Plaintiffs v Defendants

EQUITY - Fiduciary relationship - Client and accountant not established category - Relationship of trust and confidence - One plaintiff vulnerable - Confidential information disclosed - Accountant in position to affect interests of the client in a practical sense - Scope of duty - Breach - Hospital Products v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41; Grimaldi v Chameleon Mining NL (No 2) [2012] FCAFC 6; (2012) 200 FCR 296; Townsend v Roussety & Co (WA) Pty Ltd [2007] WASCA 40; (2007) 33 WAR 321 applied - Breen v Williams (1996) 186 CLR 71, ABN Amro Bank N V v Bathurst Regional Council [2014] FCAFC 65; (2014) 224 FCR 1, Pilmer v Duke Group Ltd (in liq) [2001] HCA 31; (2001) 207 CLR 165, ASIC v Citicorp (No 4) [2007] FCA 963; (2007) 160 FCR 35 cited - Pavan v Ratnam [1996] NSWSC 571; (1996) 23 ACSR 214 distinguished.

EQUITY - Accessorial liability - Knowing assistance - Requisite degree of knowledge - Fiduciary the directing mind of third party corporation - Third party the alter ego of fiduciary - Corporation knowingly assisted breach of fiduciary duty - Grimaldi v Chameleon Mining NL (No 2) [2012] FCAFC 6; (2012) 200 FCR 296, Chickabo Pty Ltd v Zphere Pty Ltd [2019] VSC 73; (2019) 57 VR 406, Harstedt Pty Ltd v Tomanek [2018] VSCA 84; (2018) 55 VR 158 applied - Barnes v Addy [1874] UKLawRpCh 20; (1874) LR 9 Ch App 244, Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 cited.

1 This proceeding concerns the plaintiffs' opportunity to purchase and the actual purchase by the third defendant of a controlling interest in the shares in Chris Debono Pty Ltd, trading as Chris's Body Builders ('CBB', or 'Business'), a business that manufactures tipping bodies and tipping trailers.

2 The plaintiffs, Mr Porter and Mr Conheady, contend that in breach of retainer and in breach of fiduciary duty, their opportunity to purchase was realised and their confidential information was used by Mulcahy & Co Accounting Services Pty Ltd ('Mulcahy & Co') and by Mr Mulcahy (together 'the Mulcahy parties') to acquire a controlling interest in the shares in CBB in the name of the third defendant, BFMM Investments Pty Ltd ('BFMM'). BFMM, a company of which Mr Mulcahy, Mr Matthews, Mr Broadbent and Mr Ford are the directors, is alleged to have knowingly assisted the Mulcahy parties in breach of fiduciary duty and to have knowingly received confidential information.

3 The Mulcahy parties deny the existence of any retainer, or of the fiduciary duties alleged. They deny the information relied upon by the plaintiffs was confidential information. They deny breach. They contend the opportunity to purchase was no longer open to the plaintiffs at the time it was exploited by them. They contend the acquisition of 70% of the shares in CBB by BFMM was independent of any breach of fiduciary duty. BFMM denies the allegations of knowing receipt of confidential information and of knowing assistance in breach of fiduciary duty.

4 The trial was limited to liability and to causation issues relevant to liability. Evidence was given by witness statement, with evidence of key contested conversations and events given orally.

5 The parties and the witnesses are based in or around Ballarat, Victoria.

6 Mr Porter is the founder and, until its recent sale to a Japanese company for $74m,[1] was the Managing Director of Porter Excavations Pty Ltd, a plant hire and civil construction business, together with other corporate entities controlled by Mr Porter, known as Porter Group ('Porter Group'). Porter Group has been a customer of CBB for approximately fifteen years.[2] During that time, CBB was wholly owned by Crist Debono (known as Chris) and his brother, Anthony.

7 Mr Conheady is an accountant.[3] He commenced work for Porter Group in mid-August 2016 and from 16 January 2017 until the sale of the business he was the Chief Financial Officer of Porter Group.[4]

8 Mulcahy & Co, founded by Mr Mulcahy in 1998, is a provider of accounting and business advisory services. Since the Business was established, Mr Mulcahy has expanded the range of services offered through various entities to include accounting, financial planning, legal mortgage broking, lending, information technology, data processing and marketing services.[5]

9 Mr Mulcahy is a director and shareholder of Mulcahy & Co. He is a certified practising accountant and a financial planner. Through his family trust Mr Mulcahy holds a 30% interest in Mulcahy & Co Legal Pty Ltd ('Mulcahy Legal'). The accounting and legal practice businesses (together 'the Mulcahy Group') are conducted from the same business premises in Ballarat with some sharing of staff and resources.

10 Mr Matthews is the founder, sole director, the largest shareholder and the principal solicitor of Mulcahy Legal. Chris Debono's daughter, Renee, is an employee of Mulcahy Legal. She began her employment in May 2015.[6] Since that time, Mulcahy Legal has provided legal assistance to CBB on a wide variety of matters.

11 Mr Conheady began using the services of Mulcahy & Co in 2005. Between 2005 and 2018, Mulcahy & Co acted as tax agent and provided services to Mr Conheady in his personal capacity and in his capacity as trustee of the Conheady Family Trust and to Conheady related entities.[7] During that period, Mulcahy & Co provided Mr Conheady with information about investment opportunities, some of which Mr Conheady took up.[8] Mr Conheady continued as a client of Mulcahy & Co until 2019.[9]

12 Historically Porter Group had used Fordham Business Advisors Pty Ltd ('Fordhams') for the provision of accounting services. Fordhams were the tax agents and ASIC agents for Porter Group. From early 2016, Porter Group had also begun using the services of the Mulcahy parties. Porter Group also engaged Mulcahy Legal to provide legal services.

13 Between April and August 2016, Mulcahy & Co carried out a review of back office systems and accounting for Porter Plant ('the Review').[10] In about August 2016, Mr Mulcahy introduced Mr Conheady to Mr Porter as a potential candidate for a new role as Chief Financial Officer of Porter Group, as recommended in the Review.[11] From late September 2016 Ms Tuck, an accountant employed by Mulcahy & Co, was seconded to Porter Plant.[12] Her secondment continued until June 2017 when she became a direct employee of Porter Group. From early November 2016 through to August 2018, Mr Conheady sought advice from Mr Mulcahy on behalf of Porter Plant, in relation to the potential ASX listing or sale of that business.[13]

14 Mr Broadbent is the managing director of an agricultural supply chain business with an annual turnover of around $450m. He is a close friend of Mr Mulcahy. His offices are located in the same building as the Mulcahy Group. Mr Mulcahy is a director of Broadbent CHS Pty Ltd, the 'overarching' company of the Broadbent businesses. From around 2003[14] Mr Broadbent invested in business opportunities with Mr Mulcahy.

15 Mr Ford is the chief executive officer of a finance, insurance and mortgage business.[15] Prior to 2017/2018 Mr Ford had invested in business opportunities with Mr Mulcahy.

16 In September 2016 Chris Debono[16] who, together with his brother Anthony, was ready to retire from CBB, retained Mulcahy & Co to value the Business and to prepare a profile of the Business with a view to its sale to an overseas purchaser.[17] That work was undertaken by Mr Mulcahy in conjunction with Mr Noether, an accountant at Mulcahy & Co. The accounts for the Business were prepared by a different accountant, Mr Hughes of John L Gregory, Accountants, later called Hotchkin Hughes.[18]

17 The CBB business profile ('the Profile') prepared by Mulcahy & Co in October 2016 reported an adjusted annual average profit for the Business of $5,000,000 and an estimated value range of $12.6m to $14.7m.[19] The proposed sale was described as one where the vendor would retain the company but would provide appropriate warranties.[20] $14m was referred to as a 'guide' to purchase price. $17m was identified as the total amount required to purchase the Business based on the carrying value of stock and work in progress ('WIP').[21] No sale eventuated in 2016.

18 On 23 March 2017, Mr Conheady sought advice on behalf of Porter Plant, from Mr Mulcahy and Mr Matthews about a potential claim against Fordhams. The claim related to a structure and taxation review previously carried out by Fordhams.[22]

19 On 30 May 2017, following permission from Mr Debono to do so, Mr Mulcahy contacted Mr Porter about the possibility of him acquiring the Business.[23] On 13 June 2017 Mr Porter told Mr Mulcahy of his interest in doing so. He said Mr Conheady would be the contact for the receipt of information.[24]

20 On 13 June 2017 Mr Mulcahy sent a copy of the Profile to Mr Conheady and Mr Porter.

21 On 16 June 2017 Mr Porter and Mr Debono met to discuss the possibility of Mr Porter buying the Business.[25]

22 On 20 June 2017 Mulcahy Legal prepared a confidentiality agreement on behalf of Mr Debono that he sent to Mr Conheady which Mr Porter later signed.[26]

23 Mr Conheady gave evidence that on 29 June 2017 Mr Mulcahy told him he could provide advice to Mr Porter about the proposed acquisition by Mr Porter of a controlling interest in the Business. He said Mr Mulcahy provided advice as to the best mode of purchasing the Business; the preparation of contractual warranties; and other matters.[27] Mr Mulcahy denied he either agreed to advise or that he provided advice.

24 From mid-2017 Mr Porter pursued the opportunity to acquire a controlling interest in the Business. Between June 2017 and March 2018, Mr Porter and also Mr Conheady, at times on behalf of Mr Porter, at other times on his own behalf, and still at other times in conjunction with Mr Porter, engaged in negotiations with Mr Debono with a view to acquiring a controlling interest in the Business.

25 In June 2017 Mr Porter and Mr Debono agreed the value of the Business as a whole was $12m.

26 On 28 August 2017 Mr Porter made a conditional offer to purchase 70% of the shares in the Business with the option to purchase the remaining 30% for $3.6m between two and five years after settlement.[28] The offer included terms that the Debono brothers continue to be employed for two years after settlement, Chris for up to 20 hours per week and Anthony up to four days per week.[29] The purchase of a 70% interest was to be completed by a date no earlier than 15 November 2017.[30]

27 The first conditional offer by Mr Porter was followed by a second conditional offer on 14 September 2017.[31] The completion date was moved to 2 January 2018.[32] The terms otherwise remained substantially the same. Mr Porter's preference was to rely on debt to finance the proposed transaction.[33] Both offers were subject to him obtaining bank finance for the whole of the purchase price.[34]

28 On 2 November 2017 there was a meeting at the Lake View Hotel attended by Mr Debono, Mr Matthews and Mr Conheady. They discussed the contract for the proposed purchase by Mr Porter. There is a dispute about what was said at that meeting.[35]

29 Mr Porter did not secure 100% external debt funding. On 15 November 2017 he abandoned his pursuit of the proposed acquisition.[36]

30 With Mr Porter's consent, Mr Conheady thereafter sought to pursue the Business opportunity for himself.[37]

31 On 16 November 2017 Mr Conheady and Mr Mulcahy met for lunch at the Ballarat Yacht Club. The number of people present for the lunch and what was discussed is disputed. The plaintiffs say only Mr Conheady and Mr Mulcahy attended the lunch. The defendants say Mr Porter and Mr Matthews were also in attendance. Mr Conheady said that during the lunch he retained the Mulcahy parties to act on his behalf concerning his proposal to acquire a controlling interest in the Business. The Mulcahy parties deny any such conversation or agreement.

32 On 16 and on 20 November 2017, Mr Conheady put proposals to Mr Debono to purchase a 70% and then an 80% interest in the Business on terms. The proposals involved a combination of vendor finance and bank debt (Mr Conheady proposed to involve three to five investors in addition to himself). Initially vendor finance was to be repaid over three years at 5.2% interest.[38] Mr Conheady said that after discussion with Mr Debono on 21 November 2017, he increased the interest rate on the vendor finance component to 9%, to be repaid over seven years, and provided for $3.6m to be paid at settlement.[39] He said Mr Debono told him they had an agreement in principle on those terms.[40]

33 Mr Debono agreed he had a conversation with Mr Conheady on 21 November 2017. In cross-examination he said he 'could have' discussed the proposal described by Mr Conheady. He could not recall whether he told Mr Conheady he agreed with that proposal.[41]

34 Mr Debono gave evidence of a conversation with Mr Porter in late November/early December 2017. Mr Porter did not recall such a conversation. Cross-examined, Mr Porter gave evidence to the effect that if there was a conversation, there was no discussion of the things Mr Debono said were discussed.[42]

35 On 23 November 2017, the plaintiffs agreed between themselves to pursue an 80% interest in the Business, 40% each.[43] Mr Conheady said he called Mr Debono and asked to bring Mr Porter 'back' into the acquisition.[44]

36 On 4 December 2017, Mr Conheady met with Mr Mulcahy. Mr Conheady said they discussed the structure for the purchase of an 80% interest in the Business. While Mr Mulcahy agreed a meeting took place, he disputed Mr Conheady's account of what was discussed.

37 On 20 December 2017, Mulcahy & Co provided a letter to ANZ at Mr Conheady's request in support of a line of credit to fund adjustments on settlement of the proposed acquisition. In the meantime, unbeknown to Mr Conheady and Mr Porter, Mr Mulcahy had begun dealing directly with Mr Debono, leading to what later became the acquisition of a 70% interest in the Business by BFMM.

38 On 25 January 2018, Mr Mulcahy made a written offer on Mulcahy & Co letterhead to purchase a 70% interest in the Business.[45]

39 On 30 January 2018, a discussion took place between Mr Conheady and Mr Mulcahy. The content of the conversation is disputed. Mr Conheady said they discussed the proposed acquisition by Mr Porter and him of an 80% interest in the Business.[46] Mr Mulcahy denies that topic was discussed. It is common ground Mr Mulcahy did not tell Mr Conheady on 30 January 2018, or thereafter of his 25 January 2018 offer.[47]

40 There are other disputes as to conversations alleged to have taken place between Mr Conheady and Mr Mulcahy. They concern the contents of telephone discussions on 10 October 2017 and 30 January 2018. In addition, Mr Conheady gave evidence of approximately 12 conversations with Mr Mulcahy between August and November 2017, corresponding to the time he was pursuing due diligence enquiries relating to the Business. He said he 'updated' Mr Mulcahy during those conversations.[48] Mr Mulcahy denies any such conversations took place.

41 Mr Mulcahy gave evidence he regarded the plaintiffs' opportunity to purchase a controlling interest in the Business as open to them to realise until 2 January 2018, but not after that date.[49]

42 The defendants contended that when, on 25 January 2018, Mr Mulcahy made an offer to Mr Debono to purchase a 70% interest in the Business for $8.4m based on a total value for the Business of $12m business, plus stock and WIP, that it was open to Mr Mulcahy to do so. Like the offers made by the plaintiffs, the 25 January 2018 offer included an offer to acquire the remaining 30% of shares in the company for $3.6m and a condition that both Chris and Anthony Debono would continue to work part time in the Business for a limited time.[50]

43 On 6 March 2018 Mr Debono told Mr Conheady he had withdrawn the Business from the market.[51] That statement was not true.[52]

44 BFMM was incorporated on 27 March 2018.[53] The shareholders in BFMM are interests associated with Mr Mulcahy, Mr Matthews, Mr Broadbent and Mr Ford.[54]

45 On 9 April 2018 BFMM paid a deposit of $400,000 for a 66.67% share in the Business.[55] On 30 June 2018 BFMM signed a share sale agreement with effect from 1 July 2018, for 66.67% of the shares in the Business.[56] The balance of the purchase price, $7.6m, was transferred into the nominated bank accounts of the vendors shortly after 1 July 2018.

46 The Amended Statement of Claim ('ASC')[57] alleges three separate retainers of the Mulcahy parties to provide accounting, taxation and financial advice in relation to the proposed acquisition of the Business:

(a) in early July 2017 a retainer by Mr Porter in relation to an acquisition by him or one of his entities ('Porter Retainer');[58]

(b) on 16 November 2017 a fresh retainer by Mr Conheady, alternatively, a novated retainer to advise on Mr Conheady's planned acquisition ('Conheady Retainer');[59] and

(c) on 4 December 2017 a joint retainer by Mr Conheady and Mr Porter or a joint novated retainer by the two of them ('Joint Retainer').[60]

47 There is no written agreement between the plaintiffs or either of them and Mulcahy & Co or Mr Mulcahy. Each retainer is alleged to be oral and to be implied. The fact and the contents of disputed conversations relied on by the plaintiffs are critical to the existence or otherwise of the retainers alleged.

48 The plaintiffs rely, by implication, on the past provision of accounting, taxation and financial advice to them by the Mulcahy parties, upon the relationship of accountant, taxation and financial adviser and client, and upon the conduct of the Mulcahy parties in providing advice to them in relation to their pursuit of the CBB opportunity.[61]

49 The plaintiffs allege terms of the Porter Retainer that:

(a) the Mulcahy parties would give accounting, taxation and financial advice to Mr Porter in relation to the acquisition of the Business as requested from time to time;

(b) the Mulcahy parties would act in good faith and in the best interests of Mr Porter;

(c) the Mulcahy parties would not improperly make use of their position as a trusted advisor to gain an advantage for themselves or to cause detriment to Mr Porter;

(d) the Mulcahy parties would not improperly use information obtained in connection with the Porter Retainer;[62] and

(e) the Mulcahy parties would keep confidential and not disclose or make use of any information or knowledge imparted to them in the course of the Porter Retainer.[63]

50 Corresponding terms are alleged to apply from 16 November 2017 to the Conheady Retainer[64] and from 4 December 2017 to the Joint Retainer.[65] The terms alleged are said to be implied, including by common industry practice and from the 'Compiled APES 110 Code of Ethics for Professional Accountants' as at November 2013 and on the successor Code applicable from 1 January 2018 ('the Code') applicable to Certified Practising Accountants.[66]

51 Earlier dealings by the plaintiffs with the Mulcahy parties are said to have led the Mulcahy parties to hold personal financial information relating to each of Mr Porter and Mr Conheady.[67]

52 The plaintiffs allege that between July and November 2017, confidential information concerning the proposed purchase of the Business was shared with the Mulcahy parties by Mr Conheady.[68] They allege that on 16, 20 and 21 November 2017[69] confidential information, including as to the price for the opportunity (based on a value of the Business as a whole of $12m) and information about an independent valuation of the Business as a whole at $21m as assessed by Munday Wilkinson accountants was provided by Mr Conheady to Mr Mulcahy.[70] They allege confidential information was provided to Mr Mulcahy as a trusted adviser in circumstances where, but for the existence of trust, that information would not have been provided.[71]

53 Separately, the plaintiffs allege that as accountants and trusted advisers, the Mulcahy parties owed them fiduciary duties.[72] Those duties are said to arise by reason of:

(a) the provision by the Mulcahy parties of accounting, taxation and business advisory services to each of them;

(b) the fact that in the course of the Mulcahy parties acting for and advising each of them, the Mulcahy parties became aware of the financial circumstances of the plaintiffs and their related entities, and the risk appetite of each of them; and

(c) the retainers; and

(d) the provision of confidential information relating to the opportunity to purchase an interest in the Business.[73]

54 The fiduciary duties alleged to be owed by the Mulcahy parties are duties:

(a) not to allow their personal interests to conflict with their duties to the plaintiffs;

(b) not to use any information, knowledge or resources of the plaintiffs which they ascertained or acquired as a result of their engagement with or for the plaintiffs against the plaintiffs; and

(c) not to take advantage of any business opportunity that might come their way as a result of their engagement with or for the plaintiffs.[74]

55 The plaintiffs allege the existence of the fiduciary duties and the terms of the retainers meant the Mulcahy parties were precluded from making use of confidential information, and from taking up, or inducing or persuading a corporate vehicle to take up the opportunity to acquire the Business.[75]

56 The plaintiffs allege that in breach of retainer the Mulcahy parties usurped their opportunity to acquire an interest in the Business for their own benefit or for the benefit of BFMM, an associate of those parties.[76] They allege those parties:

(a) failed to act in good faith and in the best interests of the plaintiffs;

(b) made improper use of their position as advisor to the plaintiffs to gain an advantage for themselves and to cause detriment to the plaintiffs; and

(c) improperly used confidential information obtained by them to gain an advantage for themselves and/or for the benefit of an associate and to otherwise cause detriment to the plaintiffs.

57 The plaintiffs further allege that in breach of fiduciary duty, the Mulcahy parties:

(a) usurped the opportunity to acquire the Business and/or assisted an associated entity, BFMM, to usurp that opportunity;

(b) used information, knowledge or resources of the plaintiffs which they ascertained or acquired as a result of their engagement with or for the plaintiffs;

(c) took advantage of a business opportunity that came their way as a result of their engagement with or for the plaintiffs; and

(d) allowed their personal interests and/or the interests of an associate to conflict with their fiduciary duties.[77]

(a) the plaintiffs were interested in acquiring the Business;

(b) the plaintiffs had had the opportunity to acquire the Business;

(c) the plaintiffs had retained the Mulcahy parties to give advice in relation to the acquisition of the Business;

(d) the Mulcahy parties owed fiduciary duties to the plaintiffs;

(e) the Mulcahy parties had breached, or if BFMM acquired the Business would breach, the fiduciary duties owed by them to the plaintiffs; and

(f) the Mulcahy parties had made use of confidential information, the personal information and the price information in usurping the opportunity or in inducing or persuading BFMM to usurp the opportunity to acquire the Business.[78]

59 It is alleged that, as a result, BFMM knowingly assisted the Mulcahy parties in breaches of fiduciary duty.[79] Alternatively, BFMM knowingly received confidential information, and took advantage of such information in usurping the opportunity to acquire the Business.[80]

60 The knowledge of BFMM is said to be imputed to BFMM, including because Mr Mulcahy and Mr Matthews are directors of BFMM.[81] In the case of Mr Matthews, in circumstances where he:

(a) knew or ought to have known that Mr Mulcahy and Mulcahy & Co owed fiduciary duties to the plaintiffs given that Mr Matthews:

(i) knew the Mulcahy parties had previously acted for the plaintiffs and sought to obtain further work (i.e. they were existing and/or prospective clients);

(ii) knew the plaintiffs were actively pursuing the opportunity to acquire the Business as Mr Matthews was acting for the vendor in relation to the proposed sale to the plaintiffs;

(iii) from at least as early as 30 November 2017, knew the Mulcahy parties were materially assisting the plaintiffs in their proposed acquisition of the Business in circumstances that Mr Matthews knew or ought to have known gave rise to or were likely to give rise to a fiduciary relationship;

(iv) worked for 'Mulcahy Legal' of which Mr Mulcahy is a shareholder and which is located in the same building as Mulcahy & Co;

(b) knew or ought to have known that:

(i) the fiduciary duties owed to the plaintiffs were being or were likely to be breached by the Mulcahy parties (or otherwise wilfully shut his eyes to that likelihood); and

(ii) BFMM was incorporated for the specific purpose of facilitating and/or benefitting from those breaches of fiduciary duty;

(c) otherwise wilfully shut his eyes to the obvious;

(d) was a director, shareholder, investor and adviser to the consortium/BFMM formed to take the business opportunity, particularly when aggregated with the knowledge of Mr Mulcahy, being a fellow member of the consortium and director of BFMM.[82]

61 The defendants deny the existence of the retainers alleged. They deny that if there were the retainers or any of them, that the terms of the retainers included an obligation to act in good faith and in the best interests of the plaintiffs. They deny owing fiduciary duties. In their defence, the Mulcahy parties, who both on the pleadings, and at trial, did not differentiate between the personal position of Mr Mulcahy and that of Mulcahy & Co, deny they were 'trusted advisers' in relation to the acquisition of the Business.[83] They allege Mr Porter retained Fordhams to undertake due diligence in relation to his proposed purchase of the Business.[84]

62 The defendants deny breach, whether of retainer or of fiduciary duty. They deny they usurped an opportunity that was open to the plaintiffs to realise.[85] They allege that on 18 December 2017, Mr Debono made known to Mr Mulcahy that he was unwilling to sell an interest in the Business to the plaintiffs or any entities associated with them.[86]

63 BFMM denies the allegations of knowing assistance in breach of fiduciary duty and of knowing receipt of confidential information. At trial, BFMM contended that knowledge of Mr Mulcahy was not sufficient to establish knowledge on the part of BFMM. They denied the other directors of BFMM, Mr Matthews, Mr Broadbent and Mr Ford, had the requisite degree of knowledge so as to make BFMM liable if the plaintiffs' claims for breach of fiduciary duty were otherwise made out.

64 The parties identified the following questions for trial:

(1) Did either or both of the plaintiffs retain the Mulcahy parties, or either of them, to act on their behalf in connection with the proposed purchase of the Business?

(2) If a retainer was entered into, when was it entered into and what were its terms?

(3) Between about July 2017 and 6 March 2018, did the plaintiffs share any and if so what information or confidential information with the Mulcahy parties?

(4) Did the Mulcahy parties, or either of them, owe the first and/or second plaintiffs fiduciary duties, whether pursuant to a retainer or otherwise?

(5) If so, what was the scope of those fiduciary duties and did those fiduciary duties extend to the Mulcahy parties, or either of them, so as:

(a) not to allow their personal interests to conflict or potentially conflict with their duties to the plaintiffs;

(b) to prevent them from using information or confidential information provided to them by the plaintiffs;

(c) to require it/him not to profit from their position as a fiduciary, or use its/his position to obtain a profit for a related party, without the fully informed consent of the plaintiffs;

(d) prevent improper use of their position as an advisor/fiduciary to gain an advantage for themselves or cause detriment to the plaintiffs;

(e) to require them to act in good faith and/or in the best interests of the plaintiffs.

(6) Did the Mulcahy parties breach the retainer referred to in questions 1 and 2 or the fiduciary duties owed to the plaintiffs referred to in question 4 by acquiring through BFMM an interest in the Business?

(7) Was BFMM formed or incorporated to take advantage of the opportunity or the confidential information referred to in question 3 to acquire the business of the Business?

(8) To what extent is any knowledge of the Mulcahy parties, where it is acquired while acting for or assisting the plaintiffs, to be imputed to BFMM?

(9) Did BFMM knowingly assist a breach of a fiduciary duty or duties owed to the plaintiffs as referred to in question 4 or knowingly receive information or confidential information acquired in breach of fiduciary duty or duties as referred to in question 4?

(10) At a certain point in time (and, if so, what time) was the opportunity for the plaintiffs to acquire the Business no longer open or possibly no longer open to the plaintiffs?

(11) Did BFMM come to acquire the Business to any extent and, if so, to what extent, independently of any breach of fiduciary duty? If so, how does that affect the plaintiffs' claims?[87]

65 Questions 1, 2 and 6 concern the existence or otherwise of retainers and as to the terms of any retainer. Question 3 concerns confidential information. Questions 4-6 concern fiduciary obligations; were fiduciary duties owed, if so, what was their scope and were they breached? Questions 3, 7, 8 and 9 concern BFMM and the allegations of knowing assistance in breach of fiduciary duty and knowing receipt of confidential information. Questions 10 and 11 concern causation, whether BFMM came to acquire its interest in CBB independently of any breach of fiduciary duty and, if it did, how that affects the plaintiffs' claims.

66 It is convenient to begin by dealing with the facts in chronological order, and in the course of so doing, to make factual findings as needed concerning contested conversations and events. Some observations are also required regarding the witnesses and their evidence. Next, to turn to the broad topics of the retainers, confidential information, the fiduciary claims, breach, the claims against BFMM, and causation. Finally, to return briefly to the 11 questions for trial and to set out the answers to each of those questions.

67 Much of the chronology of events and matters involving the parties and Mr Debono are agreed.

68 What is agreed provides context and assists in determining whose account of disputed events and conversations is to be preferred. Many of the agreed matters are relevant to the resolution of contested issues, including the existence or otherwise of the retainers and fiduciary duties alleged.

69 In April 2015 Mr Debono retained Mulcahy Legal in relation to the potential sale of the Business.[88] Between April 2015 and March 2017 Mr Matthews assisted Mr Debono during his negotiations with the then prospective purchaser, a Thai company.[89]

70 In early 2016 Mr Debono engaged Mr Mulcahy to prepare an Information Memorandum for the prospective purchaser.[90] In September 2016 Mr Debono retained Mr Mulcahy to value the Business and to prepare the Profile for the sale of the Business as a whole. No sale eventuated.[91]

71 Between April and August 2016 Mulcahy & Co carried out the Review. On 30 June 2016 an email from Mulcahy & Co thanked Mr Porter for the opportunity to complete the Review:

we see plenty of exciting opportunities ahead for Porter Plant and look forward to assisting you along the way with certain projects. We feel like we have really got to know your business and hope that we can get the chance to assist you in all areas of your accounting and financial needs in the future.[92]

72 In November 2016 Mr Conheady sought advice on behalf of Porter Group from Mr Mulcahy about the potential ASX listing or sale of Porter Group ('Project Tonka'). Mr Mulcahy provided advice concerning Project Tonka through to August 2018.[93]

73 On 23 March 2017 Mr Conheady sent an email to Mr Mulcahy providing background to a potential claim against Fordhams. A file of correspondence was enclosed. The email concluded with a request to 'ascertain what avenues of recourse are open to Tim [Porter] and Porter Excavations based upon the above'.[94] Subsequently, both Mr Mulcahy and Mr Matthews provided advice in relation to that potential claim.

74 In June 2017 Mr Mulcahy suggested to Mr Debono that Mr Porter may be interested in acquiring CBB. Mr Debono authorised Mr Mulcahy to speak to Mr Porter about the opportunity for him to do so.[95]

75 Following discussions between Mr Mulcahy and Mr Porter on 30 May 2017, on 13 June 2017 Mr Mulcahy sent a copy of the Profile to Mr Conheady and Mr Porter.[96] The covering email said the financial analysis is 'quite brief' and the 'valuation methodology is a guide'. It advised that Mr Debono would prefer any discussion is 'treated with strictest confidence'.

76 On 16 June 2017 Mr Debono and Mr Porter met to discuss Mr Porter buying the Business.[97]

77 On 19 June 2017 Mr Conheady wrote to Mr Mulcahy seeking further information about the Business, to move to the next stage of due diligence. Amongst other things, he requested information concerning staff and a list of what was being sold as the vendors had said they wished to retain the corporate entity.[98]

78 On 20 June 2017 Mr Debono instructed Mulcahy Legal to prepare a confidentiality agreement and send it to Mr Porter.[99] On 20 June 2017 Mr Matthews sent an email to Mr Conheady:

We act for CBB in this transaction, but professional standards require that on the basis we have or continue to act for you in other matters we make it clear that we are here acting on their behalf but will excuse ourselves from participation in the matter should you feel our involvement provides a conflict of interest.[100]

79 The email was sent under the signature block of Mr Mulcahy, 'director and principal solicitor' followed by the name and contact details for 'Mulcahy & Co accounting, financial planning, lending, legal, information technology'.

80 On 22 June 2017 Chris Debono took Mr Porter on a tour of the factory. He introduced Mr Porter to his brother Anthony. Mr Porter said he asked if Mr Debono would accept an overall price of $12m for the Business, and that Mr Debono said he would.[101]

81 Mr Debono agreed the price of $12m for the business as a whole, together with stock and WIP was agreed. Also, that it was agreed Mr Porter would acquire 70% of the Business, that Anthony Debono would stay on in the business but drop back to four days per week,[102] and that Mr Debono and his brother would each retain a 15% share.[103]

82 On 23 June 2017 Mr Porter signed a Confidentiality Agreement binding Porter Excavations Pty Ltd and related bodies corporate to confidentiality in relation to the acquisition. Mr Conheady then began a due diligence process.[104]

83 Following a request for information directed to Mr Mulcahy, on 27 June 2017 Mr Hughes provided financial and other information about the Business, including management accounts for FY17, an outline of staff by role[105] and a copy of the most recent fixed asset register to Mr Conheady.

84 Mr Conheady gave oral evidence of an initial telephone conversation with Mr Mulcahy in which he sought and obtained advice about the proposed acquisition by Mr Porter or an entity associated with him.

85 There was a dispute about the date of the conversation and about what was discussed. There was significant cross-examination of Mr Conheady about the date, also as to the person by whom the telephone call was initiated. When Mr Mulcahy gave evidence-in-chief, both the date of the conversation and the question of who initiated the conversation ceased to be an issue.[106] The dispute about the date remained relevant to credit issues only. The dispute about the contents of the conversation remained.

86 As to the date; when the proceeding was issued, Mr Conheady gave instructions and the statement of claim alleged the initial conversation took place in 'early July 2017'.[107] When he made his 2019 witness statement, he said the conversation occurred 'on about 10 July 2017'.[108] In his witness statement Mr Mulcahy responded saying he was on holidays at Noosa between 8-14 July 2017.[109] He denied there was a conversation as described by Mr Conheady.

87 In his 7 April 2021 updated witness statement, and in oral evidence-in-chief, Mr Conheady said the initial conversation took place on 29 June 2017.[110] He said he had previously placed the conversation as one that took place after he received a copy of the Profile and after he received financial information from Mr Hughes on 27 June 2017,[111] and before 14 July 2017, when his workbook recorded a meeting with Mr Debono.[112] Mr Conheady said he now placed the date of the conversation as 29 June 2017, based on mobile telephone records discovered by Mr Mulcahy. Those records show a 21 minute call by Mr Mulcahy to Mr Conheady on 29 June 2017.[113]

88 In cross-examination, Mr Conheady said 'Jamie returned my call'.[114] Pressed, he accepted he had no recollection of an earlier call. He said the 29 June 2017 telephone record as the date of the initial conversation 'makes sense'.[115] He said the July dates were based on his assessment, but he had no telephone record of a conversation around 10 July 2017.[116] Cross-examined, he accepted his workbook was not reliable in specifically ascertaining the date of the initial conversation.[117]

89 When Mr Mulcahy gave evidence he said he received a message from his office on 29 June 2017 to call Mr Conheady, and he did so.[118] He said he made the call from his car.

90 Mr Conheady made notes of the conversation over three pages in his workbook.[119]

Jamie [being a reference to Mr Mulcahy] not acting for vendor. Only Brad M [being a reference to Mr Matthews].[120]

92 On 20 June 2017 Mr Matthews had advised he was acting for CBB. He offered not to do so if Mr Porter felt that created a conflict of interest. That email had been copied to Mr Mulcahy.[121] It provides the context for the initial conversation and for Mr Conheady's note.

93 Mr Conheady said he told Mr Mulcahy he knew Mr Matthews had excused himself from acting (due to a conflict of interest). He asked Mr Mulcahy 'What is your role in this transaction?' to which Mr Mulcahy replied, he was not acting for the vendor and Mr Conheady could talk to him about any part of the deal. Mr Mulcahy said he could act for Tim (Mr Porter).[122]

94 Mr Mulcahy denied that on 29 June 2017 Mr Conheady asked him 'are you acting for CBB'.[123] I do not accept that evidence. I accept the evidence of Mr Conheady that he asked the question and he received the assurance that Mr Mulcahy could act. His evidence is consistent with and supported by the contemporaneous note in his workbook.

95 I also accept Mr Conheady's evidence that if Mr Mulcahy had said he was acting for the vendor, Mr Conheady would not have continued with the conversation. The note 'Jamie not acting for the vendor' is at the very beginning of the entries made. It records the results of Mr Conheady checking that Mr Mulcahy could act for Mr Porter and was not conflicted from doing so. This discussion was followed by a discussion of the structure of the proposed purchase, whether a purchase of share capital or of assets as also recorded in the workbook.[124]

96 In cross-examination Mr Conheady said that once Mr Mulcahy said he could 'act for Tim', he then said he needed to talk to him about an asset purchase of a share purchase.[125] Mr Conheady said that while he did not use the word 'advice', in fact what he did was to seek advice from Mr Mulcahy.[126] I accept that to be so, in particular concerning the question of a sale of the assets of the Business or of shares, and in relation to warranties appropriate to a share sale. I accept Mr Conheady's evidence that he recalled speaking to Mr Mulcahy about these topics.

97 Mr Conheady said he told Mr Mulcahy of his concern about loss of goodwill accompanying an asset sale. They discussed a 'scrip' sale compared to a sale of assets. He said Mr Mulcahy said a scrip sale would minimise transitional risk but would mean the purchaser was inheriting risks on events before settlement date, but that these could be the subject of vendor's warranties.[127]

98 Mr Mulcahy gave evidence that on 29 June 2017 the two men discussed the Profile.[128] The Profile referred to an asset sale compared to a share sale. Mr Mulcahy agreed that a share sale was discussed.[129]

99 In final submissions, the defendants referred to inconsistencies between language used by Mr Conheady to describe the conversation in his oral evidence and in his earlier witness statement, and also to inconsistencies with language used by Mr Mulcahy.[130] Mr Conheady referred in his oral evidence to 'scrip', rather than share capital. Scrip is Mr Conheady's language, it is not the language recorded in his workbook,[131] or his witness statement where 'shares', not scrip, is referred to. I accept Mr Mulcahy's evidence that 'scrip' is not language he would ordinarily use.[132] However, the asserted discrepancy in language does not assist the defendants. 'Share capital' as recorded in the workbook is language Mr Mulcahy does use. What is recorded is consistent with Mr Mulcahy using that language during the conversation.

100 Mr Conheady said vendor warranties was a matter of substance to him and was discussed. He said four different warranties were identified by Mr Mulcahy, which related to product risk, customer risk, government risk (including tax risk), and financial risk. Mr Conheady made a note in his workbook at the time.[133] The note lists the warranties, 'per Jamie', a reference to Mr Mulcahy.[134] Mr Mulcahy said he did not recall any discussion about warranties.[135]

101 I accept that warranties were discussed. The Profile said the vendor would 'provide appropriate warranties', but did not identify those warranties. Mr Conheady asked what warranties were needed to protect Mr Porter's interests and Mr Mulcahy advised him, identifying the four warranties noted in the workbook.

102 I accept Mr Conheady's evidence that while a number of entries in his workbook were checklists or notes made prior to meetings, that on some occasions, either during or soon after those meetings earlier notes were supplemented or modified. The entries concerning the four warranties were made either during or shortly after the telephone call on 29 June 2017. They recorded advice given by Mr Mulcahy.

103 Mr Conheady said that during the 29 June 2017 conversation he also told Mr Mulcahy a number of things. Those things included that he would retain key people, Chris Debono for two years at up to 20 hours per week, and, Anthony Debono, for two years at up to four days per week, with Mr Mitchell to step into a general management role. He said Mr Mulcahy suggested another person he knew, Mr Miller, would be suitable for the general manager role if Mr Mitchell was not.[136] There was a discussion about customer mix, those with long-term, reliable, 30 day accounts, and others who were COD.[137] He told Mr Mulcahy that Ms Gregory was responsible for cash control and credit, but was looking to retire. He told Mr Mulcahy of his plan that she would stay on at the business for at least six months.[138] Gross margins were discussed. There was a discussion of weaknesses concerning occupational health and safety and environmental issues. Mr Conheady said they discussed inventory replenishment as a weakness and that he told Mr Mulcahy he could not understand why the inventory was so high.[139] It was Mr Conheady's evidence that plant and equipment was recorded at around $1m and with an asking price of $14m, goodwill comprised approximately $13m of the purchase price. He raised his concerns about $3m in inventory in the sheds and problems this could cause at settlement with Mr Mulcahy.[140] Mr Conheady said he talked to Mr Mulcahy about increasing throughput because customers had to wait up to six months for truck and trailer bodies and as a result were going elsewhere rather than wait.[141] He said he also discussed changing staff patterns and working double shifts with Mr Mulcahy.[142]

104 Mr Conheady said opportunities to expand/improve the performance of the Business were discussed: the use of the spray booth, increased utilisation, the creation of an insurance division and optimising spare parts.[143] He said he told Mr Mulcahy that the Business was a 'gold mine', a great opportunity with 70% to 80% margins.[144] He told Mr Mulcahy that Mr Porter had negotiated the price down to $12m.[145] He told Mr Mulcahy of the discussion with Mr Debono about WIP that would be valued at cost.[146]

105 Mr Conheady was cross-examined in a manner that compared the notes in his workbook with the contents of the Profile provided to him on 13 June 2017.[147] That is, with a view to demonstrating a number of the matters Mr Conheady said were discussed were matters dealt with in the Profile. That is so, but it does not mean those matters were not discussed.

106 I find that topics of quality control, staff and the information concerning particular staff, and the opportunity for growth were items that were both discussed and were mentioned in the Profile. The ability to grow the Business, including by hiring further staff, and to expand existing parts of the Business including spare parts were also matters both noted in the Profile and discussed.[148]

107 It was Mr Conheady's evidence that Mr Mulcahy responded to a number of these matters by saying that it was 'good' and that it sounds like everything was progressing well.[149]

108 When cross-examined, it was put to Mr Mulcahy that the customer base, customer segregation, cash control, credit risk, the importance of retaining Ms Gregory, that key suppliers were all domestic and opportunities presented by the spray booth were all discussed.[150] Mr Mulcahy could not recall these matters, which are not matters referred to in the Profile being discussed, but I accept Mr Conheady's evidence that they were.[151]

109 In his witness statement and in oral evidence, Mr Mulcahy denied that he ever gave advice to Mr Porter and Mr Conheady in relation to the acquisition.[152] I do not accept that evidence is accurate.

110 I found Mr Conheady's account of the 29 June 2017 conversation, an account aided by the three pages of detailed notes in his workbook, made at the time, to be credible. The subject matter was of critical importance to him and to Mr Porter. I accept that he did not embark on a discussion concerning the opportunity to acquire a controlling interest in the Business until he first satisfied himself that Mr Mulcahy could act for Mr Porter. Once that was established advice was both sought from and given by Mr Mulcahy. The advice concerned the form of any purchase by Mr Porter; assets or shares; and the warranties that would be required on a share sale.

111 In final submissions, the Mulcahy parties submitted Mr Conheady's account of the 29 June 2017 conversation could not be acted upon. I do not agree. I do not consider Mr Conheady's earlier flawed placement of the date of the conversation adversely impacts on his credit. The same is the case concerning the 'scrip'/'share' cross-examination.

112 On 3 and 4 July 2017 Mr Conheady and Mr Matthews exchanged emails concerning a draft contract of sale.[153] No draft contract was yet in existence.

113 On 4 July 2017 Mr Matthews sent an email to Mr Mulcahy reporting on his discussion with Mr Debono the previous week, 'Porters are keen but not sure they will be able to fund 100% of the acquisition. They are going to see how much the bank will lend to them and I told him if they wanted any other investors to let us know. ... See what happens'.[154]

114 Following instructions from Mr Debono, on 11 July 2017 Mulcahy Legal began preparation of a draft contract.[155]

115 On 14 July 2017 Mr Conheady and Mr Debono had a discussion in which Mr Debono agreed to a sale of shares in the Business to Porter Group, rather than a sale of the assets. He also agreed to provide warranties. Mr Conheady made a note of this discussion in his workbook.[156]

August to October 2017: events and contested conversations

116 On 3 August 2017 the plaintiffs obtained a valuation of the Business from Munday Wilkinson. Relying on financial information previously provided by Mr Hughes and using a capitalisation of future maintainable earnings approach,[157] adopting maintainable earnings before interest and tax (EBIT) of $5,240,000,[158] and a multiple of 3.5 - 4, Munday Wilkinson valued the Business at between $18.34m to $20.96m, a maximum of approximately $21m, with a mid-point of $19.65m.[159]

117 It will be recalled that in the Profile a value of between $12.6m and 14.7m had been adopted, with $14m given as a 'guide' for the purchase price.[160] When cross-examined, Mr Conheady said although he did not recall discussing with Mr Mulcahy how the value of $14m had been arrived at,[161] he would have expected similarly detailed work as had been undertaken by Munday Wilkinson would have been undertaken by Mr Mulcahy.[162]

118 To state the obvious, the level at which Munday Wilkinson valued the Business made the purchase of a controlling interest, based on an overall value of $12m plus stock and WIP, a very attractive proposition. Given the disparity between the value upon which Mr Debono was willing to base a sale of a controlling interest in the Business and the independent valuation of the Business, the existence and content of the Munday Wilkinson valuation were matters that those who commissioned it would wish to remain confidential.

119 On 8 August 2017 Mr Conheady sent an email to Fordhams in relation to the Business.[163] On 10 August 2017 he met with Mr Palone and Mr Eynaud of Fordhams to discuss the potential acquisition of the Business by Mr Porter.[164] The structure of where Mr Porter would hold the proposed investment in Porter Group was discussed.[165]

120 The minutes of the 10 August 2017 meeting prepared by Fordhams record that Mr Porter was yet to make an offer for the Business, that the asking price was circa $12m, that buying the shares was better for Mr Porter than buying the Business, but the downside was that Mr Porter would be buying the company's history. The value placed on the business by Munday Wilkinson is recorded in the minutes. They also record that Mr Conheady had met with the banks on 7 August 2017, that there was currently $1.5m in cash available to 'tip into' the Business and that Mr Conheady believed funding of closer to 70% rather than 80%, as had been sought, would be obtained from the banks.[166] The minutes record 'will need to prepare an analysis of options in respect to entity funding and tax consequences, also will need to research service trust/head office rules for Porter Management Trust ...'.[167]

121 On 16 August 2017 Mr Conheady sent an email to Mr Debono copied to Mr Matthews, making a number of requests for information.[168] At this time, and continuing through until at least November 2017, Mr Conheady was dealing and communicating directly with Mr Matthews in relation to the proposed purchase.[169]

122 On 28 August 2017 Mr Porter made a formal conditional confidential offer, in writing, to purchase 70% of the Business for $8.4m. The offer was open for acceptance until 15 September 2017. It was conditional upon finance.[170] It provided that a deposit would be payable within 30 days after full execution of a share sale agreement.[171] It was subject to entry into a formal share sale agreement by 15 November 2017. It included a term that the vendor must deal exclusively with Mr Porter regarding the sale of shares in or the assets of the Business, and must not enter into discussions with any other party, prior to 15 November 2017.[172]

123 On 8 September 2017 Mr Conheady, Mr Porter, Mr Debono and Mr Debono's accountant Mr Hughes, met to discuss Mr Porter's 28 August 2017 offer.[173] At that meeting, the parties reached an in-principle agreement on the terms of sale, including agreeing to extend the completion date to 2 January 2018. The meeting concluded with a few beers at the Western Hotel.[174]

124 Fordhams were formally retained to advise Mr Porter about the proposed acquisition in September 2017. Mr Porter said he and Mr Conheady spoke to them about it.[175] On 15 September 2017 Fordhams provided some notes they had prepared on 'the CBB opportunity' to Mr Conheady and Mr Porter.[176]

125 There is no evidence that during August or September 2017 a copy of the Munday Wilkinson valuation was provided to Fordhams or to the Mulcahy parties.

126 On 14 September 2017 a revised formal offer in both mark-up and clean was sent to Mr Debono.[177] The revised offer reflected the terms discussed and agreed at the meeting on 8 September 2017.[178] The offer was open for acceptance until 28 September 2017. It provided that the vendors and purchasers must keep confidential information relating to the Business, the terms of the offer and the share sale agreement. It provided complete and unrestricted access to CBB's company records, premises and key staff to enable the purchaser, Mr Porter and/or nominee, to complete due diligence. It included the same conditions of entry into a formal share sale agreement and the period for exclusive dealing as the first offer, in both cases, extended to 25 November 2017. It provided for settlement on 2 January 2018. Once again it provided that a deposit would be payable within 30 days after full execution of a share sale agreement.[179]

127 On 2 October 2017 Mr Debono emailed Mr Conheady a draft share sale agreement naming Porter Plant and Mr Porter as the purchasers.[180] On 6 October 2017 Mr Debono sent Mr Conheady a shareholders' agreement prepared by Mr Matthews, which included a purchase price of $8.4m for 70% of the shares in the company, a settlement date of 2 January 2018 and required payment of a deposit of $420,000, being 5% of the purchase price, within 30 days of the date of the agreement.[181] On 4 October 2017 Mr Conheady asked Mr Matthews for word versions of the draft agreements so they could be passed on to Nevett Ford solicitors.[182] By that time, Nevett Ford were acting for Mr Porter in relation to the proposed purchase.

128 It was Mr Conheady's evidence that in conversations with Mr Mulcahy between August and October 2017, of which he said there were approximately twelve, Mr Mulcahy gave him advice to focus on product warranties and to look at the employee contracts.[183] He said during these conversations he 'updated' Mr Mulcahy about what was happening with the due diligence process,[184] what he described as 'rolling' updates.[185] In accordance with the terms of the 14 September 2017 offer, Mr Conheady and Mr Porter were obliged to keep matters relating to due diligence confidential.

129 Mr Conheady said that in these conversations with Mr Mulcahy he discussed the two categories of customers of the Business, those with 30 day accounts and those on COD.[186] He said he also discussed cash control in the business and Ms Gregory's role in credit control, warranty expenses embedded in the profit and loss statements, key suppliers to the business, inventory levels and the 4-6 month order book. He was unable to specify the dates of these 'update' conversations.[187]

130 Mr Conheady said there were discussions concerning employees. He said Mr Mulcahy suggested Craig Miller as a suitable person to act as general manager if needed.[188] Mr Mulcahy denies there was any discussion of Mr Miller or any reference to him.[189]

131 Mr Mulcahy denied that any of the 12 conversations of which Mr Conheady gave evidence took place. He said there were 'no discussions about CBB' during the period August to October 2017.[190] I do not accept the truth of that evidence.

132 I accept Mr Conheady's evidence that there were a large number of conversations concerning CBB between August and October 2017 between himself and Mr Mulcahy. I accept the subject matter of those conversations included topics such as the identification of key people in the Business,[191] a discussion concerning Mr Miller and an update in relation to conditional offers made to purchase the Business.[192]

133 Mr Conheady said these conversations were 'updating' Mr Mulcahy on conversations that he was having with the vendor.[193] To provide 'updates' about such matters to a professional such as Mr Mulcahy in the context of a confidential due diligence process is consistent with that person being viewed by Mr Conheady as a trusted adviser. However, accepting Mr Conheady's evidence, there was very little said in response by Mr Mulcahy to these updates and no evidence of specific advice from Mr Mulcahy during these conversations.

134 On 10 October 2017 Mr Mulcahy and Mr Conheady had a telephone conversation.[194] The conversation lasted nine minutes. The contents of the conversation is disputed.

135 Mr Conheady said they discussed the proposed acquisition and that Mr Mulcahy provided advice on draft warranties and due diligence.[195] Mr Mulcahy disagreed with this evidence. He said the subject matter of the conversation was about financing of the Porter Group's proposed acquisition of land in Ballan for a quarry, not the proposed acquisition of the Business.[196]

136 Mr Conheady's workbook includes an entry with a list of topics for discussion with Mr Mulcahy which Mr Conheady said relate to the 10 October 2017 conversation.[197] One topic on the list was Ballan, a property which the Porter Group had agreed to purchase with a view to conducting extractive industry. The purchase price was $2.08m. Porter Group was looking to fund 100% of the purchase price.

137 The funding for Ballan and who might value it for finance purposes was the subject of emails between Mr Conheady and Mr Mulcahy on 9 and 11 October 2017.[198]

138 Mr Conheady said that Mr Hives, the valuer who had previously been engaged to value the Ballan land had on 5 October 2017 said he was unable to value the land due to professional indemnity insurance complications.[199] He said during the 10 October 2017 conversation he asked Mr Mulcahy about other valuers. He said he also asked whether Mr Mulcahy's clients who were high net worth individuals would be a source of funding for the purchase of Ballan.[200] He said Mr Mulcahy asked him to prepare a detailed overview of the fund raising proposal for Ballan for his review prior to sending to his clients.[201]

139 Mr Conheady gave evidence that one of the items on his list for discussion on 10 October 2017 in his workbook, a PPSR audit, even though intended to be discussed, was not discussed that day.[202] The proposed purchase of CBB was noted in his workbook. Mr Conheady says it was discussed, and Mr Mulcahy says it was not.[203] The Mulcahy parties submitted the fact the PPSR audit was listed for discussion but was agreed not to have been discussed, casts doubt on whether CBB, also on the list, was discussed.

140 Mr Conheady said there was discussion of the valuation of the Ballan property, division 7A tax planning and fundraising for the proposed acquisition of CBB.[204] His workbook entry refers to these topics, but also includes reference to 'level of working capital required on day 1'.[205] It was put to Mr Conheady in cross-examination that he had not discussed fundraising for CBB with Mr Mulcahy in this conversation. He disagreed.[206]

141 In the context of the surrounding emails, I find that the dominant topic of discussion on 10 October 2017 related to Ballan and not to the proposed acquisition of CBB. If there was discussion of the other topics of which Mr Conheady gave evidence, it is likely such discussion was secondary to discussion about Ballan. If the topic of funding the CBB acquisition was discussed, there is no evidence that Mr Mulcahy agreed to take any particular action or that he gave advice about that topic.

142 In an early October 2017 entry in his workbook, Mr Conheady recorded that he spoke to Mr Palone of Fordhams on 5 October 2017 who advised 'all good to settle on Creswick property to crystallise tax loss in FY 17 year'. His notes also record that he, Mr Conheady, advised Mr Matthews to proceed with the settlement of that property.[207] Mr Conheady was cross-examined about these references to 'advise' in the workbook on the basis that no entries in the workbook relating to Mr Mulcahy record Mr Mulcahy as having 'advised'.[208]

143 I do not regard the lack of specific references in the workbook to Mr Mulcahy having 'advised' as significant. The relationship Mr Conheady enjoyed with Mr Mulcahy, one of over ten years' duration, was very different to the relationship he had with Fordhams. That firm was relatively new to Mr Conheady, he began to deal with Fordhams only after joining Porter Group. While Fordhams were generally retained on behalf of Porter Group, Mr Conheady had engaged Mulcahy Group to advise about a potential negligence claim against them. Objectively assessed, the existence of a claim that earlier advice from Fordhams was negligent warranted Mr Conheady carefully noting any new advice given by that firm.

144 When cross-examined Mr Conheady said that by 10 October 2017 Porter Group had not migrated its accounting work from Fordhams.[209] He said he could not recall when he told Mr Mulcahy that Porter Group was transitioning to Mulcahy & Co but agreed there was no document in which a transition was advised to Mulcahy & Co.[210] He accepted that the fact Porter Group engaged Mr Matthews did not mean that accounting work would also flow. In his evidence, Mr Conheady described the legal and accounting practices as 'separate businesses'.[211]

145 On 16 October 2017 Mr Conheady received the first funding proposal for the acquisition of the Business from Westpac.[212] Westpac offered $8.4m, subject to credit approval. The Westpac proposal did not provide the necessary finance to satisfy Mr Porter's wish to finance the purchase completely with debt.[213]

146 On 17 October 2017 Mr Conheady sent an email to Mr Mulcahy, copied to Mr Porter and Mr Matthews, advising contracts for the Ballan land had been signed. The following day Mr Conheady and Mr Mulcahy exchanged emails about funding part or all of the Ballan purchase price.[214] On 19 October 2017, in an exchange of text messages, Mr Conheady offered Mr Mulcahy a 'finder's fee' of 1% of the loan should he be able to be able to obtain funding for Ballan, which proposal Mr Mulcahy said he could not accept.[215]

147 On around 26 October 2017, Mr Conheady suggested to Mr Porter that he, Mr Conheady, could personally take a share in the Business as a means to increase their borrowing power.[216]

148 On 3 November 2017, Mr Porter received a funding proposal from NAB. Again, the funding offered fell short of the 100% borrowing requirement that was Mr Porter's wish.[217]

2 November 2017 breakfast meeting at the Lake View Hotel

149 On 2 November 2017, there was a breakfast meeting between Mr Debono, Mr Conheady and Mr Matthews at the Lake View Hotel. The purpose of the meeting was to finalise the share sale agreement. There is a dispute about whether vendor finance was discussed and also whether Mr Debono responded as he said he did to the idea of vendor finance during the course of this meeting.

150 In his witness statement, Mr Debono said that at this meeting he asked Mr Conheady what Mr Porter's intentions were regarding payment of the deposit and the proposed purchase. Both in his statement and in his oral evidence, Mr Debono said that at this meeting Mr Conheady proposed the purchase proceed by way of vendor finance, which Mr Debono strongly disagreed with.[218] He said that when vendor finance was raised, he responded by asking Mr Conheady if he thought he, Mr Debono, had 'fuckwit' tattooed on his forehead.[219]

151 Mr Conheady denied there was discussion of vendor finance at this meeting.[220] He also denied there was any 'fuckwit' statement by Mr Debono at the meeting. I accept his evidence as to those matters.

152 Mr Matthews said he had a recollection of the meeting. He said those present worked through the draft share sale agreement. He made notes on the draft agreement in the course of the meeting. He gave evidence that I accept that the discussion concluded with a 99% complete agreement.[221]

153 No specific date for signing was discussed or identified during the meeting.[222] Mr Matthews said vendor finance was not raised,[223] but payment of the deposit was discussed. Mr Matthews said Mr Debono wanted signatures and a deposit paid so he knew the transaction was going to settle in January 2018.[224] During cross-examination, Mr Matthews said Mr Debono told Mr Conheady that he was owed the deposit and it was outstanding.[225] Mr Matthews said that while Mr Debono was getting frustrated about delays, he did not recall him making a 'fuckwit' statement at that meeting.[226]

154 In cross-examination, Mr Debono was shown the draft agreement which included Mr Matthews' notes.[227] It was put to him there was discussion about the date for payment of the deposit and that it was agreed that instead of the deposit being paid within 30 days, it would be paid 'on signing'.[228] Shown the draft agreement in mark-up, Mr Debono accepted that, contrary to evidence given earlier by him, the deposit was not payable on 2 November 2017.[229]

155 Mr Conheady denied Mr Debono said the deposit was outstanding. I accept his evidence. The time for payment of a deposit had not yet arrived. It was to be paid upon finalisation and execution of the share sale agreement (as stated both in Mr Porter's first and second offers).[230]

156 Mr Matthews is not correct that Mr Debono demanded payment of the deposit at the breakfast meeting. The draft contract was amended to bring forward payment of the deposit from within 30 days of signing to payment on signing.[231]

157 When Mr Debono said vendor finance was discussed, he is mistaken. There is no mention of vendor finance in the draft agreement. Vendor finance first came up after Mr Porter dropped out as a purchaser on 15 November 2017. Mr Debono was in error when in cross-examination he adhered to his earlier evidence that vendor finance was raised on 2 November 2017.[232]

158 I do not accept Mr Debono's evidence that during this meeting he told Mr Conheady, whether in the context of a discussion about vendor finance or otherwise, that he did not have 'fuckwit on my forehead', and that he would not accept vendor terms. Mr Matthews has no recollection of such a statement being made at the meeting. There is no context or reason that would have given rise to such a statement.

159 Following the meeting, Mr Matthews emailed an updated share sale agreement to Mr Conheady, copied to Mr Debono.[233]

160 Mr Conheady gave evidence of a telephone conversation with Mr Mulcahy on 8 November 2017. Mr Mulcahy denies there was a discussion on that day. He gave evidence that according to his calendar, he was attending an audit of another client by the ATO at the time of the alleged telephone call.[234] The telephone records in evidence showed a call of less than two minutes from Mr Conheady to the number at the office of Mulcahy & Co at 10.33am on that day.[235]

161 Mr Conheady said that during their conversation he told Mr Mulcahy the plaintiffs were $1.5-$2m short on funding the transaction, and that while Porter Group had sufficient cash reserves to fund the shortfall, it would leave the group with an uncomfortably low cash position. Mr Conheady said Mr Mulcahy suggested he could raise the required funds through high net worth clients and mentioned Mr Broadbent. He also said Mr Mulcahy raised that he and Mr Matthews would be interested in acquiring 5% or 10% of the Business themselves. Mr Conheady said he responded by saying he was more interested in debt finance than in equity finance.[236]

162 At 11.18am on 8 November 2017 Mr Conheady sent an email to Mr Palone at Fordhams saying he would like to establish the structure for the purchase as it would 'feed into the funding approval offer' from the financiers.[237] That email forms part of an email chain from early November 2017 in which an alternative structure for the acquisition of a controlling interest in the Business which included Mr Conheady as a 5% owner was canvassed.[238]

163 At 6.30pm on 8 November 2017 Mr Conheady sent an email to Mr Matthews in relation to the contract.[239] The email referred to a meeting earlier that day between Mr Porter and Mr Debono at which agreement was reached in relation to the treatment of land tax and WIP. In that same email Mr Conheady told Mr Matthews that he would be acquiring some of the shares in CBB, either directly, or through an entity that would combine his shares and those of Mr Porter, and once he had the structures 'locked' he would advise.

164 I do not accept that Mr Conheady is correct when he says he had a telephone conversation at 10.33am on 8 November 2017 with Mr Mulcahy in which the shortfall in funding and a proposal for an equity interest on the part of Mr Mulcahy and Mr Matthews were discussed.

165 However, I do accept that at a point in time before 15 November 2017 Mr Conheady did tell Mr Mulcahy that there was a shortfall in funding. I also accept that in a conversation at around that time, after the NAB offer, received on 3 November 2017 and before 15 November 2017, there was a discussion between them about how the shortfall might be funded. Further, that in a conversation at that time Mr Mulcahy suggested that he, and Mr Matthews would be interested in taking up an equity position but that the conversation went no further.

166 On 10 November 2017 Mr Conheady sent an email to Mr Palone, copied to Mr Porter and to Mr Genobile at Fordhams asking them to approach the structuring of the acquisition on the basis that Mr Porter or his entity would be acquiring 65 shares and Mr Conheady or his entity would be acquiring five shares. 'I will leave it to you to advise him on his best structure to hold the 65 shares. I will deal with my shares'.[240] It was Mr Conheady's evidence, that I accept, that Fordhams were Mr Porter's accountants, they were never his accountants or advisers.[241] He said Fordhams were engaged to deal with structuring because of the large Porter Group with which they were intimately familiar and were best placed to advise where the investment should be held within the group.[242]

167 On 14 November 2017 Mulcahy Legal sent an interim account to CBB for legal costs for work to date in relation to the sale of the Business to Mr Porter.[243]

168 There were negotiations and further amendments were made to draft contracts during November 2017. However, no contract was signed and no deposit was paid.

169 On 15 November 2017, following discussions with his wife, Mr Porter decided to put the acquisition on hold until Porter Group could afford it without spending what he described in an email to Mr Conheady that morning as 'ALL our capital'.[244] Mr Porter and Mr Conheady agreed Mr Conheady could pursue the opportunity for himself.[245]

16 November 2017 Yacht Club Café contested lunch

170 The plaintiffs plead that in the course of a lunchtime meeting at the Yacht Club café on 16 November 2017, Mr Conheady retained the Mulcahy parties to provide accounting, taxation and financial advice in relation to his proposed acquisition of the Business (i.e. the Conheady Retainer).[246] The defendants deny the retainer.

171 The plaintiffs' evidence is that only Mr Conheady and Mr Mulcahy were present for the lunch.[247] They rely on business records relating to the lunch to show that it occurred between 12.30pm and 1.30pm[248] and a bill for the lunch paid by Mr Conheady which is consistent with two people only being in attendance.[249] The defendants say Mr Porter and Mr Matthews were also present at the lunch.

172 Mr Conheady said that during the lunch he told Mr Mulcahy he thought the CBB deal was a good deal and the numbers were solid.[250] He told Mr Mulcahy that Munday Wilkinson had valued the Business at between $18m and $21m. He told him about the future maintainable earnings they had used in the valuation and about the multipliers they had applied and the assumptions adopted.[251] He told Mr Mulcahy the maintainable earnings adopted were similar to those adopted in the Profile, but the multiple was different.[252] He did not give Mr Mulcahy a copy of the valuation.[253]

173 Mr Conheady said he discussed his plans to purchase CBB and his plans for the Business if he was successful in doing so. He said Mr Mulcahy told him to 'go for it'.[254] He said Mr Mulcahy mentioned the possibility of Paul Burke from Gull & Co investing in the deal and repeated that he and Mr Matthews remained interested in investing.[255]

174 Mr Porter said that he attended lunch at the Yacht Club with Mr Mulcahy and Mr Conheady on one occasion, but that occasion was not on 16 November 2017.[256] He said he was somewhere else that day. His diary recorded him attending an annual meeting of Porter Group representatives in Bendigo scheduled for 3.00pm. He said he recalled arriving earlier in Bendigo, around 2.00pm, to set up the meeting room for what he said was an important meeting.[257] His mobile telephone records show calls made from 12.28pm until 1.29pm from his mobile phone at different locations between Porter Plant office and Maldon, consistent with him travelling to Bendigo rather than attending lunch at the Yacht Club.[258]

175 Mr Mulcahy agreed he met Mr Conheady for lunch at the Yacht Club, but said that Mr Porter and Mr Matthews were also present. He said that the topics of conversations he could recollect were funding for the Ballan property, Xero accounting software and a land development opportunity known as Greenhill Road.[259] He said there was quite a detailed discussion about funding for Ballan and quarries, and what type of valuations might be able to be provided.[260] He denied the CBB acquisition was discussed.[261]

176 After the lunch, at 1.56pm Mr Conheady sent an email to Mr Mulcahy in relation to the valuation for Ballan.[262] The email said it had been 'great to catch up'. It said, 'as mentioned I need to obtain a valuation' for Ballan. The email did not mention Mr Porter. Mr Porter was not copied to the email that concerned valuation of the Ballan quarry that Porter Group had contracted to purchase and were seeking to fund.

177 Mr Mulcahy was cross-examined about what it was that caused him to remember what was discussed and that Mr Porter and Mr Matthews were also present, also how it was that he remembered that CBB was not discussed. Mr Mulcahy's answers were non-responsive and unconvincing.[263]

178 Mr Matthews gave evidence of his recollection of attending a lunch at the Yacht Club on 16 November 2017 with Mr Porter, Mr Conheady and Mr Mulcahy. He said he met with Mr Conheady, Mr Porter and Mr Mulcahy for lunch from 11.00am-1.30pm.[264] He gave evidence they discussed business in general, the work he was doing and their business relationship. They discussed the Greenhill project. He said he wanted to discuss syndication in relation to that project and also earthmoving works. He said he thought those present also discussed the Ballan land. He was acting for Porter Group in relation to the conveyancing for Ballan. He placed the meeting by reference to his calendar entry as taking place between 11.00am-1.30pm.[265] His calendar recorded him as out of the office during that time. In evidence-in-chief he said it was 'possible' he was wrong about the date.[266] He said he also based the date of the meeting on an expression of interest being completed for the Greenhill project and his memory that there was a meeting between the four men.

179 In cross-examination Mr Matthews was taken to an email from Mr Conheady on the morning of 16 November 2017 seeking to arrange to meet him the following week to discuss advice from a QC concerning the dispute with Fordhams.[267] That Mr Conheady emailed Mr Matthews at 10.48am that morning proposing a lunch the following week to discuss a separate topic that involved both himself and Mr Porter is inconsistent with the proposition that the three of them and Mr Mulcahy were to meet later that morning for lunch, on Mr Matthews' evidence, ten minutes later at 11.00am. In cross-examination Mr Matthews said it was his recollection that Mr Porter was present for the lunch and that CBB was never discussed.[268]

180 That Mr Matthews was present for the lunch is inconsistent with the receipt for the lunch showing drinks for two and two meals, paid for by Mr Conheady.[269] The timing of a text between Mr Conheady and Mr Mulcahy in relation to a 12.15pm meeting[270] is also inconsistent with a lunch which, according to Mr Matthews' evidence, he either attended or left the office to attend at 11.00am. I do not accept Mr Matthews' evidence that he was present at the lunch as accurate or truthful. For him to say that CBB was never discussed at a lunch which he did not attend is a serious and apparently deliberate attempt to mislead in relation to a conversation that is critical to the alleged Conheady Retainer.

181 I reject Mr Mulcahy's evidence that those who were present at the Yacht Club lunch on 16 November 2017 included Mr Porter and Mr Matthews. His evidence about who was present and what was and was not discussed was not truthful evidence.

182 Only Mr Mulcahy and Mr Conheady were present at the lunch. Before the lunch, they exchanged texts, arranging to meet at 12.15pm.[271] The receipt for the lunch is consistent with two persons only having lunch.[272] Mr Conheady paid $55.40 for the lunch.[273] The lunch began at 12.24pm and ended at 1.32pm.[274]

183 I do not accept the case for the defendants that anyone other than Mr Conheady and Mr Mulcahy were present for the 16 November 2017 Yacht Club meeting. The discussion at the Yacht Club is important. If Mr Matthews, the solicitor for the vendor, was not present for the lunch, and he was not, there was no impediment to Mr Conheady freely discussing his proposal to purchase a controlling interest in the Business with Mr Mulcahy.

184 I accept the accuracy of Mr Conheady's evidence-in-chief as to the detail of what he said was discussed:[275]

Jamie, I want you by my side to help me through this and also I want you to do the tax and accounting work once we get this thing set up, and he said he would. I said to Mr Mulcahy that, you know, we hope - I had done an extensive DD that he was aware of. We had found nothing untoward. 'You know, do you think I should actually proceed with an offer?' And Mr Mulcahy said, 'It's a great opportunity. Go for it'.[276]

185 The cross-examination of Mr Conheady focussed primarily on who was in attendance at the lunch. It did not involve challenging the detail of what Mr Conheady said was discussed or about Mr Mulcahy being 'by his side'.

186 I accept Mr Conheady's evidence that during the lunch he told Mr Mulcahy he wanted him by 'his side' to help him in relation to the proposed purchase and that Mr Mulcahy agreed to do so. I accept that Mr Conheady told Mr Mulcahy of his intention to put a terms purchase proposal to Mr Debono and that he told Mr Mulcahy that Munday Wilkinson had valued the Business at $21m. Mr Conheady provided that information to Mr Mulcahy in circumstances of trust and confidence, just as he confided in Mr Mulcahy his plans to grow and develop the Business.[277]

187 After the lunch, Mr Conheady 'went for it'. He both telephoned and, at 3.45pm, sent an email to Mr Debono offering personally to purchase a controlling interest in the Business.[278] Mr Conheady said he had been encouraged by Mr Mulcahy to make an offer during their lunchtime meeting.[279] The email proposed the purchase of 70% of equity in the Business for $8.4m plus adjustments, as had been the Porter proposal. It proposed that three to five investors would be involved in addition to Mr Conheady. The difference between this offer and the first and second Porter offers were that Mr Conheady's offer involved the provision of vendor finance as a condition of sale. His initial proposal was that the money required to be paid for the shares would be 'left in the business' and repaid to Mr Debono and his brother over a three-year period at 5.2% interest.[280]

188 Mr Conheady said he called Mr Mulcahy the next day to advise him he had made an offer and to inform him of its terms.[281] Mr Mulcahy gave evidence he did not become aware that Mr Conheady was proposing to invest in CBB until 4 December 2017.[282] I do not accept that evidence as true. Mr Conheady told him of his plans at the lunch. He asked for Mr Mulcahy's advice about whether he should make an offer. Mr Mulcahy told him to 'go for it'. He 'went for it' and followed up with a call to Mr Mulcahy the next day, after he had made the offer.

189 The email sent by Mr Conheady on 16 November 2017 was the first time the plaintiffs or either of them proposed vendor finance. Mr Debono said he understood this as him investing his money in his own Business.[283]

190 Mr Debono said that when vendor finance was proposed, he regarded Mr Conheady and Mr Porter as lacking the money needed to acquire the Business. He was affronted by the notion that he would lend money to buy his own business. The interest rate proposed was 5.2%, which Mr Debono agreed was much better than anything he could get at the bank.[284]

191 The 16 November email concluded with Mr Conheady saying he would be 'interested in your feedback'. In cross-examination, Mr Debono agreed there were further discussions at this time. Mr Conheady said when Mr Debono did not respond in writing, he followed him up the next day. Mr Conheady said in the course of that discussion Mr Debono said he was not happy with 100% finance and wanted cash in the deal.[285] Mr Debono agreed that during their discussion he told Mr Conheady the interest rate (5.2%) was too low,[286] and that he was concerned about the whole of vendor finance being left in.[287] Mr Debono said at around that time, when discussing other investors, he told Mr Conheady that he did not care who bought the company, as long as he got the money.[288]

192 There was a discussion between Mr Porter and Mr Debono at about this time. I infer from what was discussed that the discussion took place after 16 November 2016 and before 20 November 2016.

193 Mr Debono said he called Mr Porter because he wanted to hear from Mr Porter whether he was 'in or out'.[289] I accept Mr Debono's evidence that Mr Porter told him that Mr Conheady was handling it and that it was out of his, Mr Porter's, hands.[290] Mr Debono said he asked Mr Porter during this conversation, what was happening with the deposit. He is mistaken. I accept Mr Porter's evidence that he was never asked by Mr Debono to pay the deposit.[291] The timing of the call occurred after Mr Conheady had told Mr Debono that Mr Porter was out of the deal.[292] It also occurred at a time when the then current draft agreement with Mr Porter as purchaser provided for a deposit on signing of the contract. That is, as had been negotiated and agreed at the breakfast meeting on 2 November 2017 attended by Mr Debono. As no contract had yet been signed, no deposit was due for payment.

194 On 20 November 2017 Mr Conheady sent an email at 9.09am to Mr Debono putting forward revised terms for his proposed purchase of CBB. The revised terms included increasing the equity to be purchased from 70% to 80%, funded by a mix of vendor and bank finance. In this offer, $6m was to be paid at settlement (financed by bank debt) with the balance funded by vendor finance of $3.6m over three years at 5.22%.[293]

195 Mr Conheady did not seek advice from Mr Mulcahy in relation to this offer before it was made.[294] He said he was expecting to talk to Mr Mulcahy about whether he was on track with due diligence as he had never previously been engaged in such a process.[295] However, as put to Mr Conheady in cross-examination, he did not pass on all of the due diligence information that he received or even a large part of that information, to Mr Mulcahy.[296]

196 Mr Matthews gave evidence that on 20 November 2017 he and Mr Debono had a discussion. He said the discussion took place after Mr Debono had received an email with a vendor terms proposal. Mr Debono forwarded the 9.00am email from Mr Conheady to Mr Matthews at 2.32pm that day.[297] Mr Matthews said this was the first time he had heard of a proposal which involved vendor terms. He said Mr Debono told him they, meaning Mr Conheady and/or Mr Porter, must think, 'I had fuckwit on my forehead'. Mr Debono said, 'why would I leave my own money in the business, I could run it myself'. In that same discussion Mr Debono told Mr Matthews not to do any further work in relation to the proposed sale.[298]

197 At 4.14pm on 21 November 2017 Mr Conheady sent an email to Mr Debono. Mr Conheady said there was a discussion with Mr Debono in which the terms which included a deposit of $6m and $3.6m vendor finance over seven years at 9% were agreed.[299] The email said, 'just keeping log of our discussions'. In the email, the interest rate on the $3.6m component of the offer was increased to 9% payable over seven years.[300] Mr Debono, who was not a particularly regular user of email, did not respond by email.

198 Mr Debono gave evidence in his witness statement that he did not accept any offers over the telephone from Mr Conheady. It was his evidence that by late November 2017 he required both a deposit and signed finance approval before accepting any offers.[301] Asked about a discussion about $3.6m on vendor terms at 9% over seven years and whether those matters were agreed between them, while Mr Debono said he could not recall agreeing with the proposal, it could have been discussed.[302]

199 The email sent at 4.14pm on 21 November 2017 referred to 'keeping a log on our discussions',[303] it did not refer to or confirm acceptance of the proposal referred to by Mr Debono. However, I accept Mr Conheady's evidence that Mr Debono conveyed his agreement to that proposal in discussions between them at around that time.[304] I do so taking into account Mr Debono's evidence that he 'could have' discussed and could not recall whether he agreed to those terms.[305] I accept Mr Conheady's evidence despite the evidence of Mr Matthews that on 20 November 2017, the day prior to the discussion and the email, Mr Debono told him to do no further work on the sale. That Mr Debono told Mr Conheady that he agreed to sell as noted in the 21 November 2017 email is borne out both by what occurred next, and by later communications sent by Mr Conheady to third parties from which it is to be inferred he understood a transaction on those terms had been agreed and was proceeding.

200 The 21 November 2017 offer from Mr Conheady was an offer to purchase 80%, not 70% of the Business.[306] On 23 November 2017, at Mr Conheady's invitation, Mr Porter agreed to join him in the acquisition of an 80% interest in CBB with each to own 40%.[307] That Mr Conheady invited him to join and that Mr Porter re-entered the proposed transaction at that point in time is consistent with Mr Conheady having reached agreement on critical terms two days earlier with Mr Debono.

201 Mr Conheady gave evidence that on 23 November 2017 he telephoned Mr Debono and told him he had asked Mr Porter to come back into the acquisition. He followed this with a text the next day.[308] Mr Conheady was not cross-examined about that evidence.

202 On 28 November 2017 Mr Conheady sent an email to Chris Phillips, a finance broker in which he said the vendor was prepared to offer vendor finance of $3.6m for seven years at 9%. The email is consistent with Mr Conheady believing his proposal which included 9% interest had been accepted by Mr Debono.[309]

203 Also consistent with his belief that agreement had been reached with Mr Debono, on 28 November 2017 Mr Conheady sent emails to Mr Genobile at Fordhams enclosing copies of the CBB valuation from Munday Wilkinson,[310] the report by Mitchell Munn valuing assets used in the Business,[311] and the credit risk report obtained from D&B for the Business.[312] In a separate email that day, he enclosed a five year three-way financial forecast model for the transaction, saying that he had forwarded a copy should Fordhams need one of its analysts to review.[313] Mr Porter was copied to those emails as was Mr Palone of Fordhams.

204 On 21 December 2017 Fordhams invoiced Porter Plant for professional services rendered. The amount invoiced included $13,875 for work on the potential acquisition of CBB including review of the proposed contract, preparation of a detailed email with recommendations related to specific clauses and correspondence with Mr Conheady regarding finance applications to fund the acquisition and provision of support to assist the application.[314] The work invoiced included a meeting on 29 November 2017 with Mr Conheady and Mr Porter[315] to discuss due diligence and various acquisition matters.

205 On the first day of his evidence Mr Mulcahy was adamant that he did not have any conversations at all concerning CBB with Mr Conheady between 29 June and 4 December 2017.[316] When he next gave evidence, following an interval that included a weekend, he said there was a conversation on 30 November 2017 with Mr Conheady in which Mr Conheady said he and Mr Porter would be proceeding with 'the deal'. He made that concession after it was pointed out in cross-examination that in his witness statement he had admitted such a conversation.[317] In cross-examination Mr Mulcahy ultimately accepted that the evidence he had given on the first day on repeated occasions that he had no conversations concerning CBB with Mr Conheady between August and 4 December 2017 was false.[318]

206 At 12.05pm on 30 November 2017, Mr Mulcahy sent an email to Mr Matthews. The email informed Mr Matthews he had just spoken to Mr Conheady; 'He met with Fordhams with Tim Porter yesterday and they are going to proceed with CBB. He is coming in to see me Monday [4 December 2017] to work out how he will hold his shares etc'.[319] No responding email from Mr Matthews is in evidence. That is unsurprising, the two men had offices on the same floor, 20 metres apart, there was no need for Mr Matthews to respond by email.

207 The parties agree that on 4 December 2017 Mr Conheady met with Mr Mulcahy at his office. Mr Conheady said the meeting lasted 30-45 minutes.[320] Mr Mulcahy said it lasted about 5-10 minutes.[321] The evidence about what was discussed is in conflict.

208 The meeting followed a meeting between Mr Conheady and Mr Matthews earlier that afternoon. Mr Matthews had a calendar entry for a meeting regarding Porter Plant.[322] He said after the meeting, he left Mr Conheady in the meeting room. Neither Mr Matthews nor Mr Conheady say that when they met there was any discussion concerning the Business.

209 There was clearly significant integration of the legal practice and the accounting practice. Mr Matthews said that by and large, his legal practice and also the financial planning, loans, finance, marketing and accounting businesses used the common name 'Mulcahy & Co'. He said the name Mulcahy & Co was used in correspondence by the legal practice and also on some invoices, depending on how they were generated.[323] He was cross-examined about the integrated nature of the Mulcahy Group in the context of the events of 4 December 2017. He said he and Mr Mulcahy shared meeting rooms, they shared receptionists and their offices were about 20 metres apart.[324] Asked about the 30 November 2017 email and whether this caused him to put 'Chinese walls' in place. Mr Matthews said there were pre-existing Chinese walls and no additional steps were taken.[325]

210 Mr Matthews was cross-examined about the many investments he had with Mr Mulcahy, including the Western Hotel Unit Trust.[326] While he accepted that Mr Mulcahy was a business partner in Mulcahy Legal, Mr Matthews did not agree that Mr Mulcahy was a 'man of many hats'.[327] He is wrong about that. Mr Mulcahy has an interest in all aspects of the multidisciplinary practice. As the scope of activities undertaken by Mulcahy Group, and also his co-investment in businesses with persons including Mr Matthews, Mr Broadbent and Mr Ford reveals, Mr Mulcahy who is both an accountant and a financial planner does not devote his energies to providing accounting services only.

211 Returning to the meeting on 4 December 2017 with Mr Mulcahy, Mr Conheady said he did not ask Mr Porter to come to the meeting.[328] That was so even though Mr Porter was back in 'the deal'. Mr Conheady said he told Mr Mulcahy that he and Mr Porter had agreed terms, part cash, part vendor finance with Mr Debono and they would be acquiring 80% of the Business.[329] He said he and Mr Mulcahy discussed the proposed CBB acquisition, he sought advice on the investment structure, and the tax implications of a direct investment in the Business. He made a note of the meeting in his workbook.[330]

212 Prior to 4 December 2017, Mr Porter had engaged Fordhams to provide advice relating to the proposed acquisition. I accept that on 4 December 2017, while Mr Porter was 'back in' the proposed acquisition, as was the thrust of Mr Mulcahy's 30 November 2017 email, Mr Conheady wanted to get advice of his own, relating to his own personal position from Mr Mulcahy.

213 Mr Mulcahy said he was late for the meeting on 4 December 2017. He said when he came into the meeting room he added to an existing structure diagram for the proposed purchase of controlling interest in the Business on a whiteboard. He said he and Mr Conheady discussed the tax implications personally for Mr Conheady arising out of Fordhams' proposed ownership structure for CBB. They discussed dividend flows, but that was all, in their 5-10 minute meeting.[331]

214 Mr Mulcahy denied he and Mr Conheady discussed any details of the proposed purchase other than confirming that Fordhams' proposed business structure would not negatively impact on Mr Conheady's tax position.[332]

215 I do not accept the truth of Mr Mulcahy's account of this meeting. I do not accept his evidence that he wrote on the whiteboard a reference to a 20% interest in the business to be held by Mr Conheady's family trust being 20% of 80% to be held altogether by Mr Conheady and Mr Porter.[333] I accept Mr Conheady's evidence that what was discussed at that meeting was 40 units to be held by him, of 80, with the other 40 to be held by Mr Porter's entity and the remaining 20 units to be held by Mr Debono and his brother.[334] The evidence that Mr Mulcahy gave in relation to the whiteboard was completely contradicted by what counsel appearing on behalf of the Mulcahy parties earlier put to Mr Conheady that Mr Mulcahy would say.[335]

216 I accept Mr Conheady's evidence that he told Mr Mulcahy that a deal to purchase 80% on a combination of cash and terms had been reached with Mr Debono. I also accept that during the 4 December 2017 meeting he sought advice directed to protecting his own interests in relation to the structure proposed by Fordhams and that Mr Mulcahy provided such advice.

217 As I have earlier said, I do not accept Mr Mulcahy's evidence that he had no communications in relation to CBB with Mr Conheady, between 29 June 2017 and 30 November and then 4 December 2017.[336] If he had no discussions over that five month period, it must have come as a complete surprise to him when, on 30 November 2017, Mr Conheady told him that he personally would be purchasing an interest in CBB and that he wanted to come in to see him the following Monday to work out how he would hold 'his shares etc'. It was no surprise to Mr Mulcahy that Mr Conheady was intending to purchase an interest in the Business. He had told him that at the Yacht Club on 16 November 2017 and had updated him on 17 November 2017 and again on 30 November 2017.

218 Mr Matthews gave evidence that in early December 2017 Mr Debono told him he would run the Business until next June, run down stock and WIP, and then close the Business. That is how, according to Mr Matthews when questioned by counsel for the Mulcahy parties, the 18 December 2017 Lake View Hotel meeting with Mr Debono came about.[337] That is not the case. The meeting at the Lake View Hotel came about at the initiative of Mr Mulcahy for the purpose of Mr Mulcahy and Mr Matthews seeking to advance their own agenda.

219 On 14 December 2017, Mr Mulcahy sent an email to Mr Matthews listing five topics of mutual interest.[338] The fifth topic read, 'CBB - how to progress to next step (if Porter option is off the table)'. It is obvious from the text of the email this was not the first communication between the two business partners about the CBB opportunity. Mr Mulcahy gave evidence he was aware Mr Debono was very disgruntled with the way negotiations had proceeded. He said he knew that because Mr Matthews had told him.[339]

220 Cross-examined about the 14 December 2017 email, Mr Matthews rejected the proposition that the email referred to the two men progressing the opportunity concerning the Business for themselves. Mr Matthews said the item in the email referred to talking to Mr Debono 'just to talk about the fact that it probably shouldn't close as opposed to anything else'.[340] Mr Matthews said item five in the email did not relate to him.[341] I do not accept his evidence about these matters as truthful.

221 As was clearly the case, and as Mr Matthews agreed, the other four topics listed were matters that related to common business interests shared by he and Mr Mulcahy. The same was the case with the CBB 'opportunity'.[342]

222 Mr Ford gave evidence in his witness statement that 'on about 17 December 2017' he received a call from Mr Broadbent, who told him Mr Debono wanted to sell the Business. He told him there had been two failed attempts at negotiating a sale and that Mr Debono was looking to sell the business quickly. In this call, Mr Broadbent told him he had spoken with Mr Matthews, who was representing CBB. He inquired whether Mr Ford was interested in buying the Business, co-investing with him and potentially with Mr Matthews and Mr Mulcahy.[343] I accept that evidence as an accurate account of what was discussed.

223 Mr Broadbent said that on the day he called Mr Ford to discuss him investing in the Business, he made the call in the presence of Mr Mulcahy and Mr Matthews. He said the call took place when he was in Mr Mulcahy's office.[344] I also accept the truth of that evidence.

224 The sequence, according to Mr Broadbent's witness statement, was that Mr Matthews called him 'in late December 2017' and said that Mr Debono was interested in selling the Business and inquired if Mr Broadbent would be interested in buying it.[345] Mr Broadbent gave evidence in his witness statement that soon after this discussion, he had a 'general chat' with Mr Mulcahy and Mr Matthews about the Business. They agreed 'it was too good to not have a look at to see if we might be interested in going into the deal together'.[346] Cross-examined, Mr Broadbent said the 'chat' to which his witness statement referred is the same chat that took place 'on about 17 December 2017' in the course of which he telephoned Mr Ford.[347]

225 In his oral evidence about his conversation with Mr Ford, Mr Broadbent said that 'they', Mr Matthews and Mr Mulcahy, had met Mr Debono the evening beforehand and the earlier deal had fallen through.[348] It was his evidence that he was 'offered a live opportunity from Mr Matthews' to buy a business.[349] If that evidence is correct as to the sequence of the conversation between Mr Broadbent and Mr Ford, that conversation must have taken place after 18 December 2017, being the date on which Mr Mulcahy, Mr Matthews and Mr Debono met at the Lake View Hotel.

226 In re-examination, Mr Broadbent said he specifically recalled the 17 December 2017 date.[350] He said 'Brad', being a reference to Mr Matthews, rang and said to come up and talk to me and that Mr Mulcahy was also there in the office. Mr Broadbent said it was a 'working day'.[351] 17 December 2017 was a Sunday. However, Mr Broadbent's earlier evidence, like that of Mr Ford, had not been precise about the date. In his witness statement, he referred to a conversation 'in late December'. When cross-examined, he agreed the conversation had taken place 'on or about 17 December'.[352]

227 Whether the discussion between Mr Ford and Mr Broadbent in the presence of Mr Mulcahy and Mr Matthews occurred on 17 December 2017 or some other day around that time, I do not doubt that the conversation occurred before Mr Mulcahy and Mr Matthews met with Mr Debono at the Lake View Hotel on 18 December 2017. No 'deal' had fallen through at that point in time. I reject the evidence of Mr Broadbent that he was told that was the case in this conversation.

228 The conversation took place before the meeting at the Hotel. That was Mr Ford's evidence. He said it occurred on about 17 December 2017. The sequence of events of which Mr Broadbent gave evidence both in his witness statement and in his initial oral evidence, is consistent with a discussion between the four men before the meeting with Mr Debono on 18 December 2017. The substance of the conversation was consistent with the prospect of Mr Ford investing, if the opportunity to purchase was or became available. After the meeting on 18 December 2017, the 'opportunity' was not only known to be available, there was a 'deal'. That appears expressly from the email sent by Mr Mulcahy on 19 December 2017 referred to below.[353] There was no mention during the Broadbent/Ford conversation of an earlier discussion with Mr Debono as might have been expected if that had been the sequence of events.

229 On 18 December 2017 Mr Debono, Mr Matthews and Mr Mulcahy met at the Lake View Hotel. They discussed the sale of the Business.

230 Mr Debono gave evidence in his witness statement about this meeting.[354] However, when cross-examined, he said he could not recall the meeting, he could not remember the occasion and he did not know whether or not they had a drink.[355]

231 Mr Matthews gave evidence in his witness statement that he arranged a social drink with Mr Debono and Mr Mulcahy. He said the meeting went for about an hour. In cross examination he said there was a lot of back and forth discussion between he and Mr Debono about the importance and nature of the Business, and how sad it would be to see it close.[356]

232 In evidence-in-chief Mr Matthews said he remembered the meeting. He said the three men caught up and had a beer. He said prior to the meeting, Mr Debono had told him that he should cease all work in relation to the sale to Mr Porter.[357] In cross examination Mr Matthews rejected the proposition the meeting was arranged with the intention that he and Mr Mulcahy purchase the Business.[358] He said the idea of him participating in a purchase of an interest in CBB was not discussed.[359] I do not accept that evidence as a truthful account of the purpose of the meeting or of what was discussed.[360] The purpose was twofold. The first, to take the 'Porter option' referred to in the 14 December 2017 email 'off the table' so the opportunity became available. The second, to 'progress to the next step', to secure a controlling interest in CBB for Mr Mulcahy, Mr Matthews, Mr Broadbent and Mr Ford.

233 In his witness statement Mr Mulcahy said he and Mr Matthews asked if Mr Debono might be interested in selling the Business to someone else and that Mr Debono said he would be.[361] It was put to Mr Mulcahy there was a discussion about his 'vision' for the Business. He denied there was such a discussion.[362] His denial is inconsistent with the email sent by him the following day to his co-investors. In the email Mr Mulcahy reported Mr Debono was keen to progress discussions and to gain an idea of 'our vision' for the Business into the future.[363]

234 It was put to Mr Mulcahy that during the meeting he told Mr Debono, that he did not have to worry about Mr Porter and Mr Conheady, that they, he and Mr Matthews would step in and take it over. Mr Mulcahy denied this is what happened.[364] I do not accept the truth of his denial. That this is what occurred is consistent with the 14 December 2017 email that preceded the meeting, with the call involving Mr Broadbent and Mr Ford prior to the meeting, and with the 19 December 2017 email that followed it.

235 Mr Matthews said when they met, Mr Debono expressed anger that Mr Porter and Mr Conheady had wasted his time.[365] He said Mr Debono was frustrated by the time it had taken to secure an agreement with Mr Porter and Mr Conheady, and by the changing nature of their proposal to purchase an interest in the Business. Mr Mulcahy said Mr Debono said that the whole sale process was a 'fuck up', which had cost him at least $1m in lost income.[366]

236 It is unsurprising that by 18 December 2017 Mr Debono was frustrated. The negotiations in 2017 followed earlier negotiations, between 2015 and 2017, without success, for the sale of his Business to a Thai company.

237 Mr Matthews said he told Mr Debono it was a great business and asked whether Mr Debono would be interested if Mulcahy & Co could look at their clients buying the Business. He said he told Mr Debono that Mr Broadbent might be interested. He said Mr Debono seemed keen for he and Mr Mulcahy to explore the idea. He said Mr Debono said he did not want a lot of haggling or negotiations.

238 In his witness statement, Mr Matthews said that during the meeting Mr Debono said it was important to him to sell the business to good people.[367] Cross-examined about that statement, Mr Debono said that Mr Porter and Mr Conheady were 'good people'.[368] He said that he never cared who he sold the business to throughout 2017 and 2018[369] and that he was willing to sell to 'good people' in 2017 and 2018, including Mr Porter and Mr Conheady.[370]

239 At 2.46pm on 19 December 2017 Mr Mulcahy emailed the ultimate investors in BFMM, Mr Broadbent, Mr Ford and Mr Matthews. He referred to the meeting with Mr Debono the previous night 'to discuss his business sale/purchase'. The email referred to Mr Debono as being 'keen to progress discussions and gain an idea of our vision for the business into the future'. It proposed a visit to the CBB premises by the four men in the first week of January 2018.

240 It said Mr Debono was interested in selling a 70% share in CBB to them based on a $12m value of the Business, with a proposed July 2018 settlement date and wanted to meet with them. Mr Mulcahy proposed the four men hold 17.5% each of the shares in the Business (for an overall stake of 70%). The email said 'we understand the Business has been independently valued at $21m'.[371]

241 Mr Mulcahy denied the reference to an independent valuation of the Business at $21m was a reference to the Munday Wilkinson valuation. He said it referred to a valuation of the Business at $21m by Jarot Business Valuers.[372] It was his evidence that, 'we had discussions with Mr Jarot', but that Mr Jarot did not give Mulcahy & Co anything in writing.[373] I do not accept his evidence as to the source of the $21m figure as truthful.

242 No email from Jarot Business Valuers was produced. Nor was there any note of any discussion with those valuers produced by Mr Mulcahy or any of the defendants. In re-examination, Mr Mulcahy was referred to a publication by Jarot Business Assessment for April 2016.[374] That publication reported a range of return on business investment by sector. The information included reported returns on investment for manufacturing businesses with a profit of $400,000, $6000,000 or $1,000,000.[375] Those levels of profit are well shy of the $5m profit historically recorded by CBB.

243 Mr Mulcahy said Mr Noether, who worked at Mulcahy & Co, spoke to Mr Jarot. Mr Noether was not called to give evidence. Even if as a result of such a conversation, a multiple came to be adopted by Mulcahy & Co when it prepared a draft valuation of CBB, and the evidence in an admissible form did not go that far, that process could not account for the description by Mr Mulcahy of the Business having been 'independently valued'.

244 The work done to value the Business prepared by Mr Mulcahy in conjunction with Mr Noether and reported on in the Profile was not 'independent'. Various drafts of that document were attached to emails passing between Mr Mulcahy and Mr Noether in October 2016 before the Profile was finalised.[376] The Profile, when completed, attributed an approximate value of $14m to CBB (plus stock and WIP), not $21m.[377]

245 If, when sending the email, Mr Mulcahy intended to refer to a valuation carried out by his firm, he would have said so. He would not have referred to his 'understanding' that the business had been valued 'independently'. The plaintiffs contended the reference to $21m could only have come from Mr Mulcahy being informed by Mr Conheady about the Munday Wilkinson valuation disclosed in confidence to him at the Yacht Club on 16 November 2017.[378] I agree.

246 Mr Matthews was cross examined about the 19 December 2017 email. I do not accept his evidence when he denied the reference in the email to 'progress' discussions was anything other than a reference to progressing discussions that had taken place the previous day at the Hotel with a view to the four men buying a controlling interest in the Business.[379] Mr Matthews gave evidence he was unaware of any independent valuation of the Business at $21m to which the email referred.[380] I do not accept the truth of that evidence. It is not credible that he and Mr Mulcahy would not have discussed the source of the $21m figure. I do not accept as truthful his evidence that the $21m was not specifically relevant to him,[381] when compared to the $12m value Mr Debono had put on the Business. That evidence defies the commercial reality of the opportunity to purchase a business for $12m which was known to have been independently valued at $21m.

247 Mr Broadbent was asked about the reference in the email to a valuation of the Business at $21m.[382] He said it was important to him to conclude his own valuation. He said he placed 'zero' weight on an independent valuation.[383] He gave evidence that he had no respect for independent valuations and said that he 'did my own analysis'.[384]

248 While that was his evidence, Mr Broadbent produced no evidence of any valuation or analysis.[385] His discovery did not include emails referring to the results of any analysis or valuation of the Business by him. I do not accept the truth of his evidence that he carried out his own valuation. I accept that if he was buying a grain business, an industry with which he is intimately familiar, he would conduct his own analysis.[386] However, this was not a grain business. I accept his evidence that he relied on 'Brad, Rohan and Jamie', being a reference to Mr Matthews, Mr Ford and Mr Mulcahy.[387] When it was put to him that if the Business was truly valued at $21m and was for sale at $12m, it would be a very good deal, Mr Broadbent's responses were less than convincing.[388]

249 Mr Ford said the first communication he had from Mr Mulcahy in relation to investing in the Business was the email of 19 December 2017.[389] Cross-examined about the reference in that email to a $21m valuation, Mr Ford said he did not ask who prepared that valuation, and nor did he ask to see it.[390] He said he did not put much 'kudos' on an independent valuation.[391] He said that in his line of business, asset finance, it was 'pretty rare' to require a valuation.[392]

250 Whether he placed much 'kudos' on the valuation or not, Mr Ford agreed that based on a valuation at $21m, it looked like a 'great deal', one 'worth pursuing', and one that would 'pique' his interest. After he received the email, he considered it an opportunity worth looking into.[393]

251 On 20 December 2017, Mr Conheady informed Mr Mulcahy that he had organised a line of credit to fund any adjustments at settlement of the acquisition. As requested Mr Mulcahy sent a letter to the ANZ on Mr Conheady's behalf later that day confirming the purpose of the line of credit was for 'business reasons'. The letter stated that Mulcahy Accounting 'act as accountants for Mr Conheady and his wife'.[394] Mr Mulcahy did not inform Mr Conheady before he sent the letter that he and others had been moving to secure a controlling interest in CBB for themselves.

252 On 21 December 2017 Mr Conheady called Mr Debono and told him it was unlikely he and Mr Porter would obtain finance by the January settlement date and that while the indications from Westpac were positive, the process was taking time. Mr Debono agreed in cross-examination that there was such a discussion.[395] Mr Conheady said he and Mr Debono spoke about an alternative settlement date, potentially around Easter 2018. Mr Debono said he did not recall any discussion about alternative settlement dates.[396] Mr Debono agreed that as at 21 December 2017, the proposed deal with Mr Porter and Mr Conheady was 'still alive'.[397]

253 When cross-examined, Mr Debono agreed that on 21 December 2017 he would have sold to the plaintiffs.[398] He agreed that if they had come up with the money in late December 2017 into 2018, he would 'definitely' have sold to Mr Porter and Mr Conheady.[399]

254 Mr Debono's evidence was that he and Mr Porter had never had a bad word for each other. It was obvious from his evidence and demeanour when he was questioned about his relationship with Mr Porter with whom he had had a 'few beers' on more than one occasion, that the two men always got on well. They enjoyed a close business relationship, with Mr Porter's business being a significant customer of Mr Debono's Business.[400]

255 However, on 25 January 2018, Mr Debono received a formal offer in writing from Mr Mulcahy and the syndicate he had put together to purchase a 70% interest in the Business, for cash.[401]

256 In his witness statement, Mr Matthews said that on 4 January 2018, together with Mr Broadbent, Mr Ford and Mr Mulcahy, he visited the CBB factory in North Sunshine and Mr Debono showed them around. The visit lasted many hours. He said during the visit Mr Debono informed him that as Porter Plant had failed to come up with the money when a deal had been agreed, he would no longer deal with Mr Porter or Mr Conheady. Further, that Mr Debono was 'happy to string them along' if they were to come back and again express interest in acquiring.[402]

257 By 4 January 2018, the 'deal' for Mr Mulcahy and his consortium to purchase a controlling interest in the Business had been done. It was done on 18 December 2017 as reported in the 19 December 2017 email. When that email proposed a site visit early in the new year, it ended 'after we meet at site we can start getting some of these thoughts together and how we proceed (contracts, deposits etc)'.[403]

258 Between 8 to 18 January 2018, Messrs Broadbent, Ford, Mulcahy and Matthews shared information among themselves regarding the Business. That information included information memoranda concerning the Business and comparable businesses, as well as financial records of the company.[404]

259 I accept Mr Broadbent's evidence that his role in the due diligence process was to look at the factory, the stock and the WIP,[405] but that he left the 'nitty gritty' and looking through the accounts to Mr Mulcahy.[406] His role was practical analysis of items such as supply arrangements.[407] I accept his evidence that he authorised Mr Mulcahy to speak to Mr Debono on his behalf,[408] and that as part of the information he received on 15 January 2018, he was provided with financial modelling of the acquisition by Mr Mulcahy.[409]

260 On 16 January 2018 Mr Matthews sent an email to Mr Ford in which he referred to WIP and payment for stock within 12 months as a sticking point in the negotiations.[410] In cross-examination Mr Matthews ultimately agreed he knew that to be so because he acted as solicitor for Mr Debono.[411] As at 16 January 2018, he had not advised Mr Debono that CBB should obtain legal advice independent of Mulcahy Legal.

261 Mr Ford said Mr Mulcahy prepared the forecasts in support of the finance application to fund the purchase.[412] He said he was not aware of the results of inquiries made of Mr Debono.[413] He said he was not aware that Mr Porter and Mr Conheady wanted to proceed to purchase the Business.[414] He said Mr Mulcahy had authority to act on his behalf.[415]

262 On 24 January 2018 Mr Mulcahy sent Mr Matthews a draft offer to purchase 70% of CBB for his review.[416] He suggested a phone conference with Mr Broadbent and Mr Ford to discuss the draft offer. The following day Mr Mulcahy circulated a final version of the proposal to be sent to Mr Debono to Messrs Broadbent, Ford and Matthews.[417]

Formal offer to purchase the Business: 25 January 2018

263 After obtaining agreement from Mr Matthews, Mr Broadbent and Mr Ford to the proposal, on 25 January 2018, Mr Mulcahy sent the signed formal offer to purchase 70% of the shares in CBB to Mr Debono.[418] The offer was on Mulcahy & Co letterhead.[419] It was sent by Mr Mulcahy, who Mr Matthews, Mr Broadbent and Mr Ford all agreed was authorised to send it.[420]

264 The offer followed a series of communications between the four men between 15 January 2018 and 25 January 2018.[421] Later on 25 January 2018 Mr Mulcahy emailed Mr Broadbent, Mr Ford and Mr Matthews confirming that he had spoken to Mr Debono, who was happy with the proposal.[422]

265 Initially, Mr Mulcahy said he was not sure whether it was he or Mr Matthews who drafted the offer.[423] However, it is clear from Mr Mulcahy's 24 January 2018 email that he 'drafted this up today'.[424] I do not accept Mr Mulcahy's evidence that he did not have a copy of the earlier Porter offers as truthful evidence.[425] The January 2018 offer and the earlier Porter offers are remarkably similar. I do not accept that similarity is coincidental. The structure and content of the 25 January 2018 offer is so similar that it was clearly modelled on one of the earlier Porter offers.[426]

266 On 30 January 2018, Mr Mulcahy, Mr Matthews, Mr Broadbent and Mr Ford met at the offices of Mulcahy & Co to discuss and finalise the terms of the acquisition.[427] Mr Broadbent suggested they each own a one-sixth share of the issued shares so that the shareholding would be equal.[428] Mr Ford approached the NAB on 31 January 2018 with a view to securing finance for the purchase.[429] The information provided to the NAB was prepared by him.[430]

267 On the same day Mr Mulcahy and Mr Conheady met at Mr Mulcahy's office. Mr Conheady said the purpose of the meeting was to further discuss advice given by Mr Mulcahy on 4 December 2017 in relation to the proposed acquisition.[431] Mr Mulcahy said the purpose of the meeting was for Mr Conheady to provide his 2017 compliance documents so that Mr Mulcahy could prepare his tax returns.[432] Mr Conheady denied that to be so.[433]

268 I do not accept the purpose of the meeting was as described by Mr Mulcahy. I accept Mr Conheady's account both of the purpose of the meeting and of what was discussed. It was not usual for Mr Conheady to attend Mr Mulcahy's business premises in order to discuss his tax affairs. There was nothing that would have caused a change to that practice in January 2018.[434]

269 Leaving the purpose of the meeting to one side, there is no dispute that when Mr Mulcahy met with Mr Conheady on 30 January 2018, he did not tell Mr Conheady that on 18 December 2017 he had met with Mr Debono and in the course of that meeting procured the opportunity to purchase the Business for himself. He did not disclose that only five days earlier he had made a formal written offer to Mr Debono to purchase a 70% interest in the Business and that on that same day he either had or was to meet with his co-investors to discuss and finalise the terms of the acquisition.[435]

270 On 31 January 2018 Fordhams invoiced Porter Plant for work that included a review of the proposed share sale agreement and establishment of a corporate structure to acquire the Business. Cross-examined about when those companies were incorporated, Mr Conheady was uncertain.[436] The December 2017 invoice included the incorporation of the two companies.[437]

271 On 8 February 2018 Mr Porter and Mr Conheady received a formal proposal from Westpac to fund the acquisition.[438] On 9 February 2018 Mr Conheady emailed Mr Debono informing him that finance was expected to be in place, that he was expecting a final term sheet from Westpac early the following week, and was hoping to come and see Mr Debono. Mr Debono responded by saying he would be available for a meeting. He forwarded the email from Mr Conheady to Mr Mulcahy a few minutes after it was received, with the covering comment, 'what a joke'.[439] Shortly after receiving the email, Mr Mulcahy forwarded it to Mr Matthews.[440]

272 When cross-examined, Mr Mulcahy said that he 'did feel awkward' when he received that email from Mr Debono on 9 February 2018.[441] He accepted that he felt 'awkward' because it put him in a position of conflict based on what Mr Debono had said. However, he was already in a position of conflict. He had not told Mr Conheady what he, Mr Matthews, Mr Ford and Mr Broadbent were doing; secretly negotiating to buy the Business and cutting out Mr Conheady, who thought the purchase by he and Mr Porter was going ahead.[442] Mr Mulcahy said he did not disclose those matters to Mr Conheady because Mr Debono asked him not to tell him and because Mr Debono would not sell to Mr Conheady and Mr Porter.[443] Mr Mulcahy disagreed that he did not tell Mr Porter and Mr Conheady that he was now a purchaser of the Business because, had he done so, it would have disclosed to them his betrayal of their interest.[444] I do not accept as truthful his evidence about why he did not disclose that he and his co-investors had procured the opportunity to acquire a controlling interest in the Business for themselves. He did not tell Mr Conheady because he wanted to secure the Business for himself and not put securing that objective at risk as would have been the case if he had disclosed the truth to Mr Conheady.

273 On 19 February 2018, ignorant of what was occurring in parallel, Mr Porter signed the funding proposal from Westpac.[445] On the same day, Mr Matthews emailed Mr Debono a draft share sale agreement for the purchase with BFMM shown as the intended vehicle for the purchase.[446]

274 On 28 February 2018 Mr Conheady updated Mr Debono as to finance.[447]

275 On 28 February 2018, at a meeting at CBB's premises, Mr Debono told Mr Conheady and Mr Porter that 'he may withdraw the business from the market' and would let them know in relation to the proposed sale with a July settlement date on the following Tuesday.[448] Mr Porter gave evidence he did not believe Mr Debono was telling the truth, his mannerisms suggested that he was nervous and was not being 'upfront'.[449] In his witness statement, Mr Debono said that he did not recall this meeting.[450] Cross-examined Mr Debono said he could not recall making a statement about possibly withdrawing the Business from the market, but accepted that if it had been said, it would have been untrue. [451]

276 Mr Debono did not agree that a deferral of settlement until after 1 July 2018 was discussed between Mr Conheady, Mr Porter and he on 28 February 2018.[452] He is wrong about that. That it was discussed is consistent with the 2 March 2018 email sent by Mr Conheady to Mr Debono.

277 I accept Mr Porter and Mr Conheady's evidence that when they met on 28 February 2018 Mr Debono told him that he may withdraw the business from the market. Mr Debono had no intention of doing.

278 On 2 March 2018, Mr Conheady informed Mr Debono by email he and Mr Porter were still interested in purchasing CBB.[453] He advised finance was in place so there was no longer any finance condition. He proposed settlement in the new financial year, around 1 July 2018, and raised the prospect of splitting the settlement over the two financial years.[454] Mr Debono gave evidence that timing was not an issue for him because his shareholding in CBB predated the introduction of Capital Gains Tax in 1985, but that his brother had to pay capital gains tax.[455] I accept the evidence of the plaintiffs that the proposal to split the settlement came from the discussion that took place on 28 February 2018.

279 Mr Conheady gave evidence that Mr Debono told him on 6 March 2018 he was withdrawing the Business from the market.[456] Cross-examined, Mr Debono said that he 'could have' told Mr Conheady that he had appointed a financial controller. He accepted that if he did so, that statement would not be true.[457] He accepted that he 'probably' did tell him Mr Conheady he had withdrawn the business from the market. Pressed in cross-examination, he accepted that he lied about withdrawing the business from the market. He accepted it was a serious thing to lie to Mr Porter, who was both a longstanding friend and a business colleague who had put millions of dollars through the Business.[458]

280 On 14 March 2018 Mr Matthews sent Mr Debono a revised final version of the share sale agreement and shareholders' agreement.[459] On 20 March 2018 Mr Matthews sent financial forecasts and an application for finance to the NAB.[460]

281 On 23 March 2018 Mr Matthews decided it was 'no longer appropriate' that he should act for Mr Debono as vendor of the Business.[461] He informed his co-investors by email that Mr Debono had now seen an independent solicitor.[462]

282 Cross-examined about his 23 March 2018 email, Mr Matthews said he was the solicitor for CBB, but did not believe he was acting for the vendor in January or February of 2018 because there was nothing to do.[463] If that was correct, there was no need to say as set out in his witness statement that as at 23 March 2018 to act was 'no longer' appropriate. Mr Matthews had a conflict from at least 14 December 2017. From that point he was acting to advance his interests and those of Mr Mulcahy in circumstances where Mr Porter, his client, had interests in conflict with his own, as did Mr Debono, for whom he was acting on the sale to Mr Porter and Mr Conheady.

283 On 27 March 2018 Mr Matthews arranged the incorporation of BFMM.[464]

284 On 9 April 2018, Mr Matthews paid the deposit of $400,000 on behalf of BFMM for purchase of shares in CBB.[465] At no time before doing so did Mr Matthews or Mr Mulcahy inform the plaintiffs that they were personally pursuing the opportunity to acquire a controlling interest in the Business.[466]

285 On 30 April 2018 Mr Conheady, Mr Mulcahy and Mr Matthews met for lunch to discuss a new project. Mr Conheady said that in the course of the lunch he asked Mr Mulcahy and Mr Matthews if there was any update on CBB and that Mr Mulcahy said there was 'no news'.[467] Mr Matthews denied this in his witness statement and said there was no discussion of CBB at the lunch.[468] I do not accept that evidence as truthful evidence.

286 On 2 July 2018 the Share Sale Agreement dated 30 June 2018 between BFMM and the vendors was signed, taking effect from 1 July 2018.[469] A short time later, the balance of the purchase price, $7,600,000, was transferred into the nominated bank accounts of the vendors.[470]

287 On 8 November 2018 Mr Debono informed Mr Conheady that CBB had been sold to Mr Broadbent's group and that Mr Mulcahy and Mr Matthews were on the board of the company.[471]

288 I found the evidence of Mr Conheady the key witness for the plaintiffs, to be credible. For the reasons earlier discussed I accept his account of the key contested conversations and meetings on 29 June 2017, 2 November 2017, at the Yacht Club on 16 November 2017 and at the office of Mulcahy & Co on 4 December 2017. His evidence was largely based around contemporaneous entries in his workbook.

289 I accept that he specifically recalls the conversation on 29 June 2017. The fact his earlier witness statement attributed a July 2017 date to the conversation now agreed to have taken place on 29 June 2017, a date he arrived at by process of estimation, did not impact adversely on the credibility of his account of the contents of the conversation. I accept the truth of his evidence about what was said, including that Mr Mulcahy advised him about a share sale and the warranties that he should seek on behalf Mr Porter during that conversation. Mr Conheady had considerable experience in business accounting but not experience in front end business acquisition so as to know for himself what warranties to seek.

290 When giving evidence of conversations with Mr Mulcahy and others, Mr Conheady did not overstate or exaggerate so as to seek to prove his case. As an example, when giving evidence about the contested conversations between August and November 2017, Mr Conheady described those conversations as 'updates'. It was put to him that he had embellished his evidence.[472] I do not agree with that criticism.

291 Mr Conheady made appropriate concessions. He agreed that each engagement by the Porter Group of Mulcahy & Co such as the engagement concerning the ASX listing was very specific.[473] He accepted in cross-examination that he was familiar with the idea of a retainer, the scope of a retainer and was aware of the importance of getting the scope of the retainer 'right'.[474] He readily accepted, as was the case, that at no time did the Mulcahy parties invoice him or Porter Group for advice in relation to the acquisition of CBB.[475] While he was cross-examined about asserted inconsistencies, I do not attach significance to such asserted inconsistencies. When cross-examined about these matters I found his answers to be truthful.

292 Where Mr Conheady's evidence conflicts with that of other witnesses including Mr Mulcahy and Mr Debono, unless otherwise stated, his evidence is to be preferred.

293 I found Mr Porter to be a truthful witness whose evidence could be relied on. He was measured in his responses. On the critical question of who was there for lunch at the Yacht Club on 16 November 2017, I accept his evidence. I accept his evidence that if he had wished to fund the purchase of a controlling interest in the Business in early November 2017, he would not have had difficulty in doing so. I accept that he could have refinanced unencumbered equipment of which there was a substantial amount in the Porter Group fleet.[476] It was following discussions with his wife on the weekend before 15 November 2017 that he decided not to go ahead,[477] a decision taken because of his preference for funding using 100% borrowed funds, not a decision taken because of an inability to fund.

294 Mr Porter was forthright in his answers when cross-examined, including as to the involvement of Fordhams[478] and about the role of Mulcahy & Co. He did not recall Mr Conheady saying he wanted to get advice from or to retain Mulcahy & Co in relation to the acquisition.[479] Mr Porter made appropriate concessions. As an example, he agreed there was no general retainer by he or by Porter Group of Mulcahy & Co and that they were retained for specific tasks only.[480]

295 Mr Porter was cross-examined about the 15 January 2019 letter of demand directed to the Mulcahy parties and to Mr Matthews that was sent before the proceeding was issued.[481] He accepted that if he had retained Mulcahy & Co to advise him in 2017 that such a retainer would have been referred to in the letter.[482] When questioned about the conversation with Mr Debono after 15 November 2017, he responded by saying that he could not recall that telephone call.[483] I accept the truth of that evidence. I also accept as truthful his evidence that Mr Debono never asked him about payment of the deposit.[484]

296 I did not find Mr Mulcahy to be an impressive witness. As to a number of matters, his evidence was not truthful. I formed the impression that Mr Mulcahy had reconstructed events of the past based upon emails and documents in a manner he thought would suit his case rather than giving evidence based on his best recollection of what occurred.[485]

297 Mr Mulcahy was wrong about who was in attendance at the Yacht Club lunch on 16 November 2017. His evidence about the lunch was false; either deliberately false, or based on a reconstructed memory that he thought suited his case. He was wrong about other disputed matters such as the percentage unit holding depicted in the structure diagram on the whiteboard when he met with Mr Conheady on 4 December 2017.[486]

298 Mr Mulcahy sought to play down his own and his firm's involvement in dealings with Mr Conheady, seemingly conscious of the need to do so in order to seek to defeat the plaintiffs' claims. Such concessions as were made were limited, although of importance. He did agree that he assumed Mr Conheady trusted him as his accountant to tell him everything relevant to his financial affairs. Although he accepted that Mr Conheady placed trust in him, he repeatedly sought to emphasise the limited nature and scope of the work he said he had previously done and at that time was performing for Mr Conheady. He referred to having done Mr Conheady's tax returns and BAS statements 'predominantly'.[487] He nevertheless accepted in cross-examination that he was familiar with Mr Conheady's appetite for risk and with Porter Plant's appetite for risk.[488] He agreed that he had come to have knowledge of Porter Group, more than what could be gleaned from reading the profit and loss and balance sheet for the group.

299 Mr Mulcahy did not display a convincing grasp of the Code that bound his behaviour as an accountant or of concepts of conflict of interest.[489] As an accountant and a shareholder in a legal and multidisciplinary practice, the identification of conflicts of interest and the need to put in place and to maintain suitable information barriers are important. Mr Mulcahy either did not understand the importance of avoiding conflict of interest and acting in accordance with the Code, or deliberately chose to ignore those obligations. The email sent by him to Mr Matthews on 14 December 2017 comes to mind. He gave evidence that he considered the 'opportunity' was that of the plaintiffs up until 2 January 2018.[490] Even if that evidence was accepted as truthful, he and Mr Matthews actively pursued the 'opportunity' for themselves prior to that date. When cross-examined about whether it was permissible for him to purchase the Business because of a conflict of interest, his responses were unsatisfactory.[491]

300 I accept as truthful Mr Mulcahy's evidence that he 'felt awkward' in early 2018 when he did not tell Mr Conheady or Mr Porter that he and others involved in BFMM were going to purchase a controlling interest in the Business. However, I do not accept as truthful his explanation about why he felt 'awkward'.[492] Although he felt 'awkward', he did nothing appropriate to deal with that awkwardness. He continued to act favouring his personal interests over those of Mr Conheady. The undisclosed conflict of interest was present from at least 20 December 2017 when he sent the letter at Mr Conheady's request to the ANZ having met two days earlier with Mr Debono and having emailed those who became the owners of BFMM the previous day about how they might proceed to purchase a controlling interest in the Business.

301 Mr Matthews demonstrated a better understanding of conflicts of interest but nonetheless failed to act appropriately in the face of conflict. On 20 June 2017 he wrote to Mr Conheady and informed him about a potential conflict with Porter Group.[493] However, when the 'opportunity' to personally acquire an interest in the Business was raised with him by Mr Mulcahy on 14 December 2017, he put conflict considerations to one side and joined with Mr Mulcahy in the pursuit of the opportunity.

302 Mr Matthews' evidence concerning the email of 14 December 2017 was not truthful. As the email reveals, only ten days after, to Mr Matthews' knowledge Mr Mulcahy had met with Mr Conheady to discuss how he and Mr Porter were going to proceed with their acquisition of the Business, Mr Matthews and Mr Mulcahy were communicating about how they might proceed to do so for themselves.

303 Mr Matthews knew the Mulcahy parties acted for Mr Conheady and were providing him with advice about the structure of his investment in the Business with Mr Porter. Before meeting with his client, Mr Debono, on 18 December 2017, Mr Matthews and Mr Mulcahy were present for a discussion with Mr Broadbent during which he called Mr Ford and discussed the four men joining together and buying a controlling interest in the Business. If there were 'Chinese walls' in place in the multi-disciplinary practice before that meeting and call, when that call took place, any such walls disappeared. Mr Matthews' evidence concerning the 18 December 2017 meeting was not truthful. It was not just a 'social drink', it was a positive step taken by he and Mr Mulcahy so that they, Mr Broadbent and Mr Ford could cut out the plaintiffs as purchasers and secure a controlling interest for themselves.

304 Mr Debono did not have a good recollection of the detail of his dealings with any of the parties. He was mistaken in his recollection of critical aspects of the 2 November 2017 meeting at the Lake View Hotel and also, as his evidence concerning this meeting demonstrated, more broadly concerning the sequence of events. There were gaps in his recollection. When cross-examined, he generally gave honest answers, including accepting when it was put to him, that on 6 March 2018 he had lied.

305 Mr Broadbent was not a satisfactory witness. At times he was argumentative and defensive when responding in cross examination. He appeared reluctant to do his best to speak from his memory, resorting instead to what was in his witness statement. At one point he responded to the cross examiner; 'I don't know where you're going with that. So I'm probably just going to stick to my statement, thanks'.[494] On another occasion he said he could not recollect an email, despite stating in his witness statement that he had received, and relied upon that email.[495]

306 Mr Broadbent's role and involvement in critical events and conversations was limited. The key conversation in which he was involved was when he telephoned Mr Ford in the presence of Mr Mulcahy and Mr Matthews. I accept as accurate his account of what he discussed with Mr Ford.[496] As earlier noted, he gave conflicting evidence about the date of that conversation. At one point in his evidence he was adamant the conversation occurred on 17 December 2017; later; that it occurred after the meeting with Mr Debono.[497] The two answers cannot be reconciled. I have found the conversation took place before the 18 December 2017 meeting at the Lake View Hotel.

307 Mr Ford was not a witness whose evidence involved contentious conversations. The exception was as to the date of his initial conversation with Mr Broadbent. I accept his evidence as to the approximate date of that conversation. I found him to be an honest witness who was responsive in his answers in cross-examination.

308 The first question is whether the plaintiffs or either of them retained the Mulcahy parties to provide accounting, taxation and financial advice in relation to that person's proposed acquisition of the Business? If so, was it a term of the retainer that the Mulcahy parties would give such advice 'as requested from time to time'.

309 Because three separate and distinct retainers are alleged, the existence of each must be separately considered. If either or both the Porter Retainer and the Conheady Retainer is proved, were those retainers, or either of them, novated?

310 Each retainer is alleged to be both oral and to be implied. In closing submissions, the plaintiffs submitted that a professional engagement may be express or implied or inferred from the conduct of the parties.[498] In support of the existence of the retainers alleged, they relied, amongst other matters,[499] on:

(a) the existence of a well-established accountant-client relationship between Plaintiffs and Mr Mulcahy;

(b) the fact they specifically sought - and received - confirmation that Mr Mulcahy was not acting for the vendor and could act for them in relation to the proposed acquisition. Mr Matthews (properly) recognised the potential for a conflict of interest to arise as the Plaintiffs were clients of the Mulcahy group;

(c) the fact they sought and received advice from Mr Mulcahy in relation to numerous complex matters about the proposed acquisition. Mr Mulcahy did more than merely introduce them to the transaction. He acted in an advisory capacity including advising in relation to:

(i) the merits of purchasing shares in the Business rather than its assets;

(ii) the structure of the proposed acquisition;

(iii) the taxation consequences for Mr Conheady;

(iv) the warranties to be included in any share sale agreement;

(v) views about the value of CBB and whether to proceed with the proposed acquisition;

(d) the letter sent by Mulcahy & Co to ANZ on 20 December 2017 confirming the overdraft application to fund the proposed acquisition was for business purposes;

(e) the conduct of the Plaintiffs in confiding commercially sensitive information about the proposed acquisition to Mr Mulcahy including concerning the independent valuation by Munday Wilkinson valuing the Business at $21m and ways of increasing CBB's value;

(f) the number of attendances by Mr Mulcahy in relation to the proposed acquisition including meetings at the offices of Mulcahy & Co; and

(g) the detail of the advice requested and received by Mr Conheady from Mr Mulcahy, some of which is recorded in contemporaneous notes in Mr Conheady's workbook. For example, the meeting at Mulcahy & Co on 4 December 2017 using the white board for detailed discussion being a meeting that continued for 30-45 minutes.[500]

311 While in the broad, to the extent consistent with factual findings those matters support the plaintiffs' case for the existence of a retainer, each retainer plea and the evidence relating to that plea requires separate consideration. Some matters relied on by the plaintiffs are relevant to the existence or otherwise of the Porter Retainer, others are irrelevant to the existence of that alleged retainer but are relevant to the alleged existence of the Conheady Retainer and the Joint Retainer.

312 In the absence of an engagement letter, a professional engagement may be express or implied, or inferred from the conduct of the parties.[501] In Beach Petroleum NL v Kennedy, the New South Wales Court of Appeal said:

"Retainer" is a word used to describe a contract between the solicitor and the client for the provision of legal services by the solicitor for a fee and must be proved like any other contract. Like any other contract a retainer may be implied from conduct. ... If such a contract is proved it must then be examined to determine what legal services the solicitor agreed to provide.[502]

313 Those observations made in relation to the provision of legal services have equal application to the existence or otherwise of a retainer of an accounting firm to provide accounting, taxation and financial advice in the absence of a written agreement for the provision of such services.

39 The distinction between an express contract and an implied contract is obscure. Whether a contract exists between particular parties is a matter to be inferred from an objective assessment of the circumstances, including the communications between the parties. A promise may be stated expressly or may be inferred from conduct; the same may apply to an acceptance of an offer. Whilst terms may be implied which are not expressly or inferentially agreed upon, it makes little sense to say that a contract is "implied". It is sufficient to ask whether the existence of a contract has been established on the evidence...

40 The question whether a contract of retainer existed between the respondent and the solicitors, and the terms of any such retainer, needs to be addressed at particular points in time. Further, it is useful to consider the evidence without reference to particular consequences, or at least bearing in mind that there may be other consequences than those which arise in the proceedings. One consequence of direct relevance will be that the solicitors undertook to assist and advise the respondent, but another may be that the respondent was obliged to pay for those services. One way of testing the respondent's claim that he had entered into a retainer with the solicitors would be to ask whether he should reasonably be seen to have accepted an obligation to pay their fees. [503]

315 The need to assess the existence of the retainer at particular points in time to which his Honour referred resonates in this case where each of the implied retainers alleged are said to arise at separate points in time. Specific conversations are said to mark the point at which each retainer commenced. In the case of the Porter Retainer, a conversation on 29 June 2017, in the case of the Conheady Retainer, a conversation on 16 November 2017 and in the case of the Joint Retainer, a conversation on 4 December 2017. In this case, there was both no engagement letter and no invoice for the performance of work the subject of the retainers alleged, a matter that, as Basten JA said, requires consideration of whether the plaintiffs should reasonably be seen as having accepted an obligation to pay for the services alleged.

316 The requirement for clarity and for all of the essential elements of the contract to be positively proved where the contract relied on is to be implied was emphasised by Tate JA in Apple and Pear Australia Ltd v Pink Lady America LLC:

It is open to a court to infer the existence of a contract - or in this instance, a variation to a contract - from the parties' conduct on the basis of the objectively ascertained manifestation of mutual assent. But, as has been observed, such cases are rare and it will only be 'in a very clear case that a promise will be implied from facts which do not involve written or oral communication from which a promise appears.' Although, as noted above, McHugh J's observed in ICS that in the 'unrefined' commercial context the benchmarks of the classical theory of offer, acceptance, consideration and intention to create legal relations may not readily apply, and instead courts may infer a contract from conduct, he still insisted that it is necessary to draw from those circumstances 'a tacit understanding or agreement' and that the parties' conduct 'must be capable of proving all the essential elements of an express contract'. Moreover, it is 'not enough that the conduct is consistent with what are alleged to be the terms of a binding agreement. The evidence must positively indicate that both parties considered themselves bound by that agreement.' There was here no dealing identified by PLA which could properly form the basis of an agreed variation. [504]

317 In order to establish an implied retainer for professional services, the acts and conduct of the parties must show the relevant relationship has in fact been established between them.[505] Whether or not the contracts of retainer alleged, or any of them, are proved depends upon an analysis of the critical conversations relied on in the context of the dealings both before and after[506] those conversations.

318 In Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd, Allsop J discussed how the question of the existence of an implied contract alleged might be approached:

.... even in the absence of clear offer and acceptance, and even without being able (as one can here) to identify precisely when a contract arose, if it can be stated with confidence that by a certain point the parties mutually assented to a sufficiently clear regime which must, in the circumstances, have been intended to be binding, the court will recognise the existence of a contract. Sometimes this is said to be a process of inference or implication. For my part, I would see it as the inferring of a real intention expressed through, or to be found in, a body of conduct, including, sometimes, communications, even if it be the case that the parties did not consciously advert to, or discuss, some aspect of the relationship and say: "and we hereby agree to be bound" in this or that respect. The essential question in such cases is whether the parties' conduct, including what was said and not said and including the evident commercial aims and expectations of the parties, reveals an understanding or agreement or, as sometimes expressed, a manifestation of mutual assent, which bespeaks an intention to be legally bound to the essential elements of a contract...[507]

319 The defendants submitted it will only be in a very clear case that a contract will be implied and that such cases are rare.[508] They relied on a statement to that effect from Finkelstein J in Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd,[509] quoted with approval by Tate JA in Apple and Pear.[510]

320 In Branir,[511] Allsop J referred to earlier observations by Tadgell J in Toyota Motor Corporation Australia Ltd v Ken Morgan where his Honour referred to the possibility of contracts lacking manifested offer and acceptance, as 'rare',[512] commenting that 'the use of such language of prediction of frequency tends to create an unwarranted presumptive barrier to the application of the approach referred to above'.[513] I agree with the observations of Allsop J. The task is to determine the existence or otherwise of the implied contract alleged.[514] Whether such contracts are rare is beside the point.

321 While the existence or otherwise of the implied contract must be determined objectively, that does not mean what the parties themselves said and did is irrelevant. In Branir, Allsop J discussed the role of such evidence in the context of a challenge to the use of subjective evidence by the trial judge:

These are not impermissible uses of subjective intention or irrelevant matters. All these people participated in a negotiation. These statements are evidence which could assist an inference to be drawn about what happened in that negotiation. In assessing whether consensus existed, and, if it did, whether it was intended to be binding and, if so, at what point, the primary judge needed to understand what was said, how it was said and in what human context it was said. Necessarily a judge is left with the evidence of witnesses about these matters. The contemporaneous views of people as to what happened can assist in understanding what objectively is likely to have previously occurred. In a case of agreement by word and conduct, how things were said, the human and business context in which they were said and the assessment of the nature and quality of the human communication is central to a judgment about consensus and intention to contract. The objective theory of contract does not mean that one only looks at the transcript to see what was said. One looks to witnesses and any other evidence to assist in understanding how it was said, with what manifest intention and in what context. For such a task the expressions of view of the participants are evidentiary matters which can be taken into account in assessing what in fact happened and thus in assessing that ultimately objective question. That, it seems to me, is exactly what his Honour did. I see no error.[515]

322 As the contract claims include allegations that earlier retainers were novated, it is important to identify the principles applicable to novation. Those principles are helpfully summarised by the learned authors of Carter on Contract.[516] They include that the parties to a contract may by novation agree to substitute one contract (or a contracting party) for another.[517] The effect of a novation is to substitute one person for another in respect of the burden of the prior contract under a new contract.[518] Novation may be express or implied.[519] Whether there is a novation depends on the intention of the parties.[520] As Sheller, Stein and Giles JJA said in Fightvision Pty Ltd v Onisforou:

In Upper Hunter County District Council v Australian Chilling and Freezing Co Pty Ltd [1968] HCA 8; (1969) 118 CLR 429 at 437 Barwick CJ said that in searching for the contractual intention, "no narrow or pedantic approach is warranted, particularly in the case of commercial arrangements". This equally applies, in our view, when searching for an intention that there be a novation...[521]

323 The Porter Retainer depends on the contested 29 June 2017 conversation between Mr Conheady and Mr Mulcahy and on events both before and that conversation. While the retainer is alleged to continue 'from time to time', as Mr Porter abandoned his proposal to acquire a controlling interest in the Business on 15 November 2017, if the Porter Retainer existed, it ended on 15 November 2017.

324 What I have found was discussed on 29 June 2017 must be assessed in light of the previous business relationship between the Mulcahy parties and Porter Group. Regard must be had to communications concerning the Business that occurred before 29 June 2017. It is also necessary to consider what happened between 29 June 2017 and 15 November 2017.

325 The first interaction concerning the Business occurred in late May 2017 when Mr Mulcahy contacted Mr Porter to see if he might be interested in buying it. At that time, Mr Mulcahy's client was Mr Debono, from whom he obtained permission to initiate the contact. When Mr Conheady sent an email to Mr Mulcahy on 19 June 2017 expressing a desire to progress due diligence, and seeking further information about the Business, that email was sent to Mr Mulcahy on the basis he was representing the vendor from whom the information was requested.

326 Before Mr Hughes provided financial information on 27 June 2017, Mr Matthews, as solicitor for the vendor had prepared and sent the confidentiality agreement for signature.[522] The 20 June 2017 email from Mr Matthews included his signature block with the multidisciplinary Mulcahy & Co footer. Mr Matthews informed the recipients, 'we act for CBB in this transaction':

but will excuse ourselves from participation in the matter should you feel our involvement provides a conflict of interest.[523]

327 Neither Mr Porter nor Mr Conheady objected to Mr Matthews continuing to act for the vendor in response to the conflicts email.

328 As recognised by Mr Matthews, as at 29 June 2017, Mulcahy Legal was both continuing to and had previously provided legal services to entities within Porter Group. The same was the case with Mulcahy & Co accounting. In the case of Mulcahy & Co accounting, this included the Review, the secondment of Amy Tuck, an accountant, to work at Porter Group between September 2016 and June 2017,[524] advice on discrete matters,[525] the preparation of consolidated financial statements of Porter Group around 25 January 2017,[526] advice concerning FBT relating to employee entitlements[527] and advice concerning 'Project Tonka' which was ongoing.[528] Both Mulcahy Legal and Mulcahy & Co were advising in relation to the potential claim against Fordhams, work most recently invoiced on 31 March 2017.[529]

329 In 2016, in the context of the Review, Mulcahy & Co had expressed a clear wish to 'get the chance to assist [Porter Plant] in all areas of your accounting and financial needs in the future'.[530]

330 When Mr Conheady spoke with Mr Mulcahy on 29 June 2017, it was in the context that the Mulcahy parties were currently acting for Porter Group in other matters and that the Mulcahy parties were known to want to expand that business relationship. Further, Mr Hughes was CBB's accountant, the CBB financial information was provided direct to Mr Conheady by him two days before the disputed 29 June 2017 conversation.

331 I have accepted Mr Conheady's evidence that in the early stages of the discussion on 29 June 2017 he asked Mr Mulcahy 'What is your role in this transaction?' to which Mr Mulcahy replied he was not acting for the vendor and Mr Conheady could talk to him about any part of the deal. Mr Mulcahy said he could act for Tim (Mr Porter).[531]

332 In the context of the previous and ongoing work performed for Porter Group by the Mulcahy parties, the question asked of Mr Mulcahy was not an idle one. He was being asked if the Mulcahy parties could be retained on behalf of Mr Porter in relation to the proposed acquisition. The answer was 'yes'. I have accepted that if Mr Mulcahy had said he could not act for Mr Porter, that would have been the end of the discussion.[532]

333 At that point in the conversation there was a tacit understanding or agreement that Mulcahy & Co both could and would 'act' for Mr Porter and his interests in relation to the proposed acquisition. That agreement is constituted by what was said in the context of the previous and ongoing work being performed for Porter Group by Mulcahy & Co. The subject matter of the retainer was at that point broadly defined, to act for Mr Porter in relation to the proposed purchase of a controlling interest in the Business. The anticipated duration of the work was open ended, until the proposed acquisition took place or was abandoned.

334 The defendants submitted a retainer was not present because it was not made clear that Mr Conheady intended to retain Mulcahy & Co. I do not agree. I have accepted Mr Conheady's evidence that Mr Mulcahy said he could 'act for Tim', followed immediately by a request for advice as to asset or share purchase. Mr Conheady was engaging the Mulcahy parties as a business adviser.[533] Mulcahy & Co were performing that role in respect of Project Tonka and in respect of the Fordhams claim. Further express discussion was not necessary. Objectively it is the case that Mr Conheady retained the Mulcahy parties to advise Mr Porter and his interests, and Mr Mulcahy agreed to be so retained.

335 The agreement to retain was not followed by a discussion about the scope of the work to be performed. However, having received Mr Mulcahy's assurance, and consistent with the existence of a retainer, Mr Conheady and Mr Mulcahy immediately discussed the proposed acquisition. Mr Conheady sought and was given advice about two specific topics.

336 The first topic concerned whether a share purchase instead of a sale of assets and the risks associated with such a purchase. The two men discussed the 'pros and cons' of an asset sale versus a scrip sale.[534] Mr Mulcahy advised a share sale would be better for Mr Porter because it would 'minimise the disruption in terms of transitional risk'.[535]

337 The second topic was what warranties would be required to protect Mr Porter's interests in the event of a share purchase. Mr Mulcahy identified four key warranties he said should be included in any share sale agreement and Mr Conheady made a note of those in his workbook.[536]

338 The Mulcahy parties submitted Mr Mulcahy did not advise Mr Conheady on warranties and that as accountants Mulcahy & Co is not qualified to advise on legal matters such as warranties.[537] Whether qualified to do so or not, Mr Mulcahy advised about warranties as recorded by Mr Conheady in his workbook.

339 Mr Mulcahy had told Mr Conheady he could discuss 'any part of the deal'. When Mr Mulcahy responded to questions about those two topics, he was providing advice to Mr Porter and Porter Group pursuant to the retainer he had agreed to perform.

340 To adopt the language used in Apple and Pear, the requests for advice and the provision of advice 'positively indicate[s]'[538] both parties considered themselves bound by the agreement that the Mulcahy parties would provide advice to Mr Porter.

341 The defendants submitted there was insufficient clarity to establish a retainer. In light of my factual findings about what was discussed on 29 June 2017, that submission fails. Objectively, it ought to have been clear to Mr Mulcahy, a Certified Practising Accountant and an experienced professional, whose firm both in the past and at the time, was providing accounting services and advice to Porter Group, that the Mulcahy parties were being retained to advise in relation to the proposed transaction. Mr Mulcahy's responses concerning the two topics mentioned show that was the case. There was no lack of clarity.

342 The defendants submitted that because there was no written retainer and no invoice for work performed, there was no retainer.[539] They submitted that as Chief Financial Officer of Porter Plant and a person experienced in business, Mr Conheady was well aware of the commercial reasons for maintaining written business records, that he knew how to make his requests for ad hoc advice very clear, and kept written logs of such requests when previously made.[540] They submitted because he made no clear request and did not keep a written log in this case that there was no retainer. In cross-examination, Mr Conheady accepted that in his experience the absence of either a written agreement or an email setting out the terms of a retainer would be unusual where external advisers were engaged.[541]

343 While unusual not to have a written record of the fact and scope of the retainer, that does not mean there was none. The absence of a formal retailer or engagement letter sent to or signed by Mr Porter was the case with other work performed by Mulcahy & Co for Porter Group. By way of example, there was no engagement letter in relation to Project Tonka.[542] Mulcahy & Co had provided accounting, taxation and related services to Mr Conheady over many years, on some occasions without any formal letter of retainer, on other occasions with the services being provided first and the formal engagement letter being provided after the services had been performed.[543]

344 The absence of any invoice was also relied on by the defendants to contend there was no retainer. There are three reasons why the absence of an invoice for work performed is not significant in this case. First, the absence of an invoice[544] issued in a timely way was not uncommon in the business relationship between the Mulcahy parties and Porter Group. The evidence showed that on other occasions where work was performed for Porter Group there were long delays in invoicing. As an example, on 31 December 2016 Mulcahy & Co invoiced Porter Management Trust for work performed 'since prior billing'.[545] The work included work introducing Mr Conheady to Mr Porter in late July/early August 2016. As with other work described in that invoice, there was no engagement letter for the work described and it was invoiced four to five months after the work was performed. Second, limited work and time was involved in performance of the Porter Retainer; as will be seen, advice was not given after 29 June 2017 and before 15 November 2017. As was the case when Mr Mulcahy provided advice to Mr Conheady on 4 December 2017, not all work performed by the Mulcahy parties was invoiced. Third, by December 2017 Mr Mulcahy was seeking to pursue the CBB opportunity for himself. The position of conflict from at least that point on provided a good reason not to invoice from that time on for past work.

345 The plaintiffs allege the Porter Retainer was to provide accounting, taxation and financial advice.[546] The existing relationship between the parties was not one which included a general retainer by Mr Porter or Porter Group of the Mulcahy parties or a retainer to provide advice in respect of those three matters. There was no discussion on 29 June 2017 that advice would be sought and provided in respect of those three matters. What took place after the agreement to retain was reached informs the scope and content of the retainer.

346 What occurred after the initial agreement on 29 June 2017, that the Mulcahy parties could and would act, does not support the existence of a retainer to provide accounting, taxation and financial advice. The retainer involved the provision of advice about the two topics upon which advice was both sought and given on 29 June 2017. In addition, it was open ended, to advise thereafter in relation to 'any part of the deal' if called upon to do so during the currency of the retainer.

347 As events transpired, beginning with the 29 June 2017 conversation itself, Mr Conheady provided information and 'updates' to Mr Mulcahy, until 15 November 2017; but he did not seek further advice from Mr Mulcahy about 'any part of the deal' and Mr Mulcahy did not provide any specific advice about 'the deal' or any aspect of it during that period.

348 Topics other than share sale and warranties were noted by Mr Conheady in his workbook and were discussed on 29 June 2017. I have accepted Mr Conheady's evidence that, when the other topics were mentioned by him, Mr Mulcahy responded by saying things such as 'good' and that it 'sounded as if things were progressing well'. Although Mr Conheady told Mr Mulcahy about topics, such as particular staff issues and opportunities for growth, those topics were not the subject of requests for advice and Mr Mulcahy did not provide advice concerning them or any of them. While that is so, Mr Mulcahy's statement that he could discuss 'any part of the deal' left open the provision of advice on topics relating to the proposed acquisition beyond the two topics the subject of advice on 29 June 2017.

349 Although relied on by the plaintiffs in support of the Porter Retainer, nothing that occurred after 29 June 2017 and before 15 November 2017 expanded the content of the retainer. That includes the discussions between August and October 2017 at a time when Mr Conheady was 'going through due diligence'.[547] It was a feature of those conversations that Mr Conheady conveyed information to Mr Mulcahy, but that Mr Mulcahy said very little in response. Accepting Mr Conheady's account of those conversations, they were not conversations in which advice was sought or provided. They were updates and no more.[548]

350 There was nothing in the contested 10 October 2017 conversation that included a request for or the provision of advice about any aspect of the proposed 'deal'. The dominant topic of conversation that day was Ballan.[549] A discussion of 'fundraising for CBB' is noted in Mr Conheady's workbook.[550] But Mr Conheady did not seek or obtain advice from Mr Mulcahy during that conversation about the best or most appropriate way for Porter Group to fund the acquisition. Discussion about high net worth clients of Mr Mulcahy being able to assist with funding, whether for Ballan or for CBB, with Mr Mulcahy wearing his 'financing' hat, is not a discussion in which accounting taxation or financial advice was sought or given.

351 It is unsurprising that Mr Conheady did not seek advice in relation to other topic areas concerning the purchase from the Mulcahy parties on behalf of Mr Porter after 29 June 2017. That is so, first, because Porter Group had earlier retained Fordhams generally to provide accounting advice. Even though a possible claim against them was being investigated, Fordhams remained the accountants and registered tax agent for Mr Porter and Porter Plant. There was an existing engagement letter in place with Fordhams.[551] They were responsible for advising Porter Group on a wide range of matters,[552] and, in respect of Porter Plant, were its ASIC agent.[553] Secondly, Fordhams were contacted by Mr Conheady on 8 August 2017 and specifically retained in September 2017 concerning the structure of the proposed acquisition. Mr Genobile, Mr Palone and others at Fordhams provided advice to Porter Group about that aspect of the proposed acquisition from 10 August 2017 to 31 January 2018.[554]

352 The fact Mr Conheady met with Fordhams on 10 August 2017 and that in September 2017 they were retained to advise,[555] prior to Mr Porter making his first offer to purchase an interest in the Business tells against the existence of a Porter Retainer to provide accounting, taxation and financial advice for which the 29 June 2017 conversation is said to have been the initiating event.

353 There is no reason why a person may not decide to retain two separate accounting firms to provide advice about the same subject matter, at the same time. Here the initial agreement framed the services to be provided as concerning 'any aspect of the deal', but for advice concerning at least some of those aspects, Mr Porter later went elsewhere. The existence of an ongoing general retainer of Fordhams by Porter Group and the specific retainer of Fordhams relating to the proposed acquisition initiated on 8 August 2017 reinforces the absence of the Porter Retainer as alleged.

354 If the Mulcahy parties were also to have been retained to provide accounting, taxation and financial advice in relation to the proposed CBB acquisition, objectively, one would have expected any such decision to have been made by Mr Porter or, at least, to have been communicated to him. Mr Conheady never told Mr Porter the Mulcahy parties had been retained.[556] Mr Porter never attended Mulcahy & Co's offices in relation to the proposed transaction. He was unaware that Mulcahy & Co were involved, advising him or Porter Plant on the transaction.[557] He did not consider there was a retainer of Mulcahy & Co by Porter Group.[558]

355 If the Porter Retainer was as alleged, it might also reasonably have been expected that any valuation of the business obtained during the currency of that retainer would have been provided to Mr Mulcahy. The Munday Wilkinson valuation was obtained on 3 August 2017. It was disclosed, as to the amount of the valuation, to Fordhams on 10 August 2017. Neither the valuation itself nor the quantum of it was disclosed to Mr Mulcahy prior to 15 November 2017.

356 When the initial letter of complaint was raised by the plaintiffs in January 2019,[559] there was no assertion of any retainer of Mulcahy & Co by Mr Porter or Porter Group concerning the transaction; only that Mulcahy Legal had provided services to Porter Plant. The letter, which made detailed complaints concerning the conduct of Mr Mulcahy and Mr Matthews, did however refer to advice being provided about the two matters that I have found were the subject matter of the advice given on 29 June 2017.

357 In order for the Porter Retainer, as alleged, to be made out, it is necessary there be sufficient certainty about the scope and content of the work to be performed. While I accept that on 29 June 2017 there was a Porter Retainer and that the precise point of time at which the contract of retainer was formed is readily identified as 29 June 2017, I do not accept that at that time or at any time thereafter until 15 November 2017 the retainer was a retainer to advise on 'accounting, taxation and financial advice'.

358 There is sufficient certainty to find an implied retainer on 29 June 2017 to provide advice concerning the proposed purchase of a controlling interest in the Business on an ongoing basis, extending to advice on such aspects of the proposed purchase in respect of which specific advice was sought. As it happened, there were no further requests for advice and no advice was provided beyond the two matters discussed on 29 June 2017.

359 The plaintiffs have not established that at the meeting on 29 June 2017, or at any time until 15 November 2017, that as alleged in the case of the Porter Retainer, the Mulcahy parties were retained to assist and to advise Mr Porter in relation to 'accounting, taxation and financial advice' concerning the proposed acquisition.

360 While that is the case, I find there was a retainer of the Mulcahy parties by Mr Porter on 29 June 2017 ('the 29 June 2017 Retainer'). It was constituted by what was discussed that day and was to be implied from the previous and ongoing dealings between those parties and from what happened on and after 29 June 2017 until 15 November 2017. It was an implied retainer to provide advice on an ongoing basis to Mr Porter and his interests concerning the proposed purchase by them of a controlling interest in the Business. It was a retainer to provide advice on such aspects of the proposed purchase in respect of which specific advice was sought. The two topics advised upon on 29 June 2017 were examples. As events transpired, there were no other specific requests and no further advice was provided. The 29 June 2017 Retainer ended on 15 November 2017.

361 The plaintiffs allege the Conheady Retainer was entered into on 16 November 2017 or alternatively, the Porter Retainer was novated at about that time so that the parties to the Porter Retainer became the Mulcahy parties and Mr Conheady.[560] They allege the Conheady Retainer was constituted by the 16 November 2017 conversation and was to be implied from earlier and later matters and conduct. The Mulcahy parties deny the existence of the Conheady Retainer and deny novation.

362 In light of the 30 November 2017 email,[561] in supplementary closing submissions the Mulcahy parties accepted there was a Conheady Retainer to advise Mr Conheady. The retainer they identified came into existence on around 4 December 2017. All defendants submitted the retainer was limited to advising on the tax implications of how Mr Conheady would hold his shares in CBB.[562]

363 BFMM submitted there was no general retainer concerning CBB and the merits of the transaction.[563] That submission was based on the premise that the evidence given by Mr Conheady about the meeting at the Yacht Club on 16 November 2017 should not be accepted. As I have accepted Mr Conheady's account of that meeting the existence or otherwise of the Conheady Retainer must be approached on that basis.

364 The nature of the conversation that took place at the Yacht Club on 16 November 2017 between Mr Conheady and Mr Mulcahy was quite different from the nature of the 29 June 2017 conversation.

365 First, the business relationship between the participants was different. In the 29 June 2017 conversation Mr Conheady was representing Mr Porter and Porter Group, to whom the Mulcahy parties had and were continuing to provide services, but who continued to retain Fordhams under a general retainer. Fordhams never acted for Mr Conheady.[564] Mr Mulcahy was Mr Conheady's personal accountant. He identified investment opportunities of which he informed Mr Conheady, some of which Mr Conheady had in the past taken up.[565] Mulcahy & Co had provided accounting services to Mr Conheady and his family entities for over a decade prior to 2017 and were continuing to do so. Mr Mulcahy deliberately sought to paint the scope of work the Mulcahy parties had performed and were continuing to perform for Mr Conheady and his family as very narrow and limited. I do not accept that evidence as accurate.

366 Mr Mulcahy said that at the start of an engagement, it was Mulcahy & Co's practice to send a general retainer letter in which the client engaged the firm to provide the full suite of accounting services.[566] Whether in 2005 Mulcahy & Co sent such a letter to Mr Conheady does not appear from the evidence. However, what is clear is that Mulcahy & Co provided the full suite of accounting services to Mr Conheady and his family over many years.

367 There was a relationship of trust. Mr Mulcahy gave evidence:

The fact of the matter is [Conheady] trusted you as his accountant, didn't you?...I assume he did, yes.

And you appreciated he trusted you as his accountant? ... Yes

To tell him anything that might be relevant to his business affairs?...Yes

That came to your attention?... Yes.[567]

368 The nature of their business relationship and the trust that Mr Conheady placed in Mr Mulcahy provided the context for the 16 November 2017 meeting.

369 Second, when they met at the Yacht Club, Mr Conheady was seeking advice and guidance for himself, personally, from Mr Mulcahy. Porter Group was a long established and successful business with a large turnover. Mr Conheady was the Chief Financial Officer of that business, but he did not have an ownership share in that business. On 8 November 2017 Mr Conheady told Mr Matthews that he would be buying some of the shares in the Business.[568] On 16 November 2017 he told Mr Mulcahy that Mr Porter had withdrawn as a purchaser of the Business. He was now to be the purchaser.

370 Third, the conversation took place at or near the end of the due diligence process. The 29 June 2017 conversation was almost at the start of that process. It occurred two days only after Mr Hughes had provided financial information. Mr Mulcahy had recently introduced Mr Porter to the Business opportunity. By 16 November 2017 Mr Mulcahy no longer had any involvement in representing Mr Debono's interests. He had earlier been retained and had advised Mr Porter pursuant to the 29 June 2017 Retainer. Between August and November 2017, Mr Conheady had 'updated' Mr Mulcahy, those updates being provided during the currency of the ongoing 29 June 2017 Retainer.

371 Mr Conheady had been involved in detailed due diligence over many months. He had updated Mr Mulcahy about various aspects of his due diligence enquiries as they were occurring. On 16 November 2017 he told Mr Mulcahy he had found 'nothing untoward' during the due diligence process.

372 Fourth, in the intervening period, the Munday Wilkinson valuation had been obtained. It put a significantly higher value on the Business than Mr Debono had earlier agreed with Mr Porter as providing the basis for calculation of the purchase price for a 70% interest in the Business. Mr Conheady had informed Mr Mulcahy about the agreement as to the underlying value of the Business on 29 June 2017.

373 On 16 November 2017, following the withdrawal of Mr Porter, Mr Conheady sought and obtained Mr Mulcahy's advice for himself. He told Mr Mulcahy he thought it was a good opportunity with very good earnings, and asked if he should pursue the opportunity for himself. Mr Mulcahy again told Mr Conheady that he and Mr Matthews would be interested in investing 5 to 10% in the Business themselves.[569] Mr Conheady did not pursue or take up that prospect. He told Mr Mulcahy his priority was to get terms agreed with the vendor. He said he was considering making an offer to purchase 70% of the Business for $8.4m on the same terms that had been agreed with Mr Porter in relation to WIP and inventory, but on the basis of vendor finance.

374 Mr Conheady told Mr Mulcahy he thought there were significant opportunities that could drive performance improvement in the Business. He said he had identified five areas for improvement. He told Mr Mulcahy about them. First, the creation of an insurance division with an opportunity to bring in-house repairs to CBB plant, work that was being performed externally, using the infrastructure of CBB and driving higher earnings. Second, to put more management effort into the spare parts division which was a new part of the Business. He explained the margins on spare parts were around 70 - 80% and presented a good opportunity to grow with customers of the Business by providing them with plant and spare parts. Third, improving the utilisation of the spray painting booth and sandblasting area of the Business, bringing in external customers to leverage the asset base. He said Porter Group would be able to bring work to this area of the Business. Fourth, to change the shift pattern of workers in the Business to 'sweat the assets harder' using either a split shift, or double shift system and possibly weekend work so as to service customers without existing delays of five to six months that meant work was going elsewhere that could have been retained within the Business. Fifth, to consider partial or full offshore fabrication and importation to the Australian market.[570]

375 During the meeting Mr Conheady told Mr Mulcahy about the $21m Munday Wilkinson valuation of the Business, and how that valuation had been arrived at.[571]

376 Mr Conheady had never done a full end-to-end acquisition before.[572] He gave evidence that I accept, that he told Mr Mulcahy that he had never bought a business before, so this was something new for him. He said he wanted Mr Mulcahy 'by my side' as he went through the transaction to provide accounting, tax and structuring advice. Mr Mulcahy agreed he would do that work. The Mulcahy parties submit that at best this was an indication of an intention to engage Mr Mulcahy to do CBB tax and accounting work after the acquisition.[573] I do not agree with that interpretation of what was said.

377 Mr Conheady's request that the Mulcahy parties advise him as his accountant and remain 'by my side' to provide accounting, tax and structuring advice was a request for them to provide those services as he sought to secure a controlling interest in the Business, not just once he had succeeded in doing so. If the services were only to be provided after a successful acquisition, why have the conversation at that time and why seek advice in the same conversation about making an offer?

378 There was express agreement on the part of Mr Mulcahy on 16 November 2017 that the Mulcahy parties would provide accounting, tax and structuring advice. There was an implied agreement they would provide financial advice about the proposed purchase. That is to be implied from Mr Conheady asking if he should personally make an offer to purchase 70% of the Business on terms based on a $12m price, a business independently valued at $21m, and from Mr Mulcahy telling him it was a great opportunity and to 'go for it'. Financial advice was requested and given about an $8.4m proposed transaction.

379 By telling Mr Conheady to 'go for it', in the context of their long standing accountant/client relationship of trust, Mr Mulcahy was providing financial advice to Mr Conheady, to the effect that the Business was a good investment and one that Mr Conheady should personally pursue. From the request and provision of advice as to whether he should go ahead, asked of his trusted accountant of more than ten years' standing, it is to be implied the retainer extended to the provision of financial advice. That is, the same scope as the Conheady Retainer alleged in the ASC.

380 Mr Mulcahy said he assumed Mr Conheady trusted him as his accountant to tell him everything relevant to his financial affairs.[574] It is evident from what Mr Conheady told Mr Mulcahy on 16 November 2017 that the evidence about Mr Conheady trusting him is true. Without that trust Mr Conheady could not have been expected to tell Mr Mulcahy what he told him, or to seek the advice that he sought and obtained. Armed with Mr Mulcahy's imprimatur, that afternoon, Mr Conheady contacted Mr Debono and made his first offer to purchase 70% of the Business on vendor terms.

381 The Mulcahy parties contended that Mr Conheady's evidence that he entered into a separate retainer with Mr Mulcahy on 16 November 2017 did not ring true and is a 'fabrication'.[575] They relied on evidence from Mr Mulcahy that Mr Conheady was a client of Mulcahy & Co in respect of the provision of taxation compliance services, who received informal advice on a proposed holding structure of the acquisition but the advice extended no further.[576] They submitted that contrary to Mr Conheady's evidence, Mr Mulcahy was not told about the Munday Wilkinson valuation or the specifics of the proposed CBB transaction.[577] They placed particular reliance on Mr Mulcahy's evidence that denied CBB was discussed on 16 November 2017.[578]

382 The problem with those submissions is that for the reasons previously stated, I do not accept as accurate or truthful the defendants' evidence of who was present at the Yacht Club. Mr Conheady's evidence about the meeting at the Yacht Club and what was said is not a 'fabrication'. If any persons deliberately fabricated evidence about that meeting, it was Mr Mulcahy and Mr Matthews.

383 The Mulcahy parties submitted the existence of the Conheady Retainer as alleged is inconsistent with the fact Mr Conheady did not provide Mr Mulcahy with any of his extensive due diligence material, that Mr Conheady conceded it would have been a simple matter to do so and that, if he was seeking professional advice, he would want to make sure Mr Mulcahy had all the available information.[579] That submission ignores the timing of critical communications and disregards what was said about due diligence on 16 November 2017. From June 2017 until 15 November 2017, when Mr Conheady was conducting due diligence on behalf of Mr Porter, he regularly 'updated' Mr Mulcahy. At the Yacht Club, he told Mr Mulcahy he had done extensive due diligence and had found nothing 'untoward'.[580] In those circumstances, there was no reason to provide further detail concerning his due diligence enquiries to enable Mr Mulcahy to advise him about whether or not he should go ahead and make an offer to buy on terms.

384 The defendants rely on the absence of any written retainer and any invoices for work performed in support of their submission there was no Conheady Retainer. As in the case of the 29 June 2017 Retainer, the fact there was no engagement letter prepared by Mr Mulcahy following the 16 November 2017 lunch does not mean there was no retainer. There was no practice of retainers for specific work or of the performance of work by the Mulcahy parties only after a retainer letter had been signed. As earlier noted, from time to time the Mulcahy parties provided services to Mr Conheady and his family that were not the subject of a prior written retainer. Mr Mulcahy said that on 4 December 2017, he gave tax advice to Mr Conheady concerning the proposed unit trust structure.[581] In supplementary submissions, a limited retainer for that purpose was accepted by all defendants. The Mulcahy parties did not prepare a written retainer agreement for that work. They did not separately invoice for the work. Nor did they later follow it up with a separate retainer letter.

385 As earlier discussed, the fact there was no written retainer or invoice does not mean there was no Conheady Retainer and does not mean there was no work performed pursuant to it. Mr Mulcahy took action to pursue the opportunity to acquire a controlling interest in the Business for himself from at least as early as 14 December 2017. Based on previous billing practices, delays of several months in issuing invoices for work performed were not unusual. Given Mr Mulcahy's evidence that on 9 February 2018 he felt 'awkward', it is not surprising no invoice was issued for work performed for Mr Conheady.

386 The defendants submitted the informal nature of the communications and the lack of any documentation meant that any retainer should be construed as no broader than one for the provision of advice on the narrow issues admitted by Mr Mulcahy in evidence. I do not agree. As I have found, what was agreed on 16 November 2017 was that the Mulcahy parties would provide accounting, taxation structuring and financial advice to Mr Conheady as he proceeded with his proposed purchase of a controlling interest in the Business. Like the 29 June 2017 Retainer, the Conheady Retainer was an ongoing retainer. It was to continue until Mr Conheady either acquired a controlling interest in the Business or abandoned his proposal to do so. In light of what Mr Debono told him on 6 March 2018, thinking the Business was now off the market, by email to Mr Mulcahy that day, Mr Conheady ended the retainer.[582]

387 Consistent with the Conheady Retainer being a continuing retainer, on 17 November 2017 after acting on Mr Mulcahy's advice, Mr Conheady called and told him he had made an offer to purchase 70% of the Business. Two weeks later, on 30 November 2017, Mr Conheady contacted Mr Mulcahy to arrange to meet to obtain advice concerning the structure for the purchase. On 4 December 2017, advice was sought and provided by Mr Mulcahy about that issue. Contrary to the evidence given by Mr Mulcahy that the meeting on 4 December 2017 took five to ten minutes, I accept Mr Conheady's evidence that the meeting lasted for thirty-five to forty minutes.[583] It was a meeting of substance.

388 The meeting on 4 December 2017 was the second meeting of substance at which Mr Mulcahy gave advice to Mr Conheady pursuant to the Conheady Retainer, the first being the meeting at Yacht Club on 16 November 2017. The meeting on 4 December 2017 represented performance of work by Mr Mulcahy within the terms of the existing and ongoing Conheady Retainer.

389 When on 20 December 2017 Mr Conheady requested and the Mulcahy parties sent a letter to the ANZ in connection with finance required for settlement of the purchase of the Business, the provision of the letter was further work in the performance of the Conheady Retainer. When Mr Conheady met with Mr Mulcahy on 30 January 2018 and discussed the proposed acquisition, that meeting was again in performance of the Conheady Retainer. That retainer and the obligations that flowed from its terms were ongoing.

390 On 6 March 2018, Mr Conheady emailed Mr Mulcahy to inform him, as he mistakenly believed to be the case, that Mr Debono had 'withdrawn the Business from the market'.[584] That communication marked the end of the Conheady Retainer.

391 Given my finding that the Conheady Retainer alleged was agreed, it is unnecessary to consider questions of novation of the earlier Porter Retainer or of the 29 June 2017 Retainer. Had it been necessary to do so, I would not have found in favour of novation. By 16 November 2017 the Mulcahy parties were not actively engaged in performance of the Porter Retainer. There had been no advice requested or given pursuant to the 29 June 2017 Retainer since that day.

392 The contract entered into on 16 November 2016 was a fresh retainer, an agreement between Mr Conheady and the Mulcahy parties. It was an ongoing retainer to be 'by [Mr Conheady's] side', it was not a retainer that was novated.

393 The terms of each retainer alleged, including those of the Conheady Retainer are reproduced earlier in these reasons.[585]

394 The first of the terms alleged concerns the scope and content of the retainer. That term is made out in the case of the Conheady Retainer. It is not made out in the case of the Porter Retainer. The 29 June 2017 Retainer as found was an ongoing one to provide advice as requested from time to time in relation to any aspect of the proposed transaction about which advice was sought. Advice was not sought on behalf of Mr Porter that corresponds to the description 'accounting, taxation and financial advice' and there is no basis for the implication of that term in the 29 June 2017 Retainer.

395 The remaining terms are alleged to be implied. The plaintiffs rely on the Code in support of the implication of those terms. The Mulcahy parties did not make submissions in respect of the implied terms alleged.[586] They did appear to tacitly accept in their supplementary closing submissions that the Code is to be implied into any retainer.[587]

396 Taking the terms alleged in the context of the Conheady Retainer, BFMM:

(a) denied an implied term to act in good faith and in the best interests of Mr Conheady. They submitted there was no vulnerability or risk of exploitive conduct that existed with regard to Mr Conheady's relationship with the Mulcahy parties and the CBB transaction and that no such onerous term should be implied in the absence of written terms;

(b) agreed the retainer would likely include an obligation not to improperly make use of the Mulcahy parties' position as adviser. However, they submitted there was no evidence of any such improper use;

(c) agreed the retainer would likely include an obligation not to improperly use information obtained from Mr Conheady but said there was no evidence there was any obtaining of confidential information or improper use of such information. Further, the terms of any retainer should be construed as permitting Mr Mulcahy to pursue an interest in CBB, relying on his evidence that he disclosed to Mr Conheady that he and other clients of his would be interested in investing in the CBB opportunity;

(d) agreed the retainer would likely include an obligation to keep confidential information imparted in the course of the retainer. They submitted there was no evidence of breach of confidentiality.

397 The existence of a custom or usage that will justify the implication of a term is a question of fact. There must be evidence of acceptance of the custom or usage such that it is 'reasonable to assume that the parties contracted on the basis of the custom, and that it is therefore reasonable to import such a term into the contract'.[588] Generally speaking, professional codes are relevant to the standard of care of a professional such as an accountant.[589]

398 BFMM accepted the standards in the Code govern the conduct of a professional accountant and assist in creating an expectation of confidentiality. They submitted the expectation of confidentiality could be expected to be reflected in an implied term of a contractual retainer.[590] I agree the provisions of the Code are to be implied into the Conheady Retainer and the 29 June 2017 Retainer.

399 Mr Mulcahy is a Certified Practising Accountant ('CPA'). He is also a financial planner.[591] He provides clients with accounting services, including the preparation of financial statements, taxation services, business planning, business monitoring and review, general structuring advice and business valuations and analysis for sale and purchase. He provides those services in his capacity as a director and employee of Mulcahy & Co.[592] I accept that the parties must be presumed to have intended that as a CPA and as a director and employee of Mulcahy & Co, engaged in the provision of such services, that Mr Mulcahy would be bound by the Code.

400 The Code is expressed to have application to all members, including when providing professional services in an honorary capacity.[593] In applying the Code, members are bound not merely by the words but are also to be guided by its spirit.[594]

401 The Code includes sections dealing with integrity, confidentiality and professional behaviour. Fundamental principles include that a member shall be straightforward and honest in all professional and business relationships and shall respect the confidentiality of information acquired as a result of such relationships. Integrity is expressly stated to imply fair dealing and truthfulness.[595] There is an obligation not to disclose any confidential information to third parties without proper and specific authority and not to use such information for the personal advantage of the member or third parties.[596]

402 The Code imposes an obligation on members to refrain from using confidential information acquired as a result of professional and business relationships to the personal advantage of the member, or to the advantage of third parties.[597] Members are required to maintain confidentiality of information disclosed by a prospective client.[598] The need to comply with the principle of confidentiality continues after the end of relationships between a member and a client.[599]

403 The Code recognises that conflicts of interest may arise, including when the interest of the member with respect to a particular matter and interests of the client for whom the member provides a professional service related to that matter are in conflict. The member is required not to allow conflicts of interest to compromise professional or business judgment.[600] Specific examples in which conflicts of interest may arise include 'advising a client on the acquisition of a business which the firm is also interested in acquiring'.[601]

404 The plaintiffs allege and the defendants deny an implied term that the Mulcahy parties would act in good faith and in the best interests of those by whom they were retained. The implied term alleged has two distinct components; an obligation to act in good faith, and an obligation to act in the best interests of the client.

405 The implied obligation to act in good faith, if an implied term of the retainers, goes beyond a requirement of cooperation in the performance of the retainer as discussed in Mackay v Dick.[602]

406 In Masters Home Improvement Pty Ltd v North East Solution Pty Ltd,[603] the Court of Appeal identified the basic obligations encompassed in a contractual duty to act reasonably and in good faith:

(a) to act honestly and with fidelity to the bargain; (b) not to undermine the bargain or the substance of the contractual benefit bargained for; and (c) to act reasonably and with fair dealing having regard to the interests of the parties (which will, commonly, at times be in conflict), and to the provisions and objectives of the contract, objectively ascertained. The obligation does not require that a party subordinate its legitimate interests to those of the other party. The content of the obligation is informed by the contractual, commercial and factual context.[604]

407 To similar effect concerning the usual content of a good faith obligation, are observations of Allsop P in Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service:[605]

(a) obligations to act honesty and with a fidelity to the bargain;

(b) obligations not to act dishonestly and not to act to undermine the bargain entered or the substance of the contractual benefit bargained for;

(c) an obligation to act reasonably and with fair dealing having regard to the interests of the parties (which will, inevitably, at times conflict) and to the provisions, aims and purposes of the contract, objectively ascertained.[606]

408 An obligation to act in good faith, will not be implied in all commercial contracts. In Renard Construction (ME) Pty Ltd v Minister for Public Works,[607] Priestley JA said:

people generally, including judges and other lawyers, from all strands of the community, have grown used to the court applying standards of fairness to contract which are wholly consistent with the existence in all contracts of a duty upon the parties of good faith and fair dealing in its performance. In my view this is in these days the expected standard, and anything less is contrary to prevailing community expectations.[608]

409 Priestley JA considered there were strong arguments for recognition in Australia of the obligation similar to that in the United States.[609] However, universal recognition of the implication of such a term in all classes of commercial contracts has not been forthcoming.

410 In Alcatel Australia Ltd v Scarcella the NSW Court of Appeal said:

The decisions in Renard Constructions and Hughes Bros mean that in New South Wales a duty of good faith, both in performing obligations and exercising rights, may by implication be imposed on parties as part of a contract.[610] (emphasis added)

411 In Esso Australia Resources Pty Ltd v Southern Pacific Petroleum NL (recs and mgrs apptd) (admn apptd) Buchanan JA said:[611]

I am reluctant to conclude that commercial contracts are a class of contracts carrying an implied term of good faith as a legal incident, so that an obligation of good faith applies indiscriminately to all the rights and power conferred by a commercial contract. It may, however, be appropriate in a particular case to import such an obligation to protect a vulnerable party from exploitive conduct which subverts the original purpose for which the contract was made.[612]

412 In Vodafone Pacific Ltd v Mobile Innovations Ltd[613] the NSW Court of Appeal doubted the assertion made in some judgments that 'commercial contracts' was a class of contracts carrying an implied term of good faith.[614]

413 In Burger King Corporation v Hungry Jacks Pty Ltd,[615] Sheller, Beazley and Stein JJA noted that 'the Australian cases make no distinction of substance between the implied term of reasonableness and that of good faith.'[616] Further, that a term of good faith and reasonableness may be implied as a matter of law.[617] Specific examples identified by the Court included where terms are implied as a matter of law into contracts of a certain class, for example, an obligation implied into employer/employee contracts not to disclose secret processes.[618] The Court continued:

For a term to be implied at law in a new category of case, it must be both reasonable and necessary: see Castlemaine Tooheys and Byrne. In Byrne, McHugh J and Gummow J explained the meaning of necessity in this context. They said (at 450):

Many of the terms now said to be implied by law in various categories of case reflect the concern of the courts that, unless such a term be implied, the enjoyment of the rights conferred by the contract would or could be rendered nugatory, worthless, or, perhaps, be seriously undermined... Hence, the reference in the decisions to 'necessity'...

This notion of 'necessity' has been crucial in the modern cases in which the courts have implied for the first time a new term as a matter of law.[619]

414 In Carter on Contract,[620] noting there is no general contractual term implied requiring the exercise of good faith in contract performance, the learned authors state that such a duty may be implied in specific contexts,[621] or so as to give business efficacy to a particular contract. Further, that such a term may be implied as a necessary term, in fact or law.

415 An obligation to act in good faith may be factually implied to give business efficacy to a particular contract, having regard to the circumstances of the case and provided the five conditions outlined in BP Refinery (Westernport) Pty Ltd v Shire of Hastings are satisfied. [622]

416 In the case of informal contracts, the implication of such a term must be necessary for the reasonable or effective operation of the contract. As stated by Deane J in Hawkins v Clayton: [623]

[W]here it is apparent that the parties have not attempted to spell out the full terms of their contract, a court should imply a term by reference to the imputed intention of the parties if, but only if, it can be seen that the implication of the particular term is necessary for the reasonable or effective operation of a contract of that nature in the circumstances of the case. That general statement of principle is subject to the qualification that a term may be implied in a contract by established mercantile usage or professional practice or by a past course of dealing between the parties.[624]

417 In such circumstances, the nature and context of the contractual relationship will inform both the implication of an obligation to act in good faith, as well as the content of that obligation.[625] In Australian Competition and Consumer Commission v Geowash Pty Ltd (Subject to a Deed of Company Arrangement) (No 3),[626] after considering an extensive list of authorities, Colvin J observed:

... Some contractual contexts are such that there is a level of trust reposed by one party in the other, for example dealings with a lawyer, doctor or financial adviser. In other contractual contexts, one party may seek to encourage a party to repose trust in what is being said by the other party. Contractual dealings with a relational character where one party acts in an advisory or expert capacity are different to instances which are usually commercial in character. These types of contextual circumstances may affect what a party negotiating or dealing in good faith may be expected to do in particular circumstances.[627]

418 In the case of the Conheady Retainer and the 29 June 2017 Retainer, professional practice represented by the provisions of the Code dealing with integrity, confidentiality and professional behaviour, including the requirement for fair dealing, establish that a term of good faith is to be implied. The implication of such a term flows naturally from the obligation of the accountant to give the client the full benefit of performance of the accountant's obligations pursuant to the retainer where the scope of work to be performed includes the provision of advice and where confidential information is provided by the client pursuant to the retainer. In this case the implication of the term flows naturally from the obligations in the Code that apply to the contractual relationship.

419 In the case of the Conheady Retainer the implication of a good faith obligation is supported by the 'full suite of services' provided by the Mulcahy parties to Mr Conheady, the length of the relationship, the specific scope of services the subject of the Conheady Retainer, and the trust placed by him in Mr Mulcahy of which both men gave evidence.[628]

420 Applying the criteria in BP Refinery (Westernport),[629] to imply a good faith obligation in the Conheady Retainer is both reasonable and equitable. It is necessary to give business efficacy to the contract in circumstances where the subject matter includes the provision of financial advice and where confidential information relating to the proposed transaction is provided. It can properly be said that to imply such a term is so obvious that it 'goes without saying'. As what is involved in such a term is clearly identifiable, having the essential characteristics identified by the Court of Appeal in Masters[630] and by Allsop P in Macquarie International,[631] the term is capable of clear expression. The term does not contradict any express term of the contract and the implication of it is necessary to give business efficacy to the contract.

421 In the case of the 29 June 2017 Retainer, the good faith obligation is to be implied from the Code, from the ongoing provision of advice to Porter Group in circumstances of confidence concerning Project Tonka and from the conversation on 29 June 2017 in which Mr Mulcahy confirmed he 'could' and then did act for Mr Porter providing advice on two issues on that day and agreeing to do so as requested thereafter about 'any part of the deal'. I accept that it was a term of the Conheady Retainer and also of the 29 June 2017 Retainer that the Mulcahy parties would act in good faith.

422 However whether the good faith obligation implied into the Conheady Retainer and the 29 June 2017 Retainer was accompanied by obligation to act 'in the best interests of the client' is another matter. Although pleaded as part of a single implied term, the best interests obligation is not an accepted incident of a good faith obligation. The obligation alleged is also not an accepted obligation of a fiduciary, should a fiduciary relationship be found to exist.

423 There is nothing in the Code that supports the implication of a positive obligation on the part of an accountant to act in the best interests of a client by whom the accountant is retained. There is an obligation not to disclose confidential information to third parties or to use such information for the personal advantage of the member[632] but no positive obligation to use that information in the best interests of the client.

424 A duty to act in good faith and in the best interests of the client was alleged to form part of the fiduciary obligations of an accountant in Neville's Bus Services Pty Ltd v Pitcher Partners.[633] O'Callaghan J said of such an asserted obligation:

the particular pleaded fiduciary duties (to act with good faith and in the best interests of NBS .....are not accepted as fiduciary duties because they are impermissibly "prescriptive". As the plurality explained in Pilmer v Duke Group Ltd (in liq) [2001] HCA 31; (2001) 207 CLR 165 at [74]:

...In Breen v Williams [(1996) 186 CLR 71], the point was made, by way of contrast to what is said in some of the Canadian judgments, that fiduciary obligations are proscriptive rather than prescriptive in nature; there is not imposed upon fiduciaries a quasi-tortious duty to act solely in the best interests of their principals. In Breen v Williams, Gaudron and McHugh JJ said [at 113]:

In this country, fiduciary obligations arise because a person has come under an obligation to act in another's interests. As a result, equity imposes on the fiduciary proscriptive obligations - not to obtain any unauthorised benefit from the relationship and not to be in a position of conflict. If these obligations are breached, the fiduciary must account for any profits and make good any losses arising from the breach. But the law of this country does not otherwise impose positive legal duties on the fiduciary to act in the interests of the person to whom the duty is owed.[634]

425 There is no implied term of the Conheady Retainer or of the 29 June 2017 Retainer, that the Mulcahy parties owed an obligation to act in the best interests of the client. For the reasons discussed by O'Callaghan J in Neville's Bus Services, that remains the case if the Mulcahy parties owe fiduciary duties to the plaintiffs or either of them.

426 There is no real contest about the implication of the other terms for which the plaintiffs contend.

427 The obligation of Mr Mulcahy not to improperly make use of his position as an adviser is consistent with the fundamental principles in clauses 100.5(a) and (d) of the Code imported into both the Conheady and 29 June 2017 Retainers. It is an obligation that is appropriately implied into the Conheady Retainer given the trust placed by Mr Conheady in Mr Mulcahy. That there was also a relationship of trust between Porter Group and the Mulcahy parties such that the obligation is to be implied concerning Mr Porter is also the case. So much is evident from the fact and nature of the ongoing engagement of the Mulcahy parties to advise Porter Group concerning Project Tonka and in relation to the potential claim against Fordhams, both highly confidential and sensitive matters.

428 Where confidential information is communicated on the understanding that a restriction is being imposed upon the recipient's right to use and/or to communicate that information, a duty of confidence will ordinarily become an implied term of the contract between those parties. In Coco v A N Clark (Engineers),[635] Megarry J suggested that the 'officious bystander' provided a convenient touchstone for determining not only whether a contractual duty should be implied, but also whether an equitable duty of confidence should be imposed. In Ansell Rubber Co v Allied Rubber Industries,[636] Gowans J said:

that obligation [i.e. of confidence] may come into existence by reason of the terms of an agreement, or what is implicit in them, by reason of the nature of the relationship between the persons, or by reason of the subject-matter and the circumstances in which the subject-matter has come into the hands of the person charged with the breach.[637]

429 The obligation to keep information imparted in the course of the retainer confidential is an incident of the accountant/client relationship. It is an obligation recognised by clauses 100.5, 140.1(b), 140.3 and 140.6 of the Code. The obligation is also to be implied where the retainer is one involving the provision of advice and where the information that is confidential and shared by the client relates to the subject matter of the retainer. For advice to effectively be provided to the client by the accountant the client must be able to impart all manner of information about the client's business and financial affairs as might be relevant, knowing that whenever such information is shared with the accountant it will be kept confidential.

430 The obligation not to improperly use confidential information obtained in the course of a client/accountant relationship may be said to be so obvious that it goes without saying.[638] It is an obligation expressly addressed by the Code. As provided for in the Code, it is an obligation that continues after the end of the accountant/client relationship.

431 The defendants submitted the obligation not to improperly use information must be construed in light of Mr Mulcahy's evidence that he disclosed that he and clients of his would be interested in investing in the CBB opportunity. The prospect of such investment was raised with Mr Conheady between 3 and 15 November 2017 during the currency of the 29 June 2017 Retainer. It was again raised on 16 November 2017 during the currency of the Conheady Retainer.

432 It was submitted that as a result, any retainer should be construed as permitting Mr Mulcahy to pursue an interest in the Business. I do not agree. The fact that on two occasions Mr Mulcahy expressed an interest to invest personally falls well short of agreement or acquiescence on the part of the plaintiffs that Mr Mulcahy might pursue the opportunity to acquire a controlling interest in the Business for himself and his fellow investors.

433 The evidence does not support reading down the obligation in the Code that Mr Mulcahy not use confidential information for his own personal advantage. First, what was being proposed by Mr Mulcahy was co-investment as to 5-10%,[639] not investment in competition to or in conflict with the plaintiffs' interests. Second, irrespective of what Mr Mulcahy said, there was no agreement to any investment by Mr Conheady on either occasion. The implied term not to improperly use information obtained from Mr Conheady remains as a term of both retainers in an unqualified form. What was said by Mr Mulcahy about his interest in investing did not serve to convert an 'improper' use of confidential information to a 'proper' one.

434 I consider that each of the terms set out at paragraph [49](b)-(d) was an implied term of the Conheady Retainer and of the 29 June 2017 Retainer.

435 The Joint Retainer is alleged to have occurred as a result of the discussions on 4 December 2017 between Mr Conheady and Mr Mulcahy. The plaintiffs allege as a result of those discussions both Mr Conheady and Mr Porter engaged the Mulcahy parties to advise them on the proposal to purchase the Business on the same terms as the Conheady Retainer.[640] Alternatively, the plaintiffs allege that earlier retainers, including the Conheady Retainer, were novated on 4 December 2017 so that the parties to that retainer became the Mulcahy parties on the one hand and Mr Porter and Mr Conheady on the other.[641]

436 The defendants deny the existence of the Joint Retainer and deny there was a novation. I consider they are correct to do so.

437 Nothing that occurred at the meeting on 4 December 2017 could be interpreted as a new engagement or a re-engagement of the Mulcahy parties by Mr Porter. The purpose and content of the meeting involved Mr Conheady obtaining advice about his particular interest as a participant with Mr Porter in the proposed acquisition of an 80% controlling interest in the Business. What Mr Mulcahy was asked to give advice about and what he advised Mr Conheady about that day was Mr Conheady's interest in the proposed 40 - 40 unit holding structure. That is, based on 80% of the Business being acquired by Mr Conheady and Mr Porter. It was no part of that discussion for Mr Conheady to seek advice on behalf of Mr Porter or for Mr Mulcahy to advise Mr Porter and he did not do so. Mr Porter had his own accountants, Fordhams, and they were advising him at that time.

438 The provision of documents to Fordhams by Mr Conheady on 28 November 2017, including the financial forecast, and the review of the forecast by Fordhams was on behalf of Mr Porter and so as to assist Mr Porter to safeguard his interests. That is in contrast to the interests of Mr Conheady which Mr Conheady personally sought to protect and about which he obtained advice when he met with Mr Mulcahy on 4 December 2017.

439 There is no substance to the allegation that on 4 December 2017 there was either a Joint Retainer or a novation of an earlier retainer that involved Mr Porter again becoming a client of the Mulcahy parties in relation to the transaction.

440 As submitted by the defendants, Fordhams also provided advice in relation to the shareholders agreement and incorporated the corporate vehicle and holding trust for the proposed acquisition as requested by Mr Conheady.[642] That was work performed jointly for Mr Porter and Mr Conheady as the proposed purchasers of the Business. However the meeting attended by Mr Conheady with Mr Mulcahy on 4 December 2017 was to make sure what was being proposed by Fordhams was a structure that properly reflected and protected his personal interests. The advice provided by Mr Mulcahy to Mr Conheady during that meeting was part of performance of the ongoing Conheady Retainer.

441 I do not accept submissions by the defendants that the 30 November 2017 email sent by Mr Mulcahy to Mr Matthews indicates that Mulcahy & Co understood Fordhams were advising Mr Porter in relation to CBB and that Mr Mulcahy was engaging with Mr Conheady only to 'work out how he will hold his shares'.[643] The request by Mr Conheady to meet and to be provided with advice about holding his 40% interest in the Business cannot be viewed in a vacuum, ignoring events that preceded it, in particular, what was discussed on 16 November 2017.

442 The ASC identifies four categories of information alleged to be confidential of which Mr Conheady informed Mr Mulcahy.[644] The first, 'the confidential information shared in the course of performance of the Porter Retainer, including that Mr Porter was prepared to buy 70% of the Business based on a value of $12m for the whole business and as to sources of funding to acquire the Business'. The second, the 'further confidential information' provided by Mr Conheady at the meeting at the Yacht Club on 16 November 2017. That information included that Mr Conheady would personally pursue the opportunity to acquire the Business that Mr Porter was no longer interested in doing so, that Mr Conheady was prepared to pay 70% of $12m to acquire a controlling interest in the Business, that the Business had been independently valued at up to $21m by Munday Wilkinson, the manner in which that value had been calculated, and the five ways in which Mr Conheady considered the Business and its profitability could be improved.[645] The third category, 'the price information' concerns the offer to buy a 70% interest in the Business on terms and the in principle acceptance by Mr Debono on 20 and 21 November 2017 to sell on those terms to Mr Conheady and a consortium of investors.[646] The fourth category, 'personal confidential information' regarding the assets and liabilities, income and expenditure, cash flow, borrowing capacity, business acumen and appetite for risk of the plaintiffs and their related entities.[647]

443 Whether information is being disclosed in circumstances importing a duty of confidence may be determined by considering whether a reasonable person standing in the shoes of the recipient of the information would have realised upon reasonable grounds that the information was being given to that person in confidence.[648]

444 The price Mr Porter was prepared to pay, what had been negotiated about WIP on a sale and opportunities to expand/improve the performance of the Business were disclosed by Mr Conheady to Mr Mulcahy on 29 June 2017. The disclosure occurred in circumstances where Mr Porter was the potential purchaser, where Mr Porter and Mr Conheady had entered into a confidentiality agreement with the vendor, where the 29 June 2017 Retainer was agreed and where advice was sought and provided about a share sale and warranties. A reasonable person in the position of Mr Mulcahy would have realised the information provided by Mr Conheady on 29 June 2017 was being given to him in confidence.

445 When Mr Porter made his two offers to acquire a controlling interest in the Business, those offers were not copied to Mr Mulcahy and there was no provision of that information to him. Mr Mulcahy was not consulted about or involved in the negotiation of the contract of sale or shareholders agreement. He did not attend the 2 November 2017 meeting. However, at a time after 3 November 2017 and before 15 November 2017, Mr Conheady shared information with Mr Mulcahy about Mr Porter's shortfall in funding the transaction. Although no advice was sought or obtained from Mr Mulcahy at that time, the information conveyed was confidential in nature and was shared in circumstances of confidence.

446 The 29 June 2017 Retainer by Mr Porter was ongoing. Mr Mulcahy had said Mr Conheady could talk to him about any part of the deal, and Mr Conheady did so. The 'updates' that Mr Conheady provided to Mr Mulcahy between August and November relating to his due diligence enquiries was information shared by Mr Conheady with Mr Mulcahy in circumstances of confidence. This was not information that a reasonable person in the position of Mr Mulcahy would have expected could be shared with others or used for the recipient's own purposes.

447 The 'further confidential information' provided by Mr Conheady to Mr Mulcahy on 16 November 2017 is also information that a reasonable person standing in Mr Mulcahy's shoes on that day would have realised was information given to him in confidence. Information provided by Mr Conheady to Mr Mulcahy during the lunch at the Yacht Club was provided so that the Mulcahy parties might discharge their obligations including to provide advice to Mr Conheady pursuant to the Conheady Retainer.

448 The information included information about the existence of the Munday Wilkinson valuation, the quantum of the valuation and how that valuation was arrived at. That information was important and sensitive confidential information. It was an independent valuation of the Business that at least strongly suggested, if not demonstrated, that the value of $12m that Mr Debono had put on the Business as a whole was grossly understated. Although the written valuation was not itself provided, because Mr Mulcahy had himself valued the Business, but had adopted a different multiple, the provision of the written valuation itself was unnecessary. Objectively the information was not only confidential, it was valuable confidential information in the hands of any person who might be interested as a potential purchaser of the Business or a controlling interest in it. That is so as a matter of common sense. It was accepted to be so by Mr Ford:

Mr Ford, my question was it looks like a great deal based on these figures, doesn't it?... Yes.

And it looks like a deal worth pursuing, doesn't it? ... Yes

And these figures, I assume, would pique your interest? Yes

And you've received, have you previously, other offers to participate in investments from Mr Mulcahy? Has he given you other opportunities?... Yes, I've invested with Jamie in the past.

But you don't always pursue them, do you?... No

But, after you received this email, this one was worth looking into?... Yes.[649]

449 The fact Mr Mulcahy saw fit to refer to the $21m valuation in his 19 December 2017 email with a view to securing Mr Broadbent, Mr Ford and Mr Matthews as his co-investors is consistent with the importance he attached to such confidential information.

450 That Mr Conheady had conducted extensive due diligence,[650] so extensive that it irritated Mr Debono[651] and that the due diligence process had not revealed anything untoward was also important confidential information imparted by Mr Conheady to Mr Mulcahy on 16 November 2017. Knowing an extensive due diligence process had been carried out and that nothing 'untoward' had been uncovered meant that a person who was aware of that fact was at an advantage compared to another person who might also be interested in the Business but did not have that knowledge.

451 The defendants submitted any confidentiality attaching to information about CBB arising from Mr Conheady's due diligence enquiries, could have been protected by him requiring a confidentiality undertaking or agreement but that he 'elected' not to obtain such an undertaking or agreement. The question of an election does not arise. Mr Conheady was imparting confidential information to his trusted adviser of many years. Initially he was doing so in the context of the ongoing 29 June 2017 Retainer, later he was doing so in the context of the Conheady Retainer. He was entitled to proceed on the basis of the implied obligations of confidentiality that formed part of those retainers. That was the case concerning due diligence enquiries about which he 'updated' Mr Mulcahy. It was the case when he reported to Mr Mulcahy on 16 November 2017 that nothing 'untoward' had been discovered.

452 The plaintiffs allege Mr Conheady's assessment of the Business as a 'good business' and worth buying following his due diligence enquiries was confidential information. The defendants submit that that information was separately known to Mr Mulcahy as a result of his work preparing the Profile.

453 There is a difference between Mr Mulcahy's assessment of the Business when preparing the Profile in 2016 and Mr Conheady's assessment in November 2017. Mr Mulcahy had not undertaken a due diligence process. Mr Conheady had done so. His assessment of the Business took into account the performance of the Business since October 2016. Without that updated information, a person who proceeded by reference to the Profile would have been proceeding on the basis of outdated financial information. Mr Conheady's assessment that in November 2017 that it was a 'good business' was confidential information imparted in circumstances of confidence.

454 The defendants submitted the five business improvement ideas conveyed to Mr Mulcahy on 16 November 2017 do not comprise confidential information, that the majority of the ideas were developed by Mulcahy & Co, were included in the Profile or otherwise were of a general commercial nature.[652] I do not agree. The Profile and its contents were confidential, provided only after Mr Porter signed a confidentiality agreement. The business improvement ideas, even if mentioned in the Profile, had been evaluated and assessed by Mr Conheady in the due diligence process. The circumstances in which the five ideas were conveyed to Mr Mulcahy were circumstances of confidence.

455 As to the third category, 'the price information', I have found that on 21 November 2017 Mr Debono agreed to sell an 80% interest in the Business to Mr Mulcahy on terms, $6m at settlement and $3.6m as vendor finance for seven years at 9%.[653] While Mr Conheady proceeded on the basis the offer to purchase on those terms had been accepted,[654] including when asking Mr Mulcahy for the letter to the ANZ on 20 December 2017, Mr Conheady did not tell Mr Mulcahy the precise terms of the offer that had been agreed to by Mr Debono.

456 Mr Conheady told Mr Mulcahy about the terms of his initial offer on 17 November 2017.[655] Those terms were later revised. It was the revised terms that were agreed to by Mr Debono.[656] There is no evidence Mr Conheady told Mr Mulcahy about the revised terms.

457 On 30 November 2017 Mr Conheady called Mr Mulcahy and told him he and Mr Porter were proceeding with the 'deal' with Mr Debono.[657] That information was communicated by Mr Conheady when arranging to meet with Mr Mulcahy to discuss how he would hold his investment. When the two men met on 4 December 2017, the internal arrangements concerning that deal; the 40 - 40 split of an interest in the Business as between Mr Conheady and Mr Porter; were disclosed to Mr Mulcahy. The fact a 'deal' had been reached with Mr Debono and that as part of that deal Mr Conheady and Mr Porter would hold 40% each of the shares in the Business was information a reasonable person standing in Mr Mulcahy's shoes would have realised was information being given to him in confidence. It was information given in order that the Mulcahy parties might advise Mr Conheady.

458 The defendants submitted it was disingenuous to characterise the preparedness of Mr Porter and Mr Conheady to acquire an interest in the Business based on a value of $12m as confidential information. They submitted the evidence of all of the defendants' witnesses was that the value of the Business was fixed by Mr Debono at $12m.[658]

459 If the information about the price at which Mr Debono was willing to sell the Business was known to Mr Mulcahy, it was information that Mr Mulcahy obtained in 2016 in circumstances of confidence when acting for Mr Debono. It was information that Mr Debono was only willing to share with others who had first signed a confidentiality agreement.[659]

460 However, no matter what Mr Debono may have been willing to sell the whole of the Business for in October 2016, the fact he was willing to sell something else (a controlling interest in the Business based on that same value of $12m to the plaintiffs from June 2017 via a share sale) was new and confidential information when shared with Mr Mulcahy. Similarly, when Mr Conheady told Mr Mulcahy he had reached a 'deal' to buy a controlling interest on vendor terms, that was new confidential information provided to Mr Mulcahy.

461 The fourth category of confidential information is information described by Gillard J in Yunghanns v Elfic Ltd[660] as 'getting to know you factors':

..as a general rule it is necessary to identify and establish that there was some confidential information provided ... But the degree of particularity of the confidential information must depend upon all the circumstances. Often it cannot be identified for fear of disclosure. In considering this factor it must be borne in mind that a solicitor makes notes, forms views and opinions of clients and observes things that the client may have forgotten or overlooked. In some cases the circumstances of the retainer and the nature of the legal work will be sufficient to establish the nature of the confidential information. In this regard the relationship between solicitor and client may be such that the solicitor learns a great deal about his client, his strengths, his weaknesses, his honesty or lack thereof, his reaction to crisis, pressure or tension, his attitude to litigation and settling cases and his tactics. These are factors which I would call the "getting to know you" factors. The overall opinion formed by a solicitor of his client as a result of his contact may in the circumstances amount to confidential information that should not be disclosed or used against the client.[661]

462 Concerning Mr Porter, the plaintiffs rely on the 30 June 2016 email from Mulcahy & Co, which stated 'we feel like we have really got to know your business'.[662] The Mulcahy parties got to know Mr Porter, Porter Group and its business as a result of the Review. They got to know Porter Group as a result of the secondment of Ms Tuck, the preparation of the 2016 Porter Group consolidated accounts, their involvement in Project Tonka, and as an incident of providing advice about the proposed claim against Fordhams. They got to know about Mr Porter's appetite for risk by being told that Mr Porter wanted to fund the purchase by borrowing 100% of the purchase price, they got to know his attitude to funding acquisitions by borrowing through Mulcahy & Co's involvement in the Ballan purchase, by being told on 16 November 2017 that Mr Porter had withdrawn as a purchaser and being informed on 30 November 2017, that Mr Porter was 'back' as a purchaser in the context of a terms purchase of an 80% interest in the Business.

463 The defendants denied the Mulcahy parties knew confidential information about Mr Porter. They submitted the audited financial accounts of Porter Plant and therefore its general financial capacity to execute an acquisition such as CBB were publicly available online.[663] Mr Porter confirmed that to be so.[664] However, having access to audited accounts is not the same as having detailed knowledge of a business that flowed from carrying out the Review. It is not the same as 'getting to know you' and, as a result, having detailed information about the risk appetite of Mr Porter and his desire to purchase CBB on a fully funded basis. Information about those matters was confidential information. So too was the information that Mr Porter had been unable to secure funding at the level he wanted in order to support his 14 September 2017 offer confidential information.

464 The Mulcahy parties knew the 'personal confidential information' concerning Mr Conheady. They had that knowledge as a result of providing accounting services to Mr Conheady and his family from 2005. Specifically concerning the proposed purchase on terms, they knew of the risk appetite of Mr Conheady derived from the 16 November 2017 discussion. Mr Mulcahy also knew about Mr Conheady's quest to obtain funding from the ANZ because Mr Conheady sought and obtained the Mulcahy parties' help with that.

465 I accept that confidential information acquired by the Mulcahy parties included in respect of both plaintiffs 'getting to know' their financial strengths and weaknesses, their appetite for risk, and their attitudes to and preferences for debt or equity relevant to the proposed acquisition of a controlling interest in the Business.

466 Apart from pleaded categories of confidential information, there is a further document in respect of which confidentiality issues arose at trial. That document is the 14 September 2017 offer by Mr Porter.[665] The defendants submitted there are no conclusions of breach or of use of 'confidential information' which can be drawn from the similarity between the draft letter of offer Mr Mulcahy prepared on 24 January 2018[666] and the offer made by Mr Porter on 14 September 2017.[667] Mr Mulcahy accepted that the 'sequence' of the topics set out in the offers was similar.[668] The defendants submitted the key terms of such an offer are no doubt similar for other business purchases. They submitted there is no evidence that Mr Mulcahy saw the offer sent by Mr Porter on 14 September 2017 or that having sent it to Mr Debono, that Mr Porter retained any confidentiality in it.[669]

467 Mr Mulcahy gave evidence that he knew 2 January 2018 was the last date for settlement of the sale to Mr Porter. That date was specified in the 14 September 2017 Porter offer. I do not agree that Mr Porter did not retain confidentiality in the 14 September 2017 offer. It was an express term of the offer that it was confidential. There is no evidence Mr Porter or Mr Conheady provided a copy of that offer to Mr Mulcahy.[670] If Mr Mulcahy did not see or have access to the 14 September 2017 offer, he must have an amazing sixth sense. The contents of the 24 January 2018 letter which he prepared and which when approved by his co-investors was sent by him to Mr Debono on 25 January 2018 bore an uncanny resemblance to the 14 September 2017 Porter offer.

468 The knowledge of the precise terms of the 14 September 2017 Porter offer was confidential information that a person who knew about it could use to prepare and to make a cash offer to Mr Debono, likely more attractive to him, as was the Porter offer, compared to a terms offer. The 14 September 2017 offer was known to Mr Debono to whom it was made. It must be the case its contents were known to Mr Matthews, the solicitor charged by Mr Debono with preparation of contract documents intended to give effect to it. I infer that it was Mr Matthews who provided a copy of the 14 September 2017 offer to Mr Mulcahy. He may have done so in advance of the meeting with Mr Debono on 18 December 2017 or he may have done so after that meeting. What is clear is that Mr Mulcahy used the 14 September 2017 offer to prepare the 24 January 2017 letter, finalised on 25 January 2018 and sent to Mr Debono.

469 The matters relied upon by the plaintiffs in the ASC as giving rise to the fiduciary duties alleged are very wide ranging.[671] In the case of Mr Porter they include the provision by the Mulcahy parties of accounting taxation and business advisory services to Porter Plant and Mr Porter between 2016 and 2018, in the course of which, the Mulcahy parties became aware of personal financial information, including Mr Porter's appetite for risk.[672] The plaintiffs relied on the Porter Retainer, and allegations relating to that retainer;[673] including the sharing of confidential information by or on behalf of Mr Porter with Mr Mulcahy between July and mid November 2017, in circumstances where the Mulcahy parties knew the confidential information was provided to them as trusted advisors and where, but for the existence of that trust, it would not have been provided.[674]

470 So far as Mr Conheady is concerned, the matters relied on include the provision by the Mulcahy parties of services to Mr Conheady from 2005,[675] the provision of the 'further confidential information' on 16 November 2017 in circumstances where Mr Mulcahy advised the acquisition of the business was a 'great opportunity' and recommended Mr Conheady proceed;[676] the Conheady Retainer and associated allegations,[677] the repetition and confirmation of the 'confidential information' in the course of the Conheady Retainer,[678] the fact that acting in reliance on Mr Mulcahy's recommendation on 20 and 21 November 2017 Mr Conheady made an offer to purchase 80% of the Business which was accepted in principle on 21 November 2017,[679] the agreement between Mr Conheady and Mr Porter to purchase together and 'price information' about that purchase including how the acquisition should be structured, how the arrangements between Mr Porter and Mr Conheady should be structured and the tax implications for Mr Conheady of which the Mulcahy parties were informed on 4 December 2017.

471 The plaintiffs also relied on the provision of information about the price Mr Conheady and Mr Porter were prepared to pay for the Business, provided to the Mulcahy parties as trusted advisor in circumstances where but for that trust, it would not have been provided.[680] They relied on the Joint Retainer and associated allegations that they would purchase 80% of the Business.[681] They rely on the sending by the Mulcahy parties of the letter to the ANZ on 20 December 2017, and the events of 30 January 2018 when Mr Conheady met with Mr Mulcahy to discuss the structure of the proposed acquisition and its taxation implications.[682] They rely on the fact that at that time Mr Mulcahy did not disclose that he was or might be interested in personally acquiring the Business.[683]

472 In support of the alleged duty they rely on the fact the opportunity to acquire the Business was a valuable opportunity which, if exploited, would be likely to yield substantial benefits. That is said to be the case in circumstances where the capacity to exploit that opportunity was such that it was valuable property that was capable of being appropriated.[684]

473 The plaintiffs submitted that a person may take upon themselves the role of a fiduciary by a less formal arrangement than contract,[685] that a fiduciary duty is imposed by virtue of the character of the relationship and that fiduciary obligations may result from the course of dealings between parties.[686] They submitted that even if the engagement of the Mulcahy parties by the plaintiffs or either of them was not a formal contractual retainer, Mr Mulcahy owed fiduciary duties to them. They submitted that by reason of those fiduciary duties, the Mulcahy parties could not:

(i) pursue their own interests in circumstances where there was a conflict or substantial possibility of conflict between those interests and those of Mr Porter and Mr Conheady. Having been engaged by Mr Porter and Mr Conheady, the Mulcahy parties were precluded from changing sides;[687]

(ii) profit from their position as a fiduciary, or use their position to obtain a profit for a related party, without the fully informed consent of Mr Porter or Mr Conheady. The Mulcahy parties never sought to obtain consent. Instead, Mr Mulcahy chose to conceal the fact that he was negotiating with the vendor for his own benefit and for the benefit of persons associated with him.

474 The defendants submitted earlier retainers by Mr Conheady were limited to the provision of compliance services and that the retainer concerning CBB was a narrow retainer to provide information on taxation outcomes about a proposed holding structure.

475 The Mulcahy parties submitted they dealt with the plaintiffs at arm's length and on an equal footing, an important if not decisive indicator that no fiduciary duty arose.[688] They submitted the essence of the relationship is not just the reliance on 'the guidance or advice of another, where the other is aware of that reliance and where the person upon whom reliance is placed obtains, or may well obtain, a benefit from the transaction or has some other interest in it being concluded'.[689] In addition confidentiality must be shown to exist. They submitted that as there was no disclosure of confidential information the 'vital element' of confidentiality was missing.

476 The Mulcahy parties submitted the 'getting to know you' matters alleged are insufficient to create the necessary vulnerability or expectation of loyalty in the absence of any commercial relationship between the parties relating to the acquisition of the Business. They submitted that as the plaintiffs were conducting their own negotiations with the vendor, there was no vulnerability. Mr Mulcahy was the introducer only with the consequence the plaintiffs' assessment of the Business, their finance arrangements having regard to their own appetite for risk and borrowing capacity was irrelevant to Mr Mulcahy or to BFMM as subsequent purchaser.

477 BFMM submitted the relationship between the plaintiffs and the Mulcahy parties did not bring about a 'factual fiduciary relationship' where there is a reasonable expectation that one party should subordinate their interests to the interests of another.[690] BFMM submitted in determining the existence and scope of any fiduciary duty, the Code was merely a matter that might be considered in determining whether the relationship is one of a fiduciary character.

478 BFMM contended the services provided by the Mulcahy parties were limited, were provided under commercial agreements for the provision of discrete pieces of professional assistance, and that Mulcahy & Co did not act for or on behalf of the plaintiffs, or exercise a power or discretion which affected the interests of the plaintiffs, in a legal or practical sense. Whilst the plaintiffs may have placed trust and confidence in Mulcahy & Co in the performance of services, that does not convert what was a normal commercial or professional relationship into a relationship of a fiduciary character.

479 BFMM submitted none of the indicia of vulnerability, reliance or confidence to support a fiduciary duty owed by the Mulcahy parties, or either of them, were present. They submitted the fact Mr Mulcahy acted for CBB in relation to a sale of an interest in the Business, and that Mr Porter and Mr Conheady were aware of this relationship, tells against any separate fiduciary duty arising between the Mulcahy parties and the plaintiffs. They submitted the plaintiffs could not have reasonably formed a view that a relationship of loyalty existed between them and the Mulcahy parties which required the Mulcahy parties to act in their interests.[691]

480 BFMM submitted that even if a fiduciary duty were found to exist, such a fiduciary relationship would have to be construed narrowly and not as to impose obligations on the defendants in respect of a potential acquisition of the Business. They submitted allegations of a conflict of interest between the Mulcahy parties' interests and the plaintiffs' interests are erroneous.[692]

481 BFMM submitted that defining the scope of any fiduciary relationship requires considering the existence and ambit of any retainer agreement and that it is from the terms, ambit and scope of the contract of retainer that the fiduciary relationship arises, takes it content and exists.[693] Further, that fiduciary relationships cannot be inconsistent with the terms of a contract - they cannot be 'superimposed upon the contract in such a way as to alter the operation which the contract was intended to have according to its true construction'.[694] It follows that a person may be in a fiduciary relationship as to some aspects of the relationship but not others.[695]

482 BFMM submitted regardless of whether a retainer is found to exist, the enquiry as to the existence of a fiduciary duty looks to whether the relationship of the parties is one of agency, or of ascendancy or influence by one party over another, or dependence or trust on the part of that other.[696] Further, that any contractual relationship between Mulcahy & Co and Mr Conheady did not elevate the parties' relationship to a fiduciary one. They submitted that the narrow and often informal advice provided to Mr Conheady in the absence of any written agreement or invoice fell well short of giving rise to a duty requiring subordination of personal interests on the part of the Mulcahy parties.

483 In respect of Mr Porter, BFMM submitted the evidence supports that at all times, Mr Porter placed reliance on Fordhams as his primary advisers generally and concerning the CBB transaction. As a result, he was not in a position of vulnerability and reliance on Mulcahy & Co at any relevant time.

484 There is no single definition that can be given to identify a fiduciary relationship.[697] In Hospital Products,[698] Mason J set out an important statement of principle concerning fiduciary duties:

The accepted fiduciary relationships are sometimes referred to as relationships of trust and confidence or confidential relations (cf. Phipps v. Boardman (25)), viz., trustee and beneficiary, agent and principal, solicitor and client, employee and employer, director and company, and partners. The critical feature of these relationships is that the fiduciary undertakes or agrees to act for or on behalf of or in the interests of another person in the exercise of a power or, discretion which will affect the interests of that other person in a ... legal or practical sense. The relationship between the parties is therefore one which gives the fiduciary a special opportunity to, exercise the power or discretion to the detriment of that other person who is accordingly vulnerable to abuse by the fiduciary of his position. The expressions "for", "on behalf of", and "in the interests of" signify that the fiduciary acts in a "representative" character in the exercise of his responsibility, to adopt an expression used by the Court of Appeal.

It is partly because the fiduciary's exercise of the power or discretion can adversely affect the interests of the person to whom the duty is owed and because the latter is at the mercy of the former that the fiduciary comes under a duty to exercise his power or discretion in the interests of the person to whom it is owed ... [699]

485 A relationship will be a fiduciary one when it involves one of trust, and where confidence is reposed in the fiduciary.[700] In Grimaldi v Chameleon Mining NL (No 2),[701] Finn, Stone and Perram JJ said:

As to who is a "fiduciary", while there is no generally agreed and unexceptionable definition, the following description suffices for present purposes: a person will be in a fiduciary relationship with another when and insofar as that person has undertaken to perform such a function for, or has assumed such a responsibility to, another as would thereby reasonably entitle that other to expect that he or she will act in that other's interest to the exclusion of his or her own or a third party's interest: on who is a fiduciary, see Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41 at 96-97 (Hospital Products); News Ltd v Australian Rugby Football League Ltd [1996] FCAFC 870; (1996) 64 FCR 410 at 538-541; and see generally Conaglen, Fiduciary Loyalty (2010), Ch 9.[702]

486 The fiduciary relationship is, as Brennan CJ stated in Breen v Williams, 'a relationship of ascendancy or influence by one party over another, or dependence or trust on the part of that other'.[703] The distinguishing characteristic of a fiduciary relationship is that its essence, or purpose, is to serve exclusively the interests of a person or group of persons. It is a relationship in which the parties are not free to pursue their separate interests.

487 In ABN Amro Bank N V v Bathurst Regional Council,[704] Jacobson, Gilmour and Gordon JJ summarised the principles of fiduciary relationships:

1. The "critical feature is that the fiduciary undertakes or agrees to act for or on behalf of or in the interests of another person".

2. It is the element of undertaking (from the point of view of the fiduciary) or obligation (for and on behalf of the beneficiary) that has the consequence that equity insists that the principal must act in the "interests of" or "for the benefit of" the beneficiary rather than in the principal's own interests.

3. Whether a fiduciary relationship exists in a particular case, and if so, the scope of that fiduciary relationship, are matters which depend critically upon the particular circumstances of the case.

4. The characteristics which define a fiduciary relationship cannot be exhaustively defined. It is inappropriate to treat the existence of a fiduciary obligation as being dependent upon whether the principal and beneficiary fall into a particular status relationship:

5. Similarly, whether a fiduciary relationship has come into existence does not depend upon the motivation or desire of one party to establish a relationship of trust or confidence. What matters is whether there is a relationship involving the requisite undertaking, determined as a matter of objective characterisation, rather than by having regard to the subjective expectations of the parties.[705]

488 The relationship between a professional advisor and client, including that of accountant and client, does not fall within one of the established categories of fiduciary relationships. However, the categories of fiduciary relationships are not closed.[706] The relationship between accountant and client may give rise to a fiduciary relationship[707] where the 'critical features of those established relationships'[708] are found to exist. Ad hoc fiduciary relationships are 'infinitely varied',[709] with the scope of the duties owed pursuant to such relationships determined by the facts.[710]

489 A fiduciary relationship can be found or implied from the circumstances.[711] There is no requirement that there be any form of contract (such as a retainer) or formal legal relationship between the parties to establish a fiduciary duty. In Pilmer v Duke Group Ltd,[712] McHugh, Gummow, Hayne and Callinan JJ said:

It is important also to recognise the distinct character of the fiduciary obligation, which sets it apart from contract and tort. In Norberg v Wynrib McLachlin J said:[713]

"The foundation and ambit of the fiduciary obligation are conceptually distinct from the foundation and ambit of contract and tort. Sometimes the doctrines may overlap in their application, but that does not destroy their conceptual and functional uniqueness. In negligence and contract the parties are taken to be independent and equal actors, concerned primarily with their own self‑interest. Consequently, the law seeks a balance between enforcing obligations by awarding compensation when those obligations are breached, and preserving optimum freedom for those involved in the relationship in question. The essence of a fiduciary relationship, by contrast, is that one party exercises power on behalf of another and pledges himself or herself to act in the best interests of the other."[714]

490 In ASIC v Citicorp (No 4),[715] Jacobson J considered the relationship between contract and fiduciary relationships:

In Hospital Products 156 CLR at 97, Mason J observed that "contractual and fiduciary relationships may co-exist". His Honour said that if a fiduciary relationship is to exist between parties to a contract, the fiduciary relationship must conform to the terms of the contract. He went on to say that:

The fiduciary relationship cannot be superimposed upon the contract in such a way as to alter the operation which the contract was intended to have according to its true construction.

The observations of Gummow J in Breen v Williams 186 CLR at 132-133 are to the same effect. But his Honour also pointed out that a contractual term may be so precise in its regulation of what a party may do that there is no scope for the creation of a fiduciary duty.

It follows from these statements of principle that it is open to the parties to a contract to exclude or modify the operation of fiduciary duties...

It may well be that a fiduciary cannot exclude liability for fraud or deliberate dereliction of duty but beyond that there appears to be no restriction in the law to prevent a fiduciary from contracting out of, or modifying, his or her fiduciary duties, particularly where no prior fiduciary relationship existed and the contract defines the rights and duties of the parties....

The effect of the Australian and English authorities referred to above is that where a fiduciary relationship is said to be founded upon a contract, the ordinary rules of construction of contracts apply. Thus, whether a party is subject to fiduciary obligations, and the scope of any fiduciary duties, is to be determined by construing the contract as a whole in the light of the surrounding circumstances known to the parties and the purpose and object of the transaction...[716]

491 Also concerning the role of contracts in determining the existence or otherwise of a fiduciary duty, in Hospital Products Dawson J said:

a fiduciary relationship does not arise where one of the parties to a contract has failed to protect himself adequately by accepting terms which are insufficient to safeguard his interests. Where a relationship is such that by appropriate contractual provisions or other legal means the parties could adequately have protected themselves but have failed to do so, there is no basis without more for the imposition of fiduciary obligations in order to overcome the shortcomings in the arrangement between them.[717]

492 In commercial professional relationships, while some aspects may be commercial in nature and others may be fiduciary in nature, 'it is not an all or nothing situation'.[718] 'Commercial transactions do not stand outside the fiduciary regime simply because they are commercial transactions'.[719]

493 BFMM submitted that if a contractual relationship is found to exist between the parties which bears obligations similar to those of a fiduciary character, including an obligation to act in good faith, such a finding still does not necessarily elevate the relationship to a fiduciary one.[720] That is correct. To determine if a fiduciary relationship exists, as was recognized by Gibbs CJ in Hospital Products, 'all the facts and circumstances must be carefully examined'.[721]

494 A fiduciary relationship has been found to exist in a professional adviser context in circumstances where:

(a) there has been an undertaking by the adviser to act in the interests of another and not in his or her own interests;[722]

(b) the financial adviser has held themselves out as an expert on financial matters and undertaken to perform a financial advisory role for the client;[723]

(c) the adviser has provided strategic advice which involved the use of financial acumen, judgment and expertise to further the client's interests.[724]

495 The parties referred to a number of cases where fiduciary duties were alleged to be owed by accountants. As appears from those cases, including Gartner v Ernst & Young (No 2),[725] Pavan,[726] Townsend v Rousetty & Co (WA) Pty Ltd,[727] Simpson v Donnybrook Properties Pty Ltd,[728] McClymont v Critchley[729] and Sliteris v Ljubic,[730] whether an accountant owes a fiduciary duty is heavily dependent on the particular facts.[731] In Townsend v Collova, Le Miere J stated:

Not every task performed by an accountant for a client gives rise to a fiduciary relationship between them. The work done by the fiduciary must provide him with a power or discretion which can detrimentally affect the interests of his client and there has to be a relationship of influence, dependency or trust between the parties.[732]

496 BFMM referred to decisions in the United States in support of their contention that no fiduciary duty was owed. In United States v Arthur Young & Co[733] the United States Supreme Court said:

An independent certified public accountant performs a different role from an attorney, whose duty, as his client's confidential adviser and advocate, is to present the client's case in the most favorable possible light. In certifying the public reports that depict a corporation's financial status, the accountant performs a public responsibility transcending any employment relationship with the client, and owes allegiance to the corporation's creditors and stockholders, as well as to the investing public.[734]

497 In Iacurci v Sax,[735] the Connecticut Appellate Court held that an accountant acting as a tax return preparer was not in a fiduciary relationship with the client. The Court found the long-term relationship between the parties and the accountant's superior knowledge and skill on tax matters did not give rise to a fiduciary duty.

498 In Pilmer v The Duke Group Ltd,[736] partners in an accounting firm prepared a report for Kia Ora (later renamed Duke Group) in relation to a proposed takeover of another company. They reported that the price offered was fair and reasonable. Following the takeover Kia Ora went into liquidation. The High Court had to determine whether the accountant owed a fiduciary duty to Kia Ora. The majority (McHugh, Gummow, Hayne and Callinan JJ) held there was no fiduciary duty:

72 The trial judge correctly recognised that in some instances contractual and fiduciary relationships co‑exist and he referred to Daly as indicating that, in certain circumstances, a financial adviser may owe fiduciary obligations to a client. The trial judge concluded from the evidence that at times the appellants did undertake work as financial and corporate advisers including work on company appraisals and evaluations.[737] However, he found that the appellants had not acted in any such capacity for Kia Ora.

73 In submissions at trial reliance had been placed upon the passage from the report, ... stating the opinion of the appellants that the price proposed to be offered was fair and reasonable in all the circumstances. The trial judge rejected the submission that this represented advice given to Kia Ora to enter into the takeover transaction. Rather, that part of the report was an expression of an opinion given pursuant to the contract of retainer which obliged the appellants to value the issued capital of Western United and to express an opinion, with reference to listing rule 3J(3)(b), as to whether the purchase price was a fair price. His Honour concluded that the circumstance that the appellants acted incompetently and in breach of their contractual and tortious duties did not mean that they gave advice in the relevant sense for the purpose of liabilities as a fiduciary.

74 The trial judge was correct in principle in taking this approach. In Breen v Williams, the point was made, by way of contrast to what is said in some of the Canadian judgments, that fiduciary obligations are proscriptive rather than prescriptive in nature; there is not imposed upon fiduciaries a quasi‑tortious duty to act solely in the best interests of their principals.

75 The trial judge added that there was no other reason to suggest the existence of a fiduciary relationship.[738] In particular, the appellants were not agents of Kia Ora, there was no relationship of ascendancy or influence by the appellants over Kia Ora, nor one of dependence or trust on the part of Kia Ora in the relevant sense. It was to be expected that Kia Ora relied upon the appellants to do their work competently and independently but they were not guiding or influencing Kia Ora in the sense discussed in the cases dealing with fiduciary relationships.[739]

499 In Pavan,[740] the NSW Court of Appeal (Mahoney ACJ[741] and Beazley JA, with whom Meagher JA[742] agreed) determined a relationship between an accountant, Mr Ratnam, and his client, Dr Pavan, did not give rise to a fiduciary relationship. The case involved an accountant with a longstanding relationship with his client. Dr Pavan alleged Mr Ratnam was his adviser. The trial judge found he was not, he prepared Dr Pavan's tax returns.[743] Mr Ratnam proposed to develop land. He and Dr Pavan agreed that Dr Pavan would buy one of the units for $210,000. The development was to be carried out by a company controlled by Mr Ratnam. Dr Pavan paid the $210,000. The company carrying out the development failed. Dr Pavan claimed a Quistclose trust in relation to the amount paid,[744] alternatively, breach of fiduciary duty. Beazley JA said:

The cases establish that a number of factors may characterise a relationship as being of a fiduciary nature. They include: vulnerability, reliance and the presence of loyalty, trust and confidence. The notion of vulnerability, as used in this context, is not to be understood in the sense of any "weaker party" concept. Rather, it refers to the circumstance where another party agrees (not necessarily contractually) "to act on behalf of or in the interests of another and, as such, is in a position to affect the interests of that other person in a legal or practical sense. As such, fiduciary relationships are marked by vulnerability in that the fiduciary can abuse the power or discretion given him or her to the detriment of the beneficiary": see Hodgkinson per La Forest J at 168. Reference is also usefully made to Professor Finn's (now Justice Finn of the Federal Court of Australia) description in "The Fiduciary Principle" at 50-1:

...fiduciary responsibilities will be exacted where the function the advisor represents himself as performing, and for which he is consulted, is that of counselling an advised party as to how his interests will or might best be served in a matter considered to be of importance to his personal or financial well-being, and in which the adviser would be expected both to be disinterested, save for his remuneration, and to be free of adverse responsibilities unless the contrary is disclosed at the outset.[745]

500 When determining that no fiduciary relationship arose, her Honour considered the following matters factually relevant:

(i) the respondent and the appellant were in a tax accountant/client relationship;

(ii) in the course of and as part of that relationship, the respondent, from time to time, advised the appellant on appropriate financial structures and investment directions;

(iii) in 1983, the appellant was concerned to minimise his tax liability;

(iv) at that time, separate from his accountancy practice, the respondent had himself decided to pursue a particular investment opportunity, namely the development of land at Penrith upon which he proposed to build industrial units;

(v) the respondent acquired Nupace Pty Ltd as the investment vehicle;

(vi) there was no contractual relationship between the appellant and the respondent in respect of the project, although the respondent "introduced" the appellant to the project; and

(vii) there was no evidence of any representation by the respondent to the appellant that any monies he committed to the project were to be held "on trust", or were to be kept separate from Nupace Ply Ltd's monies; or were not to be utilised by Nupace Pty Ltd during the course of the development.

None of these circumstances point to the existence of a fiduciary relationship. Although the appellant undoubtedly had confidence that the project would be successful and it may well have been that that confidence was engendered by the fact the respondent was involved with it, there are none of the indicia of vulnerability, reliance or confidence in the sense which those matters bear in the context of a fiduciary relationship.[746]

501 In Townsend v Roussety Co (WA) Pty Ltd,[747] Buss JA (with whom Wheeler and McLure JJA agreed[748]) upheld the finding of the trial judge[749] that where an accountant prepared financial statements and advised in relation to loans, but did not act or provide advice in relation to the appellants' negotiation of an investment in the proposed business, he did not owe fiduciary duties to them in respect of the acquisition of that business.[750]

502 Both in Townsend v Roussety Co (WA) Pty Ltd[751] and in Pavan,[752] a key consideration in determining the existence or otherwise of a fiduciary duty was whether the accountant was in a position to affect the interests of the client in a legal or practical sense. That is, causing the client to be vulnerable in that the fiduciary might be in a position to abuse the power or discretion given him or her to the detriment of the beneficiary.

Application to the facts: Did the Mulcahy parties owe a fiduciary duty?

503 There are a number of reasons why I consider the Mulcahy parties owed a fiduciary duty to Mr Conheady.

504 First, the Conheady Retainer, the purpose of which was to provide accounting, taxation, structuring and financial advice in relation to Mr Conheady's proposed purchase of a controlling interest in CBB, was not a limited or narrow retainer as submitted on behalf of the defendants. Mr Mulcahy, and his firm, agreed to be 'by [Mr Conheady's] side' for the transaction.

505 Second, the Conheady Retainer sat within the full suite of services relationship that had been in place between Mr Conheady and the Mulcahy parties for over a decade. Contrary to the defendants' submissions, the services provided by the Mulcahy parties were not provided under a commercial agreement for the provision of discrete pieces of professional assistance.

506 Third, while the implied obligation to act in good faith, a term of the Conheady Retainer, is not itself a sufficient basis to find a fiduciary obligation, the existence of that obligation is consistent with the existence of such a relationship.

507 Fourth, and of more significance is the existence of the implied terms that the Mulcahy parties would keep confidential and not disclose or make use of confidential information or knowledge imparted to them in the course of the Conheady Retainer and the fact that confidential information was provided within the context of the Conheady Retainer where those obligations had application.

508 The disclosure of confidential information by Mr Conheady, identified by the Mulcahy parties as a 'vital element' to the existence of a fiduciary relationship, was not missing as was the submission on behalf of those parties. It was present in respect of Mr Conheady in the form of the 'further confidential information', and the 'price information' (but not including the precise terms upon which agreement had been reached in principle to the purchase of an 80% interest). It was also present in the form of the 'personal confidential information' concerning Mr Conheady.

509 Fifth, and critical to the existence of a fiduciary relationship, is the presence of a relationship of trust and confidence. Mr Conheady said, and I accept, that he trusted Mr Mulcahy 'implicitly' as his adviser.[753] Mr Mulcahy knew that Mr Conheady trusted him as his accountant. He described Mr Conheady as a 'trusted client'.[754] He said he appreciated Mr Conheady trusted him to tell him everything that might be relevant to his business affairs.[755] That is what Mr Conheady did. On 16 November 2017 when Mr Conheady provided the 'further confidential information', including about the Munday Wilkinson valuation, to Mr Mulcahy he did so because he trusted and relied on him absolutely to protect his interests in relation to the proposed transaction.

510 I agree with the plaintiffs that the present circumstances are to be distinguished from Pavan.[756] First, because unlike Pavan,[757] here there was a relationship of trust and confidence.[758] Second, the advice provided in Pavan by the accountant was much narrower in scope than in this case.[759] Third, Mr Ratnam was a 'tax accountant'. Mr Mulcahy was the head of the multidisciplinary practice of which Mulcahy & Co as the 'accounting' arm provided a full range of services to Mr Conheady and his family.

511 Sixth, when he agreed to stand by Mr Conheady's side, Mr Mulcahy assumed a responsibility to Mr Conheady as would reasonably entitle Mr Conheady to expect that he would act in the interest of Mr Conheady (on and from 16 November 2017) to the exclusion of his own or a third party's interest.[760] When asking Mr Mulcahy to be 'by my side' and whether he should make an offer for the Business, Mr Conheady was not merely relying on Mr Mulcahy's skill as an accountant. He was trusting and relying on him for advice and guidance that the Mulcahy parties would act in his interests, and not against them, in relation to the proposed transaction as he sought to bring that transaction to fruition.

512 Seventh, the provision of confidential information within and for the purposes of the Conheady Retainer gave the Mulcahy parties a power over Mr Conheady. It armed them with knowledge of confidential information concerning the proposed transaction in circumstances of trust that could detrimentally affect the interests of Mr Conheady if the Mulcahy parties misused that information..[761]

513 Eighth, the provision of the confidential information, including the 'personal information' and the 'getting to know you' information occurred in circumstances where Mr Conheady was vulnerable in a practical sense concerning the opportunity to acquire a controlling interest in the Business, the very subject matter about which he engaged Mr Mulcahy to be at his side. Mr Conheady was vulnerable because the Mulcahy parties had confidential information regarding his and Mr Porter's proposals. He was vulnerable because the recipient of the information, Mr Mulcahy, was in a position to affect in a practical sense his interest in relation to his proposed investment in the Business. Mr Mulcahy was in a position to do so because he conducted a multidisciplinary practice, including the provision of accounting and legal services and was a shareholder through his family trust in the legal practice acting for the vendor of the Business. Mr Conheady was vulnerable because Mr Mulcahy had previously acted for Mr Debono when preparing the Profile, he knew Mr Debono, and Mr Debono's daughter was employed in the legal practice.

514 For those reasons I find that Mr Mulcahy and his firm, Mulcahy & Co, whom he represented, were in a fiduciary relationship with Mr Conheady from 16 November 2017.

515 The fiduciary relationship between the Mulcahy parties and Mr Conheady is alleged by the plaintiffs to comprise duties owed by the Mulcahy parties:

(a) not to allow their personal interests to conflict with their duties to the plaintiffs;

(b) not to use against the plaintiffs any information, knowledge or resources of the plaintiffs which they are ascertained or acquired as a result of their engagement with or for the plaintiffs; and

(c) not to take advantage of any business opportunity that might come their way as a result of their engagement with or for the plaintiffs.[762]

516 The obligations alleged are consistent with the terms of the Conheady Retainer and with the Code. The obligations in the Code include express obligations to avoid 'conflicts of interest', examples of which include 'advising a client on the acquisition of a business which the firm is also interested in acquiring', to maintain confidentiality of information, and not to disclose or to make use of such information.

517 The fiduciary obligations alleged are also generally consistent with obligations identified in Breen v Williams,[763] an obligation to protect confidential information,[764] not to obtain any unauthorised benefit from the relationship and not to be in a position of conflict.[765] The exception to this general consistency is that the second duty alleged in the ASC, reproduced at paragraph [515](b) above, is not confined to confidential information.

518 BFMM advanced three propositions which it submitted must be considered to correctly determine the scope of any fiduciary duty.[766] First, breach of a duty requires always identifying the scope of the duty to determine whether the impugned conduct is captured within that duty as defined.[767] Secondly**,** the scope of the conflict rule is far from rigid and is moulded to the specific factual circumstances under which the duty arises and may relevantly be defined by the course of dealing of the parties.[768] Thirdly**,** the high threshold to establish the existence of a conflict in breach of fiduciary duty is if there is a 'significant possibility' of conflict.[769]

519 The existence of each of the fiduciary duties alleged, subject to the requirement concerning confidentiality is consistent with these three propositions. As to the first, the duties owed are consistent with the Conheady Retainer, the Code, the existence of trust and confidence reposed by Mr Conheady in the Mulcahy parties and his vulnerability. As to the second, the conflict here is between the duty owed to the client in relation to the opportunity to secure a controlling interest in the Business, the pursuit of which the Mulcahy parties agreed to stand with Mr Conheady in his bid to secure, and Mr Mulcahy's own desire to secure a controlling interest in the Business for himself. As to the third, the fact that on two occasions Mr Mulcahy told Mr Conheady he would be interested in investing in the Business himself shows there was more than a significant possibility of conflict. That conflict materialised when Mr Mulcahy moved successfully to 'white ant' Mr Conheady and to secure the opportunity for himself and his co-investors.

520 As discussed by McLure P in Streeter v Western Areas Exploration Pty Ltd (No 2),[770] the Mulcahy parties were prohibited by the profit rule from obtaining a profit by reason of their fiduciary position or by taking advantage of opportunity or knowledge derived from their fiduciary position.

521 As to the content of the fiduciary duties, I find that the Mulcahy parties owed fiduciary duties to Mr Conheady:

(a) not to allow their personal interests to conflict with their duties to him;

(b) not to use against him any confidential information which they ascertained or acquired as a result of the Conheady Retainer;

(c) not to take advantage of any business opportunity that might come their way as a result of their engagement with or for Mr Conheady so as to obtain any unauthorised benefit or profit from the relationship.

522 While the Mulcahy parties owed fiduciary duties to Mr Conheady, I do not consider that to be the case concerning Mr Porter. That is so for the following reasons. First, Mr Porter did not repose the same degree of trust and confidence in Mr Mulcahy as did Mr Conheady. Mr Porter did not tell Mr Mulcahy about and nor did he pass on copies of either of his offers to purchase to Mr Mulcahy. He did not ask Mr Mulcahy if he should make either of those offers. By way of contrast, Mr Conheady relied on Mr Mulcahy who advised him to 'go for it' before he made his offer on 16 November 2017. He told Mr Mulcahy about his offer on 17 November and then about the 'deal' he had reached with Mr Debono. Mr Porter did not do any of these things and Mr Conheady did not do any of them on his behalf. Second, while their business relationship, relevantly constituted by the 29 June 2017 Retainer, was one for the provision of advice from time to time, (and included a good faith obligation, obligations of confidentiality and not to be in a position of conflict, and terms implied by the Code), within that retainer advice was in fact sought only about two issues and then only on one day. This was not a 'by my side' engagement that saw Mr Porter seek and obtain advice along the way, after 29 June 2017 as the proposed transaction progressed. Third, there was not the necessary relationship of dependence on the part of Mr Porter that there was with Mr Conheady. Mr Porter and his interests were separately looked after by Fordhams from August/September 2017. When Mr Porter re-entered as a purchaser together with Mr Conheady of an 80% interest in the Business, the relevant financial information was provided to Fordhams so that Mr Porter could obtain advice from them.

523 Although Mr Porter's interests were exposed because of the confidential information about the opportunity shared with the Mulcahy parties, and because of that he was vulnerable, the relationship between him and those parties was not a fiduciary relationship. Mr Porter's relationship with the Mulcahy parties fell short of bringing about a 'factual fiduciary relationship' where a reasonable expectation that one party should subordinate their interests in a particular matter to the interests of another arose.[771]

524 The plaintiffs allege that, in breach of each of the retainers, the Mulcahy parties usurped the opportunity to acquire an interest in the Business for their own benefit or for the benefit of an associate to the Mulcahy parties.[772]

525 There is no evidence of breach of any of the terms of the 29 June 2017 Retainer prior to that retainer coming to an end on 15 November 2017. The position is very different concerning the Conheady Retainer. It is also different concerning the use of confidential information shared during the currency of the 29 June 2017 Retainer.

526 The plaintiffs are correct that from at least 14 December 2017 Mr Mulcahy took steps, successful steps, to usurp the opportunity to acquire a controlling interest in the Business for his own benefit and for the benefit of his co-investors in BFMM. Mr Mulcahy did so using confidential information imparted to him by Mr Conheady in the course of the 29 June 2017 Retainer and in the course of the Conheady Retainer.

527 The actions taken by Mr Mulcahy were in breach of the terms of the Conheady Retainer. Mr Mulcahy breached the Conheady Retainer beginning on 14 December 2017 when he sought out Mr Matthews with a view to progressing 'the next step' in relation to CBB. He was present with Mr Matthews when Mr Broadbent called Mr Ford to invite him to co-invest in the Business. Those who became the investors in BFMM having discussed the proposed investment, Mr Mulcahy and Mr Matthews met with Mr Debono at the Lake View Hotel. The aim of the 18 December 2017 meeting at the Hotel, initiated by Mr Mulcahy and Mr Matthews, was twofold. It was to take the 'Porter option' 'off the table' to 'white ant' the Mulcahy parties' client, Mr Conheady, in his pursuit of the purchase of a controlling interest in CBB, and it was for Mr Mulcahy to secure a controlling interest in the Business for himself and his co-investors. Both objectives were achieved at the meeting.

528 During the meeting Mr Debono conveyed his frustration with the plaintiffs.[773] No matter the extent of those frustrations, before the meeting, the plaintiffs were the only potential purchaser. They had completed due diligence, and on 21 November 2017 Mr Debono had agreed to sell 80% of the business to Mr Conheady.

529 What happened at the 18 December 2017 meeting fundamentally changed the position. Mr Mulcahy and Mr Matthews asked Mr Debono about selling a controlling interest in the Business to them for cash, instead of selling to Mr Conheady on terms. The proposal they put was the same as the 14 September 2017 Porter proposal, but with a July 2018 settlement date.

530 The day after the meeting at the Hotel, Mr Mulcahy reported in an email to his co-investors that Mr Debono had said he was 'keen to progress discussions' to sell a 70% share in the Business to them based on a $12m value with a 1 July 2018 settlement date. He reported, no doubt to entice and encourage the recipients of his email to co-invest with him, that the Business had been independently valued at $21m.

531 From the time of meeting at the Hotel on 18 December 2017, Mr Conheady and his co-investor, Mr Porter, were on the outer. Matters progressed rapidly in favour of Mr Mulcahy and his consortium as outlined in the chronology above. There was a site visit by all investors on 4 January 2018, and a formal written offer on 25 January 2018, an offer on the same terms as made verbally on 18 December 2017 as summarised in the 19 December 2017 email; an offer very closely reflecting both the terms and the language of the 14 September 2017 Porter offer.

532 These actions taken by Mr Mulcahy when he was at the same time acting for Mr Conheady were not disclosed or reported to Mr Conheady. Mr Mulcahy did not tell Mr Conheady about the meeting at the hotel with Mr Debono. He did not tell Mr Conheady that although Mr Conheady believed he had a 'deal' to purchase 80% of the Business on terms, that Mr Debono was instead 'keen to progress' the sale of a 70% interest to Mr Mulcahy and his consortium for cash, with settlement in six months' time.

533 These matters were actively concealed by Mr Mulcahy when on 20 December 2017 Mr Conheady requested the letter be sent to the ANZ and the Mulcahy parties provided that letter. They continued to be actively concealed when the two men met on 30 January 2018 and when Mr Conheady sent an email to Mr Mulcahy on 6 March 2018 saying Mr Debono had withdrawn the Business from the market, and thereafter.

534 As at 14 December 2017 and continuing, Mr Mulcahy owed contractual duties of good faith, not to make improper use of his position as a trusted adviser, not to improperly use confidential information and not to use his position or the confidential information so as to gain an advantage for himself or to cause detriment to Mr Conheady. By taking the actions that he did from 14 December 2017, Mr Mulcahy and Mulcahy & Co breached those contractual duties.

535 Mr Mulcahy's actions fundamentally undermined the services the Mulcahy parties had agreed to provide and, from 16 November 2017, were ostensibly providing pursuant to the Conheady Retainer. These were not the actions of Mr Mulcahy standing 'by the side' of Mr Conheady. These were actions taken in breach of the good faith obligation calculated to undermine the benefit of Mr Conheady's retainer of the Mulcahy parties. They were dishonest actions, deliberately undertaken by Mr Mulcahy without fidelity to the Conheady Retainer.

536 The actions taken by Mr Mulcahy to secure the opportunity for himself involved using confidential information. On 18 December 2017 Mr Mulcahy made a cash offer to Mr Debono when he knew there was a 'deal' for Mr Debono to sell on vendor terms to Mr Conheady. He knew about that deal, and that it involved terms because of the further confidential information and the 'price information' shared with him by Mr Conheady. When he put the cash proposal to Mr Debono on 18 December 2017, Mr Mulcahy took advantage of confidential information about his 'competitors' for the opportunity. He knew that Mr Conheady and Mr Porter had not secured funding for the proposal he put to Mr Debono, the proposal Mr Debono was 'keen to progress'. On 19 December 2017 Mr Mulcahy improperly disclosed to third parties, Mr Matthews, Mr Broadbent and Mr Ford, and for his own benefit used confidential information about the Munday Wilkinson $21m valuation.

537 There were implied terms of the Conheady and 29 June 2017 Retainers that Mr Mulcahy not improperly use confidential information, not make use of the Mulcahy parties' position as adviser, and keep confidential information imparted in the course of the retainer. The four categories of confidential information earlier discussed were all required to be kept confidential by the Mulcahy parties. To use such confidential information for the purpose of acquisition of a controlling interest in the Business the Mulcahy parties were also interested in acquiring was to breach of the terms of the Conheady Retainer, the 29 June 2017 Retainer (the obligations of confidentiality under the Code continued after the retainer itself ended) for Mr Mulcahy's purposes, to advance his interests and to damage those of his clients.

538 Mr Mulcahy improperly made use of his position as trusted adviser to Mr Conheady to usurp the opportunity to acquire a controlling interest in the Business for himself and for BFMM, and to cause detriment to Mr Conheady by depriving him of the benefit of that opportunity. The actions taken by Mr Mulcahy were in breach of the Code and of the terms of the Conheady Retainer.

539 Mr Mulcahy seemed to consider that once 2 January 2018 came and went, he was free to pursue an interest in the Business and, in substance, that he had acted entirely properly.[774] He was wrong about that in two respects. First, Mr Mulcahy's actions in breach of the Conheady Retainer began well before 2 January 2018. They began at least as early as 14 December 2017 when he sent the email to Mr Matthews, they continued when he was present for the call by Mr Broadbent, when on 18 December 2017 he met with Mr Debono at the Lake View Hotel and on 19 December 2017, when he sent the email to his co-investors. Throughout that time, on his evidence, he considered that Mr Conheady and Mr Porter had the opportunity to purchase the interest in CBB and to settle that purchase by 2 January 2018. Even so, he actively moved to secure a controlling interest in the Business. That is before his client's opportunity, even if viewed in the manner described by him, had ceased to be available to his client.

540 The second reason Mr Mulcahy was wrong about not acting improperly and in breach is because the obligations owed pursuant to the Conheady Retainer and of confidence in relation to the 29 June 2017 Retainer did not end on 2 January 2018, they were ongoing. Mr Mulcahy said he felt 'awkward' on 9 February 2018 and said he raised with Mr Debono whether he should tell Mr Porter, who he knew to still be interested in acquiring CBB, that Mr Debono would not sell to him and Mr Conheady. He said he felt awkward because if he told Mr Porter, Mr Porter might have cancelled $3m in equipment orders, resulting in loss to Mr Debono. It was his evidence that he was 'concerned for all their positions'.

541 The fact Mr Mulcahy felt 'awkward' is a product of his knowledge that he had successfully diverted his client's opportunity, he had done so using confidential information and he was actively concealing his actions from his client. It was clear from Mr Conheady's dealings with him on 20 December 2017, 30 January 2018 and 6 March 2018 that, until 6 March 2018, Mr Conheady believed the Mulcahy parties were acting in accordance with the Conheady Retainer, standing 'by his side'. In fact, Mr Mulcahy was continuing to act to secure the opportunity for himself during that time, including with the visit on 4 January 2018 and by sending the 25 January 2018 offer.

542 The reason Mr Mulcahy was 'concerned for all their positions' is because he had put himself in a position of conflict between his duty to his client and his own interests, and he had chosen to prefer his own interests.

543 Each of the alleged breaches of the Conheady Retainer with the exception of the obligation to act in the best interests of Mr Conheady is made out.

544 In the case of the 29 June 2017 Retainer I find there was a breach of the ongoing confidentiality obligations, to keep confidential and not to use such information when at the Lake View Hotel on 18 December 2017 Mr Mulcahy put a proposal that reflected the 14 September 2017 Porter offer and then made that offer in formal terms on 25 January 2018 knowing that Mr Porter had been unable to finance an offer in those terms as he had wished.

545 The plaintiffs alleged breach of fiduciary duties by the Mulcahy parties.[775]

546 BFMM submitted there was no breach of fiduciary duty for a number of reasons. First, because there was no failure to act in good faith and in the best interests of the plaintiffs. Secondly, because there was no improper use of the Mulcahy parties' position as an adviser, as the scope of the agreements for services had no term that could be implied to prevent the acquisition of CBB by BFMM. The CBB opportunity was introduced to the plaintiffs by Mulcahy & Co, so it was not possible that the opportunity to acquire 'came their way as a result of their engagement with or for the Plaintiffs'. BFMM did not obtain any advantage in the acquisition of the Business that emanated from the plaintiffs' engagement with the Mulcahy parties, including through the use of confidential information. Thirdly, the information belonging to the plaintiffs and made available to Mulcahy & Co in connection with the provision of tax and accounting services was not relevant to the CBB transaction and not capable of assisting Mulcahy & Co or BFMM to make a profit.

547 Each of these submissions fails because of the findings I have earlier made. As to the first matter, there was a failure to act in good faith. As to the second, there was improper use by Mr Mulcahy of his position as adviser. There were implied terms that the Mulcahy parties would not improperly make use of their position as trusted advisor and would not use confidential information to gain an advantage for themselves or to cause detriment to Mr Conheady and nor would they impart confidential information to third parties. Mr Mulcahy did each of those things. He made improper use of his position as trusted advisor when he contacted Mr Matthews on 14 December 2017, when he was present for the call by Mr Broadbent, when he met with Mr Debono on 18 December 2017, when he sent the email to his co-investors on 19 December 2017, when he prepared what became the formal offer to purchase a controlling interest in the Business on 25 January 2018 and when he continued the pursuit of that controlling interest until it was secured by BFMM. He used confidential information when he met with Mr Debono on 18 December 2017 and when he sent the email on 19 December 2017. He shared confidential information relating to the Munday Wilkinson valuation with third parties in that email. He derived an advantage from using confidential information. Confidential information enabled him to put a cash offer to Mr Debono when he knew Mr Conheady and Mr Porter had been unable or unwilling to finance such an offer and in circumstances where he knew Mr Conheady's offer had resulted in a deal which included vendor terms. Confidential information about the Munday Wilkinson valuation was used by him to secure the participation of his co-investors.

548 Not only did the opportunity that was realised by BFMM 'come their way as a result of their engagement with or for the plaintiffs', as alleged by the plaintiffs, it was because Mr Mulcahy both had confidential information and used it and preferred his own interests to those of his client, that the opportunity was secured by BFMM of which he was a director. Mr Mulcahy was the driving force behind the acquisition.

549 As to the third matter submitted on behalf of BFMM, the confidential information was relevant to the transaction. Knowledge of the earlier Porter offers and the inability to secure funding for those offers on a basis acceptable to Mr Porter, and of the Conheady 'deal' to purchase 80% on terms enabled Mr Mulcahy to craft a cash offer matching the 14 September 2017 Porter offer. The independent valuation of the Business at $21m was confidential information which Mr Mulcahy communicated to his co-investors in a successful bid to 'pique' their interest and to secure their involvement in BFMM.

550 BFMM further submitted a breach of duty only arises, in so far as the alleged breach involves a conflict, if the conflict was pursued and personal interest was the actuating motive rather than some bona fide concern for the benefit of the company as a whole or for fairness as between members.[776] Accepting that to be an accurate statement of principle for present purposes, the submission fails on the facts. Contrary to arguments advanced on behalf of the defendants that he was motivated by altruism, namely by a desire to ensure the Business was not closed down, Mr Mulcahy was motivated to secure a controlling interest in the Business for himself and his co-investors. The pursuit by Mr Mulcahy of the opportunity for himself was his actuating motive.

551 An issue arose at trial whether the Mulcahy parties could be in breach of fiduciary duty if the opportunity of which they took advantage was unable to be taken advantage of by the plaintiffs. BFMM submitted that Regal (Hastings) Ltd v Gulliver,[777] which stands for the proposition that a director is in breach of his or her duties if he or she takes advantage of an opportunity that the corporation would otherwise be interested in but was unable to take advantage of was distinguishable. It was submitted that case applies to situations involving an established strict category of fiduciary relationship - that of director and company - and involved a scope of duty that relevantly extended to prohibit the taking of profit. In BFMM's submission, the correct question to ask is whether the scope of any fiduciary duty could be found to extend to prevent BFMM from acquiring CBB for profit. In BFMM's submission, it could not.

552 There are three answers to this submission. The first is that on the facts, the plaintiffs were in a position to take advantage of the opportunity for which they already had secured a 'deal'. The second is that the decision in Regal (Hastings)[778] is not confined to the circumstances of a director and company and, if I am wrong about the ability of the plaintiffs to take advantage of the opportunity, has application in the circumstances of this case. The third, in this case the fiduciary duty owed to Mr Conheady, included a duty of the Mulcahy parties not to use their position to profit themselves or to obtain a profit for a related party without fully informed consent.

553 As to the first matter, when Mr Mulcahy met with Mr Debono on 18 December 2017, the opportunity to acquire a controlling interest in the Business on terms was already the subject of a 'deal'. On 19 February 2018 Mr Porter signed the funding proposal from Westpac. On 2 March 2018 Mr Conheady sent an email to Mr Debono in which he confirmed that finance was now in place and was unconditional.[779] If the Porter 14 September offer is treated as the opportunity, Mr Porter had the ability to fund that offer if he chose to do so, including by borrowing against the Porter Group fleet of vehicles. Whatever view is taken of the 'opportunity', the issue to which the court referred in Regal (Hastings)[780] does not arise on the facts.

554 As to the second matter, in Streeter v Western Areas Exploration Pty Ltd (No 2)[781] McLure P said:

The High Court's formulation of the profit rule in Warman and Chan focuses attention on the conduct of the fiduciary. There must be a causal connection between the fiduciary office and the receipt of the benefit. The "opportunity" referred to in the profit rule is that taken by the fiduciary to obtain the profit. If the opportunity is derived by reason of his fiduciary position, it is irrelevant that the company to whom the duty is owed was unwilling, unlikely or unable to make the profits for which an account is taken or that the fiduciary acted honestly and reasonably:[782]

555 In Warman International Ltd v Dwyer,[783] the plurality said: 'it is no defence that the plaintiff was unwilling, unlikely or unable to make the profits for which account is taken'.[784]

556 In light of the decision in Warman[785] and the observations of McLure P in Streeter,,[786] I do not consider that the decision in Regal (Hastings)[787] is limited in the manner contended for on behalf of BFMM.

557 As to the third matter, I have found that the fiduciary obligation that was breached by the Mulcahy parties included an obligation not to take advantage of a business opportunity that might come their way as a result of their retainer by Mr Conheady so as to obtain any unauthorised benefit or profit. The business opportunity that Mr Mulcahy usurped was usurped by him by reason of his breach of fiduciary duty so that he and his co-investors in BFMM might profit. The plaintiffs never authorised the receipt of any such benefit or profit by Mr Mulcahy.

558 In Schmidt & Ors v AHRKalimpa Pty Ltd (receiver appointed)[788] the Court of Appeal said:

A person who occupies a fiduciary position may not use that position to gain a profit or advantage for himself or herself, nor may he or she obtain a benefit by entering into a transaction in conflict with his or her fiduciary duty, without the informed consent of the person to whom the duty is owed. A fiduciary must account to the person to whom the duty is owed for any benefit or gain:

(a) Which has been obtained or received in circumstances where a conflict or significant possibility of conflict exists between his or her fiduciary duty and his or her personal interest in the pursuit or possible receipt of such benefit or gain; or

(b) Which was obtained or received by use or by reason of his or her fiduciary position or of opportunity or knowledge arising from it.[789]

559 I accept the submission on behalf of the plaintiffs that in the fiduciary context the common law rules about causation do not apply. Loss or a liability to account will be established in cases such as the present even if the loss was caused or contributed to by other matters.[790] However in this case the loss was caused by the actions of Mr Mulcahy taken in breach of fiduciary duty.

560 The Mulcahy parties submitted the 'vital element' of confidentiality is missing. They submitted the opportunity and confidential information about CBB was introduced by the Mulcahy parties to the plaintiffs with the authority of the vendor. They submitted there was no evidence Mr Mulcahy received any benefit from the relationship of adviser in respect of the acquisition. They submitted any opportunity to acquire CBB did not 'belong to' the plaintiffs whose offer was subject to finance and that the exclusivity period in relation to the conditional offer from Mr Porter[791] had expired on 25 November 2017.

561 The submission that the 'vital element' of confidentiality required to establish breach is missing fails in light of my findings that confidential information was provided by Mr Conheady to Mr Mulcahy.[792] The 'further confidential information' about the Business communicated to Mr Mulcahy by Mr Conheady on 16 November 2017 was new information about the Business. It was current, it included the results of Mr Conheady's due diligence process and it included information about the independent valuation of the Business.

562 So too, the Mulcahy parties submission that there was no evidence Mr Mulcahy received any benefit from the relationship of adviser to Mr Conheady must be rejected. The benefits received by Mr Mulcahy included being told about the Munday Wilkinson valuation, confidential information he regarded as of such significance to himself and his fellow investors as to expressly refer to it in the 19 December 2017 email. He benefitted from knowing that Mr Conheady's deal was a terms deal and that Mr Porter had previously been unable to secure finance to fund the very same offer that Mr Mulcahy made to Mr Debono. There was a direct relationship between the confidential information known to Mr Mulcahy and his actions in securing the opportunity to obtain a controlling interest in the Business.

563 A fiduciary is not permitted to allow his or her duty to conflict with his or her personal interest. As submitted on behalf of the plaintiffs, the principles concerning breach of fiduciary duty in this context are strict.[793]

564 There was a 'significant possibility of conflict' from at least 14 December 2017 when Mr Mulcahy sent his email to Mr Matthews. There was a direct conflict between Mr Mulcahy's duties to his client to protect confidential information and not to obtain any unauthorised benefit from the relationship, and Mr Mulcahy's use of confidential information to obtain a controlling interest in the Business for himself. In Warman the plurality said:

A fiduciary must account for a profit or benefit if it was obtained either when there was a conflict or possible conflict between his fiduciary duty and his personal interest, or by reason of his fiduciary position or by reason of his taking advantage of opportunity or knowledge derived from his fiduciary position.[794]

565 The Mulcahy parties submitted the CBB opportunity was not an exclusive opportunity open only to the plaintiffs, it was always an opportunity 'open to any potential purchaser'.[795] The answer to that submission is that the entire sale process was confidential, beginning with Mr Debono's requirement for a confidentiality agreement. As at December 2017 only one potential purchaser was in a position to secure that opportunity. It was Mr Conheady, with Mr Porter as his 'partner'. No other person, except for Mr Conheady's trusted adviser, Mr Mulcahy, and Mr Debono's solicitor, Mr Matthews, knew about the opportunity. It matters not that the exclusivity period in the 14 September 2017 Porter offer expired on 25 November 2017. That offer had been overtaken by Mr Conheady's agreement with Mr Debono to a purchase that included vendor terms. Nor does it matter that the opportunity eventually taken was or might have been different to the one being formulated by Mr Conheady; cash not terms, 70% not 80%. The fact that the transaction was a transaction to secure a controlling interest in the shares in CBB is what matters. That was the very transaction, the opportunity to secure, that Mr Mulcahy was precluded from taking up by reason of his position as a fiduciary.

566 I find that as alleged by the plaintiffs, the Mulcahy parties usurped the opportunity to acquire the Business. They used confidential information of Mr Conheady to do so. Mr Mulcahy took advantage of a business opportunity that came his way as a result of the Conheady Retainer. He allowed his personal interests to conflict with his fiduciary duties.

567 I also find that Mr Mulcahy as a director of BFMM and the driving force behind its acquisition of a controlling interest in the Business assisted BFMM to acquire that interest. He allowed both his personal interests and the interests of BFMM to conflict with his fiduciary duties to Mr Conheady.

568 The claim against BFMM is that it knowingly assisted in breaches of fiduciary duty owed by the Mulcahy parties by usurping the opportunity to acquire the Business; in the alternative, that BFMM knowingly received confidential information and took advantage of that information in usurping the opportunity to acquire the Business.[796]

569 Although this trial is not concerned with remedies, the relief claimed against BFMM comprises damages, equitable compensation, alternatively, an account of profits and a declaration that the shares owned by BFMM in Chris Debono Pty Ltd are held on constructive trust.[797]

570 Knowledge on the part of BFMM is critical to what the plaintiffs must prove to make out their claims. They plead BFMM knew they were interested in acquiring the Business, knew they had the opportunity to do so and knew they had retained the Mulcahy parties to give advice in relation to the acquisition. They allege BFMM knew the Mulcahy parties owed fiduciary duties to them and had or would breach those duties if BFMM acquired the business.

571 BFMM can only act through its directors. The plaintiffs allege the knowledge of BFMM is to be imputed to the company by reason of Mr Mulcahy and Mr Matthews being directors.[798]

572 The plaintiffs allege Mr Mulcahy's knowledge is to be imputed to BFMM[799] because he was a director of the company and its agent. They contend BFMM was formed to take advantage of the opportunity of which Mr Mulcahy was aware. He deployed it in having BFMM incorporated to acquire the Business. Mr Mulcahy is alleged to have been the controlling mind of BFMM, the person who was instrumental in putting together the consortium.[800] The plaintiffs submitted that as a result, BFMM is and was the corporate creature, vehicle or alter ego of Mr Mulcahy and, as such, is liable for his breaches of fiduciary duty.[801] They submitted that as one of four directors and shareholders of BFMM, Mr Mulcahy had knowledge of breaches of fiduciary duties. He was the person who breached them.

573 The knowledge of Mr Matthews is also alleged to be imputed to BFMM.[802] That is so because he knew or ought to have known the Mulcahy parties owed fiduciary duties to the Plaintiffs. He was intimately aware of the pre-existing relationship between the Mulcahy parties and Mr Conheady and Mr Porter. He was aware Mr Conheady was obtaining Mr Mulcahy's advice about the acquisition prior to the consortium's inception.[803] He worked for Mulcahy Legal of which Mr Mulcahy is a shareholder, and his legal practice shared office facilities with Mr Mulcahy - their personal offices were on the same floor, only about 20 metres apart.[804]

574 The plaintiffs submitted it is apparent from the 30 November 2017 email (as it is from Mr Matthews email to Mr Mulcahy on 4 July 2017) that information barriers in the multi-disciplinary practice were weak. As at 30 November 2017 Mr Matthews knew the Mulcahy parties had previously acted for Mr Porter and that Mr Mulcahy was to see Mr Conheady on 4 December 2017 in relation to the acquisition of a controlling interest in the Business. The plaintiffs submitted Mr Matthews knew the Mulcahy parties were materially assisting them in circumstances that Mr Matthews knew or ought to have known gave rise or were likely to give rise to a relationship of trust and confidence. That was said to be particularly so given Mr Matthews' knowledge of the pre-existing working relationship between Mr Mulcahy on the one hand and Mr Conheady and Mr Porter on the other.[805]

575 BFMM submitted that, if a breach of fiduciary duty were found to have occurred, BFMM did not have the requisite knowledge to establish the 'knowing' element of a Barnes v Addy[806] claim as pleaded by the plaintiffs. BFMM submitted its knowledge, at its highest, would not rise to a 'level of knowledge' that 'would put an honest and reasonable man on inquiry'. BFMM submitted there is no evidence that the three directors of BFMM, other than Mr Mulcahy, were aware:

(a) that the Mulcahy parties or either of them advised or maintained a client relationship with Mr Porter;

(b) that the Mulcahy parties either advised or maintained a client relationship with Mr Conheady (in respect of Mr Broadbent and Mr Ford), or were aware the Mulcahy parties either advised or maintained a client relationship with Mr Conheady beyond providing tax compliance services and structuring advice on the holding of shares (in respect of Mr Matthews).[807]

576 BFMM submitted the three directors of BFMM, other than Mr Mulcahy:

(a) independently conducted their own analysis of the CBB opportunity and were experienced in doing so;

(b) were aware CBB was on the market available to any willing purchaser;[808]

(c) believed the CBB opportunity was no longer open to the plaintiffs;[809]

(d) understood the Business would be closed if it would not be purchased by BFMM;[810] and

(e) were never provided confidential information belonging to the plaintiffs.[811]

577 In support of the first submission, that of making their own inquiries, BFMM relied on Mr Mulcahy's evidence that he had commissioned an independent valuation of the Business for the purposes of putting together the Profile which valued CBB at $21m, and his evidence when cross-examined that:

we valued the business in 2016 at 21m via Jarrot Business Valuations, a business valuation service we subscribe to at our accounting firm.[812]

578 BFMM submitted that for those reasons, the directors of BFMM had no reason to have been 'on inquiry' as to a possible breach of duty as a result of which the plaintiffs' case for knowing assistance and knowing receipt must fail.

579 A third party will be liable if it knowingly received trust property with notice of the breach of fiduciary duty or if that party knowingly assisted a breach of fiduciary duty.[813]

580 The knowledge required to be proved for knowing receipt and for knowing assistance in breach of fiduciary duty are not the same. As to knowing receipt, in Grimaldi the Full Federal Court concluded:

The High Court in Farah Constructions did not settle the knowledge/notice requirement in relation to recipient liability. Nonetheless, from at least the 1990s and in the wake of the Baden classification, judges had begun in recipient liability cases to generalise from what had been said both by Gibbs J (at 398) and by Stephen J (at 412) with whom Barwick CJ agreed, about the insufficiency of traditional, or category (v), constructive notice - though not of category (iv) notice - as a basis for personal liability. To allow that, as Stephen J commented, would be "to disregard equity's concern for the state of conscience of the defendant": at 412; ....In Kalls Enterprise Pty Ltd (in liq) v Baloglow [2007] NSWCA 191; (2007) 63 ACSR 557 - a decision which post-dates Farah Constructions - the New South Wales Court of Appeal applied Baden's categories (i)-(iv), but not category (v) to a knowing receipt claim. Kalls Enterprise in turn has been applied subsequently: see eg Horsman v MG Kailis Pty Ltd [2009] WASC 166; Fodare Pty Ltd v Shearn (2011) 29 ACLC 11-036.[814]

581 The reference to the Baden classification is a reference to Baden v Société Génerale[815] where knowledge was broken into five separate mental states; actual knowledge; wilfully shutting one's eyes to the obvious; wilfully and recklessly failing to make such inquiries as an honest and reasonable person would make; knowledge of circumstances which would indicate the facts to an honest and reasonable person; and knowledge of circumstances which would put an honest and reasonable person on inquiry. The first three categories were said to encompass forms of actual knowledge, while the last two categories encompassed constructive knowledge.[816]

582 In Harstedt Pty Ltd v Tomanek,[817] Santamaria, McLeish and Niall JJA described the necessary elements of liability for knowing assistance under the second limb of Barnes v Addy,[818] as:

(a) the existence of a fiduciary duty owed by the fiduciary (as trustee or otherwise);

(b) a 'dishonest and fraudulent design' on the part of the fiduciary;

(c) assistance by the third party in that design; and

(d) knowledge on the part of the third party of the circumstances constituting that design.[819],[820]

583 In Chickabo Pty Ltd v Zphere Pty Ltd[821] Sifris J discussed the authorities dealing with what must be established to prove a 'dishonest and fraudulent design' on the part of the fiduciary in order to satisfy the second limb in Barnes v Addy[822]:

188 The breach of fiduciary duty itself must be 'dishonest and fraudulent' in order to satisfy the second limb of Barnes v Addy. It is clear that this requirement excludes 'well-intentioned' or 'trivial' breaches of trust or fiduciary duty from the scope of 'knowing assistance', and something more than a mere breach of trust or fiduciary duty will be required to establish liability.

189 However, beyond such a basic observation, the authorities diverge on the precise meaning of 'dishonest and fraudulent design'. Writing extra-judicially, Black J has observed this requirement 'raises issues of particular difficulty, at least for judges at first instance'.

190 In Hasler v Singtel Optus Pty Ltd (**'**Hasler'), Leeming JA astutely observed:

In short, the issue is recurring, important, and leading to inconsistent formulations of principle in courts across Australia. The issue is producing uncertainty in an area where it is highly desirable that there be no uncertainty.

191 Some courts have adopted an approach which requires conduct of a character approaching common law fraud. In Craigcare Group Pty Ltd v Superkite Pty Ltd, Hallen J declined to find knowledge of a fraudulent and dishonest design, finding 'I cannot be satisfied that [the fiduciary's] conduct was morally reprehensible'. Similarly, in Alexander v Burne, Young AJ stated:

Nevertheless, the words 'dishonest and fraudulent design' require something more than a serious breach of trust. There must be some plan on the part of the trustee to defraud the trust, knowing it to be a defrauding of the trust, for the trustee to be liable under this second limb of Barnes v Addy.

192 The circumstances of Westpac Banking Corporation v Bell Group Ltd (in liq) (No 3) ('Bell') arose out of the collapse of the 'Bell Group of companies' in the early 1990s. The plaintiff liquidators of the Bell Group sought to recover funds from various banks who had realised securities given by members of the group. Inter alia, the plaintiff alleged the banks had received these proceeds whilst knowing that by giving the securities, the directors had breached fiduciary duties owing to the member companies, giving rise to liability under Barnes v Addy. Drummond AJA (which whom Lee AJA agreed) extracted the following relevant principles regarding the phrase 'dishonest and fraudulent design' from Farah:

(a) A mere finding of breach of duty by the fiduciary will not be sufficient to show a dishonest and fraudulent design; some additional feature will be required;

(b) It is not necessary to demonstrate the breach of fiduciary duty occurred in circumstances where the fiduciary acted with a conscious awareness that what he was doing was wrong: the breach of duty can be characterised as dishonest or fraudulent according to equitable principles;

(c) The 'additional feature' will exist if the breach of duty is 'more than a trivial breach and is also too serious to be excusable because the fiduciary has acted honestly, reasonably and ought fairly to be excused'. Findings of honest and reasonableness require a 'discretionary judgment having regard to all the circumstances of the case.' A person may be fraudulent in the eyes of equity, even though he acted with subjective honesty.

193 Drummond AJA went onto find that Owen J, at first instance, had erred by holding 'conscious wrongdoing' on the part of the fiduciaries was required, and that the fiduciary's conduct must 'attract a degree of opprobrium raising it above the level of a simple breach'. According to Drummond AJA, such a finding 'suggests that there must be a level of misconduct on the part of the directors greater than I think Farah requires'.

194 Hasler concerned alleged breaches of fiduciary duty by the former General Manager (Logistics) at Optus, Mr Leon Curtis, by causing Optus to pay for warehousing supplied by a company operated by Mr Cutis and Mr Craig Hasler. Mr Hasler was held to be jointly liable for the losses incurred by Optus, as a person knowingly involved in Mr Cutis' dishonest and fraudulent design. Hasler challenged the findings at trial, contending that a finding of dishonest and fraudulent design was not open on the facts, and the correct approach to the second limb of Barnes v Addy was narrower than that stipulated in Bell.

195 Leeming JA acceded to the submissions criticising the approach adopted by Drummond and Lee AJJA in Bell, noting the meaning accorded to 'dishonest and fraudulent' by their Honours was 'not itself well-defined, is unsupported historically and leads to anomalies' Leeming JA went on to observe the formulation 'dishonest and fraudulent' avoids the potential for dispute as to the meaning of 'fraud' in equity, by also requiring there must be dishonesty - namely, 'a transgression of ordinary standards of honest behaviour'.

196 Whilst disagreeing with the majority in Bell as to the meaning of 'dishonest and fraudulent design', Leeming JA adopted Optus' alternative submission that 'on any view, Mr Curtis' breach was serious enough to attract accessorial liability'. His Honour relevantly observed:

Mr Curtis was throughout the period paid a salary by Optus and employed as a senior manager pursuant to a contract which required him to "serve [Optus] faithfully and diligently" and "not [to] act in conflict with [Optus'] best interests". He brought about a position where the company Sumo, of which he was a shadow director, was supplying warehouse services to Optus, not pursuant to any competitive tender, but at prices which (on behalf of Sumo) he set, and which (on behalf of Optus) he approved, with the result that Sumo derived many millions of dollars of revenue. That of itself is sufficient to answer the description of a dishonest and fraudulent design. There is a plain transgression of ordinary standards of honest behaviour. No honest employee would do such a thing without having first obtained the consent of his or her employer. Even if Mr Curtis is to be believed in his evidence that he did not appreciate that there was a conflict of interest, let alone dishonesty, his self-deception does not prevent his conduct from being dishonest.

584 In Harstedt[824] the Court of Appeal discussed knowledge as a necessary element of knowing assistance:

84 The applicable principles may be stated briefly. A third party will not be liable for knowing assistance unless he or she knew, or had reason to know, of the dishonest and fraudulent design on the part of the fiduciary. It is not necessary to show that the third party acted dishonestly. Such liability is distinct from the liability of a third party who procures or induces a breach of fiduciary duty.

85 It has been customary, though not without some controversy, to analyse the requirement of knowledge for accessorial liability for breach of fiduciary duty by reference to the following five categories set out by Peter Gibson J, acting on an agreement between counsel, in Baden....

86 Each of the first two categories speaks for itself. The third category 'involves such a calculated abstention from inquiry as would disentitle the third party to rely upon lack of actual knowledge of the trustee's or fiduciary's wrongdoing'. The fourth category is 'designed to prevent a third party setting up his or her own "moral obtuseness" as the reason for not recognising an impropriety that would have been apparent to an ordinary person'. The fifth category derives from the doctrine of bona fide purchaser for value without notice.

87 The High Court in Farah endorsed the Baden scale and indicated that knowledge falling within any of the first four categories, but not the fifth, represents the law in Australia.[825]

585 Recently in Turner v O'Bryan-Turner,[826] Ward CJ in Eq, adopted the analysis of the Court of Appeal in Harstedt[827] concerning knowing assistance, including as follows:

538 As to the knowledge requirement, as adverted to, the Court stated (see at [84]ff) that the third party, to be liable, must have known, or had reason to know, of the fiduciary's dishonest and fraudulent design (citing Grimaldi at [259]; and see also Nicholson v Morgan (No 3) [2013] WASC 110; (2013) 8 ASTLR 277 at [61]-[68] per Edelman J, as his Honour then was); and, crucially, that it is not necessary that the third party itself have acted dishonestly (citing Farah at [163]), noting that liability for knowing assistance is distinct from the liability of a third party who procures or induces a breach of fiduciary duty (citing Farah at [68]). ....

541 I note, as did the Court in Halstedt (see at [87]), that the High Court in Farah endorsed Peter Gibson J's distillation of principles in Baden Delvaux and indicated that knowledge falling within any of the first four of these categories (but not within the fifth category) represents the law in Australia (see at [177]-[178]).

542. It remains only to observe, as to Royal Brunei, that the High Court in Farah noted that Lord Nicholls' formulation of principle represents a general principle of equitable accessorial liability (see at [162]); and, again, the High Court chose not to adopt his Lordship's more generalised formulation and, in so doing, there maintained the distinction between third party liability for procuring or inducing the breach of fiduciary duty and liability for assisting or participating in that breach (see at [163]). The significance of this for present purposes is that the High Court made clear that, in relation to claims for knowing assistance, the dishonest and fraudulent design must be on the part of the fiduciary, not the assistant (see at [160]; [179]), it is not necessary to demonstrate that the third party itself acted dishonestly (see at [163]) and that "knowledge", in the sense of the first to fourth categories identified above, is necessary.

543. As the Court in Halstedt commented (at [96]), the approach adopted in Royal Brunei impermissibly, "shifts focus from the third party's knowledge of the dishonest and fraudulent design on the part of the fiduciary to the dishonesty of the third party itself" (emphasis omitted) and that this, "signifies a departure from the conventional understanding of liability under the second limb of Barnes v Addy by imposing liability with respect to any breach of fiduciary duty so long as the third party itself was objectively dishonest" and it dispenses with the "knowledge" requirement explained above, which, at least since the decision in Farah, is the law in Australia (cf Beach Petroleum at [405]; and see also, for example, Comgroup Supplies Pty Ltd v Products for Industry Pty Ltd [2016] QCA 088 at [54] per Margaret McMurdo P, Atkinson and Mullins JJ).

544. In Hasler, Leeming JA considered with approval (at [131]) the reasons of the primary judge (see at [290]-[298] per McDougall J) to the effect that, whether or not, subjectively, the accessory appreciated that what was going on was dishonest or fraudulent was immaterial: the relevant issue being that the facts which were there known to the accessory, regarded objectively, demonstrated a breach of fiduciary duty by the fiduciary (and the activities of the accessory assisted in, or facilitated or furthered that breach).[828]

586 In Grimaldi,[829] the Court referred to four different manifestations of participation by a company in breach of fiduciary duty by an individual. The first two categories are relevant in this case:

(a) the company was the corporate creature, vehicle or alter ego of the wrongdoing fiduciary, in which case it (the company) has a transmitted fiduciary duty:

(b) the knowledge of an agent is imputed to the company.[830]

587 In Harstedt[831] the Court said:[832]

69 ....where a company 'is the corporate creature, vehicle, or alter ego of wrongdoing fiduciaries who use it to secure the profits of, or to inflict the losses by, their breach of fiduciary duty'. In such cases, the company 'is fully liable for the profits made from, and the losses inflicted by, the fiduciary's wrong'. ...[833]

588 In their written submissions BFMM referred to the observations by Edelman J in Commonwealth Bank of Australia v Kojic,[834] where his Honour said:

...as a rule of attribution it was never intended to be a universal rule'.[835] To discover what a corporation knows it is necessary to ascertain what certain individuals within the corporation know: ASIC v Big Star Energy (No 3) (2020) 148 ACSR 334 at [45]-[47]; Hamilton v Whitehead [1988] HCA 65; (1988) 166 CLR 121 at 127. As described by Owen J in Bell Group Ltd (in liq) v Westpac Banking Corporation (No 9) (2008) 39 WAR 1 at [907]: 'To speak of a corporation having a state of mind is almost orphic in its conception. A corporation is a legal entity separate and apart from its directors and shareholders.

589 BFMM submitted the conventional approach of identifying the person who is the 'directing mind and will' is not always apt. Its application will depend on matters such as the variable function of those holding office and the context in which knowledge of a company is to be considered.[836]

590 AHRKalimpa Pty Ltd v Schmidt[837] involved a breach of fiduciary duties in the context of a joint venture dispute and breach of directors duties. One of the joint venturers (Schmidt) formed a company (Otway Livestock Exports Pty Ltd) to take advantage of a business opportunity not disclosed to his joint venture partner. It was held that the company was the 'corporate creature, vehicle of alter ego' used in an attempt to secure profits from that opportunity. As such accessorial liability arose in circumstances where the company received a benefit from Schmidt's wrongful conduct with full knowledge (i.e. Schmidt's knowledge) and without paying any consideration. At trial, Elliott J held that it mattered not that there were other directors.[838] That conclusion was not disturbed on appeal.[839]

591 BFMM was formed for the sole purpose of taking advantage of the opportunity to acquire a controlling interest in the Business. That is the opportunity Mr Mulcahy usurped from Mr Conheady.

592 I accept the plaintiffs' submission that it was Mr Mulcahy who was the controlling mind of BFMM. He was the driving force, the moving party, the person who orchestrated the formation of the consortium of shareholders in BFMM. He sent the email on 14 December 2017 'how to progress the next step'. Between sending that email and meeting on 18 December 2017 at the Lake View Hotel with Mr Debono, Mr Mulcahy was present with Mr Matthews when his close friend, Mr Broadbent, telephoned Mr Ford and invited him to be part of a consortium to pursue the opportunity he had identified, his clients' opportunity to acquire a controlling interest in the Business. He met on 18 December 2017 with Mr Debono and put his proposal to Mr Debono, in essence the same proposal as the 14 September 2017 Porter offer. It was Mr Mulcahy who reported on the outcome of that meeting on 19 December 2017 to those who became the directors of BFMM. He passed on confidential information about the $21m valuation. He drafted the formal letter of offer on 24 January 2018, and sent the offer to Mr Debono on 25 January 2018. Each of Mr Matthews, Mr Ford and Mr Broadbent who became the co-investors in BFMM with Mr Mulcahy authorised Mr Mulcahy to send the letter on 25 January 2018.[840] He was authorised to make and sign binding offers on their behalf, and he did so on 25 January 2018.

593 It was Mr Mulcahy who reported back to his fellow investors on 25 January 2018 confirming Mr Debono was happy with the proposal. When the consortium met on 30 January 2018, they met at his offices. It was to him that Mr Debono forwarded the 8 February 2018 email from Mr Conheady with the covering 'what a joke' comment. That was because Mr Mulcahy was the prime mover on behalf of the consortium that became BFMM. He brought the opportunity to BFMM and orchestrated the realisation of that opportunity by it.

594 In this case, as discussed in Harstedt,[841] BFMM is the corporate creature, vehicle, or alter ego of Mr Mulcahy, the wrongdoing fiduciary, who used BFMM to secure the profits of and to inflict the losses occasioned by his breach of fiduciary duty. Mr Mulcahy was also the agent of BFMM and it is bound by his actions.[842]

595 BFMM said Mr Mulcahy was not the 'controlling mind' or able to alone control BFMM and that there is no evidence he possessed or shared confidential knowledge with his fellow directors. I do not agree. I have found that on 19 December 2017 Mr Mulcahy shared confidential information about the independent valuation of the Business with his fellow directors. I do not accept the evidence of Mr Matthews and Mr Broadbent that such information was not relevant to and a motivating factor behind their decisions to invest. I accept as truthful evidence of Mr Ford that after he received information about the valuation he considered this investment was an opportunity 'worth looking into'.[843]

596 BFMM submitted that the company cannot be the alter ego of Mr Mulcahy because he did not have the authority to direct the company, decisions required a majority of director votes. That submission takes too simplistic a view of who relevantly had authority in BFMM. Who relevantly had authority is not to be determined by looking at voting rights only. Context is critical in determining whether Mr Mulcahy was at the relevant time the directing mind and will of the company.

597 While Mr Mulcahy was one of four directors, and alone not able to control the votes at board level or of shareholders in a meeting, it was he who conceived of the opportunity, he brought together the investors, he brought the opportunity to them and to BFMM, and he orchestrated the delivery of that opportunity to the company. BFMM was formed to take advantage of that opportunity and that is the context in which it is properly found BFMM was his alter ego.

598 Applying the authorities discussed by Sifris J in Chickabo,[844] Mr Mulcahy engaged in a 'dishonest and fraudulent design'. His actions went well beyond trivial breaches of fiduciary duty. As I have found, they were not motivated by altruism for the Business or for Mr Debono, they were not well-intentioned. The conscious awareness on the part of Mr Mulcahy that what he was doing was wrong is evident from his concealment of his actions from his client and from the 'awkwardness' he felt when he received the email from Mr Debono on 9 February 2018. There was by Mr Mulcahy, what Leeming JA described in Hasler v Singtel Optus Pty Ltd as a 'plain transgression of ordinary standards of honest behaviour. No honest [accountant] would do such a thing without having first obtained the consent of his or her [client]'.[845] Such conduct is clearly sufficient to answer the description of a dishonest and fraudulent design.

599 BFMM as the corporate vehicle in which Mr Mulcahy held a substantial shareholding asserted Mr Mulcahy in breach of fiduciary duty by being the purchaser of the 70% interest in the Business.

600 While the role and involvement of Mr Mulcahy in BFMM which company was his alter ego is sufficient of itself to establish liability on the part of BFMM, it is also the case that Mr Matthews either wilfully shut his eyes to the obvious, or recklessly failed to make such inquiries as an honest and reasonable man would make. He had knowledge of circumstances which would indicate the facts to an honest and reasonable man that Mr Mulcahy was engaged in breach of fiduciary duty when he contacted him on 14 December 2017 and from at least that date joined with him, Mr Broadbent and Mr Ford, to secure the opportunity for themselves.

601 Mr Matthews knew about conflicts of interest and recognised them as far back as 20 June 2017. When Mr Matthews said in evidence he did not know Mr Conheady was coming in to the office on 4 December 2017 and to discuss how he would hold his shares and was 'very clear' about that, that evidence was not true.[846] Mr Matthews knew Mr Mulcahy was going to meet with Mr Conheady on 4 December 2017 to talk about how he would hold his shares. The 30 November 2017 email told him that. Ten days later Mr Mulcahy was inviting him to join in pursuit of a controlling interest in the very same business that, from the 30 November 2017 email, Mr Matthews knew Mr Mulcahy's client, Mr Conheady was both pursuing and thought he had secured. With that knowledge Mr Matthews was present for the conversation between Mr Broadbent and Mr Ford. He then went with Mr Mulcahy to the hotel to meet with Mr Debono to secure the opportunity. As one of the four directors of BFMM, Mr Matthews knew there was an accountant/client relationship, he knew the client was being advised by the accountant about the very transaction and opportunity that he and Mr Mulcahy moved to exploit for themselves. Mr Matthews' knowledge certainly falls within the fourth category in Baden,[847] constructive knowledge. However, his knowledge goes further.

602 On the balance of probabilities I find that at the very least Mr Matthews wilfully shut his eyes to the obvious and wilfully and recklessly failed to make such inquiries as an honest and reasonable man would make. He knew Mr Mulcahy had acted for Mr Porter and was acting for Mr Conheady. He knew or deliberately ignored the fact the $21m valuation was confidential information imparted to Mr Mulcahy in circumstances of confidence. It suited him and his commercial interests to ignore those matters and to proceed in the face of them to join with Mr Mulcahy to secure a controlling interest in the Business. His earlier concerns about conflicts of interest were put to one side and he joined with Mr Mulcahy, who was conflicted and not permitted to pursue the opportunity, to secure the opportunity in the name of BFMM.

603 I find that Mr Mulcahy, who owed a fiduciary duty to Mr Conheady, engaged in a dishonest and fraudulent design and that BFMM knowingly assisted in that design. BFMM having knowingly assisted Mr Mulcahy to usurp the opportunity to acquire a controlling interest in the Business is liable accordingly.

604 It is unnecessary to decide whether the knowing receipt of confidential information by BFMM provides a separate basis upon which to impose liability on BFMM. There is no doubt the information concerning the Munday Wilkinson valuation was confidential information. The more difficult question, not specifically addressed in submissions, is whether the information or, for that matter, the opportunity to acquire the Business has the necessary proprietary character to come within the first limb of Barnes v Addy.[848]

605 In their defences the defendants asserted they were not liable because the opportunity was 'not available' to the Plaintiffs because the vendor would not sell to them.[849] The Mulcahy parties alleged Mr Debono told Mr Mulcahy on 18 December 2017 that he would no longer sell to the plaintiffs.[850]

606 The problem with that allegation is that it does not accord with the evidence. Mr Mulcahy did not give evidence that Mr Debono said those things to him when they met at the Lake View Hotel on 18 December 2017. In his witness statement, Mr Mulcahy said Mr Debono expressed 'how very angry' he was with Mr Porter and Mr Conheady,[851] but his witness statement did not include reference to a statement by Mr Debono that he would not sell to the plaintiffs. In his oral evidence, including in re-examination, there was no mention by Mr Mulcahy of such a statement having been made by Mr Debono.

607 Mr Matthews was also present at the Lake View Hotel on 18 December 2017. His witness statement does not refer to Mr Debono saying during the meeting that he would not sell to the plaintiffs.[852] No such statement by Mr Debono was referred to in oral evidence given by Mr Matthews.[853]

608 When cross-examined, Mr Debono agreed that Mr Porter and Mr Conheady were 'good people'[854] and if they had come up with the money and been able to fund it, he would have sold to them in 2017 and in 2018.[855] The defendants submitted that when Mr Debono gave that evidence he was 'confused in his answer, was clearly adversely responding to the pressure of forceful cross examination and suffering hearing difficulties, such that his answer was not representative of his true belief'. I do not accept the validity of that submission. Mr Debono knew Mr Porter to be a good man.[856] Porter Group was an important customer of the Business and Mr Conheady was the Chief Financial Officer of Porter Group. Mr Debono was not confused or under pressure when he said that he would have sold to the plaintiffs if they had come up with the money in 2018. I find that he would have done so.

609 I agree with the plaintiffs' submissions that the idea Mr Debono would not have sold to them on 18 December 2017 or thereafter is wrong and misconceived. The only reason Mr Debono did not sell to them is because a new purchaser, Mr Mulcahy, came along, undermined the 'deal' Mr Conheady had already made with Mr Debono and secured the opportunity for himself and for BFMM. If Mr Mulcahy, together with Mr Matthews, had not orchestrated the meeting at the hotel on 18 December 2017 and had not 'white anted' Mr Conheady, Mr Debono would have sold an 80% interest in the Business to Mr Conheady and to Mr Porter on terms previously agreed. Mr Debono was 'ready to retire'.[857] Absent intervention on the part of Mr Mulcahy, there was only one potential purchaser, the plaintiffs, who were going to buy a controlling interest in the Business and to facilitate Mr Debono's retirement.

610 BFMM also submitted in relation to causation that it came upon the opportunity to acquire the Business independently of any information from Mr Mulcahy. Given the factual findings that I have made, that submission is not sustainable.

611 It is convenient to reproduce the agreed questions for trial and provide short answers to each of those questions in light of the findings that I have made:

(1) Did either or both of the plaintiffs retain the Mulcahy parties, or either of them, to act on their behalf in connection with the proposed purchase of the Business?

(2) If a retainer was entered into, when was it entered into and what were its terms?

Answer: The Conheady Retainer as alleged in the ASC as found at paragraphs [379] and [380] and the 29 June 2017 Retainer as found at paragraph [360] above. The terms of each of those retainers are relevantly included terms as to good faith as found at paragraphs [418]-[420] regarding the Conheady Retainer, paragraph [421] regarding the 29 June 2017 Retainer and the terms alleged at paragraph 49(b)-(d) as found at paragraph [434].

(3) Between about July 2017 and 6 March 2018, did the plaintiffs share any and if so what information or confidential information with the Mulcahy parties?

Answer: Yes. The four categories of confidential information referred to at paragraph [442] with the exception concerning the third category that Mr Conheady did not tell Mr Mulcahy the precise terms of the offer that had been agreed to by Mr Debono as found at paragraphs [455] to [456].

(4) Did the Mulcahy parties, or either of them, owe the first and/or second plaintiffs fiduciary duties, whether pursuant to a retainer or otherwise?

Answer: Yes. The Mulcahy parties owed fiduciary duties to Mr Conheady as found at paragraphs [503] to [514].

(5) If so, what was the scope of those fiduciary duties and did those fiduciary duties extend to the Mulcahy parties, or either of them, so as:

(a) not to allow their personal interests to conflict or potentially conflict with their duties to the plaintiffs;

(b) to prevent them from using information or confidential information provided to them by the plaintiffs;

(c) to require it/him not to profit from their position as a fiduciary, or use its/his position to obtain a profit for a related party, without the fully informed consent of the plaintiffs;

(d) prevent improper use of their position as an advisor/fiduciary to gain an advantage for themselves or cause detriment to the plaintiffs;

(e) to require them to act in good faith and/or in the best interests of the plaintiffs.

Answer: The fiduciary duties owed to Mr Conheady are those identified at paragraph [521].

(6) Did the Mulcahy parties breach the retainer referred to in questions 1 and 2 or the fiduciary duties owed to the plaintiffs referred to in question 4 by acquiring through BFMM an interest in CBB?

Answer: The Mulcahy parties breached the terms of the Conheady Retainer as found at paragraph [543]. The Mulcahy parties breached the ongoing confidentiality obligations owed to Mr Porter pursuant to the 29 June 2017 Retainer as found at paragraph [544].

Answer: The Mulcahy parties breached the fiduciary duties owed to Mr Conheady as found at paragraphs [566] to [567].

(7) Was BFMM formed or incorporated to take advantage of the opportunity or the confidential information referred to in question 3 to acquire the Business?

Answer: Yes, as found at paragraphs [567], [591] to [592].

(8) To what extent is any knowledge of the Mulcahy parties, where it is acquired while acting for or assisting the plaintiffs, to be imputed to BFMM?

Answer: Such knowledge is to be imputed to BFMM as found at paragraphs [591] to [599].

(9) Did BFMM knowingly assist a breach of a fiduciary duty or duties owed to the Plaintiffs as referred to in question 4 or knowingly receive information or confidential information acquired in breach of fiduciary duty or duties as referred to in question 4?

Answer: Yes to knowing assistance as found at paragraph [603]. As to knowing receipt, it is unnecessary to decide.

(10) At a certain point in time (and, if so, what time) was the opportunity for the plaintiffs to acquire the business of CBB no longer open or possibly no longer open to the plaintiffs?

Answer: At no relevant point in time was that the case.

(11) Did BFMM come to acquire CBB to any extent and, if so, to what extent, independently of any breach of fiduciary duty? If so, how does that affect the plaintiffs' claims?[858]

Answer: BFMM did not come to acquire a controlling interest in the Business independently of breach of fiduciary duty by Mr Mulcahy.

612 I have found there existed the Conheady Retainer as alleged and there existed the 29 July 2017 Retainer in favour of Mr Porter. There were breaches of the Conheady Retainer by the Mulcahy parties. In breach of that retainer the Mulcahy parties usurped Mr Conheady's opportunity to acquire a controlling interest in the Business for their own benefit and for the benefit of BFMM of which Mr Mulcahy was the directing mind and will. There were breaches of the confidentiality obligations in the 29 July 2017 Retainer. In breach of that retainer the Mulcahy parties used confidential information to usurp Mr Conheady's opportunity to acquire a controlling interest in the Business.

613 I have found the Mulcahy parties owed fiduciary duties to Mr Conheady, and that they breached those duties. I have found that BFMM knowingly assisted Mr Mulcahy and the Mulcahy parties in breach of fiduciary duty.

614 Subject to hearing from the parties I consider it appropriate that the findings that I have made following this first stage trial are embodied in declarations. If that course is adopted it enables clear delineation between the first stage trial and the second stage trial, should such a trial be necessary, dealing with relief.

615 It goes without saying that the entitlement or otherwise of the plaintiffs or either of them to such relief falls to be determined in accordance with the findings that I have made.

616 I direct that by 21 days from the date of this judgment the parties file submissions not exceeding 10 pages in relation to the following matters:

(a) whether it is appropriate that declarations be made and if so, as to the terms of any such declarations and;

(b) as the proposed future conduct of the proceeding.

MULCAHY & CO ACCOUNTING SERVICES PTY LTD (ACN 105 360 325)

[1] Transcript of the trial in proceeding S ECI 2019 00118 ('Transcript'), 3 May 2021, 474 (Porter, cross-examination).

[2] Plaintiffs, Amended Statement of Timothy Porter dated 7 April 2021 ('Porter Statement'), [3].

[4] Plaintiffs, Amended Statement of Chris Conheady dated 7 April 2021 ('Conheady Statement'), [17]; Porter Statement [16]; Agreed Chronology prepared pursuant to Orders dated 12 January 2021 ('Agreed Chronology'), 3.

[5] First and Second Defendants, Witness Statement of James Mulcahy dated 19 December 2019 ('Mulcahy Statement'), [4].

[6] Third Defendant, Witness Statement of Bradley Matthews dated 19 December 2019, ('Matthews Statement'), [15].

[7] Plaintiffs, Amended Statement of Claim dated 24 June 2019 ('ASC'), [5]; First and Second Defendants, Defence dated 23 August 2019 ('Mulcahy Parties' Defence'), [5(a)].

[8] Mulcahy Statement'), [10], [12]; Court book provided at the commencement of Trial ('CB'; unless otherwise specified, the version of the Court book referred to in this judgment), 124-136.

[9] Conheady Statement, [4]; Mulcahy Statement, [9].

[10] Porter Statement, [5]-[13]; Mulcahy Statement, [13]-[14].

[12] Mulcahy Statement, [19(a)]; Porter Statement, [10]; CB, 440-460.

[13] Conheady Statement, [25]; Mulcahy Statement, [19(b)].

[16] Chris Debono conducted all relevant meetings and negotiations. References to Mr Debono are references to Chris Debono and not to his brother, Anthony.

[19] CB, 185-197,196-197. Mr Mulcahy referred to $12.6m - $14.7m as 'a guide'. See Transcript, 3 May 2021, 552-553.

[23] Mulcahy Statement, [34]. The date in Mr Mulcahy's witness statement was corrected during evidence in chief to 30 May 2017.

[24] Porter Statement, [24]-[25]. Mr Debono did not recall the date of this meeting. Transcript, 4 May 2021, 708 (Debono, cross-examination).

[25] Agreed Chronology, 5; Porter Statement, [24]; Matthews Statement, [35].

[26] Matthews Statement, [36]; CB, 643.

[27] Transcript, 26 April 2021, 102-103.

[31] Porter Statement, [35]; Conheady Statement, [55]; First and Second Defendants, Statement of Crist Debono dated 19 December 2019 ('Debono Statement'), [18]; CB, 309-316.

[32] CB, 311; Transcript, 26 April 2021, 21.

[35] Agreed Chronology, 10; Debono Statement, [26].

[36] Porter Statement, [42]-[44]; Transcript, 29 April 2021, 408.

[37] Agreed Chronology, 11; Porter Statement, [44]-[45]; Conheady Statement, [73]-[75].

[39] CB, 392; Transcript, 29 April 2021, 404.

[40] Transcript, 29 April 2021, 404-405.

[41] Transcript, 4-5 May 2021, 737-738 and c/f Transcript 703-704, 735 (Debono).

[42] Ibid, 29 April 2021, 460-464 (Porter), 4 May 2021, 705-706 (Debono, cross-examination).

[46] Ibid; Transcript, 27 April 2021, 138.

[47] Transcript, 4 May 2021, 630 (Mulcahy, cross-examination).

[48] Conheady Statement, [61], [64]; Transcript, 26-27 April 2021, 111-112, 216 (Conheady).

[49] Transcript, 4 May 2021, 626, 655 (Mulcahy, cross-examination).

[50] CB, 1265-1266; Transcript, 4 May 2021, 629-630 (Mulcahy, cross-examination).

[52] Transcript, 5 May 2021, 748 (Debono, cross-examination).

[55] Matthews Statement, [105]; CB, 1477-1481.

[56] Agreed Chronology, BFMM acquired 80 shares in CBB, comprising two thirds of the issued shares. See Matthews Statement, [114]-[115]; CB, 1991-2032, 2035-2038, 2145, showing BFMM's shareholding in CBB as at 1 July 2018.

[66] See Further and Better Particulars to the Statement of Claim dated 15 April 2020, [1] and [2].

[67] See ASC, [6]-[8] regarding Porter, [27] regarding Conheady.

[81] Ibid, [52], particulars (i) and (iii).

[82] Further Particulars to the ASC dated 9 April 2021.

[83] Mulcahy Statement, [127]; Transcript, 3 May 2021, 525; Mulcahy Parties' Defence, [12]-[13], [24]-[26], [33], [36]-[38].

[84] Mulcahy Parties' Defence, [16(a)].

[85] Mulcahy Parties' Defence, [42]; see too Third Defendant, Defence dated 5 August 2019 ('BFMM Defence').

[87] Joint Statement of Issues, 7 April 2021.

[88] Agreed Chronology, 2; Matthews Statement, [20]-[22].

[91] Agreed Chronology, 3; Mulcahy Statement, [24]; Debono Statement, [7]-[8], [10]; CB, 185-197.

[93] Conheady Statement, [25]; Mulcahy Statement, [19(b)]; CB, 179, 421, 430, 614.

[94] Conheady Statement, [21]; Mulcahy Statement, [19(c)]; CB, 175 - 177.

[95] Mulcahy Statement, [29]; Debono Statement, [11]-[12].

[96] Porter Statement, [21]-[22]; Conheady Statement, [31]-[32]; Mulcahy Statement, [34]-[35]; CB, 184; Transcript, 3 May 2021, 552.

[98] CB, 198; Transcript, 3 May 2021, 552-555 (Mulcahy).

[99] Matthews Statement, [35]-[36].

[100] Conheady Statement, [35], Matthews Statement, [36], CB, 200.

[101] Porter Statement, [26]-[27].

[102] Porter Statement, [27]-[29]; Transcript, 4 May 2021, 711-712 (Debono, cross-examination).

[103] Transcript, 4 May 2021, 711-712 (Debono).

[104] Conheady Statement, [36]; Matthews Statement, [39], CB, 201.

[106] Transcript, 3 May 2021, 492-493.

[107] ASC, 12; Transcript, 27 April 2021, 160 (Conheady).

[108] Plaintiffs, Statement of Chris Conheady dated 1 November 2019, [41].

[110] Conheady Statement, [42]-[48] (excluded paragraphs about which the witness was cross-examined); Transcript, 26 April 2021, 102, 106-108 (Conheady, evidence in chief), 27 April 2021, 165-202 (Conheady, cross-examination).

[111] Transcript, 26 April 2021, 102-103 (Conheady).

[113] Ibid, 26 April 2021,, 110-111 (Conheady); CB, 2598.

[114] Ibid, 27 April 2021, 165 (Conheady).

[116] Ibid, 26 April 2021, 111(Conheady).

[117] Ibid, 27 April 2021, 162 (Conheady).

[119] Not in sequence in the Court Book, see CB, 253, 2565 and 254.

[120] CB, 253; Transcript, 26 April 2021, 107-110; Plaintiffs, Opening Submissions dated 9 April 2021 ('Plaintiffs' Opening Submissions'), [14].

[122] Transcript, 26 April 2021, 105 (Conheady).

[123] Ibid, 3 May 2021, 561 (Mulcahy).

[125] Transcript, 27 April 2021, 199-200 (Conheady).

[126] Ibid, 27 April 2021, 134 (Conheady).

[127] Ibid, 26 April 2021, 103-106 (Conheady).

[128] Ibid, 3 May 2021, 494 (Mulcahy).

[130] First and Second Defendants, Outline of closing submissions dated 10 May 2021 ('Mulcahy Parties' Closing Submissions'), 45-55.

[131] See CB, 253; cf Transcript, 26 April, 104-105 (Conheady).

[132] Transcript, 3 May 2021, 500 (Mulcahy).

[133] Ibid, 26 April 2021, 106-107 (Conheady); CB, 253-255.

[135] Transcript, 3 May 2021, 499-500 (Mulcahy).

[140] Ibid, 26 April 2021, 103, 116 (Conheady).

[143] Ibid, 26 April 2021, 115 (Conheady).

[148] CB, 192-194; Transcript, 27 April 2021, 192-199 (Conheady).

[149] Transcript, 26 April 2021, 114 (Conheady).

[150] Ibid, 3 May 2021, 569-572 (Mulcahy).

[152] Mulcahy Statement, [41]; Transcript, 3 May 2021, 559 (Mulcahy).

[153] CB, 699; Matthews Statement, [40]-[41].

[155] Matthews Statement, [42]-[43]; CB, 701.

[156] Conheady Statement, [49]-[50], CB, 255; Transcript, 4 May 2021, 716-718 (Debono, cross-examination).

[161] Transcript, 27 April 2021, 196-197 (Conheady).

[164] CB, 2624-2629; Transcript, 28 April 2021, 321-328.

[167] CB, 2627; Transcript, 28 April 2021, 327 (Conheady).

[169] See, eg, CB, 881-882. See also CB, 975. On 7 November 2017 Mr Conheady emailed a copy of the draft asset valuation prepared by Nicholas Munn direct to Mr Matthews.

[171] Porter Statement, [31]; Conheady Statement, [53]; CB, 286-293.

[174] Porter Statement, [32]-[33]; Conheady Statement, [57]; Debono Statement, [17]-[18]; Transcript, 4 May 2021, 720 (Debono, cross-examination).

[175] Transcript, 27 April 2021, 204 (Conheady, cross examination), 29 April 2021, 446 (Porter, cross-examination).

[176] CB, 2630-2635; Transcript, 28 April 2021, 328-330 (Conheady, cross-examination).

[179] Porter Statement, [35]; Conheady Statement, [58]; Debono Statement, [18]; CB, 309-316.

[181] Debono Statement, [22], CB, 497-526. Deposit payment clause 3.2(a), CB, 505.

[182] Matthews statement, [50]; CB, 857.

[183] Transcript, 27 April 2021, 127 (Conheady).

[184] Ibid, 26 April 2021, 115 (Conheady).

[185] Ibid, 27 April 2021, 214-215 (Conheady).

[186] Ibid, 26 April 2021, 112 (Conheady).

[187] Ibid, 26 April 2021, 113-116 (Conheady).

[188] Ibid, 26 April 2021, 112 (Conheady).

[189] Ibid, 3 May 2021, 500 (Mulcahy).

[190] Ibid, 3 May 2021, 501 (Mulcahy).

[191] Ibid, 26 April 2021, 110-112 (Conheady).

[192] Ibid, 26-27 April 2021, 117, 218 (Conheady).

[193] Ibid, 26 April 2021, 111-112 (Conheady).

[194] Ibid, 27 April 2021, 125 (Conheady); CB, 332.

[195] Conheady Statement, [59]; CB, 332-333.

[197] CB, 333, the entry in the workbook relied upon is not dated.

[199] CB, 621; Transcript, 27 April 2021, 229 (Conheady).

[200] Transcript, 27 April 2021, 126-129, 221-223 (Conheady).

[201] Ibid, 27 April 2021, 126 (Conheady).

[202] Ibid, 27 April 2021, 228 (Conheady).

[203] Ibid, 27 April 2021, 128-129 (Conheady), 3 May 2021, 506 (Mulcahy).

[204] Ibid, 27 April 2021, 225-228 (Conheady).

[206] Transcript, 27 April 2021, 227 (Conheady).

[208] Transcript, 27 April 2021, 226-227.

[212] Transcript, 28 April 2021, 310-311 (Conheady).

[215] CB, 627-628; Transcript, 27 April 2021, 234-235 (Conheady).

[216] Porter Statement, [40]-[41]; Conheady Statement, [66]; CB, 482; Transcript, 29 April 2021, 419-420 (Porter).

[217] Conheady Statement, [67]; CB, 334.

[218] Debono Statement, [26]; Transcript, 5 May 2021, 730-731 (Debono).

[219] Transcript, 5 May 2021, 731 (Debono).

[220] Ibid, 28 April 2021, 285 (Conheady).

[221] CB, 885; Transcript, 5 May 2021, 786-787 (Matthews).

[222] Transcript, 5 May 2021, 787 (Matthews).

[225] Ibid, 5 May 2021, 806 (Matthews).

[229] Transcript, 5 May 2021, 724, 727-729 (Debono); CB, 894.

[231] CB, 894; Transcript, 5 May 2021, 727-728 (Debono).

[232] Transcript, 5 May 2021, 730-731 (Debono).

[233] CB, 1039, and the enclosed marked-up draft agreement at CB, 1041.

[234] Mulcahy Statement, [45]; CB, 632; Transcript, 3 May 2021, 507-508.