Rawley Pty Ltd ACN 009 027 454 v Bell - [2007] FCA 583 - FCA 2007 case summary — Zoe

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Rawley Pty Ltd ACN 009 027 454 v Bell

[2007] FCA 583

Federal Court of Australia|2007-07-01|Before: Finn J

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Source facts

Court

Federal Court of Australia

Decision date

2007-07-01

Before

Finn J

Source

Original judgment source is linked above.

Judgment (96 paragraphs)

[1]

Rawley Pty Ltd ACN 009 027 454 v Bell (No 2) [2007] FCA 583 MISLEADING OR DECEPTIVE CONDUCT - applicant investors in a failed start-up company - claim to have been induced to invest by conduct in contravention of ss 52 and 59 of the Trade Practices Act 1974 (Cth), the Fair Trading Act 1987 (SA) and the Fair Trading Act 1987 (WA) - claims which involved investments in securities precluded by s 51AF of the Trade Practices Act 1974 (Cth) and s 995A of the Corporations Law CORPORATIONS LAW - investors claim to have been induced to invest by conduct in contravention of s 995 of the Corporations Law - substantially the same claim as under the Trade Practices Act 1974 (Cth) - instances of misleading or deceptive conduct established - conduct did not induce the applicants to invest or was inconsequential NEGLIGENCE - duty of care claimed to be owed by accountant - representations pleaded as breaching this duty were not relied upon by the applicants FIDUCIARY LAW - fiduciary duty claimed to exist as between licensor and licensee or as promoters - alleged non-disclosure - no fiduciary relationship INSURANCE - cross-claim made by insured against insurer - clause within the policy that if full payment of the premium was not made then there would be no cover - late payment - no insurance cover at the relevant time Trade Practices Act 1974 (Cth)ss 51AE, 51AF, 52, 59(2), 75B and 82 Corporations Law ss 9, 92(2), 995, 995A, 1325 Fair Trading Act 1987 (SA) Fair Trading Act 1987 (WA) Australian Securities and Investment Commission Act 1989 (Cth), s 12BA(1) Corporations Act 2001 (Cth) s 1041H Insurance (Agents and Brokers) Act 1984 (Cth) ss 14 and 27 Insurance Contracts Act 1984 (Cth) Part VII Trade Practices (Industry Codes Franchising) Regulations 1998 (Cth)

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THE RAWLEY CLAIMS..................................................................................................... [10] The Principal Actors and Background Information..................................................................... [10] (i) Sladojevic..................................................................................................................... [10] (ii) Bell............................................................................................................................... [11] (iii) Benson.......................................................................................................................... [12] (iv) The Ilic WA investors/the Icon Group.......................................................................... [15] (v) Parker.......................................................................................................................... [17] (vi) Lee................................................................................................................................ [18] the tiltform technology, tiltform licensing agreements and associated documents...................................................................................................................... [19] The technology/patent issues..................................................................................................... [20] Marketing and licensing documents........................................................................................... [23] THE MATTERS IN ISSUE.................................................................................................. [30] THE MISLEADING OR DECEPTIVE CONDUCT CLAIMS......................................... [37] WITNESSES AND WITNESS ISSUES.............................................................................. [45] Sladojevic's deceptive strategies............................................................................................... [57] Affidavits.................................................................................................................................. [63]

THE 2 JUNE MEETING............................................................................................ [64] Findings and Conclusions on the 2 June meeting........................................................................ [74]
PERTH: 23-26 JUNE 2000........................................................................................ [76] Sladojevic, Bell and Benson in Perth......................................................................................... [79]
26 JUNE - 17 JULY.................................................................................................. [116] (i) The follow-up to the proposal.................................................................................... [117] (ii) John Dawkins............................................................................................................. [124] (iii) The 12 July BDO projections..................................................................................... [127] (iv) Raising of loan capital............................................................................................... [134]
THE 17 JULY MEETING......................................................................................... [137] Findings on the 17 July meeting............................................................................................... [152]
17 JULY - 11 AUGUST............................................................................................. [158] The later BDO projections...................................................................................................... [158]
THE 7 AUGUST LETTER AND THE INVESTMENT.......................................... [165] Findings on the 7 August letter................................................................................................ [184] After the investment................................................................................................................ [189] OTHER MISLEADING CONDUCT................................................................................ [198] CAUSATION AND RELIANCE....................................................................................... [209] THE MISLEADING OR DECEPTIVE CONDUCT CLAIMS: CONCLUSIONS....... [238] NEGLIGENCE.................................................................................................................... [243] THE PROMOTER CLAIMS............................................................................................. [246] CONCLUSION................................................................................................................... [271] THE CHEHADE CLAIMS................................................................................................. [272] The Principal Actors, Issues of Credibility and Background Information................................... [273] (i) Sladojevic................................................................................................................... [273] (ii) Bell............................................................................................................................. [275] (iii) Benson........................................................................................................................ [278] (iv) Chehade..................................................................................................................... [279] THE MATTERS IN ISSUE................................................................................................ [281] MISLEADING OR DECEPTIVE CONDUCT CLAIMS................................................ [287] Chehade as a witness............................................................................................................. [288] (i) The professional/business relationships..................................................................... [290] (ii) Chehade's skill and experience.................................................................................. [296] (iii) Working at Greenhill Road........................................................................................ [297] (iv) Tripodi's employment by Bell Chehade..................................................................... [301] (v) The timing of Chehade's investment decision........................................................... [303] (vi) Bell's offer to sell his practice.................................................................................... [316] THE MISREPRESENTATIONS....................................................................................... [326] (i) The first misrepresentation........................................................................................ [326] (ii) The second misrepresentation.................................................................................... [334] (iii) The third and fourth misrepresentations................................................................... [341] (iv) The fifth misrepresentation........................................................................................ [343] (v) The other wrongful conduct pleaded......................................................................... [356] CAUSATION AND RELIANCE....................................................................................... [362] The 7 August letter................................................................................................................. [363] Chehade's investment............................................................................................................. [373] NEGLIGENCE.................................................................................................................... [375] CONCLUSION................................................................................................................... [376] THE CROSS-CLAIMS....................................................................................................... [377] The factual setting................................................................................................................... [383] Consideration......................................................................................................................... [389] CONCLUSIONS................................................................................................................. [397]

[11]

REASONS FOR JUDGMENT 1 These two cases concern the attempts of investors in a failed start-up company, Tiltform Australia Pty Ltd, to recoup their losses from those who are said to have induced their investments or who were otherwise liable to them for their losses. 2 In the first proceeding, that initiated by Rawley Pty Ltd as trustee for the Tiltform Unit Trust and by Connoisseur Holdings Pty Ltd as a beneficiary of that trust, claims are made (i) against the first respondent, Geoffrey Bell, for negligent misrepresentation; (ii) against Bell and the second respondent, Robert Sladojevic, for declaratory relief and damages in respect of their being concerned in, or aiding and abetting of, contraventions of ss 52 and 59(2) of the Trade Practices Act 1974 (Cth) ("the TP Act") and the equivalent provisions of the Fair Trading Acts of South Australia and Western Australia; (iii) as a result of a late amendment, against Bell and Sladojevic for declaratory relief and damages/compensation under s 1325 of the Corporations Lawin respect of contraventions of s 995 of the Law; and (iv) against Bell and Sladojevic, for compensation for breach of fiduciary duty as alleged promoters of Tiltform Australia. No claim for relief is made against the company, Tiltform Licensing Pty Ltd, whom it is alleged contravened the above statutory provisions. The misleading or deceptive conduct claims made against Bell and Sladojevic relate nonetheless to conduct attributable to Tiltform Licensing. 3 In the second proceeding Amin Chehade makes like claims against Bell and Sladojevic although the conduct relied upon to found these claims differs significantly from that in issue in the Rawley matter. Nonetheless as the two proceedings share much in their factual substratum, it has been considered appropriate that they be dealt with together and it was ordered that the evidence in one, insofar as it was relevant and admissible, would be evidence in the other. 4 In both the Rawley and Chehade matters there are, additionally, cross-claims by Bell against CGU Insurance Ltd challenging CGU's cancellation of his professional indemnity insurance policy. He seeks indemnification etc in respect of any liability to Rawley or Chehade in the present matters. The cross-claims will be considered in the last part of these reasons. 5 In both matters the conduct of which complaint is made occurred over roughly a three month period in 2000. Only one set of the representations impugned - those of Sladojevic of 7 August 2000 - is evidenced in a document. The rest were allegedly oral. Their having been made is disputed. Issues of credibility, of alleged reconstruction and of accuracy of recall beset this matter. As will be seen, I have rejected oral evidence of all of the principal witnesses in some degree. 6 In the event I have concluded that both applications and Bell's cross-claims should be dismissed. 7 There is a bewildering array of corporate and other actors who have participated in the events leading to these proceedings. To assist understanding I have appended two schedules to these reasons. The first lists the various corporations mentioned in these reasons. Many have the word "Tiltform" in their name. The purpose of the list is to help in differentiating them. The second list is of the various natural persons to whom I will refer in these reasons. It indicates the respective positions of each person and his or her relationship to the companies mentioned in Schedule 1. 8 For ease in exposition I will deal with the general background and setting to the claims made in both matters in my consideration of the Rawley claims. The matters distinct to the Chehade claims will be deferred to my separate consideration of those claims. 9 I would add that the ready resolution of these matters was complicated by the unexpected duration of the hearing - the taking of evidence occupied 21 days - by Bell representing himself throughout, by Sladojevic changing his legal representatives when the trial had been adjourned after 11 days of hearing, and by the colourable character or uncertain provenance of some parts of the documentary evidence.

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(iii) Benson 12 Benson was the managing director of Tiltform Australia from its formation in May 2000 until it was wound up in April 2001. Though involved in some number of the meetings, etc in dispute in this proceedings, he is one of the few apparently disinterested principal actors in that he is not a party to these proceedings. The following skeletal outline of the circumstances giving rise to the formation of Tiltform Australia is not intended to represent findings. My purpose here is simply to provide background to the matters that are in issue. Benson controlled a company, Burnstop Pty Ltd, that supplied specialised building products to the building industry. His wife, Rita, had had previous business contact with Sladojevic and became aware that he was considering selling the hiring business. At the end of 1999 or early 2000 they met with Sladojevic at which meeting the Tiltform system was explained to them as was his proposal to licence it in each State. Benson apparently evinced an interest in the South Australian licence but was informed that there was an in-principle agreement with a Jim Brennan to take that licence and one other. He was also told that the WA licence was not available. Nonetheless he was supplied with "roll-out" booklets for each State except Western Australia containing details of the costs of the respective licence and forecasts of potential income. Benson then sought advice from an Andrew Lloyd, a financial adviser, who, having been shown the booklets, suggested that Benson proceed not only with the South Australia licence but should seek to obtain the licence for the whole country. Benson believed he did not have the capital to go into the purchase of the South Australian licence and needed somebody to assist him in raising funds to do so. 13 In the course of discussions involving Bell, Sladojevic, Benson and Lloyd in January (though all were not present at each discussion), the proposal for a licence for all of Australia (excluding Western Australia) was considered. After obtaining legal advice Jim Brennan was offered, and acquiesced in taking, the licence for New Zealand. By early February 2000 Bell was supplying Benson with draft documents for the national licence excluding Western Australia. On 10 February Bell indicated to Benson the details of the basis of any licensing arrangement with Benson. These included a payment of $890,000 for the Territories on offer (these included $90,000 for SA/NT and $300,000 for Victoria/Tasmania), $500,000 to be paid upfront and $390,000 on terms to be agreed, $50,000 would be required as a deposit. Benson subsequently indicated that he and Lloyd would proceed first with the SA/NT licence before the eastern States licences and offered $50,000 deposit for that licence. Bell continued to hold out for the upfront payment of $500,000. 14 The expected $50,000 deposit had not been paid by 24 February leading to Bell's complaints about delay. By 2 March Benson and Lloyd had made advances to Bell of $50,000 of which Benson provided a total of $10,000. He had no recollection of making any other payments on his own behalf. Apparently on 13 March 2000 Benson took over Tiltform Licensing's hire business. At that time he had not paid the SA/NT licence fee, nor had he paid a further $60,000 for the purchase of the SA formwork. Throughout April and May Bell and Sladojevic remained concerned that the moneys promised by Benson and Lloyd were not forthcoming. Bell complained of this on 26 April 2000. The response was a cheque drawn on the Lloyd Family Trust for $250,000 which was dishonoured on 7 June 2000. It was made plain to Benson that he needed a new investor if he was going to secure the licences. He ceased dealing with Lloyd and introduced Dr Ben Abraham as an investor. Ben Abrahams paid Bell $250,000 in early June. To backtrack, Tiltform Australia was incorporated on 1 May 2000. Benson was then its sole shareholder and director. Its licence agreement for South Australia and the Northern Territory was executed on 6 June 2000. By this time the first of the meetings giving rise to the Rawley proceedings - that of 2 June 2000 - had occurred. By at least early-mid July, Tiltform Australia's offices were on the same floor of the Greenhill Road premises occupied by Bell Chehade and Tiltform Licensing.

[15]

(iv) The Ilic WA investors/the Icon Group 15 Peter Ilic was an acquaintance of Sladojevic in Perth; his brother was Sladojevic's friend. He and Sladojevic met up at a presentation of the Tiltform technology that Sladojevic gave in Perth in June 1999. Ilic then indicated that he would see if he could get together a group to acquire an exclusive licence for Western Australia: Sladojevic later told him that the upfront fee "for a period spanning the life of the patent": Affidavit, par 34; was expected to be around $100,000. Ongoing royalties would also be payable. A company, subsequently called Tiltform Concrete Systems (WA) Pty Ltd ("Tiltform WA") which was operated by Ilic, a Darren Jennings and Joe Barone executed an exclusive licence 20 March 2000. Barone, who seems to have been Ilic's father-in-law, financed the investment through a $225,000 funding arrangement with Ilic apparently designed to get the business up and running. I note in passing that in December 1999/January 2000 Ilic, who had previously worked in Sydney with Sladojevic, worked in the Adelaide offices of Tiltform Licensing to learn the conduct of the hiring operations. 16 The licensing agreement reached with Sladojevic deferred payment of the $100,000 licence fee until 1 July 2000. Bell's evidence was that the reason for the deferral was because the company needed to purchase formwork and Barone's money was put into that. This was seen as "their most functional way of going". A product launch which Sladojevic attended was held in Perth. After that demonstration a director of Icon Group Management Pty Ltd ("the Icon Group"), Guiseppe ("Joe") Murabito, met Sladojevic. While impressed with the technology, he said he expressed no interest in it at that stage. He did tell another of the Icon directors who also was there - Renato Palmiero - that he thought Icon Group should approach Tiltform WA and seek some form of "preferred contractor" status. Murabito recommended the system as well to Gavin Lee, the company's third director and to its accountant, Greg Parker. Shortly after Icon Group commenced hiring from Tiltform WA, discussions were initiated between Ilic and Icon Group regarding investing in Ilic's company. There is some debate over whether Ilic approached Murabito and Icon Group at Sladojevic's suggestion, or whether Icon Group approached Ilic. Be this as it may, it is clear that Icon Group decided it would be more economical for it to acquire the WA licence than to hire formwork from Tiltform WA. It was also known that Barone wished to withdraw his $225,000 from the business and that Tiltform WA needed working capital. Murabito raised the prospect of investing in Tiltform WA at a directors meeting on 26 May 2000 at which an investment proposal which probably emanated from Ilic was discussed. There had been some exchange of correspondence prior to that meeting. The proposal, according to Parker, was for Icon Group to take a 72 per cent equity interest in Tiltform WA for $505,000 plus a further $70,000 to pay out a director's loan. Parker was asked by the Icon directors if he wished to review this investment opportunity personally, not as their accountant, as they were interested in looking at it as investors - Parker agreed to this. A week later he and Murabito were at their first meeting with Sladojevic and Bell in Adelaide.

[19]

The technology/patent issues 20 I have earlier given a description of the essence of the Tiltform technology. It was, to an extent at least, the subject of one or more patent applications as is evidenced in the Schedule to the SA/NT Licence Agreement. It seems that at least one patent was later granted in respect of it. It is also clear that the technology itself became the subject of litigation(s) between a company or companies associated with Gino Pietrobon (who purchased the manufacturing business of A R Tiltwall Services) and Tiltform Licensing. An aspect of these litigations was an alleged patent breach by a Pietrobon company of Tiltform's "patent" - a breach which was witnessed by Sladojevic on 6 August 2000. There has been some controversy as to when Sladojevic became aware of the breach, although I am satisfied that it probably was on or about the date I have given. Both Bell and Benson were made aware of this matter when in New Zealand on 7 August although Benson may well have had prior knowledge of it. By 10 August 2000 Sladojevic and Bell were meeting with patent attorneys to discuss the breaches of patent. It is unnecessary for me to determine when the relevant patent was granted (it seems not to have been before the above date) although it does seem that, by later in the year, patent litigation was on foot and was continuing up to the time Tiltform Australia went into voluntary administration. There appears to have been communications between Sladojevic and at least Benson as to the sharing of the costs of the action against the Pietrobon company. 21 A difficulty I have with the evidence is that, despite insisting during oral evidence his solicitor had "drilled into him" to distinguish between a "patent" and a "patent application", Sladojevic not only in his affidavit (see e.g. par 34) but also in documents he authored, used the term "patent" to describe both. I am not prepared to accept he was any more precise in oral communication. I will return to this. I should also add that there are documents, the provenance of the information in which can be traced back to Sladojevic, which create an entirely false impression of the patent litigation and its prospects. As I will later indicate these documents were contrivances designed to secure an advantage to Sladojevic in his subsequent dealings with Vinet in late 2000. 22 Benson's evidence is that he learned of the alleged Pietrobon breach of the patent before the Rawley Unit Trust investors made their investment in Tiltform Australia. He could not recall if he told them about it. Parker's evidence is that he did not become aware of this litigation before March 2001 and that mention of it did not find its way into board minutes of Tiltform Australia. It is clear from correspondence between Lee and Tiltform Australia's lawyers of 14 and 19 September 2000 that Lee both was aware of the breach of patent proceedings and of Tiltform Licensing's pursuit of a cost-sharing arrangement with Tiltform Australia for the litigation.

[20]

Marketing and licensing documents 23 There are four classes of document used by Tiltform in the conduct of its licensing business to which I need refer. These are (i) the marketing proposal booklets; (ii) confidentiality agreements; (iii) disclosure documents created in accordance with the Franchising Code of Conduct: see Trade Practices (Industry Codes Franchising) Regulations 1998 (Cth); and (iv) licensing agreements. 24 The marketing proposal booklets for the various State and Territory licences on offer had their genesis in a document prepared by Sladojevic (with assistance) at some time in late 1999. They were based on an assessment of the size of the Adelaide market and on actual trading results in Australia. These were extrapolated to determine the likely size and profitability of the markets in the other States and Territories. Copies of the booklets are in evidence. Apart from describing the virtues of the Tiltform system, each outlined the costs, the savings effected and the rental and sales rates and profitability in the Adelaide market and then went on under the heading "proposed roll out costs and returns for the [respective State] market" to provide an 8 year profit/loss projection for that State. 25 As I earlier indicated, Sladojevic provided Benson with copies of these booklets in late 1999/early 2000. In his affidavit Sladojevic stated he provided the copy relating to Western Australia to Ilic prior to Tiltform WA entering into the WA licence agreement. There is no evidence suggesting that either Ilic or Benson provided any of the Icon Group directors or Parker with such a booklet prior to their proposed investment in Tiltform WA or their actual investment in Tiltform Australia. 26 The confidentiality agreements were of a form routinely used in business negotiations. They were required to be signed by Murabito and Parker prior to their first meeting with Sladojevic and Bell in Adelaide on 2 June of 2000. 27 The disclosure document (prescribed by the TP Act s 51AE) is in evidence and was given to Benson and Lloyd for the proposed Australian licences (other than Western Australia). Of present relevance, the document outlines estimates of projected establishment costs and/or costs items to start up the hiring business in each State and Territory; the initial licence fee for each licence; and the ongoing licence fee of 7 per cent. In relation to "Earnings Information" it stated: "The licensor does not give earnings information about any proposed licence. Any previously presented financial figures or projections of the licensor must (other than for actual trading figures) not be relied upon by the licensee (See Special Condition 14.1(a)) and have been put forward as a guideline only for the licensee's own assessment with its accounting and other professional advisors. Earnings may vary between licences. The only actual earnings are that of the business in South Australia conducted by the licensor since February 1999, for which enquiries can be made direct with the licensor or its accountant and Item 20 hereof will provide some financial details of the same." 28 It is Parker's evidence (which I accept) that he received the above version some time prior to a meeting on 17 July to which reference is made below. 29 Several of the licence agreements (some signed, some not) are in evidence. They are in standard form. I will refer only to the SA/NT licence for present purposes. It contains clauses favourable to the licensor and intrusive powers to control the licensee which commonly are found in exclusive licences involving the use and exploitation of intellectual property. For present purposes I merely note the following. The licensee was obliged (i) to use a specified "Tiltform" business name and to have its corporate name regulated: cl 8.1; Sched cl 15.19; (ii) to have its advertising pre-approved: cl 8.4; (iii) to have its manager approved in writing: cl 8.7; (iv) to keep approved hiring and sales reports and to deliver these to the licensor as directed: cl 8.13; and (v) to keep approved books of accounts and records and to operate such accounting systems as the licensor prescribed and to permit the licensor and its agents to inspect etc the same when so requested: cl 8.14. Importantly, cl 11.2.4 provided: "11.2.4 If the Licensee is a corporation (whether in its own right or as trustee of any trust) there shall be:- (i) no change in the directors of the Licensee; (ii) no allotment of shares by the Licensee; or (iii) no registration or any transfer of shares; without first obtaining the prior written approval of the Licensor." The licence was unassignable without the prior written approval of the licensor: cl 12.1. A separate clause conferred a veto power on any allotment or sale by the Licensee of shares or of units in a unit trust which had the effect of transferring the effective control of the corporation or unit trust to a third party.

[21]

THE MATTERS IN ISSUE 30 There are four separate events or actions taken between 2 June 2000 and 7 August 2000 at, or in, which Sladojevic and/or Bell are alleged to have made actionable misrepresentations on behalf of Tiltform Licensing. These were: (1) on 2 June at a meeting in Adelaide - (i) Sladojevic represented to Parker that investment in the Tiltform group was a secure investment; and (ii) Bell and Sladojevic assured Parker as to the commercial viability of claims made by and on behalf of the Tiltform Group with respect to the "Icon Group's" proposed agreement to take a 72 per cent interest in Tiltform WA. (2) on 26 June at a meeting in Perth - (iii) Bell represented to the Icon Group directors and Parker that over $2 million in investment for Tiltform Australia had already been raised; (iv) Sladojevic represented that there would be sufficient working capital in Tiltform Australia; (3) on 17 July at a meeting in Adelaide with Benson, Parker and Lee - (v) Bell again represented that the capital sum of 2 million dollars had already been raised for Tiltform Australia; and (4) on 7 August Sladojevic sent a letter to Benson, intending it to be forwarded to Parker and the WA investors, which stated that: (vi) unless they were to commit to Tiltform Australia within 48 hours the investment opportunity would be lost; (vii) Tiltform Licensing had previously been offered the sum of $250,000 for the WA licence; (viii) the funds were required within the 48 hours at which time negotiations with other investors who wished to invest in Tiltform Australia would be resumed; and (ix) Sladojevic had spoken that day to Tiltform Australia Chairman, John Dawkins, and was certain that Dawkins could find replacement investors. 31 Additionally, because of the non-disclosure of information in relation to some number of matters, it is pleaded that Bell and/or Sladojevic engaged in other material instances of misleading or deceptive conduct. These, for the most part, have been abandoned. I will deal separately with the few remaining non-disclosure claims relied upon: see below "Other Misleading Conduct". 32 The pleading translates the conduct of Bell and Sladojevic into claims under the TP Act in a rather circuitous and, to a degree, an unrevealing way. That conduct is said to have contravened s 52 and s 59 of the TP Act. The primary contravenor is said in the application to be Tiltform Licensing although no relief is sought in the proceeding against that company. Declarations and damages are sought against Bell and Sladojevic under s 82 of the TP Act on the basis that, for the purposes of s 75B of the TP Act, they were knowingly involved in Tiltform Licensing's contraventions. Parallel claims are made against them under the equivalent provisions of the Fair Trading Act 1987 (SA)and the Fair Trading Act 1987 (WA). 33 Following amendments to the application and pleadings which I raised with the parties after the hearing of the matter, the same conduct of Bell and Sladojevic as was said to have contravened s 52 of the TP Act was alleged in the alternative to have contravened s 995 of the Corporations Law. Relief was sought under s 1325 of the Law. This amendment was a technical, but necessary, one. The reason I raised it with the parties is that the matter was founded on the premise that the alleged wrongs gave right to causes of action under Part V of the TP Act. Those wrongs were committed at various dates in 2000 and were related to dealings in the "securities" (i.e. shares) of Tiltform Australia. At that time s 51AF of the then TP Act stipulated that Part V did not apply to the supply of services that are financial services. Such "services" includes "securities": see Australian Securities and Investment Commission Act 1989 (Cth), s 12BA(1) ("financial services"). Section 995 of Ch 7 Pt 7.11 of the Corporations Law as it stood in 2000 prohibited a person in connection with any dealings in securities from engaging in conduct that was misleading or deceptive or was likely to mislead or deceive (i.e. the same formula in part as in s 52 of the TP Act). "Securities" were defined in the Law to include "shares": s 92(2). Relief could be granted under s 1325 of the Corporations Law in respect of conduct constituting a contravention of Pt 7.11. Finally, s 995A of the Corporations Law provided that the provisions of State Fair Trading Acts (defined in s 9 to include those relied upon in these proceedings) did not apply to dealings in securities. If the principal claims made in the Rawley - and for that matter the Chehade - matter were not to be dismissed on formal jurisdictional grounds, the amendment I raised was necessary. 34 A separate negligence claim is made against Bell who it is said owed a duty of care to the applicants in making representations to them in relation to their proposed investments in, first, Tiltform WA and the Tiltform Australia; reasonable reliance on those representations is pleaded, the representations being essentially the same as the misrepresentations and other misconduct pleaded against him in the Misleading or deceptive conduct claim. Breach of the alleged duty of care arose essentially because of the same factors that rendered the representations misleading or deceptive in the Misleading or deceptive conduct claim. 35 A further claim is made against Bell and Sladojevic as promoters of Tiltform Australia. The basis of this claim appears to be that they were promoting the taking up of shares in Tiltform Australia although, as put, much is made of the allegedly fiduciary character of the licensor (Tiltform Licensing) and licensee (Tiltform Australia) relationship. I would note here that, at the beginning of the hearing I indicated my difficulty with this claim. The supplementary submissions advanced after the end of the hearing have not dispelled my difficulty. The breach of fiduciary duty asserted arises from alleged non-disclosure of matters that relate in the main to dealings between Tiltform Licensing and Benson prior to the emergence of the WA investors in June 2000 although the non-disclosures also relate to conduct in issue in, or else relevant to, the misleading or deceptive conduct claims. 36 I will as a matter of convenience deal with the misleading or deceptive conduct claims first. They provide an appropriate vehicle through which to expose most of what is in issue in each of the claims.

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THE MISLEADING OR DECEPTIVE CONDUCT CLAIMS 37 The applicants in this matter have not abandoned their TP Act and State Fair Trading Act claims notwithstanding that they have, in my view, been excluded by the then s 51AF of the TP Act and s 995 of the Corporations Law. Nonetheless, I will refer to both claims primarily because the substantial jurisprudence on what is misleading or deceptive, etc for TP Act purposes is generally applicable to s 995 (and its successor in s 1041H of the Corporations Act 2001 (Cth)): see generally Ford's Principles of Corporations Law, 22.450 (13th ed 2007). 38 By way of statutory background I should note, first, that a corporation contravenes s 52 of the TP Act if it engages in conduct in trade or commerce that is misleading or deceptive or is likely to mislead or deceive. It is not in dispute in this matter that the misleading or deceptive conduct alleged, if it occurred, was in trade or commerce. For present purposes, I need only note as well that conduct is misleading or deceptive if it induces or is capable of inducing error. Whether it has this character is a question of fact to be determined on the evidence as to the context in which it occurred and the relevant surrounding facts. So much is well established. 39 Though it has not loomed large at all in the applicants' submissions I should also note s 59(2) of the TP Act the contravention of which has been pleaded in relation to alleged misrepresentations with respect to the profitability of, and the level of working capital available to, Tiltform Australia. It provides insofar as presently relevant: "(2) Where a corporation, in trade or commerce, invites, whether by advertisement or otherwise, persons to engage or participate, or to offer or apply to engage or participate, in a business activity requiring … the investment of moneys by the persons concerned and the performance by them of work associated with the investment, the corporation shall not make, with respect to the profitability or risk or any other material aspect of the business activity, a representation that is false or misleading in a material particular." 40 Section 75B for present purposes deems a person to be involved in a contravention of (inter alia) Part V (which includes s 52 and s 59 by a corporation if that person "has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention": see s 75B(1)(c). This, as I earlier noted, is the vehicle relied upon by the applicants to impose liability on Bell and Sladojevic under s 82 of the TP Act in respect of the contraventions alleged against Tiltform Licensing by virtue of their conduct: see Wheeler Grace & Pierucci Pty Ltd v Wright (1989) 11 ATPR 40-940. Section 75B does not require that the participant knew he or she was participating in a contravention of the Act. What, though, is required is actual knowledge of the essential elements of the contravention and intentional participation in it: Yorke v Lucas (1985) 158 CLR 661 at 666 ff. 41 Section 82(1) provides: "A person who suffers loss or damage by conduct of another person that was done in contravention of a provision of Part V may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention." 42 Turning now to the much more direct course laid open by s 995, subs (2) of that section provides that a person shall not, in or in connection with any dealing in securities engage in conduct that is misleading or deceptive or is likely to mislead or deceive. I would note that this provision applies directly to "a person" hence the lack of any need to pursue Bell or Sladojevic via accessorial liability provisions as is necessary under the TP Act. 43 Section 1325(1), insofar as presently relevant, empowers the Court to compensate a person who has suffered loss or damage because of another's conduct that was engaged in in contravention of s 995 for the loss or damage so suffered. 44 While I will deal in turn with the principal events in which misleading or deceptive conduct is alleged to have been engaged in, I preface this with observations on the principal witnesses in this matter. The need for this will become plainly apparent given the issues of credibility and reliability I have already foreshadowed.

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WITNESSES AND WITNESS ISSUES 45 It is clear both from their evidence and from their conduct in this proceeding that a considerable level of personal hostility came to exist - and still exists - between Sladojevic and Parker. Both are quite opinionated. Their personal styles are markedly different and their personalities clashed. I am not prepared to discount their animosity in my treatment of the evidence of either of them, but of Parker in particular. I consider the view he has of Sladojevic, of his personality and of his behaviour has on occasion coloured his evidence and the subject matter of his recall. In saying this I am not suggesting his evidence was deliberately dishonest or vengeful. 46 Bell's relationship with Sladojevic is equally a matter of which account ought be taken in evaluating his actions as revealed in the evidence. He and Sladojevic clearly had a successful working relationship over a number of years to the point where Bell was prepared to forsake his professional practice and to join forces with Sladojevic in the Tiltform group. However, that relationship unravelled over a relatively short time. Bell's own evidence is that he could be persuaded and/or dominated by Sladojevic to the extent of engaging in actions which he might otherwise have refrained from doing. That he would so act was demonstrated starkly in his participation in the successful strategy of September 2000 to get Vinet to agree to sell his shares in Tiltform which required the deliberate giving of false instructions to lawyers and to making of serious misrepresentations about the viability and poor financial position of the Tiltform group of companies. Bell knew this was a sham; he was unhappy about it; but he went along with it: see below, "Sladojevic's deceptive strategies". By November 2000 he was wanting to get out; he did not like the way things were going and the way business was being done; Sladojevic "stopped listening to my advice"; he was denied access to Tiltform Licensing's books; etc. In January 2001 lawyers representing Sladojevic wrote to Bell on several occasions making serious imputations against him. The allegations were denied but this heralded the end of Bell's relationship with Sladojevic. They each executed a deed of release on 5 March 2001. It emerged in Sladojevic's cross-examination that the allegations made in the January letters were again "strategy" representations. Sladojevic conceded the instructions he gave were not true: such allegations "get made for leverage". Bell, seemingly, was unaware of this when he gave evidence in the matter. I have recounted the above, not because Bell has given evidence sharply critical of Sladojevic (which he has not) but because the nature of his relationship with Sladojevic probably provides some explanation of his actions. 47 I equally should comment on Sladojevic's relationship with Benson. This relationship needs to be considered bearing two matters in mind - first, Sladojevic's tendency to domineer; and, secondly, his power over Tiltform Australia by virtue of the licence agreements Tiltform Licensing had with it. While Benson was, in the relevant period, within Sladojevic's power vis-ŕ-vis investments to be made in Tiltform Australia, the evidence is that at that time their relationship was cordial. I accept that Benson readily accepted and acted upon proposals and suggestions of Sladojevic relating to securing investment in Tiltform Australia. But I do not accept, and it has not been suggested, that Sladojevic was in essence a "shadow director" of Tiltform Australia: cf Secretary of State for Trade and Industry v Deverall [2001] Ch 340 at 354; Australian Securities Commission v A S Nominees Ltd (1995) 133 ALR 1 at 52-53. The evidence is that Benson had and relied upon his own financial advisers in relation to the formation and their operation of Tiltform Australia and that he was experienced in the conduct of his own businesses. I do not accept that he was simply Sladojevic's cipher despite Parker's occasional attempts to paint him as such. 48 As I have foreshadowed issues of reliability and credibility have loomed large in this matter. The critical events occurred five years before the hearing in this matter and occurred within a very short period (i.e. 2 June - 7 August 2000). None of the misrepresentations about which complaint is made (save that of 7 August) is evidenced, or even alluded to, in any way in contemporary documents. The three critical meetings (i.e. of 2 June, 26 June and 17 July) at which misrepresentations are alleged to have been made, are the subject of totally divergent and inconsistent accounts. 49 Because of the views at which I have arrived as to the reliability of the various witnesses, it is appropriate that I provide some explanation at the outset of why I regard them individually as I do. 50 Parker has obviously invested considerable time and effort in attempting to recall the events leading up to and the reasons for, the WA investment. There is nothing in his own contemporary notes to support his claims that the oral misrepresentations were made. I consider that significant parts of his evidence, particularly when describing what he says were his own opinions, judgments, understandings and motivations at the time, are unreliable. I am satisfied that those opinions etc, often represent after the event rationalisations and explanations for his own actions and they often ascribe significance to matters which those matters did not have to him at the time. 51 I do not consider Parker to have been untruthful. Rather he has in certain critical respects convinced himself that things were said or done which I have not found to be made out on the evidence before me. I accept in this that he was influenced by his motivation to do his best for the investors he had brought into the WA group and for whose loss he appears to feel a responsibility. This is understandable given the manner in which that loss was incurred. 52 Lee. This witness' affidavit contained a significant number of annexures with the contents of which he had well familiarised himself. When taken away from these documents his evidence was far less convincing. I am satisfied that there was a significant degree of reconstruction in his evidence. What is clear is that he was unwilling to accept responsibility for financial decisions, the raising of financial concerns, etc. These were, he said, Parker's responsibility. I am by no means satisfied that he was so blindly trusting as he sought to convey. 53 Murabito. Such was Murabito's lack of recall of events, that I consider his recall of a few strategically significant matters (e.g. Bell's "$2 million" assurance on 26 June 2000) should be treated with circumspection. In saying this, I am quite conscious of how fallible are memories and of the remoteness of the events about which Murabito was being questioned in close detail. 54 Benson. Given he was not a party to these proceedings, but was an actor in some of the events that are in issue, it might be expected that Benson would provide helpful, independent evidence of those events and their context. I have not found that to be the case. I do not regard his evidence as either full or frank. As his cross-examination progressed, he took refuge in his inability to recall matters. I am satisfied that this often was a contrived response. Even the applicants in submissions conceded that Benson sometimes gave the appearance of making no effort to recollect events. While it is the case that Benson is a disinterested party in the present proceedings, he was by no means a disinterested actor in the life and death of Tiltform Australia. I consider he was quite mindful of this and the implications of it in giving his evidence. 55 Bell. Bell sought to project himself as an ethical, detached professional adviser. Throughout this proceeding he represented himself. His evidence-in-chief was given in narrative form. From his business diaries and time sheets he could give what is probably a reliable account of objective facts such as where he was, who was there, etc. The diaries, though, yielded little by way of information as to what was discussed at meetings etc. Bell's memory for the most part does not stretch far beyond his diaries and time sheets. He conveyed the impression of wishing to consign from memory a period in which he made judgments and took actions which he has come to regret. His oral evidence did not directly confront what had been put against him in the Rawley and the Chehade proceedings. However, he denied volunteering the $2 million representation. For a variety of reasons I do not regard Bell's evidence as reliable. He was both dogmatic and counter-suggestive in cross-examination to the point on occasion of making assertions which either contradicted his own documents or else seemed contrived, adversarial responses. I am satisfied he has limited recall of some of the critical events in this matter despite his confident assertions concerning them. I equally am satisfied that he has reconstructed and rationalised his evidence in ways that best serve the interests of his case. I consider this to be particularly so concerning the meeting of 2 June 2000. I have disbelieved the evidence he gave concerning his actions during the day of, and at the meeting of, 26 June. His answers on occasion were designedly obfuscatory, as for example when he denied that the 26 June meeting was a meeting which later led him to distinguish between "formal" and "informal" meetings. He equally, but unconvincingly, created the impression of indifference to, or lack of interest in, matters with which he obviously had a real concern or interest. This was particularly so in relation to the financial affairs of Tiltform Australia and to the payment of licence fees. Though he claimed for himself roles and responsibilities in Tiltform Licensing he often enough disclaimed actual responsibility in matters which seemingly fell within his claimed sphere by asserting he was acting on Sladojevic's instructions or that the matter had been taken over by Sladojevic. His claimed level of participation in the 2000 strategy to buy out Vinet typified this: see below. 56 Sladojevic. It is difficult to accept major parts of Sladojevic's evidence. His affidavit evidence, even after amendment, was conceded to be reconstructed from documents and was in important details inconsistent with his oral evidence. The extent of this reconstruction is indeterminate. As a witness he was argumentative, evasive and obviously self serving in the gratuitous commentary in which he indulged. When one couples this with the deviousness and ruthless self interest he betrayed on at least four occasions in engaging in deceptive "strategies": see below; reason for reserve about his evidence is clear. He has engaged in opportunistic behaviour and has resorted to falsehood. I am satisfied his evidence on any subject not corroborated by independent documentary evidence or a reliable third party ought be regarded with caution.

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Sladojevic's deceptive strategies 57 Sladojevic has admitted on three occasions in his evidence that he engaged in deception and/or known falsehood to secure perceived advantages for himself. One such occasion involved the making of false accusations against Bell via lawyers' letters of January 2001 during the breakdown of their business relationship. Another, not conceded by Sladojevic related to the letter of 7 August 2000 he wrote nominally to Benson, but intending that it be sent to the WA investors. Later in these reasons I find that letter was, and was intended to be, misleading. The two other occasions in which he resorted to deception concerned separate dealings he had with Vinet in 1999 and in 2000. Given my concern with Sladojevic's credibility it is appropriate that I refer to these two occasions. 58 First the 1999 dealing with Vinet. I have earlier noted that in September 1999 Vinet disposed of his interests in Tiltform and Tiltform Services (save for a 25 per cent interest in Tiltform) and resigned his directorship of both companies. The following is only a skeletal account of how Sladojevic sought to procure these actions. 59 Having concluded by May of 1999 that it was impossible for he and Vinet to continue working together, Sladojevic met with Bell and his solicitor, Richard Solomon, for advice on how to resolve the matter. He then evolved a strategy to get Vinet "to come to the table". Wholly misleading accounts of the true financial position of Tiltform Licensing had been prepared such that it appeared to have considerable debts when it appears in fact to have been trading profitably. Those accounts, though were used by Sladojevic as part of a proposal put by him to get Vinet to sell his shareholding. Sladojevic equally communicated (falsely) to Vinet that his father who was in fact moving from Sydney to Adelaide to live with him because of ill health, had sold his house to relieve the cash flow problems of the Tiltform companies. 60 The proposals put to Vinet went through several iterations as the financial position of the companies were said to be "gradually getting worse". In the result an agreement was struck under which Vinet sold most of his shareholdings and resigned his directorships. Sladojevic's evidence is that he acted entirely of his own accord in this matter and that Bell was not involved in it. 61 The second Vinet strategy (in 2000) focussed on Vinet's 25 per cent shareholding in Tiltform. That company was the owner of the Tiltform intellectual properties. It was proposed to have another Tiltform company, Tiltform Technologies Ltd, listed on the New Zealand stock exchange and central to this proposal was that that company owned all of the shares in Tiltform. Sladojevic, Bell and several other persons evolved a strategy to induce Vinet to sell. This strategy involved (inter alia) the knowingly false misrepresentations that (a) the Tiltform companies were unviable and in a poor financial position; (b) Sladojevic's father was pressing for repayment of his loan; (c) Bell had threatened to wind up the companies because he was owed "a huge amount of money for fees and had to be issued shares in Tiltform Licensing in lieu; (d) Bell served a statutory demand on one of the companies in October 2000 (Bell in fact had such a document prepared) and that he refused to provide financial support to Tiltform; (e) the companies did not have the funds to protect the patent from Pietrobon's breach of them and that four cases were on foot; and (f) patent attorneys had advised that Pietrobon's copy of Tiltform's system did not violate the patent, and this significantly decreased the value of the intellectual property. As a result of this strategy Vinet agreed to transfer his shares in Tiltform to Sladojevic's father for no consideration provided he was given various warranties. In the event the listing in New Zealand did not proceed and the Vinet issue was "left hanging". I should add that, while Sladojevic's evidence is that Bell was complicit in this strategy, Bell sought quite self- servingly to distance himself from significant involvement in the strategy. The evidence suggests otherwise as witness his instructions to solicitors in October 2000 to prepare a letter of demand in respect of previously written off debts at Sladojevic's suggestion, so enabling Sladojevic to point to it in relation to the supposed financial difficulties of Tiltform. I am satisfied that Bell was a knowing participant in this strategy. 62 One consequence of the strategies in relation to Vinet is that documents created for the purposes of them have added very significantly to misinformation relied upon in the conduct of this proceeding. Amendments were made to the pleadings and cross-examination conducted on the premise that the information conveyed in such documents was correct. This resulted both in time wastage and quite a deal of confusion and contradiction for which Sladojevic principally, but also Bell in some degree, bear responsibility.

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THE 2 JUNE MEETING 64 The background to the 2 June meeting has been mentioned above. After Parker had agreed to review the investment opportunity in Tiltform WA which had been discussed with the Icon Group directors on 26 May 2000, Parker (with Lee's assistance), prepared forecasts of the Cash Flow, Profit and Loss and Balance Sheet of Tiltform WA for the 2001-2003 financial years. In doing this he relied upon a one page document prepared by Ilic which described the outlays, income and investment in the business in the period of its operation. 65 It is Parker's evidence, which I accept, that at this time he did not have, or have access to, the WA licence agreement, the disclosure document or the WA market proposal booklet. While he had spoken to Ilic before 2 June, he did not look to him for significant assistance because, as he said of Ilic, "as far as business acumen is concerned … he lacks the certain qualities that one is required to have when talking about these particular numbers". He also said that Sladojevic expressed a like view of Ilic at the 2 June meeting. 66 Parker saw his function at the time as being that of conducting a "due diligence", and that in consequence the primary purpose of his visit to Adelaide to meet with Bell and Sladojevic on 2 June was to have the reasonableness of his financial projections confirmed. Sladojevic in his affidavit said that Parker stated at the beginning of the 2 June meeting that he was attending "to evaluate the proposed purchase of shareholding in Tiltform WA". I note in passing that it was Lee's evidence that the reason Murabito and Parker went to Adelaide on 2 June was because Sladojevic had to agree to any transfer of shares. Parker's evidence on this was to the contrary. He was unaware of such an approval requirement at the time and had not by then been supplied with a copy of the licence agreement imposing it. 67 On 31 May 2000 Murabito rang Sladojevic. He informed Sladojevic that there had been discussions with Ilic in relation to purchasing a majority interest in Tiltform WA. He went on to say, according to Sladojevic, that they wanted to meet with him and Bell "to discuss the proposal and licensing issues with us". The following day Sladojevic sent a fax to Murabito confirming the meeting on 2 June at Tiltform Licensing's Greenhill Road offices. The facsimile noted, amongst other things, the following: "Attending the meeting with me will be Mr Geoff Bell who is also an integral part of our organisation and responsible for the strategic planning of our organisation." 68 The meeting was held on the afternoon of 2 June. Murabito and Parker, who had flown in from Perth, were required to sign confidentiality agreements. It is Parker's oral evidence that Bell was introduced at the meeting as the accountant for Tiltform Licensing. He reiterated often in his oral evidence that he dealt with Bell "as an accountant". Bell later had informed him he had previously been the senior partner of a firm named Bentleys. 69 Despite the descriptions above as to the purposes of the meeting, there is wide divergence between Parker and Murabito on the one hand and Sladojevic and Bell on the other as to what transpired at it. The only contemporary documentary evidence of the meeting was Parker's notes of it. Significantly Bell denied that many of the matters referred to in the notes were discussed at all, or could be remembered by him. What he was insistent upon, contrary to Parker's evidence, is that he was never shown the projections let alone approved them. Without actually being shown the Parker notes, Sladojevic nonetheless confirmed that he recalled discussing most of the matters noted by Parker. I would note in passing that Sladojevic did take issue with one notation referring to "patent documentation". He emphasised there was at the time only a patent application. 70 It is unnecessary to reproduce the notes here. They refer to the technology and to its potential, and to the licensing agreement. Parker stated in cross-examination that he made the notes "while Sladojevic was talking" - "during his explanation of where Tiltform was at". He went on to say: "So what you are suggesting is that Mr Sladojevic was promoting the virtues of the system?---Most definitely. You can see from the notes that I have made that it was all good stuff. He informed you that as the technology was further developed, it would be made available to licensees?---That is correct, and that the projections that I had prepared were really not of any consequence because these improvements - and you can see from the notes that I have made regarding door jambs, snap-on windows - they were just going to blow the projections out of the water. He was there talking about proposed developments of the system which you, of course, took with a grain of salt until such time as they had been produced?---Oh no, it made me feel more comfortable that the projections that I had prepared which when I looked at them from an investor's point of view, were quite satisfactory. All I was hearing now was better news but I thought no more of it other than that." 71 The notes are almost entirely silent on matters which could be said to be related either to Parker's projections or to Bell's confirmation of their reasonableness. Parker nonetheless claims he provided Bell with copies of them and that the detail of items in them were discussed. He did, though, make the following acknowledgement in cross-examination by counsel for Sladojevic: "You have got no note that Bell confirmed the accuracy of your projection?---No, I don't but that doesn't mean that he didn't. I don't have a habit of noting absolutely everything that takes place in a meeting, bearing in mind this was a meeting at which we were discussing financial projections and we went down the various items composed in that, more particularly the profit and loss. Do you have a note in relation to that?---No. You are telling us that the confirmation of the financial projections was the prime purpose of the attendance?---It was my primary purpose of coming to Adelaide, yes. You don't have any note of Bell confirming the accuracy of your projection?---No, I don't." 72 Parker equally has said in his affidavit that Sladojevic stated that the projections actually underestimated what was achievable. For his part Sladojevic denies having said this. He equally denies that the projections were tabled or discussed at the meeting. Murabito in contrast said that Parker discussed the projections with Bell while he was more in discussion with Sladojevic about the technology and its applications. Sladojevic confirmed that Bell and he were engaged in separate conversations. 73 Notwithstanding the applicants' pleading that misrepresentations were made as to an investment in the Tiltform group being a secure investment (Sladojevic) and as to the commercial viability of claims made by the Tiltform group as to the proposed investment in Tiltform WA (Sladojevic and Bell), neither of these loomed large in the evidence or in the applicants' submissions. They were not put explicitly and unequivocally to either respondent. Rather the applicants now contend that this meeting had "limited significance", this being that it showed that Parker was carrying out a "due diligence process" and that Sladojevic and Bell engaged with him in that process. This last is relied upon in aid of the applicants' distinct claim that Sladojevic and Bell conducted themselves as promoters.

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PERTH: 23-26 JUNE 2000 76 Having returned to Perth after the 2 June meeting, Parker had discussions with the directors of Icon Group and with other business associates who, collectively, were potential investors in Tiltform WA. By 12 June 2000 the funds required to acquire the 72 per cent interest had been raised. The participants were to be Rawley Pty Ltd ($100,000), Icon Group directors ($175,000), Airport Consulting Pty Ltd ($75,000) and Connoisseur Holding ($225,000). These I will refer to as the WA investors. On the same day Murabito wrote separately to the directors of Tiltform WA and to Barone accepting their respective offers to sell shares to these investors. The agreement with Barone (which also involved discharging a debt of $70,000 owed to him by Ilic and an agreement by Ilic in turn to repay that amount to the investors) would result in his original $225,000 funding arrangement being paid out. It was envisaged by the Investors that a unit trust ("the Tiltform Unit Trust") would provide the vehicle for their investment. Arrangements were then made to meet with Tiltform WA's solicitors to formalise the share transaction. A meeting to that end was held on 22 June 2000. 77 Between 23 and 27 June Sladojevic, Bell and Benson each spent some time in Perth. The dates of their so doing (in the cases of Bell and Benson) and their respective reasons for their so doing are disputed. Meetings were conducted between variously one or more of Sladojevic, Bell and Benson, the directors of Tiltform WA, the Icon Group directors and (on 26 June) Parker. These resulted in the emergence of a new proposal which was put to the Icon Group and Parker at a meeting on 26 June. This was that the WA investors (who at that time probably were taken by Bell and Sladojevic to be simply the Icon Group) would take an interest in Tiltform Australia and Tiltform Australia would take over Tiltform WA. It was at the 26 June meeting that the two misrepresentations (one by Bell, one by Sladojevic) are alleged to have been made. 78 The evidence as to what transpired over this period is marked by sharp contradictions. To understand these I will deal first with the questions of when and why Sladojevic, Bell and Benson were in Perth. By way of backdrop to this I would emphasise that at the beginning of this four day period it was the understanding of the WA investors that they had committed themselves to an investment in Tiltform WA and that an investment in Tiltform Australia had not been canvassed.

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Sladojevic, Bell and Benson in Perth 79 It is convenient to deal first with Benson. He gave contradictory evidence as to why he went to Perth. In his affidavit he states he attributed his trip to Perth to the suggestion of Sladojevic that he meet the investors who were looking to buy into Tiltform WA. Sladojevic denied this was the case in cross-examination. In Benson's cross-examination, he said he was in Perth to look at a trade show that Tiltform WA was putting on in its warehouse. He went to the show "by arrangement" (seemingly with Ilic); Sladojevic was there; and he was then told of the WA investors in Tiltform WA. It is unnecessary for me to make a positive finding about this matter, but I would indicate that the latter explanation for his trip probably is closer to what occurred than the former which I disbelieve. What is clear is that Benson left Perth on 25 June 2000. I say this so as to emphasise he was not at the 26 June meeting at which, as I find, a proposal under his name was distributed. 80 Bell. His evidence, supported by his office time-sheets, is that he was in his Adelaide office until 1.30 pm on 24 June. He flew to Perth on Sunday 25 June arriving late in the afternoon and he returned to Adelaide on 27 June. He said the purpose of his trip was to inspect the books of Tiltform WA to confirm the royalty payment that "we were due to receive", as also to facilitate the process of dealing with the change of the owners. Bell's positive disclaimer that he was in Perth on 24 June contradicts the contrary evidence of Sladojevic, Lee, Benson and Murabito. In relation to this matter I consider Bell's time-sheets are more likely to provide guidance as to his whereabouts than the evidence of those I have just listed. 81 Sladojevic. The evidence of Sladojevic is that he was asked by Ilic to come to Perth to meet a Mia Sarich who was a potential investor in Tiltform WA. Sladojevic gave evidence of two meetings with Sarich. The first was on the afternoon of 23 June at which Benson, Ilic and Barone were present. Murabito is said to have arrived at the warehouse but, on seeing Sarich there, waited outside until Sarich left. Sladojevic said they did not get on. Murabito denies he was at the premises on that day and that he first met Benson the following day (i.e. 24 June). Benson had no reliable recollection of a meeting on 23 June, although he accepted there was such a meeting, albeit with Ilic and Sladojevic. He gave contradictory evidence about Murabito's presence. He did not suggest Sarich was there. Nonetheless, he accepted he was at a meeting which had been arranged the previous night on 24 June at which Murabito, amongst others, was present. None of Sarich, Ilic or Jennings gave evidence in these proceedings. 82 The second claimed meeting with Sarich is said to have occurred at dusk on 25 June at a restaurant at which Benson and his wife, Bell, Ilic, Jennings, Sarich and Sarich's uncle were present. Bell's evidence-in-chief was that he had a "quiet dinner" that night with Sladojevic, Barone and Ilic "because we had a busy day coming up the next day". In cross-examination he gave evidence that he had dinner with Sladojevic and Murabito and that he only heard of the possibility of a separate investor on the morning of 26 June where Sladojevic told him that the Sarich group had dropped out. It was Benson's evidence that his wife was not with him on this trip to Perth and, as I earlier indicated, that he returned to Adelaide on 25 June though he could not recall at what time. He did not recall doing anything prior to his departure. Again Sladojevic's evidence is without corroboration and conflicts with that of Bell and Benson. 83 In the above circumstances, and for the reasons I gave earlier as to my view of the reliability of Sladojevic's evidence, I am not prepared to accept either that these two meetings with Sarich occurred or that he went to Adelaide for the reason he gave. I do not venture a view as to what his actual reason was. 84 In view of what I have said about the alleged meeting of 23 June, I am unprepared to make any findings as to whether a meeting or meetings were held on that day or as to what may have transpired at them. I emphasise this for this reason. It was put to Sladojevic in cross-examination that on 24 June, Benson, at Sladojevic's instigation, raised with the "Icon people" the possibility of them investing in Tiltform Australia. Sladojevic denied this and said: "That was first raised the night before [i.e. on the 23rd]" and by Murabito. Murabito has denied this. 85 It is clear that there was a meeting held at the Icon Group offices on 24 June which was attended by Lee, Murabito, Palmiero, Benson, Sladojevic and, probably Ilic and Jennings. Given my earlier finding, I am satisfied Bell was not present. That meeting, according to Lee, was concerned with finalising issues and having further discussions concerning the investment in Tiltform WA. He denied that the question of investing in Tiltform Australia was raised at this meeting let alone that the Icon people indicated they were interested in such a suggestion. Murabito's evidence, in contrast, was that the Tiltform Australia proposal was raised (he was not sure by whom); it was discussed in some detail; the Icon directors were interested in the proposal for a national licence; and it was indicated that the proposal would have to be discussed with Parker who would not be available until Monday, 26 June. Parker was in Melbourne. 86 Benson's evidence was that he proposed the Tiltform Australia investment, with that company then taking over Tiltform WA. He did not believe the ins and outs of the proposal were discussed. It was "more of a general overview of what my company proposed to do and how their company could benefit by being involved". He said Ilic and Jennings were keen on the proposal; the Icon Group showed some interest but were not going to proceed without getting input from Parker. 87 Sladojevic's affidavit evidence was broadly consistent with Benson's. In cross-examination he indicated he had approved the proposal; he regarded the verbal indications from the Icon directors and Ilic and Jennings as confirming the proposal; but he did not recollect it being decided that the parties would meet again on 26 June 2000 when Parker had returned. His affidavit, to the contrary, records (at par 118 that "a second meeting was arranged for Monday evening at the Icon Group's offices". In cross-examination he said this was wrong. I do not accept this retraction. 88 For my own part I am satisfied that, on 24 June 2000, the Tiltform Australia proposal was raised; was discussed in general terms; interest was shown in it; but a follow-up meeting was said to be necessary and was agreed for 26 June in the evening at Icon Group's offices. I reject Lee's evidence inconsistent with this. 89 It is Bell's evidence that when he arrived in Perth on the evening of 25 June he was told by Sladojevic that: "Nigel Benson had been and gone and they had done a deal where they were going to roll WA into Tiltform Australia." This evidence, which I accept, is of some significance in evaluating the events of the following day. I will deal with these in two parts: events prior to the 26 June meeting; and the meeting itself. 90 Prior to the 26 June meeting. Bell gave evidence that he spent the whole of the day of the 26th at the Tiltform WA factory working in Ilic's office. He said he briefed Tiltform Licensing's Adelaide solicitor, Richard Solomon, concerning the changes that were happening with the licence agreement and he was going back and forth with Solomon most of the day. He also looked at the Tiltform WA royalty issues. Sladojevic was also at the Tiltform WA factory during the day of 26 June. In cross-examination he indicated he could remember "specific discussion that day with Mr Solomon that Mr Bell had on the phone when I was present with Mr Bell". I will return to more of Sladojevic's evidence below. 91 To anticipate matters, at the 26 June meeting a document was distributed which was entitled: "PROPOSAL FOR ACQUISITION OF THE WEST AUSTRALIAN LICENSE FOR THE TILTFORM TECHNOLOGY VIA ACQUISITION OF THE SHAREHOLDING IN TILTFORM CONCRETE FORM SYSTEMS (WA) PTY LTD AS HOLDER OF THE LICENSE RIGHTS TO THE TECHNOLOGY." It bore the printed date "25th June 2000" and purportedly emanated from "Nigel Benson" for Tiltform Australia. It was unsigned. Benson disclaims the authorship of the document which, for convenience, I will describe as the "Tiltform Australia proposal". He, nonetheless, acknowledges that he later made use of it to explain, inter alia, the essence of the proposal to his solicitors and his accountants. He gave evidence that he would "often" reproduce proposals put forward by Sladojevic that were acceptable to Sladojevic. 92 The proposal commenced with a "Financial Forecast" which stated, inter alia: "Tiltform Australia expects that by concentrating full-time on two key objectives: establishing fully owned outlets to saturate the capital cities over 3 years; and the sublicensing of operators in minor rural cities and towns, turnover will increase from the present level of $230,000 per annum, to $6,038,000 in the first year, $10,695,000 in the second, and $11,928.000 in the third. To help achieve this growth, the directors have recognised the need for significant capital injection and the recruitment of competent staff in each of the rental locations. Establishing one outlet in each of Sydney, Melbourne and Brisbane each year for 3 years requires total capital of $5,500,000, however the proceeds of sub-license sales in the smaller rural areas and increasing revenue as outlets are established in the CBD and major country regions will fund most of the cost of opening these 9 outlets. Market penetration using our system within three years is expected to be 60% of all commercial tilt up construction, with additional potential from the housing sector as the development of this is rolled out (the housing market has not been included in the enclosed projections)." (Emphasis added.) 93 It referred to "Financing Requirements (Australia Licences Other Than WA)" noting that: "The directors have invested considerable funds and other resources into the company. The total requirements of the company over three years are forecast as: Year 1 Year 2 Year 3 … TOTAL: $2,577,400 $1,400,000 $1,400,000" 94 The proposal detailed the offer being made. It noted that: "As discussed with both the Icon and Sarich Groups together with The Head Licensor Mr Robert Sladojevic, We agreed to issue shareholdings in Tiltform Australia Pty Ltd (Our Holding Co. that holds Licenses to all other Australian States and Territories) to either or both the Icon/Sarich Groups." The proposal then sought investment of $500,000 by either or both named groups with Tiltform Australia in turn offering to pay both $100 for all of Tiltform WA's shares and $225,000 to pay out Barone's loan to Tiltform WA. 95 It concluded: "The Settlement of the Proposal would be sequenced as follows so as to protect the interest of every party: 1) Icon and/or Groups contribute their proportion of funds and are issued with the corresponding shareholding of Tiltform Australia. 2) Once Shareholdings are issued to the groups in Tiltform Australia, Tiltform Australia then acquires 100% of the shareholdings in Tiltform Concrete Form Systems (WA) Pty Ltd. 3) An Agreement in Principle is entered into between all parties confirming that Shares are issued by Tiltform Australia Pty Ltd only on the agreement that it shall proceed with the purchase of 100% of Tiltform (WA) shares for $100.00 and payment to Mr Barone of $225,000 as payment in full for his loan to Tiltform (WA). 4) The allotment of shares in Tiltform Australia and purchase of shares in Tiltform (WA) shall be settled simultaneously during the same settlement. We trust that the following is in line with our discussions and verbal acknowledgements of the proposal. Accordingly we would appreciate your response to the proposal at the earliest time possible so as to enable preparations for the transaction to proceed." 96 It is the applicants' case that, absent evidence to the contrary, it should be inferred that the document is the creature of Bell and Sladojevic. Bell and Sladojevic deny any involvement in its preparation. 97 There are in evidence two facsimile communications from the solicitor, Richard Solomon, to Bell, one of 26 June 2000 (which was received in Ilic's office by Bell and Sladojevic although Sladojevic said he did not read it); the other, of 27 June but which refers to discussions, etc. of the previous day. The 26 June facsimile refers to a telephone discussion and instructions received earlier in the day. The advice it provides (which relates primarily to the alteration and/or preparation of documents and the transfer of shares) was given in light of "commercial discussions [which] are taking place for Tiltform Australia to purchase all or the majority of the shareholding of [Tiltform WA]". The facsimile contained the caution: "… your company should not directly involve itself in this transfer of shareholding or in the future issue of shares in Tiltform Australia Pty Ltd other than requiring any future transfer of shareholding/change of directors to be approved by your company." I would note in passing that in cross-examination Sladojevic recalled a 26 June telephone warning from Solomon that "[w]e were clearly told not to get involved". 98 More significant for present purposes is the 27 June 2000 facsimile. It began as follows: "We refer to our three page facsimile sent to your Adelaide office of yesterday afternoon(and faxed on to yourself) and to our subsequent telephone discussion and further instructions. (Emphasis added) We confirm the following, namely:- 1. In respect to Tiltform Concrete Form Systems (WA) Pty Ltd ("the WA company") it is proposed that this company sells all of its shareholding to Tiltform Australia Pty Ltd for $100,000, with settlement this coming Friday, 30 June 2000, Tiltform Australia Pty Ltd simultaneously with the sale would lend to the WA company (which will then be a fully-owned subsidiary of Tiltform Australia Pty Ltd) the sum of $225,000.00 so that the WA company can make payment to Joseph Barone of his loan account of $225,000.00. Apparently, there is a loan account of Peter Ilic with the WA company for a far lesser sum than the amount of $225,000.00, which loan account is to continue after settlement because Peter Ilic will be purchasing shareholding in Tiltform Australia Pty Ltd (again, simultaneously with settlement on 30 June 2000). … 4. We understand that Lee/Parker as one group and another group (you are not sure of the particulars) will each be injecting $500,000.00 into Tiltform Australia Pty Ltd simultaneously with settlement on 30 June 2000, for which each group will receive approximately 15% shareholding in Tiltform Australia Pty Ltd." (Emphasis added.) I note in passing that, save for the dates, this facsimile replicates information contained in the Tiltform proposal and it was information communicated by Bell to Richard Solomon. Given that Bell only arrived in Perth on the evening of 25 June (i.e. after the 24 June meeting where the deal was "done"), the most likely source of that information was Sladojevic. 99 Despite the evidence of Bell and Sladojevic to the contrary, I infer that Bell, at Sladojevic's direction, composed the Tiltform proposal at Ilic's office prior to the 26 June meeting. It is probably the case that inaccuracies in the proposal (e.g. that the Icon Group and Sarich might both invest - Sladojevic knew this would not occur because of mutual animosities) are attributable to Bell having the primary role in composing the document. As the 27 June facsimile from Richard Solomon indicated, Bell's instructions appear to have conceded he was not "sure of the particulars" relating to who was investing. I equally find that Benson was willing to, and did, adopt the proposal as Tiltform Australia's from when he became aware of it. Given his relationship with Sladojevic at the time and the known need for Sladojevic's approvals, I do not find his so acting to be remarkable. 100 The 26 June meeting. The evidence concerning this matter is both discordant and, in key respects, inconclusive. Virtually the only matter that is not controversial is that Murabito cooked a meal for those who attended. Indeed both Bell and Sladojevic sought in oral evidence to give the gathering the character of a get together for a meal. 101 As I have already found, this meeting was one agreed to at the 24 June meeting. Its purpose was to have Parker involved in discussing any proposed investment in Tiltform Australia. I reject Bell's insistence that the gathering at the Icon Group offices was not, and was not intended to be, a "formal meeting". Bell was not present at the 24 June meeting. His distinction between "formal" and "informal" meetings was neither convincing nor apt in the circumstances. 102 As to the persons who attended, I have already found that Benson left Perth on 25 June 2000. He did not attend this meeting. Parker arrived late to the meeting. His evidence was that he had "no idea" as to its purpose. The other attendees, Sladojevic and Bell apart, were Lee, Murabito, Palmiero and, although they played no significant role, Ilic and Jennings. 103 All of the witnesses, who attended and who gave evidence, with the exception of Bell, confirmed that the Tiltform Australia proposal document was available at the meeting. Lee's evidence is that Sladojevic presented them with it; Murabito could not remember how it came to be there; it was there when Parker arrived late; Sladojevic originally attributed its distribution to Benson (see below) but having recanted this as "reconstruction" (having heard Benson's evidence), he said he had no independent recollection of it being distributed; and Bell denied it was there, though he did give evidence of an envelope being there that he or Sladojevic was to take to Adelaide for Benson. Sladojevic disputed the envelope evidence. I would note as well that Sladojevic's counsel in final submissions suggested it would be a reasonable conclusion to find that the proposal may have been distributed by Ilic at Benson's request. Ilic was not called to give evidence in Sladojevic's case. 104 I find that the proposal document was available at the meeting and was discussed. I infer that it was brought to the meeting by Sladojevic or Bell (and if by the latter, at the former's direction). In saying this I find that it was prepared in Ilic's office and reproduced there. 105 In his affidavit evidence (which he later retracted in considerable measure as "reconstruction"), Sladojevic assigned Benson a central role in the meeting as the following indicates: "122.1Benson went though the proposal for investing into the 'national' licensee for the benefit of Parker who was not at the previous meeting. 122.2 Benson handed out copies of a document titled 'Tiltform Australia Pty Ltd - 25 June 2000 - Proposal for Acquisition of the West Australian Licence for the Tiltform Technology Via Acquisition of the Shareholding in Tiltform Concrete Form Systems (WA) Pty Ltd as Holder Of The Licence Rights To The Technology' … 122.3 Parker studied this document and discussed the proposal with the group. A discussion took place between Benson and Parker concerning the amount of money already invested in Tiltform Australia. 122.4 Benson said at this meeting words to the effect that he and his partner were investing $500,000, and that there was another investor in their group that was looking at investing $500,000. He added that if the Icon Group and Sarich each invested $500,000, there would be a total of $2 million invested. Neither Benson nor anyone else said that $2 million had already been raised." In the face of Benson's evidence, the retraction of the above was made. 106 Having been presented with a copy of the proposal, Parker's affidavit evidence of the meeting was, in part, as follows: "18. After I had reviewed the Tiltform Australia Proposal, I was comfortable with its terms and conditions, with one exception. The one thing of which I was unsure was the ability of TA, as national licensee, to fund the national operation … I needed to know how the national operation would overcome a cash flow problem, if it arose, because there was no historical data to proceed with. There was no equivalent document to that which I had received to assess the position of Tiltform WA as in 'GBP1'. 19. So, after I had reviewed the Tiltform Australia Proposal, I asked Bell in the course of the … Meeting if there had been sufficient equity capital raised by TA to fund its operations. I asked Bell this question because he was an accountant and I could rely upon what he said about the financial position. Bell replied with words to the effect of 'there is over $2 million already raised without your investment'. At exactly that point in time, Sladojevic interjected and said, words to the effect 'You blokes don't have to worry about money. We have already taken care of that and we've got plenty of people who want to invest', and he went on (at length) to say how 'stupid' we would be if we didn't take up the offer contained in the Tiltform Australia Proposal. Based upon what both Bell and Sladojevic had said, I considered that the raising of money and the honouring of commitments were not going to be a problem for Tiltform Australia. 19A. I also expressed the view at this meeting that I needed to know whether the return on our investment would be at least as good as our return if we limited ourselves to simply investing in the WA licence. Obviously the investors to whom I had spoken and had committed funds would need to be consulted if projections indicated a different result." 107 In oral evidence Parker indicated that he understood the proposal came from Benson as it had his name on it. He later prepared a facsimile to Benson (to be signed by Lee) to indicate interest in the proposal. He realised it was Benson's company they would be dealing with and in that facsimile he addressed his questions to him (see below). 108 Lee's evidence referred only to the $2 million representation attributed to Bell. The essence of it is captured in the following short passages of cross-examination by Sladojevic's then counsel (whose questions were premised on Benson's presence at the meeting): "I suggest that [Parker] raised the question of how much had been invested thus far in Tiltform Australia?---Yes. … Was there discussion, to your recollection, about how much had already been invested in Tiltform Australia?---Well, there was a question asked by Parker to which Bell replied that regardless of our investment there was already $2 million raised. You are quite clear in your mind about that?---Very clear. Did he say from whom?---No. … At the time of this meeting wasn't it your understanding that this document was a proposal from Benson on behalf of Tiltform Australia?---That was our understanding but it was a bit confusing, it was handed out by Sladojevic. Sladojevic didn't speak about the funding of Tiltform Australia at all at that meeting, did he?---I can't recall whether it was Sladojevic or Bell but it was definitely Bell who mentioned that $2 million had been raised even without our funds." 109 Murabito's affidavit evidence is that the meeting was held because they wanted Parker "to listen to what Rob and Geoff had to say … [Greg] asked Geoff how much money Tiltform Australia had raised. Geoff said that "$2 million has been raised" or "words very similar to that". In cross-examination he revealed little recall of the detail of the meeting. He did say Bell referred to "$2 million" which he differently described as "it was mentioned by Geoff Bell that $2 million was going to be raised"; "$2 million has been raised" and "Bell then said $2 million is being raised by others". 110 Sladojevic, as noted earlier, retracted his affidavit "$2 million" evidence quoted earlier. His evidence instead was of absence of recall, but also was a denial that $2 million was spoken of as moneys already invested in Tiltform Australia. Bell strenuously denied having made the representation attributed to him. This was consistent with his further denial that the meeting was a meeting as such. Bell gave general evidence in cross-examination relating to his views of capital raising by Tiltform Australia and of Benson. I note the following: "Weren't you having continuous discussions with Mr Benson on the topic of his getting investors?---No, nothing to do with Tiltform Licensing whatsoever at any stage. So do you deny that you had any discussions with Mr Benson on the topic of his getting investors?---Yes, I do. In fact, it was very much the opposite case. We could never find out from Benson what was going on. What were you trying to find out from Benson so far as what was going on?---Well, we naturally wanted to know what he was doing about raising capital. Well, that is what I am asking, Mr Bell. I am putting to you that you were continuously having discussions with Mr Benson on the topic of prospective investors - - -?---Not at all. There's a difference between being actively involved in promoting investors in Tiltform Australia and asking the principal of the company what they are doing about raising capital. … Do I understand that you were not having any doubts in June 2000 about them being able to get their money together?---Correct. I had no doubts about that. You had no doubts?---Because they had already brought in Ben Abraham. Nigel Benson was the last under way with his licences and his investment group and they had - the WA group had started to move forward with the change of ownership there with the new WA owners, and the two came together at the one time and so - - - So you had no concerns in June about sufficient capital being raised?---No." 111 My own views as to this meeting are as follows. I am satisfied that after reading the Tiltform Australia proposal, Parker did question Bell on the company's capital raising - the opening paragraphs of the proposal quoted above invited such questioning. In the context of that meeting and given that Tiltform Licensing both was the licensor of the company making the proposal and had to approve it, Bell was the appropriate person to whom to address such a question. I equally am satisfied that the sum of $2 million was referred to by Bell in ensuing discussion. I would observe in passing that, before his recant, even Sladojevic was prepared to acknowledge that reference was made to such a figure, though by Benson, not Bell. Consistently with my findings as to Bell's role in the preparation of the proposal, I do not accept Bell's evidence concerning the meeting. It was self serving and contrived. Bell, understandably, sought to minimise the significance that ought be given the meeting. Sladojevic's evidence, considered in the context of his recant, was unreliable. The actual substance of Bell's representation is less easily identified. Again given the context in which Parker asked the question, Bell's reference to $2 million probably expressly excluded the potential WA investment. Such is Lee's evidence. On the question whether the $2 million had already been raised, as distinct from was going to be, or would be raised, Murabito's evidence is equivocal. Parker and Lee are definite. The most that can be derived from Murabito's evidence is that Bell made some reassuring comment about the raising of (actual or prospective) $2 million. While Parker is definite that Bell said the money had been raised, I entertain some concern as to whether this in fact occurred and that, rather, it was something which Parker and for that matter Lee subsequently came to believe was said. Nonetheless, despite my misgivings, I accept that a representation such as Parker alleged was made and was false - I do not say knowingly false - at the time it was made, although I am satisfied that Bell had no reasonable grounds for making the representation. 112 I am less certain as to the significance it had in its setting, as I will later indicate, given Parker's subsequent inquiries concerning Tiltform Australia's equity capital. I equally accept that the representation was a quite unusual one for Bell to make in the business setting in which it was made. I am, though, satisfied that all concerned were at this time infused with enthusiasm for the technology and the potential it offered and were optimistic about capital raising prospects. 113 I equally am satisfied that at that meeting Sladojevic made reassuring comments concerning Tiltform Australia's position and the proposed investment, and he adverted to the interest being shown by others in investing. What he said was probably to the effect of the evidence given by Parker in his affidavit and, to the extent that it was taken as confirmation of what Bell had represented, it was false and Sladojevic had no reasonable grounds for providing that information. I should observe that the representations attributed to Sladojevic save for the 7 August letter, did not loom large in the evidence or in submissions. As I will later indicate they are of little consequence in this proceeding. 114 In making the above finding concerning Sladojevic - and for that matter the earlier finding concerning Bell - I am rejecting the evidence of both of them, not only in relation to the alleged representations, but also in relation to their professed lack of any knowledge (which I do not accept for reasons which will become apparent) of the financial circumstances of Tiltform Australia, of its fund raising activities and of those making exertions for its benefit. 115 Notwithstanding my findings, as I will indicate below, I do not consider that these representations were of any lasting significance, if they were of any significance at all.

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(i) The follow-up to the proposal 117 The 26 June meeting produced immediate responses. Parker, apparently on the same night, authored two documents for signature by others. The first was in the form of a letter to Benson. It referred to the "Proposal dated 25 June 2000" and it indicated that the signatories were "extremely interestedin pursuing further discussions to progress taking us towards the result envisaged by such Proposal". The designated signatories were Murabito "on behalf of The Icon Group", Ilic "on behalf of himself and Tiltform [WA]" and Jennings "on behalf of himself". The document in evidence was signed only by Murabito and Ilic. It was put to Benson that the original was faxed to him. He had no memory of receiving it. 118 The second and more significant "Parker document" was a letter signed by Lee on behalf of Icon and faxed to Benson on or about the date it bore of 27 June. As will be noted below, Benson later supplied some of the information sought in this letter. The letter reiterated what was said in the first Parker document; it asked for clarification of "several issues"; and sought Benson's "assistance in providing the relevant information". The first of these related to "Financial Forecast". After referring to the projections Parker had made for the Tiltform WA proposal, it asked whether Benson was able to provide similar, detailed projections "which expand on the numbers you have used when referring to projected turnover and financing requirements so that we may relate the return on investment from Tiltform Australia to that envisaged from our investment in Tiltform WA". The second related to "Shareholding". It noted that what would be taken was a "minority shareholding". And it asked to be provided with a copy of the company's Constitution, any Shareholders' Agreement and details of the differences, if any, between classes of shares. It went on to deal, thirdly, with "Board Representation", fourthly, with the management of the WA operation and, finally, with settlement. 119 Benson replied by email on 6 July. He indicated that they were re-evaluating their forecasts; discussions with "a very high profile ex federal minister have resulted in him unofficially joining the group as chairman"; and he added: "I don't need to tell you how this profile will add credibility to Tiltform Australia along with instantly raising the value of the company". Lee phoned Benson in relation to the email. The notes made on the email of that conversation included: "concerned about manufacturing capacity"; "reiterated we are 100% roring (sic) to go"; and "new figures here on Monday". 120 Benson in turn by email sought to explore whether Lee was prepared to offer a $150,000 refundable deposit "to enable both parties to further cement relations". Lee ignored this. On 10 July Benson sent a facsimile to Lee providing "details as per your request". The company's constitution was provided. It was noted that "shareholders rights have been explored … for a view to the future and possible overseas investment and expansion into Asia". It also indicated that "P & L - Cashflow etc still not correct". Benson expected to send them the following day. They were provided on 12 July: see the 12 July BDO projections below. 121 On 11 July Benson sent a letter to Lee in which, in response to the 27 June letter, he said there was no shareholders' agreement and the shares were all to be ordinary shares. As to board representation, he commented that he intended to have a maximum of seven members and indicated: "Your group can hold two positions on the board until such time as the other shareholder positions are filled. The reason for this is as explained previously, and that is the anticipated move into the Asian region will involve our joint venture partner becoming involved in the Australian holding company prior to our joint venture expansion into Asia." 122 Finally he noted that: "Negotiation with another two investors are nearing completion and I am hopeful that they will commit once our new prospectus document is completed. (expected by Friday this week)" 123 Parker's oral evidence was that Benson's response to the 27 June letter was unsatisfactory. I consider this to be a judgment subsequently made. He did not, though, have any telephone discussions with Benson prior to receiving the 12 July projections.

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(ii) John Dawkins 124 While there is some uncertainty in the evidence as to when, how and by whom the first contacts were made with Dawkins, it seems clear that he met and had discussions with Sladojevic and Bell at the beginning of July 2000; he was asked whether he would be interested in being the independent chairman of Tiltform Australia; there was also discussion with them about whether he could introduce them to people who might be interested in putting equity capital into the business. Dawkins later met Benson. On 7 July, Benson sent him an email seeking that he accept the position of chairman. Dawkins replied on 19 July indicating that "[s]ubject to my being satisfied with your capital structure, I would be happy to be involved as you propose". 125 In oral evidence Dawkins indicated that the capital structure of Tiltform Australia was "always the problem". Both he and Sladojevic agreed that even with the contribution from the West Australians, there was a need to secure other financing, "either equity or debt". Dawkins observed that while he did not discuss with Benson how the equity capital position was advancing in the first months of his involvement, he did with Sladojevic. He said he did mention a couple of names to Bell and Sladojevic of people who might be approached for equity capital and he mentioned a Mr Krogan of Elderslie Finance which had a specialist lease financing business for debt capital. He was not involved directly in discussions with the persons named. As Dawkins said: "I made some suggestions. It was up to [Bell and Sladojevic] to carry forward those negotiations". I would note in passing that Elderslie Finance was a subsidiary of a company of which Dawkins was a director. 126 I will return to Dawkins below. There is, though, one matter which can conveniently be dealt with at this point although it is only tangentially related to Dawkins. On 5 July (i.e. after at least Bell and Sladojevic, but also probably Benson, had had discussions with Dawkins) a meeting was held which, according to Bell's handwritten notes, was attended by Bell, Simon Abraham (whose company BDO (SA) Pty Ltd was Tiltform Australia's accountant), Nigel Benson and a Ms O'Boyle. Bell had no independent recollection of the meeting. Abraham had no notes of it and, while not disputing that the meeting occurred, had no recollection of what was discussed there even after reading Bell's notes. While I am not prepared to speculate as to what precisely the notes conveyed - Bell's interpretation of them was not reliable and was not pursued in cross-examination - the notes at least indicate discussions were had about Tiltform Australia's capital, the composition of the board and of the expectations someone present had of Dawkins as a funds raiser. While the purpose of the meeting is unclear, what I consider it does at least reveal is that at the time it occurred Bell was participating in a discussion about the internal management and affairs of Tiltform Australia.

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(iii) The 12 July BDO projections 127 The first version of the projections for Tiltform Australia that Benson had been foreshadowing to Lee was provided on 12 July 2000 ("the 12 July BDO projections"). They took the form of profit and loss, cash flow and balance sheet forecasts for 2000-2001, 2001-2002 and 2002-2003 financial years. The monthly forecast for July and August 2000 in the Cash Flow Forecast made provision for "capital inflows" of $475,000 and $500,000 respectively and for none thereafter in that financial year. Parker interpreted the $500,000 as being that of his WA investors. The entry for loan capital was limited to $390,000 in July 2000, this figure representing vendor financing by Tiltform Licensing. The Cash Flow Forecast revealed a sharply declining bank balance from August 2000 until February 2001 beginning with $241,515 and ending with $15,901 (December) and $17,601 (January). The Balance Sheet Forecast identified that $310,000 had been raised as share capital prior to 30 June 2000. 128 In his affidavit Parker indicated that in his review of the 12 July projections he became alarmed that the projected capital inflow did not reflect the equity capital of $2 million "that Bell and Sladojevic had categorically stated had already been raised". In consequence, Tiltform Australia's closing cash at bank was extremely "thin" up until January 2001. He identified what he described as a "black hole" during the first seven months of trading where it was obvious that additional funds would be required to pay the outgoings of the rapidly expanding business. That "hole" he considered would have been filled by the injection of an additional $500,000 of equity capital. 129 After discussing the projections with Lee that day, Parker prepared a letter to Benson for Lee to sign. That letter indicated that the Tiltform Australia proposal continued to represent "a very viable alternative to the agreements we were in the process of finalising". It went on, insofar as presently relevant: "A review of the documents you have sent over has identified several areas which we feel need some attention - not from the point of view of our group making its investment in Tiltform Australia Pty Ltd - but more so being of the nature of strategic planning issues. The areas we wish to work with you on are as follows:

WORKING CAPITAL The programmed roll-out of each State and Territory is not able to be gleaned from the financial forecasts provided, however we have observed that the working capital available during the first six months or so is very thin … 2. OVERHEADS … 3. LEASE FACILITY We would like to find out about the terms and conditions relative to the leasing facility you have put in place e.g. total funding limit approved, security, guarantees, indicative rates and any specific lending criteria imposed in the deal. 4. VENDOR FINANCE … 5. SHARE CAPITAL We would like to make sure that the $475,000 is a guaranteed cash inflow, and there are issues relating the 'prospectus' and the joint venture partner you referred to in your fax dated 11 July 2000 that require clarification. We share in your belief that Tiltform Australia Pty Ltd has the potential to achieve the projected results, and we believe that with our commitment to working with you and other members of the management team these results will be achieved. Rather than embark upon a fresh series of telephone calls, faxes and emails we feel that the above issues are more expediently dealt with by meeting with you (probably in the next few days) to ensure that our involvement proceeds within the timeline set out in your projections." 130 Notwithstanding that the Bell "$2 million statement" was not reflected in the projections, Parker acknowledged he did not make explicit reference to this in the letter. Neither did he seek to contact Bell about the projections or, for that matter, Sladojevic. As he said in cross-examination: "---I was dealing with Tiltform Australia. And it was your understanding, at that time, that Tiltform Australia was Benson's company; yes?---It was Benson's proposal. Benson's company, Benson's proposal - - - ?---Yes and it was Benson's company. And it was up to him to arrange the investors?---Yes, it was. And that always remained your understanding from that time on, didn't it?---After having read what Sladojevic said and Bell said on the 26th, what I was looking for was that funding had been confirmed. I was looking for it from Benson and I wasn't getting the answers". (Emphasis added.) 131 Lee then made arrangements with Benson to travel to Adelaide with Parker for a meeting on 17 July. He said in his affidavit that the meeting was to be with Sladojevic and Bell. Parker said it was with Benson. Lee accepted in cross-examination that in the various telephone discussions he had with Benson prior to 17 June, he did not mention the equity capital that Bell was alleged to have spoken about. He said this was a financial matter; "[Parker] was looking after all financial issues". I would interpolate this was a constant refrain in Lee's oral evidence. 132 Parker and Benson arrived in Adelaide on 16 July. They dined with Benson and his wife that evening. This was the first occasion on which Parker and Benson had met. 133 Despite Lee's view as to the purpose of the meeting, it is clear that it was intended to be only with Benson. This said, both Bell and Sladojevic (though he arrived late) attended it. It is unnecessary to attempt to unravel what their respective particular reasons may have been for being there. I would merely say I do not accept that they attended for reasons of courtesy and to welcome visitors.

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THE 17 JULY MEETING 137 On the trip from Perth, Parker and Lee prepared on a laptop what Parker described as "an agenda, a script that we could follow and make sure that we covered all the issues that remained to be answered". Printouts of it were produced in Bell's office. The agenda included the following: "WORKING CAPITAL · Stock on hand - investment into inventory not provided for in cashflow · Capital to be injected by JV Partners not reflected in cashflows · Original proposal put finance requirements over 3 years at $5.3M. If we take out the costs associated with acquiring the formwork (now leased), we still end up with a cashflow problem within the first six months. · View proposed roll-out schedule for each State and associated costs - including appointment of mamagement (sic) and staff · Projections show initial formwork investment = $60,000 we understand current WA formwork expenditure to be in the vicinity of $160,000. · Confirm $310K is from Nigel/Dr Abraham · 415K (sic) in bank after 6 months" It is Parker's evidence that the final reference to "415K" was a typographical error and should have read "$15K". 138 There were separate headings, for example, for "overheads", "lease facility", "share capital", etc. The agenda did not make any express reference to whether the $2 million said to have been raised at the 26 June meeting "had been confirmed". 139 Parker's account of the meeting had Sladojevic present from the beginning. He recalled working down the agenda. The second and third dot points were effectively discussed together. The amount of $475,000 shown in the BDO projections was identified by Benson as being provided by Chehade. Beside the second dot point on his own copy of the agenda Parker wrote the figure "$500" which he understood was to be injected by the joint venture partners in addition to the sums allowed for in the projections. He also wrote three "sub-licences", being a reference to the sale of sub-licences which would provide further income. His evidence is that after the Chehade money was identified he asked Bell about capital raising. His affidavit account of this is as follows: "I specifically asked Bell whether TA's capital raising would compensate for the deficiencies in working capital (the "black hole"). He once again categorically stated that $2 million had already been raised from other investors and joint venturers. When I inquired about the 'joint venturers', he referred to the contacts that Dr Ben Abraham had in Malaysia. Dr Abraham was Benson's founding 'partner' in Tiltform Australia, and Dr Abraham and Benson wanted to ensure that they were front-runners in acquiring the licence for Malaysia. Sladojevic interjected and said words to the effect that capital raising was not our concern and told Lee and me that if we were not happy with the 'big picture' of the Tiltform technology we should 'piss off back to Perth'. Sladojevic made these comments as he stood up and moved around the table. He said words to the effect that 'you blokes are going to get rich out of this' and that 'if you don't want to be in this business, we have several investors who will take your place'. He then drew a large circle on the whiteboard and wrote the letters 'BP' inside the circle. It was then that he said that 'what you can't see is the big picture'. He went on to say that Tiltform had developed a 'Foam Panel' which would increase the profitability of the business but which had not even been factored into the forecasts. He said that there were many other things which would produce cash flow and profit that had not been factored into the forecasts; so many in fact, that he said that 'you might as well throw the forecasts out the window'. Sladojevic then went on to say, with respect to the 'Foam Panel' that had been left out of the forecasts, that it would enable Tiltform to 'crack the residential construction market', which would have a major positive impact on profitability." 140 In his oral evidence, Parker gave a somewhat different account of the genesis of Bell's comment. It was that he asked Bell directly "about the $2,000,000 you said had been raised, that is not reflected [in the cash flow]". This same dichotomy between affidavit evidence and oral evidence is to be found in Lee's evidence. 141 Parker made no contemporary note referring to $2 million. I would also note in passing that he indicated that by the time of this meeting he was aware of and "very happy about" Dawkins' proposed involvement as chairman. 142 Lee accepted in oral evidence that Sladojevic was not there to begin with but was there for the second dot point discussion. Sladojevic's evidence was that, though the meeting was to begin at 9 am, he did not get there until after 11 am. Given what I have said above, it is unnecessary to recount Lee's evidence other than to add that it confirmed Parker's evidence as well in relation to Sladojevic's intervention. 143 In cross-examination Lee acknowledged that it was plain from the BDO projection that nothing like $2 million had been raised. The cross-examination went on: "I ask you to tell me why, notwithstanding what you claim to be Sladojevic's interruption, you didn't pursue the topic and say: well who are the other investors, how firm is it, who is putting in what and when? All of those issues that you referred to a few minutes ago?---Well, we were told that it was someone who knew someone from the Malaysian Royal Family and it was all a bit secretive but that's it and it was guaranteed and it was as good as in the bank and just not worry about it, let's focus on the picture. You don't say anything to the effect that it was guaranteed, that it was secretive, that you shouldn't worry about it. You don't say any of those things in paragraph 39 of your affidavit?---Well, we just took valid his word that it was guaranteed that it was going to be $2 million in it. Let's not worry too much about it now because we've got more important things to do. Not more important so far as you were concerned though?---Well, in the scheme of things it was very important. In the scheme of things the actual dollars raised was very important to you wasn't it?---Yes. You see you don't refer at all in your affidavit to Bell offering a guarantee or saying that the money was guaranteed. You go no further than saying - I am sorry, I better pause there. You agree that you don't refer to Bell saying that the money was guaranteed?---Well, from our point of view he was the accountant at Tiltform and he was professional and we took him at word and we were about to become business partners and there was this element of trust. An element of trust in relation to someone whom you had only met on I think one occasion before?---Possibly one, that would be the Perth occasion, yes. Yes, not that I am denigrating Mr Bell but about whose professional reputation you knew nothing, isn't that right?---That would be a fair assumption, yes. I am sorry, Mr Lee, I just want to pursue this just a bit more. In your affidavit in paragraph 39 you say: Bell stated that Tiltform had been speaking to investors with connections to the Malaysian Royal Family full stop. Do you see that?---Mm. You don't go on to say: we've got promises, or rather he said we've got promises we're going to get X dollars from that source, or anything like that do you?---Well, what I say is that he raised $2 million from other investors". (Emphasis added.) 144 To anticipate matters when Lee was cross-examined on a document authored by Sladojevic of 7 August 2000 on which Lee had written a note, he indicated his understanding of what the $2 million referred to by Bell comprehended: "Are you suggesting that at this time, you thought that any money to be put in by Chehade was not part of the $2 million that you claim Bell had referred to?---Correct. Are you suggesting also that any moneys put in by Benson and Ben Abraham were over and above the $2 million referred to, as you claim, by Bell?---Yes. In what you claim Bell said, you claim that he said: we have already raised $2 million?---That's what I heard him say. Why would that not include what Benson, Ben Abraham and Chehade were putting in?---We just believed it wasn't the case. Is there something that you claimed Bell said which indicated that?---I can't think specifically but it was definitely my understanding that it did not include those people who were already involved in Tiltform Australia". (Emphasis added.) 145 Benson's evidence has Bell at the meeting from the beginning, with Sladojevic arriving later. His evidence is that at the meeting where "funding in a broad sense" was being discussed Bell said words to the effect that $2 million in investment funds for Tiltform Australia had already been raised from investors other than the WA investors. He could recall little more of the meeting. He said that after the meeting in Parker's presence Lee asked him about whether Bell's statement was correct. He replied that he could not understand why Bell had said that because as far as he, Benson, was aware only $1 million aside from their proposed investment had been raised. Parker confirms this. Lee thought he asked Benson that question on another occasion. In his affidavit Lee ascribed Benson's observation on Bell's $2 million to a meeting he had with Parker and Benson on 4 September where Parker told Benson he was disappointed that Bell's $2 million investors had not yet paid their money. In his affidavit Parker said Benson confirmed his 17 July observation at the 4 September meeting. In cross-examination about this meeting Benson indicated that he was not the only person who knew how much had been raised and by whom. He referred to Bell and Sladojevic as instigators of some of the approaches made and he stated more generally: "Everything that we did in that office was done as a group". 146 I would interpolate that, in his affidavit, Parker dealt as follows with Benson's observation on Bell's $2 million: "At that time Benson's statement that as far as he knew only $1 million had been raised did not concern me. It appeared to me by that time that Sladojevic and Bell seemed to be in control of what was in fact happening and it may well have been, therefore, that Benson was not aware of what arrangements had in fact been made. My trust in Bell and the fact that he would not make a statement if it were not true was what I relied upon at the time albeit that as it turns out my trust was misplaced. In any event, from my point of view we had assurances about a further $500,000 in share capital which had filled the black hole which I had identified." When cross-examined on Benson's observation, he said: "It took me a little while to understand that Benson was basically a puppet and Benson, whilst he was a hell of a nice guy, he wasn't really in control of TA, he had been given the licence and he had been appointed a director, but Robert and Geoffrey both had to come to that meeting when Gavin and I came over - they couldn't leave him alone to talk to us - and when I started talking about financing to Benson and Bell, up jumps Robert and starts putting on a bit of a performance. But what you failed to say at this point in time in relation to the making of the investment, is that Mr Sladojevic confirmed unequivocally in the document yet to be discovered [i.e. the 7 August letter] that there were plenty of investors that were still going to be introduced to fund this thing". (Emphasis added.) 147 Bell's evidence is that he knew the meeting was not intended to be with Sladojevic and him. He met and welcomed Parker and Lee at Sladojevic's request because they were using the Greenhill Road offices for the meeting. He and later Sladojevic nonetheless participated in the meeting. Bell took notes. While he denies emphatically making the representations attributed to him by Parker, Lee and Benson, he has little, if any, recall of what was said at the meeting. The order of the notes he took suggests that Parker did not deal with dot points two and three (relating to capital and cash flow) at the commencement of the meeting. Of Bell's six entries in his notes the last two were "$475,000 coming in" and "$500,000 over and above the WA to come in". Bell in cross-examination agreed that at this time he had no understanding of who was investing what amount. The cross-examination then continued: "So at that time, apart from someone indicating that there was $475,000 coming in, and an additional $500,000 over and above the Icon investment, you didn't have an understanding of who was investing what amount?---No. At that time, you understood that there was just short of $1 million, being the total of the figures on this note, being invested in the short term, plus the Icon investment?---Yes. Had Mr Benson, either at that meeting or some time prior to that, informed you how much capital he was seeking to raise in total?---He had indicated that he had already raised $1 million worth of capital and that they were looking to raise up to 2 million capital. Did he say to you that that $2 million was to be inclusive of the proposed investment of $500,000 by Icon?---No, there was no discussion on that basis. So all he said was that they were looking to raise $2 million in total?---Yes. Without distinguishing between - - -?---Yes. Do you recall whether or not that figure being a total - a figure of $2 million that Benson was hoping to raise, do you recall whether that figure was mentioned at the meeting on 17 July?---No, it wasn't mentioned because it's not noted here. You are saying you don't recall it being mentioned?---That's correct. Mr Benson, in his evidence, said that Dr Abraham had approached some people aside from Icon and aside from Mr Chehade, to invest in Tiltform Australia. He referred to a person by the name of Stan Maka, M-a-k-a, and other contacts of Dr Abraham's in Malaysia. As at 17 July, were you aware of any of that going on?---No. Were you aware at any time from June through to September 2000, about any of that happening?---No." 148 Sladojevic's evidence in cross-examination differed from his affidavit which he now describes as being reconstructed from documents. For the most part his oral evidence simply denied the claims made by Parker and Lee as to what transpired or else disclaimed recollection of what was put to him. He did maintain that he did not ask Bell to be there; the first he knew of the meeting was when he arrived at his office on that day; he was invited into the meeting to say "hello"; and he was then told the Western Australians had finalised their deal with Benson. The meeting was a pleasant one with no animosities. He was there for about twenty minutes. 149 There is one additional matter to which reference should be made concerning the 17 July meeting. It relates to the lease facility of $8 million being sought from Elderslie Finance. Both Lee's (hence Parker's) letter to Benson of 12 July 2000 and Parker's agenda for the 17 July meeting referred to the "Lease Facility" as a subject for discussion. 150 Parker's evidence in cross-examination was at that meeting that Benson referred to the application for this facility. The cross-examination continued: "That was a matter of some importance insofar as it would, to some extent, assist the shortfall of cash flow, would it not?---Well, it was never contemplated that we would be going to external financiers to raise money, that is a debt facility, rather than using equity capital. … So it was a concern to you, was it, to hear that Tiltform Australia was proposing to seek, or may have in fact already sought, substantial lease finance for formwork from Elderslie?---You will see on page - - - Can you just answer that question?---Well, yes, it was. I was going to tell you that not only was that lease issue raised but also the question of who is going to guarantee the bank overdraft. At that meeting?---It was on the cheat sheet. …" Parker accepted that there was also discussion of a funding application to the National Australia Bank. Of these proposals he was asked: "You didn't object, or protest?---Well, of course I did, I have already said that. Who was going to provide the guarantees? Suffice to say that the proposal to raise $8,000,000 with this company in the way that it was, was ludicrous. I mean, I didn't know that meeting was taking place with Elderslie a few days beforehand but, quite honestly, whoever went to that meeting with an expectation of a new start company with this level of working capital in it at that stage was being very, very naďve." He went on to accept that, despite his concerns about the inquiries being made into lease finance, he continued investigating the proposed Tiltform Australia investment: "there was nothing that I could do to stop those inquiries for finance". 151 Lee's copy of the 17 July agenda with his own annotations on it was in evidence. Beside the heading "Lease Facility" he had noted "8 million 15% Elders" and "Greg - NAB - 8.5%". The following is part of his cross-examination on this document: "MR HOWARD: When you were talking about the lease facility neither you nor Parker objected to the concept of the formwork being leased, did you?---I don't believe so, no. Neither of you suggested at that time that there would be difficulties with directors' guarantees of leases?---I can't remember the directors' guarantees being discussed. In relation to this entry: NAB, that being a reference to the National Australia Bank, I assume?---Yes. What is the first word there?---Greg. To what does that refer?---In the course of discussions, $8 million from Elders at 15 per cent was discussed as being negotiated and Greg said he may know someone in NAB who he can speak to in relation to funding of 8.5 per cent instead of 15 per cent. Right, I see. So can I assume then that in the course of this meeting there was general acceptance of the proposal that formwork would be leased from one financier to another?---I can't recall exactly but anything to do with that financial decision would have been made by Greg. Right. He certainly didn't oppose that concept on that occasion?---I think he suggested he could probably get a better rate. Yes, but as a concept, leasing of formwork, he didn't object?---I don't believe so."

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Findings on the 17 July meeting 152 I am satisfied that Parker had his agenda at this meeting and sought to address it though probably not in the order of the items in it. I equally am satisfied that the subjects of capital raising, cash flows and the leasing facility were discussed and that Sladojevic arrived late but was present when the issue of capital was discussed (which Bell's sparse notes would suggest was later in the meeting). Though the Parker authorised letter of Lee to Benson of 12 July setting out the "areas" in need of attention was optimistic in tone (despite referring to the working capital available being ("very thin"), I am satisfied Parker had a concern about the 12 July BDO projections. This meeting was the opportunity to have that concern addressed. 153 As with the 26 June meeting I am satisfied that the figure of $2 million was mentioned in the context of capital raising and in the manner both he and Lee have sworn in their affidavits. I reject their inconsistent oral evidence that Parker put the $2 million representation directly to Bell. The explanation I accept more accords with the agenda for the meeting and Parker's concern as to the thinness of working capital. The oral evidence on this matter is unreliable and contrived. This figure seems to have been the amount which was perceived by Benson (see Bell's evidence) - and I infer Parker - as providing a satisfactory comfort zone for the proposed business. Despite his protestations to the contrary I again accept that it was Bell who referred to the $2 million. As I have indicated he was aware of Benson's $2 million aspiration; he had some real familiarity with the internal management and affairs of Tiltform Australia - he had attended several meetings in the first half of July with Benson and Tiltform Australia's accountant, Simon Abraham; he was involved via Dawkins with capital raising (be it equity or loan) and, as I find, contrary to Bell's evidence, but consistent with Benson's, information about Tiltform Australia was exchanged between Benson, Sladojevic and Bell at the Greenhill Road offices including about potential investors and investments. 154 While Parker's evidence is that the representation was that the $2 million "had already been raised from other investors and joint venturers", Lee's evidence retreated from this to the point that "it was guaranteed", "it was as good as in the bank". I would have to say that in this particular matter I prefer Lee's evidence to that of Parker. Parker's evidence is a replication of his 26 June evidence. Not only do I have some doubt whether his 17 July evidence on this matter reflects an accurate recall of what was said, I consider that Lee's more qualified version more probably reflects what Bell said. Bell, I am satisfied, was aware of Benson and Abraham's pursuit of investors. It may well be that when making his observation he was simply giving expression to a confident expectation as to the outcome of dealings with another investor or other investors. Be that as it may, I consider it more probable that Bell would, in the then circumstances, have made the more qualified representation Lee attributes to him. That representation, insofar as it purported to describe an existing state of affairs was false on the evidence before me. Insofar as it referred to a future matter, it had not been shown that Bell had reasonable grounds for making the representation. 155 Benson's evidence of his response to Lee after the 17 July meeting corroborates Parker's and Lee's evidence of the Bell statement. Notwithstanding the circumspection I consider needs to be shown to Benson's evidence generally, I have no bases for disbelieving it here. It has not been suggested that Parker, Lee and Benson acted collusively in advancing their evidence in relation to this particular matter. 156 Before concluding with this meeting I should indicate that I reject the evidence given by Parker that he objected to the application for an "$8 million" leasing facility. On this matter I again accept Lee's evidence that not only was no objection raised at the time, but that Parker raised approaching the National Australia Bank for just such a facility. The importance of this will become apparent below. 157 The other matter I wish again to emphasise are first, that no contemporary document (whether a note or otherwise) makes reference to $2 million dollars; and secondly, neither Parker or Lee at, or after, the 17 July meeting contacted Bell to ascertain the identity of the "guaranteed" investors. As I later indicate I am satisfied that Bell's representation was not considered by Parker to be significant at the time and was, in the event, inconsequential.

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The later BDO projections 158 Immediately following the 17 July meeting Parker, Lee and Benson went to the offices of Simon Abraham. As Parker indicated in his affidavit, the purposes of the meeting were to arrange for Abraham to produce revised projections and to address the issue of a proposed Shareholder Agreement. He described the first of these as follows: "30B. At the meeting at BDO Simon Abraham was instructed to introduce into the projections the additional working capital which had been discussed that morning. He was told to reflect introduced capital following 1 July 2000 as being $1.5 million subject to advice from Benson as to whether or not the remaining $25,000 would be coming from Chehadeand if so, the timing of the receipt of those funds." (Emphasis added.) This change, I would note in passing, would have added $500,000 to the "capital inflow" item in the 12 June BDO projection's "Cash Flow Forecast". 159 By 19 July 2000 Lee had prepared an "Action Plan" for Tiltform Australia which designated tasks, the person(s) responsible for each and review and completion dates. The completion date for all matters was 7 August 2000. I would note in passing Lee agreed in cross-examination that, while he and Benson had several discussions between 17 and 31 July on when the Icon investment would be made, "[t]here was no definite date". The Action Plan indicated that a "Business Plan" was urgently required for submission to Elderslie to support "our Leasing Application". It was prepared by Lee and Benson. Benson produced a draft which was provided to Lee on 21 July. 160 On 31 July Simon Abraham sent a revised set of projections ("the 31 July BDO projections") to Benson. These were copied to Parker. The "capital inflow" item in the Cash Flow Forecast now provided for $210,000 in July 2000 and $1,000,000 in August 2000. This represented only a $235,000 increase on the 12 July projections. There was not the $1,500,000 that was envisaged for capital in these months (subject to Benson confirming the amount of Chehade's investment). The "Closing Bank" for the months November 2000 to February 2001 compared with the 12 July projections had deteriorated as follows: November December January February 12 July 30 July 12 July 30 July 12 July 30 July 12 July 30 July 60,836 4,233 15,901 (103,467) 17,601 (66,853) 194,807 (10,536)

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THE 7 AUGUST LETTER AND THE INVESTMENT 165 It was, at the latest, in early August that Sladojevic discovered the alleged breach by a Pietrobon company of Tiltform's "patent". Photographs of 6 August which are said to evidence the breach were tendered. Benson's evidence is that he found out about the patent breach before the Western Australians made their investment. Indeed there is evidence that it was Benson who informed Sladojevic of rumoured breaches of the patent. Parker gave evidence that he was not so aware at that time. Bell who went to New Zealand on 5 August 2000 gave evidence of receiving a call on the evening of 8 August from Sladojevic who was "pretty agitated" and was told of the patent infringement. Sladojevic is said to have then had a long conversation with Benson who had gone to New Zealand on 7 August. 166 Though there is some uncertainty as to timing, Benson spoke to Sladojevic, probably on 7 August 2000, and informed him that the Western Australian investment would not be made on 9 August. He believed he told Sladojevic it would be made on 11 August 2000. He recalls Sladojevic expressing displeasure at this and Sladojevic told him he was going to send a hurry up letter to him to send to Western Australia. 167 Sladojevic in turn sent an email to Benson on the same day but denied as "untrue" that he asked Benson to pass it on both to Chehade and Parker and Lee. Sladojevic said his intention was to fire up Benson. 168 It is necessary to refer to the email in full. It contains four alleged misrepresentations relied upon in the Rawley proceeding. It was headed "URGENT NOTICE" and said, omitting formal parts: "Re: W.A. and N.Z. Licenses for the Tiltform Technology Further to our telephone conversations today we would like to put you on notice in relation to the above Licenses. You have stated today that you have received notification from your proposed West Australian Shareholders that they shall not have their funds available for settlement until Friday 11 August. This is not acceptable to us at all and we are not prepared to entertain any further delays. · The License Agreements for W.A. and N.Z. ARE TO BE SETTLED IN 48 HOURS, ie by 4.00 PM Wednesday 9 August 2000. We are not prepared to accept any further delays or extensions to this deadline. We have been more than fair and reasonable in the extensions of time given to you in order for the proposed W.A entity to get their affairs in order. We feel that the delays are totally unjustified and unwarranted. When we were in Perth the representatives of this proposed entity clearly intimated that their funds were quote "approved and in the bank' when it was a question of this entity taking over the majority shareholding in the W.A. License prior to the proposal for their involvement in the National Operation. If they are intimating now after all this time that they are still finalising the funds then I feel that they are probably not of the calibre required for the National Organisation. I accordingly feel that it might be a good time for you to resume negotiations with the other candidates, you will probably find that your chairman Mr John Dawkins would also agree following all the mucking around by the W.A. mob and Mr Chehade. I spoke to Mr Dawkins on two occasions today and on the second occasion he was asking about the finalisation of the deal with the W.A. syndicate and Mr Chehade. He apparently was not aware of the new delays thus I feel that you should notify him of same for I guarantee that he would not be impressed considering the offers that were let go from the other proposed investors. I an (sic) more than certain that Mr Dawkins could find replacement investors and settle with same within the specified deadline thus I highly recommend that you immediately consult with him first thing tomorrow morning upon your arrival in Auckland. · I also want a written response from you by close of business hours tomorrow as to your intent to proceed with the N.Z. License and settlement of same within 24 hours. If this is not received I shall be instructing Geoff to proceed with the sale of the License to our N.Z. candidate immediately whilst he is currently there. By the close of business hours tomorrow, if a satisfactory response is not received from you, we shall as stated declare the License open to other candidates and the amount of the up front License Fee shall be set at a minimum of $400,000.00 Australian which as you are fully aware is more in line with the actual N.Z. Market potential. · In line with the foregoing the same is set for W.A.. If we do not receive a favourable response by close of business hours (Adelaide Time) tomorrow I shall personally settle with Mr Barone so as to remove him from the business. · Based on your proposed settlement dates I have personally made promises to Mr Barone on these dates. You have accordingly made a liar out of me for which I am not impressed. If I am to settle with Mr Barone then I shall proceed with the sale of the W.A. License to others. As you are fully aware I have already been offered $250 K for this License by others which is $150 K more than what you are being charged There shall be no further notifications or negotiations in relation to these two Licenses. If the settlement deadlines I have set are not met within the time frame set than I shall proceed with the course of action detailed in the foregoing. Accordingly I strongly urge you to immediately get in contact with Mr John Dawkins as well as both the proposed W.A. Shareholding group and Mr Chehade." 169 The four misrepresentations alleged to have been made in this letter are (as pleaded): "20.1 Unless the Applicants were to commit to the Tiltform Australia Proposal within 48 hours, the investment opportunity set out in the Tiltform Australia Proposal would be lost (Fourth Misrepresentation); and 20.2 Tiltform Licensing had previously been offered the sum of $250,000.00 for the WA Licence (Fifth Misrepresentation); and 20.3 That funds were required within 48 hours, failing which negotiations would be resumed with other candidates who wished to invest moneys in Tiltform Australia ('Sixth Misrepresentation'); and 20.4 Sladojevic had spoken twice with the Chairman of Tiltform Australia, Mr John Dawkins ('Dawkins'), that day, in consequence of which Sladojevic was more than certain that Dawkins could find replacement investors who would be able to settle before the specified deadline ('Seventh Misrepresentation')." 170 In written submissions two further instances of misleading or deceptive statement are relied upon. These are: (i) the threat to sell the New Zealand licence at a higher price; and (ii) the threat to settle with Barone personally and to sell the WA licence to someone else. The former of these was later abandoned. The latter was the subject of cross-examination and I am prepared to entertain it as in issue in the context of this letter. 171 On the evening of 7 August 2000 Benson sent the above email to Lee with a covering note which stated: "The latest change in the settlement date has now created a huge problem for the overall future of Tiltform Australia. This is unacceptable. Based on your indication that the monies were to be forwarded on the 7th August and promises were made to others including Robert for the settlement of the Western Australian outstanding amounts based on you deposit. Calls by myself for you to place a deposit were also wavered due to you (sic) preference to deposit the full amount. Much time has now passed with no monies changing hands. As these promises were made I had to inform Robert that the amounts were not due for another week. The response to this is as attached. I am not amused when I have spent several hours enticing Mr Dawkins to come aboard and now find myself in a position where he has spent some time today with our layers (sic) sorting out share details based on everyone's commitment, now looking at the prospect of breaking the news to him along with the attached letter. As you can appreciate what is stated in this letter is of grave concern to me also. Much time has been spent on this project by myself and others and I will not sacrifice that for you or anyone else. Advise me of your response in the morning. I will have my phone on whilst in Sydney so I suggest you call. If I don't here from you asap you will leave me no alternative than to go elsewhere at the end of the day." 172 Benson said in cross-examination he did not know whether or not Sladojevic was actually threatening to cancel the licences. He also indicated that he had been told by the WA investors, but he could not recall by whom, that settlement would take place on 7 August and he told Sladojevic this. In his affidavit he stated that the investors - he could not recall whom when crosss-examined - later told him their moneys would not be available until 11 August. He told Sladojevic this and was then told by Sladojevic that he would send Benson the letter to be forwarded to the WA investors and Chehade with a view to putting pressure on them to get their moneys. 173 I would interpolate at this point that I am satisfied that the Sladojevic letter was yet another of those communications from him that have been referred to in this proceeding as a "strategy letter". It was intended to be sent to Parker and Chehade. It was designed to secure an advantage. And it was designedly misleading to that end. 174 I do not accept Sladojevic's evidence that he did not intend Benson to forward the 7 August letter to Parker and Chehade. While I consider all of Benson's evidence should be approached with caution, I do accept it on this matter. The purpose of the letter was transparent. It was directed at the West Australians and, unstatedly, at Chehade. Benson was the messenger. 175 Sladojevic's evidence on the genesis of, and reason for, the letter had various strands to it. These were that Barone and Ilic had been phoning him regularly from July asking when the matter was going to be settled; the date for payment of the WA licence was 1 July 2000; he was not (in July) aware of the shareholding structure of Tiltform Australia; he had lost faith in Tiltform Australia's ability to settle the deals; Benson in July did not have definite information on the date of settlement; in late July Benson told him settlement would be on 9 August 2000; he then promised Barone (who was to be paid out $225,000) that it would be settled on the 9th; after Benson's 7 August communication of further delay until 11 August he was very upset and frustrated; Tiltform Australia had yet to pay the agreed licence fees for some number of the licences; he did not want his relationship with Barone, or his trust in him, to be jeopardised by the money not being paid as promised (Barone did not give evidence) - hence the letter. He wrote it "to let off steam". 176 It is his evidence that Dawkins called him on two occasions on 7 August as he (Dawkins) could not get hold of Benson. He enquired as to how the Icon Group and Chehade investments were going. Dawkins accepted that he spoke to Sladojevic about that subject but could not confirm on what date and whether it was by telephone. He could not deny Sladojevic's evidence on the matter. Sladojevic admitted that on 7 August he did not have a genuine belief that Dawkins, if necessary, could come up with replacement investors. As he said: "I was more or less letting off steam". 177 Dawkins further indicated that he did not express concerns to Sladojevic as to the speed of completion of the Western Australian participation. It was the case, though, that until those negotiations were concluded, the proposed form of Tiltform Australia could not materialise and that was "a kind of precondition almost to my involvement". 178 He went on to say he did not "let go any investors": he had nothing to do with the negotiation in Western Australia. He was trying to help Sladojevic and Bell develop a capital base whether or not Western Australia was in or not. 179 In his affidavit Parker made the following reference to the letter: "Sladojevic referred to two conversations with Mr John Dawkins ('Dawkins'), Chairman-elect of Tiltform Australia Pty Ltd, who, Sladojevic said, 'would not be impressed considering the offers that were let go from the other proposed investors'. I had no doubt whatsoever that Sladojevic was referring to the other equity participants that Bell and Sladojevic had referred to during the conversations we had had [on 26 June and 17 July 2000]." (Emphasis added.) He tried without success to contact Bell in New Zealand on his mobile phone and at his hotel. He left messages for Bell to call him: "The purpose of my attempts to ring Bell was to ask him whether Sladojevic was really serious in carrying out his threat and secondly to confirm again that there were in fact other investors lined up as had been indicated in the letter." Consistent with this, Parker in his oral evidence sought to interpret Sladojevic's letter as saying there were already other investors lined up. Nonetheless in cross-examination he agreed to the following: "You had not a skerrick of evidence to suggest that others were going to make a capital injection?---Well, from this [7 August] letter, I did have evidence from Mr Sladojevic himself. Mr Sladojevic, I suggest in this letter is suggesting that replacement investors could be found in lieu of you, of your agreement, in fact suggesting that Mr Dawkins could find a replacement investor?---You could say that, yes." He also was unaware of any date for settlement having been specified by Lee. He equally considered Sladojevic was quite likely to terminate the approval for Tiltform Australia to acquire the WA licence, "[h]aving seen Mr Sladojevic in action previously". He was then asked: "That is what prompted you to make the injection of funds, wasn't it?---No, it wasn't. The reference that you made to Mr Dawkins, you said that you are reading it as if Mr Dawkins could find replacement investors to take out the Western Australian investment, or the Icon investment. I read that having raised this issue before of the $2,000,000 that is how I read that, not replace Icon."

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There is no evidence that Parker contacted Benson in relation to the 7 August letter. Lee's evidence is that he (Lee) did not despite Benson's request in his covering email, although he said "he would have had discussions with [Parker] and I'm sure [Parker] contacted him". Lee did not have any discussions with Benson before the WA investment was made. He assumed Parker had, although he could not recall Parker suggesting he had. 180 A copy of the 7 August letter with annotations in Lee's handwriting is in evidence. Lee said he made these the day he received the facsimile. Following the early reference to "further delays" is the note "we are waiting for further info from Nigel"; a latter annotation said: "we have been waiting info. ź $ in bank from others ź WA/SA details." On the second page were the notations: "we are a minnow in this deal ź 15% ź 85%." This was followed by "do you know how much money is in the bank"; "is the leasing arrangement in place" and "with all due respect we have been waiting for the answers before investing 500K". I would note that the notation "$ in bank from others" was, Lee accepted a reference to "other known investors" i.e. Chehade. 181 Lee's evidence is that the further information referred to in the first annotation related to that which they were putting in the business plan. When he was asked whether they were not prepared to proceed without that further information he said: "Well, we needed further clarification on some issues". When asked whether they got that clarification at any time from Benson he said no. The only clarification he said they got referred back to the Bell promises that the $2 million "was as good as in the bank". When asked whether Parker ever said to him he was satisfied the $2 million was in fact raised and in Tiltform Australia, he said: "I don't know whether those were the exact words but he was assured from the correspondence and discussions he had that they would be stupid not to put it in based on their previous assurances." Those discussions were the ones of 26 June and 17 July. This evidence reflected the reasons he gave in chief for the decision to invest - Bell's assurances and trust in Tiltform Licensing. In his cross-examination the following exchange occurred: "MR HOWARD: Now, Mr Lee, you were persuaded to make the investment on 10 and 11 August, were you not?---Yes. I suggest to you that the factors which caused you to make the investment were one, the prospect of making very substantial profits based on the projections which had been provided?---Partly, yes. Secondly, you thought that one way or another you would be able to overcome any cash flow difficulties at the end of calendar 2000?---Yes. Thirdly, you were confident that Tiltform Australia would, in fact, be able to enter into suitable leasing arrangements for the acquisition of formwork?---That was one of the reasons, yes. So notwithstanding your reservations, you put in the money?---With reservations." 182 In re-examination he reverted to the reasons he gave in evidence-in-chief: the "prime consideration" was Bell's $2 million and there was "an element of trust in what each party was telling each other". In his affidavit he said: "I agreed to commit the Trust's funds on the strength of Bell's statement that, aside from our funds, Tiltform Australia had raised a further $2 million in equity funding. But for that statement, I would not have agreed to invest the Trust's funds." 183 Murabito's evidence on the letter and the decision to invest needs to be seen in the context of his acknowledging that he did not know what to look for in projections and that he left financial issues to Parker and Lee. Nonetheless he did say at the meeting when the decision to invest was made Bell's $2 million statement was referred to by Parker. This reiterated what was said in his affidavit. His evidence in cross-examination about the investment itself is wholly unreliable.

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Findings on the 7 August letter 184 I have already indicated that I am satisfied that the letter was intended to be sent to Parker and Chehade; it was designed to secure an advantage; and it was designedly misleading to that end. I am satisfied that Benson expected from his dealings with Lee that settlement would occur on 7 August 2000 - his 7 August email to Lee suggests this as does the "Action Plan" he prepared with Lee - and he communicated this to Sladojevic. Benson's later understanding of a delay in settlement until 11 August was, I infer, a consequence of a communication to that effect made to him by Lee on or before 7 August. Benson's communication of this delay to Sladojevic provided the opportunity for the strategy letter to be written. I consider the most probable explanation for the letter was that Sladojevic simply wanted to procure the early finalisation of the dealings relating to the WA licence and the WA investment in Tiltform Australia. I do not consider that Sladojevic acted as he did because he wished the WA investment to be made before the WA investors learned of the Pietrobon "patent" breaches. 185 As to the contents of the letter itself, I am satisfied it was, and was intended to be, misleading and that it contained representations which were either false at the time of their making or for which Sladojevic had no reasonable grounds for their being made. I find that the 48 hour cancellation threat (the Fourth Misrepresentation) was designed to exert pressure on the WA Investors to settle but was itself a bluff. Given there were not other significant investors in the wings, I consider it improbable that Sladojevic had any intention at the time of the letter of taking the course foreshadowed. I equally am satisfied that the "other candidates" representation (the Sixth Misrepresentation) was designed to suggest the existence of a state of affairs, i.e. negotiations could be resumed with "the other candidates", when that state of affairs did not exist and Sladojevic had no reasonable basis for believing that it did. It was a "leverage" misrepresentation, as was that relating to Dawkins finding replacement investors (the Seventh Misrepresentation). Sladojevic conceded he had no genuine belief concerning what Dawkins could accomplish when he wrote the letter. I am not satisfied on the evidence that the representation relating to an offer of "$250K" for the WA licence has been proved to be a misrepresentation. Even on their written submissions the applicants acknowledge that Sarich may have been a candidate to invest $250,000. Finally, the unpleaded representation that Sladojevic would settle personally with Barone and sell the WA licence to someone else was, in my view, simply a rhetorical flourish. Despite Sladojevic's unconvincing attempts in evidence to suggest both personal generosity and to stress the importance he attributed to personal relations and commitments, I consider this representation in the context of this letter to have been made again solely for leverage purposes. 186 I find that Parker did attempt to contact Bell after he received the letter and that his purpose was to ascertain whether Sladojevic was serious in making the threat he did. I do not accept that he also wished Bell to confirm that there were other investors already lined up. Parker's evidence on what he took from the letter about other investors - be they investors allegedly "let go", replacement investors Dawkins could find or "other candidates" with whom Benson could resume negotiations - was quite unconvincing and suggestive of self-serving reinterpretations of what was said in the letter. This is particularly evident in the affidavit evidence referred to above and in the interpretation he put on the letter in cross-examination - see an example of this in his oral evidence quoted above - an interpretation he conceded might be incorrect. I should emphasise I do not accept his evidence which he reiterated on some number of occasions that, at the time he received the letter he considered it conveyed (which it clearly does not) that "the $2 million" had been raised by Bell and Sladojevic from others. I do, though, accept his evidence also quoted above that Sladojevic's threat did not prompt him to make the injection of funds he did on 9 August. I will refer to that matter below. 187 Despite the notations he made on his copy of the 7 August letter (which were not alarmist in tone), I am satisfied from his conduct at the time that the letter was not a cause of particular concern to Lee. He did not respond to Benson's request. He seemingly left discussions with Benson to Parker, although his evidence on this may well reflect his obvious attempts to distance himself from responsibility for financial decisions - a responsibility he assigned to Parker. Lee did not say he shared Parker's allegedly mistaken interpretation of the letter. And he had already indicated to Benson prior to the letter that the investment was to be made on the day on which it was made. 188 I am equally satisfied that the letter did not have the significance to Parker at the time that has been sought to be attributed to it in this proceeding. I consider it likely that, after some initial concern about the letter (hence the attempt to contact Bell - though, seemingly, not Benson), its true character and purpose were perceived. As the WA investors had already determined to make the investment the only outstanding matter being the date of lodging the moneys in Tiltform Australia's bank account they commenced doing so on 9 August and disregarded the letter.

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After the investment 189 Events subsequent to the investment, insofar as they are relevant, can be recounted shortly. On or about 14 August, Lee moved to Adelaide and assumed the position of General Manager at Tiltform Australia. He then undertook the preparation of additional financial projections and became aware the $2 million had not come in. He did not ask Bell or Sladojevic about it. 190 On 24 August Elderlie Finance declined the proposed leasing facility though it did offer to provide assistance in securing venture capital. This offer was not taken up. By the end of August a New Zealand branch had been opened. Premises, vehicles and formwork were acquired in Sydney and in Victoria though Tiltform Australia was short of funds to acquire formwork. 191 It is Parker and Lee's evidence that at a meeting on 4 September with Benson, Parker indicated he was disappointed that Bell's $2 million investors had not paid their money to Tiltform Australia. Benson is said by them to have confirmed that he heard Bell make the statement at an earlier meeting about $2 million already being raised, but had no idea why Bell said that. Benson did not give evidence on this matter. 192 From at least this time onwards attempts were made on a number of fronts to raise capital and to secure equipment financing. By mid-September Tiltform Licensing had proposed to invest $500,000 in Tiltform Australia for a 15 per cent share and to provide a draw down facility of $2.5 million for equipment purchases and the establishment costs of proposed rollout. An agreement to this effect was signed on 20 September 2000. 193 Personal relations between Sladojevic and Parker and Lee continued to deteriorate. As Dawkins put it "there were certainly strong views held on both sides" and personal criticisms were being made. At a meeting on 25 September 2000, at a meeting of Benson, Parker, Lee, Sladojevic and Bell, the above offer from Tiltform Licensing was withdrawn after an acrimonious altercation between Sladojevic and Parker. After Sladojevic had made accusations concerning the conduct of "the Western Australian operation", it is said by Lee and Parker, that Parker responded by reminding him of his and Bell's conduct that "was less than honest". Parker, it is said, then referred to Bell's $2 million having been raised and Sladojevic's August 7 ultimatum. 194 From this time personal relations broke down. The WA investors sought to sell their shares. The Tiltform group continued to loan finance to Tiltform Australia and continuing though unsuccessful efforts were made to raise capital. Tiltform Australia's liquidity problems prevented it from stocking adequate levels of hire equipment and from being profitable with positive cash flows. 195 An attempt in March 2001 was made through a Memorandum of Understanding to find a way for Tiltform Licensing and Tiltform Australia to work together, but failed again in circumstances of considerable acrimony. 196 External administrators were appointed by the directors of Tiltform Australia on 6 April 2001. 197 Finally, I would note that at no stage did Parker or Lee agree to, or sign, guarantees of Tiltform Australia's debts.

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OTHER MISLEADING CONDUCT 198 Apart from the claims of misrepresentation considered above, complaint is also made of conduct said to be deceptive by reason of the non-disclosure of certain matters. Many of these complaints arose out of documentation associated with Sladojevic's strategy documents related to his dealings with Vinet. These particular complaints are no longer pressed. Nonetheless three remain. 199 These are, first, that Bell failed to disclose he acquired a shareholding in Tiltform Licensing in exchange for extinction of a debt due to him for professional fees; secondly, that Bell and/or Sladojevic failed to disclose that, in or about June 2000, Pietrobon's company, Tiltwall Services, whose hiring of the formwork had accounted for 60 per cent of the income for hiring in South Australia, had ceased hiring the formwork; and, thirdly, they did not disclose that in July that they had become aware that the reason Tiltwall Services had ceased hiring the formwork was that it, or someone associated with it, had developed its own alternative system of formwork. The pleading of each of these matters seems to have been prompted by Vinet strategy material. 200 I will deal with each of these matters briefly here - they are the subject of complaint in the promoter claim as well - though I would note that, in their misleading or deceptive conduct submissions, the applicants have not expressly addressed how and why these non-disclosures contravened s 995/s 52 though they nonetheless continue to press them. 201 By way of background to what I have to say I would observe the following. It is trite to say the question whether conduct in a given instance is of the s 52/s 995 proscribed character is to be determined having regard to all the relevant circumstances. Silence can render conduct misleading or deceptive if in all the circumstance the party complaining of the non-disclosure was reasonably entitled to expect that if the matters in question existed, had occurred, or were contemplated, they would be disclosed: see Hughes Aircraft Systems International v AirServices Australia (1977) 76 FCR 151 at 198-199 and the cases there discussed. 202 The seeming background relied upon to found a "duty to disclose" in this matter (at least for the purposes of the misleading or deceptive conduct claims) was Parker's claimed trust in Bell as a fellow accountant who was the accountant for Tiltform Licensing and whom he dealt with as such. 203 The evidence concerning Bell in this regard is slight. In Sladojevic's original letter to Murabito agreeing to the 2 June 2000 meeting Bell (who was to be in attendance) was described as "an integral part of our organisation and responsible for the strategic planning of our organisation". 204 It is Parker's evidence that the purpose of his trip to Adelaide on 2 June was "to have my projections affirmed by Mr Bell" and that he questioned Bell at that meeting "as the accountant for Tiltform Licensing". Sladojevic, according to Parker, introduced him as such at the meeting though he indicated he now worked out of Tiltform's offices "because he was heavily involved in Tiltform". In cross-examination for the second cross-respondent he denied that he considered Bell to be an "integral part of the Tiltform Licensing organisation". He never changed his view of Bell: "based on my own experience with participation with the businesses of my clients, I can be very heavily involved but I am still their accountant". He went on to say: "He did not come across to you, did he, as a detached professional adviser? Did he not come across to you as conducting himself in a manner consistent with that as an office holder of the Tiltform Group?---I can't say I ever gave that any consideration because my association with Mr Bell was always accountant to accountant. We spoke the same language. We had the same ethics. We basically belonged to the same organisations. I didn't reflect on Mr Bell being an officer of the company." 205 Parker did not know Bell prior to this meeting. There was no pre-existing relationship of trust between them. Parker only met Bell on two other occasions prior to the WA investors advancing their money. I have described the nature of those encounters. After the 7 August letter he unsuccessfully telephoned Bell for the purpose of ascertaining Sladojevic's intentions but Bell never replied to the messages left. 206 I would have to say on the basis of the evidence of the circumstances of Parker's dealings with Bell and of the functions Bell performed in them and especially of his appreciation that Bell was "heavily involved in Tiltform", I am unable to accept that his relationship with Bell could be a significant factor in founding a reasonable expectation that Bell would make the disclosures about which the complaint of non-disclosure is made. To the extent that Parker believed otherwise, i.e. that their relationship was one of trust, he was, in my view, guilty of self-deception in the circumstances. In the circumstances Bell was not - and could not reasonably be considered to be - acting as a detached professional adviser. The open plan of his firm's and Tiltform's offices was emblematic of his involvement in, and alignment with, the affairs of the Tiltform group. 207 To the extent then that a "duty to disclose" was nonetheless said to arise, this would seem to be because of the significance of the non-disclosed information given the nature and circumstances of the negotiations being engaged in. As to the information itself, that relating to loss of Tiltwall Services' business and with it allegedly of 60 per cent of Tiltform Australia's business was contained in a Vinet strategy document as Sladojevic explained in his affidavit: see para 38.45. Given its provenance I am not satisfied either that the information was other than misleading or that it should have been disclosed. It was misinformation at best. As to the information that Tiltwall Services, or someone associated with it, had developed an alternative system, this also was related in its emphasis to the Vinet strategy. The actual burden of the non-disclosed information has not been explained. To the extent that the reference to an "alternative system" is to be taken as suggesting that that system did not breach Tiltform's intellectual property rights, it simply reflects Vinet strategy misinformation on the evidence before me. If it is to be taken as suggesting that a breach of those rights had occurred (and this is not clear in the Rawley matter), the nature and financial significance of that breach and its possible bearing on the character of the investment being made (given that Tiltform Australia was the licencee of those rights) required explanation in the evidence. This did not occur. Parker's evidence of how he would have acted had he been told of it - which was itself premised on the prior 60 per cent non-disclosure - does not satisfy that need. No proper evidentiary foundation has been laid sufficient to support a duty in the circumstances to disclose this particular piece of information. 208 In any event, I am not satisfied the non-disclosures pleaded did, in all the circumstances, give rise to a contravention of s 52 of the TP Act or of s 995 of the Corporations Law.

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CAUSATION AND RELIANCE 209 I have found that both Bell and Sladojevic engaged in conduct that contravened s 52 of the TP Act (if applicable) and s 995 of the Corporations Law: in Bell's case in making the separate $2 million misrepresentation in here described, the first at the 26 June meeting in Perth, the second, on 17 July in Adelaide; In Sladojevic's case, in his 7 August letter and in his comments at the 26 June meeting. 210 Given that the primary relief sought is damages under s 82 of the TP Act or, in the alternative, s 1325 of the Corporations Law, the critical issue in this case is whether any or all of the contravening conduct materially contributed to the loss the applicants' claim they suffered in consequence of their making their investment. In this particular setting the applicants accept, properly, that it is for them ultimately to prove contravening conduct was an inducement to their making of the investment in Tiltform Australia: see Lam v Austintel Investments Australia Pty Ltd (1989) 97 FLR 458 at 477-478; albeit it need not be the sole inducement: Kabwand Pty Ltd v National Australia Bank Ltd (1989) 11 ATPR 40-950 at 50,378; see also Travel Compensation Fund v Tambree trading as R Tambree and Associates (2005) 224 CLR 627 at [32]. As s 82 makes plain, the loss or damage suffered must be "by conduct of another person that was done in contravention of [s 52]": see Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 at 525. Notwithstanding the submissions made by Sladojevic on the potential difference between s 82 and s 1325 in this regard because of the former's use of "by" and the latter's "because of", this as will be seen is not a difference I need explore here given my findings. 211 It is unnecessary to enlarge on the above in any detail. It is well accepted. Because I have found contraventions to have occurred, it is helpful still to be reminded of the observations of the Full Court of this Court in Ricochet Pty Ltd v Equity Trustees Executors and Agency Co Ltd (1993) 41 FCR 229 at 235: "A finding that a misrepresentation might have induced a decision will not of itself establish as a matter of probability that it did. Consistently with that finding, it may be that, on the balance of probabilities, a party was induced to make a decision by a combination of factors including the misrepresentation. Assuming a non-trivial contribution to the causative process by the misrepresentation, then it may be actionable. Ultimately, the 'causative threshold' beyond which liability attaches to a misrepresentation which is one of a number of factors inducing a decision that produces loss, will be a question of judgment. This is a familiar process adverted to in various related contexts by Mason CJ in March v E & M H Stramare Pty Ltd (supra) and in this Court in Elna Australia Pty Ltd v International Computers (Aust) Pty Ltd (No 2) (1987) 16 FCR 410 at 418-419 and Pavich v Bobra Nominees Pty Ltd [1988] ATPR 49,849. (See also Munchies Management Pty Ltd v Belperio (1988) 84 ALR 700 at 712). But the mere possibility that a misrepresentation might have induced a course of action by the representee can never of itself attach liability under s 82 to the making of it." 212 I would also note, because of their present relevance, the observations of Gummow J in Elders Trustee and Executor Co Ltd v E G Reeves Pty Ltd (1987) 78 ALR 193 at 241: "It is, of course, fundamental that s 52 is not designed for the benefit of persons who fail, in the circumstances of the case, to take reasonable care of their own interests …" 213 To anticipate what I will say, while the nature of the representations made by Bell and Sladojevic were likely to induce reliance, any inference that the applicants acted on those representations is negatived in the circumstances of this case. I am satisfied that those representations played no part in their decision to invest. I regard the evidence given to the contrary by Parker, Lee and Murabito as unreliable. In each of their cases it reflected at best reconstruction and rationalisation resulting in the creation of a collective memory. Their decision was one in which Parker was influential. They backed their own judgment as to the prospects for the Tiltform technology and Tiltform Australia. In so doing they assumed a risk that adequate working capital would be secured and the short term cash flow problem overcome. They did not rely upon Bell or Sladojevic. They knew, or ought to have known, through Parker, that Bell's "$2 million" had not been raised. Their investment decision was not relevantly influenced by Sladojevic's 7 August letter. 214 I have, in outlining the evidence for the misleading or deceptive conduct claims, referred not only to the context in which those representations were to be evaluated for the purpose of determining their falsity or otherwise but also to the context in which their causative significance is to be judged. The following are my reasons for the conclusion I have foreshadowed. 215 There are five matters of general significance to which reference should be made at the outset as they bear in various ways on the resolution of the present question. First, the relevant events occurred over a relatively short period, i.e. from 2 June to 9 August, and at a time when both Tiltform Australia was in its infancy and the national licence system had not been established. Secondly, the contact between Parker and Lee on the one hand and Bell and Sladojevic on the other in this period was quite limited. Less so the contact between Lee, though not Parker, and Benson. Thirdly, all of the above persons, it can be inferred, were aware that in order to succeed Tiltform Australia would have to have sufficient working capital to address both licence fees and investment in formwork. The licence agreements and the disclosure documents made this clear. Thirdly, there was at the above time a considerable level of enthusiasm being demonstrated for the Tiltform technology, its use in the construction industry and in its profit making potential. Bell and Sladojevic and the WA investors exhibited that enthusiasm. Fourthly, the clear inference to be drawn from the evidence is that the climate in which the negotiations occurred for the WA investment in Tiltform Australia was one in which buoyant expectations were entertained that working capital would be forthcoming. Dawkins advent as "chairman" of Tiltform Australia in late July clearly provided some stimulus to this. Fifthly, the WA investment was made in Tiltform Australia which at the time was, and was known by the WA investors to be, Benson's and his joint venture partner Dr Abraham's company. No investment was being made in Tiltform Licensing. Neither Bell nor Sladojevic held offices in, or were shareholders of, Tiltform Australia although as I will later indicate a claim is brought against them as promoters of that company. 216 It is clear that, from the outset, the directors of the Icon Group - Murabito, Palmiero and Lee - made their own highly positive business judgment of the virtue and attractions of the Tiltform technology, of its profit making potential and of the advantage of acquiring a licence of it. When Parker was offered participation in the investment opportunity Tiltform WA, he in turn came to share the same positive attitude to the Tiltform "opportunity" after his initial meeting in Adelaide on 2 June with Sladojevic and Bell - an attitude contributed to significantly by Sladojevic's explanations etc of the technology. I need not repeat here my findings on that meeting other than to say I do not consider that Parker's projections were discussed in detail with Bell at that meeting, though there was discussion of them. The collective decision of the WA investors to accept the offer of shares in Tiltform WA within ten days of Parker's return from the 2 June meeting provides some evidence, in my view, of their faith in the Tiltform technology. 217 Their preparedness to countenance abandoning that investment in favour of one in Tiltform Australia is, in my view, a further reflection of this - although, for prudential reasons, the Icon Group directors were not prepared to proceed without getting input from Parker. This reliance upon Parker for advice about financial aspects of the investment, or else for making appropriate inquiries on such matters - reliance evidenced in differing ways in the evidence of Lee and of Murabito - reflected the course previously taken in relation to the Tiltform WA investment. It assumed far greater significance in relation to the investment in Tiltform Australia. I infer that all of the WA investors were satisfied with the Tiltform technology itself at time of the investment. Murabito indicated he made his own assessment of that. Where the investors required advice was in relation to the financial assessment of the decision. Though Lee participated in some degree in the meetings and actions taken leading to the making of that assessment - a participation, as I have indicated, that he self servingly sought in evidence to down-play - it is the case, and I so find, that Parker assumed primary responsibility in that matter. I am satisfied that the investors other than Parker relied upon him at least to the extent that he raised no matter either to dissuade them from investing and to signify his own unpreparedness to invest. I will return to this below. In a very real sense, the question of whether the WA investors relied upon the contravening conduct of Bell and Sladojevic is one whether Parker relied upon that conduct. 218 As I have earlier found, the first of Bell's $2 million representations and Sladojevic's seeming confirmation of it, were made at the 26 June 2000 meeting in Perth. I have indicated what were the circumstances of its making. While I have found Bell's representation to have been false I have made no finding as to whether it was knowingly, notwithstanding my rejection of Bell's evidence and his professed lack of knowledge of the financial circumstances etc of Tiltform Australia. 219 Parker's affidavit evidence was that he took from the representations of Bell and Sladojevic that the raising of money and the honouring of commitments were not going to be a problem for Tiltform Australia. Parker clearly was enthusiastic about the "Benson proposal" (which, as I have held, was authored by Bell at Sladojevic's direction) - as is evidenced in the language of the follow-up documents ("extremely interested in pursuing further discussions") he (Parker) authored on the same night. These were sent to Benson as Parker properly realised it was Benson's company they would be dealing with. 220 Significantly, Parker did not seek further elaboration of the comment from Bell at the time - or, for that matter, at any time thereafter. Equally the follow-up letter to Benson of 27 June made no explicit reference to the $2 million purportedly raised. The proposal, though, did seek detailed financial projections. It also sought the copy of any Shareholders' Agreement. Parker said in cross-examination that "any money raised [i.e. as represented] should have been represented on the financial forecasts". He did not ask the identities of the existing shareholders. 221 In my findings on the 26 June meeting I indicated that I did not consider these Bell/Sladojevic representations were of lasting significance, if they were of any significance at all. Parker conducted his own due diligence and the questions he asked in the 27 June letter were in his own words "the first of a process of due diligence". While he may, at the time, have taken from the representations that the raising of money and the honouring of commitments were not going to be a problem for Tiltform Australia, I am satisfied he set out on his own course to verify whether such was the case. This, in my view, is why at no stage did he seek any elaboration of Bell's comment from Bell. 222 Benson's communications in response to the 27 June letter were with Lee (the letter's signatory). Eventually he provided the very answers Lee was looking for. This was in the 12 July BDO projections. The projected capital inflow produced did not reflect raised equity capital of $2 million. Parker, I find, accepted the reality of what this signified and its consequences. While concluding that the working capital provided in the forecasts which would be available in the first six months or so was "very thin", he again composed a letter to Benson of 12 July (signed by Lee) indicating their belief that "the proposal continues to represent a very viable alternative" to the investment in Tiltform WA. Despite his evidence to the contrary, I find that by 12 July neither he nor Lee had any belief that $2 million had been raised independent of the WA investment. I infer this in Lee's case because of the ongoing dialogue between him and Parker. 223 I am satisfied, furthermore, that his "viable alternative" statement reflected his belief at that time. I consider it probable that the substance of Benson's communications with Lee prior to receipt of the BDO projections was communicated to Parker. This included, first, the prospect of Dawkins (as yet unnamed) being chairman which, as Benson observed in an email to Lee, would add to the credibility of, and instantly raise the value of, Tiltform Australia; secondly, an indication that negotiations with another two investors were nearing completion; and, thirdly, approaches were being made to Elderslie Finance for a proposed $8 million leasing facility. Though Parker in his evidence scorned the last of these, I do not accept his evidence on that matter as I have previously indicated. He acknowledged, though, that he was by 17 July already aware of, and very happy about, Dawkins' proposed involvement. 224 The second $2 million representation, as I have found, was made at the 17 July meeting between Parker, Lee and Benson into which Bell and Lee intruded themselves. Parker had neither met, nor spoken to, Benson before he went to Adelaide for that meeting. 225 I will not repeat here my findings concerning the making of that representation. However, I would note the following. First, I have found that Parker prepared an agenda for that meeting. That agenda, while dealing (inter alia) with working capital made no reference to Bell's $2 million that had not been raised. In my view it is unsurprising it did not. As I have found by the date of that meeting Parker did not believe that it had been raised. Indeed the question he said he asked of Bell in his affidavit - "whether TA's capital raising would compensate for the deficiencies in working capital" - is quite consistent with that finding. 226 Secondly, I would note that the evidence both of Lee and of Parker, to the extent that it suggests Bell made any further elaboration of his comment, linked the alleged capital raising to Benson's co-venturer in Tiltform Australia, Dr Ben Abraham. If such had occurred Benson would have been likely to have known of it. 227 Notwithstanding Sladojevic's intervention after Bell made his observation, neither Lee nor Parker sought later elaboration from him. Each knew that they could derive confirmation of what Bell said from Benson. I have referred to Benson's evidence earlier and to my acceptance of it. Lee in Parker's presence asked him after the meeting whether Bell's statement was correct and he replied he could not understand why Bell had said that because, as far as he was aware, only $1 million had been raised apart from their proposed investment. 228 I find that Lee and Parker accepted and acted on what Benson had said. Bell's representation was neither believed at the time, nor was it relied upon. A clear indication of this is given by Parker in his affidavit (at pars 30A and 30B) where he described the 17 July meeting with Simon Abraham of BDO to prepare revised projections that introduced into the projections "the additional working capital which had been discussed that morning". In this, I find, Parker and Lee were continuing their due diligence process and were working towards having prepared for them projections to be utilised in making their financial assessment of the WA investment. In other words, they were making their inquiries and conducting their negotiations without regard to Bell's representations. Their actions belie their evidence to the contrary. 229 If Parker had any residual hope that Bell may have been correct - and I do not consider he did - the worsening position revealed in the 31 July BDO projections gave him reason to seek answers from Bell in whom he claimed he had trust. He did not. Parker contacted Benson. I consider he did so because he was relying on Benson in relation to information about capital raising. It is unnecessary for me to make a finding on whether he told Benson the WA investors would not commit until the issue of working capital had been resolved and could be confirmed. I would observe, though, that this observation in his affidavit bears in the context of this proceeding a distinctly self-serving character. What is important is that Parker's dealings were with Benson and, insofar as they were founded on financial information, that information was provided by, or at the direction of, Benson. 230 As I indicated in my findings on the 17 July meeting, Bell's representation was without significance to, and was not being relied upon by, Parker and Lee. 231 While the quite separate misrepresentations made by Sladojevic in the 7 August letter may be thought to have provided an inducement to Parker and Lee to make a precipitate investment, I am satisfied that it was not causative at all of the WA investors' decision to invest. None suggested that it was and Parker positively disclaimed that it was the likelihood of Sladojevic terminating his approval that prompted the injection of funds. 232 I find that Parker and Lee may have had had some initial concern about the threat - hence Parker's attempts to call Bell for this reason (though, as I have found, not for confirmation that there were other investors lined up) - but they then disregarded it. They did so because, after having already executed the Tiltform Unit Trust Deed (Parker sought to minimise the significance of this by saying it occurred before he received the 31 July BDO projections), they had already made the decision to make their investment. The remaining matter for them related simply to when the monies would be deposited. It was to have been 7 August but, as I have accepted, this was to be deferred until 11 August. I would note that the first instalment of the investment moneys (from Parker) was in fact paid into Tiltform Australia's account on 9 August 2000. This, coincidentally, was Sladojevic's deadline day. 233 On the state of the evidence, it is impossible to be precise as to when and how the decision to invest was made. I am satisfied that it was made prior to 7 August. I infer this from the Benson-Lee communications that led to the 7 August 2000 letter, the last of which probably occurred after Parker had received the 31 July BDO projections. It may have been the case that the investors met and discussed the investment on several occasions over the period after 17 July and before 9 August (when investment moneys began to be deposited into Tiltform Australia's bank account) - Lee's oral evidence would seem to support this - and that a final meeting was held after 7 August. What I do not accept is that at that meeting (if it occurred), or at any prior time, Parker gave any assurance to the others about Bell and Sladojevic's representations, or that the others made their decision to invest because of those representations. This said, I accept that at some time prior to the first instalment of the investment moneys being advanced by Parker on 9 August, Parker and probably Lee did provide their own financial assessments of the viability of the investment to the others. 234 I consider the WA investors made their decision because of the optimism they entertained about the prospects of the investment, notwithstanding that the 31 July BDO projections indicated significant short term cash flow problems. It is not for me to speculate upon what motivated Parker to commit to the investment decision and to communicate this to the other investors, though I consider that factors such as expectations concerning Dawkins' capital raising capacity, the availability of a significant leasing facility and the technology itself may have been influential. I should emphasise I do not accept that the investment decision was made as Parker, Lee and Murabito have said, or for the reasons they gave. I consider their accounts to be quite improbable. 235 Lee probably went to the heart of the matter when in cross-examination he accepted (as I earlier quoted) that the factors which caused him to make the investment were the prospect of making very substantial profits, their ability to overcome the cash flow difficulties and confidence in being able to enter into suitable leasing arrangements for the acquisition of formwork. Lee, as I have earlier noted, resiled from this in re-examination and reverted to his original explanation that he decided to invest because of Bell's $2 million and of trust in what each party was telling the other. I do not accept this explanation for the reasons I have given. 236 For the sake of completeness there is a number of ancillary matters I should note. First, I do not accept that Parker did misinterpret the 7 August letter at the time. It provided no assurance as to Bell's representation. His evidence (affidavit and oral) on what the letter conveyed to him was inconsistent and wholly unconvincing - the moreso because, as I have found, (a) by the time of the letter, Bell's representation was known to be incorrect and was not being relied upon in the due diligence in which Parker had been engaged; and (b) the decision to invest had already been made. 237 I equally do not accept evidence given in cross-examination by Lee that appears to suggest that Benson, on occasion, confirmed Bell's representation. Benson's evidence on the 17 July meeting and Lee's and Parker's on the 4 September meeting with Benson in Adelaide (which I accept and which evidence Benson's conduct) is quite to the contrary.

[46]

THE MISLEADING OR DECEPTIVE CONDUCT CLAIMS: CONCLUSIONS 238 I have found that both Bell and Sladojevic have engaged in conduct that was misleading or deceptive. In the case of Bell there were two instances of this. The first was the $2 million representation made at the meeting in Perth on the evening of 26 June 2000. The second was the $2 million representation made at the meeting in Adelaide on 17 July 2000. In Sladojevic's case there also were two instances of such conduct. The first was his comments on capital at the 26 June 2000 meeting which, in context, were confirmatory of what Bell had represented. The second was the complex of misrepresentations contained in the 7 August 2000 letter. 239 I am satisfied that both Bell and Sladojevic had no reasonable grounds for making the representations that they did. I equally am satisfied that when they made those representations each was acting as either an officer of Tiltform Licensing (Sladojevic) or as a financial adviser to, and as speaking for, Tiltform Licensing (Bell) and that in consequence the representations so made were representations of Tiltform Licensing. I will refer further in the "Promoter Claims" to their respective functions in, and for, Tiltform Licensing. Further I am satisfied that for the purposes of s 75B of the TP Act (if applicable in the circumstances), they had actual knowledge of the essential elements constituting the contravention and in particular that they had no reasonable grounds for making those representations. 240 Notwithstanding the above, I am not satisfied that the WA investors suffered any loss by that conduct for the purposes either of s 995 of the Corporations Law or of s 82 of the TP Act (which in any event I consider has no application to this matter because of s 51AF). I have concluded that the WA investors made their own, independent judgment about the investment without regard to the above representations and made their decision accordingly. 241 The basis of my decision turns critically on issues of credibility and of reliability of evidence. For this reason I do not consider it necessary to consider those other matters which would require determination if I had come to the contrary conclusion on causation and, in particular, (i) the decidedly unusual contention that the first applicant had no standing to bring this proceeding; and (ii) the causation issue of whether Tiltform Australia so conducted itself as to be responsible for its loss. I would comment in any event in relation to the second of these, that the issues sought to be ventilated were matters for expert evidence. None was tendered. 242 The misleading or deceptive conduct claims against Bell and Sladojevic will be dismissed.

[48]

THE PROMOTER CLAIMS 246 To comprehend how these claims are put against Sladojevic and Bell, it is necessary to refer at a little length both to the applicants' pleading and to their submissions. Both Bell and Sladojevic are claimed to have been promoters of Tiltform Australia. The burden of these claims is that they were in consequence fiduciaries, although as I will indicate, there is very real opacity as to whom their fiduciary duty was owed, what that duty comprehended and how it was breached. 247 In Bell's case this claim is particularised in the following way: "8.8.1 Bell was involved in the commercialization of the intellectual property to which Tiltform Licensing had access from in or about January 2000 and at all material times thereafter. 8.8.2 Bell sought the identification of an investor or investors who had the financial means to proceed to take up licences from Tiltform Licensing from in or about January 2000 and at all material times thereafter. 8.8.3 Bell on behalf of Tiltform Licensing constituted Benson as the agent of Tiltform Licensing pending satisfactory completion of licensing agreements for all Australian states save Western Australia by letter dated 2 May 2000. 8.8.4 In or about June 2000 participated in discussions with Benson and [Sladojevic] to secure one John Dawkins to be the Chairman of Tiltform Australia to aid in the raising of capital for Tiltform Australia. 8.8.5 Following the incorporation of Tiltform Australia by Benson undertook with [Sladojevic] to advance the taking up of capital in Tiltform Australia with a view to that company implementing and participating in the Tiltform Australia Proposal [of 26 June 2000]. 8.8.6 Bell fulfilled the undertaking (8.8.5) by engaging in the activity and conduct of himself and [Sladojevic] as pleaded in [relation to the misleading or deceptive conduct claim]. 8.8.7 Bell together with [Sladojevic] stood to benefit from the implementation of the Tiltform Australia Proposal by reason of his [shareholding in] Tiltform Licensing." 248 The 2 May 2000 letter referred to in para 8.8.3 was from Bell to Benson. Tiltform Licensing agreed in a separate letter of the same date to Benson registering a company ("Tiltform Holdings Australia") which, on completion of the licensing process, would hold the Australian licences (excepting WA). The above pleaded letter appointed Benson Tiltform Licensing's agent in Benson's dealings with "sub-licences" of the Australian licences until completion of his company's licensing agreements with Tiltform Licensing. It was, in other words, an interim measure permitting Benson to enter into sub-licence agreements before his own "head" agreement with Tiltform Licensing had been completed. It is difficult to see how this letter could conceivably be relevant in establishing the fiduciary relationship alleged. 249 In Sladojevic's case, his status as promoter is particularised in relatively similar, but counterpart, terms to those of Bell. The only additional particular was that: "9.7.3 In or about January 2000 [he] attempted to persuade Benson to take the New South Wales and Queensland licences from Tiltform Licensing." 250 I would note that in the cases of both Bell and Sladojevic the above matters relied upon to constitute them fiduciaries relate, in part, to their conduct on behalf of Tiltform Licensing and, in part, for Tiltform Australia. 251 In their written submissions this amalgam is explained in the following way, i.e. Bell and Sladojevic "were promoting the benefit of their licensed product through Tiltform Australia and the Applicants were entitled to consider them as within their confidence". Relying, in particular, upon the terms of the licence agreements with Tiltform Australia, it is said investors in the position of the applicants would know they (i.e. the applicants and Bell and Sladojevic) "were in it together, would believe that the promoters' actions and advices would be as much in their [i.e. the applicants'] interest as their own, and would be made for the mutual purposes of the relationship, and not for the promoters' own self interest". I have indicated earlier in these reasons that the licence agreements contain clauses favourable to the licensor - I would instance intrusive powers to control the licencee - which are commonly found in exclusive licences involving the use and exploitation of intellectual property: cf Pacific Brands Sports & Leisure Pty Ltd v Underworks Pty Ltd (2006) 149 FCR 395. 252 The above would seem to be suggesting that the licensing agreement constituted a fiduciary relationship between Tiltform Licensing and Tiltform Australia. When I put this, in my view, extraordinary proposition which would turn fiduciary many exclusive dealerships, agencies, intellectual property licences, etc.: cf Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41; counsel for the applicants resiled from it. However, in supplementary submissions, counsel re-embraced the above though with one additional matter of emphasis which is said to be "critical". This is that Sladojevic and Bell "were promoting the take up of shares in Tiltform Australia and advancing the licence that Tiltform Australia had with Tiltform Licensing is (sic) the reason why the proposed investors should seriously consider the investment." 253 So, it is said, from the moment Bell and Sladojevic put forward the Benson Tiltform Australia proposal on 26 June 2000 without Benson's sanction, they were promoting the take up of capital in Tiltform Australia, and they placed themselves in a position where their interest in the share take up conflicted with their duty, seemingly, to act in the joint interest of themselves and the WA investors. I note in passing that the substance of the proposal - the making of an investment in Tiltform Australia - had already been discussed at the 24 June 2000 meeting. 254 In any event, it is said - in my view surprisingly - that this is a case "where the existence of a fiduciary relationship is indicated by the particular licence agreement alone". They point to the licence being an exclusive Australia wide one; to the fact that the position of Tiltform Australia in the Tiltform Group was fundamental to the success of the Group; and to the terms of cl 11.1.2 of the agreement which imposed, in essence, what is commonly encompassed in clauses imposing duties of fair dealing on parties to long term commercial relationships: I refer, purely for reasons of convenience and because good faith itself is not in issue, to Finn, "The Fiduciary Principle" in Youdan (ed) Equity, Fiduciaries and Trusts, 10 ff, 1989. 255 It is unnecessary to set the above clause out here other than to notice by way of example that it requires (inter alia) either party in its dealing with the other to avoid - "(c) Conduct that is not reasonably necessary for the protection of the legitimate business interests of the Licensor, the Licensee or the licensed system of the Licensor." There is, of course, nothing fiduciary about such clauses. On its face it accepts that the parties have several and potentially adverse interests to protect in their relationship and are permitted to do so subject to the limitations imposed by the clause. 256 I have set out what is said to be the basis of the promoters claim at some length for this reason. I have had considerable difficulty in divining precisely what that basis might be. As pleaded, it suggests that the circumstances gave rise to a fiduciary relationship between each of Bell and Sladojevic as promoters of Tiltform Australia on the one hand and the WA investors on the other. The relevant relationships, I would add, were not with Tiltform Australia as such, as is ordinarily the case with promoters of companies: see Tracy v Mandalay Pty Ltd (1953) 88 CLR 215 at 241-242. How the pleaded relationship emerges from the particulars is by no means clear. Presumably its consequence, though, was that Bell and Sladojevic were obliged to act in the interests of the WA investors. 257 In written submissions it was suggested initially that they were promoters "because of the clear benefits to be derived by them from a share take up in [Tiltform Australia]". The decision of the High Court in Tracey v Mandalay Pty Ltd, (esp at 241) was in this relied upon for support by way of asserted factual analogy. Those submissions, though, went on to make the assertion of a fiduciary relationship akin to that of proposed joint venturers: United Dominion Corporation Ltd v Brian Pty Ltd (1985) 157 CLR 1. This joint venture - which could only be said to be between the WA investors and Bell and Sladojevic if the alleged joint venturers' separate corporate entities (i.e. Tiltform Licensing and Tiltform Australia) were disregarded - seems to be focussed on Bell's and Sladojevic's obligations as promoters of "the benefit of their (sic) licensed product through Tiltform Australia". I note in passing that no claim is made against Bell and Sladojevic as knowing participants in a breach of duty by Tiltform Licensing. Presumably, in this version of the joint venture, Bell and Sladojevic as fiduciaries were obliged to act in the mutual interest of themselves and the investors within the scope of the proposed venture. 258 In supplementary submissions, the "proposed joint venture" basis continued to be insisted upon, although apparently as an amalgam of the two previous approaches advanced, i.e. they were promoters of Tiltform Australia in the take up of the shares and of the proposed joint venture. The nature of the fiduciary duty owed in this amalgam submission is entirely unclear. Fully informed consent apart, were Bell and Sladojevic obliged to act in the interests of the proposed joint venturers (including themselves) to the exclusion of their own, several personal interests? Or were they obliged to act in the interests of the investors to the exclusion of any personal interest of their own? 259 Because of the difficulties I have in understanding how precisely the promoter fiduciary relationships are said to have been generated and what was the nature of the fiduciary wrongdoing allegedly engaged in in light of the relationships, I will give in relatively short form my own conclusions as to why I consider that there was, in the circumstances, no fiduciary relationship between Bell or Sladojevic and the WA investors. In so doing I have attempted as best I can to take account of the submissions advanced by the applicants. 260 This is not a case which requires any significant elaboration of the basic principles of law governing fiduciary relationships: see generally Meagher, Gummow & Lehane, Equity: Doctrines & Remedies, Ch 5 (4th ed 2002); and, on proposed joint ventures having fiduciary characteristics, see Gibson Motorsport Merchandise Pty Ltd v Forbes (2006) 149 FCR 569 at 571-576. 261 It is sufficient to note for present purposes that (i) the distinguishing characteristic of a fiduciary relationship is that "its essence, or purpose, is to serve exclusively the interests of a person or group of persons" (which, as in the case of a partnership or fiduciary joint venture, can include the fiduciary): see generally Meagher, Gummow & Lehane, at 5-005 ff; (ii) a relationship may be fiduciary in part and non-fiduciary in part: Hospital Products Ltd v United States Surgical Corporation, at 97-98 ff; (iii) insofar as the fiduciary relationship is claimed to be founded on mutual trust and confidence, the circumstances must nonetheless be such that the parties to the relationship can reasonably expect loyalty from the other, i.e. the subordination of self interest to joint interest: Gibson Motorsport Merchandise Pty Ltd at [11]-[13]; (iv) a person who provides information, suggestion or advice to another upon which that other may reasonably be expected to rely is not for that reason alone necessarily in a fiduciary relationship with that other, though that person will be a fiduciary if the factual matrix is such that that other is in the circumstances reasonably entitled to expect that the information provider, etc is acting in the matter in that other's interest: cf Pilmer v Duke Group Ltd (in liq) (2001) 207 CLR 165; Commonwealth Bank of Australia v Smith (1991) 42 FCR 390; (v) the loyalty obligation imposed on a fiduciary is that he or she cannot - (a) in any matter within the scope of the fiduciary relationship (see Bertchnell v Equity Trustees Executor & Agency Co Ltd (1929) 42 CLR 384 at 408) have a personal interest or an inconsistent engagement with a third party; or (b) use his or her position to own, or to a third party, possible advantage, unless this is freely and informedly consented to by the person(s) to whom loyalty is owed, or is authorised by law: Chan v Zacharia (1984) 154 CLR 178 at 199; Breen v Williams (1996) 186 CLR 71 at 113; (vii) outside of commercial agency, partnership and trust relationships, care needs to be taken in concluding that commercial parties are in a fiduciary relationship for some or all purposes - not because a commercial relationship cannot be fiduciary, but because such a relationship, commonly, possesses characteristics (e.g. known adversarial interests, the reasonable expectation of self-reliance, etc.) which negative a fiduciary finding: Gibson Motorsport Merchandise Pty Ltd, at [2]-[18]; News Ltd v Australian Rugby Football League Ltd (1996) 64 FCR 410 at 539-541. 262 Turning to the present matter, it is important to emphasise at the outset that the WA investors were not proposing to, and did not, invest in a licence with Tiltform Licensing. They were investing in Tiltform Australia, an entity which the investors knew was to, and did, have exclusive territorial licences from Tiltform Licensing. The advantage they sought to gain from so investing would accrue from Tiltform Australia's successful exploitation of those licences for its own benefit. 263 It was also obvious to all concerned that to the extent that that exploitation was successful, Tiltform Licensing (and those with interests in it) stood in turn to benefit in virtue of the provisions of the licence agreement. In this sense the two companies shared, i.e. had common but several interests, in the prospering of their business relationship. But there was nothing fiduciary at all about that relationship. The licence agreement required considerable cooperation between the parties as well as ongoing trust and confidence in each other. But it was not for that reason fiduciary: cf Gibson Motorsport Merchandise Pty Ltd at [12]-[16]. Such is the commonplace in relational contracts, i.e. contracts which create an ongoing business relationship. Nonetheless there was nothing in the terms of the contract remotely suggesting that the parties were binding themselves in any way to promote "mutual interests". The agreement was designed to serve the several interests of each, and in this it gave Tiltform Licensing considerable powers over Tiltform Australia to protect its own interests. 264 The licence agreements of themselves created no fiduciary relationship as between Tiltform Licensing and Tiltform Australia. This, though, is not the relationship which, by virtue of the agreement "alone", is said to have been fiduciary. It is at this point that the difficulty with the applicants' submission becomes transparent. 265 It was clearly the case that, in their dealings with the WA investors, Bell and Sladojevic acted in the main on behalf of Tiltform Licensing in relation to a prospective investment in its licensee, Tiltform Australia. It was or should have been obvious to the investors that such was the case and that Tiltform Licensing had manifest interests in the making of the proposed investment. It was not necessary for the investors to have read the licence agreements for them to have reason to know that such was the case, although Parker's evidence is that he read it after returning to Perth from the 2 June meeting and he was aware that Tiltform Licensing's approval was necessary for any change in shareholding. The circumstances were redolent of Tiltform Licensing's own interest both in its relationship with Tiltform Australia and in any investment made in Tiltform Australia. To the extent that Bell and Sladojevic acted and were seen to act for Tiltform Licensing no possible foundation existed for characterising Bell and/or Sladojevic's relationship with the WA investors as fiduciary. As would have been apparent to anyone in the position of the WA investors, Bell and Sladojevic were seeking to protect and advance Tiltform Licensing's interests and, as is commonly the case in commercial dealings, they sought positively to encourage the investment in Tiltform Australia, both by enhancing its attractiveness (by, for example, introducing Dawkins to Benson) and by encouraging (through representations) its being made. The latter action was taken for the immediate benefit of Tiltform Australia, though self-interest was writ large in it. 266 In virtue of their positions with Tiltform Licensing both Bell and Sladojevic were, under the licence agreements, armed with the ability to acquire considerable knowledge about Tiltform Australia. Whether or not they possessed such knowledge in fact in purporting to make representations about Tiltform Australia, they were not acting on behalf of, nor were they understood by Parker and Lee to be acting on behalf of, Tiltform Australia. Their representations were made, as I have indicated, in a context in which Tiltform Licensing's interest were manifest and in which they were furthering that company's interests albeit by making representations about Tiltform Australia. 267 The one action they took which was in appearance an action of Tiltform Australia was the passing off of the Tiltform Australia proposal document as Benson's. In so acting Bell and Sladojevic appear, on the evidence, to have assumed a power to act in this matter for Tiltform Australia for an investment relationship. 268 Unsurprisingly given its purpose, Benson and Abraham did not subsequently disown that document. It came to represent a basis for dealings with Tiltform Australia and the WA investors. Those dealings, as I have earlier found, were relevantly to the exclusion of Bell and Sladojevic. Parker and Lee dealt in the matter with Benson and his financial adviser, Simon Abraham. Whatever might be said of the subterfuge, Bell and Sladojevic engaged in on 26 June, it led to a dealing between a formed and functioning company with its own board (i.e. Tiltform Australia) and its arm's length investors who conducted their own due diligence in the matter. There is, in my view, no basis in the circumstances for using the 26 June proposal as a springboard to a promoter-like, fiduciary finding against Bell or Sladojevic. 269 Parker, and through him the other investors, may well not have known that Bell had a shareholding in Tiltform Licensing. That Bell did, though, did not make him a fiduciary. Parker knew Bell and Sladojevic represented Tiltform Licensing; he knew the investors were not investing in that company but in Benson and Abraham's company; as I have found, he made his investment decision without reliance upon Bell or Sladojevic's misrepresentations; and he ought reasonably to have known that Tiltform Licensing stood to benefit from the investment as did those who stood behind it. He was not expecting disinterested conduct from Tiltform Licensing or from Bell or Sladojevic - although he was entitled to expect that he would not be misled or deceived by them. 270 There is, in my view, no proper basis to support the fiduciary claims. I reject them. I would add for the sake of completeness that while I have had the decisions in Catt v Marac Australia Ltd (1987) 9 NSWLR 639 and Hill v Rose [1990] VR 129 pressed upon me by the applicants, I have found them to be of no real assistance in resolving the present question. As is common where fiduciary relationships are claimed to arise ad hoc, it will be the particular circumstances of the case in question which will ordain the appropriateness or otherwise of a fiduciary finding. It is unnecessary that I comment further on the above two cases: cf Meagher Gummow & Lehane at 5-015.

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THE MATTERS IN ISSUE 281 There are four separate events or actions taken between June 2000 and September 2000 at, or in, which Sladojevic or Bell are alleged to have made actionable misrepresentations both on behalf of Tiltform Licensing and, respectively, on their own accounts. These were: (1) in June 2000 in a discussion with Chehade concerning employment and investment opportunities in Tiltform Australia, Sladojevic represented that: "6.1 Tiltform Australia was looking to employ an accountant; and 6.2 Chehade's prospects of securing such employment with Tiltform Australia would be enhanced if he were to invest in Tiltform Australia; and 6.3 An investment of $500,000 would secure a 15% interest in Tiltform Australia; and 6.4 Tiltform Australia had already secured sufficient investment funding to provide for working capital and cash flow needs, so that any additional funds invested by Chehade would act as a 'buffer' ('First Misrepresentation'); and 6.5 Sladojevic would recommend to the directors of Tiltform Australia that it accept an investment of $500,000 by Chehade in order that Chehade could obtain a return on his investment ('the Recommendation')"; (2) in July 2000, in the course of a meeting "at the Tiltform premises", Bell represented to Chehade that Chehade "would be a very lucky man" if he were to invest in Tiltform Australia (the "Second Misrepresentation"); (3) on 7 August 2000, Sladojevic had sent to Chehade the same letter he had sent to the WA investors which, in Chehade's case, stated that: "9.1 Chehade must commit equity funding of $500,000 within 48 hours, failing which his opportunity to invest would be lost; and ('Third Misrepresentation'); 9.2 Negotiations between the chairman of Tiltform Australia, Mr John Dawkins, and others wishing to invest in Tiltform Australia would be resumed in the absence of the said commitment sought from Chehade ('Fourth Misrepresentation')"; and (4) on 16 September 2000, in the course of a meeting at the Tiltform premises, Sladojevic represented to Chehade that there were large numbers of people wanting to invest in Tiltform Australia and that Chehade would lose the opportunity to invest if he did not commit promptly (the "Fifth Misrepresentation"). 282 Further, it is pleaded that, because of the non-disclosure of the same matters as were relied on in the Rawley proceedings, Bell and/or Sladojevic engaged in other material instances of wrongdoing. Consistent with what was said in the Rawley proceedings, I am entitled to assume that most of these have been abandoned. Two additional instances of non-disclosure were relied upon in the Chehade matter. These were that: "11. Neither Sladojevic or Bell at any time during the period between February 2000 and September 2000 inclusive informed Chehade that: 11.1 Tiltform Licensing had not received from Tiltform Australia payment for the acquisition of various licences for which Tiltform Licensing had contracted, which payment were in arrears; or 11.2 That a director of Tiltform Australia, Mr Nigel Benson, had informed both Sladojevic and Bell that he was experiencing difficulties in raising, and had not raised, sufficient capital to fund the acquisition of the said licences by Tiltform Australia." 283 The pleadings translate the conduct of Bell and Sladojevic into actionable wrongs on the same bases as in the Rawley matter. 284 First, there is the claim against Tiltform Licensing (for which no relief is sought) for contraventions of s 52 and s 59(2) of the TP Act (and its State equivalents) and for relief against Bell and Sladojevic personally via s 75B of the TP Act in respect of Tiltform Licensing's contraventions. This must fail for the reasons I gave in the Rawley proceedings, given that the conduct engaged in was in relation to financial services with the consequence that Part V of the TP Act did not apply to it: TP Act, s 51AF; ASIC Act s 12BA(1) "financial service". Equally, s 995A of the Corporations Lawexcluded the application of State Fair Trading Acts to dealings in securities. As in Rawley, I permitted a late amendment to the Chehade Statement of Claim so as to allege contraventions of s 995 of the Corporations Law and so as to claim damages under s 1325 of the Corporations Law. 285 As in the Rawley matter, a negligence claim is made against Bell who, it is said, owed a duty of care to Chehade in making representations in relation to his proposed investment in Tiltform Australia. The representation said to have been made negligently, but which was relied upon reasonably, was the same as that founding the misleading or deceptive conduct claim. As I later will shortly indicate, there is no substance at all in this claim. 286 Again, as in Rawley, a claim is made against Bell and Sladojevic as promoters of Tiltform Australia. The breach of fiduciary duty alleged is identical in terms to that in Bell save that the alleged non-disclosure was to Chehade. The reasons I gave in the Rawley matter for dismissing this claim apply with equal force here. I will make no further reference to this claim.

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(i) The professional/business relationships 290 I have touched briefly on this matter already. I am satisfied from Bell's evidence and from his conduct towards Chehade that he respected Chehade's competence at least in the finance side of an accountancy practice and that he was prepared to give him a considerable degree of autonomy in that part of the practice. In the MoU of 3 April 2000 Bell acknowledged that he had had "little or no role in the effective running of the taxation/accounting division of the practice since its inception". He acknowledged his appreciation of the role so performed by Chehade. I would interpolate though it is not directly relevant, that Bell was aware that Chehade did accountancy work for his father in what Bell believed were his "various businesses and vast property interests". 291 Chehade did not participate in the provision of consultancy and business advisory services, these being Bell's domain. Bell was well regarded and respected by Chehade who considered he was an extremely experienced and knowledgeable accountant. I am satisfied that Bell, in consequence, possessed the capacity to influence Chehade in at least those matters that fell within the area of Bell's professional competence. This said, I do not consider that the evidence discloses a relationship of professional influence differing significantly from that commonly found between senior and junior members of a profession who have worked closely together. 292 I emphasise the above for this reason. On a number of occasions in his evidence Chehade indicated that he had trust in Bell and Sladojevic and he used that "trust in Robert and Geoff" to justify several instances in which he omitted to make inquiries or otherwise to take reasonable steps to obtain information in relation to the investment. As will become apparent later in these reasons, I am satisfied that Chehade in fact surrendered the exercise of his own judgment to what he perceived to be implicit in the judgments and actions of Bell and Sladojevic. They were not responsible for his so doing and cannot be made so by virtue of the supposed "trust" in them he said he had. 293 The following passage in cross-examination and the resultant re-examination indicate both the surrender of judgment and the refuge taken in trust in Sladojevic and Bell to which I have referred: "When Mr Benson was talking with you about this investment of $500,000, did you ask him for any financial information about share capital?---No, I didn't. Or projections?---No. You were familiar with financial projections or financial forecasts?---Yes. You knew they were an important management tool?---Yes. And very important when considering whether any particular business venture was likely to be successful?---Yes. And one of the important components of such projections are cash flow forecasts?---Yes. But you didn't ask Mr Benson for any such forecasts?---No. And you didn't ask Mr Sladojevic or Mr Bell?---No, I didn't. No, I didn't feel I needed to." When re-examined on why he did not feel the need to ask Benson, Bell or Sladojevic, Chehade replied: "Because of my trust in Robert and Geoff." 294 In the written submissions made on Chehade's behalf an attempt is made to project him as someone vulnerable to exploitation. I am not satisfied that such is the case, although I am satisfied that he did demonstrate an acquisitiveness unmatched by restraint or judgment. I equally am not satisfied that he is as unsubtle and incapable of engaging in artifice or deceit as it was sought to portray him. 295 Despite Chehade's slight evidence suggesting the contrary, his business relationship with Sladojevic was not in my view accompanied by reciprocal warmth or personal respect. I accept Sladojevic's evidence on his view of Chehade. Bell confirmed this in observing "Robert and Amin didn't get on". This said, I am satisfied that Chehade was impressed by Sladojevic's business - the moreso given Bell's level of commitment to it (as evidenced in the MoU) - by his "intimate knowledge" of it and by the opportunity for returns it seemed to hold out. I am also satisfied, as I will indicate below, that his appreciation of the Tiltform group business was more significant than he admitted to in evidence. However, I am not satisfied that he had, or on the evidence had reason to have, trust in Sladojevic. He knew Sladojevic was domineering. He may have considered that Sladojevic could exercise influence in Tiltform Australia. But he gave no reason why he had trust in him to exercise that influence on his (Chehade's) behalf.

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(v) The timing of Chehade's investment decision 303 Benson, it will be recalled, was the managing director of Tiltform Australia. The first intimation he received from Chehade of an interest in investing in Tiltform Australia of sufficient seriousness to permit its being included in the company's projections, would seem to have occurred prior to 12 July 2000. As appears in my reasons in the Rawley matter, Tiltform Australia's accountant, Simon Abraham of BDO, produced what I have described as the 12 July BDO projections which included (inter alia) a "capital inflow" sum of $475,000. It was Parker's evidence in the Rawley matter, that at a meeting of 17 July 2000 at which he, Bell, Sladojevic, Lee and Benson were present, Benson identified that sum as being provided by Chehade. I have accepted that evidence. In turn, Bell's diary note of the meeting refers to "$500,000 over and above the WA [investors] to come in" though he disclaimed knowledge of the identity of the investor. A note of his of a phone conversation of the following day with Benson and Lee stated: "$.5m Amin Chehade". 304 Benson's own account of his dealings with Chehade is broadly consonant with what the documents suggest. He said that it was at the instigation of Bell and Sladojevic that he approached Chehade; they (he later said he believed it was Sladojevic) had told him that "Amin was interested in buying into the company"; he then spoke to Chehade but could not recall whether he phoned him; they discussed both investing $500,000 and Chehade's taking a position with Tiltform Australia ("He was looking for a position" as the practice was not going the way he planned); the investment was subject to his being able to raise the funds; and there was a time when he became sure that Chehade was going to invest the whole half million but he could not recall when that was. He had no memory of the figure of $475,000. 305 The above version is also corroborated in part by Parker's evidence that at the meeting with Simon Abraham (the BDO accountant) to discuss revised BDO projections, Abraham was told to reflect introduced capital following 1 July 2000 as being $1.5 million "subject to advice from Benson as to whether or not the remaining $25,000 would be coming from Chehade and if so, the timing of the receipt of those funds." The 31 July BDO projections refer to a capital inflow in August 2000 of $1,000,000 which, I infer, was a reference to the separate sums of $500,000 to be put in by Chehade and by the WA investors. 306 Chehade's changing versions of his investment differ significantly from Benson's account and has been complicated further by Chehade's emphasis in oral evidence on when he made the "commitment to make the investment". His affidavit version, which is at some variance from his oral evidence, but which has resonances with Benson's, has him meeting with Benson after a telephone call on the previous day (date unspecified); Benson making the offer both of a 15 per cent share in the company for $500,000 and of the position of Financial Controller in the company; and accepting the offer subject to being able to secure a loan to finance the purchase. No date is ascribed to when the offer was accepted but it appears, in the context of his affidavit, to have been in mid to late July 2000. 307 In his cross-examination he placed his first meeting with Benson as occurring at Greenhill Road when Sladojevic organised a meeting between Chehade and Benson to talk about investment in Tiltform Australia, this meeting being in early August. In his evidence-in-chief, in contrast, he agreed he made his commitment to Benson to purchase the shares subject to finance on or about 4 August 2000. He rejected Benson's claims that this commitment was made by about 18 July 2000. He recalled having a phone conversation with Benson concerning investing in the company and taking employment in it as an accountant in July, probably late July. He later moved this time into early August when the sequence of events in his affidavit was referred to. He later said he could not say definitely that he did not have conversations with Benson prior to 17 July 2000 about investing and obtaining employment. This was followed by his agreeing that he possibly did have such conversations with Benson possibly on or before 17 July 2000. He then told Benson he proposed making an investment if he could raise funds, but that he did not commit to anything until he had put the deposit down and subject to raising funds. 308 On 7 August 2000 he paid a deposit of $10,000. He said he realised he might end up forfeiting this sum. Chehade later approached a Dennis Davies of South Australia Business Co-op at Sladojevic's suggestion. This was unsuccessful. In the event he raised almost the entirety of the $500,000 from family members. He paid the purchase price by instalments of $50,000 (on 25 August), $20,000 (on 6 September), $340,000 (on 16 September), $40,000 (on 26 September), $30,000 (on 6 October) and $10,000 (on 11 October). Chehade took up the position of financial controller in Tiltform Australia on 1 September 2000. 309 It is convenient at this point to refer to the evidence of Bell and Sladojevic as to their knowledge of Chehade making his investment. Sladojevic's evidence was that he and Bell learned in about mid-July that Chehade was proposing to invest in Tiltform Australia. Bell was in a room with him when he found out. In his affidavit he said that he and Bell were both told by Tripodi, an employee of Bell Chehade, that Chehade was going to work for Tiltform Australia and had done a deal to invest in that company. This was said to have occurred in early to mid July. I note in passing that Tripodi commenced work with Bell Chehade on 31 July 2000. Sladojevic denied arranging for Chehade to meet Benson. In his affidavit version of the 17 July meeting with Benson, Parker, Lee and Bell, he noted that Benson mentioned $500,000 was coming from Chehade. In oral evidence he disavowed this as "reconstructed". Later in oral evidence he said he had no specific discussion with Bell about Chehade investing in Tiltform Australia although both Benson and Bell told him of this in late July. He had no specific recollection of whether or not Bell was dismissive of the suggestion that Chehade might invest $500,000. 310 Bell's evidence-in-chief was that he had a meeting with Chehade on 24 August (Chehade denies this) the significance of which he described as follows: "… that's when I found out from him that he had decided to put $50,000 into Tiltform Australia and take a job with Tiltform Australia effective from 1 September … So at all times I thought: well, okay, Amin's putting in 50,000 into Tiltform Australia, well you know, that's obviously about all he could afford to put in, and little did I know even though I've referred to a file note dated 18 July which indicates at point 5 'Am. Chehade' with a circle around it, as I say, that was the furtherest thing from my mind that he would be putting in money like that and at no stage during that conversation on that Thursday night did he indicate to me that he was going to be putting in half a million dollars into Tiltform Australia. I only found that out about a month later when he approached me and said: I have put in half a million dollars. I'd already heard a rumour that he was putting a half a million dollars in because Joe Tripodi had already told me that the funding of one of those problem bills in September when Tiltform Australia were struggling with their funding, that money had actually come from Chehade and that's how I knew but Amin Chehade had never approached me and told me that he was putting in half a million dollars." I would note again in passing that on 25 August, Chehade paid Tiltform Australia an instalment of $50,000. 311 Bell acknowledged in cross-examination that Benson told him of the possibility of Chehade investing in Tiltform Australia but this was "something [he] dismissed immediately as absolute rubbish". He did not approach Chehade about the matter. He could not see the investment as a reality "because Robert and Amin didn't get on". He indicated, though, that he knew Chehade had recently paid cash for his house. He continued to insist that the first he knew of the $500,000 investment was in late September 2000. 312 My findings on this matter can be stated shortly. I am faced with the denials both of Sladojevic and Bell that they did not know of Chehade's investment, in Sladojevic's case, until mid July and, in Bell's case, until late September. I have rejected that evidence. I equally have rejected Sladojevic's evidence that he did not arrange for Chehade to meet Bell. The unstated premise of Chehade's evidence is that he had not expressed any interest in investing in Tiltform Australia until Sladojevic mentioned the investment opportunity. I am not satisfied that such was the case. I am satisfied from Benson's evidence that at least Sladojevic was sufficiently aware of Chehade's potential interest to mention this to Benson. As I will later indicate, I am not satisfied that that interest was enlivened by the representations made by Sladojevic surrounding the "First Misrepresentation", because I am not satisfied that those representations were made as alleged. In this state of affairs, the most reasonable and probable deduction from what is known is that Chehade made his interest in Tiltform Australia apparent in the course of office conversation some time in late June into early July. It is reasonable to infer that both Sladojevic and Bell were aware of this. Their subsequent conduct, especially at the 17 July meeting with the WA investors was consistent with this. 313 Sladojevic's mention of Chehade to Benson led Benson to make an approach to Chehade some time before 12 July 2000, the date of the first BDO projections. That approach may have been by phone. Some time before 17 July - the date of the meeting of Bell, Sladojevic and Benson with the WA investors which I considered in detail in my reasons in the Rawley proceedings - Benson offered Chehade both employment in Tiltform Australia and a 15 per cent interest for $500,000. Chehade knew at the time that this price matched that given to the WA investors. He had learned this "just from the office … it was just spoken about". I equally accept Benson's evidence that it was Chehade who had indicated he was looking for a position. His ready acceptance of Benson's offer of employment supports this. At, or shortly, after that meeting Chehade accepted the offer subject to being able to raise finance. 314 It is unnecessary for present purposes to characterise the effect of the stipulated condition, although I am satisfied that in this context it conditioned the performance not the formation of the contract: see Meehan v Jones (1982) 149 CLR 571. It is equally unnecessary, given what later occurred, to express a concluded view on the date on which the contract was made. My own view is that it probably was around the time of, but prior to, the 17 July meeting. What is clear is that it was on foot when the deposit of $10,000 was paid on 7 August. Even if that payment was to be regarded strictly as a deposit, the contract's conditional character was spent shortly thereafter when Chehade paid $50,000 on 25 August 2000 and began employment with Tiltform Australia on 1 September 2000. At best by then, it had become an instalment contract and no more. This, I would note, seems to be the submission put on behalf of Sladojevic in relation to the alleged Fifth Misrepresentation. In reaching the above conclusions I have accepted the essence of Benson's evidence. I have rejected much of Chehade's evidence. I do not accept either Bell's or Sladojevic's evidence concerning when and how they respectively became aware of Chehade's investment or decision to invest. In particular I am satisfied that by 17 July 2000 Bell was aware that Chehade had made a commitment to Benson to invest $500,000. 315 To foreshadow matters, my conclusions here have quite some bearing on my findings in relation to the alleged misrepresentations.

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(vi) Bell's offer to sell his practice 316 Bell's evidence is that he started to talk with Chehade about Chehade buying into the accountancy practice in late July 2000. He said that Sladojevic was by then suggesting to him that he should become a director of Tiltform Licensing. He met with Chehade on 26 July 2000 and then, it seems, offered to sell 90 per cent of the practice to Chehade and/or Tripodi for $200,000. I again note that Tripodi did not start work until 31 July although Bell in oral evidence suggested he must have started earlier. I would also note that there is no evidence that Tripodi was a qualified accountant. There is evidence that he was not. 317 Bell said in cross-examination that Chehade did not say he was not interested in purchasing the practice. He said he would consider the proposal. 318 On 3 August he had a further meeting at which he suggested a variation to his original proposal "to make it more palatable to [Chehade]". This proposal was, apparently, that he pay $50,000 and have vendor finance for the balance. 319 Bell became a director of Tiltform Licensing on 3 August. He was in New Zealand from 7 to 9 August. Letters bearing the date 8 August, but signed by Bell before then, were sent to clients of the practice. These announced the appointments of Chehade as a partner in the business and of Tripodi as Senior Accountant, as well as a change of name to Bell Chehade. Chehade recalled a letter like this being prepared. Chehade was cross-examined by Bell about this letter as follows: "Does it surprise you that a letter dated 8 August was sent to a client of the firm with that content?---No, because at the time you were aware that you would be selling the practice and you wanted to keep the clients, or not upset the clients and you wanted to just make sure the transition was smooth, so you didn't want to let the clients know that you were selling at that point. You wanted to keep them - because I recall having discussions with you and work was coming in for the beginning of the financial year and telling you: we need to tell them, but you did not want to tell the clients. You kept on mentioning to hold back until you had a buyer, if you actually ever got one, which you eventually did so, no, this went out at the time where you knew you were selling the practice." Bell did not accept that Chehade said the clients should be told. 320 When Bell returned from New Zealand he said he discovered that Tripodi was working for Tiltform Licensing. Bell said this was because he was offered more money by Sladojevic than he was getting from Bell Chehade. He said he had no knowledge of Tripodi leaving Bell Chehade because Chehade was leaving the partnership. 321 Chehade's evidence was that there was no suggestion when the job offer was made to Tripodi that Bell was going to sell the practice. Later, he said Bell could have spoken about selling "as early as June, July". He said he told Bell he was not interested in buying the whole practice, but only a part of it but Bell said he wanted to sell the whole practice. In his first affidavit Chehade said this offer was made to him at the time Bell became a director of Tiltform Licensing (this occurred in early August 2000). "[A]s I felt that I did not at that time have sufficient experience to manage a practice of that size I began to look for other employment and business opportunities. It was at this time that Sladojevic mentioned to me that another Tiltform company, Tiltform Australia Pty Ltd ('Tiltform Australia') needed an accountant and that the position may be available to me, particularly if I were to invest into Tiltform Australia as a shareholder." 322 Chehade's evidence was that Tripodi told him after he had commenced with Bell Chehade that he was leaving because Bell was selling the practice and Sladojevic "basically threatened him and told him there was not going to be any Bell Chehade, they wouldn't be in this office, he was going to kick him out". Chehade said he proposed they could possibly do something together. Tripodi is said to have then indicated that he was going to work for Tiltform Licensing (i.e. with Sladojevic). 323 I have already indicated that Sladojevic's evidence-in-chief was that Tripodi told him in the presence of Bell that Chehade was investing in Tiltform Australia. He gave like evidence of being told by Tripodi in Bell's presence that Chehade was taking employment with Tiltform Australia. As to the latter, he said he then engaged Tripodi because his companies would otherwise be left without someone to be doing the accounts. In cross-examination he enlarged upon this referring to Chehade being in a position of conflict of interest. While I have rejected Sladojevic's evidence that Tripodi told him of Chehade's investment, I am satisfied his evidence of how he learned of Chehade's employment with Tiltform Australia is probably correct. In saying this I am not suggesting Bell was present at that time. 324 I have already found that, at least by 17 July, Bell was aware that Chehade was investing $500,000 in Tiltform Australia. I do not consider the evidence establishes that he was then aware that Chehade had accepted an offer of employment with that company. It is more probable than not that Bell first raised the issue of sale of his practice in a serious way at the 26 July meeting. I am not satisfied that his offer was categorically rejected then as Chehade would seem to suggest. I equally am not satisfied that Chehade had by then informed Bell of his intended move to Tiltform Australia. It is unnecessary to speculate as to why he may not have. Further, I am not satisfied that Bell would not have made his offer, knowing of Chehade's investment. Despite his protestations to the contrary, I consider he had nothing to lose by making the offer given he had determined to sell. I need not speculate about whether he considered there might have been a chance that the Chehade family's "vast property interests" might be deployed in a way beneficial to him. 325 The 8 August letters were prepared prior to Bell's going to New Zealand and probably were sent before he returned. It is unlikely that at the time of their preparation he was aware of Chehade's intention. The most probable inference to be drawn from what is known is that some time in early August (probably after Bell's revised offer to Chehade, Chehade told Tripodi of his move and that this in turn resulted in Tripodi telling Sladojevic). Whether Bell was with Sladojevic when this occurred is a matter about which there must be doubt. I am prepared though, to infer that Sladojevic would have explained to Bell why Tripodi was being engaged by him. I am not, on the evidence before me, prepared to accept that Tripodi was already working with (i.e. was on the payroll of) Tiltform Licensing when Bell returned from New Zealand. I reject Chehade's version of his conversation with Tripodi. I consider it to be an invention.

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(i) The first misrepresentation 326 This, as pleaded, related to an alleged meeting in or about June 2000 at which Sladojevic is said to have represented that: (a) Tiltform Australia was looking to employ an accountant; and (b) Chehade's prospects of securing such employment with Tiltform Australia would be enhanced if he were to invest in Tiltform Australia; and (c) An investment of $500,000 would secure a 15% interest in Tiltform Australia; (d) Tiltform Australia had already secured sufficient investment funding to provide for working capital and cash flow needs, so that any additional funds invested by Chehade would act as a "buffer" ("First Misrepresentation"); and (e) Sladojevic would recommend to the directors of Tiltform Australia that it accept an investment of $500,000 by Chehade in order that Chehade could obtain a return on his investment. Subsequently Sladojevic is alleged to have stated to Chehade that he had made the recommendation to the directors of Tiltform Australia and that Chehade "owed him one". 327 In written submissions, Chehade's legal representatives have sought to package this sequence of events as "another of Sladojevic's little strategies". I have referred to "Sladojevic's deceptive strategies" in the Rawley matter and will not reiterate what I have there said. I simply do not accept there was such a strategy here nor I do not accept that representations were made as alleged. 328 I have already found that Benson approached Chehade some time prior to 12 July 2000 as a result of Sladojevic mentioning to him that Chehade had an interest in investing in Tiltform Australia. I have rejected Sladojevic's evidence to the contrary. I have also found that it was Chehade who indicated he was looking for a position. I have further found that by 17 July 2000 Chehade was aware from office conversation that the WA investors were acquiring 15 per cent of the company for $500,000. 329 These findings are not necessarily inconsistent with the making of the alleged representations, but neither are they probative of them. While I have rejected much of Sladojevic's evidence and have found him to have, on occasion, engaged in deceptive strategic behaviour, I am not satisfied that he so acted in this matter or that his evidence concerning it is wholly to be rejected. 330 I am not satisfied that there was in early to mid July 2000 such an immediate and pressing need for him to support Tiltform Australia or such a clear personal advantage to be won by Sladojevic as to lead him to contrive a stratagem to induce Chehade to make an investment in Tiltform Australia - the more so given, as I later will indicate, Chehade's infatuation with investing in any event. It was, after all, around this time that John Dawkins (of whom there were clearly strong expectations) was offered his position as chairman of Tiltform Australia. 331 I do not regard the alleged first misrepresentation (relating to working capital and cash flow etc) to be one Sladojevic was likely to make. It had a level of specificity about financial matters which the evidence more generally suggests was not characteristic of him. Equally, and unlike his outburst at the 17 July 2000 meeting with the WA investors, there was no apparent need to make this type of representation. The terms of the representation themselves invite suspicion of recent invention in light of what subsequently transpired. 332 Put at its highest, it was probably from office conversation that Sladojevic and Bell became aware of Chehade's interest in investing. The evidence suggests there was a deal of information sharing about, and exchanges concerning, the Tiltform business (including that of Tiltform Australia once formed) and that Sladojevic, given his enthusiasm for his business and its future, contributed significantly both to what Chehade came to know of the business and to Chehade's own interest in participating in the venture. As Chehade said: "[Sladojevic] would be forever walking around the office and explaining how well it is going to do." It may well be the case that Sladojevic told Chehade he would mention his interest to Benson. I would note in passing that in early July Benson had just moved into the Greenhill Road premises and was previously unknown to Chehade. What I do not accept is that Sladojevic spoke to Chehade in anything like the terms alleged. I consider it likely that the alleged representations are the product, in part, of invention and, in part, of reconstruction of a course of conversations quite unrelated to the specific question of Chehade's possible investment in Tiltform Australia. 333 In any event, as I will indicate below, Chehade made his investment for reasons unconnected with the representations alleged.

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(ii) The second misrepresentation 334 This, as pleaded, is that in July 2000 in the course of a meeting at Greenhill Road, Bell represented to Chehade that he "would be a very lucky man" if he were to invest in Tiltform Australia. 335 Chehade's evidence of this matter is that Benson by telephone first, and then in person of the following day, discussed the "Investment Opportunity" and employment, an offer being made to Chehade on the latter occasion. As I have indicated that opportunity was accepted around the time of, but prior to, 17 July meeting. In his affidavit Chehade described as follows his meeting with Bell: "In mid to late July 2000, when I was considering whether or not to invest in Tiltform Australia, I approached Bell, as an accountant whom I respected and as a person who had detailed knowledge of the affairs of Tiltform Australia and the other members of the Tiltform Group. I asked Bell what he thought of Tiltform Australia and the Investment Opportunity, the details of which I explained to him. Bell said to me that I would be 'a very lucky man' if I were to invest in Tiltform Australia." 336 I have rejected Bell's evidence of when he says he became aware that Chehade invested $500,000 (i.e. in late September 2000). I have found that, by 17 July 2000, Bell was aware that Chehade had made a commitment to Benson to invest such a sum. If this meeting ever occurred, it had to have happened prior to when Benson's offer was accepted. 337 Chehade's case, as I understand it, is that at the relevant time Bell was familiar with Tiltform Australia's fundraising effort. He knew what money had been put in by Abrahams and Benson which was considerably less for a far greater stake in the company (apparently 70%). He also knew that only the WA investors were lined up to invest in the company. He also knew how much of the Western Australian money would be needed to pay the balance of licence fees payable at that time to Tiltform Licensing (including the WA licence) and to pay out Barone. He knew there was little left to fund any roll out and he knew how much was required because he had assisted to prepare the disclosure documents given to potential licensees. Far from Chehade being a lucky man it was Tiltform Australia, and through it Sladojevic and Bell, who would be lucky if Chehade decided to invest. It was reprehensible, it is said, that as Chehade's employer and friend he did not caution him. 338 Given his evidence as to when he learned of Chehade's investment, Bell, necessarily, denied having the above meeting. 339 For my own part, I am not satisfied that it ever occurred. I have already referred to Chehade's unreliability as a witness. I am not satisfied that this alleged meeting ever occurred. I have not accepted that Sladojevic provided Chehade with an "investment opportunity". If Chehade and Bell had conversations about possible investment in Tiltform Australia - and I do not discountenance the possibility both that such may have occurred, given the office environment, even if only at a general level and that favourable comments about the company's potential may have been ventured - I consider it unlikely that it related to this specific "investment opportunity". I do not accept, as I will indicate when considering the issue of "causation" below, that Chehade would have looked to Bell for advice or reassurance. He simply wanted to be part of the 'Tiltform action' with its prospects of profit. At best, this alleged misrepresentation might be a construction Chehade now seeks to place on comments Bell may have made about Tiltform Australia in general conversation. It is unnecessary for me to speculate about that. 340 I do not find that the second misrepresentation has been made out.

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(iv) The fifth misrepresentation 343 This is pleaded as having been made at a meeting at the Greenhill Road premises on 16 September when Sladojevic represented to Chehade that there were large numbers of people waiting to invest in Tiltform Australia and that he would lose the opportunity to invest if he did not commit promptly. 344 I am of the view that, if such a representation was made, it could have no operative significance in the proceedings. Chehade's circa 17 July 2000 contract with Tiltform Australia was by 16 September unconditional and binding and he was by then contractually obliged to pay the outstanding $420,000. I will nonetheless deal with the representation alleged. I would note, though, that the submissions made on it are quite perfunctory even by the standards of undue brevity otherwise displayed in the Chehade submissions. 345 Chehade's first affidavit states of this meeting that: "I went to see Sladojevic in his office at the Tiltform offices to ask him to explain to me how the funding of Tiltform Australia would operate. Sladojevic took me to the meeting room, where he proceeded to draw on the whiteboard a diagram which, he said, depicted how funds invested in Tiltform Investment Co (formerly known as Tiltform Capital Ltd) would be used for the purchase of materials for the national roll out of the Tiltform System by Tiltform Australia." 346 He produced a copy of the whiteboard diagram. I have annexed a copy of it: see Sched 3. It was in fact a photocopy of a thermal paper printout from the whiteboard, the photocopy having been inscribed (though to no named person) by Sladojevic. He went on in his affidavit to say that he invested the remaining $420,000 after receiving the above explanation, together with Sladojevic's assurance that these were "people lining up to invest" (these seem to have been made on other occasions, though those occasions are not the subjects of the pleading) and Bell's "very lucky man" comment. 347 Chehade's oral evidence was insistent as to his having sought the funding explanation, but was generally unsatisfactory. The following are representative instances of his evidence. (i) "What meeting are you referring to when you say: the meeting when we discussed how the roll out was going to work?---How the funding for the roll out was going to work, was the meeting on - the diagram that Robert --- that we went through, me and Robert - the 19th - the 16th of September. The 16th of September?---Yes. Are you saying that at that meeting Sladojevic explained to you how the roll out was to be funded?---He drew the diagram and very briefly and I guess in simple terms, explained that it was going to be funded by him or his company, the licensor and it was - the materials were going to be funded by the licensor. Is that the first time that he told you how it was going to be funded?---No. When was the first time?---Again, there was - while we were in the offices, from about June/July, there was many discussions. Nothing specific in regards to meetings but we were in the same office and there was - I would walk into Robert's room just to have a chat to him about general things. We would talk about it and that is when he would mention these things about investing, etcetera, etcetera. He would come and have a chat to me. Everything was pretty much open door. Mr Chehade, I suggest to you that you are making that up?---No." (ii) "MR HOWARD: What did you say to Mr Sladojevic when you claimed you saw him on 16 September?---I asked if - something along the lines of if he could just explain to me again how funding was going to work with regards to the rollout of the formwork system around Australia. You asked him how funding was going to work?---How the rollout was going to happen in conjunction with the funding, yes. I guess my aim of the meeting was just to get reconfirmation that, yes, the licensing or the tiltform, Robert was going to fund the rollout as indicated to me, as was my understanding. As indicated to you by whom?---By Robert. I suggest he had never indicated to you that he was going to arrange funding for the rollout?---Yes, he did. When?---He did that morning I had the meeting and he did prior to that, prior to me investing. Prior to the 16, when do you say Robert indicated to you that he was in some way to fund the rollout?---Before - I can't recall when. It was a period of time over, you know, a few weeks where - as you can appreciate we were in the same offices, we're walking past each other, we're talking, there's nothing, I guess, there's no segregation there so we would always be having chats and talks and that was one of my discussions, knowing I was going to invest and I guess initially understanding how it was going to work and Robert explaining that there was - I also knew of the formwork system and Robert explained how we were going to - the intention was to roll it out Australia-wide. Well, when do you say he expressly discussed that with you?---I can't recall specifically when. It was over a period. We would have just general chats. It wasn't specific meetings, just general talk within the office. Well, is this not the reality? You were aware from conversations which occurred in the office that Tiltform Australia was proposing to roll out in all states as soon as practicable?---I was aware of that, yes. Also to roll out in New Zealand?---Yes, New Zealand was included. I suggest to you that you had assumed that there was sufficient funding in Tiltform Australia for the roll out to occur?---No. I assumed there was sufficient funding in Tiltform Australia for everything but the roll out, the day to day operations, everything but the roll out. The manufacturing the formwork was all going to be funded by Tiltform Licensing." 348 Chehade denied that the photocopy he produced came into his possession at a later date. 349 Sladojevic denies seeing Chehade at all on 16 September. He was at the office at about 8.30 am for a meeting with Dennis Davis from SABC and Bell. The meeting lasted for about half an hour. He later spoke to Tripodi and left about 10 am. Of his meeting he said in his affidavit: "At the above meeting on 16 September 2000, a diagram was drawn on the whiteboard with input by Bell, Davies and myself. The diagram was left on the whiteboard for the following week continuing discussions and changed from time to time over that period. The diagram was concerned with setting up a finance company for myself and Bell to run side by side Tiltform Licensing, which would be used by Tiltform Licensing to raise funds and provide capital to Licensees. (This company was ultimately incorporated and named 'Tiltform Capital Pty Ltd' …). Davies had advised myself and Bell that it would be beneficial for Tiltform Technologies to acquire a stake in its head licensee company at this would (sic) assist in the back door listing of Tiltform Technologies because it would show to investors that we had faith in the Technology. The diagram was not, as alleged in Chehade's affidavit, drawn to explain how the funding for Tiltform Australia would work. Document 268, is a true copy of the whiteboard diagram. Early during the following week, I added to the whiteboard diagram, the words 'Compliments from: "The Loudmouth, Shithead, Unprofessional Neanderthal". I wrote this as Parker and Lee had previously called me such things and I sent the diagram to them to show how this 'neanderthal' was going to help organise funding for Tiltform Australia. The diagram was not prepared for Chehade's benefit and did not involve him or his investment." (Emphasis in original.) 350 The whiteboard diagram referred to is one of several diagrams that were contained in the whiteboard. 351 In his oral evidence Sladojevic indicated that some of the handwriting on the document as printed out was Davies; he photocopied the printout immediately after the meeting and then inscribed it as he intended to give it to Parker; he denied giving it to Chehade; and he gave it to Parker at a meeting on 20 September. Sladojevic gave a relatively detailed explanation of the diagram. It was part of a sequence of diagrams created over several weeks. This particular one was conceptual in character. The principal companies were yet to be formed. As he said of the diagram in cross-examination: "I had a meeting with Mr Parker, Mr Lee and Mr Benson on the 13th where we suggested that we as licensors would look at ways of generating income to try to fund to them their formwork materials. This here is phase one of that, in that first graph, to establish an investment company as a part of a group, and how we would first raise moneys into that investment company, and this diagram depicts that we were going to use licence sales from international licences to generate income into Tiltform International, which didn't even exist at the time, which is a company we were looking at floating. That would have a finance agreement with the investment company as such, which was at that stage just a hypothetical, generic name called Tiltform - as you can see, in someone else's handwriting next to it - Investment Company. So that investment company there would then have a licence agreement - a formal agreement with Tiltform International so they did have security over the funds. The money from there would be passed to Tiltform Manufacturing which in turn would then provide the equivalent amount of value of formwork to the licensee. This was done so that the funds would only be used for formwork, not other purposes, and that way we have security over the material and the licence itself." 352 Bell had no specific recollection of this meeting, though he did recall a number of Saturday meetings with Davies around September that were concerned with funding arrangements. I would note that Davies was not called to give evidence. 353 For my own part, I accept Sladojevic's evidence as to the provenance of the photocopied document and his explanation of it. Such evidence as there is of the Tiltform group of companies would seem to confirm that the principal entities referred to in the diagram were not yet formed. For this reason, if no other, the diagrammatic representation seems a wholly inappropriate vehicle to explain the funding of the rollout by Tiltform Australia. 354 Given Chehade's obvious indifference to making inquiries as to the financial circumstances of Tiltform Australia prior to his "committing" to the investment, I find it quite improbable that at this late date he made this particular inquiry, the more so given his oral evidence (which I do not accept) that Sladojevic had previously told him how the rollout was to be funded ("there was many discussions"). While there is no obvious explanation of how Chehade came to have the inscribed photocopy of the diagram, I accept Sladojevic's evidence that it was produced for Parker (it reflected the sometimes less than tasteful communications he had with Parker) and that he did not give it to Chehade. 355 Because I am not satisfied that the alleged meeting ever took place, I do not accept that the pleaded representations were made as alleged.

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(v) The other wrongful conduct pleaded 356 The conduct said to be misleading or deceptive relates to nine alleged instances of non-disclosures by Bell and/or Sladojevic. There has been no attempt in submissions, oral or written, to explain why these non-disclosures were actionable in Chehade's case. All that the combined written submission does is to make the uncontroversial but unhelpful comment that silence may constitute misleading or deceptive conduct. Unsurprisingly I do not intend to deal in detail with these allegations both because of my findings on the alleged misrepresentations but also because, in light of the fact that most of the allegations were abandoned in the Rawley matter, I am entitled to assume that the same allegations have been abandoned in the present matters. 357 In the Rawley matter I indicated that the question whether conduct in a given instance is proscribed by s 52/s995 is to be determined having regard to all the relevant circumstances. Silence can render conduct misleading or deceptive if in all the circumstance the party complaining of the non-disclosure was reasonably entitled to expect that if the matters in question existed, had occurred, or were contemplated, they would be disclosed: see Hughes Aircraft Systems International at 198-199. 358 Seemingly the "duty to disclose" in Chehade's case was founded in his "trust in Robert and Geoff". I have earlier commented on that trust. I would simply reiterate that to have trust in another person for whatever reason (be it reasonable or fanciful) does not as of course result in the imposition of an obligation on that other to act in accordance with the dictates of that trust. If such trust is to have any significance at all in a particular matter (I exclude from this relationships of undue influence), there must ordinarily be reason in the relationship of the parties either in that matter or arising from past or present dealings that properly could give rise in the circumstances to the expectation that the disclosure of the information in question would be made if it was known to the trusted party. 359 The short answer to the Chehade case is that neither Bell nor Sladojevic on my findings so conducted themselves in relation to Chehade's investment decision that they could properly be expected to disclose information to Chehade. As I will indicate below, I am satisfied Chehade did it his own way. He was the author of his own harm. His trust may have been in Bell and Chehade making the investment a profitable one given their commitment to the Tiltform enterprise and its success. That was not a trust that could author a liability of the type claimed here. 360 I should add that the professional respect Chehade had for Bell may have provided some basis for having the requisite trust in Bell in respect of a particular dealing, if Bell had sufficiently intruded himself into that dealing. On the evidence and my findings I am not satisfied that he did. It is unsurprising that Chehade gave little by way of oral evidence of Bell's involvement in his investment. 361 I should also indicate that complaint has been made in Chehade's "Promoter Claims" of non-disclosures by Bell and Sladojevic of all of the instances relied upon for the s 995 claims. I simply note here, as I earlier foreshadowed, that there was no proper basis for these claims in the Rawley matter. The position in the Chehade case is even less tenable.

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The 7 August letter 363 Sladojevic has called into question both whether Chehade ever actually received this letter (it took the form of an email from Benson to Chehade) and whether it had any influence on his putting in money. The Chehade Statement of Claim does not allege that Chehade ever received the letter, let alone when he received it. In his affidavit, Chehade stated that Benson "gave him a copy". Benson went to New Zealand on 7 August; and was in transit that day, though had telephone and email communications with Sladojevic. 364 In his oral evidence, when asked whether Benson gave, or emailed, him the letter, Chehade said it was forwarded to him by email. He could not recall whether there was an accompanying letter. He was then asked in cross-examination: "Did he [Benson] speak with you about that email?---Yes, he did. And was the effect of the conversation that you better make up your mind as to whether you were going to be making the investment or not?---It was along the lines of, Robert has sent me an email and then he is not happy with the delays at which at that point I hadn't even had the funding. I said, well I - you know, there is nothing I can do at this point. I will do my best. And then I read the email. And as a result of reading the email did you decide that you either better invest or lose the opportunity?---Yes. And rather than lose the opportunity, you put in your $10,000?---Yes, that is correct. Without making further inquiries?---Yes, that is correct. Without even knowing whether the Western Australian group were going to come up with the money?---Yes, that is correct. I had made enough inquiries with Geoff and Robert to convince myself that the investment was fine." 365 The email letter, in form was directed to Benson. It was forwarded to Lee in Western Australia as an attachment to an email sent by Benson to him that email being dated "Monday, 7 August 2000 20:20". Chehade had as an attachment to his first affidavit, a copy of Sladojevic's email. It was not accompanied by any covering letter. Nor did it otherwise indicate that it had been forwarded by Benson. 366 Chehade paid his $10,000 to Tiltform Australia's bank account directly by cheque on 7 August 2000. He was cross-examined on this payment: "You have told us that on 7 August you paid $10,000?---Yes. Into the account of Tiltform Australia?---Yes. Either on that day or a day or so before, did you have a conversation with Benson and tell him that you were going to put that $10,000 in?---Yes, from what I can recall. Yes. Tell us about that conversation, what was said?---I mentioned that I could put a deposit down or pay - I can't remember exactly what I mentioned but I mentioned the fact that I had to get the funding and I would try to source the funding and I put a deposit down to secure the investment, subject to me getting the funding. Was that at his request?---No." I note in passing that if this was the 7 August conversation Chehade earlier said he had with Benson, no mention is made of the letter of the same date. 367 Benson's evidence is that he forwarded the email to Chehade. He could not recall when Chehade paid his $10,000. Sladojevic's evidence was that he sent the email to Benson "late evening" on 7 August. 368 The Chehade submissions do not seek to engage in any way with the evidentiary issues raised by Sladojevic's. It is merely said that I should have no hesitation in finding that Chehade received the letter as Sladojevic intended and that it clearly had an impact on him as on the same day he put down the deposit of $10,000 "to confirm his intention to proceed". 369 As to Chehade's receipt of the letter, I am satisfied, though with some misgivings, that the letter was sent to him by Benson. As to the alleged influence on him of it, I am not so satisfied. In particular I am not satisfied on balance that the $10,000 deposit made on 7 August was made after Chehade received the forwarded email from Benson. Given that (a) Benson went to New Zealand on that day from Sydney; (b) Sladojevic sent the email to him "late evening"; and (c) Benson's email to Lee was in turn an evening email - it would be appropriate to infer that the email forwarded to Chehade was sent at around the same time as that to Lee. If such was the case, even accepting that Chehade spoke to Benson after he received it (which I do not), it is improbable that the deposit was made after his receipt of the letter and was influenced by it. In the circumstances I cannot be satisfied that the two events - the making of the deposit and the receipt of the letter - were not simply unrelated events. Further, I consider it likely that, before 7 August, Chehade had informed Benson that he would put a deposit down to secure the investment. Chehade gave evidence as to such a conversation on or before 7 August. I consider there must be a real question as to whether it occurred on 7 August given Benson's travels on that day and the issue of timing to which I have referred. 370 Despite Chehade's evidence to the contrary, I am satisfied that he placed no reliance on the 7 August letter in making his deposit and that it was not causative of any loss. 371 I have dealt with the above on the basis that Chehade made his commitment on 7 August. As I earlier indicated, I am satisfied he had contracted with Tiltform Australia subject to a performance condition probably prior to 17 July 2000. 372 My conclusion above is fatal to Chehade's s 995 case which must in consequence be dismissed.

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THE CROSS-CLAIMS 377 In both the Rawley and the Chehade proceedings Bell made cross-claims against his insurance broker and agent, OAMPS Insurance Ltd, and against his insurer, CGU Insurance Ltd. 378 The claims made against CGU were in respect of a policy of professional indemnity insurance said to be effective from 28 February 2001 to 28 February 2002. Bell was notified of the Rawley and Chehade claims on 27/28 June 2001. He notified OAMPS of these in early July. He was informed by OAMPS on 25 July that CGU declined to indemnify him and had cancelled the policy on 15 June for non-payment of the premium. 379 In his cross-claim he contests the validity of that cancellation; he claims various breaches of the terms of his policy; he alleges an infringement of s 52 of the TP Act in consequence of his expectation of notice before cancellation; and he seeks a declaration that he is entitled to be indemnified for any liability to the Rawley applicants and to Chehade. Damages and other orders are also sought. 380 It is unnecessary to outline his claims against OAMPS which have been settled, other than to note that they allege breach of contract, negligence and an alleged contravention of s 52 of the TP Act and that they relate generally to the circumstances of his policy's cancellation. 381 CGU's defence is multi-layered. The principal ground of defence for present purposes is pleaded as follows: "5.4.1 It was a term of the policy contained in clause 2.1 thereof that the first cross respondent would not be liable to indemnify the cross-claimant until full payment of the Gross Premium stated in the Schedule to the Policy had been made and it was further a term of the Policy contained in clause 2.5 thereof that if full payment of the Gross Premium was not made to the first cross respondent there would be no cover under the policy. 5.4.2 The Cross claimant failed to pay the full amount of the Gross Premium to the first cross respondent by 8 June 2001 and accordingly the cross claimant is not entitled to any indemnity under the Policy." 382 I will later refer to the other defences raised. The above, in my view, is a complete answer to the cross-claim.

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The factual setting 383 The above quotation from CGU's defence accurately describes the burden of clauses 2.1 and 2.5. The CGU policy was arranged through OAMPS as Bell's agent. The full amount of the premium was $3,461.70. CGU accepted that in consequence of the provisions of ss 14 and 27 of the Insurance (Agents and Brokers) Act 1984 (Cth) - it is unnecessary here to refer to their terms - the premium was payable within 90 days of the inception of the cover on 28 February 2001. 384 Bell had arranged with a Mr Milford of OAMPS to pay the premium in three equal monthly instalments payable at the end of March, April and May 2001. The March and April instalments were paid to OAMPS. The third instalment was not paid within the 90 days - i.e. by 29 May 2001. 385 On 8 June 2001 a Mr Partridge, a senior underwriter with CGU, authorised that a letter and a facsimile be sent to OAMPS c/- Milford by way of notice of cancellation of the policy. Having referred to Bell's non-payment of the premium, each stated (inter alia) that if the premium was not received within seven days or some prior arrangement has been agreed, the policy would be cancelled. 386 Having received the facsimile on 8 June 2001, Milford advised Bell on 15 June by telephone that final payment of the premium was required immediately. On 18 June 2001 Milford sent a facsimile to CGU advising that Bell had already paid $2,311.70 of the premium and would pay the balance in a few days. It was requested that the policy be maintained pending payment. On 20 June OAMPS sent a further letter to CGU indicating it was continuing its efforts to collect the outstanding premium. This was received on 26 June. CGU responded on that day indicating that "cover will not be held" but "a new quote could be arranged" once payment had been received. 387 On 27/28 June 2001 Bell received notification of the claims in the Rawley and Chehade matters from their legal advisers. It is Bell's evidence that he then telephoned OAMPS and made arrangements for payment of the outstanding instalment of $1,150.00 by means of a payment authority given OAMPS. On 3 July, and by facsimile on 4 July, he sent OAMPS written notification of the claims. On 5 July Bell paid the final premium instalment to OAMPS. On 16 July 2001 Milford sent Bell's 4 July facsimile to CGU notifying the claims. 388 On 17 July 2001, Partridge telephoned Milford and told him Bell's policy had been cancelled for non-payment. Partridge further indicated he need not respond to Milford's request to extend the cover made in his 18 June facsimile. On 19 July 2001 CGU returned Bell's claim documents to Milford given that the policy had been cancelled. On 25 July 2001 Milford advised Bell of this.

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Consideration 389 Bell's case, as I understand it, is that CGU was "estopped" from denying insurance cover until either he was notified that his policy might be cancelled, or he was afforded the opportunity to obtain alternate cover. His submission, in other words, appears to be founded on those provisions in Part VII of the Insurance Contracts Act 1984 (Cth) dealing with cancellation of a policy. 390 It is the case that CGU's contemporary correspondence with OAMPS referred to "cancellation" of the policy for non-payment of premium. Its defence, likewise, pleaded cancellation as one of its grounds of defence. That ground, though, has not been pursued. 391 The ground of defence presently under consideration is concerned, not with cancellation of the policy for non-payment, but with the cover to be provided by the policy not being operative by reason of non-payment at the times the Rawley and Chehade claims were notified to Bell in late June. This distinction is reflected clearly in the language of the Policy itself. 392 I have already referred to cll 2.1 and 2.5 of the Policy which link the provision of the cover to full payment of the policy, cl 2.5 providing that if full payment of the gross premium is not made, "there is no cover". By way of contrast, cl 11.1(a)(v) of the Policy acknowledges the insurer's right to cancel the policy under s 60 of the Insurance Contracts Actwhere (inter alia) the insured "failed to pay the premium for this policy". This distinction between what I will call "cessation of cover" on the one hand and cancellation of the policy on the other is recognised explicitly in the Act in the manner in which it regulates instalment contracts of general insurance: see s 39 and s 62; and see generally Waterman v Gerling Australia Insurance Co Pty Ltd (2005) 194 FLR 419; Sutton, Insurance Law in Australia, 7.42 (3rd ed 1999). 393 It is a question of construction of the policy, admittedly under the shadow of the Insurance Contracts Act, as to whether in the circumstances Mr Bell had the cover provided by the CGU at the time of notification of the claims, i.e. 27/28 June 2001. Apart from recognising the difference between cessation of cover and cancellation, the Act does not apply to or regulate directly provisions such as cl 2.5. On its face that sub-clause is a self-executing one. Once the contingency on which it is premised occurs, the cover ceases. The cover may later be revived by the making of payment in full, assuming an election to cancel for non-payment had not by then been made. Unless and until that occurred, there would be no cover notwithstanding that the Policy itself may remain on foot. Far from throwing any doubt on this construction the policy itself supports it. 394 I have not considered it necessary to give detailed consideration to the principles applied in the construction of contracts of insurance. These have recently been essayed by Brereton J in Waterman's case. For my own part, I respectfully agree with his Honour's conclusion in that case. It deals with the very issue raised here though with a clause not quite as unmistakeably explicit as here. I would merely wish to emphasise that while I well understand that an automatic cessation of cover might have the same undesirable policy effects as the Australian Law Reform Commission identified in relation to automatic cancellation: see ALRC Report 20 Insurance Contracts, 1982 [246]-[247], I agree with Brereton J that there is nothing in the Insurance Contracts Act, that Report and the now accepted principles of interpretation of contracts: see e.g. Lion Nathan Australia Pty Ltd v Coopers Brewery Ltd (2005) 223 ALR 560 at [71] ff; affd (2006) 156 FCR 1; that would permit the torturing of the clear and coherent terms and text of a contract so as to effectuate that policy in some way. That is a matter for the legislature to address. 395 Accordingly, I am satisfied that there was no insurance cover on 27/28 June 2001; that CGU's defence has been made out; and that the cross-claims must be dismissed with costs. 396 I do not intend to consider the other defences raised by CGU, given that the only live issue between CGU and Bell is costs (having regard to my findings in the Rawley and Chehade matters). However, I should indicate this much. Those defences called into question (i) whether Bell's actions giving rise to the claims against him arose from the conduct of the business planning consultancy covered by the Policy, it being contended that he was acting in the management of Tiltform Licensing by June and July 2000; (ii) whether he was relevantly acting as an "officer of Tiltform Australia and so subject to an express exclusion of the Policy"; (iii) whether Bell's conduct fell within the "unintentional dishonest" acts or omissions exception to the Policy; (iv) whether the policy was voidable under s 28 of the Insurance Contracts Act on account of fraudulent representations contained in the proposal for insurance, or else CGU would have been entitled to reduce its liability to nil. I am of the view in respect of each of these that CGU had a reasonably arguable defence on the material before me.

[96]

Schedule 1 LIST OF CORPORATIONS Tiltform Australia Incorporated on 1 May 2000. Company set up as national licensee to hire out Tiltform formwork system. Company went into liquidation in April 2001. Tiltform Licensing Company formed to own the exclusive license agreement for the commercialization of the Tiltform technology. Sladojevic sole shareholder following resignation of Vinet. Bell given 5% shareholding of company in September 1999. Bell appointed Director in August 2000. Tiltform Pty Ltd Company set up to own the intellectual property for the technology in 1998. AR Tiltwall Services Pty Ltd Company commenced by Vinet and Sladojevic in 1997 for the purpose of manufacturing and hiring the Tiltform technology. Hire business sold to Dino Pietrobon in March 1999. Tiltwall Services Pty Ltd Pietrobon company that bought the panel manufacturing business from Vinet and Sladojevic. Continued to hire formwork from Tiltform Concrete Systems SA/Tiltform Australia until some time in early to mid-2000. Company allegedly involved in breach of Tiltform patent in early August 2000. Tiltform Concrete Systems SA Company operated by Nigel Benson as from February/March 2000 for SA operations of Tiltform hire business. Taken over by Tiltform Australia in May 2000. Bell Partners/Bell Chehade Bell Partners was an accounting and business consultancy practice set up in 1997 by Bell as sole partner. Firm became business adviser and accountants for Tiltform group of companies from 1998. Name of firm changed in April 2000 to Bell Chehade following appointment of Chehade as salaried partner. Tiltform Manufacturing Company incorporated in April 2000 for the purposes of manufacturing components for the formwork system. Components then supplied to licensees of the formwork. Bell, Benson and Sladojevic all Directors as at December 2000. Tiltform Technologies Company set up on the advice of Dennis Davies to facilitate a back door listing of a Tiltform company in New Zealand. Company owned all of the shares in the "licensor" group of companies, said to be, Tiltform Management, Tiltform Technologies, Tiltform Manufacturing, Tiltform Capital, Tiltform Unit Trust, Tiltform and Tiltform Licensing. Tiltform Capital Incorporated in October/November 2000 to raise investment funding which could be lent to Tiltform Australia to fund the hire of formwork components. Tiltform Management/Administration Incorporated in September/October 2000 to pay for the rent, fit-out, lease and running costs of the office shared by Tiltform Licensing, Tiltform Manufacturing and Tiltform Australia. Tiltform Concrete Systems (WA) Pty Ltd WA Licensee of the Tiltform system run by Peter Ilic, Darren Jennings and invested in by Joe Barone. Company hired formwork to Icon Group who then proposed to invest in the company. Eventually taken over by Tiltform Australia. Icon Group Company established in Perth in 1992. Business involves "top end" residential commercial and concrete construction. Company initially hired Tiltform system from Tiltform WA but ultimately sought to acquire the licence. Connoisseur Holdings The second applicant and an investor, unit holder and beneficiary under the terms of the Tiltform Unit Trust. Airport Consulting Pty Ltd Currently holds ordinary units in the Tiltform Unit trust. Tiltform Unit Trust Trust set up by WA investors to facilitate the investment in Tiltform Australia. Rawley Pty Ltd The first applicant and trustee of the Tiltform Unit Trust. Is an investor, unit holder and beneficiary under the trust. Schedule 2 LIST OF NATURAL PERSONS Ben Abrahams Benson's replacement financier. Simon Abraham Independent accountant for Tiltform Australia. Joe Barone Investor in Tiltform Concrete Systems (WA). Geoffrey Bell Sole member of Bell Partners accounting and consultancy practice. Director of Tiltform Licensing from August 2000. Business adviser to Robert Sladojevic and Tiltform Group from mid-1999 onwards. 5% shareholder in Tiltform Licensing from September 1999. Nigel Benson Managing director of Tiltform Australia from May 2000 - April 2001. At the time of Tiltform Australia's incorporation, was its sole shareholder and director. Amin Chehade Employed by Bell Partners in 1997 and appointed salaried partner in July 2000. Practicing accountant involved in accounts for Tiltform group. Invested in Tiltform Australia in mid-2000. Appointed financial controller of Tiltform Australia in September 2000 and a director in March 2001. John Dawkins Chairman of Tiltform Australia from mid-2000 onwards. Appointment never formally recognized. Peter Ilic Director of Tiltform Concrete Systems (WA). Involved in negotiations for sale of shareholding to Tiltform Australia in Perth during late June 2000. Darren Jennings Investor in Tiltform Concrete Systems (WA). Gavin Lee Director of Icon Group and supervised provision of marketing and architectural services. Worked as General Manager of Tiltform Australia from August 2000. Appointed Director of Tiltform Australia on 4 September 2000. Joint trustee of the Tiltform Unit Trust with Gregory Parker. Andrew Lloyd Financial adviser to Nigel Benson during initial negotiations for Tiltform Australia. Provided some finance for deposit on licence agreement. Ultimately replaced by Ben Abrahams. Joe Murabito Director of Icon Group. Joined Icon because of expertise in concreting and manages large tilt-up projects for the company. Recommended use of Tiltform Technology to Icon and involved in meeting in Adelaide regarding investment into Tiltform WA, and meeting in WA regarding investment into Tiltform Australia. Renato Palmiero Director of Icon Group. Oversaw all construction projects undertaken by Icon. Gregory Parker Independent accountant for Icon Group. Provided financial advice to Icon Group directors relating to investment in Tiltform WA and then Tiltform Australia. Appointed director of Tiltform Australia in September 2000. Joint trustee of the Tiltform Unit Trust with Gavin Lee. Gino Pietrobon Purchased panel manufacturing business from AR Tiltwall Services to become Tiltwall Services. General Manager of that company from September 1999. Company involved in alleged patent breaches of Tiltform technology in August 2000. Robert Sladojevic Developed concrete "tilt-up" system. Director and/or shareholder of each company in Tiltform Group with the exception of Tiltform Australia. Richard Solomon Legal adviser to Tiltform Licensing group at time of proposed investment by WA investors in Tiltform Australia. Alex Vinet Helped develop the titlform technology with Sladojevic. Former director/shareholder of Tiltform Group of companies until late 1999. Sold final shareholdings in late 2000.

Rawley Pty Ltd ACN 009 027 454 v Bell

At a glance

Court

Decision date

Before

Source

Judgment (96 paragraphs)

Parties

Legislation Cited (11)

Cases Cited (26)

Cited By (2)