Queensland Mining Corporation Ltd v Renshaw

Place: Sydney

Division: GENERAL DIVISION

Category: Catchwords

Number of paragraphs: 186

Counsel for the Plaintiff: Mr R Scruby

Solicitor for the Plaintiff: Kemp Strang Lawyers

Counsel for the First and Second Defendants: Mr M Watts

Solicitor for the First and Second Defendants: Haylen McKenzie Solicitors

Solicitor for the Third Defendant: MacKellars Lawyers

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1308 of 2013

BETWEEN: QUEENSLAND MINING CORPORATION LIMITED (ACN 109 962 469)

JUDGE: PERRY J DATE OF ORDER: 10 APRIL 2014 WHERE MADE: SYDNEY

1. On or before 4.00pm on 17 April 2014, the parties are to submit Short Minutes of Orders which give effect to the reasons of the Court. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1308 of 2013

BETWEEN: QUEENSLAND MINING CORPORATION LIMITED (ACN 109 962 469)

JUDGE: PERRY J DATE: 10 APRIL 2014 PLACE: SYDNEY

INDEX TO REASONS FOR JUDGMENT 1 PRELIMINARY [1] 1.1 The parties [3] 1.2 The disputed payments [7] 1.3 Overview of the statutory framework within which the issues arise [12] 1.4 The matters in issue on the application [18] 1.5 The issues arising on the cross-claim [27] 1.6 Evidential issues [34] 2 FACTUAL BACKGROUND [36] 2.1 Employment and consultancy agreements between QMCL and the Renshaw defendants [36] 2.2 Events leading up to the Settlement Deed [41] 2.3 The Settlement Deed of 23 October 2012 [50] 2.4 Subsequent meetings of the Board of Directors [60] 3 CONSIDERATION [64] 3.1 What is a "benefit"? [64] 3.2 The Renshaw defendants' primary contention: the Termination Payments constituted compensation for amounts owed under pre-existing contractual obligations and are not therefore a "benefit" [75] 3.3 Did individual components of the Termination Payments constitute 'benefits" for the purposes of s 200B(1) [82] 3.3.1 The sum of $83,333 paid to DFK Hill [83] 3.3.2 The sum of $60,000 to DFK Hill [91] 3.3.3 The sum of $24,000 of the $264,000 paid to Butmall [93] 3.4 Were the termination payments made "in connection with" Mr Renshaw's retirement? [95] 3.5 Are the Termination Payments exempt under s 200F(2) of the Act? [96] 3.5.1 The statutory criteria [96] 3.5.2 Are the criteria in s 200F(2)(a)(i) met? [107] 3.5.3 Even if s 200F(2)(a)(i) were satisfied, is s 200F(2)(b) satisfied - calculations based on amounts contained in the Annual Reports [116] 3.5.3.1 Remuneration to Mr Renshaw and Butmall as disclosed in the Directors' Reports pursuant to s 300A of the Act [119] 3.5.3.2 Conclusions as to the relevant calculations [128] 3.5.4 Deficiencies in the analysis provided by the Renshaw defendants [135] 3.5.4.1 The Renshaw defendants analysis of the transactions said to comprise base salary [136] 3.5.4.2 Fees for Services paid to Butmall (Item 1) [140] 3.5.4.3 Bonus Payments (Item 4) and Share Option (Item 9) [144] 3.5.4.4 Long Service Leave (Item 5) [148] 3.5.4.5 Allowances (Item 8) [149] 3.5.4.6 Conclusion [150] 3.6 Is QMCL estopped from seeking to recover the Termination Payments? [154] 3.6.1 No estoppel is raised in the face of the Act [160] 3.6.2 No estoppel arose on the facts in any event [170] 4 THE CROSS-CLAIM [181] 5 ORDERS [186]

1. PRELIMINARY 1 The applicant, Queensland Mining Corporation Limited (QMCL), seeks to recover termination payments allegedly made to the first and second defendants in contravention of s 200B(1) of the Corporations Act 2001 (Cth) (the Act). As explained below, various payments were made which total $677,333. 2 For the reasons which I give below, the application for recovery of the termination payments should be allowed. Those payments were made in breach of s 200B of the Act and held on trust by the recipients for QMCL. The applicant is entitled, if not required, to recover those payments under s 200J of the Act. No estoppel could or has been raised which would preclude recovery of those monies.

1.1 The parties 3 QMCL is a corporation registered under the Act and quoted on the Australian Securities Exchange (ASX). It was originally incorporated as a private company by the first defendant, Mr Howard Victor Renshaw, with the intention of acquiring copper and gold mining leases in Queensland. It subsequently became a listed public company. 4 Mr Renshaw was managing director of QMCL from 8 July 2004 to 23 October 2012. He was the only executive director of the company over that period. His duties were principally capital raising, company promotion, management of exploration, tenements and mining leases, acquisitions, drilling operations and corporate matters. He remained as non-executive director with QMCL following his resignation from the position of Managing Director until 21 January 2013. 5 The second defendant, Butmall Pty Limited (Butmall), is owned and controlled by Mr Renshaw, with Mr Renshaw having been the sole director and shareholder since 2005. 6 Finally, the third defendant, DFK Richard Hill Pty Limited (DFK Hill), was QMCL's accountant from November 2005 to April 2013. The Director of DFK Hill was also the company secretary of QMCL from August 2007 to February 2013, and a director of QMCL from 1 October 2009 to 30 November 2012. Throughout this time, DFK Hill also undertook duties as Mr Renshaw's accountant.

1.2 The disputed payments 7 In response to a Notice to Admit, the Renshaw defendants admitted that Mr Renshaw resigned as Managing Director on 23 October 2012 in accordance with an agreement executed the same day between QMCL, Butmall and Mr Renshaw (the Settlement Deed). Notwithstanding that the submissions on behalf of the Renshaw defendants appeared later to retreat from that admission, the Notice to Admit and its response were admitted in evidence without objection and no leave was sought to retract that admission. QMCL concedes that it is bound by the Settlement Deed subject to the operation of Part 2D.2 of the Act. 8 Mr Renshaw and Butmall contend that the Settlement Deed provided the means by which QMCL paid out its pre-existing obligations under the Services Agreement dated 27 November 2011 (the November 2011 Services Agreement) with Mr Renshaw and Butmall pursuant to which Mr Renshaw had been engaged as Managing Director of QMCL and Butmall had agreed to provide certain services to QMCL. Absent the Settlement Deed, the November 2011 Services Agreement was for a term of three years ending on 30 November 2014 and did not contain provision for the early termination of the contract on the giving of notice or otherwise. 9 The following payments (the Termination Payments) made in connection with the termination of Mr Renshaw's employment under the Settlement Deed are in dispute and were made by QMCL by four separate cheques dated 23 October 2012 for the following amounts: the sum of $270,000 made payable to Mr Renshaw; the sum of $83,333 made payable to DFK Hill's trust account; the sum of $60,000 made payable to DFK Hill's trust account; and the sum of $264,000 made payable to Butmall. 10 DFK Hill did not receive any benefit from the payments made to it or have an interest in the monies paid to it other than to hold the payments on trust for Mr Renshaw and Butmall. At the time of the trial, DFK Hill held on trust the sum of $50,333 being the subject of Mr Renshaw's employment entitlements on trust for Mr Renshaw, but had disbursed payments in the sum of $93,000 to Mr Renshaw pursuant to two separate authorisations executed by him. The first of these authorisations was for a payment of $60,000 which was authorised by Mr Renshaw on 14 June 2013 and the second payment was for a sum of $33,000 authorised on 8 July 2013. Both amounts were paid to Mr Renshaw's personal ANZ bank account. If they are otherwise unsuccessful in defending the claim, Mr Renshaw and Butmall (the Renshaw defendants) accept that they are liable to repay those moneys as they were the beneficiaries of the trust and so much of those moneys as were paid out by DFK Hill as trustee was paid at their direction and with their authority. 11 Clause 2.2 of the Settlement Deed provided also for the payment of a further termination benefit to Mr Renshaw of 2 million fully paid ordinary shares in QMCL by 21 December 2012 or, if not issued by then, $110,000 in lieu. While initially the subject of a claim by Mr Renshaw, that claim was ultimately not pressed.

1.3 Overview of the statutory framework within which the issues arise 12 QMCL contends that each of the Termination Payments identified at [9] above were made in contravention of s 200B of Div 2 of Pt 2D.2 of the Act, being "benefits" for the purpose of that provision, and that they must therefore be repaid to QMCL by the Renshaw defendants under s 200J. 13 Section 200B(1) of the Act provides that: "200B(1) Benefits in connection with retirement if person has held a managerial or executive office (1) An entity mentioned in subsection (1AA) must not give a person a benefit in connection with a person's (the retiree's) retirement from an office, or position of employment, in a company or a related body corporate if: (a) the office or position is a managerial or executive office; or (b) the retiree has, at any time during the last 3 years before his or her retirement, held a managerial or executive office in the company or a related body corporate; unless there is member approval under section 200E for the giving of the benefit. Note 1: This subsection extends to benefits given by way of compensation for, or otherwise in connection with, a person's loss of an office or position (see subsections 200A(1) and (3)). Note 2: Sections 200F, 200G and 200H provide for exceptions to this subsection. Note 3: The recipient of the benefit need not be the retiree." 14 The seriousness with which the Parliament views such breaches is apparent from the fact that a breach of s 200B(1) constitutes an offence of strict liability: s 200B(1A) of the Act. 15 The term "benefit" and the circumstances in which "a benefit is given in connection with a person's retirement" are broadly defined in ss 200AB and 200A respectively of the Act, while s 200 requires that a broad interpretation be adopted of when a benefit is given, affording priority to substance over form. The Corporations Regulations 2001 (Cth) (Corporations Regulations) also specify that certain things are, and are not, benefits pursuant to s 200AB(1)(e) and (2) of the Act respectively, and when a benefit is given in connection with a person's retirement pursuant to s 200A(1A). Those things which are specified in the Corporations Regulations as not constituting a benefit for the purposes of the Division include, relevantly, a genuine superannuation contribution paid by an employer or employee: see reg 2D.2.02(2)(c), Corporations Regulations made pursuant to s 200AB(2)). The Act also provides that certain benefits and benefits given in certain circumstances are exempt from s 200B(1), namely, (a) a payment for leave of absence to which a person is entitled under an industrial instrument (s 200F(1)(a)); (b) a benefit given under an order of a court (s 200F(1)(aa)); (c) a genuine payment by way of damages for breach of contract or for past services where the value of the benefit is less than the person's average annual base salary (ss 200F(2) and 200G respectively); (d) a benefit given in prescribed circumstances (s 200F(1)(b)); or (e) a benefit given where the failure to do so would contravene a law in force in Australia (otherwise than because of breach of contract or trust) (s 200H). 16 In effect, the statutory scheme can be summarised as casting a broad net so as to ensure that all payments or other things given in connection with retirement are caught by the statutory requirement for shareholder approval save where the Act or regulations creates an exemption. 17 Where a contravention of s 200B(1) occurs, the benefit is held on trust by force of s 200J(1) and must be immediately repaid. Specifically, s 200J provides that: (1) If an entity (the giver) contravenes section 200B by giving a benefit to a person (the recipient), then the amount of the benefit, or the money value of the benefit if it is not a payment: (a) is taken to be received by the recipient on trust for the giver; and (b) must be immediately repaid by the recipient to the giver. (1A) An amount repayable under subsection (1) to the giver: (a) is a debt due to the giver; and (b) may be recovered by the giver in a court of competent jurisdiction. (2) Subsection (1) applies to the whole of the amount of a payment or of the money value of the benefit even though giving the benefit would not have contravened section 200B if that amount or value of the benefit had been less."

1.4 The matters in issue on the application 18 First, no argument was put by the Renshaw defendants that the payments to Butmall should be treated differently from the payments to Mr Renshaw for the purposes of s 200B of the Act because those payments were made to a different legal person. In effect, the parties proceeded on the basis that the payments made to Butmall were to be treated as payments made to Mr Renshaw in determining whether the Termination Payments constituted a "benefit". That understanding is correct in my view given the terms of s 200B(1): see also note 3 to s 200B(1). Specifically, s 200B proscribes the giving of a benefit to "a person" simpliciter where it is given in connection with "a retiree's" retirement. 19 Secondly, there was no issue that: (a) the company was a relevant entity as contemplated in s 200B(1AA)(a) of the Act and therefore an entity for the purposes of s 200B(1); (b) Mr Renshaw held a managerial or executive office in the company for the purposes of s 200B(1) at the time of his retirement on 23 October 2012; and (c) Mr Renshaw's resignation from the office in question, constituted a "retirement from the office or position" for the purposes of s 200B of the Act. 20 As to (b) above, s 200AA defines a "managerial or executive office" relevantly to mean: "(1) For a company to which section 300A applies for the previous financial year for the company, a person holds a managerial or executive office in the company during the current financial year if the person's details were included in the directors' report for that previous financial year for the company in accordance with paragraph 300A(1)(c). Note: A person holding a managerial or executive office ceases to do so if the person's details are not included in the next directors' report. However, this is not relevant to whether the person has retired from an office or position in the company (see paragraph 200A(1)(f)). (2) The person is taken to hold the managerial or executive office for the whole of the current financial year unless and until the person retires from an office or position in the company before the end of that year. Note: Retires has an extended meaning (see section 200A)." 21 In this regard, there was no dispute that QMCL is a company to which s 300A applied for the previous financial year, being a company that is required to include specified information under the heading "Remuneration Report" in the directors' annual report for a financial year regarding remuneration of each member of the key management personnel for the company, and that Mr Renshaw's details were included in the Remuneration Report in the Annual Report for QMCL for the previous financial year. 22 Thirdly, s 200E provides that member approval will be given for the purposes of s 200B only on compliance with three conditions, namely: (a) the giving of the benefit is approved by a resolution passed at a general meeting of the company (s 200E(1B)); (b) the prescribed details of the benefit must be set out in, or accompany, the notice of the general meeting that is to consider the resolution (s 200E(2)); and (c) neither the retiree nor any associate of the retiree may vote on the resolution (s 200E(2A)). 23 It is also common ground that no general meeting was called to consider any resolution to approve the Termination Payments; nor is there any evidence to suggest that any director, including Mr Renshaw, took any steps to do so. As such, I am satisfied that no member approval was given for the Termination Payments. 24 The remaining matters which are in issue between the parties can be summarised as follows. (a) First, did the Termination Payments constitute in whole or in part "a benefit" as defined in s 200AB of the Act? In this regard, the Renshaw defendants contended that: (i) none of the amounts paid under the Settlement Deed constituted a "benefit" for the purposes of Division 2 because they represented the amounts that QMCL was liable to pay to the Renshaw defendants under the November 2011 Services Agreement; or in the alternative (ii) neither the sum of $60,000 paid to DFK Hill nor the sum of $264,000 paid to Butmall constituted a benefit as the former was paid as withholding tax due to the Australian Taxation Office (ATO) and the latter as GST payable to the ATO; and (iii) the amount of $83,000 was a genuine superannuation contribution and excluded from the definition of a "benefit" by regulations made pursuant to s 200AB(2) of the Act. (b) Secondly, were any of the Termination Payments exempt from the operation of s 200B(1) of the Act? In this regard, the Renshaw defendants alleged that no shareholder approval was required by virtue of s 200F(2)(a)(i) and (b) of the Act because the amounts paid under the Settlement Deed constituted genuine payments by way of damages for breach of contract and did not exceed the amount worked out under s 200F(4). (c) Thirdly, is QMCL estopped from bringing its claims to recover the Termination Payments? The sole form of estoppel ultimately relied upon by the Renshaw defendants was estoppel by representation by deed. With respect to this issue, the Renshaw defendants contend that, if shareholder approval was required, QMCL is estopped from recovering the Termination Payments by reason of its representation: (i) in cl 11.2 of the Settlement Deed that it would obtain such approval; (ii) in cl 4.2 of the Settlement Deed that it released the Renshaw defendants from "any and all actions, causes of action, claims and demands". 25 Notwithstanding their contentions as to the existence of an estoppel, the Renshaw defendants expressly disavowed any contention to the effect that the parties were able to "contract out" of the relevant statutory provisions. Furthermore, while their pleaded case relied also upon the indemnity provision in cl 5.1 of the Settlement Deed, reliance was not placed upon that clause by the Renshaw defendants at trial. 26 Finally, while the amended defence pleaded the dissipation of the moneys that had been paid to Mr Renshaw personally, it was not contended that, by reason of the statutory trust created by s 200J of the Act, those monies could not be recovered because they could not be traced. It was accepted by the Renshaw defendants that, in providing in s 200J(1A) that an amount repayable under subsection is a debt due to the giver, it was clear that equitable principles of tracing did not apply.

1.5 The issues arising on the cross-claim 27 By a cross-claim brought against QMCL, Mr Renshaw and Butmall seek damages and interest on various causes of action. These are related to matters raised in defence to the primary application and may be summarised as follows. 28 First, various breaches of the Settlement Deed are alleged as a consequence of which the Renshaw defendants are said to have suffered loss and damage. Specifically, Mr Renshaw and Butmall contend that: (a) if the approval of QMCL members was required for some or all of the Termination Payments, QMCL failed to obtain such approval in breach of cl 11.2 of the Settlement Deed; (b) in commencing the proceedings against the Renshaw defendants, QMCL acted in breach of cl 4 of the Settlement Deed whereby QMCL released and discharged the Renshaw defendants from any such claim. 29 At the hearing, the only loss identified by the Renshaw defendants was equivalent to the whole of the Termination Payments on the ground that the Settlement Deed imposed upon the company the responsibility for "obtaining any QMC[L] shareholder approvals". It was said by the Renshaw defendants that, but for the inclusion of those words, the claim for damages would not have been open to them. 30 Secondly, the Renshaw defendants initially pleaded that QMCL breached the Service Agreement by terminating the agreement in accordance with a resolution passed at a board meeting on 16 October 2011 without cause or reasonable notice. That case was not, however, run at trial and was inconsistent with the agreed fact that Mr Renshaw resigned on 23 October 2011 under the terms of the Settlement Agreement. The claim pressed at trial by the Renshaw defendants was that QMCL had repudiated the contract in requesting Mr Renshaw to resign, thereby giving rise to an immediate right in Mr Renshaw (and it would appear Butmall) to damages and to terminate the contract. While, as QMCL correctly pointed out, that case had not been pleaded, QMCL raised no objection to the matter being raised and determined. However, QMCL denied any repudiation of the contract. 31 As to the alleged breaches of the Settlement Deed raised in the counterclaim: (a) QMCL denied any breach contending inter alia that any rights conferred under cl 11.2 of the Settlement Deed to require QMCL to obtain membership approval would themselves constitute benefits within the meaning of s 200AB(1)(d), for which membership approval was required under s 200E; and (b) QMCL denied any breach of cl 4 of the Settlement Deed, contending inter alia that it does not operate to release or indemnify Mr Renshaw or Butmall from the claims in the statement of claim and, if they purported to do so, they would be contrary to s 200J of the Act and void or unenforceable for illegality. 32 QMCL also claimed that the Renshaw defendants are prevented by clause 4.1 of the Settlement Deed from bringing the claim. 33 Finally, in the cross-claim as pleaded, the Renshaw defendants claimed damages for alleged breaches of the Settlement Deed as a result of conduct engaged in by QMCL that was said to be disparaging of Mr Renshaw in breach of cl 7 of the Settlement Deed and in breach of the obligation to keep the Deed confidential in accordance with cl 8 of the Settlement Deed. However, no submissions, orally or in writing, were put in support of these claims, and no attempt was made to prove any loss. In the circumstances, I did not understand the claim to be pressed notwithstanding counsel for the Renshaw defendants stating generally that all of the claims in the cross-claim were maintained when asked by the Bench. In those circumstances, I do not consider that there is an obligation upon me to deal with the issue: see Siegwerk Australia Pty Ltd (in liq) v Nuplex Industries (Australia Pty Ltd) (2013) 305 ALR 412 at 433 [100] (Robertson J) (with whom Perram and Dodds-Streeton JJ agreed at 414-415 [4] and 428 [79], respectively). In any event, no loss having been proved, any claim by the Renshaw defendants on the cross-claim for damages based upon a breach of these clauses must fail.

1.6 Evidential issues 34 At the hearing, I admitted certain paragraphs of the affidavit of Mr Renshaw affirmed on 29 November 2013 subject to relevance, namely, paragraphs 25 (second sentence), 26 (whole paragraph), 27 (last sentence), 44 (whole paragraph) and 57 (last sentence). It is therefore necessary for me to rule upon the objections made to those paragraphs. 35 Broadly speaking, the objections to the relevance of these paragraphs turned upon whether I accepted the correctness of certain defences relied upon by the Renshaw defendants. In those circumstances, I have received the material deposed to in those paragraphs, save for the last two sentences of paragraph 26 which does not relate to any issue fairly raised by the defendants.

2.1 Employment and consultancy agreements between QMCL and the Renshaw defendants 36 QMCL initially entered into a contract of employment with Mr Renshaw appointing him as Managing Director on 30 November 2007 (the Initial Employment Contract). The contract was for a term of three years retrospectively commencing on 1 July 2007 and was to continue after the initial term for periods of three months (cl 4 of the Initial Employment Contract). Save for circumstances not presently relevant, the contract was terminable on three months' notice by either party under cl 5. 37 On 5 September 2007, Butmall entered into a consultancy contract with QMCL to supply a managing director, Mr Renshaw, to QMCL effective on 1 October 2007 (the October 2007 Consultancy Contract) and therefore also intended to operate retrospectively. The expressed intention was, among other things, that the contract would not create any relationship of employment between Mr Renshaw and QMCL. Thus, cl 17 expressly provided that "[t]his Agreement is made on the understanding that it shall not be deemed to constitute any form of contract or employment or partnership between QMC and the Contractor or between QMC and the personnel or employees of the Contractor." The contract provided for contractor remuneration to be an amount equivalent to the salary of $180,000 plus 9% superannuation exclusive of GST, being a total of $192,200. By clause 5, the Consultancy Contract was for a term of 1 year and was to continue on a month by month basis thereafter as QMCL would determine and require. It is apparent from the terms of this contract that it was intended to be substituted for the contract made directly between Mr Renshaw and Butmall on 30 November 2007. 38 Several years later, by a letter dated 16 May 2011, QMCL confirmed the basis of a renewed Service Contract ratified by the Board on 30 March 2011 between QMCL and Mr Renshaw. Mr Renshaw entered into that contract both personally for the provision of personal services by him and for and on behalf of Butmall for the provision by Butmall of corporate services as agreed between QMCL and Butmall (the May 2011 Services Agreement). 39 The May 2011 Services Agreement was terminated by the Services Agreement between QMCL and Mr Renshaw both personally, and for and on behalf of Butmall, which was ratified by the Board of QMCL on 20 November 2011 (the November 2011 Services Agreement). The terms of this agreement as ratified by the Board of QMCL were confirmed in a letter dated 27 November 2011. This agreement provided for: (a) the provision of a base amount of $285,000 plus $50,000 superannuation per annum, the amount of $285,000 being comprised of a payment of $165,000 to Mr Renshaw for his personal services and a further $120,000 plus GST payable to Butmall for corporate services; (b) a cash bonus calculated according to share movements up to a maximum of $120,000; and (c) a further performance bonus of up to $120,000 based on the Board's assessment of Mr Renshaw's performance in achieving and/or implementing QMCL's strategy. 40 The agreement did not contain any termination clause. It is this agreement which was current at the time that the Mr Renshaw resigned and the Settlement Deed was entered into on 23 October 2012.

2.2 Events leading up to the Settlement Deed 41 On 29 February 2012, TAMQ Copper Pty Limited (TAMQ) acquired 15.31% of the then issued capital of QMCL and advised the ASX accordingly. Mr Robert Besley, the adviser of TMAQ, joined the Board of QMCL as a Director shortly thereafter and Ms Cathie Wu, the Managing Director of a major shareholder of TAMQ, was appointed his alternate Director. TAMQ later changed its name to Great Tang Brothers Resource Investment Pty Ltd. 42 It is agreed that Mr David Usasz and Mr Richard Hill were directors of QMCL throughout October 2012. 43 Subsequently on 16 October 2012, Ms Wu was appointed a non-executive director as the nominee of the most recent addition to the list of QMCL's substantial shareholders, Perfect Nation Global Limited. From that point, the directors of the company were: Mr Renshaw (Managing Director); Mr Usasz (Non-executive Chairman); Mr Hill (Non-executive Director and Company Secretary); and three additional Non-executive Directors, Mr Robert Besley, Mr Brian Rear, and Ms Wu. 44 On 16 October 2012, Mr Renshaw attended a meeting of the Board of Directors of QMCL in Sydney at which all the directors were present (Mr Rear attending by phone). Under item 2 headed "Position of Managing Director", the Minutes record that: "HR tendered his resignation from the Company to allow the retention of a person with proven experience to take the White Range Project to the next stage including the completion of the BFS. It was resolved in accepting HR's resignation i. HR would continue as a non-executive director ii. Obligations under his current Managing Director's contract would be paid out. iii. A Board Committee comprising HR, DU, BR, CW and RH be appointed to carry out an executive search for a new CEO to be appointed as soon as practicable. iv. DU and RH be authorised to finalise the Company's contractual obligation under the MD's contract. It was further resolved to approach Brian Rear to be interim CEO. Mr Rear agreed to consider the role and would revert back to the Board in a few days." (Emphasis in original) 45 However, this account of the meeting on 16 October 2012 was inconsistent with the terms of the Settlement Deed pursuant to which the parties purported to terminate the November 2011 Service Agreement and Mr Renshaw agreed to resign. 46 It was also contradicted by the evidence of Mr Hill, who was then a director of QMCL and Company Secretary, that Mr Renshaw was requested to resign from his position as Managing Director at the meeting, and by Mr Renshaw's evidence that: "During that meeting I presented my usual reports and at the end of the meeting the Chairman, David Usasz, said to me words to the effect 'We would like you to retire as the Managing Director, and continue as a non-executive Director. We propose that your contract be paid out in full'. He then looked around the boardroom table at the other directors and they said nothing. I said 'I do not agree to retire until the company and I agree to the terms on which I am to depart and on the orderly management succession of the company,' or words to that effect. … I did not resign at that meeting as [the Minutes of the Meeting of the Board of Directors of QMCL on 16 October 2012] might suggest. To the best of my recollection, at the directors' meeting on 16 October 2012 the directors authorised David Usasz and Richard Hill to formalise the payout of my contract, as Mr Usasz had said at the meeting, 'in full'." 47 It would also appear that it was for this reason that, at the following Board Meeting on 29 October 2012, Mr Renshaw is recorded in the minutes as having "abstained from approving section on Position of Managing Director in the minutes [of the meeting on 16 October 2012] on basis that process approved not followed". 48 In the end result, Mr Renshaw's explanation of what occurred was not challenged, and QMCL accepted and relied upon Mr Renshaw's evidence to that effect. In the circumstances, I accept that evidence and do not accept the account of the meeting contained in the Minutes of the Meeting of the Board on 16 October 2012, insofar as the minutes record that Mr Renshaw tendered his resignation at that meeting and that it was resolved to accept his resignation. 49 Subsequently, on or about 18 October 2012 Mr Renshaw consulted his solicitor, Philip Kelso. He instructed him to act on Mr Renshaw's behalf in relation to the preparation of an agreement with QMCL that formalised the Renshaw defendants' entitlements said to be owing to him under existing contracts with QMCL, if Mr Renshaw retired as Managing Director. Over the following days, Mr Kelso held discussions with Richard Hill and David Usasz towards that end and drafted the proposed settlement agreement.

2.3 The Settlement Deed of 23 October 2012 50 In the morning on 23 October 2012, Mr Renshaw attended Mr Kelso's office in Sydney. Present also at the meeting were Mr Kelso, Mr Usasz and Mr Hill. The meeting lasted for a number of hours. After reading the Settlement Deed very carefully, Mr Renshaw signed the document on his own behalf and on behalf of Butmall, witnessed by Mr Kelso. Mr Usasz and Mr Hill signed the Settlement Deed in their capacity as directors of QMCL in the presence of Mr Renshaw and Mr Kelso. 51 Recital B to the Settlement Deed under the heading "Background" states that: "QMC acknowledges if it terminates the Renshaw Agreement it must pay Butmall and Renshaw the (sic) ('Renshaw Parties'); all of the sums as required by the Renshaw Agreement [being the Management and Services Contract dated 27 November 2011] as set out in clause 1 Table 1." (Emphasis in original) 52 Clause 1.1 states that: "QMC terminates the Renshaw Agreement effective as at the date of this Deed and agrees to pay the Renshaw Parties a Termination Sum of $ (sic) $653,333 as set out in Table 1. of this clause. TABLE 1 Period Renshaw Butmall Termination Sum 1/12/2012 to 165,000 120,000 30/11/2013 1/12/2013 to 165,000 120,000 30/11/2014 Superannuation for the above period 83,333 TOTAL 413,333 240,000 $653,333

[sic] (the Termination Sum") upon signing of this Deed. The parties also agree that any adjustment for statutory entitlements including but not limited to accrued long service leave from 8 July 2004 will be calculated by the QMC company secretary and paid to Renshaw or as he directs on or before 26 October 2012." 53 Clause 1.2 provided that QMCL must pay the Termination Sum to the Renshaw Parties by bank cheque or transfer to any account nominated by Mr Renshaw or Butmall upon the giving of a written direction but not before. 54 Conversely, cl 2.1 provided that: "2.1 By this Deed, Renshaw hereby agrees to resign as Managing Director of QMC upon receipt by the Renshaw Parties of the Termination Sum paid in accordance with Clause 1.2." 55 As earlier mentioned, it is agreed by the parties that the moneys due under cl 1.2 were paid on the date that the Settlement Deed was signed, and that Mr Renshaw resigned in accordance with cl 2.1 on the same day. Indeed, Mr Renshaw would not have signed the agreement unless the moneys were to have been paid on the same day. As he said in cross-examination: "[MR SCRUBY:] …you signed the agreement on 23 October? --- [MR RENSHAW] Yes. [MR SCRUBY:] …You received cash payments under that agreement on 23 October also? --- [MR RENSHAW] Yes. … [MR SCRUBY] Now, I take it when you signed the agreement, you knew that that was going to happen. That is, that the payments were going to be made on the same day? --- [MR RENSHAW] Yes, because why would I enter into or sign ... the agreement?" 56 It was clear from the way in which the last of these answers was conveyed in his oral evidence that Mr Renshaw was emphatic that he would not have signed the agreement unless the payments were going to be made on the same day that he signed the agreement. 57 The Settlement Deed also included extensive releases and indemnities. Specifically, cl 4.2 provided that QMCL released and forever discharged Mr Renshaw and Butmall from any actions, causes of action, claims and demands which they may have, including arising from or relating to the November 2011 Service Agreement and provision of services to QMCL. Clause 5.1 also made provision for QMCL to indemnify Mr Renshaw and Butmall for any such actions, causes of action, claims or demands. 58 Finally, cl 10 provided that any provision of the Settlement Deed which is invalid or unenforceable shall be read down if possible so as to be valid or enforceable or severed to the extent of the invalidity or unenforceability. 59 Mr Renshaw continued as a non-executive director of QMCL until 21 January 2013. He provided voluntary services to QMCL pursuant to his agreement to assist the Board and the Chairman without payment under cl 2.5 of the Settlement Deed. Mr Renshaw also remained a director of each of QMCL's twelve subsidiary companies until approximately March 2013.

2.4 Subsequent meetings of the Board of Directors 60 The Settlement Deed was circulated to the directors of QMCL on 24 October 2012. 61 At a meeting of QMCL's Board of Directors held on 30 November 2012 at which Mr Renshaw was present as a Non-Executive Director, the minutes record at item 10 that: "CONFIRMATION OF HR SETTLEMENT Board paper schedule/Howard Renshaw Contract/Settlement Deed was tabled and noted. Resolved David Usasz & Richard Hill finalize within the signed agreement already in place as circulated to the board on 24th October 2012." 62 I also note that, while the minutes make no mention of the Termination Payments being put to a general meeting, item 4 of the minutes records that the directors resolved to convene an extraordinary general meeting of members at the earliest opportunity to consider certain other proposed resolutions. 63 Finally, at a meeting of the directors on 21 January 2013, item 2 of the Minutes recorded that "the resignation of Howard Renshaw as a Director was accepted with regret."

3.1 What is a "benefit"? 64 The definition of "benefit' is pivotal to the legislative scheme for the proscription of termination benefits without member approval. 65 Prior to amendments made in 2009, the term "benefit" was defined in s 9 of the Act, which provided that: "benefit: (a) means any benefit, whether by way of payment of cash or otherwise; and (b) when used in Division 2 of Part 2D.2 (sections 200A to 200J) - means: (i) a payment or other valuable consideration; or (ii) an interest in property of any kind; or (iii) any other benefit." 66 However, with effect from 24 November 2009, Div 2 of Part 2D.2 of the Act was substantially amended by the Corporations Amendment (Improving Accountability on Termination Payments) Act 2009 (Cth) (the 2009 amendments). It is the Act as amended in 2009 which applies in the present case. The effect of those amendments, in broad terms, was to expand the circumstances in which shareholder approval of termination benefits is required by: (a) broadening the definition of benefits; (b) widening the scope of individuals whose remuneration is subject to the requirement of shareholder approval; and (c) substantially reducing the threshold level of termination benefits at which shareholder approval is required from a benefit that exceeds seven times the person's total annual remuneration, to a benefit that exceeds the person's base salary for one year. 67 As the member stated in the Second Reading Speech to the Corporations Amendment (Improving Accountability on Termination Payments) Bill 2009, the 2009 amendments were intended to respond to community concern about the levels of termination benefits to company management by "empower[ing] shareholders to more easily reject such payments where they are not in the best interests of the company, the shareholders or the community.": Commonwealth, Parliamentary Debates House of Representatives, 24 June 2009, 6969 (Chris Bowen). In addition, the 2009 amendments introduced an obligation upon the retiree to repay unauthorised termination benefits immediately and provides that such benefits are held on trust for the company until repaid. 68 Following the enactment of the amendments, s 200AB now defines "benefit" in broader terms, in a non-exhaustive manner, providing that: "(1) For the purposes of this Division, a benefit includes any of the following: (a) a payment or other valuable consideration; (b) any kind of real or personal property; (c) any legal or equitable estate or interest in real or personal property; (d) any legal or equitable right; (e) a thing specified in regulations made for the purposes of this paragraph. Note: For specification by class, see subsection 13(3) of the Legislative Instruments Act 2003. (2) However, for the purposes of this Division, a benefit does not include a thing specified in regulations made for the purposes of this subsection. Note: For specification by class, see subsection 13(3) of the Legislative Instruments Act 2003." 69 The width of the definition is emphasised by the legislative direction in s 200 as to how the term is to be interpreted and applied. That section (which was also inserted in 2009) provides that: "For the purposes of this Division, in determining whether a benefit is given: (a) give a broad interpretation to benefits being given, even if criminal or civil penalties may be involved; and (b) the economic and commercial substance of conduct is to prevail over its legal form." 70 Section 200A also defines the circumstances in which "a benefit is given in connection with a person's retirement" as follows: "General rules (1) For the purposes of this Division: (a) a benefit is given in connection with a person's retirement from an office or position if the benefit is given: (i) by way of compensation for, or otherwise in connection with, the loss by the person of the office or position; or (ii) in connection with the person's retirement from the office or position; and (b) giving a benefit includes: (i) if the benefit is a payment - making the payment; and (ii) if the benefit is an interest in property - transferring the interest; and (c) a person gives a benefit even if the person is obliged to give the benefit under a contract; and (d) a pension or lump sum is paid or payable in connection with the person's retirement from an office or position if the pension or lump sum is paid or payable: (i) by way of compensation for, or otherwise in connection with, the loss by the person of the office or position; or (ii) in connection with the person's retirement from the office or position;…" 71 The phrase "in connection with" was considered generally by the Full Court in Minister for Immigration and Multicultural Affairs v Singh (2000) 98 FCR 469. In their joint reasons, Black CJ, Kiefel, Sundberg, Katz and Hely JJ explained that: "28. The case law on the phrase 'in connection with' indicates that it is an expression of wide connotation that merely requires a relation between one thing and another: for example, Perrett v Commissioner for Superannuation (1991) 29 FCR 581; Burswood Management Ltd v Attorney-General (Cth) (1990) 23 FCR 144; Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280. But in Burswood at 146 the Full Court quoted with approval a statement made by Davies J as follows: 'Expressions such as "relating to", "in relation to", "in connection with" and "in respect of" are commonly found in legislation but invariably raise problems of statutory interpretation. They are terms which fluctuate in operation from statute to statute ... The terms may have a very wide operation but they do not usually carry the widest possible ambit, for they are subject to the context in which they are used, to the words with which they are associated and to the object or purpose of the statutory provision in which they appear.' 29. The phrase 'in connection with' does not necessarily require a causal relationship between the matters said to be connected: Perrett, and phrases such as 'having to do with' are sometimes referred to as a useful synonym: Re Nanaimo Community Hotel Ltd v British Columbia [1944] 4 DLR 638. But so too are phrases such as 'in the course of', or 'forming part of': Dawson v Hoffman Brick & Potteries Ltd [1924] VLR 208. As the Full Court emphasised in Burswood at 146 reference to reported cases is of little assistance, because the nature of the relationship between one thing and another which is encompassed by the phrase 'in connection with' depends so much upon the statutory context in which the words appear." 72 That decision, in turn, was considered by Besanko J in White v Norman (2012) 199 FCR 488 (White) in construing the phrase "in connection with" in the context of s 200B of the Act as in force immediately before the 2009 amendments: White at 492 [10]. In White, the plaintiff sought to enforce a contractual provision under a contract entitling him to amounts based on his remuneration where his employment was terminated without notice. The defendant receivers and managers of his prior employer resisted the claim on the basis, relevantly, that payment of the remuneration benefits was prohibited by s 200B(1) of the Act. One of the issues raised concerned whether those benefits were sufficiently connected with the plaintiff's loss of office to fall within s 200B(1), given that the obligation to pay the benefits derived from the fact that the employer chose to terminate the office under the contract without notice, rather than choosing to terminate the office in accordance with the requisite period of notice. 73 Besanko J saw no reason for reading down the width of the words "in connection with" in the context of s 200B and held in line with Singh that they did not require a direct causal connection. Specifically, his Honour held at 506 [67] that: "I do not think that there is any doubt that the termination of the plaintiff's employment was a loss of his office of chief executive officer and therefore his retirement from that office (s 200A(1)(e)). The direct cause of the engaging of the contractual obligation to make the NDR [Non-Discretionary Remuneration] and DR [Discretionary Remuneration] payments was the decision to proceed that way rather than by way of a notice of termination. In a sense, the NDR and DR payments are not directly linked to the loss of office per se, but to the mechanism adopted to bring about the termination. But, as the authorities show, the words 'in connection with' are words of wide import and there is no need for a direct link. On the face of it, the NDR and DR payments follow from the plaintiff's loss of office, albeit, one must add, the circumstances in which that came about. Is there reason, having regard to the subject matter and purpose of the provisions, to read down the phrase, 'in connection with'? I am not able to identify any such reason. In fact, the breadth of the exceptions in s 200F, particularly that in s 200F(2)(a)(ii), suggest the broad interpretation is the correct one." (emphasis added) 74 In my opinion, there is nothing in the 2009 amendments that suggests that the Parliament intended that a narrower construction of the words "in connection with" be adopted. To the contrary, the amendments are consistent with those words being interpreted broadly in the manner suggested given, in particular, the insertion of s 200 requiring that a broad interpretation be adopted in determining whether a benefit is given and requiring that the substance of conduct is to prevail over its form and the insertion of s 200A which makes it clear that a person gives a benefit even if obliged by contract to do so.

3.2 The Renshaw defendants' primary contention: the Termination Payments constituted compensation for amounts owed under pre-existing contractual obligations and are not therefore a "benefit" 75 The primary contention of the Renshaw defendants is that there was no "benefit" to them arising from the Settlement Deed within s 200B of the Act on the ground that the Settlement Deed did no more than provide compensation for the relinquishment by them of their contractual rights under the November 2011 Services Agreement in the same amount as would otherwise have been due. As they submitted: "Put simply, under the Settlement Deed the Defendants gave up their rights to payments under the Service Agreement in exchange for payment(s) of no more than the same amount. In substance, the Settlement Deed was an agreement compensating the Defendants for the payments that they would have otherwise received, save for the effective termination of the Service Agreement by the Settlement Deed…. If the Defendants gave up their contractual rights under the Service Agreement for payments having an equal or less than monetary value, then the Defendants did not by operation of the Settlement Deed, receive any 'benefit' for the purposes of s 200B of the Act." 76 They further contend in this regard that "[t]he correct analysis of the relevant statutory provisions must commence with looking at the economic and commercial substance of the conduct of the parties, as required by s 200 of the Act, in agreeing to the terms of the Settlement Deed and not merely, as the Applicant's submissions suggest, by looking at each discreet payment in isolation from its commercial context and in this way, by ignoring the rights given up by the Defendants in negotiating the payments received." 77 Thus, it was said by the Renshaw defendants that the payments made under the Settlement Deed represented no more than payments made to fully extinguish the obligations that QMCL genuinely believed that it owed to Mr Renshaw and Butmall on 23 October 2012 and, in particular, QMCL's payment obligations under the November 2011 Service Agreement, together with any other claims that Mr Renshaw and Butmall may have had but for clause 4.1 of the Settlement Deed. Construed in this way, it was submitted that the conclusion that they did not receive any benefits under the Settlement Deed for the purposes of s 200B does not offend the legislative purpose. Rather, it was submitted that this approach ensures that the relevant statutory provisions do not catch cases which, like the present case, involve pre-existing and genuine contractual obligations, as opposed to any ex gratia payment to compensate for a loss of office in the sense of a payment for the loss of prestige associated with the holding of the office. 78 I accept that the Settlement Deed was concluded with the intention of paying amounts to Mr Renshaw and Butmall equivalent to those to which they would otherwise have been entitled under the November 2011 Services Agreement if that agreement had continued for its full term to 30 November 2014. This accords with the position as agreed and resolved upon at the meeting of the Board of Directors of QMCL on 16 October 2012: see paras 43-45 above. It also accords with the Recitals to the Settlement Deed. 79 Nonetheless, leaving aside the question of whether any specific exemptions in the Act apply to particular components of the termination payments, it is clear, in my view, that the Renshaw defendants' argument that the Termination Payments do not constitute "benefits" within the meaning of s 200B of the Act because they do not confer a benefit, must fail. The Termination Payments are clearly each "a payment" and therefore fall within the definition of a "benefit" in s 200AB(1)(a). That is all that is required by the statutory definition of the term. 80 The Renshaw defendants' submission would require an additional consideration that the payment benefit the recipient in the sense that the recipient receives something more than that to which they would otherwise have been contractually entitled. However, there is no warrant in the statutory language for that added criterion. A "benefit" as defined in s 200AB is not limited to payments aside from those which were the subject of pre-existing contractual obligations. To the contrary, s 200A(1)(c) expressly provides that "a person gives a benefit even if the person is obliged to give the benefit under a contract", while s 200H provides that s 200B(1) "…does not apply to a benefit given by a person if failure to give the benefit would constitute a contravention of a law in force in Australia or elsewhere (otherwise than because of breach of contract or breach of trust)." (emphasis added). There is no distinction drawn in these provisions between payments under a contract entered into prior to or after the person's retirement, even though that distinction may be relevant when determining whether a statutory exemption applies. As I have earlier explained, Div 2 of Part 2D.2 has been framed so as to cast the net widely in terms of what constitutes a "benefit" from which exemptions are then expressly "carved-out", rather than by starting with a narrow concept of "benefit" such as that urged by the Renshaw defendants. 81 Furthermore, I do not accept that it is accurate to say that the Termination Payments in fact represent amounts due under pre-existing obligations in the November 2011 Services Agreement. To the contrary, the Termination Payments were paid in advance of the time that they would have been paid had the Services Agreement remained on foot for its full term and were paid on different terms and conditions. Thus, unlike the November 2011 Services Agreement, the moneys were payable as consideration for the discharge of pre-existing obligations under the November 2011 Services Agreement and Mr Renshaw's resignation as Managing Director, instead of being payable for the continued provision by Mr Renshaw and Butmall of services to QMCL until 30 November 2014. Nor was there any evidence that the amounts paid under the Settlement Deed were adjusted for their present day value at the time of payment as against the value of those moneys if they had been paid over the remainder of the term of the November 2011 Services Agreement. These aspects suggest that even if the word "benefit" were given its ordinary meaning, the Termination Payments could properly be characterised as a "benefit".

3.3 Did individual components of the Termination Payments constitute 'benefits" for the purposes of s 200B(1) 82 In the alternative to their primary contention, the Renshaw defendants deny that the following amounts comprised within the Termination Payments constituted benefits for the purposes of s 200AB: the sum of $83,333 paid to DFK Hill; the sum of $60,000 paid to DFK Hill; and the sum of $24,000 of the $264,000 paid to Butmall.

3.3.1 The sum of $83,333 paid to DFK Hill 83 The Settlement Deed identifies the sum of $83,333 as being superannuation for the period commencing on 1 December 2012 and ending on 30 November 2014. 84 Mr Renshaw gave evidence that the cheque drawn by QMCL in the sum of $83,333 was made payable to "DFKRH Pty Ltd Trust Account" which he understood to be a trust account controlled by QMCL's external accountants. That cheque was retained by Mr Hill, then the accountant for both QMCL and Mr Renshaw, and banked into the trust account on or about 23 October 2012. Mr Renshaw's gave evidence that it was his belief that those proceeds were held in that account for payment to HVR 75 Pty Ltd (ABN 35 669 766 448) which was the trustee for the HVR Super Fund, being Mr Renshaw's self-managed superannuation fund. However, there is no evidence of any subsequent conduct by him that is consistent with that belief, such as an authorisation by him for these monies to be paid out to the HVR Super Fund or payment of those monies to that fund. 85 The Renshaw defendants contend that this amount constitutes compensation for Mr Renshaw's future superannuation entitlements pointing to Mr Renshaw's entitlement under the November 2011 Services Agreement to "$50,000 superannuation p.a.", in addition to his base salary. As such, they contend that this amount is not a "benefit" for the purposes of s 200B(1). Specifically, by virtue of reg 2D.2.02(2)(c) of the Corporations Regulations, "a genuine superannuation contribution that is paid by an employer or employee on or after the commencement of the regulation" does not constitute a benefit for the purpose of Div 2 of Part 2D.2 of the Act. 86 In my view, the submission must be rejected. 87 First, there has been no superannuation contribution which could attract the operation of the regulation. Even accepting Mr Renshaw's evidence, the evidence goes no higher than to establish that moneys have been paid which Mr Renshaw intends be paid into his self-managed superannuation fund. 88 Secondly, and related to this, the exemption in reg 2D.2.02(2)(c) in its terms does not extend to compensation for the loss of future superannuation entitlements, as is the case here. 89 Thirdly, the fact that the regulation defines the exemption as limited to a "genuine superannuation contribution that is paid…" implies both that the superannuation contribution must not only have been paid, but have been paid because the entitlement to payment of the contribution has accrued. As QMCL submitted, whatever other consequences may flow from the requirement that the contribution be "genuine", the inclusion of that requirement strongly suggests that a superannuation contribution for the purposes of the exemption could not refer to a sum which is calculated by reference to a hypothetical situation in which the employment relationship continues when it is known that that relationship has come to an end. At that point the payments sought to be characterised as a superannuation contribution no longer constitutes part of the remuneration package for the employee, but has become divorced from that relationship. Furthermore, the requirement that the contribution be one "that is paid" strongly suggests that it must be paid to a superannuation fund, of which there is no evidence here. 90 Finally, to construe the regulation in the manner submitted by the Renshaw defendants would potentially undermine the object of Division 2 of Pt 2D.2 of, in general, requiring shareholder approval before sums are paid pursuant to contractual obligations that would exceed the person's average annual base salary. It would effectively insulate payments from the requirement for shareholder approval to compensate a retiree for the loss of one aspect of his or her remuneration arrangements to which he or she would otherwise be entitled to receive without any ceiling.

3.3.2 The sum of $60,000 to DFK Hill 91 By their amended defence, the Renshaw defendants alleged that the payment of $60,000 to DFK Hill on trust for Mr Renshaw was a payment of moneys payable to the ATO by way of withholding tax, the obligation in respect of which is said to arise "from such of the [Termination Payments] which were taxable". The cheque was retained by Mr Hill and was again banked into the same trust account on 23 October 2012. Mr Renshaw gave evidence that he understood that the cheque for $60,000 was for the estimated PAYG tax which, by agreement, was to be forwarded to the ATO on his behalf with respect to the amounts he personally received pursuant to cl 1.1 of the Settlement Deed. There was no evidence that the moneys were in fact ultimately paid to the ATO or of any authorisation given by Mr Renshaw for the moneys held on trust to be so applied. 92 No submissions were made by the Renshaw defendants in support of this ground and, as such, it did not appear that the point was ultimately pressed. In any event, the definition of a "benefit" extends to "payments" simpliciter irrespective of their purpose (they must only be given in connection with a person's retirement, which I address separately). No exception is made in the Act or the Corporations Regulations for payments which are intended to be applied in the discharge of tax liabilities. As such, I consider that the payment was a benefit to which s 200B(1) applied, subject to the question of whether the Termination Payments were exempted under s 200F(2).

3.3.3 The sum of $24,000 of the $264,000 paid to Butmall 93 The Renshaw defendants contend that the payment of $24,000 to Butmall represented a "grossing up" payment for GST pursuant to cl 16.3 of the Settlement Deed and did not constitute a "benefit" for the purposes of s 200B because there was an obligation to account to the ATO for the receipt of those moneys. For this reason, it was contended that the monetary value of the alleged GST "benefit" receipt is nil. In this regard, cl 16.3 of the Settlement Deed provided that: "If a party makes a supply under or in connection with this Deed in respect of which GST is payable, the consideration for the supply but for the application of this clause 16 (GST exclusive consideration) is increased by an amount equal to the GST exclusive consideration multiplied by the rate of GST prevailing at the time the supply is made." 94 However, notwithstanding that under cl 16, the consideration for the supply must be increased to cover the GST, the existence of the liability to pay $24,000 in GST was not proved, as QMCL contended. Furthermore, the payment is still a "benefit" because it is a "payment" which is not the subject of any statutory exclusion. Finally, and in any event, even on Butmall's construction of a "benefit", it stood to benefit from the payment in a practical sense as the payment would enable Butmall to discharge a liability that it would otherwise have had to discharge from its own funds.

3.4 Were the termination payments made "in connection with" Mr Renshaw's retirement? 95 In my view, the Termination Payments were made in connection with Mr Renshaw's retirement from his office as Managing Director. Mr Renshaw agreed to retire as Managing Director only upon agreement being reached as to the terms on which he was to depart, agreement as to those matters was in fact reached with the terms embodied in the Settlement Deed, and Mr Renshaw retired upon payment of the Termination Payments in accordance with the terms of the Settlement Deed. Indeed, it was Mr Renshaw's evidence that he would not have signed the Settlement Deed by which he agreed to resign unless the Termination Payments were paid on the same day. In these circumstances, the existence of a sufficient connection for the purposes of s 200B(1) between Mr Renshaw's resignation and the payment of the Termination Payments cannot, in my view, be doubted. The latter was directly related to the former. As I have earlier explained at paragraph [18] no distinction was drawn in this regard by the parties between payments to Mr Renshaw and payments to or on trust for Butmall.

3.5 Are the Termination Payments exempt under s 200F(2) of the Act?

3.5.1 The statutory criteria 96 Section 200F(2) of the Act relevantly provides that: "(2) Subsection 200B(1) does not apply to a benefit given in connection with a person's retirement from an office or position in relation to a company if: (a) the benefit is: (i) a genuine payment by way of damages for breach of contract; or (ii) given to the person under an agreement made between the company and the person before the person became the holder of the office or position as the consideration, or part of the consideration, for the person agreeing to hold the office or position; and (b) the value of the benefit, when added to the value of all other benefits (if any) already given in connection with the person's retirement from offices or positions in the company and related bodies corporate, does not exceed the amount worked out under whichever of subsections (3) and (4) is applicable." 97 Both parties accepted, correctly in my view, that both subsections (a) and (b) must be satisfied in order to attract the operation of the exemption, that is, that the benefit must be of a kind referred to in s 200F(2)(a)(i) or (ii) and, for the purposes of s 200F(2)(b), the value of the benefit must not exceed the base salary which is calculated under either s 200F(3) or (4) as applicable. 98 The Renshaw defendants contended that the criteria in s 200F(2)(a)(i) and (b) were satisfied. No reliance was placed upon s 200F(2)(a)(ii) by Mr Renshaw or Butmall. 99 Section 200F(3) relates only to cases where the "relevant period" is less than one year, while subs (4) applies in cases where the "relevant period" is one year or more. The "relevant period" in turn is the period or total accumulation of periods for which the person "has held a managerial or executive office in relation to a company": s 200F(5). 100 Section 200F(4) provides for the amount to be differently calculated depending upon the duration of the relevant period. In the present case, Mr Renshaw held the office of managing director with QMCL for a period in excess of 8 years. As such, the amount must be worked out under s 200F(4)(e) which provides as follows: "(4) This subsection applies in every other case. The amount worked out under this subsection is: … (e) if the relevant period is 3 years or more - the average annual base salary that the person received from the company and related bodies corporate during the last 3 years of the relevant period." 101 As earlier explained, s 200F(4) in its current form was introduced by the 2009 amendments and substantially reduced the threshold for termination benefits requiring shareholder approval. Thus under s 200F(4) prior to the 2009 amendments, termination benefits could reach up to seven times a person's total annual remuneration received from the company and related bodies corporate before shareholder approval was required. However, under s 200F(4) as amended in 2009, shareholder approval is required where the benefits would exceed the person's average annual base salary for one year. 102 The widening of the net to catch more termination benefits effected by the 2009 amendments is further complemented by the narrow definition of "base salary". It is apparent that the Parliament intended that definition to be exhaustive as s 9 of the Act provides that "base salary has the meaning specified in regulations made for the purposes of this definition." Regulation 2D.2.01, in turn, made pursuant to s 9, specifies certain matters as base salary: "Item Matter 1 The components of a short term employee benefit that: (a) are not dependent on the satisfaction of a performance condition; and (b) are specified in paragraphs (a), (c) and (d) of column 3 of item 6 in the table in subregulation 2M.3.03(1); and (c) are paid during the relevant period 2 A superannuation contribution that: (a) is not dependent on the satisfaction of a performance condition; an (b) is paid during the relevant period 3 A share-based payment that: (a) is not dependent on the satisfaction of a performance condition; and (b) is specified in column 3 of item 11 in the table in subregulation 2M.3.03(1); and (c) is paid during the relevant period 4 A liability or prospective liability to pay tax in respect of a fringe benefit taxable amount under: (a) the Fringe Benefits Assessment Act 1986; or (b) the Fringe Benefits Tax Act 1986; that relates to the provision of a matter specified in item 1, 2 or 3"

103 Regulation 2D.2.01(2) defines the "relevant period" for the purposes of reg 2D.2.01(1) as being, relevantly: "(a) if a person has held an office in relation to a company: (i) throughout a period of more than 12 months; or (ii) throughout a number of periods of more than 12 months in total; the relevant period for that person is the last 12 months of that period or the last 12 months of the total period". 104 Paragraphs (a), (c) and (d) of column 3 of item 6 in the table in reg 2M.3.03(1) contain certain of the prescribed details in relation to remuneration of key management personnel for inclusion in the Annual Directors' Report under s 300A(1)(c). Those paragraphs relevantly prescribe the inclusion of a person's "short-term employee benefits, divided into at least the following components: (a) cash salary, fees and short-term compensated absences; … (c) non-monetary benefits; (d) other short-term employee benefits". As set out above, these components are picked up by item 1 of reg 2D.2.01 so as to fall within the definition of "base salary". The effect therefore of this item is to link the amount of base salary to certain of the amounts required to be disclosed to the market and the shareholders in the Annual Directors' Report under s 300A(1)(c) of the Act and reg 2M.3.03(1). 105 Equally important to understanding what is meant by "base salary" are those prescribed details in relation to remuneration of key management personnel which are not picked up in the definition of "base salary" in the regulation and which therefore must be taken to be excluded from the definition, save insofar as they fall within other subparagraphs of the definition in reg 2D.2.01, namely: 1. "short-term cash profit-sharing and other bonuses" (paragraph (b) of column 3 of item 6 in the table in reg 2M.3.03(1)); 2. "post-employment benefits" (item 7 in the table); 3. "long-term employee benefits other than benefits mentioned in items 6 and 7…" (item 8 in the table); 4. "termination benefits" (item 9 in the table); and 5. "Share-based payments made to the person" (item 11 in the table). 106 Finally, reg 2M.3.03(5) provides that an expression in subreg (1) that is defined in a relevant accounting standard applied for the purpose of disclosing information, has the meaning given by that accounting standard. An "accounting standard" is defined in s 9 to mean an instrument in force under s 334 or a provision of such an instrument as it so has effect. Relevantly, in this regard: (a) the term "short-term employee benefits" was defined in the accounting standard AASB 119 (2010) to mean "employee benefits (other than termination benefits) that are due to be settled within twelve months after the end of the period in which the employees render the related service": (Australian Accounting Standards Board, Employee Benefits (2010), AASB 119.7; see also AASB 119.8 as to items included within "short-term employee benefits" which essentially mirrors reg 2M.3.03(1) of the Corporations Regulations). This definition was amended in AASB 119 (2011) so as to insert the word "wholly" before the word "settled"; (b) the term "termination benefits" in turn means "employee benefits payable as a result of either: (a) an entity's decision to terminate an employee's employment before the normal retirement date; or (b) an employee's decision to accept voluntary redundancy in exchange for those benefits.": (Australian Accounting Standards Board, Employee Benefits (2010), AASB 119.7; (2011) AASB 119.8).

3.5.2 Are the criteria in s 200F(2)(a)(i) met? 107 It will be recalled that s 200F(2)(a)(i) of the Act provides that the prohibition in s 200B(1) does not apply to a benefit given in connection with a person's retirement if the benefit is "a genuine payment by way of damages for breach of contract". 108 The Renshaw defendants contend that, in requesting Mr Renshaw's resignation, QMCL repudiated the November 2011 Services Agreement giving rise to an immediate right to damages for anticipatory breach and to terminate the contract. On this basis, the Renshaw defendants contend that the Termination Payments made under the Settlement Deed constituted "a genuine payment by way of damages for breach of contract" within s 200F(2)(a)(i) by reason of the fact that, as a matter of substance, those moneys were equivalent to a payment that would have been a payment of damages but for the Settlement Deed. While the Renshaw defendants did not plead that the Service Agreement had been repudiated, no point was taken by QMCL to that effect. However, QMCL denied any repudiation of the November 2011 Services Agreement. It contended that the agreement was terminated by the Settlement Agreement pursuant to which Mr Renshaw resigned voluntarily. 109 In Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115 (Sanpine) at 135-136 [44], Gleeson CJ, Gummow, Heydon and Crennan JJ explained the senses in which the term repudiation is used: "First, it may refer to conduct which evinces an unwillingness or an inability to render substantial performance of the contract. This is sometimes described as conduct of a party which evinces an intention no longer to be bound by the contract or to fulfil it only in a manner substantially inconsistent with the party's obligations. It may be termed renunciation. The test is whether the conduct of one party is such as to convey to a reasonable person, in the situation of the other party, renunciation either of the contract as a whole or of a fundamental obligation under it. … Secondly, it may refer to any breach of contract which justifies termination by the other party." (emphasis added) (footnotes omitted) 110 In that case, the question was whether repudiation had been established in the second of these senses. In the present case, however, the Renshaw defendants contend that QMCL repudiated the November 2011 Services Agreement in the first sense, that is, renunciation. 111 There is no suggestion that the November 2011 Services Agreement was expressly repudiated. Rather, the question is whether a refusal to perform the agreement is reasonably to be implied in accordance with the principles in Sanpine. An inference to this effect is not to be drawn lightly given the seriousness of the matter. The absence of a willingness or readiness to perform must be clear. As Besanko J held in White v Norman (2012) 199 FCR 488 at 499 [37]: "A party may repudiate a contract by renouncing his liabilities under it whether that be by evincing an intention no longer to be bound by it or by showing that he intends to fulfil the contract only in a manner substantially inconsistent with his obligations and not in any other way: Shevill v Builders Licensing Board (1982) 149 CLR 620 (Shevill) at 625-625 per Gibbs CJ (with whom Murphy and Brennan JJ agreed). The Court is to approach repudiation of a contract bearing in mind that it is a serious matter and is not lightly to be found or inferred. The Court must consider all the circumstances of the case: Shevill at 633 per Wilson J. Those circumstances are the objective acts and omissions and not, for example, an uncommunicated intention. To pose the test formulated by Deane and Dawson JJ in Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623 at 658 in terms of the facts of this case, the question is whether, viewed objectively, the conduct of the first defendant on behalf of [the plaintiff's former employer] on 19 April 2010 was such as to convey to a reasonable person in the situation of the plaintiff, repudiation or disavowal, either of the contract as a whole or of a fundamental obligation under it." 112 The evidence as to what occurred at the meeting on 16 October 2011 when Mr Renshaw was requested to resign was not in issue: see [40]-[48] above. There was no evidence, for example, that Mr Renshaw was confronted with a threat of dismissal if he did not accept the request to resign, evidence of which may well have established a renunciation of the contract by QMCL. To the contrary, the meeting accepted Mr Renshaw's position that he would not resign unless and until he was happy with the terms and conditions of the termination of his employment as Managing Director. As such, in my view, the conduct of QMCL at that meeting was such as would convey to a reasonable person in Mr Renshaw's position that QMCL would continue to abide by the terms and conditions of the agreement unless and until agreement was reached as to the terms and conditions on which Mr Renshaw might resign. 113 Nor in my view does the evidence suggest at that stage that there was any intention by QMCL to terminate the November 2011 Services Agreement insofar as it related to the provision of services by Butmall, separate from those provided by Mr Renshaw as managing director. There was no evidence of that topic being specifically raised at the meeting. 114 Equally in my view, the subsequent conduct of QMCL would not convey to a reasonable person in Mr Renshaw's position any clear intention to repudiate or disavow the November 2011 Services Agreement. Rather, the conduct of both QMCL and Mr Renshaw is consistent with them being mutually desirous of reaching agreement for Mr Renshaw to resign as managing director on terms and conditions which would see his entitlements under the Services Agreement fully paid out and with which Mr Renshaw was happy. In this regard, Mr Renshaw had the benefit of legal advice from a solicitor engaged by him; it was Mr Renshaw's legal representative who prepared the draft agreement; and Mr Renshaw's legal representative was present throughout the negotiations with Mr Renshaw and QMCL on 23 October 2011 at which the Settlement Deed was concluded. Furthermore, Mr Renshaw read the Settlement Deed very carefully before he signed it and would not have signed it unless the moneys were to be paid on the same day, as in fact occurred. 115 It follows that I do not consider that there was a breach of the November 2011 Services Agreement. As a result, I do not consider that the Renshaw defendants can rely upon the exemption from s 200B of the Act contained in s 200F(2).

3.5.3 Even if s 200F(2)(a)(i) were satisfied, is s 200F(2)(b) satisfied - calculations based on amounts contained in the Annual Reports 116 In view of my conclusion that the criterion in s 200(2)(a)(i) is not met, it is strictly unnecessary for me to consider whether s 200F(2)(b) was satisfied. Nonetheless, as the issue was one on which the parties were in dispute, it is appropriate for me to consider whether the second criterion in s 200F(2) would have been met in the alternative. 117 QMCL conceded during the course of the proceedings that the sum of $110,000, being the bonus referred to in cl 2.2 of the Settlement Agreement which had accrued prior to conclusion of the Settlement Deed, should not be taken into account for the purposes of calculating the value of the termination benefits under s 200F(2). In light of this concession and my finding above, the "value of the benefit[s]" for the purposes of s 200F(2)(b) is $677,333.00. 118 QMCL submitted that Mr Renshaw's average annual base salary should be calculated by reference to his salary as disclosed in the Directors' Reports within the Annual Reports for the financial years 2010-2013. It was QMCL's submission that if Mr Renshaw's average annual base salary is calculated by reference to those figures, his annual average base salary for the relevant period exceeded the value of the benefits conferred under the Settlement Deed, notwithstanding the concession made as to the bonus of $110,000.

3.5.3.1 Remuneration to Mr Renshaw and Butmall as disclosed in the Directors' Reports pursuant to s 300A of the Act 119 In compliance with s 300A of the Act, the Directors' Report for the 2010 financial year disclosed as follows: "Key management personnel remuneration 2010 Short-term benefits Long-term benefit Director Director's fee and salary Superannuation Bonus Total Other Share-based payment Total … 280,000 50,000 - 330,000 - 51,428 51,428 Mr Howard V Renshaw …

120 The Directors' Report for the 2011 financial year disclosed as follows: "Key management personnel remuneration 2011 Short-term benefits Long-term benefit Director Director's fee and salary Superannuation Bonus* Total Other Share-based payment Total Executive Director 280,000 50,000 60,000 390,000 - - - Mr Howard V Renshaw …

• The Board approved the bonus of $60,000 to the managing director in relation to the acquisition of the White Range project completed during the financial year." 121 The Directors' Report for the 2012 financial year disclosed as follows: "Key management personnel remuneration 2012 Short-term benefits Long-term benefit Director Director's fee and salary Superannuation Bonus Total Other Share-based payment Total Executive Director 285,000 50,000 40,000* 375,000 - - - Mr Howard V Renshaw …

• In relation to FY2011 for the successful acquisition and settlement of the White Range project in December 2010. Performance was assessed by the Remuneration Committee pursuant to the management/service contract." 122 The details of remuneration for Key Management Personnel contained in the Directors' Report for the year ended 30 June 2013 disclosed in relation to Mr Renshaw: (a) short-term benefits: a director's fee and salary in the sum of $430,032; (b) post-employment: superannuation in the sum of $108,333; (c) long-term benefit: "other" in the sum of $290,871. 123 The note to the last of these entries explains: "Entitlement paid in relation to: termination payment $240,000; and annual leave $13,822 (reimbursement of accumulated leave); and long service leave $37,049 (reimbursement of accumulated leave) - These amounts were paid to Butmall Pty Ltd to reimburse that company for annual leave and long service leave entitlements whilst the subject of the services contract." 124 Furthermore, the Notes to the Financial Statements in each of the annual reports for the years ending 30 June 2010, 30 June 2011 and 30 June 2012, stated in relation to Key Management Personnel Remuneration that: "The Board's policy for determining the nature and amount of remuneration for key management personnel of the Group is as follows: … - all key management personnel receive a base salary, superannuation, options and performance incentives;" 125 In addition, Mr Renshaw together with the CFO wrote to the auditors on 28 September 2012 confirming their opinion that the financial report of QMCL for the year ending 30 June 2012 gives a true and fair view in accordance with the Australian Accounting Standards and the Act, including that the Remuneration Report in the Directors' Report was prepared and presented in conformity with s 300A of the Act. 126 Moreover, on 23 November 2012, Mr Renshaw signed a statutory declaration verifying the accuracy of all of the statements contained in a Rights Issue Prospectus of QMCL and verifying that he had received the remuneration stated in the extract of the Prospectus annexed to his Statutory Declaration. The Prospectus included a table at page 28 that is described as showing "the total annual remuneration paid to both executive and non-executive directors (inclusive of superannuation and bonuses)". The table attributed the sums of $375,000 and $390,000 to Mr Renshaw for the 2012 and 2011 financial years respectively, consistently with the amounts disclosed in the Annual Reports for those financial years. Further, it is stated at page 29 of the Prospectus that full details of payments made, relevantly, to Howard Renshaw and his related parties are fully set out in the Annual Reports for the financial years ended 30 June 2011 and 30 June 2012. 127 Finally, the accuracy of the figures disclosed in the Directors' Report for the financial years in question was confirmed by Mr Renshaw in his evidence. In particular, Mr Renshaw gave evidence that: (a) the information as to the amounts or remuneration attributed to him in the financial accounts contained in the Directors' Reports were true and correct to the best of his belief; (b) he was not aware of any mistakes having been made or any payments missed; (c) if he had any concerns he would have raised them at the time; (d) while he did not prepare the reports, he had full confidence in the CFO and was confident the accountants got it right; (e) he believed that the members of the audit committee presented the accounts in good order and he was not aware of any dramatic issues having been raised in relation to the accounts; and (f) while he raised the possibility that amounts paid to Butmall could have appeared in parts of the Annual Reports in addition to those disclosed in the parts dealing with related party transactions as the CFO was responsible for constructing the report and his accountants prepared the accounts for Butmall, Mr Renshaw did not identify any such amounts in the Annual Reports and accepted the importance of ensuring that the market was told how much Butmall had been paid, given his interest in Butmall.

3.5.3.2 Conclusions as to the relevant calculations 128 Based upon this evidence, QMCL contends that: "…the amount worked out under s 200F(4)(e) is $392,508 (being the average of the amounts disclosed as the short term benefits received by Mr Renshaw's [sic] by way of remuneration in the annual reports for each of the years 2010 ($375,000), 2011 ($390,000), 2012 ($375,000) and 2013 ($430,032)." (emphasis in original and casebook references omitted) 129 Mr Renshaw and Butmall submitted, however, that the figures contained in the Directors' Reports were not the figures to which the Court should have regard in applying s 200F of the Act. 130 First, it was asserted by the Renshaw defendants that the accounts were prepared on an accruals basis. However, the short answer to the point is, even assuming that to be the case, there is no reason to doubt that all payments to Mr Renshaw relevant to calculating his base salary for the purposes of the Act were disclosed in the annual reports before the Court. Those reports covered the period up to the termination of Mr Renshaw's engagement as Managing Director and the termination of the November 2011 Services Agreement with Mr Renshaw and Butmall. 131 Secondly, the Renshaw defendants submitted that payments may have been made which were outside the Services Agreement. For this reason Mr Renshaw and Butmall put before the court voluminous evidence of bank statements cross-referenced to company ledgers which were said to prove that the actual amounts received were greater than those disclosed in the annual reports. However, I do not accept that the Renshaw defendants have established that any payments made outside of the Service Agreements should be taken into account by me in determining average base salary for the purposes of s 200F in the face of Mr Renshaw's own evidence confirming his belief in the accuracy of the remuneration disclosed in the Annual Reports and the other evidence as to their accuracy to which I have referred. It may well be, for example, that some of the payments identified in the bank records and ledgers constituted reimbursement for expenses properly incurred. Otherwise, in the absence of any basis in the evidence for remuneration beyond that provided for in the 2007 and 2011 contracts and beyond those disclosed in the Annual Reports, the question of whether any further payments were made which should be taken into account in the calculation of base salary is at best speculative. 132 Finally, the fact that the definition of "base salary" is linked to specific amounts required to be disclosed to shareholders and the market in the Directors' Report under s 300A(1)(c) of the At and reg 2M.3.03(1) reinforces the appropriateness of using those figures in calculating base salary as there is then a correlation between the maximum amount that could be payable without shareholder approval with the amount of salary that has been disclosed to shareholders. At the very least, this suggests that the onus of establishing that it is appropriate to depart from those figures is a heavy one, particularly where the contention is that the average base salary should be more than that which would have been calculated on the basis of the amounts disclosed in the Directors' Reports. 133 In the circumstances, therefore, I am satisfied that QMCL correctly contended that the calculations under s 200F(4) in the circumstances of this case should be based upon the figures disclosed in the Annual Reports. However, I do not agree that the calculations should be worked out on the basis of Mr Renshaw's annual salary over a four year period as proposed by QMCL. Section 200F(4)(e) requires that the figure be that of the average over a three year period, albeit that this does not lead to a material difference in outcome here. Applying this approach, in making the relevant calculations required by s 200F(4)(e) it is convenient to do so by reference to the period 1 November 2009 - 31 October 2012 (rather than 24 October 2009 - 23 October 2012). This enables the calculations to be made using Mr Renshaw's average monthly salary for each of the 36 months that comprised the relevant three year period and in any event does not work to the disadvantage of the Renshaw defendants. 134 The table below sets out the precise calculations which lead me to conclude that Mr Renshaw's average base salary for the purposes of s 200F(4) is $386,114.67. Financial year Mr Renshaw's remuneration from Annual Reports Average monthly salary Number of months in period Amount for the period 2009/2010 $375,000 $31,250 8 (November-June) $250,000 2010/2011 $390,000 $32,500 12 (July-June) $390,000 2011/2012 $375,000 $31,250 12 (July-June) $375,000 2012/2013 $430,032 $35,836 4 (July-October) $143,344 Three year total $1,158,344 Three year average base salary $386,114.67

3.5.4 Deficiencies in the analysis provided by the Renshaw defendants 135 Further, and in any event, the Renshaw defendants' submissions based upon their analysis of the evidence of transactions recorded in the bank statements tendered by them included amounts that would have fallen outside the definition of "base salary" in any event. As a result, their figures would still have produced an average base salary well below the total of the Termination Payments.

3.5.4.1 The Renshaw defendants analysis of the transactions said to comprise base salary 136 Based upon the voluminous evidence of bank statements and company ledgers to which I have referred, the Renshaw defendants submitted that the following amounts should be included as "base salary": Category Code Nature of payments Basis for inclusion as 'base salary' Amount (as per Reconciliation) B-FEE Fees for services paid to Butmall Item 1 of reg 2D.2.01 with paras (a), (c) or (d) of column 3 of Item 6 in the Table to Reg 2M.3.03(1) $784,015 H-FEE Salary paid to Mr Renshaw As above $283,750 CAR Motor vehicle allowance paid to Mr Renshaw As above $41,070.16 BONUS (incl. Z - see note 2) Bonus payments made to Mr Renshaw and Butmall As above $310,600 LEAVE Payment to Mr Renshaw of annual leave and long service leave As above $217,809.47 DF Directors fees paid to Mr Renshaw and Butmall As above $138,750.04 SUPER Superannuation contributions As above $135,000 ALLOW-ANCE Managing Director's travelling allowance and out-of-pocket allowance paid to Mr Renshaw As above $56,420 Share Option (see note 2 below) Issue of Share Options to Mr Renshaw as a bonus Item 3 of reg 2D.2.01 with Item 11(a)(ii) in the table to Reg 2M.3.03(1) $286,000

TOTAL OF "BASE SALARY" ABOVE - $2,253,414.67 I.E. AVERAGE ANNUAL "BASE SALARY" - $751,138.22 137 In calculating these figures, the Renshaw defendants included the Goods and Services Tax in the totals in the right-hand column on the basis of their assertion that GST (where applicable) is to be included in the amounts used to make the calculations required by s 200F of the Act. That assertion was not expanded upon in submissions. 138 In short, on the Renshaw defendants' calculations, the average "base salary" in the sum of $751,138.22 exceeded the "value of the benefit[s]" for the purposes of s 200F(2)(b) of the Act, namely, $677,333. 139 However, in my view, the approach of the Renshaw defendants is flawed in a number of respects, even putting aside the question of whether the amounts identified by them were accurate and correctly described and the other findings that I have made.

3.5.4.2 Fees for Services paid to Butmall (Item 1) 140 Item 1 relates to fees for services paid to Butmall. Mr Renshaw's evidence was that these were fees for services paid periodically by QMCL to Butmall in the period 16 October 2009 to 23 October 2012 pursuant to the contractual agreements between QMCL and Butmall for that period and include a component for GST of 10%. 141 However, under the May 2011 and November 2011 Services Agreements, Mr Renshaw was engaged directly for the provision of personal services by him, while Butmall was separately engaged to provide corporate services in its own right: see paragraphs 37-38 above. Those contractual arrangements are reflected in the notes to the financial statements in the Annual Report for the year ended 30 June 2012 which stated that "[d]uring the year, the Group used the services of Butmall Pty Ltd (a company associated with Mr Howard Renshaw) for the provision of management in corporate and financial advisory services". Similarly, the notes to the financial statements for the year ending 30 June 2011 on transactions between related parties stated that the Group "used the services of Butmall Pty Ltd for the provision of accounting, administration, secretarial and corporate staff for the company head office and administration services at commercial rates pursuant to the Service Contract. Mr Howard Renshaw was a director of Butmall Pty Ltd during the whole of the year." A similar statement is found also in the financial records for the year ended 30 June 2010 on transactions between related parties when the relationship between the parties was governed by the October 2007 Consultancy Contract between QMCL and Butmall. 142 The amounts paid to Butmall for the provision of these services disclosed in the annual reports for those financial years in the section dealing with related party transactions as opposed to the section disclosing key personnel remuneration, are as follows: Year Amount ($) 2010 211,727 2011 116,400 2012 50,333 TOTAL 378,460

143 It is apparent for the reasons set out above that none of these payments that were made directly to Butmall can be regarded as falling within the definition of Mr Renshaw's "base salary". They are not a "short term employee benefit". They are not a benefit to the employee at all. Yet the 'reconciliation' undertaken by the Renshaw defendants, which is summarised in the table at paragraph 134 above, does not attempt to differentiate between these payments and other payments to Butmall, for example, to reimburse it for entitlements paid to Mr Renshaw.

3.5.4.3 Bonus Payments (Item 4) and Share Option (Item 9) 144 I do not consider that there is any basis on which bonus payments to Mr Renshaw and Butmall as per row 4 in the table at paragraph 134 above could be included as being "base salary". Mr Renshaw gave evidence that the bonuses granted to him "were determined annually on a discretionary basis without reference to any pre-existing performance condition agreed with [QMCL]." However, it is apparent from the Directors' Reports in the 2011 and 2012 financial years that the two bonuses awarded to Mr Renshaw totalling $100,000 were performance assessed (see paragraphs 119 and 120 above). It follows that they are therefore not within the definition of "base salary". 145 Equally, while the Directors' Report reveals that a "share-based payment" in the sum of $51,428 was made to Mr Renshaw in 2010, that is the only payment of shares disclosed in the Directors' Reports. There is no evidence as to the basis for any further share payments. Furthermore, and fatally to the Renshaw defendants' contention that such payments should be included, reg 2D.2.01(1) does not pick up the reference to "Share-based payments made to the person" in reg 2M.3.03(1). As a result, such payments are not included in the definition of base salary: see my reasons at paragraph 104 above 146 Moreover, while provision existed under the May and November 2011 Services Agreements for the payment of bonuses only to Mr Renshaw, these were performance based remuneration. The first were tied to increases in the share price of the company and the second was "[a] further performance bonus of up to $120,000 based upon the Board's assessment of [Mr Renshaw's] performance in achieving and/or implementing the Company's strategy in place from time to time". There is nothing that limits the term "performance condition" in item 1 of reg 2D.2.01 to an assessment of the individual's personal performance, as opposed, for example, to the performance of the company's shares in the market. As such, in my view both kinds of bonuses for which provision is made in the May and November 2011 Services Agreement are dependent upon satisfaction of a performance condition and therefore fail to satisfy the definition of "base salary" in item 1 of the table in reg 2D.2.01. Further and in any event, it is apparent from the failure of reg 2D.2.01(2) to pick up the reference to "short-term cash profit-sharing and other bonuses" in reg 2M.3.03(1) that such bonuses were not intended to be included in the definition of base salary: see my reasons at paragraph 104 above. 147 Finally, there is no evidence as to the contractual basis upon which any other bonus might have been awarded to Mr Renshaw. Clause 4 of the October 2007 Consultancy Contract between Butmall and QMCL provided that QMCL would from time to time institute a bonus scheme for additional remuneration to management, the terms of which were entirely at QMCL's discretion, and that Butmall would be entitled to participate. However, no provision was made for Mr Renshaw, who was not a party to that contract, to be entitled to participate. Furthermore, schedule 4 to that contract specified that there was no bonus scheme in place at the time that the contract was concluded and there is no evidence of any such scheme having been subsequently established during its life.

3.5.4.4 Long Service Leave (Item 5) 148 While annual leave is likely to fall within the definition of "base salary", being a "short-term compensated absence" likely to be paid within 12 months (reg 2M.3.03(1)) and therefore a "short-term employee benefit" within reg 2D.2.01(1), long-service leave manifestly does not fall within the definition of a short-term employee benefit, contrary to the position taken by the Renshaw defendants. Nor necessarily would payments for accumulated leave on which the Renshaw defendants made no specific submissions. Consistently with this, in the Directors' Report for the financial year ending 30 June 2013, the payment of long service leave to Butmall in the sum of $37,049 is disclosed as a "Long-term benefit" and not a short-term benefit, as is reimbursement for accumulated leave in the sum of $13,822. The payment is stated to have been paid to Butmall to reimburse it for annual leave and long service leave entitlements "whilst the subject of the services contract" which would appear to be a reference to the period when Mr Renshaw's services as Managing Director were engaged through the October 2007 Consultancy Agreement between QMCL and Butmall.

3.5.4.5 Allowances (Item 8) 149 While a travelling allowance may fall within the definition of "base salary" on the basis that it is "a short-term employee benefit", it is difficult to see how reimbursement by QMCL for disbursements could fall within the definition. In the present case, there is no evidence as to the basis on which the so-called allowances were paid. In the absence of such evidence, the Renshaw defendants have simply failed to prove that the sums referred to in this category fall within the definition of "base salary".

3.5.4.6 Conclusion 150 In short, the position for which the Renshaw defendants contended did not grapple with the limited definition of "base salary" in the regulations. The Renshaw defendants effectively treated the task as one of identifying the total amount of remuneration paid to Mr Renshaw and Butmall, notwithstanding the 2009 amendments and the split contractual responsibilities between Mr Renshaw and Butmall under the May and November 2011 Services Agreements. Nor was there any attempt by the Renshaw defendants in evidence or submissions to reconcile the amounts that they allege were paid to Butmall and Mr Renshaw and should be included in base salary, on the one hand, with the terms of the 2007 and 2011 Agreements with QMCL or with the amounts disclosed by way of remuneration and related party transactions in the annual reports for the financial years ending 30 June 2009 to 30 June 2013, on the other hand. 151 Once, however, for the reasons set out above, the fees for services paid to Butmall as disclosed in the annual reports as a related party transaction are excluded from the calculation of base salary, together with bonus payments, allowances, share options and the amount disclosed in the annual report for 2013 for long service leave and reimbursement of accumulated leave, the total amount of base salary paid to Mr Renshaw and Butmall for the period commencing 1 November 2009 - 23 October 2012, based on the evidence of the Renshaw defendants, is $1,171,063.67 as set out in the following table: Total three year amount proposed by Renshaw defendants Deductions applied Description of deduction $2,253,414.67 $378,460 Amount paid to Butmall as disclosed in annual reports in sections dealing with related party transactions (B-FEE) $310,600 Bonus payments made to the Renshaw defendants (BONUS) $56,420 Travelling allowance and out-of-pocket allowance paid to Mr Renshaw (ALLOWANCE) $286,000 Issue of share options to Mr Renshaw as a bonus (SHARE OPTIONS) $37,049 Payment of long service leave to Butmall $13,822 Reimbursement of accumulated leave Revised Calculations Total deductions from the amount proposed by the Renshaw defendants: $1,082,351 Revised total: $1,171,063.67 Revised average annual base salary $390,354.56

152 As set out in the table above, if the figure of $1,171,063.67 is taken as the combined total of the amount of base salary paid to the Renshaw defendants during the relevant periods, it would yield only an average "salary" of $390,354.56. That figure is approximately only $2,150 less than the figure calculated by QMCL on the basis of the annual reports and both figures fall well short of the value of the Termination Payments. It follows that even if the Renshaw defendants' approach to calculating base salary were accepted, they would have failed to satisfy s 200F(2)(b). 153 Finally, in my view it is by no means self-evident that GST was properly included in any of the figures compiled by the Renshaw defendants. However, given the conclusions that I have already reached, it is unnecessary for me to reach a concluded view upon the issue and preferable not to do so given the absence of submissions by either party on the issue.

3.6 Is QMCL estopped from seeking to recover the Termination Payments? 154 The Renshaw defendants contended in their pleadings that QMCL is estopped from recovering the amounts by reason of the promises and representations made in cl 4 of the Settlement Deed from maintaining or succeeding in these proceedings. It is said that this clause gives rise to an estoppel by representation in respect of which there is no need to prove detriment. 155 The Renshaw defendants' estoppel pleading was expanded upon in written and oral submissions to encompass representations also made in cl 11.2 of the Settlement Deed. 156 Clause 4.2 of the Settlement Deed provided that QMCL: "… hereby release and forever discharge, Renshaw and/or Butmall … from any and all actions, causes of action, claims and demands which QMC and/or the QMC Parties had, now have or can, shall or may have arising out of or relating to in any way whatsoever any matter, cause or thing including, but not limited to: a. the Renshaw Agreement and provision of services to QMC and/or to the QMC Parties under the Renshaw Agreement; and/or b. any act or omission in connection with Renshaw's discharge of his functions and duties as Managing Director of QMC and/or as a director and/or officer of any other of the QMC Parties in addition to QMC." 157 Clause 11.2 provided that: "Each party to this Deed undertakes to do all things reasonably necessary to give to any other party the benefits accruing to that other party by operation of this Deed including obtaining any QMC shareholder approvals and compliance with the ASX Listing Rules." 158 Specifically, the Renshaw defendants contend that "…the promises and representations made in clauses 4.2 and 11.2 of the Settlement Deed prevent [QMCL] from relying upon the relevant statutory provisions. The representations in the clauses led to … '…the conduct of relations between the parties on the basis of an agreed or assumed state of facts' being that shareholder approval would be obtained by [QMCL] and that [QMCL] would not make any future claim against the [Renshaw] Defendants." (emphasis in original) 159 With respect, in my view the contention is misconceived. For the reasons which I explain, no estoppel could be raised in the face of the Act; nor in any event would the representations give rise to an estoppel.

3.6.1 No estoppel is raised in the face of the Act 160 By s 200H of the Act, the fact that the failure to pay a benefit would constitute a breach of contract does not displace the prohibition upon payment of termination benefits imposed by s 200B (see, also, the limited exemption in s 200F for payment of damages for breach of contract). Equally, in my view, it follows that the parties cannot avoid the operation of the legislative provisions by agreeing that termination benefits be given in contravention of s 200B on the condition that no claim will be made for their recovery, thereby avoiding the obligation imposed by s 200J upon the recipient to repay the moneys or at least rendering that obligation unenforceable by the giver. In this regard, it is important to stress that ultimately the purpose of the Division is that excessive benefits should not be given to retiring executives without shareholder approval. If the parties, therefore, could pay the benefits on condition that the giver released the recipient from any claim or demand for them under s 200J, it would mean that unauthorised payments could in fact be made and the prohibition in s 200B circumvented. 161 Given these considerations, I consider that cl 4.2 of the Settlement Deed, insofar as it purports to release the Renshaw defendants from any actions, causes of action, claims or demands for the Termination Payments under s 200J of the Act is at best unenforceable if not void to that extent for illegality. It cannot trump the unqualified statutory obligation upon the Renshaw defendants to repay those moneys, nor override the capacity of QMCL to recover those moneys as a debt under s 200J(1A) in the best interests of the shareholders and otherwise in the discharge of its obligations to shareholders. Equally, it is apparent that the failure by QMCL to seek shareholder approval prior to giving the Termination Payments in breach of s 200B cannot defeat an action to recover the benefits even if the failure to seek shareholder approval constituted a breach of the Settlement Deed. Nor did the Renshaw defendants contend otherwise. As explained at the outset, the Renshaw defendants expressly disavowed any case based on the proposition that the parties could contract out of the relevant statutory provisions. 162 Furthermore, the Renshaw defendants' position ignores the fact that, if cl 4.1 of the Settlement Deed on their proper construction operated to preclude recovery of benefits, the release would itself constitute a benefit requiring shareholder approval as s 200AB(1)(d) defines "benefit" to include "any legal or equitable right". No such approval was given. 163 The question then arises as to whether an estoppel may be raised notwithstanding the statutory prohibition on enforcement of provisions of the contract, as contended by the Renshaw defendants. This question was considered by the Privy Council in Kok Hoong v Leong Cheong Kweng Mines Ltd [1964] AC 993. In that case, in the context of considering the laws of money lending and money security, their Lordships considered, at 1016, that the test to apply is "whether the law that confronts the estoppel can be seen to represent a social policy to which the court must give effect in the interests of the public generally or some section of the public." Thus, for example, the Privy Council contrasted laws that deny the validity of transactions by certain individuals for their own protection or the protection of others where the Court could not sanction departures from the law through estoppel, on the one hand, with laws that are not essentially prohibitory despite declaring transactions to be unenforceable or void and do not preclude estoppels, on the other hand: at 1015-1016. Examples of the former include laws for the protection of infants or the creditors of a bankrupt, and of the latter, the Statute of Frauds 1677 (UK): see, eg, Humphries v Humphries [1910] 2 KB 531. 164 This approach was subsequently approved by the English Court of Appeal in Shah v Shah [2002] QB 35 in which Lord Justice Pill held at 44 [20]-[21] that: "Beldam LJ stated [in Yaxley v Gotts [2000] Ch 162], at p 191, that 'The general principle that a party cannot rely on an estoppel in the face of a statute depends upon the nature of the enactment, the purpose of the provision and the social policy behind it.' In my judgment, that statement of Beldam LJ, reflecting as it does the judgment of the Privy Council in the Kok Hoong case [1964] AC 993 is, with respect, an accurate statement of the law of England and Wales. The court is entitled to consider the particular statutory provision, its purpose and the social policy behind it when deciding whether an estoppel is to be allowed." 165 These decisions have been followed in Australia including by the New South Wales Court of Appeal in Overmyer Industrial Brokers Pty Ltd v Campbells Cash and Carry Pty Ltd [2003] NSWCA 305 (Overmyer) and by the Queensland Court of Appeal in Sultana Investments Pty Ltd v Cellcom Pty Ltd (2009) 1 Qd R 589 at 605-606 [50]-[53] and Neumann Contractors Pty Ltd v Traspunt No 5 Pty Ltd [2011] 2 Qd R 114 at 132-133 [67]-[69] (in obiter). 166 Thus, in Overmyer, the appellant contended that the respondent was estopped from relying on s 42AA of the Property, Stock and Business Agents Act 1941 (NSW) which deprived a licensee of an entitlement to remuneration by way of commission and precluded recovery of any such remuneration absent compliance with certain requirements. While describing the purpose of the provision in the 21st Century as "unclear" and referring to recurrent criticism of the harsh way in which the section could operate, Young CJ (In Eq) (with whom Meagher and Beazley JJA agreed) observed at [16] that "[i]t derives from the time when in transactions over the sale of domestic dwellings the rapaciousness of some less reputable real estate agents was notorious." Young CJ concluded at [55]-[56] that it was "almost unarguable that the legislature has made it as plain as plain can be that there is not to be recovery of the remuneration in the instant case and that no estoppel in the face of the statute will lie. … [T]here can be neither a legal nor an equitable estoppel in the face of a statute if that runs counter to the social policy of the statute". 167 The decisions in Overmyer and Neumann Contractors were also recently applied by this Court in Ace Insurance Ltd v Trifunovski (2011) 200 FCR 532 to hold that an estoppel could not be raised against the entitlements of certain employees to minimum annual leave and long service requirements under the Workplace Relations Act 1996 (Cth) and the former industrial award: at 570-571 [137] (Perram J). 168 Applying these principles, it is clear from the language and purpose of Div 2 of Part 2D.2 of the Act that no estoppel could be raised against the express prohibition on the payment of benefits without shareholder approval and the obligation to repay such moneys enforceable by the giver. In so providing, Division 2 is not concerned merely with the interests of the giver and the recipient, but with protecting the interests of the public generally and of shareholders as a section of the public against excessive termination payments or 'golden handshakes' as they are colloquially known. The public nature of that concern is reinforced, among other things, by the fact that a breach of s 200B is a criminal offence. In short, as QMCL submitted, if correct, the Renshaw defendants' construction "would mean that Division 2 of Part 2D.2 is a dead letter: the requirement for shareholder approval of termination benefits could be bypassed by agreement between the company and executive. That would be an extraordinary result, and would permit companies and executives to do with impugnity the very thing the provisions in Division 2 are designed to prevent." There is nothing that the Renshaw defendants pointed to in the decision of the High Court in Commonwealth v Verwayen (1990) 170 CLR 394 that detracts from these principles. 169 Finally, while the issue was not raised by the parties, I note (without deciding) that cl 4.2 may well fall into difficulty by reason of s 199A(1) of the Act in any event. That section provides that a company or related body corporate must not exempt a person from a liability to the company incurred as an officer of the company. If that provision applied, then the same questions would arise as to whether an estoppel could be raised in the face of s 199A with, potentially, the same result.

3.6.2 No estoppel arose on the facts in any event 170 In any event, I do not consider that any basis for an estoppel by conduct was established by the Renshaw defendants. It is unnecessary to be exhaustive as to the deficiencies in the Renshaw defendants estoppel defence. It suffices to identify a number of flaws in that defence which are fatal. 171 First, the so-called representation in cl 11.2 constitutes a promise to do something in the future. However, as Owen J observed in his recent helpful discussion of the relevant principles in Bell Group Ltd (In liq) v Westpac Banking Corporation (No. 9 and 10) (2008) 39 WAR 1 (Bell Group) at 460-461 on which QMCL relied, "[t]he law is that in order to support a plea of estoppel by representation, the representation must be one of an existing fact [including mixed representations of fact and law]; a promise or representation of an intention to do something in the future is insufficient: Ferrier v Stewart (1912) 15 CLR 32 at 44 per Isaacs J; Yorkshire Insurance Co Ltd v Craine (1922) 31 CLR 27 at 38 (Privy Council, Lord Atkinson); Verwayen [(1990) 170 CLR 394] (at 499-500) per McHugh J." Equally, cl 4.2 contains a promise to release and discharge; it does not make any representation as to an existing fact. 172 Secondly, neither cl 4.2 nor cl 11.2 contain a clear and unambiguous representation of the kind necessary to establish an estoppel: cf Bell Group at 462-463 [3470]-[3476]. 173 Thirdly, the Renshaw defendants did not establish reliance on any assumed facts on the basis of the alleged representations. Indeed, with respect to cl 11.2 the Termination Payments were made on the date that the Settlement Deed was concluded on Mr Renshaw's instructions. Mr Renshaw's conduct is, therefore, inconsistent with any contention that he relied upon QMCL to obtain shareholder approval. His conduct denied that possibility. 174 In the fourth place, as QMCL submitted, it is not sufficient merely to establish that a representation is made. It is necessary to establish that it would be unjust or unfair to allow a departure from the assumed state of affairs. As Owen J explained in Bell Group at 460 [3460] (referring to Dixon J in Grundt v Great Boulder Pty Gold Mines Limited (1937) 59 CLR 641 at 674-675): "…the justice of an estoppel is not established by the fact, in itself, that a state of affairs has been assumed as the basis of action or inaction and that a departure from the assumption would turn the action or inaction into a detrimental change of position. It depends also on the manner in which the assumption has been occasioned or induced. Before a person can be estopped, he or she must have played such a part in the adoption of the assumption that it would be unfair or unjust if he or she were left free to ignore it." 175 However, the difficulty which immediately confronts the Renshaw defendants in establishing the necessary unconscionability that may ground an estoppel is, as QMCL submitted, that it is the Act which, not only prohibits the payment of the Termination Payments, but requires that they be repaid. In pursuing repayment through these proceedings, QMCL is doing no more than is required by the Act to recover the money held on trust for it. The Renshaw defendants simply have no right to continue to hold the money for their own benefit or otherwise by operation of the Act. 176 Nor in any event have the Renshaw defendants made any attempt to demonstrate that QMCL played such a part in the adoption of the assumptions relied upon that it would be unfair or unjust if it were permitted to ignore it. Indeed, the evidence is that the contract which contains the representations relied upon was drafted by the solicitor engaged by Mr Renshaw. 177 In the fifth place, the question of unconscionability is linked to the requirement that reliance upon the representation be reasonable: Standard Chartered Bank Australia Ltd v Bank of China (1991) 23 NSWLR 164 at 180 (Giles J). As to this requirement, Owen J in Bell Group explained at 464 [3482]-[3483] that: "The authorities focus upon limiting liability of a representor in relation to estoppel by examining the position of the representee and requiring that reliance on the representation be reasonable. In turn, the reasonableness of relying upon a particular representation and adopting an assumption based on it depends on the form and content of the representation actually made and which induced that assumption to be adopted. In Standard Chartered Bank of Australia Ltd v Bank of China (1991) 23 NSWLR 164 at 180 Giles J noted that notions of good conscience and fair dealing underlie the doctrine of estoppel by conduct. This calls for consideration of the part played by the representor in occasioning the adoption of the assumption by the representee, including the reasonableness of the conduct of the representee in adopting and acting upon the assumption. The question of reasonableness, his Honour said, is inherent in reliance, although not always enunciated as such. In other words, 'reasonableness' has two aspects: (a) whether it was reasonable for the representee to adopt the assumption in question on the strength of the representation made; and (b) whether the action taken by the representee in reliance upon the representation was itself reasonable. In Standard Chartered Bank v Bank of China, Giles J explained how reasonableness should be assessed. His Honour indicated that the question of the unconscionability of a departure from the assumption and the criteria of reasonableness were linked, and cited the passage from Deane J's judgment in Verwayen, at 445: The question whether departure from the assumption would be unconscionable must be resolved not by reference to some preconceived formula framed to serve as a universal yardstick but by reference to all the circumstances of the case, including the reasonableness of the conduct of the other party in acting upon the assumption and the nature and extent of the detriment which he would sustain by acting upon the assumption if departure from the assumed state of affairs were permitted.' Giles J (at 180 - 181) then said that actual knowledge that the representation is untrue will defeat the estoppel, because the representee cannot be found to have reasonably adopted and acted in reliance upon the truth of the representation. He also proffered the view that 'the preferable approach is to take account of the representee's actual knowledge in asking whether the representee reasonably adopted and relied upon the representation, rather than ask whether the representee had constructive notice that the representation was untrue'. The same approach was taken in Macquarie Bank Ltd v Lin [2005] QSC 221 per McMurdo J. I, too, propose to follow the approach adopted by Giles J." 178 Applying these principles, it cannot be said that the Renshaw defendants have established that it would have been reasonable for them to rely on an assumption that shareholder approval would be obtained. (a) No evidence was led as to Mr Renshaw's actual state of knowledge, nor of that which could be imputed to Butmall. (b) There was, in any event, no representation in clause 11.2 of the Settlement Deed that shareholder approval would be obtained. The undertaking given was only that "[e]ach party to this Deed undertakes to do all things reasonably necessary to give to any other party the benefits accruing to that other party by operation of this Deed including obtaining any QMC shareholder approvals…". The reference to obtaining any QMCL shareholder approvals did not therefore assume that approval was required. Further, the use of the word "including" makes it clear that the obtaining of any shareholder approvals was embraced within the undertaking "to do all things reasonably necessary to give" the benefit. In its terms, therefore, the clause did not amount to a guarantee that shareholder approval would be obtained. (c) I also consider that any reliance upon cl 11.2 as a guarantee that shareholder approval would be provided, would not be reasonable in all of the circumstances. In particular: (i) no such guarantee could be given by the directors as it was for the shareholders to determine whether to grant approval under s 200E of the Act, absent Mr Renshaw and any associate of Mr Renshaw who were precluded from voting by s 200E(2A); (ii) the outcome of any vote would be speculative; and (iii) Mr Renshaw can be taken to be aware of these matters by reason of his position as a director of QMCL. 179 Finally, on a plain reading, s 200B(1) requires that shareholder approval be given in advance of the termination benefits being given if the prohibition is not to be contravened. Thus it provides that an entity "must not give" a benefit "unless there is member approval under section 200E for the giving of the benefit". The correctness of this construction is confirmed by s 200E(2) which provides that the second condition for member approval is that the details of the benefit must be set out in, or accompany, the notice of the general meeting to consider the resolution. Those details must include details of what is expressed to be "the proposed benefit": s 200E(2)(a) and (b)(i) (emphasis added). However, a benefit that has already been given is no longer merely "proposed". This construction is also confirmed by the fact that 200J imposes an obligation upon the recipient "immediately" to repay an unauthorised benefit and creates a statutory trust over any such benefit received. 180 In this regard, the Settlement Deed provided that QMCL "must pay the Termination Sum to the Renshaw Parties … upon the giving of a written direction to make payment but not before." While there was no written direction in evidence, Mr Renshaw gave evidence that he signed the Settlement Deed on the basis that the Termination Payments would be paid on the same day. Those matters demonstrate that the parties could not have been operating on the assumption that QMCL would obtain shareholder approval in accordance with s 200B which could have been done only before the Termination Payments were given. They also demonstrate that it was the conduct of Mr Renshaw in requiring payment on that day which precluded any party from being able to obtain shareholder approval (even leaving aside the question of whether shareholder approval should have been obtained before the Settlement Deed itself was concluded). Those matters are fatal to the proposition that an estoppel by representation could be raised by cl 11.2.

4. THE CROSS-CLAIM 181 The Renshaw defendants seek damages for breach of clauses 11.2. They contend that the words "reasonably necessary" in clause 11.2 should be read in context to mean "necessary to reasonably secure the approval", the promise being that approval would be given. The Renshaw defendants specifically eschewed any case of loss of opportunity, putting their claim only on the ground that they were entitled to damages in the total amounts otherwise payable under the Settlement Deed based upon their construction of the Settlement Deed as imposing an obligation upon QMCL "to secure" shareholder approval. 182 The claim cannot succeed. For the reasons that I have already given at above, cl 11.2 cannot be construed as imposing any obligation to obtain shareholder approval. Nor could QMCL have discharged such an obligation in law. The power to grant approval lay with the shareholders apart from Mr Renshaw and his associates. 183 That being the case, it is open to speculation as to whether shareholder approval would have been forthcoming. As such, it cannot be said that the Renshaw defendants have proved any entitlement to damages as claimed. 184 Furthermore, it was Mr Renshaw's own conduct in requiring that the Termination Payments be made on the date that the Settlement Deed was concluded that meant that shareholder approval could not be obtained in accordance with s 200B of the Act, as opposed to any breach of contract by QMCL. 185 Nor, given that Mr Renshaw remained as a non-executive director, was there any reason why he could not have convened a meeting in order to enable the Settlement Deed to be put before the shareholders for their approval. Consequently, as QMCL contended, if there is a dereliction of duty in the failure to call the meeting, then that is a dereliction by all of the directors, including Mr Renshaw in his capacity as a director of QMCL.

5. ORDERS 186 For the reasons given above, the application should be allowed with costs. The Termination Payments are to be repaid to QMCL. I will hear the parties as to the precise terms of the orders to give effect to these reasons. I certify that the preceding one hundred and eighty-six (186) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perry.