SMITH -v- LEVERAGED EQUITIES LTD [2020] WASCA 122 (5 August 2020)

1. On this appeal Mr Smith did not challenge any of the primary judge's factual findings; only conclusions from the facts were contested.[2] Accordingly, it is convenient to recount the background facts by reference to the primary reasons.[3] It should not, however, be thought that what follows is a comprehensive account of the primary reasons. The primary judge had to contend with the claims against Mr King and Mrs King as well as the claims against Leveraged Equities and ASASL. Also, at first instance Mr Smith raised many additional causes of action against Leveraged Equities which are no longer pursued on appeal. It is only necessary to set out the background to the extent necessary to deal with the issues on appeal.
2. The nature of the relationship between the parties has been described at [1] to [6] above. At the outset it should be acknowledged that the primary judge found that Mr King was seriously dishonest on several occasions (all of which resulted in the transfer of Wesfarmers shares belo[4]ging to Mr Smith).4 There were, however, no findings that Leveraged Equities knew of Mr King's dishonesty at th[5] time of the transfers.5 Moreover, as to the 30 July 2007 agreement the primary judge made an express finding that he was not satisfied that Leveraged Equities was involved in the contravention constituted by[6]Mr King's conduct.6
3. The primary judge found that Mr King was not a conservative investor. Mr King was found to have traded in high volumes and to have borrowed heavily to do so. The primary judge found that, on occasions relevant to the litigation, Mr King took market positions which left him very exposed when share values fell.[7]
4. The Authorised Representative Agreement between ASASL and Stripe permitted Stripe to use a trading system known as the 'E*Trade Trading System' for the execution of ASX transactions.[8] However, Stripe and its directors (including Mr King) guaranteed the settlement of all trades Stripe executed.[9] This was relevant to the trading Mr King conducted in Mrs King's name involving the Leveraged Equities margin lending account. Mr King and Stripe were the named advisers and Mr King the authorised representative for Mrs King's margin lending account with Leveraged Equities.[10] If Leveraged Equities would not fund particular trades (because, for example, the available security was inadequate) the contracts would still settle.[11] The trading was conducted through E*Trade. E*Trade was obliged to discharge Mrs King's obligation to purchase or sell shares whether or not Mrs King delivered the purchase price or shares. In turn, ASASL was required to indemnify E*Trade. Stripe and its directors, including Mr King, were to indemnify ASASL.[12]
5. Accordingly, while the exposure for failed trades would fall on Mrs King, there was a coextensive liability that lay with Stripe and Mr King.[13]
6. The primary judge made detailed findings as to the contractual terms on which Mrs King (and later Mr Smith) contracted with Leveraged Equities in relation to the margin lending account under a Margin Loan Facility Agreement dated 20 July 2006 between Mrs King and Leveraged Equities.[14] The primary judge also addressed how such margin lending accounts were administered in fact.[15] Importantly, Leveraged Equities reserved an absolute discretion to decline to advance a loan (cl 2.2(b)).[16] The maximum amount Leveraged Equities was prepared to advance was based on the security value of all secured property.[17] If at any time the total amount owing exceeded the security value by more than a buffer, the borrower (Mrs King) had to provide additional collateral, repay some or all of the total amount owing or sell or redeem some of the secured property so that the total amount owing no longer exceeded the security value (cl 4.1). In the event of default Leveraged Equities was entitled to enforce a mortgage over the secured property.[18]
7. The maximum amount Mrs King could borrow would, typically, fluctuate on a daily basis insofar as the security value was a percentage of the market value of the shares held as security.[19]
8. Towards the end of July 2007 Mr King, using his mother's account, had entered into contracts to purchase shares with a total amount payable that exceeded $3.061 million. The funds available in Mrs King's account were insufficient to settle the purchases. Leveraged Equities would not advance settlement funds based on the value of the current security it held.[20] Mr King needed to find cash or lodge security of sufficient value so that Leveraged Equities would lend the funds required to settle the trades against the value of the security.[21]
9. Mr King was aware that Mr Smith had sufficient Wesfarmers shares to provide collateral for the trades.[22]
10. Mr King contacted Mr Smith by telephone early on 30 July 2007; they met later that day. Mr King offered Mr Smith $50,000 as consideration for the use of 85,000 Wesfarmers shares as collateral for about six weeks. The discussions resulted in a written agreement[23] between Mr King and Mr Smith. In substance the agreement provided for Mr Smith to provide collateral for Mrs King's Leveraged Equities account in the form of 85,000 Wesfarmers shares for a period of up to 15 September 2007. Mr King agreed to pay $50,000 to Mr Smith for the use of the collateral.[24]
11. The primary judge found that the agreement and Mr Smith's acts pursuant to the agreement were induced by misleading or deceptive conduct on the part of Mr King.[25]
12. When Mr King and Mr Smith met on 30 July 2007 to sign the written agreement, Mr King also provided - and Mr Smith signed - other documents to give effect to the arrangement. These comprised:
    1. An Application Form for Mr Smith to be added as guarantor to Mrs King's account.[26]
    2. A Form of Acknowledgement of a Master Deed of Priority between an entity named Australian Clearing House Pty Ltd and Leveraged Equities.[27]
    3. An Authority Letter addressed to Leveraged Equities by which Mr Smith authorised the transfer of 85,000 Wesfarmers shares from his HIN (referring to 'Holder Identification Number' - a number which uniquely identifies a person as the holder of shares) to the margin loan account in the name of Mrs King.[28]
13. Mr Smith transmitted those documents to Leveraged Equities.[29] The primary reasons do not state when this occurred. It could not have occurred any earlier than 30 July 2007 (the day of the meeting) and was no later than 31 July 2007 (because Leveraged Equities contacted Mr Smith on 31 July 2007).[30]
14. In a subsequent section of his reasons the primary judge made detailed (and unchallenged) findings as to the process of the transfer of Mr Smith's shares to Leveraged Equities.[31] The Application Form included an offer to give Leveraged Equities a mortgage; this was executed by an employee of Leveraged Equities under power of attorney given in the Application Form.[32] Leveraged Equities could require that, as guarantor of Mrs King's account pursuant to the Application Form Mr Smith signed, Mr Smith's securities be held by a nominee or in a participant sponsored holding.[33] Mr Smith insisted that the shares he provided as collateral be held under a sponsorship arrangement, rather than by a nominee, and that is what happened. Thus there was no change in ownership.[34] Mr Smith remained the registered owner of the shares.[35] However, his proprietary rights were subject to the sponsorship agreement[36] and the mortgage in favour of Leveraged Equities.[37]
15. Following the processing of the Application Form and the Authority Letter the 85,000 Wesfarmers shares thus became collateral for Mrs King's margin lending account; the shares then provided about 80% of the security value in relation to the account.[38] The outstanding trades (which might otherwise have failed) settled on 1 August 2007.[39] From 10 September 2007 Mr King recommenced trading on his mother's account.[40] While the $50,000 was paid to Mr Smith, the 85,000 Wesfarmers shares were not returned to him on 15 September 2007.[41] Mr King was able to delay Mr Smith with promises.[42]
16. On 21 January 2008 Mrs King's account was in margin call; the security value left a shortfall of $333,421.27 as against the loan amount.[43] Mr King asked Leveraged Equities to lodge further Wesfarmers shares against the account, sending Leveraged Equities, via email, an undated document purportedly signed by Mr Smith authorising the transfer of 25,000 Wesfarmers shares.[44] Mr Smith's signature was forged by Mr King.[45] The transfer of the 25,000 Wesfarmers shares was completed on 25 January 2008.[46] The primary judge found that, at this time, Leveraged Equities had no reason to suspect dishonesty on Mr King's part - or that Mr King was acting outside his authority.[47]
17. Mr Smith travelled to Europe on 5 March 2008 and did not return until 12 April 2008.[48]
18. As at 8 March 2008 three pending trades on Mrs King's account were due to fail because of insufficient capacity in the margin lending account. On 10 March 2008 Mr King caused another 15,000 Wesfarmers to be transferred to Mrs King's account. The circumstances of the transfer were much the same as the second transfer involving the 25,000 shares in January 2008. The transfer was implemented by a letter emailed to Leveraged Equities, purportedly signed by Mr Smith, authorising the transfer. Again the letter was forged by Mr King.[49]
19. Leveraged Equities was not aware that the transfer of the 15,000 Wesfarmers shares was made without Mr Smith's authority.[50]
20. After Mr Smith returned from Europe, he demanded an explanation for the transfer of the additional 40,000 Wesfarmers shares. Mr King blamed the transfer on clerical error.[51] On 7 May 2008, 25,000 Wesfarmers shares were returned to Mr Smith.[52] No findings were made as to the reasons for or circumstances of the return. The finding is one of bare fact without elaboration: Mr King sent an email advising Mr Smith that shares would be coming back into his account; on 7 May 2008 the 25,000 Wesfarmers shares were returned.[53] As will be seen, an issue arises in the appeal as to whether the return of these shares should be allocated to the initial tranche of 85,000 shares (Mr Smith's primary position) or the second or third transfers (the 25,000 and 15,000 shares as transferred in January and March 2008). The returned shares could not relate to the 10,625 rights issue shares as the return pre-dated the rights issue.
21. On 2 June 2008 Wesfarmers made a rights issue. This resulted in an accretion to the Wesfarmers shares in an amount of 10,625 shares.[54]
22. The rights issue shares were held in Mrs King's Leveraged Equities margin lending account.[55] The primary judge made an unchallenged finding that the Wesfarmers shares that entitled Mr Smith to participate in the rights issue were the 85,000 shares held in an account under Mr Smith's HIN with Pirie Street Custodians as his sponsor.[56] Pirie Street Custodians acted as the sponsor for the shares held on Mrs King's margin lending account with Leveraged Equities.[57] Mr Smith remained the registered owner of the shares; however, his rights were subject to the sponsorship agreement.[58]
23. Mr Smith made contact with Leveraged Equities on 24 June 2008.[59] Previously, by letter dated 13 June 2008, Mr Smith had sought return of 50,000 Wesfarmers shares, as originally transferred, and the rights issue shares (Mr Smith continued to be under the misapprehension that the transfer of the 40,000 shares the subject of the second and third transfers was a mistake).[60] On 24 June 2008 Mr Smith sought that all of his Wesfarmers shares be returned to him; however, the current account position did not allow their release.[61] In subsequent June 2008 telephone calls Mr Smith informed Leveraged Equities of the agreement as to the 85,000 shares. The primary judge found that Leveraged Equities was not previously aware of an agreement of that kind.[62] The primary judge also found that no one at Leveraged Equities was aware that the 21 January 2008 and 8 March 2008 authorities (as to the 25,000 and 15,000 Wesfarmers shares) were forged, or alleged to be forged, until the issue was raised by Mr Smith in late June 2008.[63]
24. The primary judge later reiterated that Leveraged Equities became aware of Mr King's fraud in relation to the second and third share transfers from about late June 2008 or, at the latest, by 17 July 2008.[64] The relevant date in June 2008 appears to have been 24 June 2008.[65] In any case, as at 17 July 2008, Leveraged Equities recorded that the second and third share transfers 'were indeed fraudulent'.[66]
25. Commencing from late 2008 there were extensive communications and negotiations between Mr Smith and Mr King with a view to Mr King making Mr Smith whole.[67] It is not necessary to outline these dealings or the terms of a deed that was signed by Mr King and his partner.[68]
26. In August 2008, Mr Smith requested that Leveraged Equities return the Wesfarmers shares. Mr Smith said that they had been fraudulently transferred to Leveraged Equities by Mr King. Leveraged Equities, by one of its officers, said that the shares could not be released.[69] On 23 December 2008, Mr Smith, by his solicitors, demanded that Leveraged Equities make immediate transfer to him of the balance of the Wesfarmers shares then held by Leveraged Equities.[70]
27. By August 2008 Mrs King's margin loan account was suspended. As at 31 August 2008 the loan totalled $2,899,557.13 and there was a security value shortfall. Over the ensuing months the share price of the Wesfarmers shares dropped. Margin calls were made. Sometimes Mr Smith made payments to Leveraged Equities to reduce Mrs King's debt and avoid the sale of his Wesfarmers shares. On other occasions there was a transfer or sale of Wesfarmers shares.
28. The primary judge recorded the following transactions:
    1. On about 18 September 2008 Mr Smith paid $150,000 and authorised the sale of 10,000 Wesfarmers shares (which realised $290,060.61).[71]
    2. On about 27 October 2008 Mr Smith paid $130,000 to Leveraged Equities and transferred a further 15,000 Wesfarmers shares to be held as security.[72]
    3. On about 5 December 2008 Leveraged Equities sold 68,000 Wesfarmers shares receiving an amount of $1,125,248.67 on 10 December 2008.[73]
    4. On 9 September 2011 Mr Smith paid Leveraged Equities an amount of $764,983.20 to clear Mrs King's margin lending account.[74]
29. The $764,983.20 was paid by Mr Smith to Leveraged Equities after he commenced proceedings against Leveraged Equities.[75] The amount was paid without prejudice to any claims by Mr Smith against Leveraged Equities including the claims made in the action.[76] After payment, on about 20 September 2011, Leveraged Equities transferred the then balance of the Wesfarmers shares it held in relation to Mrs King's margin lending account - some 47,625 unencumbered shares - to Mr Smith.[77] The primary judge stated that: [78]

It is not possible to say whether the shares then returned included shares from the second and third share transfers [ie the 25,000 shares in January 2008 and the 15,000 in March 2008] or the rights issue [the 10,625 in June 2008].

1. Accordingly, in total Leveraged Equities applied 78,000 Wesfarmers shares owned by Mr Smith[79] and received an amount of $1,044,983.20 in cash payments from him.[80]

Primary judge's findings on the various claims The claims against Mr King

1. Mr Smith pursued claims against Mr King for breach of fiduciary duty, breach of a duty of care, breach of contract and misleading or deceptive conduct (the latter relying on s 10 of the Fair Trading Act 1987 (WA), s 1041H of the Corporations Act and s 12DA of the Australian Securities and Investment Commission Act 2001 (Cth)).[81] The misleading or deceptive conduct claim succeeded insofar as it relied on s 10 of the Fair Trading Act 1987.[82] However, the primary judge dismissed the claims for breach of duty of care[83] and breach of contractual duty.[84] The primary judge also rejected the breach of fiduciary duty claim.[85]
2. The primary judge concluded that, in making the 30 July 2007 agreement, Mr King was not bound by fiduciary obligations.[86] That finding is challenged as part of ground 2 (and inferentially as part of ground 3). Mr Smith's case on appeal as to the initial 85,000 share transfer relied, among other things, on establishing that the transfer of the shares occurred as a result of a breach of fiduciary duty owed by Mr King to Mr Smith.

1. Mr Smith was held to be entitled to recoup the amounts he paid on behalf of Mrs King as guarantor of her liabilities to Leveraged Equities.[87]

1. The primary judge dismissed a number of claims against Leveraged Equities which are no longer pursued on appeal. These were claims by way of:
   1. Misleading or deceptive conduct.[88]
   2. Unconscionable conduct (relying both on the general law and various statutory provisions).[89]
   3. Knowing receipt of property transferred in breach of fiduciary duty.[90] (Here the primary judge again referred to not being satisfied that Mr King breached fiduciary duties to Mr Smith with regard to the 30 July 2007 agreement.)[91]
   4. Conversion.[92]
2. The claims dismissed by the primary judge, and now re-agitated on appeal, were claims that Leveraged Equities had been unjustly enriched at Mr Smith's expense.
3. The primary judge held that the 85,000 initial share transfer was pursuant to Mr Smith's guarantee of Mrs King's margin lending account and the sponsorship agreement where the breach of fiduciary duty alleged by Mr Smith had not been established.[93] Among other things that was a finding that the benefit had been transferred to Leveraged Equities under a contract. In connection with Mr Smith's unjust enrichment claim the primary judge had earlier referred to authority that, where a benefit was transferred under a contract, the fact of the contract would provide the recipient with a right to retain the benefit until the contract was avoided or set aside.[94] The primary judge held that the contract between Mr Smith and Leveraged Equities was not liable to rescission under statute by reasons of Mr King's breaches.[95] Nor was the primary judge satisfied that Mr Smith had established causes of action in misleading or deceptive conduct, or unconscionable conduct, entitling him to rescission of his agreements with Leveraged Equities.[96] Also, his Honour was not satisfied that Mr Smith had established the basis alleged for restitution of the shares and traceable benefits retained by Leveraged Equities.[97]
4. These conclusions as to the initial share transfer are challenged by ground 2 of Mr Smith's appeal.
5. The primary judge concluded that the 85,000 shares were the shares that entitled Mr Smith to participate in the rights issue. The mortgage to Leveraged Equities extended to those shares. The primary judge held that the guarantee was a sufficient basis for the rights issue shares to be retained - Mr Smith having not established a basis for setting aside the guarantee as against Leveraged Equities.[98]
6. The primary judge held, however, that on becoming aware of Mr King's fraud in relation to the second and third share transfers, Leveraged Equities could no longer rely on the guarantee or mortgage as authority to retain those shares as security. The primary judge stated that, subject to other defences, Mr Smith was entitled to the return of the shares, but by September 2011 all remaining shares had been returned.[99] The primary judge, without determining 'change of position' and 'good consideration' defences on the part of Leveraged Equities, made no provision for relief against Leveraged Equities and ultimately dismissed the claim against Leveraged Equities.[100]
7. The primary judge stated that:
   1. In practical terms 25,000 Wesfarmers shares had been returned to Mr Smith in May 2008 - stating, in the following sentence, that Leveraged Equities was still entitled to hold the shares 'initially transferred'.[101] On appeal Leveraged Equities relied on this statement in contending that there was an unchallenged factual finding that the shares that were returned to Mr Smith on about 7 May 2008 were the 25,000 shares the subject of the second share transfer.[102]
   2. It was not clear what would have occurred had Leveraged Equities returned the 15,000 shares (as transferred in March 2008) in July 2008. His Honour stated that the return was likely to have triggered a margin call. The primary judge was unable to calculate the extent to which such a margin call would have caused the sale of Mr Smith's Wesfarmers shares as held as security. However, any margin call would have resulted in the sale of at least some of Mr Smith's shares. The primary judge thus stated that 'the return of shares is likely to have caused Mr Smith substantial loss.'[103]
   3. The remaining 47,625 Wesfarmers shares were returned to Mr Smith in September 2011.[104]
   4. Leveraged Equities retained no further shares. With uncertificated holdings it was not possible to identify whether the shares that were sold were from the initial transfer, the rights issue or the second and third share transfers. But Leveraged Equities no longer held any shares which could be the subject of the order sought.[105]
8. In this respect the primary judge referred to Mr Smith claiming an order for the delivery of the shares the subject of the second and third share transfers, less any shares returned to him.[106] That, however, was not the full extent of the relief sought. There was a more general claim for restitution.[107] And Mr Smith pleaded that Leveraged Equities must make restitution for, among other things, the shares or the value of the shares.[108]
9. Ground 1 challenges the primary judge's reasoning and conclusion summarised at [47] above.

1. Mr Smith's claim against ASASL was based on the position of Stripe and Mr King as authorised representatives of ASASL and the responsibility attributed to ASASL as a financial services licensee under ch 7 div 6 of the Corporations Act. The nature of the claim, and the primary judge's reasoning in relation to the claim, is more readily understood after considering the statutory provisions relied on by Mr Smith. Accordingly, the primary judge's reasons are considered at [259] to [262] below. For now it sufficies to state that the claim was dismissed.

1. Mr Smith relied on four grounds of appeal. Three grounds were directed to the failure of Mr Smith's case against Leveraged Equities. Ground 1 concerned the second and third share transfers. Ground 2 concerned the first share transfer. Ground 3 concerned the 10,635 rights issue shares but was derivative on ground 2 insofar as the shares that entitled Mr Smith to participate in the rights issue were the 85,000 shares as initially transferred. The fourth ground was directed to ASASL.
2. Ground 1 relied on the primary judge's finding, at [546] of the primary reasons, that subject to defences Mr Smith was entitled to the return of the second and third share transfers (ie the 25,000 and 15,000 share transfers on 25 January 2008 and 10 March 2008 made as a result of Mr King's forgeries). Mr Smith alleged error in not ordering restitution on the basis that such shares had been already returned where: (1) Leveraged Equities obtained benefits from the shares; and (2) the return of the remaining balance of 46,625 shares on 20 September 2011 was pursuant to an agreement that the transaction would be without prejudice to Mr Smith's claims.
3. Leveraged Equities sought to uphold the primary judge's finding dismissing the claim. In the alternative, by notice of contention, Leveraged Equities submitted that the primary judge's decision should be upheld on the basis that:
   1. Leveraged Equities changed its position in relation to the receipt of the second and third share transfers.
   2. Leveraged Equities provided good consideration for the receipt of the second and third share transfers.
4. As senior counsel for Mr Smith accepted at the appeal hearing, ground 2 was dependent on a premise that Leveraged Equities received the initial 85,000 share transfer as a volunteer: it was accepted that '[i]f Leveraged Equities is not a volunteer, then ground 2 must fail'.[109] Nevertheless, based on the premise that Leveraged Equities received the shares as a volunteer, Mr Smith contended that the primary judge was in error in failing to order restitution by reason of erring in law in not finding that the transfer occurred as a result of a breach by Mr King of fiduciary duties he owed to Mr Smith. Mr Smith contended that, as Leveraged Equities was a volunteer, Leveraged Equities was liable to account for the shares where they were received by reason of a breach of fiduciary duty. Ground 3 was tied to ground 2 insofar as ground 3 concerned the 10,635 rights issue shares and the shares that entitled Mr Smith to participate in the rights issue were the initial 85,000 shares.[110] Senior counsel for Mr Smith accepted that ground 3 must fail if ground 2 failed.[111]
5. In answering grounds 2 and 3, Leveraged Equities sought to sustain the primary judge's finding - rejecting the challenge to the finding that there was no relevant breach of fiduciary duty - and otherwise relied on similar contentions as to change of position and good consideration as with ground 1.
6. Ground 4 alleged that the primary judge erred in law in holding that Mr Smith could not recover from ASASL pursuant to s 917E of the Corporations Act. Three aspects of the primary judge's reasoning were challenged. Those matters, and a notice of contention point raised by ASASL which essentially repeated its answer to ground 4(a) of the appeal, are best explained when addressing ground 4.

The 'strict recipient liability' principles in restitution as invoked by Mr Smith

1. On appeal there was no dispute between Mr Smith and Leveraged Equities as to the applicable restitutionary principles that Mr Smith invoked in support of his two unjust enrichment claims. Rather, the dispute was as to whether the recipient liability principle for which Mr Smith contended was engaged on the factual findings of the primary judge.
2. An innocent volunteer who receives personal property in circumstances of theft or fraud cannot, when that is discovered, retain the property or its traceable product as against the true owner, but must account to the owner for the identifiable property remaining.[112] In Heperu Pty Ltd v Belle Allsop P (as his Honour then was) explained the principle in terms that the innocent recipient could not knowingly seek to retain the property or its proceeds without, in effect, becoming a party to the act of the wrongdoer and liable accordingly.[113] It is the inconsistent subsequent dealing or retention by the recipient, after he or she learned of the true position, that affects the recipient's conscience and gives rise to the liability.[114] The principle extends to require restoration where a volunteer receives the property as a result of a breach of fiduciary duty.[115]
3. The strict liability of the innocent volunteer recipient is subject to defences.[116]
4. In this court, Leveraged Equities directed attention to observations made by the Full Court of the Federal Court of Australia in Great Investments Ltd v Warner.[117] Those observations, which were also the subject of consideration by the primary judge,[118] were in the context of the Full Court addressing the applicable principles concerning liability for receipt of a company asset transferred without authority. The Full Court identified two different situations. The first situation was where a company transferred a benefit to a recipient under a valid contract. A valid contract, unless rescinded, provided a reason for the recipient to retain the benefit.[119] The Full Court noted, but did not determine, that a question then arose as to whether an election to rescind sufficed, as opposed to an order for rescission.[120] The second situation was the 'simpler scenario' where a benefit was transferred by a company without its authority and without a contract. Then:

[T]he company may be entitled, subject to defences, to a proprietary claim if the recipient still has the specific benefit. Even if the recipient does not retain the benefit, the company will have a personal claim against the recipient, again subject to defences.[121]

1. It will be necessary to refer back to these observations, and the use Leveraged Equities sought to make of them, when addressing grounds 2 and 3. In short, Leveraged Equities contended that the recipient liability principle for which Mr Smith contended was not engaged as the relevant benefits were transferred under valid contracts (the various transactions comprised in Mr Smith's guarantee of Mrs King's margin lending account) which remained on-foot despite Mr Smith having sought an order setting them aside.[122] In that respect it will be recalled that the primary judge dismissed the claims against Leveraged Equities alleging misleading or deceptive conduct or unconscionable conduct. It was by those claims that Mr Smith sought an order setting aside the transactions constituted by the Application Form, the Authority Form and the initial share transfer in relation to the 85,000 Wesfarmers shares.
2. For now it suffices to foreshadow that, while the question of rescission must be confronted, the anterior issue that arises in relation to the principle of strict recipient liability invoked by Mr Smith is whether Leveraged Equities was relevantly a volunteer as to the initial share transfer (the 85,000 shares) and the rights issue shares (the 10,625 shares). That is an anterior issue as ground 2 was expressly premised on Leveraged Equities so being a volunteer. It is difficult to see how Leveraged Equities is to be characterised as a volunteer where it retained the relevant benefits as transferred under contractual arrangements which Mr Smith had attempted unsuccessfully to avoid (which failure was not challenged on appeal).
3. At the appeal hearing Mr Smith dealt with the grounds of appeal in their enumerated order. However, ground 1 concerns the second and third share transfers; they are subsequent in time to the initial share transfer, which is the subject of ground 2. As between Mr Smith and Leveraged Equities it makes more sense to deal with the grounds in order of the underlying chronology. Accordingly, we will deal first with grounds 2 and 3 (ground 3 being associated with ground 2) and then turn back to ground 1.

Disposition: The initial 85,000 Wesfarmers shares and the 10,635 rights issue Wesfarmers shares (Grounds 2 and 3)

1. Ground 2 and Mr Smith's submissions in support of ground 2 were substantially directed to challenging the primary judge's conclusion that there was no breach of fiduciary duty on the part of Mr King in bringing about the transfer of the initial 85,000 Wesfarmers shares. However, as has been seen, the ground was premised on the basis that Leveraged Equities received the shares as a volunteer. Consideration of the premise reveals that it is misconceived: Leveraged Equities did not receive the shares as a volunteer as it provided valuable consideration. It follows that ground 2 cannot succeed. Ground 3 falls with ground 2.

No pleading or finding that Leveraged Equities was a volunteer

1. Mr Smith's pleading did not allege that Leveraged Equities received the initial 85,000 share transfer as a volunteer. By contrast there was such a pleading as to the second and third share transfers.[123] Mr Smith also pleaded that Leveraged Equities provided no consideration for the rights issue shares being held through the margin loan facility on their issue and that Leveraged Equities thus received those shares as a volunteer.[124] Before this court, however, senior counsel for Mr Smith conceded that the rights issue shares related to the initial 85,000 share transfer.[125] The primary judge made a similar finding at [545]. The mortgage in favour of Leveraged Equities under the margin lending facility included as collateral all 'New Rights' (which included a bonus issue) attaching to or arising out of the secured property.[126] In the circumstances, as senior counsel for Mr Smith correctly conceded, ground 3 was tied to ground 2.[127] It follows that Leveraged Equities could not have received the rights issue shares as a volunteer unless it also received the initial 85,000 shares as a volunteer.
2. Before this court Mr Smith sought to explain the failure to plead that Leveraged Equities received the initial share transfer as a volunteer as having been the subject of supplementary written submissions filed with leave after trial.[128] Senior counsel for Mr Smith suggested that the parties proceeded on the basis that there was an enlargement of the pleadings by the supplementary submissions.[129]
3. The primary judge made orders permitting the parties to rely on the supplementary submissions. Those orders did not provide for any expansion of Mr Smith's case. They simply gave the parties leave to make submissions regarding the effect of the decisions in Fistar v Riverwood Legion and Community Club Ltd and Great Investments Ltd v Warner. In the course of the appeal hearing this court was provided with Mr Smith's submissions filed pursuant to the leave so granted.[130] The submissions recorded that Fistar and Great Investments concerned liability principles where a volunteer received property without the authority of the property's true owner or as a result of breach of duties.[131] It was then asserted that:

These principles apply to the claims made by [Mr Smith] in respect of all the shares ...

The facts on which Mr Smith is entitled to succeed on the basis of the principles set out in those passages of Fistar and Great Investments are pleaded.[132]

1. Accordingly, before the primary judge there was no suggestion that - by leave - there was an enlargement of Mr Smith's pleaded case by the supplementary submissions. The assertion on behalf of Mr Smith was that the strict liability claim based on Leveraged Equities receiving the first share transfer (ie the 85,000 shares) as a volunteer had already been pleaded. That assertion also appears in par 5 of Mr Smith's supplementary submissions before the primary judge:

So far as the initial tranche of shares is concerned, the breach of duties by Mr King leading to the shares being held as collateral is pleaded in paragraph 31 to 34 of the Ninth Amended Statement of Claim ('SOC'). Leveraged Equities provided no consideration for the transfer of the initial tranche and is a volunteer: see para 14.3 of the SOC ...[133]

1. That submission is not borne out by par 14.3 of the SOC, which provides:

The Collateral Contract contained express terms to the following effect ... Todd King would pay $50,000 to Smith within three business days of the 85,000 Wesfarmers Ltd shares being transferred back to Smith.[134]

1. In answering submissions Leveraged Equities addressed the effect of Fistar and Great Investments.[135] Leveraged Equities did not directly address Mr Smith's assertion that the volunteer point had been pleaded. Leveraged Equities did, however, submit that Fistar supported Leveraged Equities on the volunteer issue[136] - indicating that Leveraged Equities did not accept that it was, in the relevant sense, a volunteer. In reply Mr Smith said that he obtained no financial benefit from the transactions the subject of the guarantee - being materially misled as to the nature of those transactions - and that he (ie Mr Smith) was a volunteer. In that regard then counsel for Mr Smith made reference to a passage in Garcia v National Australia Bank Ltd[137] which spoke of recognition that a surety, obtaining no financial benefit from a transaction, is a volunteer.[138]
2. In his reasons the primary judge stated that the effect of the further submissions was to extend the claim for restitution based on receipt of the shares by Leveraged Equities to the shares in the initial transfer (ie the 85,000 shares).[139]
3. There was always a claim for restitution in relation to the initial share transfer. As pleaded there was a claim for restitution grounded in alleged misrepresentation and unconscionable conduct.[140] It would appear, however, that the primary judge understood the thrust of the supplementary submissions to be - without objection by Leveraged Equities - that Mr Smith's restitutionary claim in relation to the first share transfer was extended to encompass strict liability based on receipt of property as a volunteer where the property was received without authority or as a result of breach of fiduciary duty. The primary judge went on to consider Mr Smith's case as advanced on that basis.[141] That is of significance insofar as the reasons of the primary judge are usually the best indication of what matters were in issue between the parties at trial.[142]
4. We thus accept that, in relation to Mr Smith's strict liability restitution claim, this is a case where the parties have chosen to disregard the pleadings and have enlarged the issues beyond the pleaded case by the supplementary submissions filed post-trial. That course is to be deprecated. It is apt to cause confusion, or at least debate, as to what issues were before the primary court. There should have been an appropriate amendment to Mr Smith's pleaded case to unequivocally identify that Mr Smith sought to visit liability on Leveraged Equities in respect of the initial share transfer on the basis that Leveraged Equities received the 85,000 shares as a volunteer. Any departure from a cause of action as alleged should be reflected in an appropriate amendment so that the exact cause of action alleged forms part of the court's record and is capable of being referred to where the necessity arises.[143]
5. In this court Mr Smith contended that the primary judge had found that Leveraged Equities was a volunteer.[144] Such a finding was integral to Mr Smith's argument on appeal insofar as ground 2 was premised on Leveraged Equities receiving the initial share transfer as a volunteer and ground 3 failed if ground 2 failed (see [54] above).
6. There was no finding by the primary judge that Leveraged Equities received these shares as a volunteer. The passage relied on by Mr Smith on appeal[145] appears at [504] of the primary judge's reasons:

I accept the plaintiff's submission that the transaction was voluntary. The question is whether, as a surety, Mr Smith obtained any gain from the contract, the performance of which he guaranteed. Although Mr Smith entered the arrangement with Mr King for reward, he would not benefit from the performance of the loan agreement. In relation to Leveraged Equities he was a volunteer. (emphasis added)

1. That was not a finding by the primary judge that Leveraged Equities received the initial 85,000 share transfer as a volunteer. Rather, it was a finding that - in relation to Leveraged Equities and the transaction as undertaken - Mr Smith was a volunteer. The passage speaks to the position of Mr Smith rather than Leveraged Equities. In that respect the passage occurs in the course of the primary judge's consideration of Mr Smith's unconscionability claim. It followed consideration of the passage in Garcia v National Australia Bank Ltd as was referred to in Mr Smith's reply supplementary submissions before the primary judge. The primary judge was dealing with a submission, in the context of Mr Smith's unconscionability claim, that viewed from the perspective of Mr Smith the transaction was voluntary and he, Mr Smith, was a volunteer. In other words there was no consideration moving from Leveraged Equities to Mr Smith. But to suggest that this constitutes a finding that Leveraged Equities received the initial share transfer as a volunteer is incompatible with the words used by the primary judge and the context in which the finding appears.
2. The primary judge made no finding on the question of whether Leveraged Equities received the 85,000 initial share transfer as a volunteer. The primary judge rejected Mr Smith's strict liability claim on two other bases. First, that the breach of fiduciary duty alleged by Mr Smith had not been established.[146] Second, that Mr Smith had not established that he was entitled to rescind the agreement between himself and Leveraged Equities.[147] Thus it was unnecessary for the primary judge to make a finding on the unpleaded issue of whether Leveraged Equities was a volunteer for the purpose of the strict liability claim.
3. There is no ground of appeal alleging error on the part of the primary judge in not considering - and thereby failing to determine - whether Leveraged Equities received the 85,000 initial share transfer as a volunteer. Such an additional ground was necessary for Mr Smith to succeed based on grounds 2 and 3. As the premise of grounds 2 and 3 was never established - there being no finding that Leveraged Equities received the 85,000 Wesfarmers shares as a volunteer - grounds 2 and 3 cannot succeed. That alone means that both grounds should be dismissed given the concessions made by senior counsel for Mr Smith as recorded at [54] above.
4. In any case, for reasons now discussed, the premise that underpins grounds 2 and 3 is incorrect: Leveraged Equities did not receive the initial share transfer as a volunteer.

1. Apart from pointing to the primary judge's finding at [504] of the primary reasons - which, as previously noted, refers to Mr Smith as a volunteer rather than Leveraged Equities - Mr Smith simply asserted that Leveraged Equities received the shares as a volunteer. The highest that the point was developed was to state that Leveraged Equities was not a taker for value.[148]
2. For the purposes of the strict recipient liability principle in restitution, as relied on by Mr Smith on appeal, a 'volunteer' is a person who receives the relevant property without providing valuable consideration for it.
3. This is apparent enough from the authorities which establish the principle. Black v Freedman & Co distinguishes between a volunteer and those who take for valuable consideration.[149] In Lipkin Gorman the casino was a volunteer as the contracts of gaming pursuant to which it received the funds were rendered void by the gaming legislation. Lord Goff specifically noted that the casino, by accepting the bet, did not thereby give valuable consideration because it was under no legal obligation to honour the bet.[150] In Heperu Pty Ltd v Belle Allsop P refers, with apparent approval, to the volunteer as a person who gave no consideration for the payments as received.[151] This understanding of the concept of a volunteer is consistent with that applying in the context of Barnes v Addy knowing receipt liability.[152]
4. The question of what is meant by the concept of a 'volunteer' in the present context received more detailed consideration in two relatively recent intermediate appellate court decisions.
5. Australasian Annuities Pty Ltd v Rowley Super Fund Pty Ltd concerned a superannuation fund. The plaintiff, Australasian Annuities Pty Ltd, borrowed substantial funds and effected payment of much of the money to the superannuation fund by way of transactions described as employer super contributions, eligible termination payments and loans to the sole director of the plaintiff. Later, after receivers had been appointed to the plaintiff, proceedings were commenced seeking to recover the funds from the superannuation fund. Among other things the plaintiff sought restitution on the basis that the superannuation fund received the funds as a volunteer. At first instance it was concluded that the trustee of the superannuation fund was not a volunteer because it gave valuable consideration for the money as received.
6. While an appeal was allowed for other reasons, the Court of Appeal of Victoria upheld, by majority, the trial judge's conclusion that the trustee of the superannuation fund was not a volunteer.
7. In separate reasons the majority, Warren CJ and Garde AJA, referred to the High Court decision of Cook v Benson[153] in concluding that the trustee was not a volunteer. Rather, the payments were made in return for obligations to be performed by the trustee in accordance with the trust deed establishing the superannuation fund. The rights and benefits in fact provided to the members of the superannuation funds were sufficient to amount to consideration for the purpose of the transactions, meaning that the trustee was not a volunteer.[154] Garde AJA referred to the rights as constituting 'substantial and valuable consideration' for the contributions[155] which was not executory in nature.[156] Neave JA, who dissented on the volunteer point, concluded that the trustee was a volunteer because it had not provided valuable consideration when it received the money.[157] In her Honour's view, unlike the commercial trustee in Cook v Benson, the trustee was not a purchaser who in a commercial sense provided a quid pro quo for the money paid to it as trustee.[158]
8. The other decision is Fistar v Riverwood Legion and Community Club Ltd. There the appellant, Ms Fistar, succeeded on appeal because she was found not to be a volunteer.
9. Ms Fistar gave a fraudster $598,853.53 with a view to it being invested and returned in time for her to complete the purchase of a property. At the time of settlement of the property the fraudster supplied a bank cheque for $599,999.99 in favour of the vendor to Ms Fistar's solicitors. The bank cheque so procured by the fraudster was obtained largely using money stolen from a community club. The club brought proceedings. Relying on Heperu Pty Ltd v Belle the trial judge found that a personal action at law was available against Ms Fistar for money had and received as an innocent volunteer who had received stolen money. On appeal Ms Fistar argued that the claim for money had and received was not available against her. One of her reasons for disputing the availability of such relief was that she was not a volunteer. Leeming JA (Bathurst CJ and Sackville AJA agreeing) found that the strict liability restitution claim must fail as Ms Fistar did not receive the bank cheque as a volunteer; it was a repayment of an existing and enforceable debt.[159]
10. Leeming JA noted that two decisions relied on by the club, in which third party recipients were held to be volunteers, were cases where no consideration was provided because of the nature of the transaction.[160] His Honour observed:

[It] surely cannot be right that if a debtor pays a creditor using funds belonging in equity to a third party, of which fact the creditor is entirely unaware, then the creditor can be regarded as a volunteer and therefore, subject to other defences, is liable to disgorge the funds through a claim of money had and received. That would amount, as was said by Sackville AJA during the hearing, to a 'substantial change to the conduct of commercial transactions'.[161]

1. The relevant question was whether Ms Fistar gave value. Ms Fistar did so as Ms Fistar (by her solicitors) received the bank cheque in discharge of the fraudster's existing and enforceable obligation to repay her.[162]
2. Accordingly, in terms of the strict recipient liability principle invoked by Mr Smith on appeal, a person is not a volunteer where valuable consideration is provided by the recipient - either money or money's worth - in return for the property. As is made plain by Fistar,[163] it does not matter whether the consideration is provided to the owner of the property or to another. It will suffice that, in a commercial sense, the recipient provided a quid pro quo for the property it received. Whether an executory promise will suffice is unclear. There is some suggestion in Australasian Annuities Pty Ltd v Rowley Super Fund Pty Ltd that in answering such a restitutionary claim the provision of 'valuable consideration' requires the performance of a promise. In Great Investments Ltd v Warner the Full Court identifies that there is older precedent which establishes that value is not provided for the purpose of the defence of bona fide purchaser for value where a promise is executory and not executed.[164] For reasons that will be apparent, on the facts of the present case there is no need to resolve whether a recipient who has only provided an executory promise will remain a volunteer until the promise is performed.
3. Ultimately, when pressed on the volunteer point, senior counsel for Mr Smith expressed the argument for Mr Smith in this way:

The proposition ... is that in circumstances where Mr King procured these events in circumstances where Mrs King's account was going to be in margin call at the time that Mr Smith made the agreement with Mr King and thereafter arranged for shares to be transferred, no consideration had been received by Mr Smith.[165]

1. Accordingly, the proposition was that, at the time the shares were transferred, no consideration was received by Mr Smith. However, in the course of argument senior counsel for Mr Smith apparently accepted that there was consideration moving from Leveraged Equities to benefit Mrs King;[166] and that, in general, consideration could be given by providing something to a third party.[167] Moreover, on behalf of Mr Smith it was accepted that Leveraged Equities subsequently allowed Mrs King (or Mr King) to continue trading.[168]
2. The absence of any consideration flowing to Mr Smith is not determinative of whether Leveraged Equities was a volunteer.
3. Leveraged Equities provided substantial and valuable consideration in return for the 'transfer' of the 85,000 Wesfarmers shares (we refer to 'transfer' as, at Mr Smith's insistence, there was no change in ownership - rather Mr Smith's proprietary rights became subject to the sponsorship agreement and Leveraged Equities' mortgage). The relevant commercial context was that:
   1. Mr King, trading on Mrs King's margin lending account, had entered into contracts to purchase securities - with amounts payable totalling more than $3.061 million - without available funds in Mrs King's account to settle the purchases and where Leveraged Equities would not advance settlement funds on the value of the securities it then held.[169]
   2. Under the margin lending arrangements between Leveraged Equities and Mrs King the amount Leveraged Equities was prepared to lend was based on the security value of the secured property in relation to the account.[170] Accordingly, Mr King needed to find cash or lodge security of sufficient value so that Leveraged Equities would lend the funds required against the value of the security.[171]
   3. That is what happened. As a consequence of the agreement between Mr Smith and Mr King the 85,000 Wesfarmers shares became collateral security for Mrs King's margin lending account. As at 31 July 2007 the shares provided 60% of the market value of the securities held in relation to the margin lending account and over 80% of the security value.[172] On 1 August 2007 the purchase contracts settled relying, in part, on advances made by Leveraged Equities under the margin lending facility and, in part, on the proceeds from some sale contracts.[173]
   4. On the faith of the additional 85,000 Wesfarmers shares introduced as collateral security in relation to Mrs King's margin lending account, and in particular the additional security value derived thereby, Leveraged Equities was prepared to and did make further advances to Mrs King to allow her to complete the pre-existing contracts to purchase securities. As found by the primary judge, the contracts to purchase securities as were settled on 1 August 2007 might otherwise have failed.[174]
4. In the circumstances Leveraged Equities provided consideration in exchange for the introduction of the 85,000 Wesfarmers shares as collateral security in relation to the margin lending account: Leveraged Equities advanced additional amounts under the margin lending facility allowing Mrs King to complete the purchase of the securities the subject of the purchase contracts. Leveraged Equities was not a mere volunteer but instead took for value.
5. It is, in our view, not necessary to consider whether - given the rights and obligations under the margin lending facility - substantial and valuable consideration was provided simply so far as the Wesfarmers shares became subject to the sponsorship agreement and the mortgage. Clause 2.2(b) may have implications for such an argument (see [13] above). The commercial reality is, however, that upon receipt of the initial share transfer Leveraged Equities did in fact make an advance that would not otherwise have been made. In so doing Leveraged Equities provided valuable consideration for Mr Smith's share transfer, consideration that was not merely executory.

1. Leveraged Equities did not receive the initial 85,000 Wesfarmers shares as a volunteer. The premise to ground 2 has not been made out. Ground 2 should be dismissed for that reason. Ground 3 was dependent on ground 2 and thus should also be dismissed. It is not necessary to address Mr Smith's challenge to the primary judge's finding as to breach of fiduciary duty.
2. In answer to grounds 2 and 3, Leveraged Equities also relied on the circumstance that the primary judge had refused Mr Smith's claim to set aside the contractual arrangements between Leveraged Equities and Mr Smith (see [60] - [61] above).
3. It should be accepted that ground 2 must proceed on the basis that the contractual arrangements between Leveraged Equities and Mr Smith are valid. The challenge to those contractual arrangements failed before the primary judge and there has been no appeal against those findings. The primary judge found that Mr Smith was not entitled to rescission of the agreements on the basis of the causes of action propounded at trial.[175] The contractual arrangements between Leveraged Equities and Mr Smith were the foundation for Leveraged Equities' rights in relation to the initial 85,000 Wesfarmers shares. Unless and until the contractual arrangements were avoided they provided a right - and therefore a reason - for Leveraged Equities to retain the benefits derived from the contractual arrangements.[176]
4. At the appeal hearing senior counsel for Mr Smith submitted that if the breach of fiduciary duty was established one of the consequences might have been the rescission of the various agreements between Mr Smith and Leveraged Equities.[177] The difficulty with that submission was that there was no challenge to the primary judge's finding that, at the time of the transaction, Leveraged Equities was not aware of what Mr King was doing and the dishonest means Mr King was prepared to use.[178] Senior counsel for Mr Smith then suggested that specific relief might need to be subject to a condition, referring to Great Investments Ltd v Warner at [69].[179]
5. The passage relied on from Great Investments Ltd v Warner notes that it is unnecessary to explore particular foundational issues. Their Honours go on to state:

There was no submission, for instance, that any of the appellants had any defence of change of position which would raise other issues such as whether a defence of change of position could be effected by an order that specific relief was subject to a condition: see the discussion in Häcker B, Consequences of Impaired Consent Transfers (Mohr Siebeck Tübingen, 2009) pp 155-156 and Nelson v Nelson (1995) 184 CLR 538.[180]

1. It may be accepted that on occasions it is appropriate for the court to grant relief only on condition. Nelson v Nelson, as referred to in the passage relied on, is an example: there a declaration as to beneficial entitlement was subject to a requirement that the appellant be denied a benefit obtained by her unlawful conduct.[181]
2. As interesting a diversion such a possibility may present to a change of position defence, the suggestion is not one that requires further exploration in the present appeal. First, this is a case where Mr Smith failed, at trial, to establish his claimed basis for rescission of the contractual arrangements between himself and Leveraged Equities. In that regard it is unnecessary to consider the point left open in Great Investments Ltd v Warner as to whether an election to rescind may suffice as opposed to an order for rescission. Any purported election in the present case was necessarily ineffective insofar as there was found to be no basis to rescind on the grounds as relied upon by Mr Smith. Second, there is no ground of appeal challenging the primary judge's finding denying the claim for rescission. Nor, assuming that it might be entertained on appeal - as to which there must be considerable doubt - was there any suggestion of some alternative basis for rescission beyond the half-formed suggestion relying on breach of fiduciary duty. Finally, and in any event, senior counsel for Mr Smith did not develop the contention. There was, for example, no indication of what condition Mr Smith might submit to other than contending in the abstract that there might be a rescission on condition.[182] That, however, presupposes that Mr Smith had established some basis for rescission - and none was advanced on appeal.
3. In the circumstances the non-avoidance of the contractual arrangements between Mr Smith and Leveraged Equities provides a further answer to ground 2 (and thus to ground 3). Apart from the fact that Leveraged Equities was not a volunteer, the contractual arrangements between Mr Smith and Leveraged Equities provided the right for Leveraged Equities, as the recipient of the Wesfarmers shares the subject of the initial share transfer and the rights issue, to retain that benefit.
4. Grounds 2 and 3 should be dismissed.

Disposition: The 40,000 Wesfarmers shares transferred to Leveraged Equities pursuant to the forged letters of authority (Ground 1) The primary judge's refusal of relief

1. Ground 1 concerns the primary judge's dismissal of Mr Smith's unjust enrichment claim in relation to the second and third share transfers (the 25,000 shares transferred on 25 January 2008 and the 15,000 shares transferred on 10 March 2008). These differed from the first share transfer as the second and third share transfers were made without authority on the part of Mr Smith. The second and third share transfers were the result of Mr King's forgeries.
2. The primary judge's reasons for dismissing this aspect of Mr Smith's claim are summarised at [46] - [48] above. Importantly, in a finding unchallenged by Leveraged Equities on appeal, the primary judge held that - subject to defences - Mr Smith was entitled to the[183]turn of these shares.183 Thus the starting position - both before the primary judge and on appeal - was that Mr Smith had established his case in restitution in relation to return of the shares the subject of the second and third share transfers. However, in apparent conflict with that initial finding, and without determining the pleaded defences of change of position and good consideration, the primary judge proceeded to refuse Mr Smith any relief as to the second and third share transfers. Whether the primary judge was correct to do so - there being no challenge by Leveraged Equities to his Honour's initial conclusion as to entitlement to return of the shares - is, logically, the first issue that arises in relation to ground 1.
3. Putting aside, for now, a question of appropriation that arises as to the 25,000 Wesfarmers shares returned to Mr Smith on 7 May 2008 (see [120] - [191] below), the primary judge refused relief as:
   1. It was likely that, had Wesfarmers shares been returned to Mr Smith in July 2008, it would have triggered a margin call in relation to Mrs King's margin lending facility and caused Mr Smith substantial loss.[184]
   2. The remaining shares were returned to Mr Smith in September 2011.[185] As at the date of the hearing before the primary judge Leveraged Equities no longer held any shares which could be the subject of the order sought for delivery up.[186]
4. In written submissions Leveraged Equities asserted that Mr Smith was not entitled to restitution in respect of the second and third share transfers.[187] However, beyond recounting the primary judge's reasons, Leveraged Equities did not advance argument in support of upholding the refusal of relief. Instead Leveraged Equities referred to its change of position defence, it being suggested that this was supported by the circumstances that: (1) following the second and third transfers there were further transactions in Mrs King's lending account; and (2) the return of Wesfarmers shares to Mr Smith would have seen a margin call.[188] The change of position defence was not relied on by the primary judge and cannot, independently of a notice of contention, justify his Honour's refusal of Mr Smith's claim for relief. The possible change of position defence ought instead to be considered within the rubric of Leveraged Equities' notice of contention.
5. In oral submissions senior counsel for Leveraged Equities suggested that the first matter referred to by the primary judge (see [109.1] above) could be understood in terms of the primary judge concluding that Leveraged Equities had not been unjustly enriched because in retaining the shares Leveraged Equities conferred a benefit on Mr Smith in the sense that he did not incur an even g[189]ter loss.189 It was, however, accepted that no such argument had been pleaded or submitted to the pr[190]ry judge.190 Nor was senior counsel for Leveraged Equities able to point to any authority in support of a principle that an enrichment otherwise unjust is not to be reversed where it would result in the claimant being subjected to some[191]her loss.191
6. Senior counsel for Leveraged Equities made two further oral submissions:
   1. The primary judge was aware that he had to consider benefits retained not just the shares held.[192] That may be accepted to a point. The primary judge referred, at [530] and [544] of the primary reasons, to the value of the shares and the traceable benefits retained by Leveraged Equities - the former in connection with recounting the substance of Mr Smith's pleaded claim. The difficulty with the submission is that this is not how the primary judge approached this aspect of Mr Smith's claim by way of restitution. His Honour simply concluded that post‑September 2011 Leveraged Equities no longer held any Wesfarmers shares which could be the subject of the order sought for delivery up. There was no consideration of a personal claim based on the value of the Wesfarmers shares.
   2. The primary judge's reasons should be read as his Honour saying that he could not work out what the actual value of the unjust enrichment was because nobody had been able to tell him or present any evidence about how he might arrive at that quantification.[193] That submission, not advanced in the pre-appeal hearing written submissions for Leveraged Equities, cannot be accepted. At no point, on a fair reading of the primary reasons, is there any suggestion that the claim failed for mere want of proof of quantification. It should in any case be noted that there was some evidence before the primary judge as to the closing value of the Wesfarmers shares on relevant dates (although it appears that the evidence only extended to 31 March 2008).[194] Before this court senior counsel for Mr Smith also pointed to documentary evidence containing reference to the value of Wesfarmers shares as at June and July 2008.[195] It is also relevant that no notice of contention point is advanced to the effect that the claim must fail for want of proof of quantification.
7. Senior counsel for Leveraged Equities went on to accept that, subject to defences, if the court was against Leveraged Equities on the construction it advanced as to the effect of [547] to [549] of the primary judge's reasons, then in quantifying Mr Smith's restitutionary claim as to the second and third share transfers the relevant enquiry was to determine value as at the time the shares ought to have been returned.[196]
8. That concession was properly made. While Mr Smith's pleaded case seemingly sought additional relief - referring without particularity to 'all benefits received or receivable'[197] - on appeal it was clarified by senior counsel for Mr Smith that there was no claim for benefits received beyond the value of the shares.[198] As the obligation is to recognise the entitlement of Mr Smith to restoration of the shares obtained from Mr King's fraudulent activities to the extent that Leveraged Equities retained the shares, or their traceable product, when Leveraged Equities had notice of the claim,[199] the value of the shares as at the time they should have been returned is appropriate substitutive restitution to reverse the benefit gained by Leveraged Equities. Senior counsel for Leveraged Equities went on to state, however, that Mr Smith bore the onus at trial in identifying the benefit and quantifying its value and the amount payable by way of restitution.[200] That proposition was not disputed by Mr Smith and cannot be doubted: a claimant must prove his or her case on the balance of probabilities.
9. As to Leveraged Equities' initial submission (see [111] above), we do not accept that the primary judge considered there was no unjust enrichment and this was the reason for his Honour refusing relief on this aspect of Mr Smith's claim. That reading of his Honour's reasons is incompatible with the unequivocal finding, at [546] of the primary reasons, that, subject to defences, Mr Smith was entitled to return of the Wesfarmers shares the subject of the second and third share transfers. Nor, in our view, does the first matter relied on by the primary judge constitute a relevant defence (see [109.1] above): Leveraged Equities did not seek to characterise it as such; and, if there is such a defence to a claim for restitution invoking principles of strict recipient liability, it has not previously been articulated in the authorities and was unpleaded. In any case it assumes that Mr Smith would have been subject to a substantial loss on a margin call over and above the loss that eventually ensued. Whether that was the case was not considered and could only be a matter for conjecture on appeal in this court given the limited findings made by the primary judge. For example, his Honour was unable to calculate the extent to which a return of the shares at the relevant time - July 2008 - would have seen the sale of other of Mr Smith's Wesfarmers shares on a margin call. This part of the primary judge's reasoning provides no basis for refusing relief in restitution once it was accepted that Mr Smith was entitled to return of the shares subject to defences (these defences being as pleaded).
10. The second matter relied on by the primary judge was that the remaining shares were ultimately returned to Mr Smith (see [109.2] above). That also provides no answer by way of defence to Mr Smith's claim in respect of the second and third share transfers. There are in any event two further difficulties with this part of the primary judge's reasoning:
    1. First, the time for identification of the property is not the date of the hearing. Rather, the relevant date is the date Leveraged Equities received notice of the claim or when Leveraged Equities otherwise became aware that it retained or asserted rights over the property of another (Mr Smith) received as a consequence of fraud in the form of Mr King's forgery.[201] That was 24 June 2008 or 17 July 2008 at the latest (see [30] - [31] above). There is no doubt, from a mathematical perspective, that at that time Leveraged Equities retained some of the 40,000 Wesfarmers shares the subject of the second and third share transfers (although, as discussed below, it remains necessary to resolve the appropriation question that arises as to the 25,000 Wesfarmers shares returned to Mr Smith on 7 May 2008).
    2. Second, as Mr Smith contended,[202] the subsequent return of the remaining Wesfarmers shares only occurred in September 2011 because Mr Smith paid some $764,983.20 to Leveraged Equities - doing so on terms that the payment was without prejudice to the claims made by Mr Smith against Leveraged Equities. The primary judge referred to this in recounting the relevant facts,[203] but made no mention of it in concluding that there ought to be no relief in respect of the second and third share transfers.[204] It established, however, that Leveraged Equities received and retained a benefit to the extent that Leveraged Equities retained the Wesfarmers shares the subject of the second and third share transfers despite its knowledge of the fraudulent circumstances of the transfer and Mr Smith's request for return of the shares.
11. Accordingly, the second part of the primary judge's reasoning also provided no answer by way of defence to this part of Mr Smith's unjust enrichment claim.
12. As at the point Leveraged Equities was on notice of Mr King's fraudulent actions and Mr Smith's resultant claim - at the earliest 24 June 2008 and at the latest 17 July 2008 - Mr Smith had suffered detriment and Leveraged Equities had benefited: Mr Smith's Wesfarmers shares were under Leveraged Equities' control, and subject to its security interest, and Mr Smith was no longer able to enjoy his rights as owner. Consistent with the primary judge's finding, unchallenged on appeal, Mr Smith was entitled to restitution subject to other defences. It mattered not that at the time of the hearing Leveraged Equities no longer held any shares which could be the subject of an order for delivery up. In addition to a proprietary claim for specific restitution (self-evidently unavailable after the events of September 2011) Mr Smith made a personal claim for restitution of the value of the benefit - a claim extending to the value of the shares (see [48] above).
13. It follows that the primary judge was, with respect, in error in simply dismissing this aspect of Mr Smith's claim in relation to the second and third share transfers. His Honour should have gone on to consider Leveraged Equities' pleaded defences and the question of quantification. In resisting the appeal Leveraged Equities sought to have its defences adjudicated upon through its notice of contention. That must shortly be considered. However, before doing so consideration ought to be given to the consequences arising from the return of the 25,000 Wesfarmers shares to Mr Smith on 7 May 2008.

The appropriation question: are the returned shares attributable to the second and third share transfers?

1. An appropriation question arose as to the 25,000 Wesfarmers shares returned to Mr Smith on 7 May 2008. Mr Smith contended that these shares should be allocated to the 85,000 shares the subject of the initial share transfer. Leveraged Equities contended that the returned shares should be allocated to the second share transfer (the 25,000 shares transferred on 25 January 2008) - and, indeed, contended that the primary judge had made a factual finding to that effect which was unchallenged on appeal. The economic imperative that underpinned the parties' competing positions was clear enough. It was in Mr Smith's interest to maximise the shares that might be the subject of relief should he succeed on ground 1 but fail on grounds 2 and 3; Leveraged Equities' interest was to minimise the shares that might be the subject of relief should Mr Smith succeed on ground 1.
2. Leveraged Equities submitted that:
   1. Properly understood, the primary judge made an unchallenged factual finding that the 25,000 Wesfarmers shares returned to Mr Smith on 7 May 2008 were the shares as transferred to Leveraged Equities under the first of the forged letters of authority (ie the second transfer).[205]
   2. Accordingly, if ground 1 succeeded, it could only result in relief in respect of the third share transfer (ie to the extent of 15,000 Wesfarmers shares).[206]
3. In support of its submission Leveraged Equities pointed to the primary judge's statement at [547] of the primary reasons that:

In practical terms, 25,000 shares had been returned in May 2008. Leveraged Equities was still entitled to hold the shares initially transferred. It is not clear on the evidence what would have occurred had Leveraged Equities, in July, returned the 15,000 shares transferred in March 2008, or the rights issued shares ...[207]

1. The argument for Leveraged Equities was twofold. First, the primary judge referred to Leveraged Equities still being entitled to hold the shares initially transferred - these were said to be the 85,000 Wesfarmers shares the subject of the initial share transfer. (Against that, however, the primary judge does not record that the shares 'initially transferred' continued to number 85,000. The passage admits of the possibility that they do not.) Second, his Honour then referred to the return of the 15,000 shares - said to represent the third share transfer - but not the 25,000 shares the subject of the second share transfer. The inference was that this was because his Honour had found that the 25,000 shares the subject of the second share transfer were those returned on 7 May 2008.
2. Senior counsel for Leveraged Equities also referred to submissions made before the primary judge, which, among other things, relied on an email sent by Mr Smith to Mr King dated 30 July 2008, and contended that this established that the appropriation question was a matter in contention before the primary judge.[208] In our view the significance of this is much reduced by the circumstance that the primary reasons do not refer to the relevant submissions or email. Had the primary judge been making a finding after consideration of the matters so argued before him it is to be expected that, as his Honour did elsewhere throughout his reasons, there would have been mention of the parties' competing positions.
3. The passage relied on by Leveraged Equities (see [122] above) must be read with other parts of the primary reasons:

On about 20 September 2011, Leveraged Equities transferred 47,625 unencumbered Wesfarmers Shares, the balance of the shares it held, to Mr Smith. It is not possible to say whether the shares then returned included shares from the second and third share transfers or the rights issue.[209] (emphasis added)

By the time of the hearing, Leveraged Equities had returned 25,000 shares in May 2008 and 47,625 shares in September 2011. Leveraged Equities retained no further shares. With uncertificated holdings, it is not possible to identify whether the shares which were sold were from the initial transfer or the later transfers or rights issues ...[210] (emphasis added)

1. When the passage from [547] of the primary reasons is read in the context of those further passages we do not accept Leveraged Equities' contention that the primary judge found that the May 2008 returned shares were referrable to those transferred to Leveraged Equities under the second share transfer (ie pursuant to the first forged letter of authority in January 2008). The other passages, reproduced at [125] above, contemplate that the balance of Wesfarmers shares returned in September 2011 may have included shares the subject of the second share transfer. His Honour also expressly found that with uncertificated holdings it was not possible to identify which shares had been sold. That is consistent with his Honour's finding that it was not possible to identify the precise provenance of the shares that remained in September 2011. It followed that it was not possible to actually identify - as between the first, second and third share transfers - which transfer the 25,000 returned shares related to. As no physical identification was possible his Honour could only have appropriated the 25,000 returned shares to one or other of the three share transfers by some rule or principle that provided for allocation or attribution. At no point in the primary reasons does his Honour consider the question of appropriation by reference to any such rule or principle.
2. Accordingly, there was no unchallenged finding to the effect of that contended for by Leveraged Equities. On appeal, however, argument ensued as to the finding that should have been made on the appropriation question. As this is a largely legal question, where the relevant underlying facts fall within narrow compass and were addressed by the primary judge, it is appropriate to consider the point even though it was not dealt with by the primary judge.
3. Mr Smith contended that as the 85,000 initial tranche of Wesfarmers shares were the first received in time it followed that the 25,000 shares returned to Mr Smith on 7 May 2008 should be allocated to the first share transfer (the 85,000) rather than the second or third share transfers (the forged transfers as to 25,000 and 15,000 shares respectively). Mr Smith relied on a principle of 'first in, first out'.[211]
4. Senior counsel for Mr Smith accepted that Mr Smith contended for adoption of the principle of 'first in - first out' (said to be the 'rule in Clayton's Case')[212] as a rule of convenience only in circumstances where it was difficult to identify exactly what property had been dealt with.[213] Senior counsel for Mr Smith advanced it 'only [as] a rule of rough and ready application' that did 'not have the benefit of any sort of reasoned exposition as to why [it] would be a just outcome in all of the circumstances'.[214] Such a lukewarm rationale for the application of the rule in Clayton's Case by analogy in the present case suggests, prima facie, that the adoption of a principle of 'first in - first out' has little to commend it.
5. Otherwise Mr Smith contended for identification of the property in the hands of Leveraged Equities with a 'hierarchical preference'[215] as follows:

(b) require the defendant to show that any part of the property is legitimately their property; or

(c) apply some species of pari pasu [sic] distribution; or

(d) apply a lowest intermediate balance rule.[216] (citations omitted)

1. A number of legal principles are well established in relation to the appropriation of a payment made by a debtor who owes multiple debts to a creditor where the right of appropriation has not been dealt with by agreement between the debtor and the creditor.
2. First, a debtor who owes multiple debts to a creditor is entitled to appropriate a payment made by the debtor to the creditor to one debt rather than the other or others. Second, if the debtor makes a payment to the creditor but fails to appropriate the payment, the creditor may make the appropriation. Third, if the debtor makes a payment to the creditor and neither of them makes an appropriation, in the case of a current or running account the law appropriates the payment to the earlier or earliest debt. Fourth, if the debtor makes a payment to the creditor, it is a question of fact whether the debtor or the creditor (as the case may be) made an appropriation. Fifth, an appropriation of a payment need not be express, but can be inferred. However, an appropriation may only be inferred from the facts and circumstances of the case as known to both parties. Sixth, an appropriation requires more than a mere intention by the debtor or the creditor (as the case may be) to appropriate. An appropriation will not be effective unless the debtor or the creditor (as the case may be) has communicated his or her appropriation to the other.[217]
3. In Re Walsh, the debtor (Walsh) made four payments to the creditor (the Deputy Commissioner of Taxation). After the debtor made the four payments, a bankruptcy notice was issued by a Deputy Registrar in Bankruptcy at the request of the creditor. The debtor contended that the bankruptcy notice was invalid. The validity of the notice turned primarily on whether the debtor was entitled to appropriate and had appropriated the four payments or any of them to a judgment debt entered against the debtor before the four payments were made. Re Walsh was concerned with separate debts. It did not involve a current or running account. Lockhart J stated, in the course of setting out the principles governing appropriation of payments, that if neither a debtor nor a creditor 'makes any appropriation, the law appropriates the payment to the earlier debt'.[218] His Honour did not confine that statement to cases involving a current or running account.
4. In Re Muggleton,[219] Drummond J observed (correctly, in our respectful opinion) that:
   1. Lockhart J's statement reflected a position accepted without argument; and
   2. while the rule in Clayton's Case produces the result that, as a matter of law, a payment is appropriated to the earlier or earliest debt where the payment is made in respect of a current or running account, that is not the position where the payment is made in respect of separate debts.
5. The third principle in [132] above has no application, by analogy, in the present case. That is so even if, contrary to our view, the principle is not confined to current or running accounts. On that hypothesis, the principle applies where a debtor has more than one debt due and payable to its creditor, each debt having become due and payable at an identifiable point in time. In the present case, at the time the 25,000 shares were returned, it could not be said that a liability to return any part of the 85,000 shares the subject of the first transfer had arisen before a liability to return the shares the subject of the second and third share transfers had arisen. To the contrary, as Leveraged Equities was not then aware of Mr King's fraud, no liability had, by then, arisen.
6. In Leeson v Leeson, Greene LJ observed:

It is true that a debtor who owes two debts to his creditor is entitled to appropriate a payment which he makes to his creditor to one debt rather than to the other. When, however, he does not notify the creditor of his intention, and when the circumstances are such that the creditor receives the payment merely in satisfaction of the debts and the payment is not more appropriate to the payment of the one debt than to that of the other the creditor is entitled to make the appropriation. When it is said that there need not be an express appropriation of a payment, but that the appropriation can be inferred, that does not mean that appropriation of a payment can be inferred from some undisclosed intention in the mind of the debtor. It is to be inferred from the circumstances of the case as known to both parties. Any other view might lead to injustice, as the creditor's right to appropriate a payment would be defeated. When the matter is examined upon principle it will be found that an undisclosed intention in the mind of the debtor is not sufficient to support an appropriation. If authority is needed for that proposition it can be found in the judgment of Lush J in Parker v Guinness, where he said: 'What is to be considered is this. Is the true inference to be drawn from all the circumstances of the case that the debtor paid the moneys generally on account, leaving the creditor to apply them as he thought fit, or is the true inference that he paid them on account of special portions of the debt for the purpose and with a view to wipe these out of the account? His undisclosed intention so to do would, of course, not benefit him. It is what he did in fact, and not what he meant to do that is to be regarded.' A debtor's undisclosed intention to appropriate a payment to one of two debts owed by him to a creditor cannot benefit him.[220] (citation omitted)

That passage from his Lordship's speech has been cited with approval on numerous occasions.[221]

1. The question whether a payment made by a principal debtor (who is not bankrupt or in liquidation) is to be appropriated as to a guaranteed debt or some other indebtedness is, in the absence of an agreement between the creditor and the guarantor or surety, to be determined as if the issue had arisen merely between the principal debtor and the creditor. A guarantor or surety does not have a personal right to dictate either to the principal debtor or the creditor how a payment made by the principal debtor is to be appropriated.[222]
2. An appropriation made by a debtor must be made at or before the time of the payment.[223]
3. In Cory Brothers, Lord Macnaghten made these observations as to the time within which the creditor is bound to make an election in relation to appropriation:

[It] has long been held and it is now quite settled that the creditor has the right of election 'up to the very last moment,' and he is not bound to declare his election in express terms. He may declare it by bringing an action or in any other way that makes his meaning and intention plain. Where the election is with the creditor, it is always his intention expressed or implied or presumed, and not any rigid rule of law that governs the application of the money. The presumed intention of the creditor may no doubt be gathered from a statement of account, or anything else which indicates an intention one way or the other and is communicated to the debtor, provided there are no circumstances pointing in an opposite direction. But so long as the election rests with the creditor, and he has not determined his choice, there is no room, as it seems to me, for the application of rules of law such as the rule of the civil law, reasonable as it is, that if the debts are equal the payment received is to be attributed to the debt first contracted.[224]

1. In Seymour v Pickett,[225] Vaughan Williams LJ expressed the view, based on Lord Macnaghten's observations in Cory Brothers, that a plaintiff creditor was entitled to appropriate 'down to the moment when the plaintiff made his election in the witness-box'.[226] Romer LJ made the following comments as to time within which a creditor must make an appropriation:

The Mecca shews that as a general rule in such a case the plaintiff is entitled to appropriate down to what is there called 'the very last moment.' What is 'the last moment' must depend on the circumstances of each case. In the present case, there being no rights of third parties intervening, and under the peculiar circumstances which I have already pointed out, namely, that the question did not arise until the second trial, I think the plaintiff retained the right of appropriation until the second trial.[227] (citation omitted)

1. The principle that a creditor is not bound to make an appropriation immediately and, indeed, that an appropriation can take place 'at any time up to the very last moment', including as late as trial, has been approved in numerous subsequent cases.[228]
2. In Farrow Finance Co Ltd (in liq), Hansen J noted that in Seymour v Pickett Romer LJ referred to the possibility that the rights of third parties might intervene to terminate a creditor's opportunity to appropriate a payment made by a debtor.[229] Hansen J held that 'the very last moment' in Farrow Finance Co Ltd (in liq) had 'come and gone' in that third party rights had intervened and it was no longer open to the noteholder creditors in that case to make an appropriation.[230]
3. Similarly, in Re Muggleton,[231] Drummond J said:
   1. where there are separate debts, the better view is that, absent an appropriation by the debtor when he makes the payment, the creditor has the right at any subsequent time to appropriate the payment; and
   2. the creditor will lose that right of appropriation only by finally exercising the right or upon the occurrence of an event or circumstance that would make it inequitable for the creditor to make the appropriation when the creditor purports to do so.
4. The rule in Clayton's Case presumes that payments made in reduction of a debt are intended to be applied consecutively in discharge of the items making up the debt.[232]
5. Where an appropriation is not made by a debtor or a creditor, the rule in Clayton's Case does not apply unless there is a current or running account between the parties.[233] The term 'running account' appears to be synonymous with a current account.[234]
6. In the present case, there is no basis to apply the rule in Clayton's Case either directly or by analogy.[235] It is a rule that ordinarily applies in relation to banker and customer in the context of payments towards a current or running account where there is no appropriation at the time of payment. The presumption 'is it is the sum first paid in, that is first drawn out'.[236] Here there was no current or running account. The transactions between Mr Smith and Leveraged Equities were not analogous to a current or running account. That alone is sufficient to reject the suggestion that the rule in Clayton's Case applies.[237] But there is a further and more significant reason to reject Mr Smith's contention. The rule in Clayton's Case has no place in a context, such as the present, where the question of appropriation occurs outside a commercial trading relationship involving a current or running account and where appropriation has consequences for which of two innocent parties will bear a loss due to the actions of a fraudster.
7. The inapplicability of the rule in Clayton's Case to the instant case is confirmed by observations of Griffith CJ in Creak v James Moore & Sons Pty Ltd.[238]
8. In that case the plaintiff's salesman, Mr Watson, stole galvanised iron worth £70 and embezzled money in an amount of about £47 from the plaintiff. An accomplice to Mr Watson, Mr Quine, sold some of the galvanised iron to the defendant for £31, the funds eventually being remitted to the credit of Mr Watson. After Mr Watson and his accomplice were apprehended Mr Watson paid over the £31, and other money, to the authorities and in due course it was paid on to the plaintiff. The plaintiff became aware that the defendant had bought the iron for £31. The plaintiff then brought proceedings against the defendant claiming £32 16s for the value of goods (ie the iron) converted by the defendant to his own use. The defendant, among other things, said that he was entitled to have the amount of £31 deducted from the claim. In the High Court a question arose as to whether the plaintiff was entitled to recover the value of the goods and also to keep the sum of money which was the actual proceeds of the goods stolen when on-sold by the thief.
9. By majority (Griffith CJ and Barton J; Isaacs J dissenting) it was held that the plaintiff was bound to elect whether it would affirm or disaffirm the sale of the iron: it could not both keep the money and recover the full value of the goods.[239] The present relevance of the case, however, is a suggestion on the part of the plaintiff that there was a change of position in that it had appropriated the money received from the authorities - which included the £31 - to the embezzled money of £47. Griffith CJ rejected that contention stating:

The real nature of the transaction was that [the plaintiff] received the [£31] by way of restitution of stolen property, including both goods and money, or including goods stolen by both Watson and Quine. It would be absurd to regard it as a mercantile transaction to which mercantile rules apply. In my judgment, the doctrine of appropriation, commonly referred to as the Rule in Clayton's Case, does not apply in such a case, but, if it did, the foundation of its application would be a presumption of the creditor's intention. In this case any intention on the part of the plaintiffs to appropriate the £31 to satisfaction of the embezzled money, as distinguished from the stolen goods, is excluded by the facts. But I must not be supposed to say that I think that even if a rule, not the same as, but analogous to, the Rule in Clayton's Case, were applicable it would be an answer.

I am of opinion that if a man whose servant has stolen and sold his goods, and has also stolen his money, afterwards receives from the police money found upon the thief (which is practically this case), he is not entitled, without inquiry as to the source of the money, to appropriate it in satisfaction of the stolen money to the prejudice of the purchaser of the stolen goods, so as to exclude the obligation to elect already stated; but he is not, of course, bound to account for any greater sum than he has actually received out of the earmarked proceeds.[240] (emphasis added; citations omitted)

1. Griffith CJ confined the application of the rule in Clayton's Case to a mercantile transaction; it was not capable of providing a rule for appropriation where - like the present case - property was recovered following misappropriation. Insofar as Mr Smith contended for the adoption of a principle of 'first in - first out' the only suggested basis for that principle was the rule in Clayton's Case. As the rule in Clayton's Case is inapplicable we reject Mr Smith's contention that the appropriation question is properly determined by adopting the principle of 'first in - first out'.
2. Of the other three suggested means for identification of the property in Leveraged Equities' hands (see [130] above) only the first alternative (ie that there was an onus on Leveraged Equities to show that the Wesfarmers shares in its control were legitimately its property) was developed in any mea[241]gful way.241
3. The other two suggested rules ought to be discarded at the outset. In referring to the possibilities of some species of pari passu distribution or the lowest intermediate balance rule Mr Smith's written submissions referred to the decision of Campbell J (as his Honour then was) in Re Sutherland; French Caledonia Travel Service Pty Ltd.[242] That authority discusses the principles governing distribution of a fund comprised in a trust account in which the assets of numerous beneficiaries had become mixed. The case presented a very different factual context to the present case - there being, in the present case, a single dealing requiring appropriation as opposed to a circumstance of mixed trust funds where a corporate trustee in liquidation had not adequately documented deposits into and withdrawals from a trust account and where available funds had been wrongly depleted. For reasons that will become apparent we do not consider it necessary or appropriate to resort to some form of pari passu distribution as was approved of in Re Sutherland.[243]
4. All the more so this is not a case for the application of the lowest intermediate balance rule. This is not a case where Mr Smith seeks to trace through the Wesfarmers shares held to the benefit of Mrs King's margin lending account for any larger amount than is the lowest balance in the account between the time the shares were transferred and the time a remedy was sought.
5. In the alternative to the application of the rule in Clayton's Case, Mr Smith pressed the proposition that an onus fell on Leveraged Equities to demonstrate that the return of the 25,000 shares went to the second or third share transfers rather than the initial transfer.[244] Senior counsel for Mr Smith submitted that, as Leveraged Equities was the recipient, Leveraged Equities was in a better position to work out what happened to the property; Leveraged Equities was able to keep adequate records of any dealing following receipt.[245] We reject that submission. Mr Smith was in as good a position as Leveraged Equities to provide for some appropriation at the time of return of any shares. The rationale relied on by Mr Smith to support his contention that Leveraged Equities bears a relevant onus is without merit. Otherwise, in written and oral submissions three authorities were relied on: Brady v Stapleton,[246] Distinctive FX Pty Ltd v Van Der Slot[247]and Toksoz v Westpac Banking Corporation.[248] Senior counsel for Mr Smith accepted that, insofar as relied on by Mr Smith, each of those authorities was a tracing case.[249]
6. The latter two cases are of no assistance. Distinctive FX Pty Ltd v Van Der Slot concerned an interlocutory appeal against carve-outs to a freezing order. The appeal was allowed on the basis that, in the absence of evidence to the contrary, the whole of the disputed money was to be taken to be trust money. Mention was made that the respondent, despite opportunity, had provided no evidentiary material showing it was even arguable that the property was derived from legitimate funds. There was no final determination and the case is self-evidently distinguishable on the facts. In the present case there is no doubt that Leveraged Equities was legitimately in control of, and enjoyed a security interest as to, the 85,000 Wesfarmers shares the subject of the initial share transfer. The passages referred to in Toksoz v Westpac Banking Corporation address the sensible and robust approach that the law has taken with respect to the tracing of money following theft. It is acknowledged that common sense and reasonable inference play a part in fact finding. But that is a long way short of a finding as a matter of law that an innocent recipient (not being a delinquent trustee) bears some relevant onus; it provides no support for Mr Smith's proposition that an onus fell on Leveraged Equities requiring it to demonstrate that the returned Wesfarmers shares were referrable to the second or third share transfers.
7. Brady v Stapleton was a bankruptcy case. Prior to bankruptcy a bankrupt transferred 32,280 shares in a particular company to Mr Brady. Due to the circumstances of the transfers it was found that at all times Mr Brady held them as trustee for the bankrupt (meaning they became divisible property in the bankrupt estate). In addition to the shares so transferred, Mr Brady held 1,300 shares of which his beneficial ownership was not challenged. After the bankruptcy Mr Brady transferred 17,000 shares to a Mrs Coward, who took with notice of the trust. Mrs Coward was not a bona fide transferee for value without notice. However, it was said to be impossible to identify, among the shares held by Mr Brady and Mrs Coward, any particular shares as being the 32,280 shares subject to the trust for the bankrupt - there being the 1,300 shares of which Mr Brady was the beneficial owner. That impossibility of identification led the trial judge to refuse orders for the transfer of any shares by Mr Brady or Mrs Coward to the trustee in bankruptcy (a somewhat curious finding when only 1,300 of the 33,580 shares were referable to the shares as were originally beneficially owned by Mr Brady). That was reversed in the High Court and orders were made that Mr Brady transfer 16,580 shares and Mrs Coward transfer 15,700 shares.
8. Before this court senior counsel for Mr Smith relied on various passages from the reasons for decision of Dixon CJ and Fullagar J:

The view that impossibility of precise identification of trust shares precludes the making of an order for a transfer of shares seems really to amount to something like an inversion of the true position. In the present case its practical effect seems to be to place the burden of identification upon the wrong shoulders. In Frith v Cartland Mr Rolt QC said, arguendo, 'The trustee who mixes trust money with his own must himself distinguish them'. Mr Rolt's argument was successful, Sir W Page Wood VC saying: 'If a man mixes trust funds with his own, the whole will be treated as the trust property, except so far as he may be able to distinguish what is his own'. In Re Hallett's Estate; Knatchbull v Hallett Jessel MR, after quoting this passage, observed: 'that is, the trust property comes first' ... [250] (citations omitted)

Equities are not defeated if a trustee mixes trust moneys with his own moneys and with the mixture purchases a grey horse and a black horse, or a grey horse alone. In such a case equity imposes a charge on the two horses or the one horse. But, where it is possible to give effect to the rights of a cestui que trust by simply taking out so much money or so many bonds or so many shares, the cestui que trust may elect whether he will take property in specie out of the mass or have a charge on the mass.[251]

1. Their Honours noted a distinction to be drawn between cases where it is or is not practicable to give effect to the rights of the beneficiary by appropriating to him or her a specific severable part of the available property.[252] Dixon CJ and Fullagar J concluded that, in the case before them, Mr Brady must be presumed in accordance with Re Hallet's Estate[253] to have transferred to Mrs Coward his own 1,300 shares among the 17,000 shares he transferred to her. Thus Mr Brady was not to be treated as retaining any of his own property.[254]
2. McLure J (as her Honour then was) explained the principle in Re Hallet's Estate and Brady v Stapleton when examining the general principles applying to the law of tracing in Re Global Finance Group Pty Ltd (in liq); Ex parte Read.[255] There, dealing with the rules relating to competing claims of beneficiaries and a defaulting trustee in tracing into a mixed fund, her Honour stated:

[W]here a trustee mixes its own money with trust money, makes a withdrawal and dissipates the money, the trustee is assumed to have had an honest intention and drawn out its own money first. The beneficiaries of the trust are entitled to an equitable charge or lien on the whole of the remaining unused fund for the amount of the trust money.[256] (citations omitted)

1. Accordingly, it is presumed that a person acting as trustee is honest before being dishonest - in the case of a mixed trust fund the trustee's personal property is taken to have been deployed before the trust property. McLure J also observed that:
   1. Tracing is a process, not a right or remedy. It is a means of identifying property in the hands of a third party.[257]
   2. The tracing rules at law and in equity differ.[258]
   3. Generally, only in equity can there be tracing in and out of a mixed fund.[259] (This does not matter in the present case. There is no question of tracing outside of the Wesfarmers shares the subject of Mrs King's margin lending account.)
   4. Deposits by a trustee into a mixed fund are not presumed to be impressed with trusts unless the trustee intended that the deposits were to replace trust funds.[260] The court does not attribute an intention of restoration to a defaulting trustee because it would mean that the trustee, not the court, could settle beneficiaries' and unsecured creditors' claims inter se.[261]
2. The present case is materially different from Brady v Stapleton. First, Mr Smith pursues a personal claim for unjust enrichment rather than a proprietary claim grounded in equity. Second, one of the key features of Brady v Stapleton was that Mr Brady held the shares as trustee at all material times. However, in the present case it was accepted that Leveraged Equities could only become a trustee of the Wesfarmers shares the subject of the second and third share transfers after it was given notice of the forgeries.[262] The return of the 25,000 Wesfarmers shares to Mr Smith occurred before that time. Accordingly, on Mr Smith's own admission, Leveraged Equities was not relevantly a trustee at the time of the May 2008 return of the 25,000 shares. A rule or presumption based on an assumption that a trustee applies its own property before the trust property has no place. Third, following on from the previous matter, this was not a case where a trustee mixed trust assets with its own - and then, in suggesting that impossibility of identification prevented relief, sought to take advantage of its own wrong. The primary judge's findings that Leveraged Equities was unaware of the forgeries until late June 2008 or July 2008, and had no reason at the time of the second and third share transfer to suspect dishonesty on Mr King's part, belie any inequitable or unconscionable conduct on Leveraged Equities' part in receiving the second and third share transfers and returning the 25,000 shares. Fourth, the transfer of the 25,000 shares was to Mr Smith - the relevant claimant and person from whom the second and third share transfers had been taken - rather than a third person. The return of the shares was an act of restoration.
3. These differences take the present case outside the principle in Brady v Stapleton as relied on by Mr Smith. In any case Brady v Stapleton is not authority for the proposition that a recipient of property, such as Leveraged Equities, has an onus to identify - by some means of appropriation or otherwise - the nature of the property it has dealt with and the nature of the property it retains. Rather, the relevant principle is that where a trustee holds a mixed fund, and applies some of that fund, the presumption is that the trustee first exhausts its own property before depleting that of the beneficiaries. That principle is not of assistance to Mr Smith in the appropriation question now before the court.
4. Before leaving this aspect of the appropriation question, mention should be made of the consequences Mr Smith saw as resulting from his alternative approach relying on onus. Mr Smith, by senior counsel, readily accepted that had the 25,000 Wesfarmers shares been returned after notice - after Mr King's forgeries were known and Mr Smith had sought return of the shares - it would be a 'remedial event' and the shares would be allocated to, and received in satisfaction of, the claim made as to the second and third share transfers.[263] However, it was contended that as Leveraged Equities was not on notice at the time of the return, the 25,000 returned shares were to be taken to have been appropriated against the 85,000 shares the subject of the initial share transfer.[264] Mr Smith's contention was that if Leveraged Equities was not on notice the presumptive conclusion that there had been a return on account of the second or third share transfers was unwarranted.[265] Why that was so was unexplained. It is a result that strikes us as being incongruous. It is not obvious why, as a matter of principle, Mr Smith should be better off - and Leveraged Equities worse off - merely because the return of the Wesfarmers shares did not occur later in the piece after Leveraged Equities had notice. Certainly it is not justified by the principle in Brady v Stapleton as relied on by Mr Smith.
5. For these reasons we would reject Mr Smith's suggested approaches to the identification of the nature of the property as returned (the 25,000 Wesfarmers shares received on 7 May 2008) and the nature of the property as remained in Leveraged Equities' hands when it received notice of Mr King's fraudulent activities. It remains necessary, however, to come to a conclusion on the appropriation question as a matter of principle.
6. In the present case, beyond Mr Smith's suggestion that there are various bases upon which a court may proceed where exact identification of particular property to be returned is not possible,[266] neither senior counsel for Mr Smith nor senior counsel for Leveraged Equities cited any direct authority as to the principles to be applied in determining whether the 25,000 shares returned by Leveraged Equities to Mr Smith on 7 May 2008 were appropriated or are to be taken to have been appropriated wholly or partly to:
   1. the initial tranche of 85,000 shares transferred to Leveraged Equities' account on 31 July 2007;
   2. the second transfer of 25,000 shares transferred to Leveraged Equities' account on 25 January 2008; or
   3. the third transfer of 15,000 shares transferred to Leveraged Equities' account on 10 March 2008.
7. The 10,625 shares in the rights issue were not transferred to Leveraged Equities' account until 2 June 2008.
8. As we will explain, it is unnecessary to formulate and state definitive principles to be applied, in the present circumstances, in relation to rights of appropriation or presumptions of law where any rights of appropriation are not exercised.
9. By cl 7 of the Application Form dated 30 July 2007 and executed by Mr Smith as guarantor, Mr Smith offered to give Leveraged Equities a mortgage on the Mortgage Terms set out in s 1 of the Leveraged Equities Margin Lending Booklet. Clause 7 also provided that Leveraged Equities could accept Mr Smith's offer of mortgage by opening a Margin Loan Account in Mr Smith's name and such acceptance would, without any further action by Leveraged Equities, create a binding mortgage on the Mortgage Terms.
10. Clause 1.2 of the Mortgage Terms set out in s 1 of the booklet defines the term 'Secured Property'. The definition states, relevantly, that the Secured Property will include all Securities that are transferred into, or registered under, a Holder Identification Number with Leveraged Equities; all New Rights at any time attaching to or arising out of any Secured Property (which includes, relevantly, any shares issued pursuant to a rights issue); and any Additional Securities that Leveraged Equities requires be provided under cl 8 of the Mortgage Terms to be held as part of the Secured Property and subject to the Mortgage Terms.
11. The term 'Securities' is defined in cl 81.1 of the Mortgage Terms to include, relevantly, shares, stock units or units in the capital of a corporation.
12. Clause 2.6(a) of the Mortgage Terms provides that if at any time 'the Security Value exceeds the Total Amount Owing', Mr Smith may request that Leveraged Equities 'release part of the Secured Property'. By cl 2.6(b), Leveraged Equities is not obliged to 'release any part of the Secured Property, but may do so [in Leveraged Equities'] absolute discretion if [Leveraged Equities is] satisfied that after the release, the Security Value will be, and is likely to remain, greater than the Total Amount Owing'.
13. No provision of the Mortgage Terms deals with the manner in which any mortgaged shares or other securities released by Leveraged Equities under cl 2.6 or otherwise are to be appropriated as between different tranches of shares or other securities that have previously become secured from time to time by the mortgage.
14. Clause 6.1 of the Mortgage Terms provides that all money received by Leveraged Equities under or by virtue of the mortgage 'will be applied in the manner and order' that Leveraged Equities determines.
15. The Mortgage Terms do not include a similar or analogous provision to cl 6.1 in relation to the release by Leveraged Equities of any of the Secured Property.
16. In pars 71 and 72 of his SOC, Mr Smith pleaded:
    1. On or about 7 May 2008, 25,000 shares in Wesfarmers Ltd were transferred from being held as collateral supporting the Margin Loan Facility to Smith (the 'Share Return').
    2. Other than the Share Return, and the matters pleaded at paragraphs 79A to 79E below, none of the shares the subject of the First Share Transfer, the Second Share Transfer, the Third Share Transfer or Issued Shares have been returned to Smith.[267]
17. In par 33 of its defence, Leveraged Equities admitted pars 70 and 71 of the SOC.[268]
18. In par 73.2.1.1 of his SOC, Mr Smith pleaded that Leveraged Equities must make restitution to Mr Smith for the shares the subject of the first tranche of 85,000 shares 'other than the shares the subject of the Share Return'.[269] By that plea Mr Smith asserted, in effect, that the returned shares had been or were to be taken to have been appropriated wholly to the initial tranche of 85,000 shares transferred to Leveraged Equities' account on 31 July 2007.
19. In par 34 of its defence, Leveraged Equities relevantly denied par 73 of the SOC.[270]
20. At the trial, the witness statement dated 17 December 2014 of Mr Smith was tendered in evidence by then counsel for Mr Smith. In par 75 of his witness statement, Mr Smith said that in early May 2008, 25,000 Wesfarmers shares were transferred back to his account.
21. At the trial, the witness statement dated 23 December 2014 of Danielle Ann Jones was tendered in evidence by then senior counsel for Leveraged Equities. At all material times, Ms Jones was employed by Leveraged Equities as an account manager. In pars 110, 111 and 112 of her witness statement, Ms Jones said:
    1. On about 7 May 2008, I received a signed authority from Mr Smith to transfer from the Margin Loan Facility 25,000 [Wesfarmers] shares back to Mr Smith's etrade account. A copy of that authority, which was also signed by Mrs King, is 1DDD 126. I have not been able to locate the email by which this authority was sent to me.
    2. 1DDD 125 is the Broker to Broker Transfer of CHESS Stock form referring to that transfer dated 7 May 2008. 1DDD 127 is a copy of a CHESS holdings enquiry also dated 7 May 2008. 1DDD 128 is an annotated statement for Mrs King's account for May 2008, and on the reverse side of 1DDD 128 are a stamp and notations from the sponsorship team.
    3. That same day, someone from the sponsorship team noted in client notes that 25,000 [Wesfarmers] shares had been released. A copy of that notation is part of 1DDD 193. (original emphasis)
22. The documents referred to in pars 110, 111 and 112 of Ms Jones' witness statement do not indicate that Leveraged Equities made or purported to make any appropriation of the returned shares.
23. There was no evidence at the trial that between on or about 7 May 2008 and on or about 17 July 2008 (being the latest date by which Leveraged Equities became aware of Mr King's fraud in relation to the second and third share transfers), either Mr Smith or Leveraged Equities had made or had purported to make any express appropriation of the returned shares to the initial tranche of 85,000 shares or the second transfer of 25,000 shares or the third transfer of 15,000 shares.[271]
24. The primary judge did not make any finding as to whether the returned shares had been or were to be taken to have been appropriated wholly or partly to the initial tranche of 85,000 shares or the second transfer of 25,000 shares or the third transfer of 15,000 shares. In particular, his Honour did not make any finding in relation to whether there had been any express appropriation or any inferred appropriation or any appropriation by the application of any presumption of law.
25. In the present case, all of the shares transferred to Leveraged Equities were uncertificated holdings. That is, all of the shares were fungible in the sense that each share was indistinguishable from the other shares and each share was equivalent to the other shares. It was not possible to identify by reference to any share whether that share had been transferred as part of the initial tranche or the second transfer or the third transfer.
26. In the present case, there are, in our opinion, two alternative approaches that may properly be adopted in relation to the question of appropriation. Both approaches produce the same result.
27. The first approach is to determine the number of shares that Leveraged Equities was entitled to retain as at the time it received notice of Mr King's forgeries and the request was made for return of the Wesfarmers shares. Prima facie - in the sense of establishing an entitlement unless Mr Smith demonstrated otherwise - Leveraged Equities was entitled to retain the 85,000 Wesfarmers shares the subject of the initial transfer and the 10,625 rights issue shares (that were received after the 25,000 shares were returned). That entitlement arose under the contractual entitlements entered into in July 2007, ie the Application Form and Authority Letter which, among other things, provided for the guarantee, mortgage and the transfer of 85,000 Wesfarmers shares from Mr Smith's HIN to the control of Leveraged Equities; and, as has been seen, the contractual entitlements extended to include the rights issue shares as being subject to Leveraged Equities security (see [65] above).
28. As Leveraged Equities was entitled to retain 95,625 shares, but controlled 110,625 shares, it was obliged to return 15,000 shares to Mr Smith.
29. This analysis does not operate unfairly or inequitably against Mr Smith. After all, at the time the 25,000 shares were returned, Mr Smith believed that the 40,000 Wesfarmers shares the subject of the second and third share transfers had been transferred incorrectly due to clerical error. Mr Smith was expecting these shares to be returned without anything more. Nor, viewed from Leveraged Equities' perspective as at the time the 25,000 Wesfarmers shares were returned in May 2008, was there anything inequitable or unconscionable in Leveraged Equities relying on its contractual rights by continuing to control the 85,000 shares the subject of the initial share transfer. Leveraged Equities had not acted unlawfully and had no reason to suspect dishonesty on the part of Mr King.
30. The second approach is based on the fundamental principle that it is for a plaintiff to prove its case.
31. In the present case, on this aspect of Mr Smith's restitutionary claim in relation to the second and third share transfers, it was for Mr Smith to prove, by so identifying, that the Wesfarmers shares the subject of the second and third share transfers remained in Leveraged Equities' control, and subject to its security interest, at the time that Mr Smith informed Leveraged Equities of Mr King's fraudulent activities and sought return of the shares. Mr Smith has not done so. On the findings made by the primary judge - particularly those reproduced at [125] above - Mr Smith is unable to distinguish between the shares the subject of the various share transfers. Nor is Mr Smith able to identify the provenance of the various shares in the sense of proving on the balance of probabilities that 40,000 of the shares on hand as at late June 2008 to mid-July 2008 were referrable to the second and third share transfers. Such identification is impossible due to the uncertificated nature of the holdings and the absence of any findings (see [36] above). It is not impossible because of anything that Leveraged Equities has done or not done. Mr Smith is unable to prove on the balance of probabilities that the returned shares were not referrable to the second or third share transfers.
32. Either way, the appropriation question should be resolved in Leveraged Equities' favour. The claim in relation to the second and third share transfers should be quantified, subject to defences, on the basis that it can only result in relief in relation to 15,000 Wesfarmers shares (it being clear, as a matter of mathematics, that this amount of Wesfarmers shares the subject of the second and third share transfers remained subject to Leveraged Equities' control as at the time Leveraged Equities ought to have returned all of the shares, apart from the 85,000 shares the subject of the initial share transfer and the 10,625 rights issue shares).

1. Leveraged Equities raised two defences in answer to Mr Smith's claim in restitution as to the second and third share transfers. Leveraged Equities claimed that:
   1. It changed its position in reliance on receipt of the transfers.[272]
   2. It provided good consideration for the receipt of the transfers.[273]
2. The primary judge did not deal with those defences. Mr Smith accepted that, if the appeal on ground 1 was successful, the matter would have to be remitted to the primary judge for the purpose of addressing the defences.[274] Leveraged Equities sought, however, to uphold the primary judge's decision on the second and third transfers by relying on the defences. To that end Leveraged Equities filed a notice of contention raising the defences. Leveraged Equities contended that all necessary findings of fact were made by the primary judge and it was simply a case of this court drawing an ultimate conclusion based on the findings as made. In that regard Leveraged Equities relied on the findings made by the primary judge at [251] to [269] of the primary reasons in light of some background observations as to the operation of the margin lending facility.[275]
3. Specifically, in relation to ground 1, Leveraged Equities relied on the primary judge having made the following findings:
   1. Leveraged Equities was entitled to enforce its mortgage over the secured property when Mrs King's account was in margin call.[276]
   2. Mrs King's margin lending account was in margin call on 21 January 2008, there being a shortfall of some $333,421.37.[277]
   3. The second share transfer (of 25,000 Wesfarmers shares) took place on 25 January 2008. By this time the shortfall had increased to $670,000.[278] Leveraged Equities' written submissions suggested there was a finding that, when the second transfer occurred, Mrs King's margin lending account ceased to be in margin call.[279] There was no express finding to this effect; Leveraged Equities submits that it is, however, open to so infer.
   4. At this time Leveraged Equities had no reason to suspect dishonesty or that Mr King was acting outside his authority.[280]
   5. As at 8 March 2008 a daily funding report showed that three pending trades on Mrs King's account were due to fail for insufficient funding.[281]
   6. On 10 March 2007 Mr King caused the third share transfer of 15,000 shares to be effected.[282]
   7. As at 28 March 2008 the Wesfarmers shares accounted for almost all of the security value of the securities held in Mrs King's margin lending account.[283]
   8. Mr King traded heavily on Mrs King's margin lending account in March 2008 and continued to trade in April 2008.[284]
   9. Leveraged Equities was not aware that the authorities were forged, or alleged to be forged, until it was raised by Mr Smith in late June 2008.[285]
4. Senior counsel for Leveraged Equities did not contend that in so finding the primary judge had purported to determine Leveraged Equities' defences of change of position and good consideration. It was contended, however, that the findings as made were sufficient in the sense that all necessary findings of fact were made in relation to the defences and it was simply a case of this court coming to an ultimate conclusion by drawing an inference.[286]
5. As to those conclusions, Leveraged Equities contended that, due to the second share transfer, it did not enforce its rights under the mortgage on 25 January 2008. Instead, Leveraged Equities said that it maintained its funding to Mrs King and continued to allow Mrs King to trade with that funding.[287] As to the third share transfer, Leveraged Equities contended that, on 10 March 2008, it advanced further funds to Mrs King and allowed the three pending trades to settle. Thereafter Leveraged Equities again maintained its funding to Mrs King and continued to allow Mrs King to trade with that funding.[288] Leveraged Equities said that, for each receipt, it was acting in good faith as it received the shares in circumstances that justified its acting on the basis of the receipt.[289]
6. As to good consideration, Leveraged Equities contended that good consideration was given because Leveraged Equities' receipt of the second and third share transfers discharged a debt or liability owed by Mrs King to Leveraged Equities.[290] The suggested debt or liability was said to be that as 'represented by Mrs King's account being in margin call'.[291]

1. The rationale for change of position as a defence to a restitutionary claim lies in the inherent unfairness of requiring a recipient to make restitution where the recipient has received property in good faith and has irreversibly and materially altered his or her position, on the faith of the receipt, to his or her detriment.[292]
2. The parties went to considerable lengths developing the principles that apply to the defence of change of position. Rather than recite all the authorities referred to by the parties it is convenient to instead commence by reproducing what was stated by Gageler J in Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd:

The defence of change of position is established where a defendant proves the existence of two conditions. The first condition is that the defendant has acted (that is, done something the defendant would not otherwise have done) or refrained from acting (that is, not done something the defendant would otherwise have done) in good faith on the assumption that the defendant was entitled to deal with the payment which the defendant received. The defendant need not for the purpose of meeting this condition have acted on knowledge derived from the payer. Whether the defendant needs also to have acted reasonably is a question which does not now arise for determination. The second condition is that, by reason of having so acted or refrained from acting, the defendant would be placed in a worse position if ordered to make restitution of the payment than if the defendant had not received the payment at all. The detriment constituted by that difference in position need not, in every case, be financial or pecuniary. If financial or pecuniary, it need not, in every case, be established with precision. It can be an opportunity forgone. It must, in every case, be shown by the defendant to be substantial.[293]

1. In Alpha Wealth Financial Services Pty Ltd v Frankland River Olive Co Ltd Buss JA (as his Honour then was) identified the key elements of the change of position defence as follows:[294]
   1. The recipient must have changed his or her position. Such change in position must be legally or practically irreversible, or alternatively, there must be significant difficulties in reversing the change.
   2. The recipient must have changed his or her position on the faith of the receipt, ie the change in position must have been 'caused by the receipt'.
   3. The recipient must have changed his or her position in good faith.
   4. The recipient's change of position must accord with his or her knowledge of the facts and circumstances attending the payment.
   5. The critical moment for the recipient is when the change of position occurs.
   6. The change in position must be to the recipient's detriment. However, Buss JA noted a difference in the authorities. On the 'narrow version' of the defence it is necessary for the recipient to prove a detrimental reliance on the faith of or on the validity of the receipt. On the 'wide version' the defence is available to a person whose position has so changed that it would be inequitable in all the circumstances to require him or her to make restitution, or alternatively, to make restitution in full.
   7. The recipient bears the onus of establishing the defence of change of position.
2. The circumstances in which a payee acts on the faith of or in reliance on a receipt will be many; it is a factual question in each case.[295] In Citigroup Pty Ltd v National Australia Bank Ltd Bathurst CJ, Allsop P and Meagher JA stated:

The acts and omissions will occur in the context of a certain body of knowledge which will include knowledge of the receipt and of facts that support reliance upon the stability of the receipt and an entitlement to treat the receipt as able to be dealt with. In many cases it will be a matter of fact and degree as to whether there was any such reliance. This introduces both some degree of mental advertence to the existence of the receipt, and a causal element to the analysis of the relationship between the payment and the change of position; the ascription of the latter to the former: see Perpetual Trustees v Heperu at [133]; and J Edelman and E Bant, Unjust Enrichment in Australia (2006) Melbourne, Oxford University Press at pp 326-331. The nature and degree of the causal connection may vary from case to case.[296] (emphasis added)

1. On the necessity that it be shown that the detrimental reliance was legally or practically irreversible, senior counsel for Leveraged Equities referred the court to various texts. In Mason & Carter's Restitution Law in Australia (Third Edition) the authors state:

Proof of irreversibility, like all aspects of the defence, is to be addressed in a practical manner. Essentially, the court is undertaking 'a valuation of the (irreversible) changes to the defendant's position and offsets that amount against what would otherwise be the full measure of restitution.' As with the duty to mitigate damage in a tort situation, parties ought not to be expected to embark on difficult and problematic litigation.[297]

1. Having examined the considerations relevant to the application of the change of position defence, we are unable to uphold Leveraged Equities' notice of contention as to the defence. There are at least two respects in which the factual findings of the primary judge adverted to and relied on by Leveraged Equities are insufficient to come to a conclusion as to whether the defence of change of position is made out. Regrettably - for it is well accepted that remission is a deplorable result - this court is unable to determine the defence. It should instead be remitted to the primary judge for determination.
2. The first difficulty is in concluding that Leveraged Equities changed its position on the faith of the receipt of the second and third share transfers; and, if so, how Leveraged Equities did so in specific terms (the latter being important in assessing whether there was detrimental reliance that was legally or practically irreversible).
3. The difficulty for an appeal court in coming to a conclusion on this question in the absence of express factual findings by a trial judge ought to be self-evident. The issue is, as was made plain in Citigroup Pty Ltd v National Australia Bank Ltd, a question of fact and degree. This was a case where there was, at best, limited oral evidence on the question of how things might have been different had the additional share transfers not been made.[298] Senior counsel for Leveraged Equities sought to get around the lack of evidence as to mental advertence by referring to the contractual parameters and workings of Mrs King's margin lending facility. However, the primary judge made a finding that decisions could be made to manually override the electronic system.[299] It was also the practice of Leveraged Equities to lend money to complete the settlement of a pending purchase if the total amount owing would come to exceed the security value by no more than 60% of the buffer.[300] For example, there was at least one occasion where the account was in shortfall, but there was no margin call, and Mr King continued to trade on the account in reduced volumes.[301] This court is unable to assess how these sort of matters might have affected what occurred. Further, insofar as Leveraged Equities pointed to particular evidence of possible relevance that had been adduced,[302] the primary judge did not deal with that evidence.
4. The second difficulty is reaching a conclusion on whether there was detrimental reliance that was legally or practically irreversible.
5. Leveraged Equities sought to establish its defence in slightly different ways as to the two share transfers. On the second share transfer it was said that Leveraged Equities did not enforce its rights under the mortgage - ie there was no margin call - and Leveraged Equities allowed Mrs King to continue to trade. The full extent of the post-25 January 2008 trading is unclear (although the primary judge noted that the only January 2008 trading was a sale).[303] On the third share transfer it was said that further funds were advanced which allowed pending trades to settle and thereafter further trading occurred. There is no finding as to the amount of funding required for the three trades. Nor, as with the second share transfer, is it possible to identify precisely what post-10 March 2008 trading occurred - other than that in March 2008 Mr King traded 'heavily'.[304]
6. Accordingly, the extent of the claimed reliance is unclear. Also unclear - and more significant in assessing whether there was detrimental reliance that was legally or practically irreversible - is what the position would have been had Leveraged Equities returned 15,000 Wesfarmers shares to Mr Smith when, in late June to mid-July 2008, it became aware of Mr King's forgeries and Mr Smith requested that the shares be returned to him. In that respect senior counsel for Leveraged Equities accepted that there were no findings on the state of Mr King's margin lending account over the period of 24 June 2008 to 17 July 2008.[305] Thus this court is not in a position to assess whether, had the 15,000 shares been returned, Leveraged Equities would at that point have suffered a shortfall in terms of its security - or to what extent there might have been a shortfall.
7. The most that can be said is that the primary judge found that an officer of Leveraged Equities made a note, as at 24 June 2008, that the current account position did not allow the release of all of Mr Smith's Wesfarmers shares.[306] Putting aside that the primary judge did not find this to be the fact, the note says nothing about whether Leveraged Equities might have been made whole had it nevertheless released the 15,000 shares (as opposed to all of the shares).
8. At bottom, in seeking to answer the lack of findings as to the position as at 24 June 2008 to 17 July 2008, Leveraged Equities' submission was that whatever collateral or value of collateral it had to disgorge represented an irrecoverable loss that was sufficient to satisfy the change of position defence.[307] In our opinion that is too broad a statement. It is necessary for Leveraged Equities to prove that it would have been placed in a worse position if - when otherwise required to do so - it had made restitution. On the limited findings of the primary judge this court is not in a position to come to a conclusion on that matter. On that basis, and because of the first difficulty identified in [204] above, the notice of contention cannot succeed so far as it relies on the defence of change of position.

1. Analysis of the defence of good consideration usually starts with Barclays Bank Ltd v WJ Simms Son & Cooke (Southern) Ltd.[308] There, at proposition 2(b), Robert Goff J said that a claim to recover a mistaken payment may fail where:

payment is made for good consideration, in particular, money is paid to discharge, and does discharge, a debt owed to the payee (or a principal on whose behalf he is authorised to receive the payment) by the payer or by a third party by whom he is authorised to discharge the debt.[309]

1. Importantly, on this statement of the principle, a discharge of debt must occur by the payment. Moreover, the payer must intend that the payment is to discharge the debt. If the payer is not the debtor, the third party debtor must authorise or ratify the payment for that purpose - for, without the third party's authorisation or ratification, there can be no discharge of debt by the payment.[310]
2. Senior counsel for Leveraged Equities accepted that this orthodox formulation did not apply to the present case. In particular, viewing Mr Smith as the payer, Leveraged Equities as the payee and Mrs King as the obligee, Mr Smith did not transfer the shares to discharge an obligation owed to Leveraged Equities by Mrs King (Mrs King also not being a person for whom Mr Smith was authorised to discharge the obligation and there not being a subsequent ratification by Mrs King.) Neither the principle nor the rationale for it applied.[311] There was no relevant discharge of a debt owed to Leveraged Equities by the receipt of either the second share transfer or the third share transfer.
3. It might also be questioned whether, relevantly, the suggested 'obligation' as relied upon - never expressly identified as part of Leveraged Equities' argument on appeal but apparently being an obligation to provide additional collateral to avert Mrs King's account being in margin call[312] or to facilitate further advances[313] - was akin to a debt owed to Leveraged Equities as grounded the identified defence of discharge of an existing debt. There was certainly no discharge of a debt or liability owed by Mrs King to Leveraged Equities as contended for in Leveraged Equities' written submissions.[314] The amount owed by Mrs King to Leveraged Equities remained unaltered despite the receipt of the Wesfarmers shares the subject of the second and third share transfers.
4. At the appeal hearing, having accepted that the orthodox conception of the defence of good consideration by way of discharge of debt was unavailable, senior counsel for Leveraged Equities sought to advance the defence in a different way.[315] Initially senior counsel pointed out that Edelman and Bant have identified five different principles that are commonly brought under the umbrella label of 'good consideration'.[316] Senior counsel then drew attention to the decision of Allsop P in Hills Industries Ltd v Australian Financial Services and Leasing Pty Ltd.[317]
5. In that case two companies, H and B, received mistaken payments from AFSL. The payments were induced by a third party acting fraudulently. The third party misled H and B into believing that the payments were made in repayment of debts owed to them by his companies. In reliance on the receipt H and B discharged the debts. It was found that the change of position defence applied. However, of the two judges who considered the point, there was a difference of opinion as to whether a good consideration defence was available. Meagher JA found that H and B could not rely on a defence of discharge for value or payment for good consideration because AFSL paid the funds to discharge debts AFSL thought it owed to H and B - not on behalf of the third party. The discharge of the third party's debts to H and B did not occur because of AFSL's payment but because of the third party's fraudulent intervention. Thus Robert Goff J's proposition 2(b) did not apply.[318] Allsop P accepted that the facts were outside the formulation of the good consideration defence as stated in proposition 2(b) of Barclays Bank Ltd v WJ Simms Son & Cooke (Southern) Ltd but nevertheless upheld the good consideration defence.[319]
6. Allsop P approved various United States of America decisions on the defence of 'discharge for value'. This is described as:

In considering the defense of discharge for value, courts are almost wholly committed to the view that the receipt of the plaintiff's funds in payment of or as security for the debt of a third person is value. In situations of endless variety, courts have denied restitution because money paid by one party was received in good faith by the other, in satisfaction of or as security for a valid claim against a third person.[320]

1. It did not matter, on that doctrine, that AFSL did not intend its payments to discharge debts owed by the third party's companies to H and B. Nor did it matter that the debts were not owed by AFSL or some principal of AFSL.
2. Meagher JA, contrary to Allsop P, considered that, under Australian law, the relevant illustrations given for the 'bona fide payee' rule (the reformulated 'discharge for value' defence[321]) outside Robert Goff J's proposition 2(b) fell, under Australian law, to be dealt with under the general change of position defence or in accordance with more specific principles which have been developed in relation to payments received as an agent or intermediary.[322] So far as, in the High Court on appeal from the New South Wales Court of Appeal, the plurality endorsed Meagher JA's view that the case did not fall within the good consideration defence,[323] Edelman and Bant opine that any future development of a bona fide discharge defence will not occur under the umbrella label of good consideration.[324]
3. Senior counsel for Leveraged Equities seemingly invited this court to adopt Allsop P's wider view of a defence of discharge for value, in preference to Meagher JA's approach to the defence of good consideration, and on that basis uphold the notice of contention. It was accepted, however, that this part of Leveraged Equities' case on appeal was 'ambitious' as the defence of good consideration was still developing.[325]
4. The unsettled state of the law is the first reason we would dismiss Leveraged Equities' notice of contention so far as it relies on the defence of good consideration. If this court were to embark on resolving the difference in approach between Allsop P and Meagher JA it should do so in circumstances where there are express factual findings from the primary judge on all relevant issues. That is not the position insofar as his Honour did not address the defence in the primary reasons. For example, as to the third share transfer, the amount of funding made available is uncertain. Nor, as to the second share transfer, is there any clarity as to the detriment to Leveraged Equities, and corresponding value of the benefit to Mrs King, in the extinguishment of the right to make a margin call. Finally, so far as the implicit suggested obligation on the part of Mrs King was that she had to provide additional collateral to prevent a margin call and draw down on further funds, it is not established that there was such an obligation.
5. In addition, the argument advanced at the appeal hearing is a departure from the notice of contention as it is explicated in the written submissions that accompany the notice. There, as to ground 1 and good consideration, it is said that good consideration was given because Leveraged Equities' receipt of the shares discharged a debt or liability owed by Mrs King to Leveraged Equities.[326] That has not been established.
6. Finally, regard should be had to Leveraged Equities' pleaded defence. The defence as pleaded was that Leveraged Equities 'provided financial services to Glenice King in consideration of the Second Share Transfer and Third Share Transfer'.[327] Leveraged Equities was asked to provide particulars. Leveraged Equities accepted that Mr Smith did not receive any consideration for the provision of the shares the subject of the second and third share transfers.[328] Leveraged Equities pleaded, however, that following the receipt of the shares Leveraged Equities extended further credit to Mrs King's margin lending facility.[329] Accordingly, it is plain that Leveraged Equities did not contend that the receipts themselves effected a discharge of any obligation: the contention was that Leveraged Equities provided additional funding to Mrs King because of - and subsequent to - the receipts. Leveraged Equities was also asked to identify the transactions in Mrs King's margin loan facility which it would not have permitted had it not received the second and third share transfers. In answer no specifics were provided. Leveraged Equities said only that if it had not received further secured property there would have been insufficient secured property to support some of the investment transactions that were undertaken such that some of the transactions would have failed.[330]
7. It poses considerable difficulties for this court on appeal to seek to adjudicate, for the first time, the asserted defence where Leveraged Equities has not itself articulated the case with precision and where there are no specific findings by the primary judge. The appropriate course is to remit the question to the primary judge.
8. The defence as so pleaded is not consistent with the good consideration defence as advanced in the notice of contention and accompanying written submissions. It does, however, have echoes of a 'discharge for value' type argument as explained in Hills Industries Ltd v Australian Financial Services and Leasing Pty Ltd. Whether that provides a defence under Australian law - or whether instead such matters should be considered under the rubric of a change of position defence - is very much an open question. We have already explained why the change of position defence cannot be determined on appeal and should be remitted to the primary judge. Insofar as the good consideration defence as pleaded is, at the very least, closely aligned to and raises similar issues as the change of position defence, it is, in our view, necessary and appropriate that the asserted good consideration defence also be remitted. Upon the remission, Leveraged Equities will, of course, be confined to its pleaded case unless it obtains leave to amend.
9. We would dismiss the notice of contention so far as it relies on the good consideration defence. The defence should be remitted to the primary judge for determination.

1. Leveraged Equities' notice of contention should be dismissed. It follows that, as ground 1 should be upheld, Mr Smith's appeal against the dismissal of his claim against Leveraged Equities should be allowed in part. The claim in relation to the second and third share transfers should be remitted for consideration and determination of the two defences; and, if the defences are unsuccessful, for quantification. Mr Smith did not advance any reason why the matter ought not be remitted to the primary judge as opposed to another judge in the General Division.[331] There is an obvious efficiency in the remaining matters being remitted to the primary judge rather than another judge. That is the course that should be taken.

Disposition: Mr Smith's case against ASASL (Ground 4) The legislative provisions relied on by Mr Smith against ASASL

1. To contextualise ground 4, it is useful at the outset to refer to the provisions of the Corporations Act relied on by Mr Smith in his claim against ASASL. Before doing so there must be some introduction to the statutory context.
2. Mr Smith relied on ASASL's status as a financial services licensee (being the holder of an AFSL) with Mr King as one of its representatives. That directed attention to div 6 of pt 7.6 of the Corporations Act. Division 6, addressing the liability of financial services licensees for representatives, is found within ch 7 of the Act. Chapter 7 deals more generally with financial services and markets. By s 760A the main objects of ch 7 include the promotion of:

(a) confident and informed decision making by consumers of financial products and services while facilitating efficiency, flexibility and innovation in the provision of those products and services; and

(b) fairness, honesty and professionalism by those who provide financial services;

1. As will be seen, the statutory provisions relied on by Mr Smith are more concerned with the object in s 760A(b). Mr Smith invoked sections of the Act providing for a right of redress where there are certain failures in relation to the provision of a financial service. But in so doing div 6 of ch 7 also assists in achievement of the object in s 760A(a).
2. At the relevant time there were 12 parts to ch 7. It is not necessary to refer to all of them. The provisions, substantially introduced by the Financial Services Reform Act 2001 (Cth), put in place a regulatory framework for the financial services industry covering a wide range of financial products. Among other things, ch 7 provided for regulation of financial products, a licensing system for financial services providers and standards of conduct for financial services providers. For the purposes of this appeal, the central provisions are found in pt 7.1 (containing definitions of key concepts and commonly occurring expressions) and pt 7.6 (dealing with the licensing of the providers of financial services and other related matters).
3. Before outlining the provisions Mr Smith relied on, it is convenient to mention one key concept: the provision of a financial service. Regrettably, this requires that we track through a cascading maze of statutory definitions that branch out from an initial concept as found in s 766A of the Corporations Act.
4. Section 766A is within div 4 of pt 7.1. Division 4 is entitled: 'When does a person provide a financial service?'. At the relevant time s 766A(1) answered that question in this way:

Definition

(1) For the purposes of this Chapter, subject to paragraph (2)(b), a person provides a financial service if they:

(a) provide financial product advice (see section 766B); or

(b) deal in a financial product (see section 766C); or

(c) make a market for a financial product (see section 766D); or

(d) operate a registered scheme; or

(e) provide a custodial or depository service (see section 766E); or

(f) engage in conduct of a kind prescribed by regulations made for the purposes of this paragraph.

Regulations may deal with various matters

(2) The regulations may set out:

(a) the circumstances in which persons facilitating the provision of a financial service (for example, by publishing information) are taken also to provide that service; or

(b) the circumstances in which persons are taken to provide, or are taken not to provide, a financial service.

Exception for work ordinarily done by clerks or cashiers

(3) To avoid doubt, a person's conduct is not the provision of a financial service if it is done in the course of work of a kind ordinarily done by clerks or cashiers.

...

1. There are thus five categories of means by which a person may provide a financial service (s 766A(1)). As will be seen, at trial Mr Smith relied on two of the categories: (1) the provision of financial product advice (s 766A(1)(a)); and (2) dealing in a financial product (s 766A(1)(b)). Only the latter is invoked on appeal.
2. Many of the terms found within s 766A(1) have their own definitions and require cross-referencing to those definitions. For example, 'provide' in relation to a 'financial product' has a meaning affected by s 761E. 'Financial product advice' is defined comprehensively in s 766B and the term 'financial product' has the meaning given in div 3 of pt 7.1. The term 'deal' is defined generally in the Act's s 9 dictionary. In relation to securities that definition includes 'acquire' and 'dispose of'. However, in the context of s 766A(1)(b), and whether a person provides a financial service by dealing in a financial product, the sub-section signposts that regard is to be had to s 766C instead of the general definition in s 9.
3. Section 766C is headed 'Meaning of 'dealing''. At the relevant time it provided:

Definition

(1) For the purposes of this Chapter, the following conduct (whether engaged in as principal or agent) constitutes dealing in a financial product:

(a) applying for or acquiring a financial product;

(b) issuing a financial product;

(c) in relation to securities and interests in managed investment schemes - underwriting the securities or interests;

(d) varying a financial product;

(e) disposing of a financial product.

Extended definition

(2) Arranging for a person to engage in conduct referred to in subsection (1) is also dealing in a financial product, unless the actions concerned amount to providing financial product advice.

Where dealing on own behalf

(3) A person is taken not to deal in a financial product if the person deals in the product on their own behalf (whether directly or through an agent or other representative), unless:

(a) the person is an issuer of financial products; and

(b) the dealing is in relation to one or more of those products.

Dealing by agent

(3A) For the purposes of subsection (3), a person (the agent) who deals in a product as an agent or representative of another person (the principal) is not taken to deal in the product on the agent's own behalf, even if that dealing, when considered as a dealing by the principal, is a dealing by the principal on the principal's own behalf.

...

Regulations may extend or prescribe exception to definition of dealing

(7) The regulations may prescribe conduct that is taken to be, or not to be, dealing in a financial product. Regulations made for the purposes of this subsection have effect despite anything else in this section.

1. There is a slight incongruity between s 766A(1)(b) and s 766C(1). The former, in terms, states that a person provides a financial service if they 'deal in' a financial product. Section 766C(1) identifies the conduct that constitutes 'dealing in' a financial product. Insofar as s 766A(1)(b) directs attention to s 766C it is plain that the 'dealing in' is merely to accommodate, grammatically, the indirect language found in s 766C (which focusses on the conduct rather than the person performing the conduct by providing the financial service). That is made plain by s 766C(3)'s reference to 'deal in'.
2. Accordingly, reading s 766A(1)(b) with s 766C(1), subject to any relevant exception (eg s 766C(3)'s dealing on one's own behalf), a person provides a financial service (by means of dealing in a financial product) if, among other things, they:

1. On appeal Mr Smith's argument focussed on the concepts of 'acquiring' and 'disposing of' a financial product. As mentioned, in relation to a financial product the term 'acquire' has a meaning affected by s 761E, something primarily of significance to the issue of financial products. Section 761 also contains a definition of the term 'dispose' for the purposes of ch 7. It provides:

dispose, in relation to a financial product, includes terminate or close out the legal relationship that constitutes the financial product.

1. A different definition is provided for in s 9's dictionary:

Unless the contrary intention appears ... dispose has a meaning affected by the following paragraphs:

(a) when used in relation to financial products in a provision outside Chapter 7, otherwise than in a situation to which paragraph (b) applies, dispose has the same meaning as it has in Chapter 7;

(b) for the purposes of Chapter 6, a person who has a relevant interest in securities disposes of the securities if, and only if, they cease to have a relevant interest in the securities.

1. Through the extended definition in s 766C(2), a person will also provide a financial service within the meaning of s 766A where they arrange for a person to engage in the conduct referred to in [238] above (unless the person's actions amount to providing financial product advice). Again, however, this is subject to any relevant exception. For example, depending on the facts and circumstances, the clerks and cashiers' work exception in s 766A(3) might have application to situations that would otherwise fall within the extended definition in s 766C(2). (As to the possible application of s 766A(3), it has been suggested that the exemption applies to routine administrative or mechanical functions which do not involve the exercise of any independen[332]udgment.)332
2. By contrast, through s 766C(3A), the definition of dealing extends to the conduct of an agent who is acting on behalf of a person who is dealing in a financial product even if, due to s 766C(3), the dealing, when considered as a dealing by the principal, is a dealing by the principal on the principal's own behalf and therefore taken not to be a dealing vis-à-vis the principal.
3. Subject to certain exceptions, where a person carries on a financial services business (ie a business of providing financial services) the person must hold an AFSL covering the provision of the financial services (s 911A(1)). The holder of an AFSL has various obligations (pt 7.6 div 3). The Corporations Act contemplates that there will be 'authorised representatives' - a person authorised in accordance with s 916A or s 916B to provide a financial service or financial services on behalf of a financial services licensee (s 761A). An authorised representative also has various obligations (pt 7.6 div 5).
4. Division 6 of pt 7.6 sets out the liability of financial services licensees for their 'representatives' (the authorised representatives of a financial services licensee being included within s 901A's relevant definition of the term 'representative').
5. Mr Smith pleaded that ASASL was responsible for Mr King's conduct pursuant to s 917A - 917C, s 917E and s 917F of the Corporations Act[333] - the relevant provisions in div 6 of pt 7.6 of the Act dealing with the liability of financial services licensees for representatives. As the primary judge appreciated,[334] although pleaded, s 917C was irrelevant: there was no suggestion that Mr King was the representative of more than one licensee.
6. Section 917A(1) deals with the application of div 6. It states:

This Division applies to any conduct of a representative of a financial services licensee:

(a) that relates to the provision of a financial service; and

(b) on which a third person (the client) could reasonably be expected to rely; and

(c) on which the client in fact relied in good faith. (emphasis added)

1. For the purposes of the appeal the key part of s 917A(1) - the integer of the provision on which Mr Smith failed - was whether in terms of s 917A(1)(a) there was relevant conduct of Mr King (as a representative) that 'relate[d] to the provision of a financial service'.
2. As has been seen, the term 'financial service' is defined in div 4 of pt 7.1 of the Act (s 761A). To focus on the specific parts of the legislation relied on by Mr Smith on appeal, a person provides a financial service if they 'deal in' a financial product (s 766A(1)(b)). A 'dealing' includes 'acquiring' a financial product (s 766C(1)(a)) or 'disposing of' a financial product (s 766C(1)(e)). 'Arranging' for a person to engage in such conduct also constitutes 'dealing' in a financial product unless the actions concerned amount to financial product advice (s 766C(2)). The term 'financial product advice' has its own definition in s 766B. A security - such as a share - is a financial product (s 764A(1)(a) and s 92(1)(b)) unless it is a security of a type mentioned in s 765A (eg an excluded security).
3. As has also been seen, there are some exclusions to the concept of 'dealing'. Subject to exceptions that are presently irrelevant, a person is taken not to deal in a financial product if the person deals in the product on their own behalf (s 766C(3)). Accordingly, on appeal Mr Smith said that he did not rely upon a dealing by himself in his Wesfarmers shares.[335] Also, under the legislation at the relevant time, a credit facility was not considered to be a financial product (s 765A(1)(h)).[336] Presumably this is why Mr Smith's case was directed to the Wesfarmers shares rather than the margin lending facility.
4. At the relevant time, s 917B, s 917E and s 917F provided:

917B Responsibility if representative of only one licensee

If the representative is the representative of only one financial services licensee, the licensee is responsible, as between the licensee and the client, for the conduct of the representative, whether or not the representative's conduct is within authority.

917E Responsibility extends to loss or damage suffered by client

The responsibility of a financial services licensee under this Division extends so as to make the licensee liable to the client in respect of any loss or damage suffered by the client as a result of the representative's conduct.

917F Effect of Division

(1) If a financial services licensee is responsible for the conduct of their representative under this Division, the client has the same remedies against the licensee that the client has against the representative.

(2) The licensee and the representative (along with any other licensees who are also responsible) are all jointly and severally liable to the client in respect of those remedies.

(3) However, nothing in this Division imposes:

(a) any criminal responsibility; or

(b) any civil liability under a provision of this Act apart from this Division;

on a financial services licensee that would not otherwise be imposed on the licensee.

(4) This Division does not relieve a representative of a financial services licensee of any liability they have to the client or the licensee.

...

1. Mr King was an authorised representative of ASASL. Mr Smith sought to attribute to ASASL responsibility for Mr King's conduct. Mr Smith pleaded that he had the same remedies against ASASL as he had against Mr King.[337]
2. Two further provisions within div 6 of pt 7.6 are material.
3. First, s 917A(2) and (3) deal with references in div 6 to the term 'within authority'. Section 917A(3) can be put to one side so far as it concerns the situation where a person is the representative of more than one financial services licensee. Section 917A(2) provides:

In this Division, a reference to a representative's conduct being within authority in relation to a particular financial services licensee is, subject to subsection (3), a reference to:

(a) if the representative is an employee of the licensee or of a related body corporate of the licensee - conduct being within the scope of the employee's employment; or

(b) if the representative is a director of the licensee or of a related body corporate of the licensee - conduct being within the scope of the director's duties as director; or

(c) in any other case - conduct being within the scope of the authority given by the licensee.

1. Neither sub-par (a) nor (b) were applicable. Whether Mr King's conduct was 'within authority' was to be determined by whether the conduct was within the scope of the authority given by ASASL. This directed attention to the Authorised Representative Agreement.
2. Second, s 917D operates as an exception to s 917B and thus provides for an exclusion to the responsibility of the financial services licensee. At the relevant time it stated:

917D Exception if lack of authority is disclosed to client

A financial services licensee is not responsible under section 917B or 917C for the conduct of their representative if:

(a) the conduct is not within authority in relation to the licensee ...; and

(b) the representative disclosed that fact to the client before the client relied on the conduct; and

(c) the clarity and the prominence of the disclosure was such as a person would reasonably require for the purpose of deciding whether to acquire the relevant financial service.

Note: A person must not hold out that conduct, or proposed conduct, of the person is within authority in relation to a particular financial services licensee, unless that is the case. See section 911C.

1. Accordingly, the legislative scheme of div 6 of pt 7.6 is relatively simple. Relevantly, the division applies to conduct relating to the provision of a financial service on which a client could reasonably be expected to rely and does in fact rely in good faith (s 917A). The licensee is responsible, as between the licensee and the client, for the conduct of the representative whether or not the representative's conduct is within authority (s s 917B). Responsibility extends to loss or damage suffered by the client (s 917E) and the client has the same remedies against the licensee that the client has against the representative (s 917F). However, the licensee is not responsible where the conduct is not within authority, that fact is disclosed and the clarity and prominence of the disclosure is such as the person would reasonably require for the purpose of deciding whether to acquire the relevant financial service (s 917D).
2. Subject to s 917D and s 917F(3), the responsibility and liability cast on the financial services licensee is strict and unyielding. Section 917B makes the licensee responsible even if the representative is on a frolic of his or her own, well outside his or her authority. In this way div 6 of pt 7.6 serves a purpose of providing protection for clients.[338]

The reasoning of the primary judge on the claim against ASASL

1. The primary judge referred to Mr Smith's pleaded case and that, in particulars, Mr Smith had identified the relevant financial service as: (1) the provision of financial product advice to Mr Smith or Mrs King (the provision of financial product advice being another means by which a person may provide a financial service)[339] and (2) the dealings with the Wesfarmers shares in or about July 2007 to October 2008.[340] Elsewhere, in connection with Mr Smith's misleading conduct case under s 1041H of the Corporations Act, the primary judge had noted the lack of any pleading as to the alleged relationship between the conduct as relied on and the alleged financial service; and observed that, in the absence of ASASL, the issues raised by the plea were not properly explored at trial.[341] The primary judge went on to refer to ASASL's defence. Among other things, ASASL relied on a defence based on s 917D of the Act. [342]
2. The primary judge made five findings as to the claim against ASASL:
   1. The primary judge was satisfied that Mr Smith could reasonably be expected to rely on Mr King's conduct of 30 July 2007 and that he, Mr Smith, relied on that conduct in good faith in, among other things, signing the Application Form and the Application Letter.[343]
   2. The primary judge was not satisfied that Mr King's conduct on 30 June 2007 related to the provision of any financial service to Mr Smith,[344] ie contrary to Mr Smith's pleaded claim s 917A(1)(a) was not satisfied in the sense that the primary judge was unable to conclude that Mr King's impugned conduct related to the provision of financial product advice to Mr Smith.
   3. The primary judge was also not satisfied that Mr King ever provided financial product advice to Mrs King.[345]
   4. The primary judge held, in terms of s 917D(a), that Mr King's conduct in relation to the 30 July 2007 agreement was not within the scope of the authority given by ASASL. (The same finding was made as to Mr King's conduct in forging the second and third share transfers.) The primary judge then went on to apparently address s 917D(b) and (c) by finding that, as to the dealings on 30 July 2007, Mr King made it clear that he, Mr King, was acting on behalf of his family and in a private capacity. However, on appeal Mr Smith disputes this reading of the primary judge's reasons contending that there was no finding of disclosure of lack of authority so as to attract the operation of s 917D of the Act.[346]
   5. The primary judge was not satisfied that the conduct in forging the letters of authority for the second and third share transfers was conduct to which div 6 applied, finding that it fell outside at least s 917A(1)(b) and (c).[347]
3. As will be seen, ground 4 does not challenge the last finding. Accordingly, that finding stands as a complete answer to Mr Smith's claim against ASASL in relation to the second and third share transfers. Ground 4, if otherwise successful, could only visit liability on ASASL in relation to Mr King's conduct concerning the initial 85,000 share transfer. This was accepted by Mr Smith in that, by letter dated 23 May 2019, the legal representatives for Mr Smith informed the court that Mr Smith abandoned ground 4 insofar as it related to the second and third share transfers.[348]
4. Based on the primary judge's findings, as set out above, Mr Smith's claim against ASASL in relation to the initial share transfer apparently failed for two reasons. First, because the primary judge was not satisfied that the impugned conduct of Mr King on 30 June 2007 related to the provision of any financial service (thus s 917A(1)(a) was not satisfied). Second, because the primary judge was apparently satisfied that ASASL had made out the defence under s 917D (although Mr Smith contests this characterisation of the primary judge's reasons).

The primary judge erred in law in holding that Mr Smith could not recover from ASASL pursuant to section 917E of Division 6 of Part 7.6 of the Corporations Act (Act) in respect of Mr King's conduct as authorised representative of ASASL by erroneously reasoning:

(a) that Mr King's conduct did not relate to the provision of any financial service to Mr Smith (TJ [565] and [566]) when it was sufficient for Division 6 to apply as against ASASL for Mr King to provide a financial service to Mrs King or [Leveraged Equities]; and

Particulars

Mrs King and [Leveraged Equities] dealt with Mr Smith's WES shares, which constituted financial products, by disposing of the WES shares and acquiring the WES shares respectively, and Mr King arranged for Mrs King and [Leveraged Equities] to do so, so as to constitute the provision of a financial service for the purposes of section 917A(1)(a) of the Act.

(b) that sections 917A and 917F of the Act were inapplicable because Mr King's conduct was outside of the scope of authority granted by ASASL to Stripe and Mr King (TJ [567]) when, absent a finding of disclosure of the lack of authority under section 917D, sections 917B or 917C applied to render ASASL liable; and

(c) that Mr King's conduct fell outside section 917A (TJ [564] to [566]) when it was found, in accord with section 917A(1)(b) and (c), that Mr Smith could reasonably be expected to rely on Mr King's conduct and did, in fact, do so in good faith.

1. Accordingly, ground 4(a) addresses the first of the matters referred to in [261] above. It raises whether there was a relevant provision of a financial service to which Mr King's impugned conduct related. By ground 4(a) the alleged provision of a financial service is said to involve, among other things, a disposal of the Wesfarmers shares by Mrs King and a concomitant acquisition by Leveraged Equities. The suggestion that there was a disposal by Mrs King is puzzling. Mr Smith retained ownership of the shares at all times until some were sold by Leveraged Equities pursuant to its rights under the mortgage comprised in the margin lending facility arrangements. Prima facie any disposal had to be by Mr Smith, not Mrs King, but that is not how ground 4(a) is formulated. Even assuming that the creation of a security interest in respect of the shares might constitute a disposal (a matter in contest in the appeal) it was never explained how, in terms of ground 4(a), Mrs King - as distinct from Mr Smith - could so dispose of Mr Smith's shares.
2. Ground 4(b) addresses the second of the matters referred to in [261] above. It asserts that there was no finding of disclosure of Mr King's lack of authority.
3. In opening Mr Smith's case on ground 4, senior counsel for Mr Smith suggested that three questions arose for the court's determination.[349] In essence those questions were:
   1. Whether the dealing case as articulated in ground 4(a) was pleaded, ie whether - as senior counsel put it - there was a dealing case that Mr King dealt with Mr Smith's shares by disposing of them as agent for Mrs King or arranging for their disposal (this responded to ASASL's written submissions which raised the pleading point).[350]
   2. Whether there was a relevant dealing (the matter raised by ground 4(a)).
   3. Whether the primary judge made a finding that s 917D applied (the matter raised by ground 4(b)).
4. So summarised by senior counsel on Mr Smith's behalf, it is difficult to understand what Mr Smith seeks to agitate by ground 4(c). Mr Smith's appellant's case made no submissions in support of ground 4(c). This was noted in ASASL's respondent's answer.[351] Mr Smith's written reply submissions did not seek to rectify the omission. None of the questions for determination suggested by Mr Smith's senior counsel raised a discrete matter within ground 4(c). Nor did senior counsel for Mr Smith seemingly direct any oral submissions to ground 4(c). Insofar as ground 4(c) complains about the primary judge's findings at [564] - [566] only [565] is of apparent relevance. But there the finding complained of is already the subject of ground 4(a).
5. In the circumstances ground 4(c) should be taken to be subsumed within ground 4(a). It is, in any case, ground 4(a) that is directed to the question of whether div 6 of pt 7.6 was inapplicable because s 917A(1)(a) was not satisfied. In that respect ground 4(c) did no more than identify, correctly, that the primary judge had found that Mr Smith succeeded in relation to s 917A(1)(b) and (c) - meaning that it was the failure in terms of sub-par (a) of s 917A(1) that had to be challenged if Mr Smith's appeal was to be successful.
6. There are three relevant enquiries in determining whether s 917A(1)(a) is satisfied:
   1. First, there must be identification of the relevant 'conduct' of the representative.
   2. Second, there must be identification of the 'provision of a financial service' that is relied on.
   3. Third, it must be found that the conduct so identified 'relates to' the provision of the financial service.
7. Ground 4(a) was directed to the second of those enquiries. It did not go on to address why - were there the provision of a financial service as contended in ground 4(a) - it related to Mr King's conduct as representative. Nor was that third enquiry the subject of any detailed submissions on the part of Mr Smith in the appeal. To the contrary it was simply assumed that, if there was a relevant dealing as was contended to constitute the provision of the financial service, the impugned conduct related to that dealing.
8. Before this court senior counsel for Mr Smith seemingly identified the relevant conduct on the part of Mr King as representative as being an alleged arrangement of a disposition of Mr Smith's shares.[352] That was not Mr Smith's pleaded case. As pleaded, the conduct relied on was Mr King's alleged conduct in making the 'Collateral Representations' and in not disclosing 'Todd King's Knowledge'.[353] That conduct was pleaded as having occurred on or shortly before 30 July 2007.[354] The primary judge evidently understood that to be the case advanced by Mr Smith so far as his Honour assessed Mr Smith's claim against ASASL by reference to Mr King's conduct on 30 July 2007.
9. In his reasons, at [403] and [407], the primary judge recited the alleged Collateral Representations and the findings his Honour made as to them. For present purposes it suffices to state that his Honour found that, with some qualifications, the representations were made out and were false and were thus misleading or deceptive when they were made.[355] The conduct so found concerned only the statements made by Mr King to Mr Smith in the course of the telephone conversation on 30 July 2007, then at the meeting at Mr Smith's home later that day, and in the written agreement signed on 30 July 2007. Otherwise, as to the Todd King's Knowledge pleas, the primary judge found that the plea of non-disclosure added nothing to his conclusion that Mr King's conduct was misleading and deceptive.[356] There were, however, relevant findings that Mr King did not disclose the falsity of the Collateral Representations or tell Mr Smith about certain matters as pleaded at par 21A of the SOC. However, the primary judge was not satisfied that one of the non-disclosures - the failure to tell Mr Smith that he was at risk of becoming liable to pay amounts due to Leveraged Equities by Mrs King - was misleading or deceptive.[357]
10. In terms of 'conduct', ground 4 should be assessed by reference to Mr Smith's pleaded case as accepted at trial. The relevant conduct is thus the conduct by which the primary judge determined Mr Smith's case against ASASL pursuant to div 6 of pt 7.6, namely, Mr King's conduct on 30 July 2007.
11. For div 6 of pt 7.6 to apply to conduct of a representative, the conduct must relate to the provision of a financial service (s 917A(1)(a)). Accordingly, consistent with the second of the relevant enquiries identified in [268] above, it is necessary to identify the alleged provision of a financial service as relied on by Mr Smith.
12. In this respect there was considerable ambiguity as to Mr Smith's case on appeal. The body of ground 4(a) referred to a financial service being provided by Mr King to Mrs King. Then, however, the particulars to ground 4(a) refer to a dealing in the Wesfarmers' shares by Mrs King and Leveraged Equities with Mr King having arranged for that dealing. The latter formulation was repeated in Mr Smith's written submissions-in-chief.[358] However, in written reply submissions it was accepted that the transfer of the shares occurred as a consequence of an authorisation signed by Mr Smith; but then, somewhat inconsistently, the submissions went on to suggest that it (the transfer) was done by Mr King as agent either for Mrs King or Mr Smith (Mr Smith not having been relied on in ground 4(a) or the particulars thereto) - or, alternatively, that Mr King arranged for it to be done.[359] The characterisation contended for was that Mr King dealt with Mr Smith's Wesfarmers shares by disposing of them as agent for Mrs King or Mr Smith - or arranging for such disposal.[360] The references to 'agent' echoed the language in s 766C(3A) but had no footing in the terms of ground 4(a) as advanced in Mr Smith's appellant's case.
13. The mechanics of how the transfer was 'done by' Mr King - or Mr King 'arranged for it to be done' - were not detailed.[361] The most that was pointed to was that Mr King provided the authorisations as signed by Mr Smith to Leveraged Equities.[362]
14. At the appeal hearing Mr Smith submitted that there was the provision of a financial service by Mr King arranging for Mr Smith's Wesfarmers shares to be transferred to Leveraged Equities as security for Mrs King's margin lending account.[363] It had previously been clarified that the alleged 'dealing' relied on concerned the initial share transfer of the 85,000 Wesfarmers shares, and the grant of mortgage or entry into the sponsorship agreement putting the shares into the control of another, rather than the subsequent disposal on exercise of the power of sale.[364] Mr King was said to have arranged for a disposal by Mrs King and an acquisition by Leveraged Equities (meaning that there was also a dealing by Mrs King and Leveraged Equities); it was said to be the provision of a financial service to Mrs King.[365]
15. Initially senior counsel for Mr Smith submitted that Mr King dealt with Mr Smith's shares by disposing of them as agent for Mrs King; or alternatively, by arranging for that disposal.[366] Later, consistently with the written submissions-in-reply, the dealing contention was advanced in terms that the transfer was effected by Mr King as agent either for Mrs King or Mr Smith; or alternatively, that Mr King arranged for it (ie the transfer) to be done.[367]
16. On a separate but related matter, according to Mr Smith's argument, s 917A(1)(a) did not require the provision of a financial service to the third person (ie the client) as referred to in s 917A(1)(b) and (c).[368] Consistent with that submission, ground 4(a), in part, alleges error by the primary judge in reasoning that Mr King's conduct had to relate to the provision of a financial service to Mr Smith. Mr Smith said it was sufficient for the purposes of s 917A(1)(a), and that div 6 would apply, if Mr King provided a financial service to Mrs King or Leveraged Equities and the impugned conduct related to that financial service.[369]
17. On a fair reading of the primary judge's reasons as a whole it cannot be accepted that his Honour reasoned that the financial service had to be provided to Mr Smith. Rather, at [565] of his reasons the primary judge found that Mr King's impugned conduct did not relate to the provision of any financial service to Mr Smith. Then, at [566], the primary judge made a finding about whether Mr King provided financial product advice to Mrs King - resolving that issue in the negative. It would not have been necessary for the primary judge to make any finding about the provision of a financial service to Mrs King (by the provision of financial product advice) if his Honour considered that the financial service had to be provided to Mr Smith (as the relevant 'third party' or 'client').
18. Accordingly, so far as error is alleged in misapplying s 917A(1)(a) in this particular respect, the primary judge did not do so.
19. Moreover, there was no true issue on appeal as to whether, on its proper construction, s 917A(1) requires that the provision of a financial service (the integer under (a)) be to the person referred to in sub-pars (b) and (c) of s 917A(1). Mr Smith asserted that this is not the position. For the reasons given above the primary judge dealt with the case before him on a basis consistent with Mr Smith's construction. Before this court ASASL never contended that the contrary construction was correct. Rather, senior counsel for ASASL simply contended that, properly understood, the primary judge did not require that the financial service be provided to the third person client mentioned in s 917A(1)(b) and (c).[370]
20. Whether Mr Smith's construction is correct is open to question. However, in circumstances where there was no argument on the point - and ground 4 fails for other reasons - this court should not consider the question. For the purposes of what follows we will proceed, without deciding the point, on the assumption that Mr Smith is correct in contending that s 917A(1) may be satisfied by the provision of a financial service to a person other than to the third party client mentioned in s 917A(1)(b) and (c).
21. There is, however, more to ground 4(a) than the suggestion that the primary judge was in error in finding that Mr King's conduct had to relate to the provision of a financial service to Mr Smith. On appeal, as has been seen, Mr Smith posited a case by ground 4(a) to the effect that there was a relevant provision of a financial service other than by the provision of financial product advice to Mr Smith and Mrs King: Mr Smith alleged a dealing by Mrs King and Leveraged Equities with Mr Smith's shares; and by Mr King in arranging for Mrs King's and Leveraged Equities' dealing.
22. In answer ASASL contended that the alternate case raised by ground 4(a) was: (1) not open on the pleadings (thereby amounting to a new case);[371] and (2) failed on the proper construction of the legislation in any event.[372] As to the statutory construction question, there were two sub-points: first, disposing of a financial product was said to require getting rid of it, not merely allowing it to be used as a security;[373] second, relying on National Companies & Securities Commission v Industrial Equities Ltd[374] the concept of dealing under ch 7 was said to have a business flavour to it and require more than a one-off transaction.[375]
23. Those further aspects of ground 4(a) must now be considered. Logically the pleading question must be resolved first, and in Mr Smith's favour, before the statutory construction questions arise for determination.

Ground 4(a) and Mr Smith's pleaded case - does ground 4(a) raise a new point?

1. At the forefront of ASASL's response to ground 4(a) was the contention that ground 4(a) - and specifically the particulars to ground 4(a) - was not the case that Mr Smith had run at trial and was not a case that was available on Mr Smith's pleaded case.
2. Mr Smith contended that ASASL's pleading point ought to be rejected as the dealing case raised by ground 4(a), as explicated in Mr Smith's written submissions on appeal, was open on Mr Smith's pleading as particularised.[376] In the alternative Mr Smith contended that the facts relied on were incontrovertible such that, even if it was found that the case was not raised, that does not mean that the case cannot now be considered.[377]
3. The general principles on whether a new point may be entertained on appeal are well understood and need not be repeated.[378] In deciding whether or not a point was raised at trial no narrow or technical view should be taken.[379] But it is well-established that a point may be a new point even though it may be fitted within the litigant's pleaded case. In Whisprun Pty Ltd v Dixon Gleeson CJ, McHugh and Gummow JJ stated:

As Water Board v Moustakas makes clear, a point may be a new point even though it is within the pleadings or particulars. The pleadings and particulars are frequently decisive in determining whether a party is seeking to raise a new point on appeal. But they are not conclusive. To determine whether a party is raising a new point on appeal, it is 'necessary to look to the actual conduct of the proceedings'.[380] (emphasis added; citations omitted)

1. So, for example, where something was within the particulars but not relied on in opening, there may be no miscarriage where the trial judge did not direct the jury on the matter. In such circumstances it will not be open on appeal to complain about the lack of the direction.[381]
2. Mr Smith's pleaded case was that the impugned conduct related to the provision of a financial service.[382] The plea was a bald assertion, devoid of any identification of the material facts relied on, which did no more than echo the statutory language of s 917A(1). No particulars were provided by the plea in the SOC. ASASL made a request for particulars. Particulars were provided as follows:[383]

(a) What financial service is alleged to have been provided?

Todd King ... provided financial product advice to Smith, further or alternatively to Glenice King, and dealt with the Wesfarmers Ltd shares the subject of the First Share Transfer, the Second Share Transfer and the Third Share Transfer, which shares constituted financial products.

(b) When [is] that financial service ... alleged to have been provided?

The financial services were provided at various times from in or about July 2007 to in or about October 2008.

(c) To whom [is] the financial service ... alleged to have been provided?

Financial services were provided to Smith, further or alternatively to Glenice King.

(d) The method by which the financial service is alleged to have been provided ...

Smith objects to answering the request ... [among other reasons for the reason that]:

(i) sufficient particularisation of the conduct alleged by the plaintiff is provided in the statement of claim;

...

(iii) ... the request is not necessary to be answered in order to confine or define the issues or to fairly inform [ASASL] of the case it will have to meet at trial. (emphasis in underlining added to the answer to (a))

1. The primary judge correctly described that answer as largely non-responsive.[384] The absence of precision in those particulars is regrettable. The lack of precision is magnified by the ambiguous response to sub-par (d). Particulars were requested of the method by which the financial service was provided. All that was said on Mr Smith's behalf was that there was sufficient particularisation of the conduct alleged. But in the context of a cause of action invoking div 6 of pt 7.6 of the Corporations Act the relevant conduct (which was properly pleaded and particularised in the pleading) is not to be equated with the provision of a financial service relied on for the application of the division. Mr Smith failed to provide proper particularisation of the method by which the putative financial service relied on was allegedly provided.
2. Insofar as Mr Smith's particulars directed attention to his statement of claim, mention should be made of what else was pleaded as to the initial share transfer. We have already referred to the identification of the relevant conduct (see [270] to [271] above). Otherwise Mr Smith pleaded that:
   1. In reliance on, and induced by, the Collateral Representations, on 30 July 2007 Mr Smith agreed with Mr King to transfer the 85,000 Wesfarmers shares to the margin loan facility as collateral supporting the facility.[385]
   2. Mr Smith signed the Authority Letter and the Application Form.[386]
   3. In reliance on, and induced by, the Collateral Representations, on 1 August 2007 Mr Smith caused 85,000 Wesfarmers shares to be transferred from him to be held as collateral supporting the margin loan facility.[387]
3. ASASL admitted the signing of the Authority Letter and the Application Form. ASASL also admitted that Mr Smith caused the 85,000 shares to be held as collateral supporting the margin loan facility (but not that there was a 'transfer'). Otherwise the allegations were denied.[388]
4. Notably, while it was common ground that Mr Smith 'had caused' the 85,000 Wesfarmers shares to be held as collateral supporting the margin loan facility, there was no plea by Mr Smith alleging that Mr King had arranged for any transfer (let alone an allegation of a dealing on the part of Mrs King by disposing of the shares - that being the gravamen of ground 4(a) and its particulars - and a corresponding acquisition on the part of Leveraged Equities). The high-water mark of Mr Smith's pleading is the allegation that, consistent with the agreement between Mr Smith and Mr King, Mr Smith caused the shares to be transferred to be held as collateral. As mentioned, in written and oral submissions senior counsel for Mr Smith contended that the Authority Letter was provided to Leveraged Equities by Mr King (as Mrs King's representative) and that the transfer was done by Mr King, as agent, either for Mrs King or Mr Smith, or alternatively, that Mr King arranged for the transfer (see [273] - [277] above). None of that was pleaded.
5. At the appeal hearing senior counsel for ASASL developed a submission that the case at trial in relation to the initial share transfer involved (and only involved) a financial product advice case and the second and third share transfers (no longer the subject of ground 4) involved a dealing in a financial product case.[389] The submission was that the earlier descriptions distribute between the three transactions.[390] We are unable to accept that submission. It relied on a close reading of the SOC and attributed meaning to the circumstance that, as to the initial share transfer, Mr Smith caused the Wesfarmers shares to be transferred but with the second and third share transfers Mr King caused the Wesfarmers shares to be transferred. In our view the pleading simply reflected the fact that, on Mr Smith's case, he authorised the initial share transfer but the second and third share transfers were procured by forgery. ASASL's argument did not address what is apparent on the natural reading of the particular in par (a) to [290] above: Mr Smith alleged the provision of a financial service by both the provision of financial product advice and dealing with the Wesfarmers shares (including dealing with those Wesfarmers shares the subject of the initial share transfer).
6. In that regard the further particulars clarified that so far as Mr Smith relied on the alleged provision of a financial service it was contended that 'Todd King ... dealt with the Wesfarmers Ltd shares the subject of the First Share Transfer, the Second Share Transfer and the Third Share Transfer, which shares constituted financial products'.
7. In answering ASASL's contention on the pleading point, senior counsel for Mr Smith took this court to Mr Smith's written opening submissions at trial. Consistent with the case as particularised the alleged provision of a financial service as opened included Mr King providing financial product advice to Mr Smith and Mr King dealing with shares.[391] Those opening submissions also, by footnote, directed the primary judge to the statutory provisions including the definition of 'dealing' in s 766C. Among other things it was said:

Relevantly, 'dealing' includes arranging for a person to 'acquir[e] a financial product' or 'dispo[e] [sic] of a financial product': s 766C(1)(a) and (e) and (2). (emphasis added)

1. On the face of the written opening submissions it might be thought that Mr Smith sought, at trial, to present a case that relied on s 766C(2) whereby Mr King dealt with the Wesfarmers shares by arranging for others to acquire and dispose of them. However, this was not a case where ASASL participated at the trial; it filed a defence but did not appear at the trial.[392] The primary judge observed that, with ASASL not participating in the trial and Mr King unrepresented, the issues raised in the plea that the impugned conduct was conduct related to the provision of a financial service 'were not properly explored at trial'.[393]
2. In these circumstances we consider the questions for determination must be assessed based on Mr Smith's pleaded case as particularised. There could not be any enlargement of the issues by the manner in which the trial was conducted. That is all the more so given the sparse particularisation as provided in response to ASASL's request for further particulars and Mr Smith's refusal to provide additional particularisation of the method by which the financial service was alleged to have been provided. Mr Smith had ample opportunity - pre-trial when asked - to state with precision the sort of dealing case (by way of provision of a financial service) he was advancing against ASASL. Mr Smith chose to provide particulars that were largely non-responsive. The consequences of any inadequacy of the case as particularised cannot be alleviated by a fleeting footnoted reference in lengthy opening submissions for a trial in which ASASL did not participate.
3. While we are unable to accept ASASL's submission that Mr Smith only ran a dealing case as to the second and third share transfers, there is nevertheless a substantial disconformity between Mr Smith's case as particularised in his pleaded case and the alleged provision of a financial service as particularised in ground 4(a) (ignoring, for immediate purposes, those parts of Mr Smith's submissions on appeal that exceeded the scope of ground 4(a)).
4. Specifically, as to the claim based on the provision of a financial service by dealing in a financial product:
   1. Mr Smith's case at trial as particularised, so far as is now relevant, was that Mr King dealt with the Wesfarmers shares (which shares constituted financial products).
   2. Mr Smith's case on appeal, as particularised in ground 4(a), was that Mrs King (not Mr King) and Leveraged Equities dealt with the Wesfarmers shares by disposing and acquiring of them respectively; but, in addition, that by arranging for Mrs King and Leveraged Equities to do so, Mr King also dealt with the shares (such arranging constituting a 'dealing' in a financial product within the s 766C(2) meaning of the term).
5. In addition, Mr Smith's case at trial as particularised was that financial services were provided to Mr Smith or Mrs King. On appeal, as specified in ground 4(a), it was that Mr King provided a financial service to Mrs King or Leveraged Equities. (Although, as mentioned, in oral submissions at the appeal hearing senior counsel for Mr Smith only said that there was a provision of a financial service to Mrs King (see [276] above)).
6. Mr Smith's case on appeal thus exceeded - and thereby departed from - the pleaded case advanced at trial in at least two material respects. First, in alleging that Mrs King and Leveraged Equities dealt with Mr Smith's Wesfarmers shares; and that Mr King dealt with the shares by arranging for Mrs King's and Leveraged Equities' dealing. Second, in alleging that Mr King provided a financial service to Leveraged Equities. As particularised for trial the dealing in a financial product case was that Mr King dealt with the Wesfarmers shares and provided a financial service to Mr Smith or Mrs King. But the case as so particularised was in a context where the material plea as to the action taken in relation to the 85,000 Wesfarmers shares was only that Mr Smith caused the shares to be transferred from him to be held as collateral; and, moreover, where there was no plea to the effect that Mr King arranged for the transfer.
7. Turning then to Mr Smith's submissions on appeal, ground 4(a) did not itself raise the contention - first advanced in Mr Smith's written reply submissions and then repeated in the oral submissions of senior counsel for Mr Smith - that the shares were dealt with by disposal by Mr King acting as agent for one of Mrs King or Mr Smith. Nor that, so far as any disposal was by transfer by Mr Smith (as opposed to Mrs King), Mr King arranged for the transfer and thereby dealt with the shares. Strictly, those further matters were outside the scope of ground 4(a). Nevertheless, like ground 4(a) itself, they raised new points that went beyond Mr Smith's pleaded case - raising issues as to agency and whether, in terms of s 766C(2), there was an 'arranging' vis-à-vis Mr Smith.
8. Once these differences are appreciated we are unable to accept Mr Smith's submission that his case on appeal was open and run on the pleading as particularised at trial insofar as Mr King could be taken - in terms of s 766C(2) - to have dealt with the Wesfarmers shares by arranging for others to deal in the shares.
9. The particularised allegation as pleaded was that Mr King dealt with the shares, not that he arranged for Mrs King and Leveraged Equities to deal with the shares by disposing of and acquiring the shares respectively (let alone the alternatives introduced after Mr Smith filed his appellant's case which exceeded ground 4(a) as particularised). Were the case at trial to have extended to some form of derivative dealing due to arranging for another to engage in conduct constituting a dealing - or even the unparticularised claim of disposal by Mr King as agent for another - there should have been an allegation that there was a relevant dealing on the part of Mrs King and Leveraged Equities, one that was arranged by Mr King (in the latter case as agent). There was not. The pleaded case in the SOC got no higher than the allegation that Mr Smith caused the 85,000 Wesfarmers shares to be transferred from him to be held as collateral.
10. It may be accepted that Mr Smith's particularised case advanced the proposition that Mr King dealt with the initial Wesfarmers shares. Given the breadth of s 766C's definition of the term 'dealing' the case now sought to be advanced on appeal may be made to fit within the particulars if the particulars are read in isolation and the statutory definition is accepted to be engaged without discrimination. In truth, however, Mr Smith's case on appeal seeks to take advantage of the imprecision within, and non-responsive nature of, the particulars to contend that what is a new case on appeal is open on the particulars. When consideration is given to the pleadings as a whole, the case now advanced - one of dealing by Mr King in arranging for Mrs King to dispose of the shares and Leveraged Equities to acquire the shares - is more than merely not obvious. Indeed, it would be over-generous to characterise the case as merely being obscure. It is, in our view, not reasonably capable of identification on a fair reading of Mr Smith's statement of claim as particularised.
11. ASASL's initial answer to ground 4(a) should be accepted. The dealing case that is now asserted by Mr Smith on appeal is a departure from Mr Smith's pleaded case. Mr Smith seeks to advance a new case on appeal.
12. In the alternative Mr Smith contended that the facts relied on are incontrovertible such that, even if the case was not raised below, it does not mean that the case cannot be considered on appeal. That contention was not developed in Mr Smith's written or oral submissions.
13. There were no relevant admissions by ASASL. In suggesting that the facts were incontrovertible Mr Smith could only be relying on the primary judge's factual findings and the documentary evidence. The primary judge made findings as to the 30 July 2007 agreement, Mr Smith's execution of the Application Form and the Authorisation Letter and the material provisions of the contractual documentation.[394] His Honour also made findings as to how the accounts were administered in fact.[395] In addressing the events of 30 and 31 July 2007 the primary judge made a finding that Mr King transmitted the Application Form and the Authority Letter to Leveraged Equities.[396] We are, however, unable to identify any express finding that Mr King did so as agent for either Mr Smith or Mrs King (and the primary judge expressly found that Mr King was not acting on behalf of Leveraged Equities).[397] To the contrary the former is potentially inconsistent with the circumstance that - as was Mr Smith's pleaded case[398] - Mr King was the counterparty to the 30 July 2007 agreement; and, more strongly so, the primary judge's finding that Mr King did not purport to be acting on behalf of or in Mr Smith's interests.[399] Moreover, in his case against Leveraged Equities, Mr Smith - inconsistently with what is asserted in relation to ASASL in relation to ground 4(a) - observed that there was no finding that Mr King dealt with Leveraged Equities as Mr Smith's agent, stating, to the contrary, that Mr King was the representative of Mrs King.[400] As to Mrs King, the primary judge found that she apparently participated in the opening of the account and gave Mr King authority to represent her;[401] but the extent of that authority is not the subject of any finding, ie it may or may not have extended to any dealing in respect of the 85,000 shares. As to that, the primary judge also found that Mr King used the account in his mother's name for his (Mr King's) personal trading.[402]
14. Accordingly, it cannot be accepted that - on the primary judge's findings - the so-called facts relied on by Mr Smith on appeal are incontrovertible as was baldly asserted in Mr Smith's written submissions.[403] To the contrary, so far as Mr Smith's argument in support of ground 4(a) relied on the contention that Mr King acted as an agent, the point required the determination of factual issues which the primary judge did not resolve (no doubt because they were not in issue). Nor, in terms, did the primary judge make a finding that Mr King arranged for Mrs King to dispose of the 85,000 Wesfarmers shares.
15. In any case, so far as Mr Smith seemingly relies on the primary judge's findings as establishing the facts incontrovertibly, the contention overlooks that facts and circumstances going towards 'arranging', and whether Mr King was an agent for Mrs King or Mr Smith, were not in issue before the primary judge having regard to the case then advanced by Mr Smith. There was no occasion for the parties to adduce evidence or delve into the points now sought to be agitated. Neither Mr King nor Mrs King gave evidence. And, as the primary judge observed, the issues raised by the plea that there was conduct related to the provision of a financial service 'were not properly explored at trial'.[404]
16. We do not accept that the factual conclusions relevant to the case that Mr Smith has sought to advance under the rubric of ground 4(a) were beyond controversy. For example:
    1. The proper characterisation of Mr King's involvement in the transfer of the 85,000 Wesfarmers shares might have been met by calling evidence. Neither party made submissions on the metes and bounds of the term 'arranging' in s 766C(2) of the Corporations Act. Necessarily it refers to the process by which a person negotiates, or otherwise brings into effect, a relevant dealing in a financial product. While the term is undoubtedly broad, ultimately whether a person's activities constitute an 'arranging' will involve a question of degree. As the question is inherently evaluative it will be informed by close consideration of the factual context in which the acts relied on occurred.
    2. Insofar as Mr Smith now contends that Mr King dealt in the shares by arranging for a dealing in the shares by others - essentially in providing for the transmittal of Mr Smith's authorisation - consideration would need to be given to the interaction between s 766C(2) and s 766A(3). It is not immediately apparent that simply passing on a completed form is outside the course of work ordinarily done by clerks or cashiers. However, in the absence of proper investigation of the evidentiary matrix at trial the proper delineation between a s 766C(2) 'arranging' and the exemption under s 766A(3) becomes obscure.
    3. There might have been examination of the circumstances pertaining to whether, as belatedly contended for in support of ground 4(a), Mr King effected the transfer of the Wesfarmers shares 'as agent' either for Mrs King or Mr Smith.
    4. There might have been additional contextual evidence adduced so as to inform the evaluative question of whether the impugned conduct 'related to' the putative provision of a financial service - necessarily an enquiry involving a question of degree.
17. Similarly, it cannot be concluded that additional evidence might not have been led, or that additional cross-examination might not have occurred, had the issues sought to be raised by ground 4(a) (as expanded in written reply submissions and oral submissions) been litigated at trial. In addition, the pleaded case did not articulate a readily understandable dealing case vis-à-vis Mr King. ASASL, then in liquidation, might well have been prepared to allow the court to address that case on its merits (there being no obvious dealing by Mr King) rather than participate in a lengthy trial at considerable cost. However, it might well be that had the sort of case now advanced been articulated in the pleadings, ASASL might have thought it necessary to appear to answer the point, as indeed has transpired on appeal. We are unable to conclude that, had the case now advanced on appeal been properly pleaded and articulated pre-trial, the course of the proceedings could not or would not have altered.
18. These matters are fatal to the suggestion that Mr Smith's dealing case, as now sought to be advanced on appeal as a new case, ought to be entertained. It is well understood that a point cannot be raised for the first time on appeal where it could possibly have been met by calling evidence at the trial.[405] The present is one of those cases. In addition, in all the circumstances it cannot be said that allowing the points advanced in support of ground 4(a) to be litigated now, as a new case, could work no injustice on and could occur without prejudice to ASASL. Nor, in our view, is it in the interests of justice to allow the new case to now be litigated. That is all the more so given Mr Smith's opaque response to ASASL's request for further and better particulars of the allegation as to provision of a financial service.
19. Although, exceptionally, there are cases in which a party may advance a new case on appeal, it is not in the interests of justice to allow Mr Smith to raise ground 4(a) on appeal. It advances a new case, not raised and not open on the pleaded case at trial, where the facts as claimed to justify the case now advanced were not admitted and were not beyond controversy. Ground 4(a) should be dismissed on the basis that it raises new points which should not be entertained on appeal.

Ground 4(a) and the statutory construction question

1. The failure of ground 4(a) on the anterior point of whether it raised a new case on appeal, one not open on the pleadings, means that it is not necessary to resolve the statutory construction questions raised by ground 4(a). Nor, in our view, is it appropriate to do so where a further characterisation issue arises in any event as to whether, in all the circumstances, Mr King relevantly arranged for Mrs King and Leveraged Equities to engage in conduct constituting a dealing as asserted in ground 4(a).
2. That said, even if Mr Smith is correct in his contention that the grant of a security interest in relation to shares constitutes a 'disposing of a financial product' for the purposes of s 766C(1)(e) of the Corporations Act, it is difficult to understand how there was a relevant disposal by Mrs King. In that regard Mr Smith's case, as formulated in ground 4(a), was that there was a dealing, by disposal, by Mrs King rather than Mr Smith. But, as Mr Smith remained the owner of the Wesfarmers shares at all times, only Mr Smith (or someone duly authorised acting on Mr Smith's behalf) could grant a security interest. There was no suggestion that Mrs King had such an authority. Moreover, the primary judge found that the mortgage and sponsorship agreements were executed by an employee of Leveraged Equities pursuant to a power of attorney given by Mr Smith in the Application Form.[406] As ground 4(a), in its terms, is confined to a dealing by disposal by Mrs King rather than Mr Smith, ground 4(a) cannot succeed even if Mr Smith's preferred construction is upheld.
3. In the circumstances we do not propose to embark on the further point of statutory construction raised by ground 4(a). That question should await an occasion where the point will be determinative.

Ground 4(b) - was there a finding in terms of s 917D?

1. Mr Smith's failure on ground 4(a) means that the appeal must be dismissed so far as ASASL is concerned. However, had ground 4(a) been upheld it still would have been necessary for ground 4(b) to succeed for the appeal against the dismissal of Mr Smith's claim against ASASL to be allowed. In the circumstances we propose to deal with ground 4(b).
2. Ground 4(b), in terms, alleges that the primary judge erred in finding that div 6 of pt 7.6 was unavailable simply because Mr King's conduct was outside his authority as ASASL's representative. The primary judge found that Mr King's conduct was outside the scope of his authority.[407] There is no challenge to that finding by notice of contention. If that was all that was found, Mr Smith's complaint by ground 4(b) would have merit. Section 917B plainly operates to make a financial services licensee responsible for the conduct of a representative whether or not the conduct is within authority. However, lack of authority may provide the basis for a defence where that fact is disclosed to the client in accordance with s 917D of the Corporations Act.
3. By ground 4(b) Mr Smith also claimed that there was no finding of disclosure of Mr King's lack of authority under s 917D. In answer to that contention ASASL pointed to [567] of the primary judge's reasons:

In his dealings with Mr Smith on 30 July 2007, Mr King made clear that he was acting on behalf of his family and in a private capacity.

1. Accordingly, ground 4(b) turns on a characterisation of the primary judge's reasons: does [567] constitute a finding of disclosure of lack of authority so as to ground the exception in s 917D? Importantly, if on its true construction that is found to be the purport of the finding, there was no ground challenging the finding as erroneous. As senior counsel for Mr Smith confirmed at the appeal hearing,[408] Mr Smith's challenge by ground 4(b) went to whether the primary judge made a finding that s 917D applied.
2. Mr Smith submitted that:
   1. As an exception, the onus was on ASASL to make good the requirements of s 917D.[409]
   2. Merely because someone was acting on behalf of his or her family or in a private capacity did not answer the requirements of s 917D.[410]
   3. Section 917D required that three matters be satisfied: (1) the conduct must be not within authority; (2) that fact must be disclosed before reliance on the conduct; and (3) the clarity and prominence of the disclosure must be such as a person would reasonably require for the purpose of deciding whether to acquire the relevant financial service.[411] There was no finding with respect to the clarity and prominence of the disclosure.[412]
   4. The passage relied on made no reference to s 917D.[413]
   5. In the 30 July 2007 conversation between Mr Smith and Mr King, Mr King was asked what would happen if he were 'hit by a bus'. Mr King responded that: 'Stripe would look after it'.[414] However, as will be seen from the passage reproduced at [326] below, this was a selective account of the primary judge's reasons on this point. The primary judge went on to expressly find that this statement was insufficient to alter the personal and private character of the agreement.
3. In construing the primary judge's reasons it is necessary to consider the reasons as a whole. The following features of his Honour's reasons ought to be considered. First, at [558] of the primary reasons, the primary judge referred to ASASL's defence. The defence invoked s 917D, alleging disclosure that Mr King was not acting within the scope of his authority as an authorised representative, and pleaded that the 30 July 2007 agreement was to be a private agreement. [415] Second, at [561], the primary judge noted that ASASL's liability depended on the operation of s 917A, s 917B, s 917E and s 917F, but was 'subject to the exception in s 917D'. Third, at [563], the primary judge reproduced s 917D in full. Fourth, at [567], before coming to the conclusion mentioned at [322] above, the primary judge made the finding that Mr Smith's conduct was not within his authority in relation to ASASL. Finally, at [77] - [110], [381] - [389] and [402] - [411], the primary judge made detailed findings as to the events of 30 July 2007 and the nature of the dealing between Mr Smith and Mr King (the latter in connection with whether the transaction was one where fiduciary duties applied).
4. As to the last matter, the primary judge made the following findings (which are unchallenged for the purpose of ground 4(b)):

Second, there was no element of financial advice in Mr Smith's account of what happened and what was said. The plaintiff identifies nothing within the scope of Mr King's or Stripe Capital's contractual arrangements with Mr Smith which might contemplate Mr King providing services in relation to such an arrangement, let alone Mr King and Mr Smith being parties to one.

Third, the transaction was carried out in a way inconsistent with any ordinary business relationship. It was initiated in an early morning telephone call. Mr King appeared to be calculating the number of shares he needed while speaking on the phone; he offered double the consideration that Mr Smith agreed to - an amount Mr Smith thought was silly. The phone call was followed up by Mr King driving immediately to Mr Smith's home with a personal agreement as well as the Leveraged Equities documents that needed to be signed. The agreement had the heading 'Confidential Contractual Agreement'.

Fourth, Mr King did not purport to be acting on behalf of, or in Mr Smith's interests. On the account he gave to Mr Smith, Mr King was acting in a personal capacity on behalf of his mother and stepfather. From what Mr Smith said of the phone call and the later meeting, I do not believe that he could reasonably have thought that Mr King was purporting to advise him, or to act in his interests. The only things Mr King said about the risks or benefits of the arrangement was his own undertaking to not trade on the account while Mr Smith's shares were held as security.

Fifth, Mr Smith accepted that there had been nothing like this proposal in their relationship to then.

Sixth, on Mr Smith's account, with one exception, Mr King did not say or do anything by which he purported to act on behalf of Stripe Capital. None of the documents were on Stripe Capital forms or stationary and none of them mentioned that firm. The only relevance of Mr King being a broker was that he was the broker to Mrs King's account, a position which he said would enable him to ensure no purchases were made and to provide statements of trade activity.

The exception is that Mr King said 'Stripe would look after it', in response to Mrs S asking what would happen if Mr King 'got hit by a bus'. That statement is not, in my opinion, sufficient to alter the personal and private character of the agreement.[416]

1. When the primary judge's reasons are considered in full, and the passage from [567] of the primary reasons is properly understood in its context, we consider that - contrary to the burden of ground 4(b) - the primary judge did make a finding that the exception in s 917D applied.
2. The primary judge was alive to the defence and its statutory requirements. His Honour twice mentioned the exception created by s 917D. He reproduced s 917D immediately before setting out his findings on the claim against ASASL. Then, at [567] of the primary reasons, the primary judge commences by making a finding as to whether Mr King's conduct was within authority. No such finding was necessary for, and was immaterial to, responsibility in terms of s 917B (which his Honour had correctly identified was the relevant provision rather than s 917C). The finding that the conduct was not within the scope of Mr King's authority thus signals that his Honour was turning, at [567], to consider the defence under s 917D as had previously been adverted to in the primary reasons. The final sentence is perhaps unhappily expressed. Ordinarily it would be expected that in addressing a statutory defence there would be mention of the provision and its various integers. The relative terseness of the sentence might be explained as the product of the primary judge having had to work through a pleading which planted a forest of forensic contingencies.[417] Nevertheless, when read in context we apprehend that - by referring to Mr King as having made it clear that he was acting on behalf of his family and in a private capacity - his Honour was determining, for the purposes of s 917D(b) and (c), that there had been the requisite disclosure to make out the defence in accordance with s 917D. That is all the more so when there is reference to the earlier parts of the primary reasons. There is no other evident rationale for this part of his Honour's reasons at [567]. It should not be read as indicating that the judge had overlooked the express terms of a provision - s 917D - that he had just set out.
3. There was no challenge to the adequacy of the primary judge's reasons. Nor, as previously mentioned, is it suggested by ground 4(b) that if, properly construed, the primary judge upheld the s 917D exception on the basis that Mr King's lack of authority was disclosed, the finding was in error. The result on ground 4(b) in this appeal cannot be understood as expressing any view on either of those matters - they are not in issue on the appeal. The sole matter in issue on ground 4(b) as drafted and presented is whether there was a finding for the purposes of s 917D at all. We accept that, properly understood in context, that was the effect of [567] of the primary reasons.
4. It follows that ground 4(b) should be dismissed. That is an additional reason for the dismissal of Mr Smith's appeal in relation to ASASL.

1. Mr Smith's appeal against the dismissal of his action against Leveraged Equities should be allowed in part. The appeal should be allowed to the extent that the primary judge dismissed Mr Smith's unjust enrichment claim in relation to the Wesfarmers shares the subject of the second and third share transfers. While we mention both the second and third share transfers, any ultimate relief in respect of the claim must be limited to the value of 15,000 shares only insofar as 25,000 shares were returned to Mr Smith on 7 May 2008. This aspect of Mr Smith's action against Leveraged Equities should be remitted to the primary judge for determination of defences and quantification. Mr Smith fails in his appeal in relation to the dismissal of his action against ASASL.
2. Subject to hearing from counsel, we propose orders that:
   1. The appeal against the order of the court made 29 March 2018 in action CIV/3124/2009 dismissing the appellant's claim against the first respondent is allowed in part.
   2. Paragraph 2 of the order of the court made 29 March 2018 in action CIV/3124/2009 is set aside and the following orders are substituted:

2A. The plaintiff's claim against the first defendant is dismissed other than insofar as the plaintiff makes claim for unjust enrichment in relation to the Wesfarmers Ltd shares the subject of the second and third share transfers effected on or about 25 January 2008 and 10 March 2008 (remaining claim).

2B. The parties have liberty to apply on 7 days' notice for directions in relation to a hearing to determine:

(1) the first defendant's defences in relation to the remaining claim; and

(2) quantification aspects in relation to the remaining claim.

2C. The plaintiff's claim against the fourth defendant is dismissed.

1. Action CIV/3124/2009 is remitted to the primary judge for determination of the remaining claim as contemplated by par 2 above.
2. The appeal against the order of the court made 29 March 2018 in action CIV/3124/2009 dismissing the appellant's claim against the fourth respondent is dismissed.
3. The parties should be heard on the costs of the appeal.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] Appellant's submissions pars 33 - 36, 41, 46, 63 WAB 16 - 20, 25.

[2] Appellant's submissions par 7 WAB 11.

[3] Smith v Leveraged Equities [No 3] [2018] WASC 84 (primary reasons).

[5] Primary reasons [294], [297], [299] - [302], [522], [546]. See also [127], [134], [150] - [151], [256], [265].

[12] Primary reasons [65]. See also at [71].

[13] Primary reasons [65]. See also at [71].

[14] Primary reasons [153] - [188].

[15] Primary reasons [189] - [211].

[17] Primary reasons [159] - [161].

[18] Primary reasons [166] - [170].

[23] See Primary reasons [92] for the contents of the written agreement.

[25] Primary reasons [402] - [438] (esp [407], [409] - [411], [421], [423] - [424], [438]). See also at [570], [572] - [573].

[30] Primary reasons [114] - [128].

[31] Primary reasons [257] - [363].

[33] Primary reasons [359] - [360].

[40] Primary reasons [218] - [219].

[42] Primary reasons [223] - [228]. See also [234], [245], [260].

[57] Primary reasons [360] - [362].

[60] Primary reasons [289] - [291].

[63] Primary reasons [297]. See also at [299] - [302].

[65] See Primary reasons [522] (the primary judge was not satisfied that Mr Smith had shown that Leveraged Equities knew that Mr King had or was likely to have breached any putative fiduciary duties before, at the earliest, 24 June 2008). See also Primary reasons [299] - [302].

[67] Primary reasons [304] - [322]. See also [331], [335] - [336].

[68] Primary reasons [314] - [317].

[75] Primary reasons [353] - [354].

[79] The 10,000 shares sold on 18 September 2008 and the 68,000 shares sold on 5 December 2008.

[80] Made up of $150,000 (18 September 2008), $130,000 (27 October 2008) and $764,983.20 (9 September 2011).

[81] There were also claims based on making false or misleading statements in contravention of s 12 of the Fair Trading Act 1987 (WA), s 1041E of the Corporations Act and s 12DD of the Australian Securities and Investment Commission Act 2001.

[82] Primary reasons [424], [430], [438].

[83] Primary reasons [392] - [398].

[84] Primary reasons [399] - [401].

[85] Primary reasons [389] - [391].

[86] Primary reasons [380]. See also [381] - [388], [449].

[88] Primary reasons [450] - [488].

[89] Primary reasons [489] - [518].

[90] Primary reasons [519] - [525].

[92] Primary reasons [550] - [553].

[100] Primary reasons [579]. See also the orders of the court dated 29 March 2018 par 2 BAB 1.

[101] Primary reasons [547]. See also [549].

[106] Primary reasons [549]. See also Appellant's ninth amended statement of claim dated 28 May 2013 (SOC) par A(vii) BAB 189.

[110] Appeal ts 52, 55, 64. See also Primary reasons [545].

[112] Black v Freedman & Co [1910] HCA 58; (1910) 12 CLR 105, 109, 110 - 111; Lipkin Gorman v Karpnale Ltd [1988] UKHL 12; [1991] 2 AC 548, 559, 563, 565 - 566; Heperu Pty Ltd v Belle [2009] NSWCA 252; (2009) 76 NSWLR 230 [92] - [93], [153] - [154], [163]; Fistar v Riverwood Legion and Community Club Ltd [2016] NSWCA 81; (2016) 91 NSWLR 732 [30], [36], [47]; Great Investments Ltd v Warner [2016] FCAFC 85; (2016) 243 FCR 516 [55], [59], [64] - [69] (this case involving the transfer of company assets 'without authority').

[114] Heperu Pty Ltd v Belle [92], [154]; Fistar v Riverwood Legion and Community Club Ltd [30], [45], [47].

[115] Black v Freedman & Co (108 - 109); Australasian Annuities Pty Ltd v Rowley Super Fund Pty Ltd [2015] VSCA 9; (2015) 318 ALR 302 [121]; Great Investments Ltd v Warner [55], [60], [65].

[116] Great Investments Ltd v Warner [54] - [55], [60], [64], [67] - [68].

[117] First respondent's submissions pars 43 - 49 WAB 46 - 47.

[118] Primary reasons [535] - [537].

[119] Great Investments Ltd v Warner [56] - [57].

[120] Great Investments Ltd v Warner [58].

[121] Great Investments Ltd v Warner [60].

[122] First respondent's submissions pars 43 - 47, 49 WAB 46 - 47.

[126] GAB 30 cl 1.2(c), GAB 48. See also Primary reasons [160].

[128] Appeal ts 54 - 56, 58. See also Primary reasons [530] - [533].

[130] Appellant's submissions dated 20 December 2016 in action CIV/3124/09.

[131] Appellant's submissions dated 20 December 2016 in action CIV/3124/09 par 2.

[132] Appellant's submissions dated 20 December 2016 in action CIV/3124/09 pars 3 - 4.

[133] Appellant's submissions dated 20 December 2016 in action CIV/3124/09 par 5.

[135] First respondent's submissions dated 31 January 2017 in action CIV/3124/09.

[136] First respondent's submissions dated 31 January 2017 in action CIV/3124/09 pars 10 - 11.

[137] Garcia v National Australia Bank Ltd [1998] HCA 48; (1998) 194 CLR 395 [31].

[138] Appellant's submissions dated 8 February 2017 in action CIV/3124/09 par 2.

[141] Primary reasons [534] - [545].

[142] Whisprun Pty Ltd v Dixon [2003] HCA 48; (2003) 77 ALJR 1598 [50].

[143] London Passenger Transport Board v Moscrop [1942] AC 332, 347.

[144] Appeal ts 59. See also Appellant's submissions pars 8, 63, 65 WAB 12, 25. Compare Appellant's reply to the first respondent's notice of contention par 18 WAB 84 (where it is correctly recorded that the primary judge found that Mr Smith was a volunteer).

[147] Primary reasons [543] - [545].

[148] Appellant's submissions par 63 WAB 25.

[149] Black v Freedman & Co (109), (110).

[150] Lipkin Gorman v Karpnale Ltd (577).

[151] Heperu Pty Ltd v Belle [41], [82].

[152] Farah Constructions v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89 [189]. See also at [157] where, in relation to restitution-based liability, Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ confirm that a purchaser 'for value' is not a volunteer.

[153] Cook v Benson [2003] HCA 36; (2003) 214 CLR 370.

[154] Australasian Annuities Pty Ltd v Rowley Super Fund Pty Ltd [119] - [123] (Warren CJ); [306] - [308] (Garde AJA).

[155] Australasian Annuities Pty Ltd v Rowley Super Fund Pty Ltd [308(c)].

[156] Australasian Annuities Pty Ltd v Rowley Super Fund Pty Ltd [308(b)].

[157] Australasian Annuities Pty Ltd v Rowley Super Fund Pty Ltd [150].

[158] Australasian Annuities Pty Ltd v Rowley Super Fund Pty Ltd [146].

[159] Fistar v Riverwood Legion and Community Club Ltd [81].

[160] Fistar v Riverwood Legion and Community Club Ltd [71].

[161] Fistar v Riverwood Legion and Community Club Ltd [79].

[162] Fistar v Riverwood Legion and Community Club Ltd [71] - [72], [81].

[163] Indeed, this was also the case in Australasian Annuities Pty Ltd v Rowley Super Fund Pty Ltd. The trustee of the superannuation fund did not provide consideration to the plaintiff. Rather, the payments were made in return for the obligations undertaken to provide the rights and benefits to which the members of the superannuation fund became entitled to under the rules of the superannuation fund.

[164] Great Investments Ltd v Warner [109].

[165] Appeal ts 61. But compare appeal ts 60 where, seemingly, it was said on his behalf that Mr Smith did not contend that Leveraged Equities was a volunteer merely because it did not give consideration to Mr Smith but gave consideration to a third party.

[170] Primary reasons [159] - [161], [190].

[176] Great Investments Ltd v Warner [57] - [58].

[178] Primary reasons [127], [522] - [524]. See also at [150] - [151], [256], [265], [506].

[180] Great Investments Ltd v Warner [61].

[181] Nelson v Nelson [1995] HCA 25; (1995) 184 CLR 538, 571 - 572, 617 - 618.

[187] First respondent's submissions par 14 WAB 39.

[188] First respondent's submissions pars 3 - 13 WAB 39.

[195] Appeal ts 139 - 140. See Trial Book bundle documents 441 and 470. These suggest that a Wesfarmers share had a closing price of $37.79 as at 31 May 2008 and a closing price of $37.29 as at 30 June 2008.

[197] SOC par 74 BAB 179. See also Appellant's submissions par 38 WAB 18.

[199] Heperu Pty Ltd v Belle [163] - [164].

[201] Heperu Pty Ltd v Belle [163] - [164].

[202] Appellant's submissions par 39 WAB 18; Appeal ts 49 - 50.

[203] Primary reasons [354] - [355].

[204] See Primary reasons [547] - [549].

[211] Appellant's submissions par 43(a) WAB 19. Appeal ts 39, 41 - 42.

[212] Appellant's submissions par 43(a) WAB 19.

[216] Appellant's submissions par 43 WAB 19. Appeal ts 39 - 50.

[217] Visbord v Federal Commissioner of Taxation [1943] HCA 4; (1943) 68 CLR 354, 370 ‑ 371; Re Walsh; Ex parte Deputy Commissioner of Taxation (NSW) [1982] FCA 88; (1982) 60 FLR 355, 357; Re Muggleton; Ex parte Trenstone Pty Ltd (1993) 50 FCR 576, 582; Airservices Australia v Ferrier [1996] HCA 54; (1996) 185 CLR 483, 494 ‑ 495; Farrow Finance Co Ltd (in liq) v ANZ Executors and Trustee Company Ltd [1998] 1 VR 50, 61 ‑ 62; Caltabiano v Electoral Commission of Queensland (No 1) [2009] QCA 182; [2010] 1 Qd R 100 [29] ‑ [33], [107] ‑ [111]; CMA Corporation Limited v SNL Group Pty Ltd [2012] NSWCA 138 [7].

[218] Re Walsh; Ex parte Deputy Commissioner of Taxation (NSW) (357).

[219] Re Muggleton; Ex parte Trentstone Pty Ltd (582).

[220] Leeson v Leeson [1936] 2 KB 156, 162 ‑ 163.

[221] See eg Re Walsh; Ex parte Deputy Commissioner of Taxation (NSW) (357 ‑ 358); Caltabiano v Electoral Commission of Queensland (No 1) [31] ‑ [32], [109].

[222] Fahey v MSD Speirs Ltd [1974] UKPC 27; [1975] 1 NZLR 240, 245.

[223] Cory Brothers & Co v Owners of the Turkish Steamship 'Mecca' [1897] UKLawRpAC 17; [1897] AC 286, 293; Moree Plains Shire Council v Goater [2016] FCAFC 135 [58]; WorkPac Pty Ltd v Rossato [2020] FCAFC 84; (2020) 378 ALR 585 [257], [866], [987].

[224] Cory Brothers & Co v Owners of the Turkish Steamship 'Mecca' (294).

[225] Seymour v Pickett [1905] UKLawRpKQB 49; [1905] 1 KB 715.

[228] See eg Farrow Finance Co Ltd (in liq) v ANZ Executors and Trustee Company Ltd (70); Scales Trading Ltd v Far Eastern Shipping Co Public Ltd [1999] 3 NZLR 26, 43 - 44; Deputy Commissioner of Taxation v Falzon [2008] QCA 327; (2008) 74 ATR 76 [30]; Sociedad Agricola Topagri Ltda v BBC Techonologies Ltd [2014] NZCA 253 [22].

[229] Farrow Finance Co Ltd (in liq) v ANZ Executors and Trustee Company Ltd (70 - 71) (referring to Seymour v Pickett (725)).

[230] See also Palmer v Sutherland (1869) 2 QSCR 44, 46.

[231] Re Muggleton; Ex parte Trenstone Pty Ltd (582).

[232] Sibbles v Highfern Pty Ltd [1987] HCA 66; (1987) 164 CLR 214, 222.

[233] Cory Brothers & Co v Owners of the Turkish Steamship 'Mecca' (290 ‑ 291), (291 ‑ 292), (295); Yarra Capital Group Pty Ltd v Sklash Pty Ltd [2006] VSCA 109 [25] ‑ [26].

[234] Airservices Australia v Ferrier (504 ‑ 505) (see also fn 72); Beachquest Pty Ltd v Interstate Mortgage and Investments Pty Ltd [2001] QSC 512; [2003] 2 Qd R 586 [49] ‑ [50].

[235] Devaynes v Noble (Clayton's Case) (1816) 1 Mer 571, 608; [1815] EngR 77; 35 ER 781.

[236] Devaynes v Noble (Clayton's Case) (608), (793).

[238] Creak v James Moore & Sons Pty Ltd [1912] HCA 67; (1912) 15 CLR 426.

[239] Creak v James Moore & Sons Pty Ltd (433), (436).

[240] Creak v James Moore & Sons Pty Ltd (433 - 434).

[242] Re Sutherland; French Caledonia Travel Service Pty Ltd [2003] NSWSC 1008; (2003) 59 NSWLR 361.

[243] Re Sutherland; French Caledonia Travel Service Pty Ltd [193].

[246] Brady v Stapleton [1952] HCA 62; (1952) 88 CLR 322, 336 - 339.

[247] Distinctive FX Pty Ltd v Van Der Slot [2015] VSCA 328 [49].

[248] Toksoz v Westpac Banking Corporation [2012] NSWCA 199; (2012) 289 ALR 577 [8] - [10].

[253] Re Hallett's Estate; Knatchbull v Hallett [1880] UKLawRpCh 38; (1879) 13 Ch D 696.

[255] Re Global Finance Group Pty Ltd (in liq); Ex parte Read [2002] WASC 63; (2002) 26 WAR 385.

[256] Re Global Finance Group Pty Ltd (in liq); Ex parte Read [100].

[257] Re Global Finance Group Pty Ltd (in liq); Ex parte Read [94].

[258] Re Global Finance Group Pty Ltd (in liq); Ex parte Read [96].

[259] Re Global Finance Group Pty Ltd (in liq); Ex parte Read [96].

[260] Re Global Finance Group Pty Ltd (in liq); Ex parte Read [102] - [103].

[261] Re Global Finance Group Pty Ltd (in liq); Ex parte Read [104].

[262] Appeal ts 48. That concession was properly made: Heperu Pty Ltd v Belle [163] - [164]; Great Investments Ltd v Warner [60], [68] - [69].

[266] Appellant's submissions par 43 WAB 19.

[272] First respondent's fifth amended defence dated 5 July 2013 par 24.8 BAB 259.

[273] First respondent's fifth amended defence dated 5 July 2013 pars 22.3, 24.4 BAB 258 - 259.

[274] Appellant's submissions par 68 WAB 26.

[276] Primary reasons [166] - [170].

[278] Primary reasons [251] - [254].

[279] First respondent's notice of contention submissions par 8(b) WAB 67.

[284] Primary reasons [266], [268].

[285] Primary reasons [297], [302], [522].

[287] First respondent's notice of contention submissions par 9 WAB 68.

[288] First respondent's notice of contention submissions par 10 WAB 68.

[289] First respondent's notice of contention submissions par 11 WAB 68.

[290] First respondent's notice of contention submissions par 13 - 15 WAB 69.

[291] First respondent's notice of contention submissions par 13 WAB 69.

[292] Alpha Wealth Financial Services Pty Ltd v Frankland River Olive Co Ltd [2008] WASCA 119; (2008) 66 ACSR 594 [201].

[293] Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd [2014] HCA 14; (2014) 253 CLR 560 [157].

[294] Alpha Wealth Financial Services Pty Ltd v Frankland River Olive Co Ltd [202] - [205].

[295] Citigroup Pty Ltd v National Australia Bank Ltd [2012] NSWCA 381; (2012) 82 NSWLR 391 [6].

[296] Citigroup Pty Ltd v National Australia Bank Ltd [6]. See also at [68] - [69] and [84] - [86].

[297] K Mason, J Carter and G Tolhurst, Mason & Carter's Restitution Law in Australia (Third Edition) [2416]. See also J Edelman and E Bant, Unjust Enrichment (Second Edition) page 337.

[298] Appeal ts 99 - 101; compare Appeal ts 146.

[308] Barclays Bank Ltd v WJ Simms Son & Cooke (Southern) Ltd [1980] QB 677.

[309] Barclays Bank Ltd v WJ Simms Son & Cooke (Southern) Ltd (695). See also Australia and New Zealand Banking Group Ltd v Westpac Banking Corporation [1988] HCA 17; (1988) 164 CLR 662, 673; David Securities Pty Ltd v Commonwealth Bank of Australia [1992] HCA 48; (1992) 175 CLR 353, 379 - 380, 385.

[310] See the explanation in Hills Industries Ltd v Australian Financial Services and Leasing Pty Ltd [2012] NSWCA 380; (2012) 295 ALR 147 [113].

[312] First respondent's notice of contention submissions par 13 WAB 69 (as to the second share transfer).

[313] First respondent's notice of contention submissions par 14 WAB 69 (as to the third share transfer).

[314] First respondent's notice of contention submissions par 15 WAB 69.

[316] J Edelman and E Bant, Unjust Enrichment (Second Edition) pages 156 - 157. See also 364 - 365.

[317] The unsuccessful appeal from this decision is Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd as previously referred to. There, however, so far as the good consideration defence was considered the plurality (Hayne, Crennan, Kiefel, Bell and Keane JJ) simply concluded that as the payments were not made to discharge relevant debts the payments were not made for good consideration as explained in Barclays Bank Ltd v WJ Simms Son & Cooke (Southern) Ltd thereby endorsing Meagher JA's approach as referred to at [219] in these reasons: Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd [100] - [101].

[318] Hills Industries Ltd v Australian Financial Services and Leasing Pty Ltd [182] - [188], [200].

[319] Hills Industries Ltd v Australian Financial Services and Leasing Pty Ltd [76] - [145] (esp [141] ‑ [145]).

[320] G Palmer, The Law of Restitution (Volume III) (1978) pages 490 - 491 (reproduced in Hills Industries Ltd v Australian Financial Services and Leasing Pty Ltd [190]).

[321] Hills Industries Ltd v Australian Financial Services and Leasing Pty Ltd [191].

[322] Hills Industries Ltd v Australian Financial Services and Leasing Pty Ltd [199].

[323] Australian Financial Services Pty Ltd v Hills Industries Ltd [101].

[324] J Edelman and E Bant, Unjust Enrichment (Second Edition) page 367.

[326] First respondent's notice of contention submissions par 15 WAB 69.

[327] First respondent's fifth amended defence dated 5 July 2013 pars 22.3, 24.4 BAB 258 - 259.

[328] First respondent's answers to plaintiff's request for further and better particulars of the first respondent's defence dated 25 August 2010 par 8.5 BAB 277.

[329] First respondent's answers to plaintiff's request for further and better particulars of the first respondent's defence dated 25 August 2010 par 8.5 BAB 277.

[330] First respondent's answers to plaintiff's request for further and better particulars of the first respondent's defence dated 25 August 2010 par 10.3 BAB 278.

[332] R Austin and A Black, Austin & Black's Annotations to the Corporations Act [7.766A].

[333] SOC par 84 BAB 186 - 187. Section 917C may be ignored as it deals with the situation where the representative is the representative of multiple licensees.

[335] Appellant's reply submissions to fourth respondent's notice of contention par 12 WAB 96.

[336] Section 765A(1)(h) of the Corporations Act now excludes from the concept of 'financial product' credit facilities within the meaning of the regulations 'other than a margin lending facility'. Thus, under the current legislation, a margin lending facility may be a financial product. Consistent with that legislative choice reg 7.1.34 of the Corporations Regulations 2001 (Cth) - a regulation that specifies that certain conduct does not constitute dealing in a financial product - does not apply in relation to a margin lending facility. However, the exclusion of a margin lending facility from reg 7.1.34 only took effect from 1 January 2011. Before that time the enforcement of rights under a credit facility (including a credit facility being a margin lending facility) did not constitute dealing in a financial product.

[338] Casaclang v Wealthsure Pty Ltd [2015] FCA 761; (2015) 238 FCR 55 [199], [204] - [205], [208].

[339] Corporations Act, s 766A(1)(a).

[340] Primary reasons [555] - [556].

[341] Primary reasons [428]. See also [557].

[342] Primary reasons [557] - [560].

[346] Appellant's submissions par 78 WAB 28.

[348] WAB 63. See also appellant's reply submissions to fourth respondent's notice of contention fn 1 WAB 94.

[350] Fourth respondent's submissions pars 2 - 13, 22 - 25 WAB 51 - 54, 56. See also Appeal ts 112 - 127.

[351] Fourth respondent's submissions par 44 WAB 61.

[352] Appeal ts 66 ('the conduct was the arrangement of a disposition of Mr Smith's shares'), 67 (the conduct was 'arranging for Mr Smith to make available his Wesfarmers shares for the purposes of Mrs King's account'), 71 ('the conduct is the arrangement'). But compare Appeal ts 72 where reference is made to the 'misleading statements'.

[353] SOC par 83 BAB 186. As to which see SOC par 12 BAB 148 (as to the Collateral Representations) and SOC par 17 BAB 153 (as to Todd King's Knowledge).

[355] Primary reasons [410]. See also at [421].

[358] Appellant's submissions par 76 WAB 27 - 28.

[359] Appellant's reply submissions par 11 WAB 95 - 96.

[360] Appellant's reply submissions par 13 WAB 96.

[361] That being the language used on behalf of the appellant. See Appellant's reply submissions par 11 WAB 95 - 96.

[362] Appellant's reply submissions par 11 WAB 95.

[363] Appeal ts 66 - 67, 68, 69, 70 - 71. See also Appellant's reply submissions pars 3, 13 WAB 94, 96.

[364] Appellant's reply submissions pars 25, 33 WAB 100, 102.

[369] Appellant's submissions pars 74 - 75 WAB 27.

[371] Fourth respondent's submissions pars 2 - 13, 22 - 25 WAB 51 - 54, 56; Appeal ts 112 - 127.

[372] Fourth respondent's submissions pars 31, 33 WAB 58; Appeal ts 127 - 136.

[374] National Companies & Securities Commission v Industrial Equities Ltd [1982] 1 NSWLR 42.

[376] Appellant's reply submissions pars 10 - 11 WAB 95 - 96.

[377] Appellant's reply submissions par 13 WAB 96.

[378] For a recent compilation of those principles see Zerjavic v Chevron Australia Pty Ltd [2020] WASCA 40 [65] - [67].

[379] Water Board v Moustakas [1988] HCA 12; (1988) 180 CLR 491, 497.

[380] Whisprun Pty Ltd v Dixon [52].

[381] Boyd v Fielding [2009] VSCA 237 [70] - [77].

[383] Appellant's answers and objections to fourth respondent's request for further and better particulars of paragraph 83 of the SOC par 1 BAB 220 - 221. What is reproduced is a slight alteration of the document so as, for the convenience of the reader, to state the request in italics followed by the response.

[385] SOC par 13.1 BAB 149. See also par 14.1 ('Smith would transfer 85,000 shares ... to the Margin Loan Facility').

[388] Fourth respondent's amended defence dated 10 September 2010 pars 9, 15 BAB 299, 302 - 303.

[391] Appellant's opening submissions for trial dated 27 January 2016 par 228.

[394] See generally Primary reasons [73] - [188].

[395] Primary reasons [189] - [211].

[399] Primary reasons [384]. See also [391] (although there referring to the 2008 share transfers the reasoning would apply equally to the initial share transfer).

[400] Appellant's reply to the first respondent's notice of contention par 12 WAB 83.

[402] Primary reasons [61]. See also at [566].

[403] Appellant's reply submissions par 13 WAB 96.

[405] Water Board v Moustakas (497 - 498); Whisprun Pty Ltd v Dixon [51]. See also Zerjavic v Chevron Australia Pty Ltd [66.3], [67] (and the cases recited therein at fn 138).

[414] Appeal ts 74. See Primary reasons [387] (see also at [95]).

[415] Fourth respondent's amended defence dated 10 September 2010 par 10(a) BAB 299.

[416] Primary reasons [382] - [387].