Territory Realty Pty Ltd v Garraway

INTRODUCTION 1 This case concerns the control of Dundee Beach Pty Ltd (Dundee Beach P/L), the developer of Dundee Downs/Dundee Beach area and its management since 4 May 1999. The relevant events occurred in the period leading up to, and after, that date so I shall first record my findings as to the state of affairs which existed at that time. 2 Presently, the shareholders of Dundee Beach P/L are Territory Realty Pty Ltd (Territory Realty), Excess Pty Ltd (Excess) and Bishop Estate Pty Ltd (Bishop Estate). Subject to a recent share issue, which is contentious, the shareholding in Dundee Beach P/L between those three companies is equal. 3 It is helpful to identify who lies behind the three shareholders in Dundee Beach P/L, and to record a little of their corporate history. 4 Territory Realty was registered on 8 June 1988. David Booth (Booth) and John Sanders (Sanders) are directors of Territory Realty. Initially its directors were Paul Proctor (until 1 October 2002) and Booth. Sanders was appointed a director only on 29 January 2007. On the same date, one Ian Henry was also appointed a director. Presently Booth holds one of the two shares in Territory Realty and Sanders Investments Pty Ltd (Sanders Investments) holds the other. Previously, one share was held by Proctor, so presumably he transferred that share to Sanders Investments. Booth says that he and Sanders incorporated Territory Realty to invest in, and develop land in, the Dundee Downs/Dundee Beach area of the Northern Territory. 5 For present purposes, it is convenient to regard Booth and Sanders as the persons behind Territory Realty. Booth has clearly been the more prominent of the two in external dealings on its behalf. Proctor was at material times until 1 October 2002 a director and its secretary. 6 At material times Booth and Sanders were also directors of a company now called David Booth Real Estate Pty Ltd (formerly The Territory Realty Corporation Pty Ltd). It conducted business as Territory First National Real Estate (Territory Real Estate) during the 1980s and 1990s. That is not a company which is concerned with the present proceedings, save that for a brief time it held the Booth/Sanders interest in Dundee Beach P/L before it was transferred to Territory Realty. 7 Excess is a long registered company. It was a company controlled by Neville Walker (Walker), a prominent businessman in the Northern Territory, until his death on 7 February 2005. He was a director of Excess until then, together with Danielle Pokorny. His son David Walker became a director from 12 December 1997. Pokorny and David Walker remain as its directors. Walker held nine of its ten issued shares. They are now held by David Walker and Pokorny as trustees for his estate. The other share is held by Pokorny. 8 Bishop Estate was registered on 24 July 1995. At all material times, its directors have been Allan Garraway and Robert Woolley. They also each hold one of its two issued shares.

BRIEF OVERVIEW OF THE CLAIMS 9 Territory Realty and its directors Booth and Sanders claim against the respondents (the proceedings against Robert Kendray were discontinued) by reason of the events by which Bishop Estate and Excess came to acquire at least an equitable interest in nine shares in Dundee Beach P/L on 4 May 1999, and subsequently came to hold 32 of the 48 shares in Dundee Beach P/L by further transfers on 25 November 2003 and 2 July 2004, and secondly by the way in which Dundee Beach P/L was run from 4 May 1999 (including a further issue of shares). 10 They claim that each of the share transfers was inconsistent with the "pre-emptive rights" which Territory Realty enjoyed as an existing shareholder of Dundee Beach P/L. They seek declaratory relief to that effect, together with orders correcting the share register of Dundee Beach P/L, and (rather optimistically) orders that Bishop Estate and Excess hold their shares on a constructive trust in favour of Territory Realty. 11 The applicants also claim that the then shareholders in Dundee Beach P/L, by participating in those transfers, breached the contract between them and Territory Realty constituted by the Memorandum and Articles of Association (the Articles) of Dundee Beach P/L by failing to comply, in particular, with the procedure for the transfer of shares specified in Article 5 of the Articles, and that Garraway intentionally and wrongfully interfered with that contractual relationship by procuring or participating in its breach. 12 Also arising from the conduct surrounding the share transfer of 4 May 1999, the applicants allege that Garraway, both personally and on behalf of Herbert Thomas Hassall (known as Peter Hassall) (Hassall) and of Dundee Beach P/L engaged in misleading and deceptive conduct, to the applicants' detriment. 13 The two causes of action referred to in the preceding two paragraphs are well out of the time within which they may be brought under the Limitation Act (NT) (the Limitation Act), and the applicants seek an extension of time under that Act to bring those claims. 14 The other cause of action invoked by the applicants arises out of the conduct of Dundee Beach P/L by its directors, and by each of its shareholders or putative shareholders other than Territory Realty, in the management and operation of the affairs of Dundee Beach P/L up to, and including in one respect, the time of, these proceedings. They allege that by a series of decisions, and the implementation of those decisions, the affairs of Dundee Beach P/L over that time have been conducted oppressively within the meaning of s 232 of the Corporations Act 2001 (Cth) (the Corporations Act) and orders are sought under s 233 of that Act. The particular conduct in question is set out in the course of these reasons for judgment.

THE DEVELOPMENT OF DUNDEE BEACH AND DUNDEE DOWNS 15 The history of the development of the Dundee Downs/Dundee Beach area is not really contentious. 16 During the 1980s, Booth knew Robert Kendray and Terrance Dowling. In about the mid-1980s the three men had some discussions about purchasing and developing certain parcels of land at Dundee Downs/Dundee Beach. That land was then "owned" by Terri Co Pty Ltd under a pastoral lease. Terri Co Pty Ltd went into liquidation. Its liquidator applied for, and succeeded in being permitted to effect, the conversion of the pastoral lease into a number of smaller parcels described as Crown Lease Terms intended for future development. The liquidator then offered the Crown Lease Terms for sale by auction. 17 Booth involved Sanders in the plan to acquire the Crown Lease Terms at auction. Booth and Sanders through Territory Real Estate had marketing and sales skills. 18 Kendray was a director of, and the operator of, an earthworks construction business called H & K Earthmoving Pty Ltd (H & K Earthmoving). Hassall had no formal involvement in H & K Earthmoving, but he was involved through his wife. H & K Earthmoving was registered on 25 May 1984. Its directors from mid-1984 were Kendray and his wife Brenda Kendray and Joan Hassall, the wife of Hassall. Ms Kendray and Ms Hassall remained as directors of H & K Earthmoving until 12 November 1997 and Kendray remained as a director until 4 May 1999. H & K Earthmoving now has four issued shares, currently held by Hassall, Ms Hassall and Hassall Earthmoving Pty Ltd (Hassall Earthmoving). Until 1999, it had three issued shares held by Ms Hassall and by Kendray and Ms Kendray. Although, according to ASIC records, Hassall was not a director of H & K Earthmoving, Hassall was understood by Booth at material times to have been a co-director with Kendray of the H & K Earthmoving. 19 Dowling's anticipated role was to develop and promote the planned hotel facility anticipated to be part of the development. It later became the Lodge at Dundee. 20 The five men, that is Sanders, Hassall, Kendray, Dowling and Booth, agreed to acquire a shelf company for the purpose of bidding for certain of the Crown Lease Terms at the auction sale conducted by the liquidator of Terri Co Pty Ltd. They did so on the basis that Sanders and Booth through one company would take a third share in the proposed new company, H & K Earthmoving on behalf of Kendray and Hassall would take a third share, and a third company to be nominated by Dowling (Dowling Investments Pty Ltd) would also take a third share. Each of the shareholders was then to contribute equally to the cost of the project and share equally in the profits of the project. They were all to have an equal say in control of the project. It was anticipated that each of the three interest groups would contribute initially $100,000 towards the project, and a further $300,000 would be borrowed from the ANZ Bank on commercial terms to support the proposed acquisition of land and, to some extent, its development. 21 Hence, Dundee Beach P/L. 22 It was originally known as Howdah Pty Ltd. It changed its name to Dundee Beach P/L on 21 January 1992. Hassall, Sanders, Booth, Kendray and Dowling became its directors from 3 September 1986. It will be necessary to refer to its share structure in some detail later. Dowling left the arrangement on 1 November 1994 and ceased as a director at that time. 23 At the auction sale, Dundee Beach P/L successfully acquired Crown Lease Terms 570 and 572 for Sections 2881 and 2883, respectively at Dundee Beach and Dundee Downs. 24 Dundee Beach and Dundee Downs are in an area south-west of Darwin at the end of the Fog Bay Road beyond the Cox Peninsula. Dundee Beach is more westerly. The two sections are separated by an area known as Dundee Forest. 25 Section 2881 (Dundee Beach) contained about 5210 hectares and was for a renewable term of 10 years from 1 September 1986. The Crown Lease Term contemplated development of the land for tourism, recreation, weekender living and other uses. The lessee was required to submit plans of sub-division and development for approval, and was entitled (once an acceptable development proposal had been approved) to apply for a fee simple title or Crown lease over individual allotments where approved development required sub-division. The lessee was responsible for reporting to the Minister on at least an annual basis, as well being responsible for all development and associated costs, both within the proposed development and for the costs of the survey and construction of an access road to the coast to an acceptable standard during the term of the lease. 26 Section 2883 (Dundee Downs) is an extensive area to the east of Dundee Beach, also eligible for subdivision and development upon appropriate terms. 27 During the period up to 1998, the development of Dundee Beach and Dundee Downs was mainly managed by Booth and Kendray, although they met regularly also with Sanders, Dowling and Hassall to discuss the development plan. As it happened, they agreed upon the development processes in a way which did not call for a formal vote of the shareholders or "partners" in Dundee Beach P/L. 28 At an early point, and as the Crown Lease Terms required, a development plan was prepared with the assistance of June D'Rozario, a town planner. That plan, if accepted by the Minister for Lands and Housing (the Minister) would then provide the basis for securing planning approval from the Minister. That led to the Namarada Area Plan 1990, in essence the development plan for Dundee Beach. It was adopted by the Minister as the relevant planning instrument under the Planning Act (NT) and so was used in determining whether to grant the planning approvals sought from time to time. Those dealings with D'Rozario were mainly conducted by Kendray. By the time of the Namarada Area Plan 1990, the development of Dundee Downs in Section 2883 was well advanced and the development of Dundee Beach had progressed to some degree. 29 The development of Dundee Downs and Dundee Beach was, in a sense, organised by Kendray. He spent considerable time assessing the topography and available resources. He planned the timing and location of access roads having regard to the local resources. Through H & K Earthmoving, Kendray also progressively arranged the construction or improvements to, and in some instances creation of, access roads as necessary as well as the smaller roads with the subdivisional areas. 30 It was during this period of development that, because Kendray through H & K Earthmoving had contributed so much in value to the progress of the development by road and other subdivisional construction, it was agreed that there should be four (rather than three) equal interests in Dundee Beach P/L. A fourth share was issued to Kendray and Hassall jointly, in addition to that held by H & K Earthmoving. 31 There is some ambiguity in the evidence about which of the H & K Earthmoving and the Kendray/Hassall shares was issued first. Nothing turns on that. The allotment journal of Dundee Beach P/L shows one share each issued to David Booth Real Estate Pty Ltd (under a previous name, and subsequently transferred to Territory Realty), Dowling Investments and H & K Earthmoving on 29 September 1986, and a fourth share issued to Kendray and Hassall jointly on 6 November 1987. 32 The Namarada Area Plan 1990 zoned the Dundee Beach land according to a range of uses. They included coastal detached dwellings with allotments of not less than four hectares, recreational living (at a lesser density) which permitted detached dwellings and some agricultural or horticultural use with allotments of not less than one hectare, rural living and agricultural use with allotments of not less than eight hectares, community purposes (including shops and schools), open space for public recreational use, conservation areas and tourist accommodation and facilities. 33 The promotion and marketing first of Dundee Downs and then of Dundee Beach, and progressively the sale of subdivided lots, was undertaken by Booth and Sanders through Territory Realty. 34 The development of Dundee Downs proceeded in two stages, leaving a small balance in its north-western border known as the Rainforest Block. It preceded the development of Dundee Beach. Revenue generated by the sale of allotments in Dundee Downs was planned to be used for the further development of Dundee Downs and then for the development of Dundee Beach. Stage 1 of the development of Dundee Downs comprised 54 lots. Well before 1998, it had been fully developed and sold. Stage 2 comprised 108 lots and also well before 1998 had been fully developed and sold. The allotments ranged between 8 and 70 hectares. The Rainforest Block was left undeveloped. 35 As the Dundee Downs development neared completion, planning proceeded to the development of Dundee Beach, that is Section 2881. It was planned in a series of stages, with more intense development in those areas with direct water frontage or access. It required the construction of a 23 kilometre stretch of road from Dundee Downs to the coast. That work was carried out by H & K Earthmoving. Stage 1 was itself broken into three stages: 1A, 1B and 1C, comprising 142 lots, 124 lots and 149 lots respectively. The first blocks were released in 1990. The development of those lots had been completed by 1998. Stage 2 was also broken into three stages: 2A, 2B and 2C, comprising 51 lots, 35 lots and 101 lots respectively. Those stages also had been sub-divided and developed by 1998. Adjacent to part of Stage 2B and just south of it was a small area comprising a proposed 12 lot sub-division which was completed after May 1999. Some blocks in Stages 2A and 2C had seafront frontages, as did some lots in stages 1B and 1C. Immediately to the north of Stage 2A was an area or allotment on which the Lodge at Dundee had been built with a significant surrounding service and support area. Its construction was completed about late 1990. 36 In the northern part of Dundee Beach was a substantial area zoned TC (Tourist Commercial). The Tourist Commercial zone was a long relatively thin strip of land of uneven dimensions on the north-eastern part of Section 2881 with its southern boundaries adjacent to parts of Stage 2A and Stage 2B and the Lodge at Dundee. It also adjoined the eastern side part of what is described as Stage 4. In the southern part of the Tourist Commercial Zone, an air strip had been constructed. It had not been developed or the subject of any detailed planning proposed by May 1999. 37 The remaining development area comprising Stage 4 was a substantial area in the middle northern part of Section 2881. Its south-western section had been the subject of an application for approval, and a grant of approval, to develop it into 25 two hectare subdivisional lots. The much larger remaining portion of Stage 4 also had not, by May 1999, been the subject of a separate development application. Its zoning specified that it was to be in eight hectare subdivisional lots. The plan at that time was to complete the implementation of the 25 two hectare approved lots on the south-western section of Stage 4 first, and then to reapply to have the zoning approval changed for the balance of Stage 4 into two hectare allotments, rather than eight hectare allotments. 38 Although the subdivision of Dundee Beach had been completed to the point referred to by May 1999, a number of allotments had not been sold. They had been progressively released for sale from time to time. As might have been expected, also a number of allotments originally offered for sale and sold had come back onto the market from time to time. Allotments were therefore released for sale only as it was thought that there was a strong market for them. 39 Consequently, at May 1999, the further subdivision and usage approvals required in relation to Dundee Downs comprised only the proposed use of the Rainforest Block. The balance of Section 2883 comprised 162 subdivided allotments in respect of which separate freehold titles had issued. At May 1999, the undeveloped parts of Dundee Beach comprised the proposed 12 lot subdivision to the south of Stage 2C and adjacent to Stage 2B on its western side, the balance of development of Stage 4 (for which approval for the sub-division of the south-western part into 25 lots of two hectares had been granted), and the Tourist Commercial area. 40 However, within the development as it existed up to that time, there were a number of features which should be noted, because for various reasons they featured in the evidence. 41 Within Stage 1A in the southern section of Dundee Beach, substantial sized lots numbered 3055 and 3056, and within Stage 1B on the south-western corner in lots numbered 3230 and 3231 (at the northern end of that stage), had been lots designated as Community Purposes (the rezoned sites). In addition, there was a significantly sized lot called Section 3084 in the northern part of Stage 1A which had been designated for a school or proposed commercial site (also called the 21 lot Commercial Subdivision) designated Commercial Purposes (the school site). Finally, in the south-eastern area of Dundee Downs, again in Stage 1A, a section called Section 3054 had been set aside for a dump site (the dump site). Evidence was given about each of those sections or lots in the course of the hearing, as the way the directors of Dundee Beach P/L from May 1999 dealt with those sites was the subject of criticism by the applicants. 42 For convenience, I list the particular areas in Dundee Downs and Dundee Beach which were the subject of specific issues. They are: · the Rainforest Block (Dundee Downs); · the 25 lot approved development in Stage 4 of Dundee Beach; · the rezoned sites; · the school site; and · the dump site.

THE SHAREHOLDING IN DUNDEE BEACH P/L 43 There is some inconsistency between the records of Dundee Beach P/L and in the evidence. The records of Dundee Beach P/L, that is its share allotment journal, indicates that the two subscriber shares were transferred, and one further share issued, on 29 September 1986 to Dowling Investments, Kibosh (later transferred to Territory Realty on 26 June 1989), and H & K Earthmoving. The other shareholders were informed of the "internal" transfer of the Booth/Sanders share, and apparently had no objection. The procedures prescribed by Article 5 of the Articles set out below were not followed. It is not suggested that anything turns on that oversight (as I find it was) relevant to the outcome of this action. Subsequently as noted above, on 6 November 1987, one further share was issued to Kendray and Hassall jointly. On 17 June 1994, a further 36 shares were issued equally to each of the four shareholders, so that they each then held 10 shares. Then, on 15 October 1994 according to the share register, a further two shares each were issued to Dowling Investments, H & K Earthmoving, Territory Realty (which by then had become the registered holder of the Kibosh shares) and Kendray and Hassall, jointly so that each of the four shareholders held 12 shares. Later that year, when Dowling Investments withdrew from the arrangement, its shares were transferred to the other three shareholders equally, although that is not recorded in the share register. The ASIC records note those transfers. From about that time the shareholders in Dundee Beach P/L, each holding 16 shares, were Territory Realty, H & K Earthmoving and jointly Kendray and Hassall. 44 Then, as briefly noted above, Dowling decided to "retire" from the partnership. At that time, the remaining shareholders agreed to accept his withdrawal and to buy out his shares. Funds to buy the Dowling Investments shares at the agreed sum were generated by shareholders' loans made by Dundee Beach P/L to each of its remaining three shareholders. Dundee Beach P/L became "cashed up" to the necessary extent by selling the Lodge at Dundee. 45 Hence, at 30 June 1998 and up to 4 May 1999, the 48 issued shares in Dundee Beach P/L were held as follows: Territory Realty - 16 shares H & K Earthmoving - 16 shares Kendray and Hassall jointly - 16 shares 46 Not withstanding the shareholding restructure in 1987, the evidence indicates that the Booth/Sanders interest, the Kendray/Hassall interest and the Dowling interests continued to be recognised by each of them by meeting regularly to discuss the ongoing operations and development of Dundee Beach P/L, and that each of those interest groups was given an equal voice and an equal vote in pact. The evidence shows that practice continued between Booth, Sanders, Kendray and Hassall after Dowling withdrew from the "arrangement". I suspect that no vote came to be called for and that decision-making was generally by consensus.

THE EVENTS LEADING UP TO 4 MAY 1999 47 During 1998, Kendray and Hassall fell out. It was their falling out which gave rise to the circumstances and events which are contentious in this proceeding. It was apparent to each of Kendray and Hassall that they would need to separate their respective business interests, including but not exclusively their interests in Dundee Beach P/L. It is at this point, also, that Garraway and others come into the picture. 48 In essence, the position appears to have been that by the latter part of 1998 either Kendray was to buy Hassall out, or Hassall was to buy Kendray out, or some other form of asset sharing would have to take place. 49 Hassall came to know, or know of, Garraway through Hassall's brother-in-law Walker. Kendray had known Walker for many years, as he had in the 1970s worked for a company known as Henry Walker (later Henry Walker Eltin) of which Walker was a director and a "principal". Hassall had also worked for Henry Walker until about 1975. Garraway and Walker were well acquainted. Garraway, an accountant, was engaged by Hassall to advise him on the negotiations with Kendray. Hassall also about then secured legal advice through Clayton Utz (variously through solicitors named Michaels, Mitaros and Philip). 50 A series of negotiations took place between Kendray and Hassall and their representatives. Booth and Sanders were keen to retain Kendray's interest in Dundee Beach P/L, and so they too became involved in that process, but only relatively briefly, then they appear to have stepped out of the direct negotiation process. 51 On 15 October 1998, Booth, Sanders and Kendray wrote to Hassall putting a proposal in relation to Hassall's direct and indirect interest in Dundee Beach P/L. It was to buy out his interest (that is, his interest in the 16 shares held jointly with Kendray, and his interest in the 16 shares held by H & K Earthmoving) upon the basis of a payment of $1,129,500. That sum was to be made of $500,000 cash, $500,000 representing land at Dundee Beach to be transferred to Hassall at market value, and $129,500 being the outstanding balance of his loan accounts with Dundee Beach P/L. That letter included the comment that Booth and Sanders did not have the resources to try and buy out all the interests in Dundee Beach P/L held by Kendray and Hassall either directly or through H & K Earthmoving. Booth accepted in the course of his evidence that the offer in practical terms valued one third of Dundee Beach P/L at $1.129 million. 52 Not surprisingly, Hassall sought Garraway's advice about that proposal. 53 That letter was responded to by Garraways, the firm of which Garraway was a principal, on 20 October 1998. It made the following comment: Given that together with my client you are all the other directors and shareholders of Dundee Beach Pty Ltd, would you please confirm that your shares (ie effectively 24 shares) are likewise available for purchase for $2m (cash $1m & Dundee land at market value $1m) with no forgiving of loan account. 54 As Booth pointed out in his evidence, in fact the proposal put forward by the three of them to Hassall involved the forgiveness of the loan account for an amount equivalent to it so that the loan account would be released. That is the clear import of the earlier offer of 15 October 1998 despite Garraway, during his cross-examination, adhering to the view that the first proposal did not involve any release of the loan account. 55 Garraway followed up his letter of 20 October 1998 with a further letter of 4 November 1998. He there referred to the initial offer as being "a proposal to sell H & K Earthmoving Pty Ltd shares in Dundee Beach Pty Ltd for a total sum of $1.2m" which, he said, "is of no interest to my client". The letter requested confirmation that the shares of Booth, Sanders and Kendray in Dundee Beach P/L were available for purchase at the price offered to Hassall. It sought to impose time limits upon further negotiations. 56 Garraway said in cross-examination that he did not at the time have access to the Articles of Association of Dundee Beach P/L, but he assumed they were available to Philip of Clayton Utz, the solicitors advising Hassall at the same time. He only learnt of the restriction upon share transfer contained in the Articles, he said, in early 1999. Nothing turns on that issue. 57 On 6 November 1998, Booth, Sanders and Kendray responded. They pointed out that their offer of 15 October 1998 was for all of the Hassall interests in Dundee Beach P/L (effectively 16 shares) and including forgiveness of the loan account. They pointed out that there would then be 24 remaining shares. They invited Hassall's further response. There is then, apparently, a letter from Hassall (presumably through Garraway) to Booth, Sanders and Kendray of 10 November 1998. It does not appear in the evidence. A response of 11 November 1998 simply rejects whatever offer was then made. 58 The background to the negotiation, or at least the further negotiation, is the pre-emptive rights in the Articles of Association of Dundee Beach P/L. 59 The Articles of Dundee Beach P/L adopted Table A of the Fourth Schedule to the Companies Ordinance 1963 (NT) except as expressed in its Articles. One of the changes concerns transfer of shares. Article 5 relevantly provides: … (b) Subject to the provisions of Clause 4 hereof and Clause 5 of the Memorandum of Association, a share may be transferred by a member of other persons entitled to transfer to any member selected by the transferor but save as aforesaid and save as provided by sub-articles (g) and (h) hereof, no share shall be transferred to a person who is not a member so long as any member or any person selected by the directors as one whom it is desirable in the interests of the company to admit to membership is willing to purchase the same at the fair value thereof. (c) Except where the transfer is made pursuant to sub-articles (b), (g) or (h) hereof, the person proposing to transfer any share (hereinafter called "the proposing transferor" shall give notice in writing (hereinafter called "a transfer notice") to the company that he desires to transfer the same. Such notice shall specify the sum he fixes as the fair value thereof and shall constitute the company his agent for the sale of the share to any member of the company or person selected as aforesaid willing to purchase the share (hereinafter called "the purchasing member") at the price so fixed, or at the option of the purchasing member, at the fair value thereof to be fixed by the auditor or auditors in accordance with sub-article (e) hereof.

A transfer notice may include several shares and in such case shall operate as if it were a separate notice in respect of each. A transfer notice shall not be revocable except with the sanction of the directors. (d) If the company shall, within the space of twenty-eight days after being served with a transfer notice, find a purchasing member and shall give notice thereof to the proposing transferor he shall be bound upon payment of the fair value thereof as fixed in accordance with sub-articles (c) or (e) hereof to transfer the share to the purchasing member. (e) In case any difference arises between the proposing transferor and the purchasing member as to the fair value of a share, the auditor of the company, or all the auditors of the company if more than one, shall on the application of either party certify in writing the sum which in his or their opinion is the fair value thereof. Such sum (and in the case of difference between the auditors, the average of the sum certified) shall be deemed to be the fair value thereof and in so certifying the auditor or auditors shall be considered to be acting as an expert or experts and not as an arbitrator or arbitrators and accordingly the Arbitration Act 1891 shall not apply. … (g) If the company shall not within the space of twenty-eight days after being served with a transfer notice in manner aforesaid find a purchasing member, the proposing transferor shall at any time within three months afterwards be at liberty to sell and transfer the share (or where there are more shares than one those not placed) to any person approved by the directors and at any price. … 60 It is not suggested that cl 4 or cl 5 of the Memorandum of Association is relevant. 61 In my view, it is apparent that by reason of Article 5: · a member of Dundee Beach P/L may transfer shares to any other member without restriction; or · if there is a proposed transfer to a non-member, (i) the proposed transferor must give notice to Dundee Beach P/L of the proposed transfer and of the transferor's proposed fair value, to be the nominated price; (ii) the company (through its directors) then within 28 days as agent of the transferor may transfer those shares to any member selected by them, or to a third person who they considered to be desirable to become a member of the company in its interests; and (iii) the price at which the directors may transfer those shares on behalf of the transferor is either at the fair value (price) fixed by the proposed transferor, or, at the purchaser's option, at the fair value fixed by the auditors under Article 5(e); and · if there is a proposed transfer to a non-member and the company has not transferred the transferor's proposed shares within 28 days of receiving the notice of the proposed transfer, the transferor within three months is at liberty to sell the shares "to any person approved by the directors" at any price. Article 5 does not deal with what was to happen if the proposed transfer, assuming the directors had not procured another member or external purchaser satisfactory to them, was to an external person who was not approved by the directors. 62 For the sake of completeness, I note that Regulation 7 of Table A to the Fourth Schedule to the Company's Ordinance 1963 (NT), which is part of the Articles of Dundee Beach P/L, provides as follows: Except as required by law, no person shall be recognized by the company as holding any share upon any trust, and the company shall not be bound by or be compelled in any way to recognize (even when having notice thereof), any equitable, contingent, future or partial interest in any share or unit of a share or (except only as by these regulations or by law other-wise provided) any other rights in respect of any share except an absolute right to the entirety thereof in the registered holder. 63 In the meantime, Sanders also decided that he wished to sell his interests in Territory Realty. He wrote to Booth about that. He was not optimistic that Booth would want to buy him out at a satisfactory price, so he also wrote to Garraway on behalf of Hassall and Kendray exposing his wish. Garraway in turn notified Hassall and Kendray of Sanders' intention in relation to his shares in Territory Realty. In the event, Sanders did not then dispose of his interest in Territory Realty. 64 The more significant negotiations seem then to have continued. The position appears to have been reached that either Hassall or Kendray would acquire from the other all of the shares in H & K Earthmoving (and thereby its shares in Dundee Beach P/L), and their respective jointly held shares in Dundee Beach P/L, together with certain other assets in which they were both interested. Territory Realty as the third shareholder was not expected, at least by Garraway and Hassall, to participate or to want to participate in that process. Nor did it. Its position appears to have been that Booth and Sanders, together with Kendray, did not think that Hassall had the resources to buy out Kendray's shares in Dundee Beach P/L. They did not take any direct part in the course of negotiation between Kendray and Hassall. They were aware of the pre-emptive rights granted by Article 5 of the Articles, and expected that any other form of transaction would be subject to those rights. Events proved them to be wrong, but not in the way which they had anticipated. 65 To this point, no notice had been given either by Kendray and Hassall, or by H & K Earthmoving to Dundee Beach P/L pursuant to Article 5(c) of its Articles. However, it is apparent, and I find, that at least from early 1999 Hassall and Garraway and Hassall's legal advisers were aware at material times of the provisions of that Article. 66 On 13 and 25 January 1999, Hassall through Clayton Utz expressed that awareness to solicitors for Kendray, in the context of suggesting that, if Territory Realty was to waive its pre-emptive rights under that Article, it would be more likely to do so at the instigation of Kendray than Hassall. In correspondence from Clayton Utz on behalf of Hassall to Territory Realty of 1 February 1999, Territory Realty was asked about its insistence on maintaining its pre-emptive rights if a proposed transfer was to take place between Kendray and Hassall and Ms Hassall and Hassall Earthmoving (which was said to be owned by Hassall and Ms Hassall). It is clear from the correspondence between Cridlands (solicitors for Kendray) and Clayton Utz, and correspondence from Garraways, that Garraway was equally aware of the implications of Article 5 of the Articles of Dundee Beach P/L. The detail of the negotiation, in particular about the taxation implications of any structured arrangement between Kendray and Hassall or their entities, indicates that clearly. 67 As I noted, in the next month or two, it appears that Territory Realty sat back awaiting the outcome of the negotiations between Kendray and Hassall through their representatives. That is probably because Booth and Sanders had the view that Hassall did not have the resources to buy out Kendray, so that ultimately Kendray would be the successful buyer of Hassall's interests and remain a shareholder in Dundee Beach P/L. They were not uncomfortable with that position. As I have noted, that proved to be wrong. 68 In either the latter part of March 1999 or on about 5 April 1999, an arrangement was come to between Kendray and Hassall with respect to their respective interests in H & K Earthmoving, Dundee Beach P/L and other assets. It involved funding being provided to Hassall through Garraway and Walker. Walker's funds were to come through Excess, and Garraway's funds through Bishop Estate. However, although those funds could legitimately have been provided by loans to Hassall, that is not the structure of the arrangement. 69 At a meeting on 12 April 1999, Garraway and Hassall announced to Booth, presumably on behalf of Territory Realty, that Kendray had sold out to Hassall. He then foreshadowed a board meeting of Dundee Beach P/L on 19 April 1999, apparently to follow immediately upon the settlement of the arrangements between Kendray and Hassall. As appears below, the transaction was quite a sophisticated one. I also find that it was structured in a way which was intended to get around the pre-emptive rights under Article 5 of the Articles of Dundee Beach P/L, and to conceal that fact from Territory Realty, in particular Booth who, on behalf of Territory Realty, was in essence running its position. 70 At that meeting, Garraway on behalf of Hassall gave to Booth a letter (prepared by Clayton Utz) which he proposed that Booth and Sanders should sign (presumably on behalf of Territory Realty). It was addressed to Hassall and Ms Hassall, concerning Dundee Beach P/L and was in the following terms: We note that you have reached agreement to purchase all the shares in H & K Earthmoving Pty Ltd and certain other assets owned jointly by Robert Kendray and Peter Hassall. The assets being acquired include 16 shares in Dundee Beach Pty Ltd which are registered in the joint names of Robert Kendray and Peter Hassall. We confirm the following:- 1. That we will join with you in passing the necessary company resolutions to:- (a) rectify the share register of the company to reflect the true ownership of shares held jointly by Robert Kendray and Peter Hassall as follows:- (i) Robert Kendray - 8 shares; (ii) Peter Hassall - 8 shares. (b) To allow you to register a transfer of any of the shares described in paragraphs 1(a)(i) and (ii) to any nominee or nominees that you choose to nominate and that we waive our pre-emptive rights (if any) in relation to any such transfer. (c) To record the resignation of Robert Kendray as a Director of the company. 2. We note that you will nominate a time for a directors and shareholders meeting of the company to deal with the above matters. We note your tentative date for this meeting is 19 April 1999. Space was left for the signatures of Booth and Sanders. 71 On 15 April 1999, Garraway wrote to Booth and Sanders again referring to the meeting of 12 April 1999 and to the arrangement which was then reported to them. It included the following: I confirm my previous advice that Bob Kendray had sold all of his interests in H & K Earthmoving Pty Ltd and Dundee Beach Pty Ltd, and that a directors' meeting has been called for Monday afternoon 19 April 1999. He requested certain documentation to be provided to that meeting. That letter was signed by both Garraway and Hassall. It did nothing to indicate that there was any transfer of shares other than between Kendray and Hassall in a way which would not engage the pre-emptive rights clause. An attached agenda for the proposed meeting included the resignation of Kendray as a director and the appointment of Garraway as a director and "share transfers" as well as a "marketing report". 72 Booth, I find, was somewhat uneasy about that letter but perhaps surprisingly somewhat passive about it. He conveyed its contents to his solicitor by facsimile of 17 April 1999. I accept that at that time he understood that Kendray's shares were to be transferred to H & K Earthmoving, which as an existing shareholder would not attract the pre-emptive rights. Shortly thereafter, he also learned that the proposed meeting of 19 April 1999 would be an informal one because there had been some delay in the settlement of the transactions between Kendray and Hassall. The next meeting was proposed on 4 May 1999. 73 The formal agreement, that is the reaching of an agreement, was recorded in a letter from Clayton Utz on behalf of Hassall to Cridlands on behalf of Kendray of 12 April 1999. 74 On 29 April 1999, Clayton Utz (Philip) wrote to Garraways (Garraway) discussing the proposed transaction. He suggested three transfers to be prepared for the directors of Dundee Beach P/L meeting on 4 May 1999: (1) Kendray to H & K Earthmoving of his interest in eight shares, to be held on trust for Bishop Estate, on the basis that the trust was not to be stated on the transfer but created by a separate declaration of trust; (2) Kendray to H & K Earthmoving of his interest in eight shares, to be held on trust for Excess, but on the same basis; and (3) Hassall to H & K Earthmoving to be held on trust for Excess and Bishop Estate his interest in two shares again to be subject to an undisclosed trust. 75 The letter then commented: Cridlands have suggested that in order for H & K Earthmoving to be nominated as the Transferee, H & K must already have resolved to agree to do so. I have disagreed and have said that H & K will hold a separate meeting after settlement to resolve to execute the Transfers. This is an important issue because of the declarations of trust for the 2 transfers which they do not know about it. If a resolution has to be made by H & K prior to settlement then we will need to disclose the existence of the trusts. I am awaiting a response from Cridlands on this point before we can resolve the form of the transfers in Dundee Beach Pty Ltd. 76 Following the transfers, and the subsequent declarations of trust, the holding in Dundee Beach P/L was to be: Territory Realty - 16 Excess / Bishop Estate - 9 H & K Earthmoving - 16 Hassall - 7 In that way, Hassall would be seen to hold less than 50 per cent of Dundee Beach P/L, and Territory Realty would not know of the real nature of the transaction because the declarations of trust in Kendray's transfer of shares in Dundee Beach P/L, or his interest in the shares in Dundee Beach P/L would be not disclosed. 77 That letter of 29 April 1999 reflects what was clearly the common understanding of Garraway, Excess and Bishop Estate and Hassall. It was that the transferee H & K Earthmoving had been nominated as transferee to avoid the attraction of Territory Realty to any concern about its pre-emptive rights. That letter was produced only during the cross-examination of Garraway. Although the respondents had opened their case at the hearing to say that Philip would be called, he was not in fact called to give evidence. I have no explanation for the contents of his letter other than its words.

THE TRANSACTION OF 4 MAY 1999 78 Before discussing the detailed nature of the transaction of 4 May 1999, and the events surrounding it, it is necessary to say something about the reliability of the evidence of certain witnesses, in particular Garraway. 79 Of those persons who were involved, or interested in, the negotiations leading up to Kendray's departure from Dundee Beach P/L on 4 May 1999, only Booth, Sanders, Kendray and Garraway gave evidence. Of course, to the extent he had any direct involvement, Walker could not give evidence. Hassall did not give evidence. Also, Philip was not called to give evidence. I infer that their evidence on the issue of the reason or reasons for structuring the arrangement between Kendray and Hassall as it was, and for the nature and content of any communications with Territory Realty, would not have advanced the respondents' case, at least beyond what is disclosed in the documentation. Territory Realty was, at the time, represented by David de Winter, solicitor. His written statement was tendered by the applicants. He was not required for cross-examination. I accept his evidence. The secretary of Dundee Beach P/L at the time, Paul Proctor, was not called to give evidence but the explanation for that lies in his illness. I accept he could not give evidence. David Fuller attended the meeting of 4 May 1999 as proxy for Booth, who was overseas in May 1999. He gave brief evidence. He was not really challenged in cross-examination. I accept his evidence, although not surprisingly, given his limited earlier exposure to the background to the meeting, he was not particularly assertive in what he said. His memory of that meeting accords largely with that of Sanders. 80 I found Sanders to be an impressive and reliable witness. He was straightforward. He did not appear to gloss over issues, nor to seek to enhance the position of Territory Realty beyond his memory. He had largely left its interests to Booth in the later part of 1998 and in 1999. However, his evidence of what transpired on important occasions, including the meeting of 4 May 1999, was given directly, and in a natural manner. It accorded with certain of the other contemporaneous records. It tied in with the notes of Proctor. I accept his evidence. 81 Booth's evidence was, in my view, on the whole reliable. Much of it was unchallenged. It reflected a person who, not surprisingly, was anxious for the proceeding to be successful so on occasions it was somewhat defensive. In particular, I think his explanations for why Territory Realty was not more pro-active in protecting its asserted interests in the period from 2000 to 2007 requires careful consideration. I shall refer to that later. In addition, in some respects, I found his views about the appropriateness of actions taken, or not taken, by the board of Dundee Beach P/L after 19 May 1999 (when Booth and Sanders were removed as directors) somewhat overstated. That does not detract from my overall impression that he was a generally reliable witness, but I have treated his evidence with a little caution. 82 Kendray's evidence was given in a straightforward manner. He is disinterested in the outcome of the proceeding. His evidence was not challenged by the respondents. I accept it. 83 Garraway's evidence is more difficult to assess. He is clearly an experienced and successful businessman, as well as an accountant. Clearly, too, he was the driving force, or one of the driving forces, in the structure of the transfer of Kendray's interests in Dundee Beach P/L to Hassall's interests, and of course of Kendray's interests in H & K Earthmoving. He was also clearly the driving force in the operations of Dundee Beach P/L after 4 May 1999. I was not impressed by certain aspects of his evidence. I thought he was sometimes less than frank in giving his evidence and sometimes responsive but in a semantic way. In particular, I formed the view that he was not reliably telling the Court about the reasons for the terms of his communications with Territory Realty or with Booth and Sanders in April and May 1999 and I consider that he deliberately concealed the fact that Bishop Estate and Excess were taking an equitable interest in shares in Dundee Beach P/L. Unfortunately, that conclusion coloured my preparedness to accept other parts of his evidence without some caution. It may be that his evidence was given that way because he had a strong belief in the correctness of his actions and in his ability to run Dundee Beach P/L better than it had been run in the past. It may be that his strong belief in the ability of himself and Walker as prominent businessmen in Darwin has led him to lose sight of perhaps more venial motives initially in becoming involved as an investor in Dundee Beach P/L. I do not need to speculate about those matters. It is sufficient to say that in certain respects I have approached his evidence with caution. I will, of course, refer to those respects when recording my findings on particular matters. 84 I accept Booth's evidence, in preference to that of Garraway, that Garraway at the meeting on 12 April 1999 did not disclose that more was contemplated than a transfer from Kendray to Hassall, through H & K Earthmoving. I accept that Garraway did not disclose to Booth the handshake agreement involving Excess and Bishop Estate, or that Excess and Bishop Estate were to be the real purchasers of nine shares in Territory Realty. I further find that at that time Garraway was aware, as he had acknowledged in his cross-examination, of the pre-emptive rights restriction. Territory Realty had earlier indicated that it would object to a transfer to a non-member which did not take account of its pre-emptive rights. That is exactly what Garraway together with Hassall intended to achieve, namely to avoid Territory Realty having the opportunity to exercise those rights. At best, Garraway's communications to Booth at the time could be described as dissembling, and at worst as dishonest. 85 It is apparent that the precise roles of Excess and Bishop Estate in becoming "members" of Dundee Beach P/L (at least as beneficial owners of shares) was not made apparent, and deliberately not made apparent, until the last possible moment. Obviously at the trial, that material would have come out. The true facts were not disclosed until Garraway's affidavit of his proposed evidence was filed and served in late January 2008. There had been earlier correspondence from solicitors for Territory Realty, including letters of 10 and 19 April 2007 requesting precisely that information, but it was not adequately responded to. It will be necessary to refer to that correspondence later in these reasons for a related purpose. 86 I also accept the unchallenged evidence of a telephone conversation from Garraway to Winter in which Garraway advised Winter (on behalf of Booth for Territory Realty) that the shares were to be transferred not to Hassall or Ms Hassall, but to H & K Earthmoving, so that the pre-emptive problem did not arise. That is recorded in the contemporary file note of Winter. Winter's evidence was not challenged. Nevertheless, despite counsel for the respondents having acknowledged those matters, in his evidence Garraway challenged the accuracy of the critical statement attributed to him that the pre-emptive problem did not arise. That is directly inconsistent with a file note Garraway made on about that time in which he recorded that he had "advised David Winter 15 April 1999 no requirement pre-emptive rights". In fact, as I find and as Garraway ultimately had to acknowledge, in the face of that material, he had deliberately and carefully chosen his language in what he described as circumspect approach. 87 Garraway maintained that position at the meeting of 19 April 1999, namely that Kendray's shares would be transferred to H & K Earthmoving. Again, Garraway carefully chose his language so as not to disclose the real identity of the purchaser of at least nine shares in Dundee Beach P/L. 88 In my view, Garraway on behalf of those whom he was representing, including Excess and Bishop Estate and Hassall, deliberately sought to disguise the involvement of Excess and Bishop Estate as the real buyers of shares in Dundee Beach P/L. That was maintained on an agenda which Garraway prepared for a proposed directors' meeting on 4 May 1999, sent to Booth and Sanders, confirming the previous position as explained, namely that Kendray had sold his interests in H & K Earthmoving and Dundee Beach P/L without disclosing to whom they had been sold. 89 I also find that Garraway and Philip structured the transaction at least in part to overcome the pre-emptive rights issue. 90 A directors' meeting of Dundee Beach P/L then took place on 4 May 1999. Booth was not present, then being overseas. He was represented by a proxy, Fuller. Sanders was also present. Garraway, Philip and Hassall were present and the company secretary, Paul Proctor. 91 There is some dispute about what transpired at that meeting. One set of minutes was prepared by Philip, and another by Proctor. 92 I accept Sanders' evidence of the meeting. There was a mass of paper at the meeting. It was not carefully considered by him or Fuller (on behalf of Booth) because they understood beforehand that the shares were being acquired by Hassall for H & K Earthmoving and that no pre-emptive rights issue arose. Early in the meeting, Philip made a presentation as to the nature of the transaction. It was detailed and complex. In essence, it involved the resignation of Kendray as a director, and the sale of his interests in Dundee Beach P/L to Hassall or his interests. He specifically said, I find, that there were no pre-emptive rights issues. I also find that he did not expressly refer to Bishop Estate or Excess, or to any proposed declarations of trust in relation to any shares to be transferred to H & K Earthmoving. 93 Proctor's proposed minutes were sent to Garraway who read them at the time. He did not take any point about the accuracy of their recording that Philip said that there were no pre-emptive rights issues. Proctor's minutes were not adopted by the directors. They adopted a more formal and structured set of minutes, apparently prepared by Philip. 94 Share transfers were tabled, but contrary to the approved minute which says that they were "carefully considered" by the directors, I find that that did not occur. The share transfers involved Kendray separately transferring his interest in two lots of eight ordinary shares in the company held jointly with Hassall to H & K Earthmoving. Those transfers, as Philip, Garraway and Hassall intended, did not disclose the trusts upon which H & K Earthmoving was to hold them. The third share transfer involved Hassall transferring his interest in two ordinary shares to H & K Earthmoving "as trustees for Bishop Estate Pty Ltd". I find that that document was not drawn to the attention of those present at the meeting. I find that the document was presented at the meeting but, as the approved minute records, as A transfer by Peter Hassall of his interest in two shares in the company currently held by him with Robert Kendray to H & K. That transfer in fact records that the transfer is in respect of the payment made by "H & K Earthmoving as trustee for Bishop Estate and Excess". 95 As I have said, I accept the evidence of Sanders and Fuller, that the share transfers were presented or "tabled" but those present were told by Philip that the transfers did not involve any pre-emptive rights issues. Garraway remained silent. He did so deliberately. 96 I should at this point address some particular evidence. 97 On 5 May 1999, as the evidence shows, "Independent Management Services" secured a copy of the ASIC company extract relating to both Bishop Estate and Excess. As noted above, that would have disclosed that Garraway and Woolley were the directors and shareholders of Bishop Estate and that, at the time, Walker was a director of and the principal shareholder of Excess. I find that those company searches were initiated by Proctor. Why he did so is unclear. I accept the evidence of Booth and Sanders that up to that time, and indeed for some time thereafter, they had not heard of Excess and Bishop Estate. Whether Proctor was prompted by looking at the documents which had been "tabled" at the meeting after the meeting, and saw the reference to Excess and Bishop Estate in the third transfer referred to above, is unclear. It may have been prompted by the transfer of the Hassall share (or two half shares) which, as I have noted, set out that that transfer was to H & K Earthmoving as trustee for Bishop Estate and Excess. In any event, I do not ascribe his then awareness of some involvement of Bishop Estate and Excess to that of Territory Realty in the circumstances. It is a question of fact whether an individual who receives, or becomes aware of, certain information received, or has, that information as agent for another. I accept Booth's evidence, and that of Sanders, who were the two driving minds of Territory Realty that they did not receive that information at the time. I do not consider that Proctor received it, in the sense of becoming aware of it, at the meeting on 4 May 1999. He did not raise it at the meeting. Booth's agent, that is Fuller who attended the meeting as his proxy, did not receive it. If, as seems likely, Proctor later noticed the names of Bishop Estate and Excess when going through the papers tabled at the meeting in the circumstances I have found, in my judgment his then awareness of those names was not knowledge of Territory Realty. Fuller was the proxy for Booth at the meeting and Sanders was present as the other moving mind behind Territory Realty. They were the two nominees of Territory Realty on the board of Dundee Beach P/L. At that meeting, I find that Booth and Sanders were the agents of Territory Realty for the purpose of receiving information: cf Lennard's Carrying Co v Asiatic Petroleum Co Ltd [1915] AC 705. Proctor was present merely as its secretary. His later awareness of that information was not received as the agent for Territory Realty, and those who were its agents did not have passed on to them by Proctor that information: see A/S Rendal v Arcos Ltd [1937] 3 All ER 577 at 590. In any event, it was disclosed in respect of only one of 48 shares in Dundee Beach P/L. I would not infer that the transfer of only one share on those terms would have attracted real concerns on the part of Territory Realty, as it would have if reported to a directors' meeting before the transfer. I do not, therefore, need to consider whether it is appropriate to have received the evidence about the company searches having regard to the circumstances in which it was acquired. 98 There is a further grouping of evidence which should be noted. On 15 September 1999, Proctor, the company secretary of Dundee Beach P/L, copied a facsimile to Booth in which he referred to "the new shareholders" of Dundee Beach P/L having made "us" (presumably Territory Realty) a nominal offer for their shareholding. Booth, a few days later by facsimile, sent an email to Deloittes in which he said the following: As you would be aware, the new shareholders of the above company (Dundee Beach P/L) have terminated by directorship. and therefore notified Deloittes of a change of address. Subsequently, Territory Realty on 14 October 1999 wrote to Garraway following up on the letter of 10 May 1999 referred to above. Territory Realty said that it would consider selling its shares in Dundee Beach P/L based on the balance sheet of that company, and taking into account the land valuation conducted by a Mr Mooney. It again nominated a figure of $1.5m for its shares, including a preparedness to repay the existing shareholders' loan account (netted at about $123,000) and releasing Dundee Beach P/L or the purchasers (whoever they may be) from various claims including the claim that: Territory Realty Pty Ltd would release any claim it may have in respect of the registration of the transfer of shares disposed of, inter alia, by Mr Kendray. 99 I note further that by letter of 12 October 2001, Dundee Beach P/L wrote to a solicitor then acting for Territory Realty, which said the shareholding of Dundee Beach P/L included H & K Earthmoving holding nine ordinary shares ("Held Non-Beneficially"). 100 The references in that material might be interpreted as indicating that Territory Realty was aware of the interest of Bishop Estate and Excess in Dundee Beach P/L at the time of those various communications. I have carefully considered whether that is so. However, I accept the evidence of Sanders and Booth that they were not aware of that interest until some time towards the latter part of 2003, or perhaps a little later. Booth in his evidence explained that the reference to the transfer of shares disposed of by Kendray involved a suspicion of possible impropriety because Kendray's transfers somehow involved Hassall's interests when Hassall's interests (beyond Hassall himself) were not shareholders. I accept that the references to the new shareholders was an imprecise expression to refer to the fact that Hassall constrained by Kendray's interest from exercising the majority shareholder's influence. He was seen to be doing so by his appointment of Garraway and others to the board and his removal of Booth and Sanders as directors. 101 I find, however, that at least by 29 May 2003, Territory Realty through Booth and Sanders knew of some interest on the part of Bishop Estate and Excess in Dundee Beach P/L. Booth said he had that awareness at that time. It is unclear whether he had that awareness much earlier. The position was made quite explicit shortly afterwards. 102 The minutes of meeting of shareholders of Dundee Beach P/L on 29 May 2003 record those present as Garraway on behalf of "Bishop Pty Ltd / H & K Earthmoving Pty Ltd" and Walker on behalf of "Excess Pty Ltd / H & K Earthmoving Ltd" and Woolley on behalf of "Bishop Pty Ltd / H & K Earthmoving Pty Ltd", as well as Booth, Sanders and Hassall. However, Booth's notes of that meeting do not record the entities on whose behalf persons were present, but simply the names of those present. 103 On 12 February 2004, Garraway wrote to Territory Realty confirming a discussion of a few days earlier, and confirming in particular that the Hassall group had transferred 16 shares in Dundee Beach P/L to Excess and Bishop Estate, so that the share register of Dundee Beach P/L showed as follows: Shareholder No of Shares % of Shareholding of Group H. & T. Hassall 5) H & K Earthmoving P/L 2) 14.6%

Excess Pty Ltd 12) Bishop Estate Pty Ltd 12) 52.1% Excess & Bishop Jointly 1) Territory Realty Pty Ltd 16 33.3% 48 100.0%

That letter pointed out that, by reason of that purchase, Excess and Bishop Estate had acquired a joint controlling interest in Dundee Beach P/L, and offered to purchase Territory Realty's 16 shares in Dundee Beach P/L for $800,000 conditional on repayment of the debt of Territory Realty to Dundee Beach P/L. By letter of 11 March 2004, Territory Realty acknowledged the notice of change in shareholding without adverse comment, but declined to accept that proposal. 104 Subsequently, on 29 July 2004 Garraway wrote to Territory Realty notifying it that Hassall had transferred his remaining seven shares to Excess and Bishop Estate, so that each of Territory Realty, Excess and Bishop Estate held 16 shares in Dundee Beach P/L. The offer of $800,000 was reiterated. It was rejected. But the rejection on 27 August 2004 again acknowledged the change in the shareholding. 105 There is another reason why, in my view, the Proctor version of the minutes as adopted and understood by Sanders, is more likely to be a reliable record of what transpired at the meeting. It is more contemporaneously expressed, and includes reference to two additional directors to be nominated or proposed to be nominated, namely Walker and Woolley. That is not recorded in the formal minutes of the meeting. 106 I find that the transaction which then occurred as a result of negotiations up to that time between Kendray and Hassall and their respective advisors was that: (1) Kendray transferred his joint interest in eight shares to H & K Earthmoving; (2) Kendray transferred his joint interest in those eight shares to H & K Earthmoving by separate transfer; (3) H & K Earthmoving had previously agreed that those transfers should be held by it on trust for Bishop Estate and Excess, and subsequently and separately formal declarations of trust were executed to give effect to what had previously been agreed; (4) H & K Earthmoving paid Kendray for the transfer of his interest in those 16 shares with funds made available to it by Bishop Estate and Excess equally; and (5) Hassall on 4 May 1999 transferred his half interest in two of those shares (by then held as tenants in common rather than jointly because of the earlier transfer by Kendray of an interest in those shares severing the joint tenancy) to H & K Earthmoving pursuant to a declaration of trust held by H & K Earthmoving in favour of Excess and Bishop Estate jointly as that transfer reflected. 107 I will separately discuss the significance of those transactions, including the trusts which I find existed contemporaneously with the making of the agreement for the transfers and at the time of the transfers of those interests in the shares. 108 In my judgment, the effect of the handshake agreement as recorded and implemented was for Hassall and H & K Earthmoving to pass ownership and control of nine shares in Dundee Beach P/L jointly to Bishop Estate and Excess on 4 May 1999. Those nine shares represented nine of the 16 shares held by Kendray and Hassall jointly prior to that date. They were transferred, as to Kendray's half interest in each of 16 shares by Kendray transferring them to H & K Earthmoving (then controlled or imminently to be controlled by Hassall) and Hassall through H & K Earthmoving having agreed to declare a trust in respect of that interest in those shares. Hassall similarly transferred a half interest in two of those shares to H & K Earthmoving, declaring at the same time a trust on behalf of H & K Earthmoving to hold that interest in those two shares for Bishop Estate and Excess. Hassall retained seven of those 16 shares. Hassall also controlled the 16 shares previously held by H & K Earthmoving in its own name. 109 That arrangement came to be reflected in the share registers of Bishop Estate and Excess made on 27 June 2003, although subsequently reversed on advice on 1 June 2007. Whatever internal advice Bishop Estate and Excess may have had, or by that time Dundee Beach P/L may have had, about what should have been reflected in their share registers, the reality is that the ownership in nine shares in Dundee Beach P/L was from 4 May 1999 as follows: Territory Realty - 16 shares H & K Earthmoving in its own right - 16 shares H & K Earthmoving as trustee for Bishop Estate and Excess - 9 shares Hassall in his own right - 7 shares. I note that Kendray's interests in those shares were transferred at a value of approximately $76,250 per share. I shall call those transactions "the 4 May 1999 share transfers". 110 I also find that Territory Realty (either through Booth or Sanders) was not aware of the trust elements of those transactions at any material time at least until some time in 2003. 111 There were subsequent share transactions on the share register of Dundee Beach P/L which it is convenient to note at this point. 112 Pursuant to an agreement of 12 November 2003 between H & K Earthmoving and Hassall on the one hand and Excess and Bishop Estate on the other, H & K Earthmoving sold to Excess and Bishop Estate separately seven of the shares it then held in Dundee Beach P/L in its own right, a total of 14 shares, and Hassall sold Bishop Estate and Excess one share he held in Dundee Beach P/L in his own right (the 2003 share transfers). That reduced the shareholding of H & K Earthmoving held on its own behalf from 16 to two shares and the shareholding of Hassall held on his own behalf from seven to five shares. Again, I accept that Territory Realty did not know of that transaction at that time or indeed until late 2007. Subsequently, on 2 July 2004 Hassall and H & K Earthmoving transferred their remaining seven shares to Bishop Estate and Excess (the 2004 share transfers). Those share transfers occurred at a price of $50,000 per share. 113 In respect of each of those transactions, no notice was given pursuant to Article 5 of the Articles of Dundee Beach P/L to Territory Realty. 114 Again, I accept that neither Territory Realty nor Booth nor Sanders knew of that further share transfer at any material time until late 2007. 115 It is also necessary to make some findings about what Territory Realty would have done had a notice been given, and Territory Realty had been given an opportunity, to purchase in particular the nine shares transferred in the manner referred to, and held on trust jointly for Bishop Estate and Excess on 4 May 1999. 116 I have noted earlier that in October 1998, Kendray, Booth and Sanders together proposed to buy out Hassall's interest in Dundee Beach P/L (that is, one half of the 16 shares jointly held by Kendray and one half interest in the 16 shares held by H & K Earthmoving) for a sum in the order of $1.2m, earlier $1m and forgiveness of the loan account of about $129,000. Kendray's evidence was that he had the capacity to complete that transaction. I am satisfied that, on behalf of the remaining shareholders in Dundee Beach P/L, the price at which Hassall sold his various shares in 1999 and in 2003 and 2004, a total in effect of about $920,000, would have been able to have been paid by Kendray, and as he said, to the intent that he would then have offered a half interest in those shares to Territory Realty through Booth and Sanders. 117 Booth gave evidence that he and Sanders would have and could have purchased the nine shares from Hassall and Kendray in May 1999, at the price at which they had been paid. I infer, in addition, that the efforts on behalf of Hassall through Garraway to conceal the true nature of that transaction at the time was to avoid that opportunity being given to the existing shareholders of Dundee Beach P/L in circumstances where there was a realistic expectation that the other shareholders in Dundee Beach P/L may well have met the "fair price" nominated by Hassall or the "fair price" as determined by the auditors, assuming one or other of those amounts was likely to be (as I find it was) around the mark of that which Kendray agreed to sell those shares in equity to Bishop Estate and Excess through H & K Earthmoving. 118 I also find on the evidence of each of Booth, Sanders and Kendray that they would have continued to operate Dundee Beach P/L between the three of them on a 50/50 basis as a form of quasi partnership.

EVENTS SUBSEQUENT TO 4 MAY 1999 119 It did not take long for Garraway as a director to exert his influence in conjunction with Hassall on the future direction of Dundee Beach P/L. 120 Booth and Sanders were removed as directors at a meeting of the company called on and held on 18 May 1999. Those present were recorded as Hassall and Garraway as holding a proxy for H & K Earthmoving. That followed a notice of a meeting for that purpose issued on 7 May 1999 by Garraway. 121 Hassall remained a director until 6 October 2003. On 4 May 1999, Allan Garraway was appointed as a director, and on 26 August 1999 Walker and Woolley were appointed as directors. On 20 April 2005, (following Walker's death) David Walker and Pokorny were appointed as directors. Consequently, the current directors are Garraway, Woolley, David Walker and Pokorny. 122 In addition, on 10 May 1999, the company under the hand of Garraway wrote to Territory Realty regarding the possible sale of its shares in Dundee Beach P/L. An offer was made of $500,000 for the 16 shares. Garraway was unable to explain how that figure was arrived at. Territory Realty counter-proposed a figure of $1.5m for its 16 shares. Those negotiations came to nothing. Thereafter, apart from shareholders' meetings held periodically, neither Territory Realty nor Booth nor Sanders were aware of, nor informed of, the further conduct of Dundee Beach P/L. They retained their interest as shareholders but adopted a very passive role. 123 Since 18 May 1999, at all material times Territory Realty, broadly speaking, has received only the annual financial statements relating to Dundee Beach P/L, and information provided at shareholders' meetings in May 2003, July 2005 and July 2006. They have not otherwise received information regarding the operations of Dundee Beach P/L, its strategic plans or changes in them, its substantive position including any revaluation of its real estate assets, or any investigations or feasibility studies or costings undertaken by it. 124 Booth and Sanders have therefore been in a difficult position in terms of determining the value of Territory Realty's interest in Dundee Beach P/L. Apart from the information provided at those shareholders' meetings and from the financial statements, they have made extensive requests both directly and through solicitors for more information without positive response. They were aware, as was common ground, that in May 1999, the then directors of Dundee Beach P/L "put on hold" the sales of further land or further development pending a review of the status of Dundee Beach P/L and the development of a long term strategic plan. 125 By letter of 31 May 2005, Dundee Beach P/L informed Territory Realty that the directors had declared and paid a fully franked dividend to shareholders of $10,000 per share, so that Territory Realty was entitled to $160,000. That sum was reduced by the outstanding loan account and interest, and the further sum of legal costs incurred of $4,000 in respect of the ANZ Bank calling off its guarantee, leaving a figure of $7,312. A table calculating the amount outstanding (representing uncontentious figures to the extent of the shareholders' loan accounts in credit of $220,500 and in debit of $96,875) was included. Thereafter interest was added on 1 November 1996 at $24,500 per year. The $4,000 deduction represented fees of solicitors billed on 27 December 2001 relating to advice re guarantees in favour of ANZ Bank. 126 Somewhat surprisingly, there was no vigorous response to that communication other than a request for a shareholders' meeting which was held on 19 June 2005. 127 As a matter of significance, that is as perhaps prompting the next action on behalf of Dundee Beach P/L through its directors, solicitors for Territory Realty formally wrote to Dundee Beach P/L requesting information regarding its operations by letter of 21 December 2006. That letter asserted the instruction that the directors of Dundee Beach P/L had acted in their own interests rather than the interest of the members as a whole, including the payment of excessive management/consultancy fees to the shareholders, had improperly excluded Territory Realty from participation in the management of the company, and sought extensive information. Furthermore, a follow-up letter of 22 December 2006 requested further information and response to a number of questions concerning the operations of Dundee Beach P/L. That letter was responded to by Dundee Beach P/L writing directly to Territory Realty. It denied the allegations, and refused to provide further information. It also provided a proposed agenda for a February 2007 shareholders' meeting which included the possibility of a share issue. 128 On 14 February 2007, the directors of Dundee Beach P/L informed shareholders of a share issue which they had finalised at an earlier directors' meeting on the same day. The proposed share issue was to fund $7.5m of an estimated development cost of $10m, the balance to come from cash reserves and further borrowing. The dye by then was well and truly cast. 129 The conduct of Dundee Beach P/L since 1999, whatever its quality, is not said to have been legally inappropriate in relation to its assets except in six specified respects. They are: 1. the Rainforest Block; 2. the dump site (Section 3054); 3. the school site (Lot 21 Subdivision); 4. the Stage 4 25 Lot 2 ha subdivision development proposal; 5. the four CP lots converted; and 6. the 2/3 shareholding in The Pumphouse Gang Pty Ltd. Five of those six matters are also referred to earlier in these reasons. 130 Before turning to those matters, and to other matters concerning the "oppression claim", I shall address the causes of action arising out of the 4 May 1999 share transfer.

THE SHARE TRANSFERS AND ARTICLES 131 The primary claim of the applicants is that the equitable interest taken by Bishop Estate and Excess in nine shares in Dundee Beach P/L from 4 May 1999 amounted to a transfer of those shares in contravention of Article 5 of the Articles of Association of Dundee Beach P/L. Article 5 was engaged in the circumstances, the procedure prescribed by Article 5(b) and (c) was not followed. 132 I have addressed what would have happened had notice been given by either Hassall or Kendray that they, or one of them, desired to transfer the nine shares at a "fair value" of $76,500 each. The question which then would arise is as to the consequences of the failure to have given that notice, particularly given the elapse of time since then and the virtually total inactivity for a number of years on the part of Territory Realty in relation to that failure, including from mid 2003 when it was aware that somehow Bishop Estate and Excess had an interest in Dundee Beach P/L. 133 In my view, Article 5 is intended to restrict the transfer of a share to a non-member, including by transferring the equitable rights and interests in a share at least where the transfer is intended to, and does, transfer both the legal and equitable interests at the one time, if not technically by the same document. Here, the intention of Hassall on behalf of H & K Earthmoving was that H & K Earthmoving would not have the equitable interest in those nine shares at any point in time. It was always, upon the transfer by Kendray (and himself), to rest in Bishop Estate and Excess. 134 It is trite to accept that restrictions on a shareholder disposing of shares in a company should be clearly expressed: Australian Metropolitan Life Assurance Co Ltd v Ure (1923) 33 CLR 199 at 216. But one might rhetorically ask in such a circumstance as the present: what is the value of the share without the benefits it confers? Why should the artifice of separating legal and equitable title in the shares, by subterfuge, be intended to be permitted when the direct transfer of legal and equitable title not be permitted? That is the rationale underlying the decision in Lyle & Scott Ltd v Scott's Trustees [1959] AC 763, and see in particular the observations of Lord Keith at 785. Regulation 7 of Table A, also part of the Articles prohibits except as required by law the recognition by members of any trust in any of the shares of Dundee Beach P/L. In my view, that provision fortifies the conclusion I have reached. In essence, neither Hassall nor H & K Earthmoving (nor Kendray) was empowered to give an equitable interest in shares held by them to a third party. Bishop Estate and Excess took the "benefit" of the declaration of trust by H & K Earthmoving in the face of that provision, but knowing through their solicitors and through Garraway of the terms of the Articles. Restrictions on transferability are equally as binding on Bishop Estate and Excess, as putative equitable holders of those shares, as on the members. In another context (namely the rights of an equitable mortgagee of shares upon foreclosure) so much was found: Hunter v Hunter [1936] AC 222. 135 I do not consider that the decision in Hagan v Waterhouse (1991) 34 NSWLR 308 directs any different conclusion. Kearney J at 389-90 concluded that the proper construction of the relevant article in that case and in those circumstances was not concerned with the creation of equitable interests as ordinarily understood. It involved the application of the relevant article to an involuntary transfer arising from the imposition by law of a constructive trust. 136 Here, there are clear indications in the nature and activities of Dundee Beach P/L and in the Article itself which point to a contrary conclusion: see Lion Nathan Australia Pty Ltd v Coopers Brewery Ltd (2006) 156 FCR 1. The company was, as I have found, a vehicle for a quasi-partnership to acquire and develop Dundee Downs and Dundee Beach. It involved significant personal input from each of the shareholders, having regard to their particular skills and experience. It was in that context that, apparently, Article 5 was introduced. Its clear purpose was to ensure that existing shareholders should have the opportunity to control its affairs and its destiny. Even if that context be put aside, Article 5 itself has clear indications that the directors of Dundee Beach P/L intended to retain control of those who may be or become shareholders and those who may be or become able to direct its affairs (including an equitable owner of shares). Article 5(b) and (c) firstly permits transfer to a particular member, but alternatively through the directors to any member or "any person selected by the directors as one who it is desirable in the interests of the company to admit to membership". And even in the case where the directors do not find a transfer satisfactory to them, Article 5(g) requires the proposed transfer to be approved by the directors. Those references confirm the desired interpersonal nature of the members of the company. It is not a feature that could be preserved if the legal and equitable interests in the shares could be separated in the way that was done. Moreover, the process for transfer of shares in Article 5 contemplates the selection of a "fair value" price. The proposed transferor under Article 5(c) is to specify that value. At that point, of course, the legal and equitable interest in the shares to be transferred remains in the proposed transferor. The "fair value" to be specified clearly relates to the real value of the rights and interests which attach to the shares, and not simply to the legal title. Indeed, if it was a bare legal title, the value would be nil or close to nil. How would the proposed transferor express that? It is clear anyway that "fair value" means the fair value of each of the shares in the company, with the rights and interests which they carry. Article 5(e) makes that plain. There is no scope, therefore, to have a fair value of other than the full rights and interests which a share in the company carries. Finally, an additional but minor feature of Article 5(b) is the expression "admit to membership", which I consider also conveys the sense of membership in the sense of enjoying the rights and interests attached to shares; otherwise admission to membership could be mere tokenism. 137 I add that the decision I have made on that question is of course confined to the particular circumstances. It is not intended to indicate whether a shareholder might use shares in Dundee Beach P/L to support some other borrowing, by way of equitable mortgage or otherwise, or to determine what rights an equitable mortgagee (if one may exist in relation to shares in the company) might have either generally or upon default in meeting obligations associated with the mortgage: cf Adelaide Building Co Pty Ltd (in liq) v ABC Investments Pty Ltd (1990) 8 ACLC 445. Nor is it intended to address the application of Article 5 to the case of the testamentary disposition of shares: cf Safeguard Industrial Investments Ltd v National Westminster Bank Ltd [1981] 1 WLR 286; Safeguard Industrial Investments Ltd v National Westminster Bank Ltd [1982] 1 WLR 589. My decision as to the applicability of Article 5 in this case is confined to the particular facts which I have found to exist. 138 In my judgment, Article 5 operated to confer on the shareholders of Dundee Beach P/L in relation to the proposed transfer of the nine shares in Dundee Beach P/L the right to seek declaratory orders that the proposed transferors should comply with the process prescribed by Article 5, and for injunctive relief directing that process be undertaken. Bishop Estate and Excess, to the extent that their interests may have been affected, would have taken any interest in those nine shares (if they could in the face of Regulation 7 of Table A) with notice of the terms of the Articles. Any remedy they would have would lie against the transferors for repayment of the monies they had paid, through H & K Earthmoving. And such relief would not have been refused as being futile, as I have found that Territory Realty may well have had the resources to have met the proposed price for those nine shares. 139 However, such action was not taken promptly by Territory Realty, even when it came to learn of the interest of Bishop Estate and Excess in those nine shares. I shall refer to the significance of that delay below. 140 It follows from the above that the transfers of further shares in Dundee Beach P/L and Hassall to Bishop Estate and Excess on 25 November 2003, that is the 2003 share transfers, also plainly contravened Article 5 of the Articles of Dundee Beach P/L. Neither Bishop Estate nor Excess was a shareholder of Dundee Beach P/L at the time. Territory Realty, in practical terms, was the only other member which may have purchased those shares. No notice was given pursuant to Article 5(c) by the proposed transferors, and (so far as the evidence shows) no resolution was passed by the directors selecting either Bishop Estate or Excess as a desirable person in the interests of the company to admit to membership. 141 I have found that Territory Realty, through both Booth and Sanders, came to know at the 29 May 2003 shareholders' meeting of Dundee Beach P/L that Bishop Estate and Excess somehow had an interest in Dundee Beach P/L. Garraway clearly ran the meeting, and at that time indicated that. Booth's own notes of that meeting record that fact. How that state of affairs came about was not, however, then disclosed. Nor was it disclosed until January 2008. And, as I have concluded, that information was requested on behalf of Territory Realty from time to time prior to that date. 142 I also find that for some time prior to 25 November 2003, Booth and Sanders had been uneasy about the obviously dominant role Garraway in particular had taken in running the affairs of Dundee Beach P/L. He chaired the shareholders' meetings and led the discussion at them. He appeared to have control over the information available to the company. Hassall's role was nowhere near as assertive. That unease did not amount to knowledge of the interest of Bishop Estate and Excess in Dundee Beach P/L. It is also easier to understand the passiveness of Territory Realty in that period of four years or so between May 1999 and May 2003 in the light of the personalities involved. Sanders by then was somewhat remote from the affairs of Territory Realty. Booth and Sanders had accepted the fact that Territory Realty was a minority shareholder (as it always had been) in a changed environment. The "partnership" relationship had ceased. Territory Realty remained as an investor, in a company developing land which was under no financial pressure at May 1999 and with substantial and potentially appreciating real estate assets. And, as Booth and Sanders both said, they did not wish to confront those then driving the affairs of Dundee Beach P/L both because they were desirous of selling the Territory Realty shares on an amicable basis, and perhaps equally importantly they perceived both Walker and Garraway as significant and powerful men who it would, in general, be difficult and unhelpful (to an amicable and satisfactory buyout) to confront. Certainly, from the tone of the shareholders' meetings, and from the communications between the parties, and from my impression of Garraway as a witness, he was a forceful, capable and somewhat uncompromising personality. 143 I do not accept that, in that four year period to May 2003, Territory Realty had sufficient awareness of the involvement of Bishop Estate and Excess as "equitable" shareholders in Dundee Beach P/L to amount to acquiescence in the infringement of its rights under Article 5 of the Articles during that period: cf Orr v Ford (1989) 167 CLR 316. 144 As I have found, later that year and early in 2004, the direct transfers of the remaining H & K Earthmoving and Hassall shares to Bishop Estate and Excess occurred. Those transfers were disclosed to Territory Realty. It did nothing about them until 10 April 2007, when it asserted its rights under Article 5 and also expressed concern about what by then it suspected (at least in a general way) was the nature of the 4 May 1999 share transfers. It sought information about those transfers. The requested information was not then provided. The further negotiations between Garraway and Booth regarding the possible sale of the Territory Realty shares in Dundee Beach P/L which took place in early 2004 proved unsuccessful. 145 The respondents contend that the second of those two tranches of shares, namely the 2004 share transfers, did not attract the operation of Article 5 in favour of Territory Realty because, by then as a result of the 2003 share transfers, Bishop Estate and Excess were already members of Dundee Beach P/L. I accept that submission. But it leaves unanswered the significance of the failure of H & K Earthmoving and Hassall to have followed the share transfer procedure prescribed by Article 5 in respect of the 2003 share transfers and of Hassall in respect of the 4 May 1999 share transfers (the proceedings against Kendray no longer being pursued). 146 Territory Realty did not then, that is following the 2003 share transfers of which it was informed, assert any contravention of Article 5. Booth explained its inactivity as a commercial decision. So long as its shareholding was not diluted, the Dundee Beach P/L real estate assets would appreciate over time (although the evidence suggests that the market for land at Dundee Beach was not a strong one from 1999 and in the years leading up to 2005). Its entitlement to participate in dividends from Dundee Beach P/L would remain, and experienced businessmen including Garraway would continue to run the company. He expected the value of its shares to appreciate over time. Territory Realty received the dividend paid on 31 May 2005 without demur. It attended shareholders' meetings of Dundee Beach P/L. It participated at those meetings in discussions about the future strategic action of the company. It was, in effect, not until these proceedings were commenced on 29 May 2007 that it sought to enforce its asserted rights under Article 5. 147 The respondents contend that, in the circumstances, Territory Realty can no longer complain of the failure to be accorded those rights. Territory Realty, following the 2003 share transfer, could have applied to have had the share register of Dundee Beach P/L rectified and for the removal of the names of Bishop Estate and Excess as members: Grant v John Grant & Sons Pty Ltd (1950) 82 CLR 1 at 29, per Williams J (with whom McTiernan and Kitto JJ agreed). It did not do so. In my judgment, Territory Realty at that point had sufficient knowledge to elect whether to assert, and then to exercise, its rights under Article 5 or to accept the existence of its statutory contractual rights as a member of Dundee Beach P/L against the new members Bishop Estate and Excess: cf Sargent v ASL Developments Ltd (1974) 131 CLR 634 and Commonwealth of Australia v Verwayen (1990) 170 CLR 394. It was required to make such an election within a reasonable time: GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd (2003) 128 FCR 1 (GEC) (cited with approval by the Full Court (Finn, Sundberg and Emmett JJ) in Pacific Brands Sports & Leisure Pty Ltd v Underworks Pty Ltd (2006) 149 FCR 395 at [113]). Such an election is not reversible, provided that the election was communicated to Bishop Estate and Excess, being the parties affected by its choice. Finn J explained in GEC at [356]-[364] that that outcome is driven by the interests of fairness. The parties affected are entitled to know where they stand, in the interests of certainty, so that they are not subjected to different obligations. In Allcard v Skinner (1887) 36 Ch D 145 at 187 it was suggested that the lengthy lapse of time may demonstrate the election to accept the contractual rights. 148 In my view, Territory Realty by participating as a shareholder in the affairs of Dundee Beach P/L from 2004, that is by attending and taking part in the shareholders' meetings and by accepting the dividend declared by Dundee Beach P/L elected to accept the 2003 share transfers and indicated that it would deal with Bishop Estate and Excess as shareholders in Dundee Beach. In reaching that conclusion, I have not taken into account any communications between Territory Realty and Bishop Estate and Excess addressing the possible sale of its shares to Bishop Estate and Excess, as I regard that conduct as equivocal on the matter of election. 149 Senior counsel for the applicants made three broad submissions against that conclusion. The first was that the conduct of Territory Realty after the 2003 share transfers must be seen in the context of the 4 May 1999 share transfers, and in particular the fact (as I have found) that its true nature was deliberately concealed from the applicants, and continued to be so concealed until January 2008. Secondly, it was put that Territory Realty did not know the detailed nature of the agreement underlying the 2003 share transfers, and including whether H & K Earthmoving and Hassall had given to Dundee Beach P/L the notice required by Article 5(c) and whether the directions had then resolved to transfer those shares to Bishop Estate and Excess as selected suitable persons. Thirdly, there is no pleaded assertion of reliance upon any such election or of any detriment to Bishop Estate and Excess by having relied upon any such election, so the balancing of fairness considerations should be in favour of Territory Realty, especially having regard to the deceptive conduct of the respondents leading up to and after the 4 May 1999 share transfers. 150 I do not consider those matters colour the conclusion I have reached. As far as Territory Realty was concerned, Bishop Estate and Excess were not shareholders of Dundee Beach P/L until the 2003 share transfers. When notified of the 2003 share transfers, it was conscious of its rights under Article 5. There was nothing to suggest that those rights had been considered by H & K Earthmoving and Hassall, or by Dundee Beach P/L, or that the directors of Dundee Beach P/L had addressed any resolution under Article 5(c). However much the applicants had previously been misled (and continued to be misled) in relation to the 4 May 1999 share transfers, Territory Realty was in a position clearly to recognise that its asserted rights under Article 5 had not been reflected in the 2003 share transfers. It then chose not to assert those rights by the conduct I have referred to. In doing so, it made a commercial decision. Perhaps it was an erroneous one, assuming that it could exercise those rights and participate in the affairs of Dundee Beach P/L as a shareholder including dealing with Bishop Estate and Excess as shareholders. Perhaps it was an erroneous one, assuming that it could reassert those rights if its shareholding may have been diluted. But it was an informed election, nevertheless. 151 For the reasons already given, the 2004 share transfers were in accordance with Article 5(b), being transfers to then existing members. 152 That leaves for consideration the status of the May 1999 share transfers. In my view, for the reasons given, those share transfers were not made in accordance with Article 5 of the Articles of Association of Dundee Beach P/L. At no time until well after these proceedings commenced was Territory Realty aware of the true nature of the transaction underlying those share transfers. Indeed, its true nature was concealed from Territory Realty. It did receive some information from 2004 indicating that somehow the 4 May 1999 share transfers involved the grant of shareholder benefits to Bishop Estate and Excess. But I do not consider that information was sufficient for Territory Realty at any time to have been called upon to elect whether to enforce its asserted pre-emptive rights, or to treat Bishop Estate and Excess as the holder of those nine shares. 153 I will consider the consequences of those findings later in these reasons. As I understand Territory Realty's claim, it seeks declaratory orders as to those matters, together with a declaratory order that Bishop Estate and Excess hold those nine shares on a constructive trust for the benefit of Territory Realty, and/or an order under s 175 of the Corporations Act rectifying the share register of Dundee Beach P/L, although it was not so clear that Territory Realty would press for those orders if it failed to secure parallel orders in respect of the 2003 share transfers and the 2004 share transfers.

OTHER CLAIMS ARISING FROM THE 4 MAY 1999 SHARE TRANSFERS 154 Arising out of the same conduct in relation to and surrounding the 4 May 1999 share transfers, and largely based on the same findings, the applicants further claim that Hassall and H & K Earthmoving breached their contract with Territory Realty constituted by the Memorandum and Articles of Association of Dundee Beach P/L and that Bishop Estate and Excess, and Garraway, intentionally interfered with those statutory contractual relations between the then members of Dundee Beach P/L by the failure to comply with Article 5. They extend that claim to the 2003 share transfers and to the 2004 share transfers. For the reasons I have given, the claim does not succeed in respect of the 2004 share transfers. 155 I do not think that that claim can succeed in relation to the 2003 share transfers. 156 I have found that there was no compliance by H & K Earthmoving or Hassall with Article 5 of the Articles in respect of those share transfers. I also find that Bishop Estate, Excess, and Garraway, procured the direct sale of those shares knowing of the requirements of Article 5 and consciously proceeded to give effect to the 2003 share transfers without ensuring compliance with Article 5. Garraway, I am satisfied, was the driving force behind the agreement leading to the 2003 share transfers. His actions were on behalf of Bishop Estate and Excess. However, it is necessary for Territory Realty to show damage as a result: Northern Territory v Mengel (1995) 185 CLR 307 at 341-2. I do not think, in respect of the 2003 share transfers, that such damage can be shown. That is simply because, had H & K Earthmoving and Hassall - being desirous of transferring those shares to Bishop Estate and Excess - given notice to Dundee Beach P/L under Article 5(c), the company then through its directors was required to act in accordance with Article 5. I briefly adverted above to a possible ambiguity in Article 5 as to whether the directors then must first, or at all, explore the possibility of the shares being sold to a member rather than to a suitable person selected by them. In my view, Article 5(b) indicates that the selection of a purchasing member or an external suitable person is at the option of the directors. The definition of "purchasing member" in Article 5(c) then includes a suitable external person. I think it is clear enough that the directors may directly select a suitable external person without reference to the existing members. At the time the Articles were fixed upon, it was contemplated that the directors would be elected from each shareholder group, as was the case until 4 May 1999, so there would have been no practical issue. But after 4 May 1999, when first Kendray resigned as a director and then Booth and Sanders were removed as directors on 18 May 1999, the directors' knowledge would not have been that of the shareholders. I reject Garraway's evidence to the extent that it suggests that Dundee Beach P/L by its directors received notice from H & K Earthmoving and Hassall as proposed transferors of the shares the subject of the 2003 share transfers, and then went through the consideration contemplated by Article 5 to select Bishop Estate and Excess as suitable persons to become members. However, if the proper procedure had been followed, I have no doubt that that is what would have occurred. Garraway believed firmly that the experience and contacts that he and Walker could bring to Dundee Beach P/L was in its interests, and that their investment in the company through Bishop Estate and Excess was for like reasons in its interests (whatever additional commercial considerations motivated him). I find that Walker was of like mind. They would have driven a directors' decision to that effect. Consequently, the breach of contract by H & K Earthmoving and by Hassall, and the interference with contractual relations by Bishop Estate, Excess and Garraway would have led to no different outcome, as it affected Territory Realty, concerning the 2003 share transfers. 157 The 4 May 1999 share transfers are in a different position. 158 Based on my findings above, Hassall was in breach of contract by failing to give to Dundee Beach P/L notice of his intention to transfer his half interest in two shares then held jointly by Kendray and himself, nominally to H & K Earthmoving but in reality to Bishop Estate and Excess. Both Bishop Estate and Excess, through Garraway, were aware of the contractual obligation of Hassall to do so, as was Garraway himself. They procured Hassall to act in that way. In my view, Hassall was thereby in breach of his contract with Territory Realty, and Bishop Estate and Excess, and Garraway, by procuring Hassall to act in that way intentionally interfered in the contractual relations between Hassall and Territory Realty, so as to procure that breach of contract. 159 Furthermore, that conduct on their part was likely to, and did, cause Territory Realty damage. Had notice been given to Dundee Beach P/L of the "handshake deal" leading to the 4 May 1999 share transfers, or perhaps more accurately had Hassall given notice to Dundee Beach P/L of his intention to sell his half interest in those shares for a total of $76,500 pursuant to Article 5(c), its directors would have had to address how to secure a purchaser. Its directors at the time were Booth, Sanders, Kendray and Hassall. The nature of the "handshake deal" - that is the intention for Bishop Estate and Excess to become in reality shareholders in Dundee Beach P/L would have been exposed. Territory Realty would have had the opportunity to address that then exposed subterfuge. It was to maintain the subterfuge that the "handshake deal" was structured as it was. The loss of that opportunity is a sufficient loss to perfect the cause of action. In addition, as I have found, there is a likelihood that Territory Realty would then have secured funding to purchase that share at that price, and Kendray's eight shares (or more accurately his half interest in 16 shares), which he too wished then to sell. 160 I shall advert to the appropriate remedy later in these reasons, together with the question whether those causes of action should now be permitted to be maintained despite the effluxion of time. 161 Territory Realty's next cause of action, arising largely out of the same findings as those made, is a claim for damages under s 91 of the Consumer Affairs and Fair Trading Act (NT) (the CAFTA) for misleading and deceptive conduct contrary to s 42 of that Act. 162 The pleading is a little confusing. There is said to be relevant conduct engaged in by Bishop Estate and Excess, but then it is not specified and no relevant representations are said to have been made by those entities. The representations are alleged to have been made on four occasions by Garraway and at the meeting of 4 May 1999 by Garraway and Philip. They are alleged to have been made by Garraway on behalf of Hassall, and H & K Earthmoving and Dundee Beach P/L. I do not consider that any conduct engaged in by Garraway in the period leading up to the meeting of 4 May 1999 or at that meeting was engaged in on behalf of Dundee Beach P/L. Nor was Dundee Beach P/L knowingly involved in that conduct by him. 163 The conduct involved actions in the course of dealings leading to the 4 May 1999 share transfers between Kendray and Hassall and, formally with H & K Earthmoving but in reality with Bishop Estate and Excess. The four occasions of such conduct alleged are: 1. statements by Garraway to Booth made on 4 January 1999; 2. statements made by Garraway to Winter on 15 April 1999; 3. statements made by Garraway by providing the agenda for the meeting of 4 May 1999, and 4. statements made at the meeting on 4 May 1999. 164 I can dispose of the statements made on 4 January 1999 briefly. I do not accept that on that occasion Garraway said to Booth anything to the effect that Kendray proposed to sell his legal and beneficial interest in his shares to an existing shareholder of Dundee Beach P/L in any context which was misleading. On that occasion Garraway spoke to Booth and told him that the position was that either Kendray would sell out to Kendray, or Hassall would sell out to Kendray. The conversation was at a general level. It included the possibility of their joint assets being divided into two lists of approximately equal value, and one of those lists being allocated to one and the other to the other, on the basis of the toss of a coin. The lists of assets included, but not exclusively, their shares in Dundee Beach P/L jointly held, and the shares in H & K Earthmoving. Of course, a change in the shareholding of H & K Earthmoving would not trigger Article 5 of the Articles of Dundee Beach P/L because the shareholder in Dundee Beach P/L would be unchanged. 165 In my view, for the reasons expressed above, on the other occasions Garraway did represent, including on behalf of Hassall, that: (i) Kendray proposed to sell his interest (meaning his legal and beneficial interest) in his shares in Dundee Beach P/L to an existing shareholder; and (ii) that the disposition of Kendray's shares in Dundee Beach P/L would not energise Article 5 of the Articles of Dundee Beach P/L so there were no pre-emptive rights issues which might arise. 166 I find that that representation was made in the telephone conversation to Winter on 15 April 1999, by delivery of the agenda for the meeting of 4 May 1999, and at the meeting of 4 May 1999 (including by Philip on behalf of Garraway and Hassall). As I have indicated, I do not need to determine whether those representations were made on behalf of Bishop Estate or Excess. 167 It is also alleged that those representations were made with H & K Earthmoving having been knowingly concerned in them. I do not make that finding. It is not established on the evidence that Kendray, who up to 4 May 1999 was effectively running H & K Earthmoving and was at least one of its directors, was complicit in the concealment of the nature of the transaction. Indeed, there is some evidence that one of the reasons for not disclosing the overall nature of the transaction, and for having the Kendray and Hassall shares transferred on 4 May 1999 to H & K Earthmoving rather than Bishop Estate and Excess directly was so that Kendray himself, who was to sign a Deed of Severance reflecting the wider arrangements between himself and Hassall, might himself learn of what was intended and not be prepared to pursue the settlement which he had arrived at. 168 I also find, that those representations were false for the reasons previously given. 169 I further find for the reasons already given, that Territory Realty and so far as relevant Booth and Sanders, relied upon those representations. They understood that, following the meeting of 4 May 1999, Hassall retained seven shares in his own name and H & K Earthmoving held 25 shares in its own name, but under the control of Hassall. It was with that understanding, which was erroneous, and which was an error induced by the misleading conduct which I have found to have been made out, that Territory Realty did not take action to endeavour to frustrate the transaction which in fact occurred. It was with that understanding that Booth and Sanders understood that Hassall had procured Garraway and Walker and Woolley as directors of Dundee Beach P/L, and wished for and procured their removal as directors of Dundee Beach P/L so that control of the company fell entirely from their grasp. They acquiesced in that process, and then adopted the relatively passive role in relation to the affairs of Dundee Beach P/L thereafter by reason of that misleading conduct. That is sufficient to establish loss and damage on their part. 170 The respondents have pointed to a body of evidence which, they contend, "points ineluctably" to Territory Realty having gained knowledge at the meeting of 4 May 1999 or soon thereafter that Bishop Estate and Excess had in fact acquired equitable interests in those nine shares. I have referred to that material above. For the reasons I have given, I do not accept either that Bishop Estate or Excess, either through Garraway or otherwise, disclosed to Territory Realty in an appropriate manner the fact of their interest in those shares from 4 May 1999, until the shareholders' meeting of 29 May 2003. I also reject the contention that, prior to that date, Territory Realty through Booth or Sanders or Proctor were aware of the interests of Bishop Estate and Excess in those shares, or had had disclosed to them that fact in an appropriate form and which drew their attention to that fact. 171 For the reasons already given, consequently, I also reject the proposition put on behalf of the respondents that Territory Realty acquiesced in the running of Dundee Beach P/L by Garraway and others on behalf of shareholders which included Bishop Estate and Excess from 4 May 1999. 172 There was some damage or loss suffered by Territory Realty, which was deprived of the opportunity to take some action in relation to the contrivance to avoid the proper application of Article 5 of the Articles of Association in relation to the 4 May 1999 share transfers. I shall discuss the question of damages at a later point. 173 Part of the reason for deferring that issue is because, both in pleadings and in the course of evidence, the applicants attacked various decisions made by the board of Dundee Beach P/L since the removal of Booth and Sanders. They claim that the assets of Dundee Beach P/L had been eroded by some $5.4m in present value as the result of the disposal of five assets, referred to above, namely the Rainforest Block, the dump site, the school site, the rezoned sections, and its interest in The Pumphouse Gang Pty Ltd. 174 In addition, they allege that the value of Dundee Beach P/L has been further diminished in a way which gives rise to loss to them by reason of the failure to develop Stage 4 of Dundee Beach. 175 Those matters also relate to the "oppression claim".

(1) The Rainforest Block 176 Originally, the Rainforest Block had been proposed as a public open space. 177 Clearly, Dundee Beach P/L then contemplated that it, or part of it, might be the subject of a separate title or titles enabling it to be sold. An approach was made to the Conservation Commission for the Northern Territory (the Commission) by D'Rozario by letter of 15 May 1990 to explore the prospect of that block, or part of it, being saleable. The Commission by letter of 25 May 1990 responded positively to that proposal "in principle" although it was to do so "to issue a special freehold title over the parcel in order to protect the rainforest". The removal of the rainforest from public access was to be done subject to a number of covenants which were set out in the letter of approval in principle. It is also significant that that letter pointed out that the Commission itself did not have the resources to effectively manage a small and isolated rainforest reserve. 178 Amongst the covenants were fencing, clearance restrictions, limited permitted uses excluding commercial activities and contemplating primarily rural living, and control of groundwater extraction (said to be equivalent to the supply for two domestic households only). The Commission invited the submission by Dundee Beach P/L of a form of proposed covenants. 179 In my judgment, that approval in principle supports the claim that there was a plan of Dundee Beach P/L to secure two separate titles for that land, or at least one title upon which two residences could be established, at some time in the future. There was, however, then a considerable period of inactivity. The proposed covenants were never submitted. On 1 June 1995, the board of Dundee Beach P/L resolved to proceed to obtain title with respect to the land prior to the expiry of the Crown Lease Term on 31 August 1999. No other action appears to have been taken. 180 Following 4 May 1999, the Commission contacted Mr Garraway a short time before the expiry of the Crown Lease Term. He spoke to Hassall. He also spoke to D'Rozario, but only very belatedly on 30 August 1999. She was unable to develop any proposal in the time available. 181 Consequently, the Crown Lease Term lapsed. 182 In my view, Booth as one of the directors of Dundee Beach P/L at the time was mindful of the opportunity to procure some value in respect of the Rainforest Block, and is likely to have progressed that opportunity prior to the expiry of the Crown Lease Term, but for having been removed as a director on 18 May 1999. I am also satisfied that probably some form of agreed covenants would have been able to be negotiated with the Commission, so a title would have been issued in respect of the Rainforest Block before the expiry of the Crown Lease Term. In that regard, although the rainforest was regarded by the Commission (as it said) as significant and worthy of protection, the Commission itself did not have the capacity or resources to manage that rainforest area. The provision of a title subject to covenants imposing obligations upon the land owner to do so was a suitable and convenient mutually satisfactory outcome. 183 That opportunity was lost. 184 The evidence as to the valuation of the Rainforest Block subject to satisfactory covenants is very scant. The only evidence as to value was contained in a letter from Mr Phippin of 19 February 2008 in which he values the land at $200,000. He described it as rural/residential occupational land. His valuation was provided without inspection, and apparently without knowledge of the covenants which might have been imposed. Doing the best I can on the limited information available, and bearing in mind the onus of proof, I adopt a conservative value for the Rainforest Block of $150,000. 185 However, that does not necessarily indicate that Garraway, or the board of Dundee Beach P/L after the 4 May 1999 share transfers, acted inappropriately in allowing the opportunity to pursue that development to lapse. That is a matter I shall address later.

(2) The Dump Site 186 It appears common ground that within Dundee Beach there was to be an area allocated for a garbage storage and removal facility. At an early point, an area designated Section 3054 was fixed for that purpose, although at no time prior to 4 May 1999 was a separate title issued in respect of that designated area, nor any application for development approval or subdivision approval for that purpose. Nevertheless, that purpose was proposed, and apparently acceded to in a general sense by the Department of Lands and Housing (the Department). The proposed garbage disposal site was identified in communication between D'Rozario and the Department in late 1989 and in 1990. 187 The applicants' case is that, but for the change in composition of the board of Dundee Beach P/L from 18 May 1999, that site would have been developed for that purpose and either sold to a commercial operator, or otherwise used as a means of revenue by charging those within Dundee Beach and presumably Dundee Downs, who used it for garbage disposal. 188 The present composition is a storage facility where garbage may be dumped, and then removed for location elsewhere. It is apparently a free facility. The way that came about emerged from communications between the Lands Administration Division of the Department and Dundee Beach P/L through Hassall in March 2001. The Department contemplated using that space for a waste disposal site, but required the approval of Dundee Beach P/L to do so because it was still within the Crown Lease Term. The Department invited any alternative proposal from Dundee Beach P/L. Subsequent correspondence of July and August 2001 indicated that the Namarada Area Plan had been amended by the Minister to convert that site for development as a waste disposal site. A partial surrender form for the dump site was on 14 August sent to Dundee Beach P/L for execution. It was duly executed and returned. 189 As I understand the applicants' contentions, they are not critical of the fact that that site is used for garbage disposal purposes. What they are critical of is the decision by Dundee Beach P/L through the board to surrender that area of land from the relevant Crown Lease Term, so that it is owned and operated and controlled by the Department. That was done without direct recompense. 190 It is difficult, even assuming the decision was an inappropriate one, to put a value on that site. Phippin placed a value on it of $225,000, but his valuation is on the basis that the zoning was a higher and better use than a rural/residential use, and so it should be valued at a higher value than that amount. He also had regard to "available sales and market evidence", but there does not appear to have been any particular sales or market evidence identified relevant to the valuation of that particular parcel of land. I find it difficult to accept or make a determination as to whether that particular section of land, used for that purpose, had any especial value to Dundee Beach P/L. If it did, the evidence would need to address how much a commercial operator would pay to acquire that land, or the right to occupy it to provide the garbage facility removal which was contemplated. That, presumably, would involve some analysis of capital costs, operating costs, and likely or anticipated revenue. There is insufficient evidence to form any view as to that. 191 There were other strategic reasons why the board of Dundee Beach P/L at the time elected to go down the path it did. They concerned the ongoing relationship with the Department on a range of other issues concerning Dundee Beach, as well as the judgment that the better expedient for the dump site was to transfer it to the government so it could provide the garbage disposal facility to those owning land at Dundee Beach. 192 I do not consider that the decision of Dundee Beach P/L in relation to the dump site is shown to have been an erroneous one, and certainly it has not been shown to have been an unreasonable one involving simply the disposition of a valuable asset for no value.

(3) The School Site 193 The school site is also known as Section 3084. 194 On 10 April 2006, the Northern Territory notified Dundee Beach P/L that it wished to acquire Section 3084 to service community needs, in particular to establish a future community service centre, including potential water supply and storage. That section already contained the Dundee School and a teacher's residence. It offered $220,000 to acquire Section 3084, based upon the valuation of the Australian Valuation Office. 195 At about that time, or shortly thereafter, Garraway and Michael Mooney (a very experienced real estate valuer) met with the Minister. At the time the Northern Territory was proposing to establish an electricity supply to Dundee Beach, and was confronted also with the desirability of sealing the access road to Dundee Beach. The Minister, according to Garraway, expressed some concern that the provision of such basic infrastructure should be the responsibility of government rather than of the developer. That is entirely understandable, albeit that Dundee Beach P/L had in earlier years provided the development plan which became the Namarada Area Plan and had established such access roads and internal roads as exist there. It was not required as a condition of development approval to pay for infrastructure costs, including electricity. The Minister's attitude was simply a sign of different times. 196 At all events, Garraway says that he also raised with the Minister the proposals of Dundee Beach P/L to secure future water supply to the Dundee Beach region. Options included rainwater tanks plus a local dam or reservoir. He says that the Minister indicated that he would only consider future subdivision proposals provided that there was high quality potable water supplied from the Finniss River or the Darwin River Dam, and that the Minister expected those water supplies to be developed by Dundee Beach P/L. I suspect that is somewhat of an overstatement. I have no doubt that the Minister and Garraway discussed the supply of water to Dundee Beach P/L (which up to that time had been serviced only by bores or rainwater tanks). Rather than accept the proposal to sell Lot 3084 to the government for $220,000, in June 2006 the directors to resolve to transfer that section to the Northern Territory by way of gift. Garraway's evidence, which I accept, was that the purpose of doing so was firstly to create goodwill with the government, secondly to assist in obtaining planning approval for the rezoning of four blocks from community purposes to residential, thirdly for securing a community water supply to be paid for and maintained by the Northern Territory, and fourthly to allow existing illegal bores to be closed down. Incidentally, the transfer also resolved any questions of title to the land on which the school and the teacher's residence had been erected. Subsequently, on one part of Section 3084 has been erected a substantial water tank serviced by a bore, from which members of the Dundee Beach community can have ready access. The Dundee Progress Association on 22 June 2006 was informed of the decision of Dundee Beach P/L and provided a letter in support of the proposal. 197 The criticism by the applicants is that Section 3084 was sold by way of gift rather than for value. The evidence from Phippin is that it was valued at $275,000, assuming zoning for a rural/residential use. It is not zoned that way. It is zoned for community purposes, and is still largely undeveloped but available for those purposes. I do not think the difference between Phippin's valuation and the valuation nominated by the Minister is so great, bearing in mind Phippin's assumption erroneously as to the zoning, to accept Phippin's evidence of value in preference to that of the offer. 198 However, the significance of that transaction and of the quality of the decision made by the then directors of Dundee Beach P/L is one which is to be assessed in the context of that general value. It is to be borne in mind that, at the time of this transaction (and that involving the dump site) Garraway for Bishop Estate and Walker for Excess equally with Territory Realty had an interest in maintaining and increasing the overall value of Dundee Beach P/L and so of their respective shares. There is no suggestion of any collateral benefit to Garraway or Bishop Estate or Excess remote from their interest in Dundee Beach P/L. The commercial decision made by the board of Dundee Beach P/L, for the reasons given by Garraway, is an understandable one. It may or may not turn out to have been erroneous. But that is not the relevant question. The Court should not simply substitute its decision as to what ought to have been done at the time for that of the directors, especially with the benefit of hindsight. It is sufficient to conclude that I am not persuaded that the decision of Dundee Beach P/L through its directors in relation to the school site is shown to have been unreasonable, or indeed as presently things stand erroneous. It does not enhance the applicants' claims.

(4) Rezoning of Four CP Blocks 199 In 2007, Dundee Beach P/L through its directors decided to apply for a rezoning of those parts of Dundee Beach called Sections 3055, 3056, 3230 and 3231 from CP zoning to a zoning that would permit their useful residential purposes. That rezoning was achieved. 200 The complaint of the applicants is that the four allotments were well suited for commercial uses and that, with the change, there were no longer any blocks on the estate allocated to commercial use. 201 However, the evidence does not go far enough to support any finding that the decision to rezone those four CP blocks was an inappropriate one, or at least one not reasonably available to the directors of Dundee Beach P/L. It discloses that Garraway first consulted with officers of the Department about the need for CP land in Dundee Beach, and with valuers about the market prospects of selling those blocks with their CP zoning compared to a residential usage, and about how a rezoning might affect the value of those blocks. 202 In my view, the board is not shown to have done other than make a commercial decision which it regarded, reasonably, as in the best interests of Dundee Beach P/L.

(5) The 25 Lot Subdivision 203 It is common ground that the 25 lot subdivision approved in 1998 was allowed to lapse without Dundee Beach P/L having sought an extension of that development approval or a renewal of the development permit prior to November 2001. The consequence is, as the applicants point out, that the longer term plan to leverage off that development approval to the balance of Stage 4 of Dundee Beach, so as to achieve a denser development within that remaining part of Stage 4, was also lost. 204 The applicants allege that the failure of Dundee Beach P/L to preserve that position, and to keep that opportunity, was unreasonable and imprudent. They say that, on the basis of the present planning, eight hectare allotments would have a considerably less value to Dundee Beach P/L than that which they had managed to achieve prior to 4 May 1999. 205 In my view, the asserted consequence of that decision, as developed by the applicants, is over-simplistic. They say that it is now unlikely that the same outcome would be likely to be able to be achieved, and that instead of each allotment securing a sale price of (say) $200,000 (a total of $5m), the revenue allowing for development costs will be about 1/5th of that. That analysis assumes the realisation of the anticipated value in a timely way, although the evidence is that there were depressed market conditions between 2000 and 2004, as well as competition from resales. It assumes that the costs of the subdivision and the holding costs during any delayed sale would have been relatively insignificant. It assumes that, in due course, Stage 4 will be unable to be developed to a satisfactory level of profitability. It fails to take into account that the extension of the development permit may not have been granted. 206 In my view, the evidence does not go beyond showing that the board of Dundee Beach P/L as constituted prior to 4 May 1999 may well have proceeded with that proposed development and that it may have been profitable. It does not show that the board of Dundee Beach P/L after that date, even if Booth and Sanders remained on it, would have acted in that way. By 18 May 1999, Garraway and Walker had been added to the board, with Hassall. Booth and Sanders, even if not then removed from the board, would not have constituted a majority of it. There is no reason to think that, in the commercial interests of Dundee Beach P/L, the majority of the board would not have made the same decision that it did, namely that the subdivision development permit should be allowed to lapse. Again, it is worth recalling that by this time Bishop Estate and Excess, as well as Territory Realty, were shareholders and presumably equally anxious to maintain and enhance the value of that shareholding. Indeed, underlying the applicants' claims is that Bishop Estate and Excess at all times have been motivated (and rationally so) by their own commercial interests. There is no reason to think that those interests in relation to this transaction, involved a decision to the detriment of Territory Realty. 207 I do not regard that matter as a factor which weighs in the balance in favour of the applicant's claim for relief under s 232 of the Corporations Act.

(6) The Pumphouse Gang Shares 208 The Pumphouse Gang Pty Ltd (The Pumphouse Gang) was a company formed by Booth, Kendray, Hassall and Keith Aitkin in 1996. Booth and Aitkin remained as directors until January 2002. Hassall had resigned as a director in November 2000. Kendray was not a director, at least at November 2000. 209 Dundee Beach P/L acquired two of the three issued shares in The Pumphouse Gang from its inception. By Deed of 3 November 2000 Dundee Beach P/L sold its interest in The Pumphouse Gang to Advance Civil Engineering Pty Ltd (Advance), a company owned by Aitkin, for $67,500, together with mutual releases of any claims The Pumphouse Gang may have had against Dundee Beach P/L and Hassall, or vice versa. The release on behalf of The Pumphouse Gang was a short document, easily read. It is quite clear. It is signed by Booth and Aitkin on behalf of the Pumphouse Gang. Advance was then the holder of the third share, so it thereby became the sole shareholder. 210 The applicants claim that sale was at a gross undervalue, and that they did not know of the sale or its terms until much later. 211 I do not accept Booth's evidence that he did not know of the transaction. Given his acquaintance with Aitkin, his co-directorship of The Pumphouse Gang with Aitkin until 2002, and his signing of the release on or about 3 November 2000 which referred explicitly to Dundee Beach P/L, I think he is mistaken in asserting to the contrary. It may be that he did not pay proper attention to the transaction, so that its details may have been readily overlooked, but the removal of a significant shareholder in which he had an interest (through Territory Realty) and the concentration of its shareholding in the Aitkin company Advance makes it very unlikely that Booth did not know of it. I infer that conclusion a little more readily because Aitkin, as a co-signatory of the release as well as the "buyer" and the co-director with Booth at the time of The Pumphouse Gang, was not called to give evidence. 212 In any event, there is no adequate evidence to support a finding that the sale by Dundee Beach P/L of two of the three shares in The Pumphouse Gang was at a gross undervalue. 213 Its assets comprised two Crown Lease Terms covering the old pump house at Stokes Hill Wharf and some adjoining land. The lease over the old pump house ran from 19 January 1999 to 13 January 2002, at an annual rental of $17,500, and the contemplated usage was for a restaurant. The lease contained covenants requiring the lessee to erect improvements to a value of not less than $1.4m during its currency, to restore the pump house building as a restaurant, and requiring the lessee to provide all services to the developed premises. Compliance with those terms entitled the lessee to surrender the lease in exchange for a freehold title, but the usage would be maintained by zoning restrictions. The other lease for adjoining land was for a period of eight years from 13 January 1999. The permitted use was outdoor markets and related matters. The rent was $25,000 per annum. The lease covenants required the lessee to erect improvements to the value of not less than $1.095m within four years, although that expenditure could have been made in stages, and there was some scope for the time to be extended. The outdoor markets which were conducted on the site were not profitable. 214 There is no expert evidence as to the value of either of those leases at the end of 2000. The unimproved capital value of the freehold (without the covenants) at 1 July 1999 according to the Australian Valuation Office was $375,000 for the pump house site and $450,000 for the outdoor market site. What is clear is that its directors at 3 November 2000 had a difficult decision to make. There was no ready access to the capital required to develop the land as required by the leases, and no ready basis for confidence in incurring that capital expenditure. I accept Garraway's evidence that the pump house building itself apparently presented particular developmental difficulties, due to its condition, although some work had earlier been done to rectify it. Nevertheless, the board of The Pumphouse Gang (and indirectly Dundee Beach P/L as the majority shareholder) might have procured a more detailed assessment of the condition of the building, and of the development costs and potential benefits. It did not do so. But both Walker and Garraway were experienced developers, and I am not satisfied that the decision not to develop the pump house site and the adjoining site in the year or two following November 2000 was inappropriate. 215 The sale of the Dundee Beach P/L shares in The Pumphouse Gang was then a reasonable option to consider. It did so by private treaty, having invited tenders from Advance (the minority shareholder) and another developer. It did not publicly advertise the proposed sale in any way, although that would have presented difficulties as it was selling only some of the shares in a private company. 216 It is clear that, after the sale and to the time of the hearing, the circumstances of The Pumphouse Gang have changed significantly. It has developed the pump house site as a restaurant and offices, and has a freehold title. The pump house site as developed obviously has a significant value, on the unchallenged evidence of the valuer, Mark Harris to be now about $4m (reduced from $6m by reason of the long term restaurant lease to 2018), no doubt boosted by the Darwin Waterfront project announced in 2003. However, the evidence does not disclose the development costs. Nor does it provide a sound basis for valuing the shares in The Pumphouse Gang either at 2000 or indeed at present. In that regard, I note that Advance subsequently in 2000 spread the shareholding in The Pumphouse Gang, including to Kendray and his son and to Booth. Booth holds 10 per cent of the shares, which he acquired then for a nominal sum, albeit in consideration of services he would provide to that company. I further note that there is no suggestion that the sale transaction between Dundee Beach P/L and Advance was other than at arms' length. There is no suggestion, in particular, that Garraway or Bishop Estate or Excess stood to gain in any way by the sale of the Dundee Beach P/L shares at that time and for that price. 217 In my judgment, it has not been shown that the decision of Dundee Beach P/L by its directors to sell its shares in The Pumphouse Gang as and when it did was outside the range of reasonable commercial decisions about that asset available to its directors. It was not inappropriate about that time to consider what to do with that shareholding, it could not simply be inactive because that would have resulted in the lapsing of the Crown Lease Term over the pump house site. There was obviously a commercial decision to be made whether to proceed with a development at that site. The decision not to do so was at a time of depressed market conditions for the economy and for real estate in the Northern Territory. It preceded by a few years the announcement of the Waterfront Development. I see no reason to criticise the commercial judgment of the directors at that time, even though in this instance hindsight might suggest that another decision might have been made. Even so, how The Pumphouse Gang might have procured funds for the development and serviced the loans to support it for a number of years has not fully been explored. I am fortified in that conclusion by observing that, as in some other instances, there is no apparent reason why the interests of Territory Realty might have been seen to differ from those of Bishop Estate and Excess also as "shareholders" of Dundee Beach P/L or indeed from those of H & K Earthmoving and Hassall as shareholders at that time. 218 I shall address the significance of the above findings when considering the applicants "oppression" case, and the question of relief.

THE OPPRESSION ALLEGATIONS 219 As noted above, Territory Realty's fourth substantive cause of action is a claim pursuant to s 223 of the Corporations Act that the conduct of Dundee Beach P/L leading up to and since 4 May 1999 has been contrary to the interests of its members as a whole, or oppressive to or unfairly prejudicial to or unfairly discriminatory against Territory Realty, pursuant to s 232 of the Corporations Act, so that an order should be made that its affairs have been conducted oppressively and for consequential orders. The acts or omissions which, it contends, demonstrate collectively oppressive conduct are as follows: · the events leading up to and involving the 4 May 1999 share transfers; · the removal of Booth and Sanders from the board of the company on 19 May 1999; · the offers made to buy out Territory Realty; · the subsequent conduct of the affairs of the company in a way which precluded it from making any profits or paying any dividends at material times; · the circumstances of the payment of a dividend in 2005, in effect to do no more than to secure repayment for the Territory Realty loan account; · the payment of management and consulting fees to Bishop Estate and Excess; · the failure of the board to make reasonable and adequate disclosure of the conduct of the affairs of Dundee Beach P/L to Territory Realty from May 1999 to the date of the proceedings; · the disposal of various assets of Dundee Beach P/L for little or no consideration or for an unreasonably low or inadequate consideration when there were alternative courses open to the company, that being the items referred above; · procuring Dundee Beach P/L to pay the legal fees of all respondents to the action; and · the 2007 share issue. 220 In the event that the Court determines under s 232 that the affairs of Dundee Beach P/L have been conducted either contrary to the interests of the members as a whole, or oppressively to, unfairly prejudicial to, or unfairly discriminatory against, a particular member or members, it is empowered to make an order under s 233. The orders available under s 233 include orders that the company be wound up, for the purchase of any shares in the company by any member, regulating the conduct of the company's affairs in the future, or requiring a person to do a specified act. 221 I note that, although in its written submissions Territory Realty contended that it separately and additionally had a claim for rectification of the share register of Dundee Beach P/L to effect the removal of Bishop Estate and Excess from the share register following the 2007 share issue, its subsequent submissions in reply did not identify that claim as being based upon an independent cause of action. 222 I have addressed the events leading up to and involving the 4 May 1999 share transfers and those concerning the disposal of assets above. It is only the failure to preserve the Rainforest Block lease which, in my view, requires consideration in this context. I shall address the other matters discretely in the following section of these reasons.

(1) Removal of Booth and Sanders as directors 223 Although it is understood by the respondents to be the nature of the claim that the complaint is tied to the failure to buy out Territory Realty, it is not clearly so expressed by the applicants. Their contention is that it was oppressive to remove them as directors of Dundee Beach P/L on 18 May 1999 of itself. 224 The foundation for the allegation is that, as I have found, Dundee Beach P/L was at all times at least up to the decision by Kendray to withdraw from his involvement with Dundee Beach P/L a quasi-partnership. That is why Article 5 is in its present terms. When Booth and Sanders were removed as directors on 18 May 1999, they complained of their removal promptly thereafter. They were aware of a possibility of establishing relief in respect of that removal because they made reference to it in a letter to Garraway of 14 October 1999. 225 However, whilst that may or may not have been an inappropriate course of action at the time, in my view it is not something that should now be taken into account in the present application on the question whether the affairs of Dundee Beach P/L have been conducted oppressively. 226 That is for two reasons. 227 In the first place, as I have found, Booth and Sanders backed Kendray when Kendray and Hassall had fallen out and whilst they were working out who, as between the two of them, would remain in Dundee Beach P/L. Booth and Sanders put a joint offer with Kendray to Hassall for his interest in Dundee Beach P/L. Since 4 May 1999, when it was apparent that Kendray had sold his interest in Dundee Beach P/L and (apparently also his interest in H & K Earthmoving), neither Booth nor Sanders made any step to participate in any ongoing quasi-partnership with Hassall. They indicated, at and shortly after 4 May 1999, that they did not oppose Hassall as the majority shareholder personally and through H & K Earthmoving procuring the appointment of Garraway and Walker and Woolley as further directors of Dundee Beach P/L. In effect, in my view, they acquiesced in the termination of the quasi-partnership and for some years thereafter simply permitted the matters to stand on the basis that they were minority shareholders. That acquiescence did not involve any awareness on their part that, in addition to the transaction by which require became the majority shareholder either directly or by his control of H & K Earthmoving, Bishop Estate and Excess had also acquired a controlling interest over Kendray's shares. 228 Secondly, when it became apparent to Booth and Sanders by reason of the 2003 share transfers and the 2004 share transfers that Hassall himself had disposed of whatever interest he then held in Dundee Beach P/L to Bishop Estate and Excess, they acquiesced in that transaction also. I have found that they did so knowing of the nature of those transactions. That acquiescence is independent of their belief up to that date or to about May 2003 that Hassall controlled 32 of the 48 issued shares in Dundee Beach P/L. 229 In my view, in the circumstances, it is inappropriate to take that factor into account even if there were, initially, some merit in the complaint. I do not do so. I do not need to determine where there is in fact merit in the complaint.

(2) The offers to buy out Territory Realty 230 One element of the allegedly oppressive conduct on behalf of the majority shareholders in Dundee Beach P/L is the offers which have been made to Territory Realty from time to time to buy out its minority interest in the company. Having been removed from any direct say in the operations of the company, it is contended that Territory Realty as a minority shareholder has been locked into the company without giving it the opportunity to remove its capital upon reasonable terms: cf O'Neill v Phillips [1999] 1 WLR 1092 at 1101-2 and 1103-4. 231 The facts are not contentious. 232 On 29 May 1999, Garraway on behalf of the other shareholders offered to purchase Territory Realty's remaining 16 shares at $500,000 ($31,250 per share) with no forgiveness of its then loan account netted at $123,625. Bishop Estate and Excess had, as noted above, shortly beforehand on 4 May 1999 paid $76,250 for nine shares in Dundee Beach P/L. Territory Realty offered to sell its shares on 14 October 1999 for $1.5m ($93,750 per share). That negotiation did not progress. 233 On 12 February 2004, Excess and Bishop Estate offered to purchase Territory Realty's 16 shares for $800,000 ($50,000 per share) on the basis that it would then repay its outstanding loan account plus interest from the proceeds. That price per share was the same as the price at which Hassall and H & K Earthmoving had sold their remaining shares to Bishop Estate and Excess in the 2003 share transfers and the 2004 share transfers. Territory Realty responded by indicating that it would consider an offer of $1.5m, including the writing off of its loan account and the transfer of certain designated front beach blocks at Dundee Beach. That position seems to have been stalemated, as seen in subsequent communications between them on 29 July 2004, 27 August 2004 and 2 May 2007. 234 On the latter occasion, Excess and Bishop Estate again offered Territory Realty $800,000 for its 16 shares, indicating that the offer was to remain open only until 31 May 2007. The significance of that date is, of course, because of the proposed then share issue referred to below. I think the timing and the terms of that offer inform the reasons for the 2007 share issue. 235 On 18 February 2008, in open court, senior counsel for Bishop Estate and Excess indicated that they were prepared to buy the Territory Realty shares for "fair value based on Mr Mooney's valuation of the land assets of the company" and disregarding the new share issue, so that Territory Realty would be treated as a one-third shareholder. That offer was in round figures about $2.5m for the 16 shares, or about $156,000 per share. 236 In the period of time of those negotiations, Dundee Beach P/L was in a strong financial position. It had a significant surplus of assets over liabilities as at 4 May 1999, and its real estate was likely to have had a greater value than the historic cost of them. At about that time, the board decided not to engage in further development (save for the development of the 12 lot section referred to and two lots then already under development) and a moratorium on new land sales until a further release in early 2005. As noted, during that time there was little in the way of land value appreciation at Dundee Beach or in the Northern Territory generally. 237 I note that Bell, in his letter to the directors of Dundee Beach P/L on 7 July 2005 recorded the market value of Dundee Beach real estate in the following terms, on the basis of information provided to him by Garraway. 1998 Mooney Valuation 2005 Market Appraisal Completed Titles $1,893,100 $6,713,000 Undeveloped Land $1,260,000 $2,520,000 Total Market value $3,153,100 $9,233,000

Garraway accepted that those figures probably came from him. 238 Consequently, notwithstanding an almost three-fold increase in the market value of the real estate held by Dundee Beach P/L between 1999 and 2005, and indeed up to 2 May 2007, Bishop Estate and Excess were adhering to a value for the 16 shares which bore no relationship to the real net asset position of Territory Realty or to its real estate values. 239 I make no comment at this point about whether the proposal put in the course of the hearing on 18 February 2008 accorded with an appropriate value of the shares in Dundee Beach P/L at that time.

(4) Lack of disclosure 240 Some submissions were directed at the dividend policy of Dundee Beach P/L and its lack of disclosure generally to Territory Realty as itself indicating oppression on the part of the majority shareholders through Dundee Beach P/L. Those matters were only raised in the course of submissions and I do not propose to make findings on those allegations, or to take them into account in any way.

(5) Management and consultancy fees 241 The applicants' submission, with which the respondents do not join issue as to the amounts, is that for the financial years ended June 2001 to June 2005 each of Bishop Estate and Excess received $30,000 per year for "business, managerial and operational input", and that for the financial year ended June 2006 each received $48,000 and for the financial years ended June 2007 $72,000 (and $6,000 per month thereafter). 242 In addition, over that same period Garraway has received $12,000 per year for accounting fees and Excess has received $3,000 per year for secretarial fees (preparing the minutes). For the year ended 30 June 2005 and thereafter the accounting fees increased to $21,000. 243 The applicants contend that those amounts are excessive and unwarranted. 244 In my view, their claims in relation to the management and consulting fees of Bishop Estate and Excess are made out. The foundation for those fees is two-fold. Firstly, it is the information provided to Duncan Bell, an accountant of BKR Walker Wayland by letter of 27 June 2005 indicating the nature of the services provided by each of Bishop Estate and Excess, and secondly it is Bell's advice on the basis of that information. 245 The information was provided to Bell by Garraway in a table headed "Major items considered, addressed, undertaken during 1999/2005". 246 In my view, it significantly overstated the position. For instance, it says the company had regular directors' meetings "conducted more in the style and manner of a public rather than private company"; it involved "conducting strategic management decisions"; it required attending to indigenous issues relating to Aboriginal sacred sites and potential native title claims over assets (about which there is no evidence); it involved "conducting conceptual planning for future multi-million dollar developments" and "feasibility and design concepts" for an inland lake reserve with recreational lake facilities. 247 I do not doubt that most of the items listed in one way or another required Garraway's attention in that period of five years to June 2005 to which his request then related. Upon the whole of the evidence, however, in my view that schedule was designed to indicate in as fulsome a way as possible those things which were done by Garraway (and perhaps Walker) on behalf of Dundee Beach P/L or discussed at directors' meetings, but in a way which conveys that they occupied considerably more time and attention in many respects than was the reality. Garraway no doubt kept files dealing with individual transactions relating to planning, water resources, environmental issues and the like. The minutes no doubt were gone through. No explanation was given as to why, until 2003, Hassall or H & K Earthmoving did not contribute in a parallel or similar way to the progress of Dundee Beach P/L. 248 I found Garraway's explanation for the nature of that schedule, but more specifically the fulsomeness of the expression of the work said to be required to be done, unsatisfactory. Where he was asked about particular features, for instance the work done constituting feasibility and design concepts for an inland lake reserve with recreational facilities, his answers demonstrated that little was done. There was no feasibility study. There was no board paper. Overall, in my view, that description of the work, did not reliably present a picture of the work carried out on a recurrent basis year by year by the board, or by Bishop Estate or Excess, in each of those years or subsequently. 249 I was also unimpressed with Bell's evidence. Firstly, although he did some checking of records, he accepted that he assumed that the work had been done by the directors and associated entities to the extent to which it was described. I thought his evidence as to why it was justifiable that the work should have been done both by Bishop Estate and Excess and be invoiced by them rather than by the directors as part of directors' fees and services, was unsatisfactory and argumentative. He did not really address why Excess (Walker's company) should be treated equally with Bishop Estate (Garraway's company). I do not think he thought about that until confronted with it in the course of his evidence. He did not query why Hassall or H & K Earthmoving should not also be considered. Where he referred to directors, he said that he could not discriminate between the directors and did not endeavour to do so, and presumably did not discriminate between the time spent by Garraway or Walker in that work. He did not have regard to who the directors were or explore any issue with respect to other directors. His approach, in my judgment, was relatively formulaic and did not reflect a careful analysis of what precise work was undertaken or required to be undertaken in the relevant time. More generally, he appeared to be resentful of any attempt to explore the quality of his analysis, and progressively more dogmatic about its correctness despite what I regarded as entirely fair and legitimate questioning. His opinion, even assuming that he was given a proper foundation for it, was not one I would comfortably have accepted. His demeanour caused me to doubt his independence. 250 Although I do not regard Bell's evidence as providing a proper foundation for the management and consultancy fees, I do not attribute either to him or Garraway any complicity in the process. I accept Bell gave independent advice. Were the test an objective one as to its correctness, I would not accept it. But that is not a matter which goes to the alleged oppression claim. I conclude that, by reason of the findings I have made about how Garraway presented that claim, the purpose of the management and consulting fees was as I find below. 251 I reached a firm view as a result of the evidence that the claims made for management and consultancy fees were unjustified. 252 No submissions were made about the level of the accountancy fees. 253 In my view, the management and consultancy fees represented a means of diverting profits from Dundee Beach P/L in a way which was unwarranted. Although it may be accepted that Garraway, Woolley and Walker did more to attend to the affairs of Dundee Beach P/L than Hassall in the period until Hassall ceased to be involved in the company, there is little evidence to suggest Walker did much beyond attending board meetings, whether on his own behalf or on behalf of Excess. There is also no satisfactory explanation as to why that transaction took place retrospectively in respect of the years from June 2001. The foundation provided by Garraway for the claim and its quantification was not a balanced one. 254 The evidence indicates that in the period from 1999 to 2004 the Darwin and surrounding property markets were quite subdued. The directors decided not to promote the sale of existing subdivided land stock or to subdivide further land in that context. That may have been an entirely appropriate decision. It is also clear that subsequently, land values increased quite dramatically from about 2005, and not at all critical of the business decision there reflected. But it does not follow, that being a correct business decision, that the work required of the directors (or provided on some unspecified basis by Bishop Estate and Excess) in those years was done on the basis of payment justifiable to the amount specified. 255 In fact, I note that the respondents' submissions refer to Dundee Beach P/L through its directors: developing strategies for further subdivisions, including reviewing the viability of development in accordance with existing development permits, and for the marketing and sale of Dundee's subdivided land stock, and reviewing and revising those strategies from time to time … as being a significant element of the work carried out during those years. That is a rather grand way of saying that over those years the board decided not to promote further sales of the land, using the knowledge of the directors (as one would expect them to use) of the Northern Territory economic situation including in particular the real estate market. The balance of the work which they undertook, according to the submission is: Completing subdivision work already commenced; recovery of shareholders' loans (including successful legal proceedings against Kendray); shareholders - directors' claimed rights to beachfront blocks (including successfully defending proceedings by Kendray and, separately, by Booth and Sanders); dealing with Territory Realty and the ANZ Bank regarding guarantees given by the former board to cover Territory Realty group's own borrowings; development/sale of pump house site; community water supply, dump site, school site; extension of CLT 570 in 2003 for a further five years; rezoning four CP lots; meeting costs of future subdivisions; building and maintaining relationship with government; and water supply issues. That indicates the extent of the work which was realistically undertaken. A careful reading of that description indicates, in my view, in a fair way the extent of work which was required over that period of time by the directors.

(6) Setting off the loan account against the dividend 256 I have referred above to the circumstances in which the dividend was paid or declared for the year ended 30 June 2004 and how it was paid. In essence, it was almost cash neutral to Territory Realty because the dividend of $160,000 ($10,000 per share) was offset against the outstanding loan account and interest and the legal costs in relation to the ANZ Bank guarantee. 257 The applicants now make two points about those circumstances relevant to their oppression case. They accept that it was not inappropriate for the Territory Realty loan account to be repaid. They complain of the interest and of the deduction for legal costs. Such debits, they submit, were unjustified and discriminatory. They also complain about the timing of that transaction which, in effect, they say was designed purely to secure repayment of the loan account. 258 The agreement relating to the loan between Dundee Beach P/L and each of Territory Realty, H & K Earthmoving and Kendray and Hassall is dated 15 November 1994. The loan was expressed to be for a term of 10 years, and so was repayable by 15 November 2004. It was supposed to have been repaid by equal annual instalments commencing on 1 November 1996. It provides for interest on any unpaid instalment at 10 per cent per annum. 259 Dundee Beach P/L recovered the loan accounts of Hassall and H & K Earthmoving, and of Kendray, prior to 1 November 2004. It waived interest on those loan accounts because they were paid before 1 November 2004. Whether it was right to have done so is not to the point. Although there is some suggestion in the evidence or in correspondence that Dundee Beach P/L prior to 4 May 1999 had resolved to defer repayment of those loan accounts, so that interest on them would not continue to accumulate after 1996, that point was not pressed in submissions. 260 Although it is apparent that Territory Realty was treated in a different way to H & K Earthmoving, Hassall and Kendray, in my view that does not demonstrate oppression on the part of Dundee Beach P/L in seeking to recover its entitlement to interest under the loan agreement, absent any clear evidence (and there is none) that the entitlement was in some way contentious. 261 The applicants also assert that there is no credible justification for offsetting the legal costs of $4,000 against the dividend. At the time the dividend was paid, it was pointed out that those costs were the costs incurred by Dundee Beach P/L by the ANZ Bank calling in its guarantee provided to Territory Realty and the appropriate invoice was produced. The liability appears to be uncontentious. The circumstances, so far as they are apparent to me, seem to warrant the directors of Dundee Beach P/L taking the view that that liability for costs should be passed on to Territory Realty. 262 I do not consider that the conduct complained of under this heading adds any weight to the claim of oppression by Territory Realty. 263 I do not draw any inference adverse to any of the respondents in respect of the offers made until that of 2 May 2007. There is no reason to do so. The offers made in 1999 were very low compared to the amount paid by Bishop Estate and Excess through H & K Earthmoving for the Kendray and Hassall shares, but the price paid for those shares was known by Territory Realty and it was then familiar with the position of Dundee Beach P/L generally. The offers made in 2004 are consistent with the amounts paid on the 2003 share transfers and the 2004 share transfers, and there is nothing to indicate that those prices accepted by Hassall and H & K Earthmoving were not negotiated at arms' length. 264 However, the amount offered on 2 May 2007 and its terms were related to the then capital raising by a further share issue, and occurred clearly at a time when there was a clear basis for belief on the part of Bishop Estate and Excess that the value of shares in Dundee Beach P/L was very considerably higher than the value in 2003 and 2004.

(7) The 2007 share issue 265 The proposed share issue was notified to Territory Realty on 30 April 2007. The closing date was 1 June 2007. 266 That communication followed a resolution of the board of Dundee Beach P/L on 14 February 2007 that a share issue of $7,500,000 be made, with the shares to be issued or offer pro rata to existing members. It involved the issue of a further 150 shares at an issue price of $50,000 per share. 267 The minutes do not record how the number of shares came to be selected or how the value of those shares came to be selected. Although that price was the same price as that at which Hassall and H & K Earthmoving had transferred their shares at the time of the 2003 share transfers and the 2004 share transfers, there had been a very significant appreciation in the value of the real estate held by Dundee Beach P/L since that time. That matter appears not to have been discussed, or at least not recorded in the minutes. 268 The resolution of the directors to make that share issue was made on 14 February 2007. Present were Garraway, David Walker, Woolley and Pokorny. The resolution notes that it was passed after consideration of a report entitled "Scope and Requirements of Further Land Development at Dundee Beach" dated January 2007 (the January 2007 Report). That report was prepared by Garraway following an "in principle" resolution of the board on 28 November 2006 to then proceed with the development of further land. Those minutes record a report from Garraway and Mooney concerning their understanding, after consultations with the government, of what would be required for further subdivision. It was reported that the subdivision would need to be to the same standard as Darwin, with potable water to be supplied by the developer to the development. On that basis, the board requested Garraway to prepare the report. 269 I note that the January 2007 Report in its background includes reference to the position of Territory Realty expressed as far back as 8 May 2001, and again at a shareholders' meeting on 29 May 2003, that new shares in Dundee Beach P/L should not be issued without the consent and approval of all shareholders, and that Territory Realty would take action to veto any further issue of shares, and further that Territory Realty would not subscribe to any further issue of shares to raise additional capital. The paper then contains the following: Dundee Beach Pty Ltd is experiencing uncertainty which is causing lack of commitment and confidence in the making and being able to deliver on major financial commitments and undertakings to the N.T.G. and other parties. This uncertainty is caused by one shareholder's opposition to a share issue to raise adequate funding and needs to be resolved one way or another to enable Dundee Beach Pty Ltd to move forward. There is nothing in the evidence to justify that comment. 270 Dundee Beach by then had connected electricity supply and some services, and a sealed access road. The January 2007 Report summarised that further development would need sealed internal roads, gutters and water supply and telephone connections. Costings were provided based upon a comparison with a similar development being carried out by Excess elsewhere. 271 That report reviewed the costs of providing water to Dundee Beach. It was estimated at $5m. It then proceeded on the basis of a development of 50 blocks at a cost of $100,000 each to provide full services, namely a further $5m making a total cost of $10m. The report noted that although the infrastructure cost would be apportioned over the proposed 50 blocks and further subdivided blocks, so that the block cost would not be $100,000 per block ultimately, that would need to be funded "up front" and commented that a proposed 50 blocks is a realistic working figure to maintain a limited and controlled release for sale. Previously there had been discussion of developing a further 250 blocks, and indeed Sinclair Knight Merz, a firm of engineers in early 2006 had been asked to review the water supply options for Dundee Beach on the basis of there being 1,000 blocks (a number provided by Garraway). As there were already about 700-750 blocks at Dundee Beach, that number accords with a further potential of about 250 blocks. 272 The January 2007 Report then turned to funding options. It noted that the then cash reserves of Dundee Beach P/L (as at 31 December 2006) after taxation were $1.7m, estimated to increase to $2m by 30 June 2007. It contemplated funding for the proposed development based upon using the cash reserves, bank borrowing of $500,000 and a share issue of $7.5m. The reason why cash reserves and owners equity should be used, as explained in the report, was to ensure that Dundee Beach P/L could service borrowings, in light of the possibility of a substantial portion of the developed land not being readily saleable. Comment was also made about the "need for confidence and certainty" in dealing with the Northern Territory government. 273 The funding option of a substantial share issue was adopted based upon the views of Excess and Bishop Estate in 2003 in a submission to Dundee Beach P/L. It too referred to the impasse with Territory Realty, and the need to introduce new equity because, allegedly, servicing of debt by Dundee Beach P/L had been spasmodic in the past and was not attractive to bankers. As noted, by 4 May 1999 Dundee Beach P/L had largely met its existing indebtedness and had a substantial excess of assets over liabilities. 274 At the meeting of directors, Garraway led the discussion. David Walker at least paid relatively little attention to it, or to the report presented to the meeting. The directors were aware that the financial statements of the company included its real estate at historic cost, and that it was likely to be in excess of $9m as discussed above, so that the selection of a figure of $50,000 per share was an unscientific one for which there was no apparent justification. Territory Realty was not given a copy of the paper prepared by Garraway at any material time. Nor was it presented to the shareholders' meeting on 14 February 2007. Nor at that meeting was there a discussion about the need for capital raising in any detail. Nor were the engineering studies of Sinclair Knight Merz of 22 March 2006 made available to the shareholders' meeting. 275 I note that the report prepared by Garraway does not reflect a detailed investigation of the issues surrounding the supply of reticulated water to Dundee Beach. There is no mention of any potential storage area, or of the means by which existing owners of land in the area could or should be expected to contribute to its cost, or of consultation with other land developers, or of consultation with land owners in the very extensive area between Dundee Beach and the Finniss River (the planned source of the water) to secure contribution from them, nor any town planning analysis, nor details of any water treatment facility, nor reference to any legislative requirements. David Walker, who was a director of Dundee Beach P/L from February 2005 gave evidence in a direct and frank manner and generally I accept his evidence. Clearly, he did not attend much to the detail of Dundee Beach P/L as a director, as his knowledge was relatively slight. As he said, there were about three directors' meetings per year and in between those periods Garraway really did the detailed work outside of board meetings. He accepted that the proposed development was conceptual only at the stage of the resolution. There was no foundation upon which an investment in water supply could have progressed materially at that time. At the meeting, he confirmed that it was discussed that Territory Realty may well not take up its additional shareholding (as it had previously said it would not) and so the effect of the share issue proposed would be to substantially dilute its interest in Dundee Beach P/L. The timing of the raising of the share issue was dictated by Garraway, ostensibly or apparently because of the imminent expiry of a lease of the Crown Term. There was a need to be seen to be doing something. However, the need for further funding as presented by Garraway was apparently more substantive than it actually was. 276 In my view, that presentation was a contrived one. It was contrived for the purpose of securing agreement from the directors of Dundee Beach P/L to a share issue upon the terms specified, with a purpose in part to dilute the shareholding of Territory Realty in Dundee Beach P/L. If Bishop Estate and Excess took up the share offering to them (without taking up the shares offered to Territory Realty), its shareholding would have been reduced from one-third to about 11 per cent, or 16 out of 148 shares and the Bishop Estate and Excess interest increased correspondingly (although of course by having made the extra payments). I find that it was expected that Territory Realty would not take up that share issue, because it had said that it would not do so. 277 I reach that conclusion having regard to the state of development of any proposal for the further subdivision of Dundee Beach P/L at the time, the absence of any significant investigation in relation to the securing of water from Finniss River, the absence of any consultation or negotiation with any land owners between Dundee Beach and the Finniss River who would also have been able to have access to the water supply thereby secured, the absence of any planning which would indicate the location or storage capacity of a dam, the absence of any planning which would indicate the basis of purification of that water for potable use and its supply, the absence of any consultation with any of the existing land owners at Dundee Beach, and the artificial price for which the proposed shares were to be issued unrelated to the likely real value of the shares in Dundee Beach P/L at the time. Indeed, in my view, the evidence does not support a finding (although Garraway asserted a belief to that effect) that from 2006 the Minister had conveyed to him that any future subdivision of Dundee Beach would only be approved if quality potable water was supplied to the proposed further subdivided divisional area by a pipeline from the Finniss River. The minutes of meeting of directors of Dundee Beach P/L of 19 January 2006 record that Garraway had met the Minister earlier that month and that the Minister had "raised the feasibility of bringing water 45 kilometres from the Finniss River". 278 I find that the timing of that proposal was in its detailed form and the resolution was largely directed to diluting the interest of Territory Realty or, more probably, putting pressure on Territory Realty to sell its shares in Dundee Beach P/L. It is to be recalled that, at about the same time, Bishop Estate and Excess offered again to buy Territory Realty shares for $800,000 ($50,000 per share) when it was apparent that their value was considerably in excess of that amount and that, for the first time, a deadline had been put upon that offer to expire immediately before the exercise of the share issue was to expire, namely 31 May 2007. 279 That conclusion is fortified by the evidence of Mooney, who indicated that it would be most surprising if Dundee Beach P/L would build a pipeline from the Finniss River to Dundee Beach to benefit not only Dundee Beach but all of the other developments en route, and existing landholders there, without contribution from them. 280 There is a further element to the oppression said to arise from that transaction. It is the absence of information provided to Territory Realty compared to that available to Bishop Estate and Excess. Territory Realty simply was not given such information as was available to the directors of Dundee Beach P/L and to its other shareholders to enable it to make an informed decision about whether to participate in the proposed share issue. Whether that was to avoid providing such information to Territory Realty because it may have provided it with a vehicle to challenge the proposed share issue, or for some other reason, it is not necessary to explore. The fact is that it was not given that information. Its directors were under a fiduciary duty to Territory Realty and to Dundee Beach P/L to provide such material information as would fully and fairly inform members in relation to a proposed share issue, as well as taking reasonable steps to obtain such information as is reasonably available for communication to members if that matter is not known to the board: Fraser v NRMA Holdings Ltd (1994) 52 FCR 1; and on appeal Fraser v NRMA Holdings Ltd (1995) 55 FCR 452. 281 My conclusion does not overlook the fact that the possibility of capital fund raising had been discussed for some years. It was discussed at the shareholders' meeting on 29 May 2003, when Territory Realty said that it would not participate in any further funding by a share raising. It threatened action if that occurred. In further discussion between Garraway and Booth on 9 February 2004, further funding by a share issue was one of the possibilities discussed, as it was at the shareholders' meeting on 19 July 2005. 282 As to the process of provision of information, little was provided at the shareholders' meeting on 14 February 2007. There was then an exchange of correspondence between solicitors then acting for Territory Realty and the directors of Dundee Beach P/L obviously conducted by Garraway. The solicitors for Territory Realty were seeking information as to the basis upon which the directors had determined to proceed with the share issue, its timing and the time of the proposed resolution. They asked for information about whether the directors considered alternative means to fund the future development of the land. They referred to the available cash reserves, and the possibility of commercial borrowing. 283 Garraway (Dundee Beach P/L) declined to respond to the solicitors but responded directly to Territory Realty. His letter of 16 March 2007 was uninformative. It referred to the development proposal of $10m being for Stage 1 only of the remaining land development, and that it was contemplated that that funding would be via combination of share issue, cash reserves and commercial borrowings, and that notice would be given of the proposed share issue. That apparently prompted further letters from the solicitors then for Territory Realty inquiring of 10 April 2007 as to the records about and the basis upon which Excess and Bishop Estate acquired their interest in Dundee Beach P/L in 1999. It referred to apparent inconsistencies in the minutes, the share transfers and the ASIC register of company information. It threatened proceedings in respect of that transaction. A further letter of 19 April 2007 complained about the adequacy of information relating to the proposed share issue and the intentions with respect to it. It asked for full details of the proposed development of the remaining land of Dundee Beach P/L and of the method of raising capital to fund the development. It asked for details as to the capital expenditure program, its timing, and its benefits. It raised the need for the company to have undertaken due diligence before proceeding to a development involving a cost of $10m, including a feasibility study touching a number of topics, and a marketing program to ensure orderly realisation of the lots to project the best economic yield. All of those matters are matters which, I find, are lacking in the paper prepared by Garraway and were not properly considered by the directors. 284 I assume prompted by that correspondence, Dundee Beach P/L through Garraway provided a copy of the January 2007 Report to Territory Realty only on 26 April 2007. 285 The reluctance to provide that information in a timely manner is unexplained, and in my view not explainable consistent with a desire on the part of the board of Dundee Beach P/L to treat its members equally or to inform them properly as members about the proposed share raising. Territory Realty did not receive the SKM Report at all. 286 Of course, I have not overlooked the fact that a new share issue may have the effect of diluting the value of minority shareholders' shares does not of itself evidence oppression or unfairness: see eg Coombs v Dynasty Pty Ltd (1994) 114 ACSR 60. Nor have I overlooked the fact that all shareholders were given an equal opportunity to participate in the proposed issue. It is the timing of the proposed share issue and the apparent justification for it which, I find, is contrived. Nor have I overlooked the fact that a share issue need not be at the real value of the shares in the company at that time. Indeed, as Garraway was not cross-examined to suggest that a low share issue price was chosen to dilute the shareholding of Territory Realty as much as possible, I have not formed any view as to why the particular share issue price of $50 per share was chosen. 287 That leads me to the conclusion that, in this instance, in all the circumstances, the proposed new share issue was oppressive and unfair.

(8) Conducting affairs of Dundee Beach P/L between 1999 and 2005 288 The complaint is that the directors of Dundee Beach P/L acted oppressively in adopting, in effect, a holding position in relation to the affairs of Dundee Beach P/L from 4 May 1999 until about 2005. 289 I do not uphold that complaint. The reasons for that decision were explained in evidence. They appear rational, and properly motivated. The market for real estate at Dundee Beach and in the Northern Territory was generally depressed. There were a significant number of re-sale allotments at Dundee Beach. Producing more new blocks for sale in that period may well have depressed their value further. The wisdom of hindsight shows that the strategy adopted was an appropriate one. The evidence as to the value of allotments at Dundee Beach more recently is that they have very significantly increased in value.

(9) Payment of legal fees 290 Since these proceedings were instituted Dundee Beach P/L has funded the costs of the respondents. It has not yet emerged, and probably because their outcome until these reasons is unclear, whether it has done so by way of loan to its directors and shareholders (other than Territory Realty) or by accepting the liability to do so, in accordance with its Articles: see Regulation 113 of Table A to the Companies Ordinance. 291 The source of the funding is, at least largely, the subscription for new shares made by Bishop Estate and Excess. 292 I do not regard those circumstances as capable of indicating that the affairs of Dundee Beach P/L are being conducted oppressively in relation to its members or any of them, or unfairly in relation to Territory Realty: see the observations of von Doussa J in Coombs v Dynasty Pty Ltd (1994) 114 ACSR 60 at 94.

THE CONSEQUENCES OF THE FINDINGS 293 In the light of my findings, it is apparent that the matters which require further consideration are: (1) the claims arising out of the 4 May 1999 share transfers based upon breach of Article 5, and the associated claims of wrongful interference with contractual relations and of misleading and deceptive conduct contrary to s 41 of the CAFTA (including as to the two last-mentioned claims, the question of an extension of time to be permitted to bring them); (2) the oppression claim, arising from conduct in relation to (i) the 4 May 1999 share transfers, (ii) the 2007 share issue; (iii) the payment of management and consulting fees, and (iv) the offer made on 2 May 2007; and (3) depending upon my conclusions about those issues, the form or forms of any appropriate relief. As this topic may require consideration of whether an order should be made under s 233(1)(d) of the Corporations Act for the purchase by Bishop Estate and Excess of the shares of Territory Realty in Dundee Beach P/L (or vice versa), that will require consideration of the quite extensive valuation evidence given at trial.

CONTRACT-RELATED CLAIMS AND EXTENSION OF TIME 294 There are three claims which I have found to have been made out, but which require an extension of time under the Limitation Act because they were not brought within three years of the accrual of the cause of action. 295 They are: (i) the claim for damages for breach of contract (confined to the 4 May 1999 share transfers); (ii) the claim for damages for the tort of intentionally interfering with contractual relations; and (iii) the claim for damages for misleading and deceptive conduct under s 91 of the CAFTA. 296 The applicants in the course of final submissions indicated that they did not seek an extension of time to bring the claim for damages for breach of contract. They were content to seek only declaratory orders, arguing that no extension of time was required to obtain such orders by reason of s 21 of the Limitation Act. 297 In the latter two cases, as damage is an element of the cause of action, it is necessary to determine when each of those causes of action was perfected. However, I have found in each instance that Territory Realty suffered loss and damage at the time of the 4 May 1999 share transfers, because the conduct giving rise to each of those causes of action deprived it, at a critical time, of the opportunity to become aware of the true nature of the 4 May 1999 share transfers and to assert its right under Article 5. I do not accept the contention that no loss or damage was caused to Territory Realty until the events surrounding, and the fact of, the 2007 share issue. 298 Section 44(3)(b)(i) and (ii) of the Limitation Act is then relied upon. Those provisions impose threshold requirements upon the applicants before the discretion to grant an extension of time is enlivened. Once the discretion is enlivened, it is a general discretion as explained in Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541, and in Ulowski v Miller [1968] SASR 277. I assume in the applicants' favour that the discretion to extend time, once the threshold requirements are met, is available in respect of claims under the CAFTA notwithstanding the apparently uncompromising terms of s 91(2) of the CAFTA: cf Vink v Schering Pty Ltd (No 1) [1991] ATPR 41-064 at [21]. 299 Section 44(3)(b)(i) prescribes a material fact ascertained within 12 months of the institution of proceedings as one of the alternative thresholds. The notion of "material fact" is explained in Sola Optical Australia Pty Ltd v Mills (1987) 163 CLR 628; and see Bjelica Investments Pty Ltd v TC Waters Pepper & Co Pty Ltd (2001) 12 NTLR 1. 300 The material fact relied on by the applicants (although not pleaded) is the announcement of the 2007 share issue. It is clear enough that the applicants had knowledge of that proposed share issue only on 14 February 2007, following the directors' resolution of that day. The proceedings were then commenced on 29 May 2007. 301 Even though a fact may be material to an applicant's case if it is relevant to any of the issues to be proved if the applicant is to succeed, and is of sufficient importance to be likely to have a bearing on the case, I do not consider that learning of the 2007 share issue was in the present circumstances a "material fact". I have found that by May 2003, the applicants were aware of the fact that Bishop Estate and Excess had become shareholders in Dundee Beach P/L and they then learned of the 2003 share transfers and the 2004 share transfers shortly after they occurred. The evidence shows that the applicants were made aware from at least that time that Dundee Beach P/L through its board may issue further shares. Even though it was apparently the exercise of that power which prompted this proceeding, I do not consider that the 2007 share issue is relevant to the issues to be proved. From 4 May 1999, Territory Realty was exposed to that possibility, and from at least 2003 was aware of the prospect of such a share issue being made. The prospect was a real one at the latest from 2004 after the 2004 share transfers. They are material facts. The 2007 share issue flowed from the control of Bishop Estate and Excess, and the board which they appointed, once they had secured the majority of the shares in Dundee Beach P/L. Territory Realty knew that. I do not consider that the 2007 share issue is other than an incidental fact to the claims for intentional interference with contractual relations and for misleading and deceptive conduct, rather than being material to either of those claims in a not unimportant way: cf Lovett v Le Gall (1975) 10 SASR 479 at 481. 302 Consequently, I do not find the threshold imposed by s 44(3)(b)(i) to have been made out. 303 The alternative threshold imposed by s 44(3)(b)(ii) is that the applicants' failure to institute the proceedings within the limitation period resulted from the representations or conduct of the respondents, and the applicants' failure was reasonable in view of the representations or conduct. 304 In the light of my findings that the true nature of the circumstances surrounding the 4 May 1999 share transfers were not fully known to the applicants until Garraway's statement was filed in early 2008, at first blush that alternative might apply to the present circumstances. The applicants' submissions acknowledge that sufficient was disclosed to suspect the subterfuge which underlay the 4 May 1999 share transfers by February 2004 (when Garraway spoke to Booth about the 2003 share transfers) or at the shareholders' meeting on 29 May 2003. The proceedings were not commenced within three years of that time: see s 21 of the CAFTA. In my view, the fact that the true nature of the 4 May 1999 share transfers was not exposed until early 2009 is not sufficient to satisfy the threshold imposed by s 44(3)(b)(ii). The fact is that the claims now under consideration were made in the proceedings when commenced, before that full disclosure was given. The immediate impetus for this proceeding was the 2007 share issue, and in the proceedings allegations were then made about the 4 May 1999 share transfers. Thus it is apparent that the knowledge of the applicants about those share transfers, albeit limited, was not a real impediment to the claims based on those events being brought. In those circumstances, I am not satisfied that it was reasonable for the applicants to have delayed, at least as long as they did, and relevantly beyond May 2006 (three years after the shareholders' meeting of 29 May 2003), in bringing the claims. 305 In any event, I would not exercise my discretion under s 44(3) of the Limitation Act to extend the time within which the proceedings might have been brought to 29 May 2007. That is because I think the applicants might well have instituted the claims earlier, but chose not to do so in the hope that an amicable buy-out would occur. They realised that prospect had disappeared when the 2007 share issue was formally made, and at the same time an earlier offer - to expire just before the time to take up the share issue lapsed - had been repeated at what the applicants considered was an unrealistically low figure. Those events dictated the time of the proceeding. I also bear in mind that the applicants have another claim, namely the claim for orders under s 233 of the Corporations Act, which traverses not simply the 4 May 1999 share issue but a range of other conduct of which they complain. That has two features. First, if (as I have found) the two causes of action presently being addressed are made out, those findings may be relevant to whether relief should be given under s 233 so they have that potential significance in any event. If they succeed on that claim, there is little if any hardship if any extension of time is refused. Secondly, and related to that point, it will be difficult, if not impossible, to isolate any damages suffered by the applicants by the particular conduct and representations arising in relation to the 4 May 1999 share transfers when there have been several other events of significance to the applicants' present predicament (as they see it). They include the 2003 share transfers, the 2004 share transfers, and the 2007 share issue. That is particularly so where, as I have found, Territory Realty and the applicants generally acquiesced in the breach of Article 5 at the time of the 2003 share transfers. There is also a real basis for possible significant prejudice to the respondents by reason of any extension of time, although the relevant period to assess that prejudice is only for the period after the expiration of three years from 29 May 2003 (the shareholders' meeting date). Due to that timing, I do not think the deaths of Walker or the solicitor George in 2005 demonstrate prejudice. But, Proctor would obviously have been a very significant witness at the hearing, and he is now unable to give evidence. It is unclear whether his illness had deteriorated to the point where he would have been unable to give evidence by May 2006, so I am left with the respondents' understandable claim that the delay has prejudiced them because Proctor cannot now give evidence, and no material from the applicants which reliably indicate that he did not have the capacity to have done so (at least to some degree) up to May 2006. 306 For those reasons, I do not grant the extension of time sought to 29 May 2007, then as now, to make the claims for interference with contractual relations and for misleading and deceptive conduct. Consequently, the action, to the extent that it relies on these claims, should be unsuccessful.

(1) The principles 307 The power to make orders under s 233 of the Corporations Act arises only if s 232 is satisfied. It relevantly provides: The Court may make an order under section 233 if: (a) the conduct of a company's affairs; or (b) an actual or proposed act or omission by or on behalf of a company; or (c) a resolution, or a proposed resolution, of members or a class of members of a company; is either: (d) contrary to the interests of the members as a whole; or (e) oppressive to, unfairly prejudicial to, or unfairly discriminatory against, a member or members whether in that capacity or in any other capacity. Although of course ss 232 and 233 came into force only with the Corporations Act itself on 13 March 2000, no submission was made that their legislative ancestors were expressed in such a different way a to make the 4 May 1999 share transfers irrelevant to their possible enlivenment. However, as I determine in the next section of these reasons, I do not ultimately consider that the 4 May 1999 share transfers and the events surrounding them weigh in the scales of determining whether either of s 232(d) or (e) has been made out. 308 There was no real dispute between the parties as to the principles relevant to determining whether s 232(d) or (e) is made out. Their dispute was as to the factual determination of those questions. I do not, therefore, need to rehearse the authorities at any length. They are canvassed in the very helpful written submissions of the applicants headed "Oppression - Relevant Principles" and of the respondents entitled "Conspectus of the Law Relating to Oppression". 309 It is clear that each of placita (d) and (e) should be given separate scope for operation. 310 Section 232(e) is concerned with commercial unfairness, and its individual elements are to be regarded as different aspects of the essential criterion of commercial unfairness. The test of commercial unfairness is objective, assessed on the standard of reasonable directors in their particular circumstances, and requires an objective assessment having regard to the corporate objectives on the one hand and the disadvantage or detriment on the members or a particular member or members on the other. See generally Wayde v New South Wales Rugby League Ltd (1985) 180 CLR 459; Dynasty Pty Ltd v Coombs (1995) 59 FCR 122 and Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692. An appropriate expression of the test, as used in the two last mentioned cases, is whether the conduct is so unfair that reasonable directors who consider the matter would not have thought the decision to be a fair one. 311 Section 232(d) may operate beyond the circumstances covered by s 232(e), that is on conduct beyond what may be described as commercially unfair conduct. 312 The authorities indicate that the Court should not readily find either s 232(d) or (e) is made out: Edwards v Idaville Pty Ltd (1996) 22 ACSR 1. Such a finding requires consideration of all the circumstances, viewed cumulatively, but not with a hypercritical approach, as the measure is the standard of reasonable directors: De Tocqueville Private Equity Pty Ltd v Linden & Conway Ltd (2006) 59 ACSR 587. It is not a finding to be made because the Court may, on the information available, disagree with the decision of the directors, or because the wisdom of hindsight may show that the decision of the directors was unwise and perhaps grossly so, or because the directors or management did not conduct the affairs of the company as well as the Court considers they may have: Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (1998) 28 ACSR 688. As Murray J said in Re Spargos Mining NL (1990) 3 ACSR 1 at 44, the Court should not in substance adopt an approach to those provisions without clear justification, so that it does not simply take "over the management of the company". 313 I do not need to particularly consider the cases dealing with "oppression" (used generically) in the context of a quasi-partnership company: cf Ebrahimi v Westbourne Galleries Pty Ltd [1973] AC 360. That is because, as appears below, I have not taken into account the 4 May 1999 share transfers or the conduct surrounding them. I have also found that Territory Realty, from about 18 May 1999 when Booth and Sanders were removed as directors, accepted that the consequence of Hassall's buyout of Kendray generally in May 1999 was that the "quasi-partnership" relationship of the shareholders in Dundee Beach P/L had come to an end. It then adopted a passive role as a substantial, but minority shareholder in Dundee Beach P/L virtually up to the time of these proceedings. 314 The other conduct which may enliven s 232(d) or (e) referred to in [293] above is, in my view, to be measured in that context. It may be measured against a standard of whether the board's decisions were so unreasonable that no reasonable board could have considered the decisions to be in the best interests of the company as a whole: Reid Murray Holdings Ltd (in liq) v David Murray Holdings Pty Ltd (1972) 5 SASR 386. However, that standard may be affected where the allegation (and in this case the finding) is that the conduct complained of is oppressive to, or unfairly discriminatory of, a minority shareholder. For instance, conduct which has the purpose or effect of ensuring that the interest of the minority shareholder is rendered valueless in practical terms may be caught within the web of s 232(e): Kirwin v Cresvale Far East Ltd (2002) 44 ACSR 1; Whitehouse v Carlton Hotel Pty Ltd (1987) 162 CLR 285.

(2) Consideration and conclusion 315 As the applicants acknowledged, it is necessary to consider whether the conduct of Dundee Beach P/L through its board in the four respects discussed at [293] leads to a finding that the conduct of its affairs fell within s 232(d) or (e). 316 I do not consider that the circumstances surrounding the 4 May 1999 share transfers, or those share transfers themselves, provide a reason to attract the operation now of either of those placita. In my view, the effects of that conduct have been spent by the 2003 share transfers and the 2004 share transfers in which the applicants have acquiesced. The reality is that Territory Realty accepted, at least since 2003, that Bishop Estate and Excess are significant shareholders in Dundee Beach P/L and that it is a minority shareholder. The applicants also accepted that the quasi-partnership relationship which existed up to May 1999 did not continue thereafter, albeit that for some years they believed that Hassall personally and through H & K Earthmoving controlled the majority shareholding. There is nothing inherently contrary to the interests of the members as a whole or oppressive or unfairly discriminatory of a minority shareholder that the majority shareholder or shareholders who together operate as a majority (as obviously Bishop Estate and Excess do) should appoint the board and through it conduct the affairs of the company. It is not oppressive to or unfairly prejudicial to, or unfairly discriminatory against Territory Realty that it is a minority shareholder. I have also rejected the proposition that Territory Realty, as a minority shareholder, has (except in the specific respects that I have mentioned) been deprived of the flow of information concerning the affairs of Dundee Beach P/L to which, as a minority shareholder, it was entitled. 317 In my view, however, the 2007 share issue, together with the nature and terms of the offer made on 2 May 2007, do amount to the conduct of the affairs of Dundee Beach P/L in a way which is oppressive to Territory Realty. For the reasons I have given, I am satisfied that the decisions relating to the 2007 share issue, in the context of the more or less contemporaneous decision as to the terms and timing of the offer to purchase the shares of Territory Realty made on 2 May 2007, terminating just before the expiry of the time in which the share issue could be taken up, are so unreasonable that no reasonable board could have considered them to be in the best interests of the company as a whole at that time. Moreover, I find that the effect of those decisions of the majority at that time is unfairly prejudicial to Territory Realty. It was, in essence, to propose capital raising by share issue at the same time as a grossly low buyout figure was proposed to the minority shareholder in circumstances where, at the time, the need for future capital was not immediately apparent and the proposal for the need for future capital was undeveloped and somewhat speculative. I shall not repeat the findings I have made about that. Hence, the 2007 share issue was in the context of the majority shareholders, that is Bishop Estate and Excess, through the board which they had appointed, endeavouring to procure a buyout at a grossly unfair price in the face of the option, which they did not consider that Territory Realty would accept, of a very substantial and premature capital raising proposal. Consequently, whether I apply the "business judgment" test or a test more apt to oppression or unfair discrimination because of the motivation which I attribute to that composite set of decisions, in my view s 232(e) is enlivened. 318 I have found that the level of management and consulting fees was not justifiable. It therefore adds to the picture of the oppressive conduct. In the words of Owen J in Shamsallah Holdings Pty Ltd v CBD Refrigeration & Airconditioning Services Pty Ltd (2001) 19 ACLC 517 at [30], in the vernacular, I think it was "ripping off" the company and therefore the other shareholders. It would, however, be a difficult question to determine the appropriate relief if that were the only element of oppressive or discriminatory conduct. But it is not. It is further oppressive or discriminatory conduct which adds generally to the finding upon which I determine the appropriate relief.

(1) Form of Relief 319 The applicants contend that I should make declaratory orders in respect of adverse findings made concerning the 4 May 1999 share transfers. I decline to do so. I have recorded my findings above. I do not think any purpose would be served by any formal declaratory order, where (as I have found) that conduct is not directly relevant to the present circumstances of Territory Realty as a minority shareholder of Dundee Beach P/L with Bishop Estate and Excess being together the majority shareholders 320 In view of my finding that the conduct of the affairs of Dundee Beach P/L is in the respects I have referred to oppressive to, or unfairly discriminatory against, Territory Realty, I am empowered to make one of the range of orders available under s 233 of the Corporations Act. 321 The appropriate remedy should be selected to regulate the affairs of Dundee Beach P/L to avoid further oppression or unfair conduct. In this instance, given the relationship between the shareholders of Dundee Beach P/L and the fact that there are only three of them, in my view the least intrusive and most appropriate one is for the buy-out of one faction by the other: Marten v Australian Squash Club Pty Ltd (1996) 14 ACLR 452, and in the first place that the majority buy out the minority: Wilton-Davies v Kirk [1998] 1 BCLC 274. 322 In my view, in the first instance, the appropriate order should be for the purchase of the shares of Territory Realty by Bishop Estate and/or Excess pursuant to s 233(1)(d). I have found that the offer made to Territory Realty of 2 May 2007 was at a gross under value, and indeed that may have been recognised by the proposal put on behalf of Bishop Estate and Excess by senior counsel at the commencement of the hearing. 323 I propose to order, therefore, that, in the first instance, Bishop Estate and/or Excess purchase the shares of Territory Realty in Dundee Beach P/L at a price which I will shortly determine. In the event that those shareholders choose not to acquire the shares of Territory Realty, I would then propose to give Territory Realty the opportunity to buy the shares of Bishop Estate and Excess in Dundee Beach P/L at the same price per share. Although the applicants pointed out that a fair price may extend beyond the value of the shares (see Dynasty Pty Ltd v Coombs 59 FCR at 143-4), I see no reason to depart from the value of the shares at a certain date as the appropriate value for the purposes of the orders I propose to make. 324 In the event that neither Bishop Estate and/or Excess acquire the shares of Territory Realty in Dundee Beach P/L, or vice versa, I will give the applicants liberty to apply for such further or other orders as may be appropriate under s 233(1) of the Corporations Act in the event that the parties are unable to agree upon some other form of order to give effect to the findings which I have made. 325 It is therefore necessary to determine the value of the shares in Dundee Beach P/L. In my view, the appropriate date to do so is 30 June 2007. That is the most convenient date, as its assets largely were real estate and evidence about the valuation of its interest in real estate spanned a period of time at and soon after that date. I am also mindful that during the latter half of 2007 certain of the blocks of land included in the valuations were sold so that there has been a change in the cash assets of Dundee Beach P/L between 30 June 2007 and 31 December 2007. I am mindful of the need not to double-count assets in determining the value of its shares. 326 By 2 June 2007, that is the date of close of the 2007 share issue, both Bishop Estate and Excess had respectively subscribed for an additional $1m capital, making a total of $2m. Why they subscribed to that extent, and not to the full value of the shares offered was not much explored in the evidence. That money has been paid into Dundee Beach P/L. In my view, for the purposes of calculating a fair value of the shares in Dundee Beach P/L, it is appropriate to unravel that transaction. To select the value of shares at 30 June 2007 avoids the necessity to adjust retrospectively the interest earned by Dundee Beach P/L on that additional subscribed capital. 327 I turn to consider the value of the interests of Dundee Beach P/L in the land at Dundee Beach.

(2) Value of the land 328 The value of the shares in Dundee Beach P/L depends largely on the value of its real estate assets. That comprises both already subdivided land, of which there are relevantly 22 or 23 parcels, and what is called in submissions the "en globo land" being the land in Section 2881 not yet developed. 329 The evidence as to value was primarily given by Peter Phippin on behalf of the applicants and by Michael Mooney on behalf of the respondents. 330 In addition, the applicants called Desmond Fanning a registered real estate who now works in the Dundee Beach area (and a land owner at Dundee Beach since 1996). Fanning's evidence concerned the value of the dump site, the school site, the Rainforest Block and the previously approved 25 lot subdivision into two hectares each which was originally part of Stage 4 of Dundee Downs. For reasons appearing above, I do not consider his evidence about the value of the dump site, the school site or the 25 lot subdivision, and I have determined the value of the Rainforest Block. His evidence about the Rainforest Block was ultimately quite confined. Hence, I do not need to refer further to his evidence. As noted earlier in these reasons, the applicants also called Mark Harris, an experienced valuer, to value the developed pump house site. I have briefly referred to his evidence, but as I did not accept the applicants' primary complaint about the sale of shares in The Pumphouse Gang, again it was not necessary to refer in detail to his evidence. 331 The respondents, in addition to Mooney, called Jeffrey Pollard, also an experienced licensed real estate agent who has worked for many years in the Dundee Beach area. In the light of the number of blocks at Dundee Beach for sale in late 2007 and early 2008 by resale, he did not think it wise for Dundee Beach P/L to put newly developed blocks on the market at that time. It then had available about 20 blocks. In the financial years ended 30 June 2004, 30 June 2007 and for the period 1 July 2007 to 14 February 2008 (shortly before his evidence) there had been 87, 65 and 49 sales at Dundee Beach respectively. He said there was at the time of his evidence a demand for blocks of various sizes at Dundee Beach, but that - in the light of resale blocks - it would take some 12 to 24 months for Dundee Beach P/L to sell its then remaining current stock of land at a proper market value. I generally accept his evidence. I note that Phippin's valuation of the subdivided stock contemplated its progressive realisation over a period of 12 months or so, a slightly higher time frame than Pollard suggested. 332 I have earlier referred to certain of the evidence of D'Rozario, a well qualified and experienced town planner. On the aspect of valuation, she generally confirms Phippin's understanding of the zoning applicable to what was, at an early stage, described as Stage 4 of the Dundee Beach development proposals, that is the area to the north east of the existing substantial developments and generally east of the Lodge at Dundee, and to the parts of the Tourist Commercial zoned land in the northern part of Dundee Beach north and a little east (where the airstrip was established) of the Lodge at Dundee. Her supplementary report addressed whether the Stage 4 area could be developed into 54 allotments, with planning approval, as was the case when the Namarada Area Plan 1990 was formulated. She considered that such approval could still be obtained, albeit with some caution, and that adequate groundwater supplies are feasible without too much difficulty. Part of Phippin's valuation is based on her views. 333 The licensed surveyor Kevin Dodd was called by the respondents on that latter topic. His evidence had a possible dual significance, albeit relatively minor in the overall picture. Firstly, he agreed with D'Rozario that the lapsed development approval in relation to the 25 lot subdivision in Stage 4 was unlikely to be able to be revived unless it could be shown that adequate water for domestic purposes would be available from groundwater supplies (if not reticulated), as that is a requirement of the NT Planning Scheme, February 2007. The same applied to Phippin's premise that the Stage 4 land could be developed into 54 allotments. He doubted that rainwater harvesting would be regarded as sufficient for procuring approval to such a proposal. 334 As I have not concluded that the lapsing of the earlier development approval should attract any conclusion adverse to the directors of Dundee Beach P/L, on that aspect the evidence is not important. However, his evidence raises some doubt as to the extent to which Stage 4 will be able to be developed until a "natural resources assessment" of the area had been carried out. He accepted that the Namarada Area Plan 1990 might make further development proposals easier to achieve. That was one of the factors taken into account by D'Rozario. I think the difference between their respective professional views is one of emphasis. It is not possible to say who is correct, but I will adopt a cautious approach to the prospects of developing 54 (or some other number of) allotments in Stage 4 of Dundee Beach when considering its value. 335 Incidentally, Dodd's evidence might also support the view that the strict imposition of a reticulated water supply by a water treatment plant from a dam served by a pipeline from the Finniss River may be an overstatement despite Garraway's assertion to the contrary. However, I have not taken his evidence into account adversely to the respondents in forming my conclusions about the reasons for the 2007 share issue because it did not arise in that context and was not the subject of testing in that context. 336 Both Phippin and Mooney, with somewhat different professional backgrounds and experience, were well qualified and generally impressive witnesses. Each gave evidence responsively and carefully. Where they differed to a significant degree, the difference principally flowed from Mooney being somewhat more cautious about the development potential of the undeveloped Tourist Commercial land in the north-western part of Dundee Beach. On that topic, I generally prefer the approach of Mooney, because he has a greater familiarity with the real estate market in the Northern Territory and because, upon careful reflection, I think his more cautious approach is likely to be the more realistic one. I shall explain that conclusion in a little more detail when considering the separate areas of the Dundee Beach P/L land which has not yet been developed and sold. 337 On the other hand, as I explain below, I also formed the view that Mooney's evidence was unnecessarily conservative, perhaps because he saw his function as being to provide as low a valuation overall as professionally maintainable. That is not to conclude that his evidence was not given honestly or that his approach was not professional, but I had the overall impression that because he had worked with Garraway for some time his perspective may have been a little narrow. 338 Each of the principal valuation witnesses separately considered the value of the subdivided stock, and the en globo land. And each then considered the Stage 4 land separately as part of the en globo land. Phippin further broke up the Tourist Commercial land in the north of Dundee Beach. 339 A table of the comparative valuations is as follows:

Phippin Mooney

1. Subdivided stock $6,905,000 $6,694,000 (23 blocks) (22 blocks)
2. Stage 4 land $3,220,000 $2,119,000
3. Northern TC land $6,000,000 $1,923,750 (40 hectares) (405 hectares)
4. Airstrip (lower part of northern TC land) $5,000,000 (included above) (100 hectares)
5. Remainder land - - ___________ ___________ Total $21,125,000 $10,866,750

340 As can be seen, Phippin has separately valued parts of the en globo land comprising the TC land in the north eastern part of Dundee Beach, whereas Mooney has valued that land in one amount. The difference in their overall valuations is largely accounted for by the difference in approach to valuing that land, and the value ascribed to it.

(i) The subdivided stock 341 Consistent with the professionalism of both Phippin and Mooney, the assessed value of the 22 lots of subdivided land already "in stock" was reached by valuing each lot individually on the basis of comparable sales. Phippin's individual valuations totalled $6,905,000 and Mooney's totalled $6,694,000. That is a minor variation, entirely within an acceptable range. As suggested by the parties, I adopt the average of the two valuations, namely $6,800,000. 342 The first issue between the two valuers was whether the allotment on which there is a Telstra tower should be included. Mooney did not include it; Phippin gave it a relatively low value. The basis for that difference was not fully explored in the evidence. I do not need to resolve it. That difference is not significant when I adopt the averaging to which I have just referred. 343 The second, and more important issue, is the extent to which the valuation figure should be reduced by reason of the realisation costs and holding costs whilst those allotments were realised. 344 Mooney has reduced his valuation figure for selling costs (legal fees, commissions, advertising and promotion), the purchaser's margin, "stamp duty and legal on purchase", and "interest on holding" calculated on half the parcel for 12 months on the basis that all the allotments would be sold over 12 months. He did so on the basis of a "one line sale", that is a sale on the one day to the same purchaser. He equated that process to the valuation of the shares in Dundee Beach P/L. I do not agree that all those deductions should be made. The purpose of the valuation is to assess the value of Dundee Beach P/L (and so the value of its shares) at 31 December 2007, a date which the parties agreed to use. The comparable sales analysis of Phippin (and Mooney) assumed that the blocks would be progressively sold over a period of a year or so. I accept Phippin's evidence that "stamp duty and legal on purchase" is not an appropriate reduction. It is based upon a premise I do not accept - that the valuation methodology involves the purchase of the allotments by an investor for resale and so looks at what that investor would pay to secure a profit on resale. That was not the basis of Phippin's valuation. Nor was it the basis on which Mooney reached his primary figure, namely comparable retail sales. Stamp duty and legal fees are paid by the retail purchaser. For the same reason, I do not agree that a deduction should be made for a "purchaser's margin". That involves mixing two valuation methods inappropriately, namely the comparable sales method and the hypothetical development analysis method. The developer in this instance is Dundee Beach P/L and it has no development risk because the development of this land is in place. Nor do I accept that it is appropriate, having regard to the purpose of the valuation and the history of Dundee Beach P/L to make a deduction for holding costs. That cost was not being incurred. Nor had it been incurred or brought to account in the preceding years in relation to that stock when Dundee Beach P/L was not actively marketing its stock. My impression of Mooney during his cross-examination on these matters was that he was uncomfortable in trying to justify them, and indeed that he was to some degree endeavouring to reduce the valuation of these allotments by putting forward barely tenable deductions. If those sorts of costs were to be taken into account, the starting point would not be the primary valuations on comparable sales analysis, but on a hypothetical development basis. Mooney's deductions did not start from that premise, and as I have noted there was no developer's profit margin or risk to take into account because the development had occurred. 345 Phippin did not directly contest the fact that Dundee Beach P/L would incur some selling and promotional costs in realising these allotments. 346 I propose to reduce the average valuation by 6.7% (the percentage suggested by Mooney) to $6,344,400. I have taken that figure, although there is no direct evidence of commissions paid to selling agents or promotional costs, to include also an allowance for the possibility that the sale of the allotments might extend beyond 12 months. As was said, the market may change over that time. But the evidence suggests that the market has, if anything, strengthened so the allowance for adverse market movements is a small one.

(ii) Stage 4 land 347 Phippin's valuation of the Stage 4 land was on the hypothetical subdivision basis. He thought that it could be subdivided into 56 allotments. If that anticipated development had been approved, he thought the realisable value of those allotments would be $14,855,000. He adopted the hypothetical development analysis approach. Allowing for the cost and risks of development, he reached a figure of $3,222,000. 348 Mooney valued that land at $2,119,000 based upon a direct comparison basis, because he had doubts that the hypothetical development analysis valuation approach was appropriate. His criticism of that approach was in relation to the whole of the en globo land (Phippin agreed in relation to the balance of the en globo land), and I think it suffers for that reason. He refers to whether permission would be granted to clear all the en globo land, and to whether purchasers would want that land fully cleared. Those two matters may be apt to the Tourist Commercial land, but the Stage 4 land at all times was earmarked for development and, under the Namarada Area Plan 1990, in eight hectare allotments. Moreover, Phippin did not assume a total clearing of the Stage 4 land. I think that Mooney's comments in relation to the Stage 4 land to that extent reflect too cautious an approach. 349 Mooney raised a more significant question as to whether the proposed subdivision of the Stage 4 land would be approved, especially in the light of changed planning expectations and in particular relating to water supply. Those matters are considered by D'Rozario and Dodd above. Their views, perhaps that of D'Rozario more than that of Dodd, indicate that probably the sort of subdivision contemplated by Phippin would be approved. He proceeded on that assumption, based upon D'Rozario's report. He is not to be criticised for that. He did not see D'Rozario's supplementary report, but it does not materially change her opinion. Apart from the issue of water supply, there is no reason to think that other services and facilities in Dundee Beach would be less available to the Stage 4 land than to the earlier developed sections. The Stage 4 land comprises some 653 hectares, so clearly even allowing for access roads and for areas where natural vegetation remained or where development was limited by topography, the proposed 56 allotments were of a substantial average size. 350 On the whole of the evidence, in my view it was appropriate to consider the development potential of Stage 4 separately from the development potential of the Tourist Commercial land. The evidence shows Stage 4 had always been identified for rural/residential use in larger blocks, including in the Namarada Area Plan 1990. It is zoned for rural living. It was proximate to the existing developed areas. Part of it had previously been approved for 25 lots of two hectares, although that approval was allowed to lapse. D'Rozario's evidence was to the effect that a fresh development application for 56 blocks had good prospects of success, albeit with some caveats expressed. Mooney had earlier discussed with Garraway that form of development for the Stage 4 land, without saying it would not be permitted. 351 In my judgment, the Phippin approach to the valuation of the Stage 4 land is more technically correct upon the information he had, and upon the findings I have made about the effect of D'Rozario's evidence. However, given the uncertainty about the adequacy of the water supply, I think the hypothetical developer would have allowed a greater risk factor than that allowed by Phippin. It may have been necessary, for example, to reduce somewhat the density of the allotments or to locate the allotments a little differently so as to satisfy the planning authority on that score. Phippin applied a reduction of about 23 per cent on the anticipated sales less cost of sales. In my view, an appropriate profit and risk factor should be in the order of 30 per cent. That would reduce his valuation of the Stage 4 land quite considerably, to about $2,225,000. It is coincidental only that that figure is not significantly different from the value ascribed to the Stage 4 land by Mooney.

(iii) Tourist Commercial land 352 Phippin's approach to this part of Dundee Beach was on the basis that, consistent with its zoning, an area should be valued for sale to a developer as a tourist resort, especially in the beach front area. That, he thought, would encompass a high quality hotel, a motel, a caravan park, a shopping centre, a pub, and a community centre. Such a development would, he accepted, require full service facilities including a reliable water source. The airstrip section of that land would be suitable for a resort development. 353 The only comparable sale, he thought, was the Lodge at Dundee. It had been sold in October 2006 for $3,500,000. As noted earlier, it has a beach front location. He allowed for the value of the current buildings there, and for the value of its adjoining land, and concluded that the residual land value of the Lodge at Dundee was $2,530,000 or $26.30 psm. (for 96,200 square metres). He said there was some 400,000 square metres of comparable land in the northern part of this area, and about 1,000,000 square metres of such land around the airstrips, although it did not have a beach frontage. He applied rates of $15 psm and $5 psm respectively to those parts of this area to value them at $6,000,000 and $5,000,000 respectively. He attributed no value to the residual land in this area. 354 Mooney agreed that this area of land was suitable for en globo use or subdivision. He agreed with Phippin that a hypothetical subdivision approach was unhelpful (as noted, he extended that view to the Stage 4 land), and that a direct sales comparison method should be used. It is at this point that he parted company with Phippin. He did not regard the sale of the Lodge at Dundee as comparable. He also criticised Phippin's assessment of the area of land available in the Tourist Commercial zone. I have heard their respective evidence about the assessment of the area of land available for development. I think the dispute is relatively marginal to the reliability of the respective valuations. Nevertheless, the adoption of the per square metre value for the sale of the Lodge at Dundee would have to be applied carefully because the two areas given value by Phippin were some four times the value per square metre and 10-11 times the land size of the Lodge at Dundee. 355 Mooney then identified 13 "sales of assistance" in other relatively remote or non-urban areas in the "Darwin" region. The range of values they exposed is dramatic: from $41,954 per hectare to $13 per hectare. They show that higher prices per hectare are paid for smaller areas of land which are ripe for subdivision. Having regard to those sales, he applied a value of $4,750 per hectare to 405 hectares of this area and the nominal sum of $150,000 in total to the balance of the area, making a total of $2,073,750 for the Tourist Commercial land. He entirely discounted the relevance of the sale of the Lodge at Dundee, except to say that the fact that so much had been paid for it and that it was likely to be developed promptly would inhibit another developer from contemplating another substantial resort development. In my view, his reasons for discounting any real relevance to the Lodge at Dundee sale were not persuasive. It was a sale in close proximity for a similar usage, and over a substantial area of land. Its sale value per square metre (as calculated by Phippin) was $26.30. I also thought that the arithmetical permutations presented by Mooney to demonstrate some fallacy or inconsistency in Phippin's approach were unhelpful; they did not lead to the conclusion that his overall approach was erroneous. Phippin valued only the small part of the overall area which, at least topographically, he considered would be suitable for a resort development including such features as golf courses. 356 However, Mooney demonstrated a considerable knowledge of resort developments in the Northern Territory and, relatively speaking, their lack of success. Even though there is in the northern section some 40 hectares available for such a development, the assumption that there is a present market for such land in the Northern Territory for "international resort chains" is not a self-evident one. It was made without Phippin having had access to any study of occupancy rates in Darwin or (for instance) at Kakadu. It is not clear that the particular area at Dundee Beach is or would be in competition with other geographical areas in the South East Asian region for their acquisition and development by international chains. It is not clear whether the present lack of basic facilities (other than power) within a reasonable distance would inhibit such developers or make this area less attractive to them. The Lodge at Dundee, so the evidence shows, has satisfactory potable water access at present, and it carries an existing business and hotel licence. 357 In my judgment, overall, the approach of Phippin to the valuation of the Tourist Commercial land is the correct one. I do not think Mooney's analysis of "sales of assistance" really addresses the value of that land adequately, especially as it effectively discounts the sale of the Lodge at Dundee. Phippin has then applied his professional judgment in adopting a price per square metre separately for the northern and eastern (airstrip) positions of the land. As he said, there is no science about that. His valuation involved a value per square metre of about 60 per cent and 20 per cent of the price paid for the Lodge at Dundee. However, for the reasons given, I think he has not been conservative enough in his judgment. The evidence persuades me that there are a number of matters to which I have referred which should have weighed more heavily towards a lower value. It requires a particular purchaser with the resources and experience to acquire and develop such an area of land. Such a developer has not yet emerged for land in the Northern Territory (so far as the evidence goes). Consequently, I think the per hectare rate applied to the two areas of that land which are available for development in that way should be further reduced by about half. In my view, the value of the en globo land should be fixed as follows: Northern TC Land (40 hectares at $6 psm) $2,400,000 Airstrip Land (100 hectares at $2 psm) $2,000,000 Remainder Land -

TOTAL $4,400,000

As it happens, that is more than the Lodge at Dundee was sold for in October 2006 but less than its selling price of $5,200,000 or thereabouts in November 2007. 358 Although Crown Lease Term 2881 was due to expire in August 2008, both Phippin and Mooney proceeded on the assumption that it would be renewed. In the absence of any evidence suggesting the contrary, in my view that was an appropriate assumption to make.

(iv) Conclusion as to land value 359 For the reasons I have given, in my judgment the value of the Dundee Beach P/L real estate at 31 December 2007 was as follows: Subdivided stock $ 6,344,400 Stage 4 land $ 2,225,000 Tourist Commercial land $ 4,400,000 __________ TOTAL $12,979,400 (3) The value of Dundee Beach P/L 360 As at 30 June, the assets of Dundee Beach P/L comprised cash at the bank and a deposit totalling $4,077,554 and its interest in real estate, said to be $226,426. It is common ground that that simply reflects historical cost. Its liabilities totalled $209,956. 361 After deducting the funds paid by Bishop Estate and Excess in subscribing for further shares to the sum of $2,000,000, so as to put aside the 2007 share issue, and adjusting the value of the interest in real estate to the sum I have determined in the preceding section of these reasons, I consider the equity value of Dundee Beach P/L is as follows, as at 31 December 2007: Cash including money on deposit $ 2,077,554 Interest in real estate $12,979,400 $15,056,954 Less liabilities $ 209,956 Shareholders' Equity $14,846,998 So each of the 48 shares had a value of (say) $309,312, and the 16 shares held by Territory Realty at that date would have a value of $4,948,992. 362 That calculation adopts the calculation made on behalf of the respondents, except as to the value of the interests in real estate, with one qualification. 363 The respondents have sought to reduce the value of the interests in real estate held by Dundee Beach P/L by the goods and services tax which, they say, will be payable on the realisation of those interests and by the amount of income tax that will be payable on their realisation. The question of GST and income tax being so payable was not addressed in evidence. It emerged only in the final submissions. The applicants acknowledge some allowance should be made for income tax, but only as included in the financial statements. The statement of assets and liabilities of Dundee Beach P/L at 30 June 2007 included a liability for income tax of $206,804 in the total liabilities of $209,956 so - at least to that extent - that liability has already been taken into account. 364 I do not propose to make the further adjustments sought by the respondents. 365 In relation to income tax, I note that the realisation of much of the interests in real estate of Dundee Beach P/L will depend upon the timing of the disposition of those interests and upon the expenditure incurred from time to time in relation to it. I consider it is too speculative to make such a deduction, particularly in the absence of clear evidence from the valuers that such an allowance was an appropriate one or how it would be calculated. It appears to depend on the particular valuation method chosen. Also, I have adopted a date for the valuation of the shares in Dundee Beach P/L which, apart from fixing a different value for the real estate, adopted the figures put forward by the respondents. That included provision for income tax. How that provision was fixed, and what it allowed for, is not clear. The submission in this regard is, in my judgment, not sufficiently founded in the evidence to be accepted. 366 In relation to GST, similar considerations apply. I do not think the evidence is clear enough to make such a deduction in fact. How GST is ultimately allowed for is unclear. It is unclear whether, ultimately, it will be passed on to the purchaser or purchasers. How, if at all, it should be allowed for may depend upon the chosen valuation methodology. For instance, Phippin appears to have allowed for "non-recoverable" GST in reaching a value of the hypothetical 54 lot subdivision in the Stage 4 land. I am not prepared to make the deduction suggested, on a hypothetical basis, without that basis being explored sufficiently in the evidence, and being satisfied that it is appropriate to do so.

CONCLUSION 367 For the reasons given, the appropriate orders should be that Bishop Estate and/or Excess do purchase the 16 shares of Territory Realty in Dundee Beach P/L within a specified period of time at the price of $309,312 per share. 368 Subject to any further submissions of the parties, I would allow 60 days for that to take place. I would specify that the preparedness of Bishop Estate and/or Excess to purchase those shares be notified in writing to Territory Realty within a period of 30 days. 369 In the event that Bishop Estate and/or Excess are not prepared to purchase those shares at that price, I would allow Territory Realty the opportunity to purchase all of the 16 shares held by Bishop Estate and the 16 shares held by Excess in Dundee Beach P/L at the same price, allowing a period of 30 days after the notification period fixed for Bishop Estate and/or Excess within which Territory Realty is to give such notice to Bishop Estate and Excess that it proposes to purchase those shares at that price, and a further 60 days for settlement. I distinguish between the settlement period for Bishop Estate and Excess on the one hand, and Territory Realty on the other, because I am mindful of the possible availability of some funds to Bishop Estate and Excess by shareholders' loss from Dundee Beach P/L. 370 In the latter event, that is in the event that Territory Realty is to buy the shares of Bishop Estate and Excess in Dundee Beach P/L, I would also make orders rectifying the share register of Dundee Beach P/L to retract the shares issued to them following the 2007 share issue, but upon the basis that they promptly be repaid the amount of the subscribed capital, together with the interest on that amount which has been earned by Dundee Beach P/L since the payment of $2m was received by Dundee Beach P/L. That amount should be relatively readily ascertainable. 371 I will give liberty to the parties to apply at any time in the event that it emerges that neither of the share transfer options to which I have referred is to be taken up. It will then be necessary to consider what further or different orders should be made to give effect to my findings and conclusions. 372 I will also give the parties the opportunity to make such written submissions as to costs to date as they may be advised. The applicants are to file and serve their written submissions as to costs within 21 days of the date of these reasons for judgment, and the respondents should have a further 21 days within which to respond in writing. I will then give a separate ruling on the question of costs, if it is necessary to do so. 373 I direct the applicants, by their solicitors, to provide draft minutes of proposed orders to give effect to these reasons for judgment, including the directions as to submissions on costs, to the respondents within 14 days, in anticipation that the parties will be able to agree the appropriate form of orders to give effect to these reasons for judgment within 21 days. In the event that the parties are unable to reach agreement, I direct that each of the applicants and the respondents file and serve the respective forms of orders which they propose within 21 days, and I will then call the matter on for further submissions as to the appropriate form of orders and for making formal orders. I would, of course, extend the timetable I propose in any respect if it is with the agreement of the parties. I certify that the preceding three hundred and seventy-three (373) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield.

Counsel for the Applicants: RJ Whitington QC and I Robertson

Solicitor for the Applicants: Morgan Buckley Lawyers

Counsel for the Respondents: M Maurice QC and G Clift

Date of Hearing: 18, 19, 20, 21, 22, 25, 26, 27 and 28 February 2008 and 15 and 16 May 2008