Warner v Wong, in the matter of Bellpac Pty Limited

The proceedings before Emmett J and the appeal to the Full Court 19 It is convenient to now say something more about the earlier proceedings relating to the Hung Bonds. As noted above, the Hung Bonds with a face value of $2 million which were allegedly transferred to Austcorp and Mr Hung were the subject of previous proceedings which were heard by Emmett J in 2010 and 2011. Emmett J held that the purported assignment of the bonds from Bellpac to Shan Pei was ineffectual to pass any legal or equitable title in the bonds. His Honour concluded in Warner v Hung (No 2) at [116] and [119]: There is no instrument of assignment of an interest in the convertible bonds from Bellpac to Shan Pei. Further, there was no admissible evidence as to the fact of any communication, either written or oral, between Bellpac and Shan Pei as to the assignment of convertible bonds from Bellpac to Shan Pei. … However, the entries in the books could not, of themselves, effect the reduction. It may be that Alfred Wong had a genuine belief that the convertible bonds had been assigned to Shan Pei in reduction of the Bellpac Indebtedness. Nevertheless, the fact that there was a relevant intention to assign the convertible bonds does not mean that the convertible bonds were effectively assigned. I am not persuaded that there was an effective assignment of the beneficial interest in the $10,000,000 of convertible bonds by Bellpac to Shan Pei on 6 August 2008. 20 The reference to the "Bellpac Indebtedness" is a reference to various of Bellpac's debts, including a loan from LM Investment Management Limited (LM Investment). Austcorp and Mr Hung argued before Emmett J that, pursuant to an agreement between Compromise Creditors Management Pty Ltd (Compromise Creditors) and Shan Pei in September 2007, Shan Pei became exclusively entitled to the Bellpac Indebtedness. 21 In relation to the asserted anterior transactions between Shan Pei and Bellpac, which were said to support the subsequent assignments relating to the Hung Bonds, Emmett J concluded at [141]-[143]: However, in the absence of any admissible evidence of juridical acts that are capable of constituting them, it is not possible to conclude that any of the Impugned Transactions involving Shan Pei occurred. In particular, there was no juridical act that was effective to vest in Shan Pei either a legal or an equitable interest in the Bellpac Indebtedness. Further, there is no evidence of any writing that would satisfy s 23C(1)(c) of the Conveyancing Act in respect of any of the Impugned Transactions involving Shan Pei. Having regard to the matters specified in s 140(2) of the Evidence Act, I consider that the case advanced on behalf of Ken Hung and Austcorp is far from having been proved to the requisite standard. I am not actually persuaded that the Impugned Transactions involving Shan Pei took place. In the light of the available evidence, I consider that it is unlikely that they took place, or, to the extent that there was an attempt to effect the Impugned Transactions, that it is unlikely that the attempt was effective. It follows that no consideration has been given by Shan Pei to Bellpac for the transfer or assignment of any interest in the convertible bonds. Accordingly, there was no transfer of any equitable interest in the convertible bonds by Bellpac. Alfred Wong therefore acquired no interest in the convertible bonds. Alfred Wong therefore could not transfer any interest in the convertible bonds to Austcorp. Austcorp therefore had no interest to transfer to Ken Hung. Accordingly, subject to a possible question of hearing from non-parties, the Liquidators and Bellpac are entitled to declarations and orders in the terms claimed in their amended originating process. 22 The reference by Emmett J to s 23C of the Conveyancing Act 1919 (NSW) (Conveyancing Act) relates to an amended reply by Bellpac and the liquidators, which raised both ss 12 and 23C(1)(c) of that legislation. Section 12 dealt with legal title. It relevantly provided that any absolute assignment by writing under the hand of the assignor of any debt or other legal chose in action, of which express notice in writing has been given to the debtor or other person from whom the assignor would have been entitled to receive or claim such debt or chose in action, is and is deemed to have been effectual in law to pass and transfer the legal right to such debt or chose in action from the date of such notice. 23 Section 23C(1)(c) dealt with equitable interests. It relevantly provided that, subject to provisions of that legislation with respect to the creation of an interest in land by parol, a disposition of an equitable interest or trust subsisting at the time of the disposition must be in writing signed by the person disposing of the same or by that person's agent lawfully authorised in writing for that purpose. Emmett J found that the convertible bonds were a chose in action (see [54]). Bellpac and the liquidators argued that the relevant assignments of the convertible bonds from Bellpac to Shan Pei and from Shan Pei to Mr Wong, if they took place at all, were ineffective because of non-compliance with ss 12 and 23C of the Conveyancing Act. His Honour held that, since there was no compliance with s 12, there had been no effective assignment at law of Bellpac's indebtedness (see [126]). 24 Noting, however, that s 12 was not a precondition to the validity of an assignment of an equitable interest in a chose in action, Emmett J then considered whether s 23C applied. His Honour noted at [127] that it was common ground that Bellpac retained legal title to the Hung Bonds, by reason of it being the registered holder of the bonds. Emmett J considered and rejected various arguments advanced by Mr Ken Hung and Austcorp as to why none of the transactions giving effect to the arrangements involving Shan Pei were rendered ineffective for want of compliance with s 23C. His Honour held that those requirements applied to all the relevant transactions and there was non-compliance with s 23C(1)(c), with the consequence that that provision would operate to render ineffective any of those arrangements which might otherwise be effective. In particular, his Honour found at [139] that s 23C(1)(c) would mean that "no consideration passed from Shan Pei to Bellpac for the assignment in equity of the convertible bonds, since Shan Pei could have acquired no exclusive entitlement, in equity or otherwise, to the Bellpac Indebtedness". 25 Justice Emmett further held that the subsequent alleged transfers from Shan Pei to Mr Wong and then to Austcorp and Mr Hung were also ineffective to pass any title in the Hung Bonds. His Honour concluded at [159]: Conclusion as to Subsequent Assignments If Alfred Wong had acquired beneficial ownership of the $2,000,000 of convertible bonds, I would be satisfied that the evidence establishes that that beneficial ownership passed to Austcorp, and then from Austcorp to Ken Hung. However, I have concluded that Alfred Wong did not become the owner of the bonds, either legally or beneficially, because Shan Pei did not acquire any interest in them: nemo dat quod non habet. 26 As previously noted, Bellpac and the liquidators ran an alternative case before Emmett J that, if any of the relevant assignments of the Hung Bonds were effective, the assignment by Bellpac to Shan Pei was an insolvent transaction, an uncommercial transaction, an unreasonable director-related transaction, and also involved breaches of statutory and fiduciary duty on the parts of Mr Wong and Mr Au-Yeung. Bellpac and the liquidators contended that the transaction by which the Hung Bonds were assigned by Bellpac to Shan Pei, if it took place at all, was voidable under s 588FC of the Corporations Act (which deals with insolvent transactions). Emmett J indicated that he would be disposed to conclude that Bellpac was insolvent as at August 2008 on the basis that: (a) Bellpac's balance sheet as at June 2008 suggested that it did not have cash available to meet interest payments that continued to accrue in respect of the loan to it from LM Investment; (b) even allowing for a reduction in the Bellpac indebtedness, a substantial majority of the Bellpac Indebtedness remained owing, in respect of which Bellpac was in default as August 2008; and (c) there was no suggestion that Shan Pei or Compromise Creditors agreed that the time for repayment of the balance of the Bellpac Indebtedness was to be deferred (see [172]). 27 Justice Emmett was disposed to find that there was an insolvent transaction for the purposes of s 588FC and the transaction was also "uncommercial" within the meaning of s 588FB. His Honour concluded that, taking into account the totality of business relationship between the parties, what was intended to be effected under that relationship and how the transaction affected that intention, he would be disposed to view the arrangements involving Bellpac, Shan Pei and Mr Wong as a single transaction. Furthermore, noting the "obvious benefit derived by Alfred Wong, a director of Bellpac", Emmett J expressed considerable reservations about the propriety of the transaction and noted that Mr Wong's benefit could not be explained by normal commercial practice. Accordingly, Emmett J indicated at [177] that he was disposed to conclude that the tripartite transaction was an uncommercial transaction of Bellpac for the purposes of s 588FB of the Corporations Act. 28 After reiterating that, if the arrangements involving Bellpac, Shan Pei and Mr Wong were viewed as a single tripartite transaction, Emmett J stated that he was also disposed to conclude that the purported assignment of the convertible bonds by Bellpac on 6 August 2008 was an unreasonable director-related transaction of Bellpac for the purposes of s 588FDA of the Corporations Act (see [179]). 29 Accordingly, Emmett J indicated (in obiter at [180]) that he would have been disposed to uphold the alternative cases advanced by Bellpac and the liquidators with the consequence that, subject to the possible operation of s 588FG, the Court was empowered to make an order under s 588FF. 30 As to the alternative case brought by Bellpac and the liquidators based on alleged breaches of statutory and fiduciary duties owed by Mr Wong and Mr Au-Yeung as directors of Bellpac, Emmett J indicated that, upon the assumption that the relevant transactions should properly be characterised as a tripartite arrangement involving Bellpac, Shan Pei and Mr Wong, there were "strong grounds" for concluding that the arrangements involved such breaches at least on the part of Mr Wong, who was instrumental in proposing the arrangements (see [190]). This was because the clear effect of the arrangements was that Mr Wong was put in the position where he had assets having a face value of $10 million at his disposal for the purpose of discharging his own personal liabilities and he gave no more than an unsecured promise to pay the face value of the convertible bonds at some time in the future (see [190]). 31 In considering whether Mr Hung and Austcorp would have good faith defences under s 588FG in resisting an order under s 588FF, Emmett J indicated that he considered that neither Mr Hung nor Austcorp received a benefit from the transaction and that s 588FG would be an answer to an order being made under s 588FF. He added that he would also be disposed to find, assuming that Mr Hung and Austcorp did in fact receive a benefit, that benefit was received in good faith and in circumstances where there were no reasonable grounds for believing that Bellpac was insolvent (see [212]). 32 Justice Emmett then considered a separate argument advanced by Bellpac and the liquidators, namely that Shan Pei knowingly participated in the breaches of statutory and fiduciary duty by Bellpac's directors and, therefore, received the convertible bonds as constructive trustee for Bellpac. They further argued that Mr Hung was on notice of inquiry as to the circumstances in which Mr Wong came to be the beneficial owner of convertible bonds after signing the transfer of the convertible bonds registered in the name of Bellpac in his capacity as attorney for Bellpac. They argued that Mr Hung's own attorney (Edgar Hung) had actual knowledge of the constructive trust and misapplication of the trust property but refrained from making any inquiries, with the consequence that Mr Hung received a transfer of the convertible bonds subject to the constructive trust in Bellpac's favour. 33 Justice Emmett stated that, even if there was evidence that Shan Pei had knowingly participated in the Bellpac directors' breaches of statutory and fiduciary duty, he was disposed to find that Mr Hung and Austcorp were bona fide purchasers for value without notice and, accordingly, they were not bound by any constructive trust which had previously arisen in Bellpac's favour (see [216]). 34 As noted at [5] above, the Full Court dismissed an appeal brought by Mr Hung and Austcorp against Emmett J's judgments. In particular, the Full Court (Jacobson, Gordon and Robertson JJ) dismissed the appellants' claims that Emmett J erred: (a) in finding that the appellants bore the onus of establishing that Bellpac disposed of its beneficial ownership of the convertible bonds; (b) in finding that the Bellpac parties had failed to discharge their onus of proving that Bellpac did not dispose of its interest in the convertible bonds for value; and (c) in his application of the principle in Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298 (Jones v Dunkel). 35 The appellants also argued that Emmett J erred in holding that s 23C(1)(c) of the Conveyancing Act applied to equitable dispositions of property and was not limited to real property. The Full Court held that, in the light of its dismissal of the appellants' other three grounds of appeal, it was unnecessary to rule on this issue.

Further relevant aspects of the current proceedings 36 As previously mentioned, the current proceedings concern the balance of the bonds with a face value of $8 million, $6 million of which were transferred by Mr Wong to his personal creditors (excluding those transferred to Austcorp and Mr Hung). Bellpac remains the listed holder of the remaining $2 million of bonds. None of these bonds was the subject of Emmett J's decisions, which were all directed to the Hung Bonds. It is also to be noted that, in contrast with the position in the proceedings before Emmett J where neither Mr Hung or Austcorp were the registered owners of the convertible bonds, in the current proceedings, with one exception, each of the relevant defendants is currently recorded in Gujarat's register of bondholders as owning the relevant convertible bonds. The only exception is in respect of Mr Lee, who claims to have been assigned $2 million of convertible bonds but is yet to be registered in the Gujarat bond register. 37 There is an important difference between the current proceedings and those heard by Emmett J. It relates to the fact that the issue which his Honour described as "the principal focus of the proceeding" before him, being whether "there was an effective assignment of the $10 million of convertible bonds from Bellpac to Shan Pei and then from Shan Pei to Alfred Wong" (at [40]), did not arise on the pleadings in the current proceeding. The plaintiffs repeatedly emphasised that their case involved no such proposition and none of the defences filed by the relevant defendants raised that matter. As will emerge below, in closing oral address, the solicitor for the seventh, ninth and tenth defendants appeared to trail his coat over the issue. In reply, junior counsel for the plaintiffs submitted that there was no allegation in any of the pleadings that there was any transfer of any equitable interest in the convertible bonds from Bellpac to Shan Pei and then to Mr Wong so as to give Mr Wong a right to assign them to the relevant defendants. I accept that submission. I also accept his further submission that if any such contention was made by any defendant, that defendant would carry the onus of proof. That was the view taken by Emmett J in Warner v Hung (No 2) and his Honour's finding was upheld on appeal. Even if the relevant defendants were able to overcome the pleading objection (which in my view they cannot), I am not satisfied that they would have discharged their onus. In particular, as was also the case in the proceeding before Emmett J, I consider that the evidence before me does not establish on the balance of probabilities that there was any valid assignment from Bellpac to Shan Pei and thereafter to Alfred Wong. On this matter I would respectfully adopt the reasons of Emmett J. 38 It is convenient to also note at this point that separate proceedings between Great Investments (the seventh defendant in the proceedings in this Court) and Gujarat relating to the issue of the convertible bonds were commenced in the Supreme Court of New South Wales and were transferred to this Court on 1 March 2013. The transferred proceedings concern an application by Great Investments, the registered holder of convertible bonds in Gujarat with a face value of $1 million, to convert the bonds to shares or cash. The transferred proceedings were stayed pending the determination of these proceedings.

Gujarat's register of bondholders 39 The register of bondholders maintained by Gujarat as at the hearing date recorded the following relevant information (some irrelevant information is not included): SL No Bond Series Distinctive No Face Value Current Listed Holder Date of Ownership 1 I series 1000001-1000010 $0.5m Bellpac Pty Ltd Since Issue 2 I series 1000011-1000050 $2.0m Mr Osmond Tze Leung Kwok 1/05/2009 3 II series 2000001-2000010 $0.5m Bellpac Pty Ltd Since Issue 4 II series 2000011-2000030 $1.0m Great Investments Limited 16/12/2008 5 II series 2000031-2000050 $1.0m Mr Hong Xu 1/05/2009 6 III series 3000001-3000030 $1.5m Bellpac Pty Limited Since Issue 7 III series 3000031-3000050 $1.0m Great Investments Limited 16/12/2008 8 IV series 4000001-4000020 $1.0m Good Team Investments Limited 5/12/2008 9 IV series 4000021-4000050 $1.5m Bellpac Pty Limited Since Issue TOTAL VALUE $10m

Mr Anthony Warner 40 Mr Anthony Warner swore two affidavits, the first dated 31 March 2014 and the second dated 5 March 2015. Although his evidence was not given in accordance with the Court's Expert Witness Practice Note, with the Court's leave, Mr Cotman SC asked Mr Warner various questions the answers to which satisfactorily established his expertise and qualified him to express an opinion on the solvency of Bellpac. Mr Warner explained the documentation which he reviewed in coming to the views expressed in [78] of his first affidavit and, in particular, his opinion that Bellpac was insolvent from at least December 2007 and was insolvent as at 23 July 2008.

Mr Warner's first affidavit summarised 41 Mr Warner annexed to his first affidavit various documents which are relevant to the issue of the convertible bonds the subject of these proceedings. 42 On 21 March 2003, Bellpac acquired land, leases and other assets associated with a coal mine near Wollongong. The purchase was financed by several loans. One of the loans was made by LM Investment through its custodian (Permanent Trustee Australia Limited (Permanent Trustee)), which loan was secured by a first charge and mortgage over various of Bellpac's assets, including the land and leases associated with the mine. 43 A company called Ace Bond Capital Limited (Ace Bond) also lent Bellpac $9 million pursuant to a loan agreement dated 21 March 2003. The loan was repayable by no later than 20 March 2005 and was secured by a fixed and floating charge over Bellpac's assets and a mortgage over the land and mining leases constituting the mine. The charge was inferior to the security held by LM Investment. 44 On 29 September 2004, Ace Bond transferred its interests under the loan to various subsidiaries of Great Pacific Capital Limited (GPC), a publicly listed company, of which Mr Alfred Wong was a director. The transfer was accomplished by a deed of transfer and acknowledgment dated 29 September 2004 (the Deed of Transfer). Its effect was that Bellpac's indebtedness was owed to the relevant GPC subsidiaries. Subsequently, the date for repayment was extended to 13 July 2008 and the amount of Bellpac's indebtedness was increased to approximately $22.4 million. 45 In mid-2007, a deed of compromise (the Deed of Compromise) was executed by Compromise Creditors, Bellpac, GPC, various GPC subsidiaries and five other creditors of companies in the GPC group (the GPC Creditors). The Deed of Compromise stated that GPC and a subsidiary, GPC Finance, were indebted to the GPC Creditors and that the GPC Creditors had agreed to compromise their rights in relation to that indebtedness. One of the specified GPC Creditors was Shan Pei, whom it was said was owed a debt of $1,671,855.10. The total amount of the debts of the GPC Creditors amounted to $6,390,646.98. 46 The effect of the Deed of Compromise was to release and discharge GPC and GPC Finance from all liability with respect to debts owing to them; the various GPC subsidiaries assigned their interests in and to the Bellpac indebtedness to Compromise Creditors; and Bellpac acknowledged that that indebtedness, together with interest and other fees payable under the Deed of Loan, was owed to Compromise Creditors. 47 The Deed of Compromise stated that Compromise Creditors entered into it as trustee of the GPC Creditors Trust, constituted by a deed dated 16 July 2007 and made between Fuwin No 2 Pty Limited and Compromise Creditors. 48 The documentation also included materials relating to an extraordinary general meeting of GPC which was held on 9 November 2007. Two resolutions were passed at the meeting. The first was that GPC (for itself and certain of its subsidiaries) be authorised to complete and give effect to the Deed of Compromise. The second was that GPC be authorised to issue and allot approximately 29 million fully paid ordinary shares to Shan Pei to satisfy debts of $2,639,515 owed by GPC to Shan Pei. 49 The tendered documents also cast some light on the creation of the convertible bonds. It is evident that, in conjunction with a sale by Bellpac of certain assets associated with the mine to Gujarat, on 3 December 2004, Bellpac and Gujarat entered into a remediation licence deed, which subsequently gave rise to a dispute between them which was heard in both the Supreme Court of New South Wales and the Mining Warden's Court of New South Wales. The dispute was settled insofar as Gujarat's remediation obligations were concerned by a deed of settlement dated 12 September 2007. LM Investment, as chargeholder and mortgagee, refused to accept the terms of settlement. New terms of settlement were negotiated, which resulted in a restated settlement deed dated 23 July 2008 (the 2008 Settlement Deed). Gujarat agreed to pay $1 million in cash to or to the order of Bellpac and to issue in favour of Bellpac, and deliver to Bellpac, certificates in respect of convertible bonds evidencing a debt totalling $10 million. The delivery of the convertible bonds and the payment of the $1 million were in consideration of the surrender by Bellpac of rights to receive royalty payments from Gujarat. 50 On 5 August 2008, Gujarat issued $10 million of convertible bonds (in denominations of $50,000) to Bellpac pursuant to the 2008 Settlement Deed. The terms and conditions on which the convertible bonds were issued included a provision that title to a convertible bond was vested absolutely in the person entered in the bond register as the holder of the bond and would pass by transfer and registration. A convertible bond was to be freely transferrable. Application for the transfer of the bond was to be made by lodging a duly completed transfer form with Gujarat. 51 The terms and conditions also included a provision that the holder had the right to convert the bonds into fully paid ordinary shares in Gujarat at any time during the months of July and January, on or after 1 July 2011. The conversion price was to be calculated by reference to a formula which was set out in the terms and conditions. The shares issued to a bond holder upon conversion were to be held in escrow for six months, after which time Gujarat was to apply to have the shares listed. The convertible bonds matured on 1 July 2028 unless previously redeemed, converted or purchased and cancelled. 52 Upon issue of the $10 million of convertible bonds, Bellpac was registered in the Gujarat bond register as the holder of those bonds. On 6 August 2008, certificates in respect of all those convertible bonds were delivered by Gujarat to Bellpac's office and were received by Mr Alfred Wong, who arranged for them to be handed to his brother Ivan Wong for safe custody. 53 In his first affidavit, Mr Warner referred to letters being sent on 11 November 2009 by the liquidators' solicitors to each of Dr Kwok, Mr Xu, Great Investments and Good Team regarding the physical location of the certificates relating to the relevant convertible bonds. No response was received to any of those letters. 54 Mr Warner also stated that, in his capacity as liquidator, having reviewed Bellpac's cash receipts journal and other books and records of Bellpac he was not aware of any document in Bellpac's books and records or elsewhere which recorded the receipt by Bellpac of any consideration in respect of the relevant bonds. 55 Mr Warner deposed that he was of the opinion that: (a) Bellpac was insolvent as at 23 July 2008; (b) Bellpac was insolvent from at least December 2007 and probably earlier; and (c) Bellpac's state of insolvency continued up to his appointment as joint and several liquidator. 56 Mr Warner explained that these opinions were based on his review and the contents of the following materials (copies of which were attached to his first affidavit): (a) seven reports to creditors/advices to creditors prepared and issued by him and his colleague as administrators and liquidators of Bellpac; (b) all proofs of debt submitted by Bellpac's creditors; (c) financial reports for Bellpac for the period July 2006 to June 2009; (d) various documents relating to Bellpac's cash flow, including various loan agreements and related documents, as well as loan account statements; (e) Bellpac's income tax return for 2007 (while also noting that Bellpac did not submit tax returns for the financial years ending 2008 and 2009); (f) copies of various statutory demands and letters of demand from Bellpac's creditors; (g) various internal correspondence between Bellpac and its former solicitors relating to its solvency; and (h) conclusions reached by Mr Warner based on the materials referred to above as to Bellpac's financial position, including the fact that Bellpac failed to repay various loans when they became due and payable in 2007 and 2008, the fact that various of Bellpac's creditors were paid by third parties in 2008, the evidence which suggested that various third-parties held serious concerns regarding Bellpac's solvency, as well as a letter dated 22 May 2008 from Bellpac to its then solicitors which suggested that Bellpac was unable to pay its debts as and when they fell due. 57 Mr Warner deposed that, having reviewed all of Bellpac's books and records, he had not located any documents such as transfers or assignments in relation to the convertible bonds from Bellpac to Good Team, nor any evidence of any consideration being paid by that company to Bellpac in respect of all or any part of the convertible bonds held by it, apart from Mr Wong's letter dated 30 January 2012 in which he said that he had transferred twenty of the Series IV bonds to Good Team, as well as the entry in Gujarat's bond register which recorded Good Team as the current owner of convertible bonds with a face value of $1 million. Mr Warner drew attention to the fact that, in his letter dated 30 January 2012, Mr Wong said that he was unable at that time to locate any documents establishing a debtor/creditor relationship between Mr Wong and Good Team. 58 To similar effect, Mr Warner deposed that, having reviewed Bellpac's books and records, he could not locate any documents which recorded the transfer or assignment of convertible bonds from Bellpac to either Great Investments or Mr Hong, nor any evidence of any consideration being paid to Bellpac by either of them in respect of the relevant convertible bonds. Mr Warner drew attention to the letter dated 30 January 2012 from Mr Wong in which he said that he had transferred various convertible bonds to Mr Hong, which convertible bonds with a face value of $2 million are recorded in Gujarat's register as being owned by Great Investments. Mr Warner also drew attention to a document provided by Mr Wong as an enclosure to his letter dated 30 January 2012, which purported to be a loan agreement dated June 2008 with Mr Hong. 59 Mr Warner further deposed that, having reviewed Bellpac's books and records, he was unable to locate any documents such as transfers or assignments of convertible bonds from Bellpac to Dr Kwok, nor any evidence of any consideration being paid by Dr Kwok to Bellpac in respect of Gujarat's convertible bonds. He further noted, however, that in his letter dated 30 January 2012, Mr Wong said that he transferred convertible bonds with a face value of $2 million to Dr and Mrs Kwok and that Dr Kwok is recorded in the Gujarat bond register as the current owner of those convertible bonds. Furthermore, Mr Warner drew attention to the fact that, in his letter dated 30 January 2012, Mr Wong enclosed copies of two emails dated 26 April 2007 and 24 January 2008 respectively which purported to support the existence of a debtor/creditor relationship between Mr Wong and Dr and Mrs Kwok. 60 Mr Warner gave similar evidence in respect of the convertible bonds which are recorded in Gujarat's bond register as being owned by Mr Xu. Mr Warner said that, having reviewed Bellpac's books and records he had been unable to locate any documents such as transfers or assignments of any convertible bonds from Bellpac to Mr Xu, nor was there any evidence of any consideration being paid by Mr Xu to Bellpac in respect of the convertible bonds with a face value of $1 million, in respect of which he is recorded in the Gujarat bond register as the current owner. 61 Mr Warner also drew attention to the fact that, in his letter dated 30 January 2012, Mr Wong enclosed a copy of an agreement with Mr Xu in relation to the transfer of those convertible bonds, purportedly in support of the existence of a debtor/creditor relationship between them. 62 Finally, Mr Warner gave similar evidence in respect of the convertible bonds with a face value of $2 million which Mr Lee claims to own even though these bonds are recorded in the Gujarat bond register as being owned by Bellpac. Mr Warner deposed that, having reviewed Bellpac's books and records, he was unable to locate any documents which recorded a transfer or assignment of the bonds from Bellpac to Mr Lee, nor was there any evidence of any consideration being paid by Mr Lee to Bellpac. Mr Warner noted that, in his letter dated 30 January 2012, Mr Wong said that he had transferred the relevant bonds to Mr Lee. Enclosed in that letter were copies of two emails dated 9 March and 15 November 2008 respectively which purported to support the existence of a debtor/creditor relationship between Mr Wong and Mr Lee.

The power of attorney held by Mr Wong for Bellpac 63 Mr Warner attached to his first affidavit a copy of a power of attorney dated 7 May 2008 by Bellpac in favour of Mr Wong. By that instrument, Bellpac appointed Mr Wong as its attorney and authorised Mr Wong inter alia to "execute under hand or under seal and deliver (conditionally or unconditionally) in a place specified in schedule 3, any of the documents described in schedule 4". The description of the documents in Schedule 4 was: Any document that (sic) which Grantor is party (including a document that is to be signed by the Grantor, by itself). 64 Under cl 4, Bellpac indemnified Mr Wong against all claims, damages, losses and expenses suffered or incurred as a result of anything done under the power of attorney. It may be noted that the power of attorney made no express reference to s 12 of the Powers of Attorney Act 2003 (NSW) (which replaced s 163B of the Conveyancing Act). 65 It is desirable to set out in full cl 6 of the power of attorney in view of the reliance placed upon it by the defendants: 6. An Attorney may exercise the powers conferred by this Power of Attorney or by law even though that Attorney may have a conflict of interests in exercising those powers or a direct or personal interest in the means or result of that exercise of those powers. 66 The plaintiffs tendered copies of the transfer forms and certificates in relation to the transfer of the relevant convertible notes from Bellpac to each of the relevant defendants (or their companies) apart from Mr Lee. Each of the transfer forms expressly stated that the transferor was Bellpac and each also recorded that the relevant form had been executed by "Alfred Wong as duly appointed attorney for Bellpac Pty Limited pursuant to Power of Attorney Registered Book 4549 No. 529". In the case of the transfer form relating to Dr Kwok, it was recorded that Ivan Wong had executed the form on behalf of Dr Kwok "as duly appointed attorney for Osmond Tze Leung Kwok pursuant to Power of Attorney Registered Book 4057 No. 358".

Mr Warner's second affidavit summarised 67 In his second affidavit, Mr Warner deposed that Mr Kugel had ceased to be a joint liquidator of Bellpac on 26 September 2014. He further deposed that the convertible bonds with a total face value of $10 million were originally allotted by Gujarat to Bellpac on or around 5 August 2008, which is the date of their registration. 68 Mr Warner gave further evidence concerning a debt of $9,089,955.82, which is noted in Bellpac's general ledger as being in existence as at 2 July 2007. He said that he had not been able to locate any documents in Bellpac's books and records which indicate how if at all that stated debt related to the debt of $6,390,646.98, which is the total of the debts recorded on page 11 of the Deed of Compromise dated 16 July 2007. He noted that that amount is the same as the debt claimed by Compromise Creditors in its proof of debt lodged in the administration of Bellpac on 6 August 2009. Mr Warner added that he could find no record of any transaction or event occurring between Bellpac and Compromise Creditors to explain any increase in indebtedness beyond the amount recorded in the Deed of Compromise. 69 Mr Warner said that he could find in Bellpac's books and records no record of any resolution authorising disposition of convertible bonds to, or any record of any disposition of such bonds, to any person or entity, including Shan Pei, Mr Wong or any other person in satisfaction of Mr Wong's debts, nor any record of any transaction whereby Shan Pei became a creditor of Bellpac, whether by acquiring any debt of Compromise Creditors or otherwise. Further, he deposed that he could find no record of any transaction with payment by or consideration given by either Mr Wong or any other party for a transfer of the convertible bonds to any of the defendants in the proceedings, nor any record of any consent by Permanent Trustee or LM Investment to any transfer of the convertible bonds from Bellpac to any person or entity.

Cross-examination and re-examination of Mr Warner 70 Mr Warner was cross-examined by Mr Tzovaras for the seventh, ninth and tenth defendants. He was asked a series of questions relating to the balance sheets for Bellpac for 2006, 2007, 2008 and 2009, as well as some questions about the Deed of Compromise. The object of the cross-examination seemed to be to have Mr Warner accept that the $10 million figure which is referred to in the General Ledger could only be a reference to the convertible bonds. Mr Warner said that he was not in a position to say one way or another whether that is what the item referred to. He added that the material simply recorded Bellpac's accounting treatment of the relevant transactions and said nothing about whether or not the transactions were authorised. I accept that evidence. I found Mr Warner to be a truthful and responsive witness. 71 Mr Warner was also cross-examined by Mr Stapleton. Mr Warner was asked a series of questions which were to the effect that, having reviewed all of Bellpac's business records, he did not see any evidence which suggested that: (a) Dr Kwok believed that anyone other than Mr Wong had an interest in the bonds; (b) Mr Wong did not own the bonds; (c) Mr Wong could not assign the bonds; or (d) Bellpac might become insolvent. 72 Mr Warner accepted that there was no evidence to suggest that Dr Kwok should have been concerned that Bellpac might become insolvent, nor was there any evidence to contradict Dr Kwok's evidence that Mr Wong owed the Kwoks a $2 million debt. 73 In re-examination, Mr Warner confirmed that, while there was a ledger entry referring to the $10 million, there was no asset account which recorded the bonds. Mr Warner said that the bonds seemed to have been treated in the accounts as income. He said that the only record of the transfer of the bonds was to Compromise Creditors and the entry recorded the $10 million amount as concerning a release of the royalties. Again he said that this did not indicate that the transaction was authorised. Mr Warner said that in the winding up Compromise Creditors sought to prove a debt of approximately $6 million, reflecting the Deed of Compromise and that there was nothing to suggest that it had received $10 million. He also said that if there had been some indication that that was the case he would have been very interested as a liquidator because it might have constituted a preference. I accept that evidence.

The evidence of the defendants' witnesses summarised

Mr Zhi Hong 74 As noted above at [39], the Gujarat bond register records Great Investments as the owner of bonds described as Series II, no. S2000011-2000030 and Series III, no. S3000031-3000050, with a total face value of $2 million. The sole director of Great Investments, Ms Yuna Zhang, is Mr Hong's wife. There is no evidence to support the submission made by Mr Hong's solicitor in his outline of submissions dated 3 March 2015 at [1] that Mr Hong was a director of Great Investments. The register records the date of transfer of the bonds from Bellpac to Great Investments as 16 December 2008. The transferor on the transfer form is stated to be Bellpac and it is recorded that the transfers were executed by Alfred Wong as attorney for Bellpac. The transferee is identified as Great Investments and the transfers were signed by Ms Zhang. 75 Mr Hong swore an affidavit dated 4 March 2015 and was cross-examined. 76 Mr Hong deposed that he had known Mr Wong for over 15 years and that they had become friends. He said that, in early July 2007, after receiving a phone call from Mr Wong, he arranged for Mr Wong to receive a loan from him in the amount of approximately $1.1 million. He said that it was expected that the loan would only be for a short period but he then became concerned from about September 2007 that Mr Wong had not repaid him any money. He said that he spoke to Mr Wong several times about the matter and then wrote him a letter dated 11 March 2008. In that letter, he told Mr Wong that because Mr Wong had failed to meet any repayments, Mr Hong had no choice but to sell his home. He also advised Mr Wong that, because the loan went more than the expected two months, interest would be charged henceforth and retrospectively at the amount of $10,000 per month. Mr Hong complained in the letter that Mr Wong's conduct had caused him a "huge problem" because he had to sell his apartment to complete a business contract with a third party. 77 Mr Hong deposed that he received no response from Mr Wong to the letter and that, while he believed that Mr Wong would ultimately repay the loan, he decided to have their arrangement formally recorded, including in respect of interest. He said that he and Mr Wong met in Sydney in early April 2008 and that they recorded an agreement in a document written in Chinese which was signed by both of them. Mr Hong also explained the circumstances surrounding he and Mr Wong signing a further loan agreement in June 2008, which he described as an "acknowledgement". 78 Mr Hong gave evidence in relation to the transfer to him of the convertible bonds after Mr Wong told him that he would be unable to repay the loan for some time because of his financial position. Mr Wong told him that, instead, he could give Mr Hong bonds with a face value of $2 million from an ASX listed mining company. Mr Hong said that he reluctantly agreed to that proposal and told Mr Wong that if anything went "wrong" with the bonds and they dropped in value, Mr Wong would have to pay the difference. Mr Hong deposed that he subsequently received the signed transfers in respect of the bonds and had them registered in the name of Great Investments. 79 Mr Hong also gave evidence confirming that, although he was joined as a party in the proceedings before Emmett J, the plaintiffs discontinued the proceedings against him shortly before the hearing commenced. Mr Hong deposed that, prior to receiving a letter dated 11 November 2009 from Mr Breene, the solicitor acting for Mr Warner, he had no knowledge of the existence of Bellpac and Mr Wong never mentioned that company to him. He also deposed that when he received the transfer form for the convertible bonds he did not notice Bellpac's name on the form. Moreover, he said that, prior to receiving Mr Breene's letter, he had no knowledge of the liquidators' claim that Bellpac was beneficially entitled to the bonds registered in the name of Great Investments.

Cross-examination of Mr Hong 80 Mr Hong was asked various questions relating to the $1.1 million loan which he said Mr Wong had obtained from him. He said he was telephoned by Mr Wong when Mr Wong was in China. Mr Wong asked him if he could lend him the money for a short period of time. Mr Hong stated that he used a friend who was in China at that time to get in contact with Mr Wong so that the money could be paid by that friend. Mr Hong said that there were no documents which recorded any of these arrangements and that he told his friend that he would take full responsibility for repaying the money which the friend loaned to Mr Wong on Mr Hong's behalf. 81 When Mr Hong was asked how he had repaid his friend, Mr Hong said that he had made a series of payments by way of instalments. This was not done in Australia, but rather through a business which Mr Hong operated in China. He said that there were no records of the repayments. Mr Hong became rather vague in his recollections when he was pressed on this matter. He appeared to suggest that another of his friends was involved in repaying part of the money. 82 Mr Hong was then taken to the letter which he wrote to Mr Wong on 11 March 2008 when he became concerned that Mr Wong had not repaid any of the $1.1 million loan. 83 Mr Hong ultimately accepted that he was "a little bit nervous" at that time that he was not going to be repaid by Mr Wong given that eight or nine months had gone by and Mr Wong had not made any repayments. He said that he required Mr Wong to sign a lending agreement in early April 2008 and that Mr Wong had come to his office for that purpose. He said that the offer of the bonds was raised later that year by Mr Wong when Mr Wong told him that otherwise he might have to wait one or two years to get any money. He said that he asked Mr Wong about the bonds and the company to which they related and was told by Mr Wong that it was "a good company". Mr Hong said that he was aware that it was a public company, so he accepted what Mr Wong told him. 84 When Mr Hong was pressed about whose name the bonds were in, he said that he thought they were either Mr Wong's bonds or his company, Great Pacific. He said that there was no mention of the bonds actually being owned by Bellpac. He told Mr Wong that he would have to top up any shortfall if, when the bonds were converted, the debt was not fully cleared. Mr Wong explained that the difference to which he was referring to was the difference between the value of the bonds and the interest payments which Mr Wong was required to make under the loan agreement. 85 Mr Hong was then asked about receiving the transfers of the bond certificates. He said that his wife signed them initially, and they were then returned by Gujarat and had to be signed again. He became rather vague about the details saying that it all happened some time ago. He initially said that he may have looked at the transfers. Mr Hong's evidence then became unconvincing when he accepted that he had looked at the bonds to see what the interest rate was, when the bonds could be converted, how many bonds were involved and what the conditions were, yet he initially denied that he noticed that they were in the name of Bellpac. Ultimately, however, when pressed, Mr Hong acknowledged that he noticed Bellpac's name was on the transfer form. I accept that evidence. He said that he simply assumed that this was one of Mr Wong's many companies. Mr Hong agreed that he made no inquiries about Bellpac. He said that he was not worried about where the money came from and that his only concern was to ensure that he got paid. 86 It is clear from the detailed evidence given by Mr Hong on this and other aspects of the transfers that he read the transfer documents with some care and saw that they were in the name of Bellpac and not Mr Wong or General Pacific.

Ms Yuna Zhang 87 Ms Zhang swore an affidavit dated 9 March 2015 and was cross-examined. She is the sole director of Great Investments. As noted above, Ms Zhang is Mr Hong's wife. 88 Ms Zhang deposed to the circumstances surrounding her collection of the transfer form and bond certificates from an office in Angel Place. She said that she did not notice that it was the registered office of a publicly listed company. She said that she collected the material at her husband's request and brought it home. She said that her husband told her to sign the transfer form and return the documents to Gujarat, which she did. She said that she recollected having to resign the documents because they were returned by Gujarat. She was asked to sign in the correct place. She said she did what her husband told her to do.

Cross-examination of Ms Zhang 89 Ms Zhang was asked whether she looked at the bond certificates and transfer form and, in particular, whether she noticed that the transferor was Bellpac and that the bonds were being transferred by it through its attorney, Mr Wong. Ms Zhang was quite vague in her answers to these questions, although it later emerged that she was aware of the fact that Mr Wong had signed the documents on behalf of Bellpac. She also said that she understood that there was some loan agreement between her husband and Mr Wong. When she was asked why in those circumstances the bonds were transferred to Great Investments because it was not involved in the loan, Ms Zhang said that she simply did what her husband asked her to do. She became quite nervous when she was asked questions which she considered might be embarrassing to her husband's case. 90 When Ms Zhang was asked about her role in the litigation as sole director of Great Investments, it was apparent that she had no independent role and simply carried out her husband's instructions, including the defence of the proceedings. 91 When Ms Zhang was asked whether she accepted that it would be wrong of Great Investments to keep the bonds if in fact they were not Mr Wong's property but that of Bellpac, she paused but then admitted that she had seen Mr Wong's signature on the transfer forms. Ms Zhang then added that she did not know whose property the bonds were and whether the owner was Mr Wong or Bellpac, but she believed that it was Mr Wong's property because it was he who signed the forms. Her evidence on this topic was not consistent and appeared to have been influenced by a desire not to harm her husband's interests.

Mr Hong Xu 92 The Gujarat register records Mr Xu as the owner of bonds described as Series II, no. 2000031-2000050, with a face value of $1 million. The date of transfer to Mr Xu is stated to be 1 May 2009. The transferor on the transfer form is Bellpac with the execution having been done by Mr Wong as attorney for Bellpac. Mr Xu is identified as the transferee. The bond certificates all identify Bellpac as the registered bondholder. 93 Mr Xu affirmed an affidavit dated 8 September 2014 and was cross-examined. He gave his evidence by videolink to China. He was assisted by an interpreter. Mr Xu deposed that he had known Mr Wong for around 13 years and that they were friends and business associates in China. He said that in about March 2007 he and Mr Wong entered into a joint venture to undertake a property development in Killara. They set up a company for that purpose called Auspac Projects (Killara) Pty Ltd (Auspac). He said that he had provided Auspac with a loan of $1.5 million on condition that Mr Wong was personally liable for Auspac's repayment of the loan on completion of the joint venture. The joint venture terminated in September 2008 and he asked Mr Wong to repay the loan. They entered into a deed dated 19 September 2008, a copy of which was annexed to his affidavit. The recitals to the deed make reference to Mr Wong having made certain representations to Mr Xu which Mr Xu relied upon in agreeing to lend Auspac $1.5 million pursuant to a loan agreement dated 22 March 2007, which included an entitlement to be paid interest at the rate of 15 per cent per annum. Recital C to the 2008 deed stated: Alfred Wong, without the consent of the Lender, effected withdrawals from the bank account of Auspac with St George Bank Limited, Account No. 0000552651602 ("the Bank Account") with the result that the money that the Lender, at the request of Alfred Wong, deposited in the Bank Account was appropriated at the direction of Alfred Wong and for his benefit. 94 The deed noted that Mr Wong had paid Mr Xu the sum of $100,000 on 19 November 2007 in part repayment of the loan. The deed set out the terms and conditions on which Mr Wong would repay the balance of the loan. Mr Xu stated that he arranged for a caveat to be placed on Mr Wong's Kambala property. He said that Mr Wong failed to make any repayments of the loan. 95 Mr Xu deposed that in about April 2009 Mr Wong told him that he was unable to repay the joint venture loan, however, he offered to transfer bonds issued by Gujarat for an aggregate value of $1 million in part payment of the joint venture loan, but only if Mr Xu withdrew the caveat. 96 Mr Xu said that because he was concerned about Mr Wong's capacity to repay the loan, he decided to accept the bonds in part payment and to withdraw the caveat. An agreement dated 1 May 2009 was drafted and executed by both of them, a copy of which was annexed to Mr Xu's affidavit. Clause 3.1 contained a warranty from Mr Wong that the transfer of the bonds was "valid, effective and binding on Alfred and the registered holder of the Bonds" (emphasis added). Other provisions of the agreement obliged Mr Wong to indemnify Mr Xu in the event that, on conversion of the bonds, the net proceeds were less than $2,140,000. 97 Mr Xu deposed that he signed the transfers, which he received from Mr Wong together with the relevant bond certificates, and gave the transfers back to Mr Wong who forwarded them, together with the bond certificates, to the Gujarat registry for registration. Registration then occurred. The bond certificates were held by Gujarat pending resolution of these proceedings. 98 Mr Xu deposed that, while he was originally joined as a defendant in the proceedings before Emmett J, the plaintiff discontinued the proceedings against him shortly before the hearing took place. He also deposed that, prior to receiving a letter from the liquidators' solicitors (in November 2009), he had no knowledge of the existence of Bellpac and that neither Mr Wong nor anyone else ever mentioned that company to him prior to receiving that letter. Mr Xu said that he had no knowledge of the liquidators' claim that Bellpac was beneficially entitled to the bonds.

Cross-examination of Mr Xu 99 Mr Xu's cross-examination started with questions about the joint venture he had had with Mr Wong. He accepted the proposition that Mr Wong had "stolen" $1.5 million from Auspac and he affirmed that he wanted the money repaid. Mr Xu agreed that he found out later that Mr Wong had taken the money for his own purposes and, although he could not identify the precise date when he found out that the money had been taken, he said that it was during the period April 2007 to September 2008. He was taken to page 7 of his affidavit which records Alfred Wong having repaid $100,000 of the money on 19 November 2007. 100 Mr Xu accepted that in September 2008 he signed the first agreement with Mr Wong in which he agreed to sell his house in order to repay the money. He said that he got a lawyer to draw up the first agreement. He was then taken to the second agreement (dated 1 May 2009) and he confirmed that he also had his lawyer draw it up. He said he could not remember who the lawyer was, but it was a Caucasian lawyer who was involved in property sales. Mr Xu accepted that the second agreement dealt with the subject of the bonds. He said that Mr Wong explained to him that, because his house was heavily mortgaged, if it were sold there would be very little left after other creditors to pay back Mr Xu. When he was asked whether he instructed his lawyer what to put in the second agreement, Mr Xu said that he told him that he wanted Mr Wong to repay him. He said also that his lawyer had direct contact with Mr Wong about the contents of the agreement. He said that his lawyer explained to him what the agreement meant. He was asked whether Mr Wong told him that he owned the bonds. He said that he was told that Mr Wong had many bonds worth more than $2 million and he could pay $1.5 million worth to Mr Xu but, in the end, Mr Wong only transferred $1 million. When asked whether Mr Wong told him that he was the owner of the bonds, his answer was that "yes", Mr Wong said he owned them. When Mr Xu was asked whether he claimed to be the registered owner of the bonds he said he did not know. When the question was asked again Mr Xu simply said that he was told that he was the owner and that he had no experience in this area. 101 It was then put to Mr Xu that he knew that Mr Wong was a dishonest man. Mr Xu accepted that proposition, but he then added, somewhat curiously, that Mr Wong was "a good person". 102 Mr Xu was asked by reference to [10] of his affidavit as to when it was that Mr Wong provided him with the transfers and bond certificates after the second agreement was signed. Mr Xu said that he could not remember clearly. He then said that his wife took the documents to Wollongong for signature. He later explained that his wife took the signed transfer and bonds down to Gujarat in Wollongong to have them registered. He said that he was in China at the time and was relying on his wife to do many things. 103 It was put to Mr Xu that he had looked at the transfer form and bond certificates carefully to see what he could do with them. He agreed and said that he saw that there was $1 million worth of bonds. It was then put to him that the form said that the registered holder was Bellpac. Mr Xu said he could only remember adding up the value of the bonds and that he did not notice Bellpac's name. I do not accept this evidence for reasons which will emerge shortly. He repeated that Mr Wong told him that they were his bonds and that he was transferring them to Mr Xu. 104 Mr Xu's attention was then drawn to clause 3.1 of the second agreement which stated (emphasis added): 3.1 Alfred warrants to Hung Xu that the transfer of the Bonds is valid, effective and binding on Alfred and the registered holder of the Bonds. Alfred further indemnifies and keeps indemnified Hong Xu from and against any liability or loss that may be incurred by him as a result of the transfer of the Bonds. It is notable that this provision highlights that someone other than Mr Wong was the registered holder of the convertible bonds. Significantly, this strongly suggests that Mr Xu and his lawyer turned their minds to the fact that Mr Wong was not the registered holder and they were keen to provide that Mr Wong's warranty bound both him and the registered holder of the bonds, i.e. Bellpac. Whether or not that warranty was effective in law to bind the registered holder of the relevant convertible bonds is not to the point. 105 Mr Xu confirmed that he wanted security against Mr Wong and that was why he signed the second agreement. He was also taken to various other provisions in that agreement whereby Mr Wong could buy the convertible notes back for $2.14 million plus interest. Mr Xu said that he did not really want the bonds - what he wanted was cash. 106 Mr Xu agreed that he had read the transfer forms carefully when he signed them. I accept that evidence. 107 Mr Xu was again asked as to when Mr Wong provided him with the transfer forms and certificates. He repeated that he could not remember but thought that it was not too long after he had signed the second agreement. Mr Xu reaffirmed that he read all the documents carefully. 108 Mr Xu's attention was then drawn to [11] of his affidavit, where he said that he had returned the transfers and certificates to Mr Wong and it was he who passed them onto Gujarat for registration. It was put to him that this was inconsistent with his oral evidence that it was his wife who did this. Mr Xu became quite confused. 109 It was put to Mr Xu that in May 2009, when the second agreement was signed, he knew that Bellpac was the owner of the bonds, which he denied. Mr Xu ultimately accepted, however, that when he signed the transfers he noticed that Mr Wong had signed under a power of attorney from Bellpac. 110 When Mr Xu was again pressed about the significance of cl 3.1 of the second agreement, he repeated that he thought that Mr Wong owned the bonds. Mr Xu rhetorically asked how else could they be transferred to Mr Xu if he did not? He said that he was not aware of Bellpac's involvement until much later. It was put to him that this was a lie and that he knew by November 2009, when the liquidators wrote to him, that the bonds belonged to Bellpac. He said that he had no clear recollection of that, but he was aware that there was some legal dispute between Mr Wong and Bellpac about the Hung Bonds. He was reminded that in fact he almost become a joined party in those earlier proceedings, as referred to in [14] of his affidavit. 111 Mr Xu was also reminded that in May 2012 he was told by the liquidators that they would sue him in order to get the bonds back. It was put to him that he must have known then about the earlier Court decision relating to the Hung Bonds. Mr Xu denied that and said that he always believed that Mr Wong owned the bonds, not Bellpac. I do not accept that evidence. It is inconsistent with cl 3.1 of the second agreement, which Mr Xu signed, and which disclosed that someone other than Alfred Wong was the registered holder of the bonds. 112 Mr Xu agreed that he was aware of the fact that Mr Wong was a director of a publicly listed company. He said he thought that in fact Mr Wong was a director of two or three listed companies. Mr Xu said he did not know that one of the companies had a coal mine. 113 It was put to Mr Xu that he did not want to make any inquiries about Bellpac because that could embarrass him receiving the transfer of the bonds. He was adamant that he had no idea about Bellpac at the time. Again, I do not accept that evidence. 114 It was then put to Mr Xu that, after knowing of the earlier litigation, he sought to convert the bonds into shares in 2012. He accepted that was the case because, he said, it took time for the process to occur. Mr Xu also accepted that he believed that it was his right to convert the bonds because they were registered in his name. Mr Xu repeated that he did not know that Mr Wong was not entitled to transfer the bonds and he reiterated that he had no dealings with Bellpac. 115 There was a short re-examination in which Mr Xu explained what he meant by the word "security" as meaning that Mr Wong had to pay the money back. 116 I did not find Mr Xu to be an impressive witness. His evidence was self-serving and, at times, inconsistent with relevant documentation, as referred to above. I would not accept his evidence unless it was corroborated by relevant documentary material or other objective evidence.

Ms Emily Kwok 117 As noted above, Ms Kwok is married to Dr Kwok. Alfred and Ivan Wong are her brothers. 118 Ms Kwok swore an affidavit dated 20 June 2014 and was cross-examined. She gave evidence as to the various loans which she and her husband provided to Alfred Wong (which evidence was generally along similar lines to that of her husband). Although Ms Kwok did not keep formal records of the loans, she was able to locate copies of some correspondence and telegraphic transfer forms and bank payment slips in respect of some of the loans, which she attached to her affidavit. In her affidavit Ms Kwok deposed: Ivan was often dealing with Alfred's affairs on his behalf, including in relation to the loans that Osmond and I provided to him. In cross-examination, Ms Kwok recalled that she said something along the following lines to Ivan Wong: Look, Alfred has some bonds to transfer to us as the repayment for his debt to us, so we want that - those bonds to be registered in Osmond's name, and please do that, because you have the power of attorney. 119 Ms Kwok described the steps she took in mid-2006 to have her brother repay the money he owed them. She stated that she proposed to Alfred Wong that all the loans be consolidated into a single sum and that he should try to pay interest. She said that she determined a figure of $2 million, on which Alfred Wong would also pay interest. She said that she had searched unsuccessfully for any records of interest payments made by Alfred Wong since mid-2006. Mrs Kwok attached various correspondence to and from her other brother, Ivan, relating to interest rates on the loans, various interest payments and other matters relating to the loans. 120 As to Alfred Wong's proposal in late 2008 that he transfer convertible bonds in Gujarat for an aggregate base value of $2 million as payment of the outstanding consolidated loan amount, Mrs Kwok said that she discussed the proposal with her husband. They agreed to accept a transfer of the bonds and that they should go into her husband's name alone. She passed that information onto Alfred Wong. Alfred Wong told her that he would ask Ivan Wong, who held a general power of attorney for him, to arrange for the bonds to be transferred to Dr Kwok. Ms Kwok also said that she told Alfred Wong that if there was a significant shortfall when the bonds were converted, she and her husband would expect Alfred Wong to pay the balance of the principal and interest owing, to which he agreed. 121 Ms Kwok said that her older brother, Ivan, told her in mid-2009 that the bonds had been registered in Dr Kwok's name and that Ivan would keep the certificates in safe custody. 122 Finally, Ms Kwok deposed that because the value of the bonds could not be determined until they were converted into shares and sold, Alfred Wong continued to owe them $2 million plus all outstanding interest but less the net proceeds of any sale of the shares the subject of the bonds. 123 With the leave of the Court, Ms Kwok gave further evidence in chief orally. She described the nature of the various loans which she and her husband had extended to Alfred by reference to an updated list of those loans. She explained that some of the loans, including that relating to Great Pacific Finance Pty Ltd (GPF), involved Mr Wong not paying the Kwoks distributions from GPF in whom they were investors. The distributions were treated as further loans to Alfred.

Cross-examination of Ms Kwok 124 In cross-examination, Ms Kwok confirmed that her brother Ivan was physically present in Court. She said that she did not know where her brother Alfred was or how to contact him. She said that he travelled frequently. Ms Kwok acknowledged that she did not inquire of Alfred how he came to transfer Bellpac's bonds. She accepted that it would be dishonest to use someone else's property to satisfy a personal debt but she said that she always believed that the bonds were from Alfred. Ms Kwok resisted the proposition that her brother Ivan was the "eyes and ears" of she and her husband. She repeated that she thought that they were Alfred's bonds because, she rhetorically asked, how else could he pay off the debt by using them. 125 Ms Kwok said that she was not familiar with the details of Alfred and Ivan's business activities, including in GPF, nor their other businesses. This is a little surprising because she presented as an intelligent business person who had loaned Alfred money on many occasions for his business activities. Ms Kwok and/or Dr Kwok were also shareholders in some of Alfred's companies. 126 Ms Kwok explained that she left Australia in 1990 to go to Hong Kong and she returns to Australia periodically to visit her mother. When it was put to her that she must have acquired some knowledge of Mr Alfred Wong's business activities because of the loans she and her husband gave him, she said that Alfred was involved in complex businesses which she could not understand. I doubt that response. Ms Kwok impressed me as an intelligent woman who had a sound grasp of commercial and financial matters. Her husband had sufficient confidence in her ability to entrust his financial matters substantially to her care and attention. 127 When it was put to Ms Kwok that if Alfred had offered to pay them $2 million in cash plus the interest he owed they would have given back the bonds, she said that she could not say that that would be the case because she would need to discuss it with her husband. They might prefer, she said, to hold onto the bonds, convert them into shares and then sell the shares if they thought that they would make more money. This demonstrated her business acumen. It is not surprising that Dr Kwok was to later give evidence that he left particular financial matters to his wife, in whom he clearly had considerable confidence. 128 Ms Kwok confirmed that she never saw the transfer form or bonds because they had been executed in Sydney by Ivan as attorney for her husband. She said that Ivan completed the registration process and then told the Kwoks that the bonds were now registered in Dr Kwok's name and that he, Ivan, would keep custody of the bond certificates. 129 When Ms Kwok was asked how she knew about the details of converting the bonds, she said that because she never saw a copy of the documents, she probably asked about those details. It was then put to Ms Kwok that the reason why she and her husband became concerned about Alfred not repaying any of their loans in mid-2008 was because his publicly listed company was suspended on the ASX in May 2008. Ms Kwok said she was not aware of that. She also then added that the global financial crisis was another factor in highlighting their concerns. 130 Ms Kwok confirmed that the various loans to Alfred were consolidated in 2006. She said that Alfred started to pay interest on the loan in 2007 but that she had to chase him up frequently and she and her husband became worried about the loan principal. Ms Kwok then added that Alfred told her that he would use his bonds to repay them so she thought that he must have owned them. Ms Kwok then added that if she had been told that Bellpac was the transferor maybe she would have had to have thought about that. When it was then put to her that she would need to make inquiries about Bellpac's involvement in circumstances where the bonds were being used to satisfy Alfred's personal debt, she said that she would still accept Alfred's words because she "always trusted him". Ms Kwok concluded her evidence by saying that her brother had "really told us" that he was using his bonds to repay the debt. I accept that evidence. As will shortly emerge the difficulty remains, however, that Dr Kwok's attorney, Ivan Wong, attended to the execution and registration of the transfer and he must have seen Bellpac's name as the transferor on the relevant documentation.

Dr Osmond Kwok 131 Dr Kwok is a medical practitioner who specialises in paediatrics. He and his wife live in Hong Kong. 132 Dr Kwok swore an affidavit dated 20 June 2014 and was cross-examined. He stated that, since about 1999, he and his wife provided loans in various amounts to Alfred Wong for the purpose of Alfred's business and investment activities in Australia and China. He stated that the loans were not documented because Alfred was part of the family and they trusted him implicitly. Dr Kwok said that he left it to his wife and Alfred to keep track of the loans. He then said that he largely left such matters to his wife. 133 Dr Kwok stated that on 6 July 1999, he instructed his bank in Hong Kong to transfer telegraphically an amount of $670,000 to Alfred's bank account with the Colonial State Bank in Sydney. The money was a loan. He then explained that, because of the SARS outbreak in Hong Kong in 2003, he and his wife became increasingly concerned about their future financial position and, in particular, the money which they had lent to Alfred. He said that at that time their loans to Alfred totalled approximately A$1.5 million and HK$150,000. He said that Alfred did not make any principal or interest payments in relation to those loans and that, in mid-2006, he asked his wife to discuss the matter with Alfred. He then agreed with Alfred to consolidate the outstanding principal and interest amounts into a single loan of A$2 million. 134 Dr Kwok further stated that in 2008, Alfred told his sister that things were "very tight" for him and he did not know when he would be able to repay the loan. Dr Kwok said that in early 2009 he and his wife discussed an offer which Alfred had made to transfer bonds in Gujarat for an aggregate value of $2 million as payment for all the outstanding loans. He said that he told his wife that the bonds could be well below their face value and that his wife had to tell Alfred that if there was a significant shortfall when the bonds were converted Alfred would have to pay the balance of the principal and interest owing. 135 Dr Kwok deposed to speaking with another of his wife's brothers, Mr Ivan Wong, and asking him, as his attorney, to do the necessary things to enable the transfer of the bonds and to keep them in safe custody once they were registered in Dr Kwok's name. He referred to a general power of attorney which he had granted to Ivan on 17 May 1994, which was registered and in force until 17 February 2013. 136 Dr Kwok deposed that Ivan attended to all the steps required to have the bonds registered in Dr Kwok's name, including signing the transfer as Dr Kwok's attorney and keeping the bond certificates in safe custody after their registration. 137 Dr Kwok deposed that, prior to receiving a letter from the liquidators' solicitor, he had no knowledge of Bellpac's existence or the liquidators' claim that Bellpac was beneficially entitled to the bonds. I accept this evidence. He also deposed that, although there was an application by the plaintiffs to join him as a defendant in the proceedings before Emmett J, the application was discontinued against him. 138 With the leave of the Court, the following further evidence in chief was given orally by Dr Kwok. 139 Dr Kwok confirmed his wife's evidence that, as at 2003, Alfred owed them money and that it was agreed with him in 2006 that the loan should be consolidated in the amount of A$2 million. Dr Kwok also confirmed that that was the value of the loan in May 2009. Dr Kwok said that Alfred had not repaid any interest before then (which is inconsistent with his wife's evidence that he did pay some instalments in 2007).

Cross-examination of Dr Kwok 140 When Dr Kwok was asked whether he expected Ivan to check whether the bonds which were being transferred belonged to Alfred, he said that he asked him to attend to the execution. Dr Kwok then accepted, however, that he expected Ivan to do everything that he would have done if he were personally in Sydney in order to sign the transfer. He said several times that his expectation was that the bonds were Alfred's (and not Bellpac's). I accept this evidence. 141 Dr Kwok also said that he had not heard of Bellpac at the time when the transfers took place. I accept that, at the time the transfers occurred, Dr Kwok personally believed that the transfers were in respect of bonds which were in either Alfred's name or at least were his property. 142 Dr Kwok's attention was then drawn to the solicitor's letter dated 11 November 2009, which was written only six months after the transfers, which demanded that the bonds be returned to their allegedly rightful owner. Although Dr Kwok referred expressly to that letter in [23] of his affidavit, he said that he did not think he had previously seen the letter when it was shown to him in the witness box. Dr Kwok then said he was "mixed up'. I accept that explanation. 143 When Dr Kwok was asked what steps he took in relation to Ivan when he received the letter, he said that he asked Ivan whether the bonds had been registered in his name. It is apparent that he was content to be assured that he was the registered holder and was not particularly interested in knowing anything more about the controversy. Dr Kwok did not reply to the solicitor's letter even though he said that around this time everything was placed in the hands of his lawyer. He accepted, however, that the thrust of the letter was to inform him that the bonds had been transferred by Alfred without authority and for the purposes of his personal use relating to his private debts. 144 Finally, Dr Kwok confirmed that Ivan Wong was in Court and that he was available to be called as a witness in his case if so required. 145 There was no re-examination. 146 Dr Kwok impressed me as an honest witness who was trying to give truthful answers. It emerged that he probably had not given the attention to the detail that he should have in his affidavit and, therefore, had to change some of his evidence in cross-examination. I do not attach any particular significance to these matters. He was otherwise a reliable witness. One of the areas of inconsistency relates to [16] of his affidavit where Dr Kwok said that he spoke to Ivan about the transfer form. It emerged that it was his wife who probably did that, not him. He said that he relied on his wife and, to a lesser extent, Ivan Wong. Dr Kwok said that he was never shown the transfer form or the bonds prior to these proceedings. I accept that evidence. The fact remains, however, that Ivan Wong acted on Dr Kwok's behalf under the power of attorney and he saw and signed the transfer, as well as the bond certificates which recorded Bellpac as the registered holder. His knowledge should be attributed to Dr Kwok as principal. As noted above Ivan Wong did not give evidence even though he was available to do so.

Mr Jonathon Wong 147 Mr Jonathon Wong swore an affidavit dated 5 March 2015. Mr Wong is a solicitor. He was not required for cross-examination. 148 Mr Wong stated that, on 5 March 2015, he was given the following documents by Ivan Wong as attorney for Dr Kwok: (a) copy of a letter dated 11 May 2009 from Mr Alfred Wong on behalf of Bellpac addressed to Mr Sharma at Gujarat which asked that transfer be registered; (b) copy of a transfer form dated 1 May 2009 signed by Bellpac as transferor and Dr Kwok, by his attorney, as transferee under which 40 convertible bonds valued at $50,000 each were transferred to Dr Kwok; (c) copy of a power of attorney of Bellpac given to Alfred Wong; (d) copies of various bond certificates registered in the name of Bellpac; and (e) copy of the power of attorney given to Ivan Wong by Dr Kwok.

Plaintiffs' submissions summarised 149 The plaintiffs' submissions may be summarised as follows. 150 Although emphasising that the position of Shan Pei was probably "a non-issue", because it was not raised by any party in the proceedings, from an abundance of caution the plaintiffs submitted that they relied upon Emmett J's judgment in submitting that there was no evidence of a transfer to Shan Pei and, therefore, no valid assignment of any interest in the bonds that could have created title in Alfred Wong. They also emphasised that none of the defendants suggested that Alfred Wong had some other source of title in the bonds. Accordingly, they submitted that none of the sixth to eleventh defendants had any interest in the bonds in their capacity as creditors of Mr Wong or otherwise and the fact that they were listed in Gujarat's register is irrelevant. That is because, they submitted, the registration resulted from transfers executed by Alfred Wong as attorney for Bellpac in the context of transactions which both Alfred Wong and the relevant defendants knew were entirely in respect of his personal debts and had nothing to do with Bellpac or anyone else. The plaintiffs submitted that the transfers and attached convertible bonds made this clear and that each assignee acquired the bonds, ostensibly from Alfred Wong and in relation to his personal debt, which was unrelated in any degree to Bellpac. 151 In the light of these matters, the plaintiffs' primary case was that the relevant defendants are obliged to return the property to Bellpac, consistently with general legal principles and, if necessary, the existence of a constructive trust, citing Reckitt v Barnett, Pembroke and Slater, Ltd [1929] AC 176 (Reckitt); Tobin v Broadbent [1947] HCA 46; (1947) 75 CLR 378 (Tobin); and G E Dal Pont, Law of Agency, 3rd Edition (2014) LexisNexis Butterworths, [7.31]-[7.34]. They submitted that the circumstances gave rise to an equity in Bellpac that travelled with the legal assignment of the bonds by reason of s 12 of the Conveyancing Act. Accordingly, and independently of any considerations which arise under the Corporations Act, the plaintiffs submitted that the transactions are voidable at the instance of Bellpac and that no issue of third party interests arises in circumstances where no consideration was given by the relevant defendants to anyone, let alone to Bellpac. 152 On the question whether any defendant can rely on being a bona fide purchaser for value without notice of Bellpac's prior title, the plaintiffs submitted that: (a) no relevant defendant gave any value because all the lending occurred well prior to the relevant transactions and was unrelated; (b) they gave no release, nor undertaking not to sue, nor grant of time, nor accord and satisfaction; (c) what they effectively received was in the nature of a charge which was security for, but not in discharge of, a debt; and (d) all relevant defendants had notice that Bellpac was the transferor of the bonds and that Alfred Wong was using his power of attorney to satisfy a private debt. This should have put them on notice of the existence of a prior interest and required them to make appropriate inquiries, which none of them did. If they had, they would have discovered that Bellpac was a subsidiary of a public company and that it had secured creditors, which matters would have put them on notice that Bellpac could not properly be dealing with its assets through its attorney in respect of a debt which was entirely unrelated to the company's affairs. 153 The plaintiffs made the following broad submissions in respect of individual defendants.

Good Team 154 The register records the date of transfer from Bellpac to the sixth defendant as 5 December 2008. The transferor was Bellpac and the transfer was executed by Mr Wong as Bellpac's attorney. The transferee was stated to be Good Team and the transfer was signed by its director, Mr Luk. 155 Good Team did not file any evidence or submissions in defence of the proceedings. 156 Assuming that there was a debtor/creditor relationship between Mr Wong and Good Team, as suggested by Mr Wong's response to a s 530A notice, the transfer of the bonds created a resulting trust in favour of Bellpac.

Great Investments and Mr Hong 157 The date of transfer from Bellpac to Great Investments of the bonds valued at $2 million is stated on the register to be 16 December 2008. The transfer form shows that the transferor was Bellpac and that Mr Wong executed the document as attorney for Bellpac. The transferee is stated to be Great Investments and Ms Zhang, the sole director of the company, signed the transfer. 158 Although Mr Hong gave evidence that he asked a friend in China to arrange to lend Mr Wong A$1.1 million in Chinese currency, the plaintiffs emphasised that Mr Hong produced no written records which proved the alleged loan to Mr Wong, nor any documents recording the arrangements between Mr Hong and his friend who provided the money to Mr Wong at Mr Hong's request. Nor was there any evidence to support Mr Hong's claim that he ultimately repaid his friend in China by asking yet another friend to settle the debt. The plaintiffs submitted that, having regard to Mr Hong's evidence relating to these various arrangements, the Court could not feel an actual persuasion and be satisfied on the balance of probabilities that Mr Hong ever advanced money through one of his friends to Mr Wong or that Mr Hong then used another friend to repay that friend. 159 As to Mr Hong's evidence that he had no knowledge of the existence of Bellpac prior to receiving the letter from Mr Breene in November 2009 (and that he had not noticed Bellpac's name on the transfer), the plaintiffs submitted this was inconsistent with Mr Hong's oral evidence that: (a) possibly he did look quickly at the signed transfers; (b) he recalled checking to see how many bonds there were and ensuring that they were filled out in his company name, as well as other relevant details such as the interest rate, the conversion date, how many shares could be converted and the conditions of the conversion; and (c) he did notice Bellpac's name on the transfer, as he ultimately acknowledged in cross-examination. 160 In the light of these matters, the plaintiffs asked the Court to find that Mr Hong received the transfer form and noticed Bellpac's name but failed to make any inquiries to ascertain whether or not Mr Wong was the actual owner of the bonds or how he could properly deal with Bellpac's assets. 161 In relation to Ms Zhang, the plaintiffs asked the Court to find that she was instructed by her husband, Mr Hong, and made no decisions for herself even though she was the sole director of Great Investments. The plaintiffs also emphasised that Ms Zhang acknowledged in cross-examination that she noticed Bellpac's name as transferor on the transfer form. Indeed, they submitted, she must have noticed that because she was asked by Gujarat to resign the transfer form and therefore must have read the form at least twice. 162 Insofar as Ms Zhang's evidence was to the effect that, even though she noticed Bellpac's name, she did not know the difference between Bellpac and Mr Wong, the plaintiffs invited the Court to find that her evidence was tailored to advance the cases of both her husband and Great Investments. The plaintiffs also emphasised that neither Mr Hong nor Ms Zhang made any inquiry of anyone, including Mr Wong, as to how it came about that Mr Wong was using Bellpac's property in relation to his own personal financial affairs.

Dr Kwok 163 The Gujarat register records Dr Kwok as the owner of bonds described as Series I, no. 1000011-1000050, with a face value of $2 million. The register records the date of transfer from Bellpac to Dr Kwok as 1 May 2009. The transferor on the transfer form is Bellpac and it is declared that Alfred Wong executed the transfer as attorney for Bellpac. The transferee is Dr Kwok and the transfer form records that it was executed by Ivan Wong as attorney for Dr Kwok. 164 The plaintiffs submitted that the Court should infer from Dr Kwok's failure to call Ivan Wong, who attended the hearing most, if not all, days, that Ivan could not have given evidence which would have assisted Dr Kwok's case. 165 The plaintiffs also submitted that an inference should be drawn that Dr Kwok was put on constructive notice that Bellpac was the transferor because Ivan Wong executed the transfer (and in the absence of any evidence from Ivan Wong which limited his knowledge). The plaintiffs acknowledged that it was unnecessary in these circumstances to explore the extent to which, if at all, Dr Kwok should be attributed with constructive notice or knowledge on the basis of Ivan Wong's independent knowledge of Bellpac and Alfred Wong's business activities.

Mr Xu 166 The Gujarat register of bondholders records Mr Xu as the owner of bonds described as Series II, no. 20000031-2000050, with a face value of $1 million. The transfer occurred on 1 May 2009 and Mr Wong executed the transfer as attorney for Bellpac, which is identified as the transferor. 167 The plaintiffs challenged Mr Xu's credibility, relying on the following claims: (a) it was probably false of Mr Xu to claim in his affidavit that he advanced $1.5 million to Auspac as part of a joint venture arrangement with Mr Wong for the development of a property in Killara because, although Mr Xu asserted that Mr Wong had used his signature alone to obtain those funds which had been contributed to the joint venture company and used them for his own purposes, the written agreement between them relating to the repayment of that sum restored the money not to the joint venture company, but to Mr Xu personally; (b) Mr Xu's claim that the Killara joint venture was terminated in September 2008 and that he asked Mr Wong to repay the $1.5 million should not be accepted because Mr Xu was aware that the funds had been "stolen" by Mr Wong by at least November 2007 when Mr Wong repaid $100,000 of the $1.5 million; and (c) Mr Xu was not honest in his evidence when he denied that he knew that Mr Wong was not the registered owner of the bonds which he offered to Mr Xu to satisfy the outstanding debt of $1.4 million. The Court was invited not to accept Mr Xu's evidence that Mr Wong had told Mr Xu that he was the owner of the bonds, particularly against the background of Mr Wong's dishonesty in misappropriating the assets of the joint venture company for his personal purposes. 168 The plaintiffs also submitted that the Court should find that Mr Xu was on notice that the transferor was Bellpac because he acknowledged that he read the transfer form and bond certificates very carefully and he ultimately accepted in cross-examination that he noticed that Mr Wong had signed the transfer as attorney for Bellpac. The plaintiffs submitted that this meant that Mr Xu had sufficient information to know that Mr Wong did not own the bonds, or at least he was put on inquiry as to who was the true owner.

Mr Lee 169 The plaintiffs acknowledged that Mr Lee is in a different position to the other relevant defendants because the Gujarat register does not currently record him as being the holder of any bonds; rather Bellpac is still recorded as holding the relevant bonds. According to Mr Wong's letter dated 30 January 2012, he transferred bonds to Mr Lee with a face value of $2 million, namely Series III, no. 3000011-3000030 and Series IV, no. 4000031-4000050. As noted above, although Mr Lee filed a defence, he did not otherwise actively participate in the proceeding.

The plaintiffs' general contentions 170 Returning now to summarise the plaintiff's general contentions, their primary case was that each of the relevant defendants to whom Mr Wong transferred bonds acting as attorney for Bellpac received those assets in relation to satisfaction of Mr Wong's private debts which were entirely unrelated to Bellpac, but in circumstances where the transfer forms recorded that Bellpac was the transferor and the transfer was executed by Mr Wong as Bellpac's attorney. The plaintiffs submitted that those circumstances were sufficient to create an obligation on each of those assignees to return the property to Bellpac, whether or not that obligation arose under a constructive trust in Bellpac's favour. They also sought an order to have the Gujarat register rectified so as to record Bellpac as the owner of the disputed bonds. 171 The plaintiffs' alternative case related to the relief sought by them under s 588FF of the Corporations Act. The seeking of such relief was predicated on the basis that the Court did not accept the plaintiffs' primary case and, instead, found that the bonds were assigned to one or more of the relevant defendants. In this alternative case, the plaintiffs contended that an order should be made under s 588FF(1)(b) of the Corporations Act directing the defendants to transfer the convertible bonds to Bellpac because: (a) the transactions involving the transfer of Bellpac's bonds to the relevant defendants were uncommercial within the meaning of s 588FB; and (b) constituted insolvent transactions within the meaning of s 588FC and were voidable pursuant to s 588FE(2) and (3). 172 The plaintiffs emphasised that none of the relevant defendants contended that there was any transaction which gave Mr Wong a personal interest in the bonds which he was capable of assigning personally to any of them to pay his own debts and that, accordingly, the transactions involved transferring the bonds directly between Bellpac and the relevant defendants. This, they submitted, has ramifications for s 588FG(1) because that provision has no application in circumstances where the relevant defendants are parties to the relevant transactions. 173 The plaintiffs also submitted that, in any event, the bonds were not received by the relevant defendants in good faith because it was clear from both the relevant transfer forms and the bond certificates that Mr Wong was not the transferor and that Bellpac was. Yet the relevant defendants claimed that Mr Wong was the person whom they expected to make the transfer in respect of the personal debts which he owed them. Despite this, no inquiries were made by the relevant defendants to ascertain how it was that Mr Wong was able to deal with Bellpac's assets to pay his personal debts. 174 Finally, and in the further alternative, the plaintiffs sought damages against Mr Wong for the alleged breach of his fiduciary and statutory duties arising from the conflict which he created by abusing his role as Bellpac's attorney for personal gain to reduce his personal indebtedness. The plaintiffs submitted that Bellpac's loss was commensurate with the face value of the bonds, for which Mr Wong is liable to account. 175 The plaintiffs confirmed that no relief was sought against Mr Hung (the first defendant), Austcorp (the second defendant), Mr Au-Yeung (the fourth defendant), Shan Pei (the fifth defendant), All Seasons Resources Inc (the thirteenth defendant) or View Plan Enterprises Ltd (the fourteenth defendant).

Submissions of Great Investments, Mr Xu and Mr Hong summarised 176 As noted above, these three defendants had common legal representation and were represented by Mr Tzovaras. I shall summarise Mr Tzovaras's submissions and assess some of them in this section, while dealing with others below. Mr Tzovaras submitted that his clients had no knowledge of the existence of the Bellpac/Shan Pei/Wong transactions and they did not admit that these transactions were ineffective. They contended that each had absolute title to the relevant convertible bonds by reason of their respective names being recorded on the Gujarat bond register. 177 These defendants contended that the plaintiffs carried the onus of establishing that the Bellpac/Shan Pei/Wong transactions were ineffective and that they failed to discharge that onus. They contended that the relevant convertible bonds were the property of Mr Wong and not Bellpac and that, therefore, there was no scope to argue that each of them held their respective convertible bonds in trust for Bellpac arising from a constructive trust. In particular, they relied on an affidavit dated 18 April 2012 which was sworn by Alfred Wong in Warner v Hung (No 2). Mr Wong gave evidence there that he was told in August 2008 by Mr Danny Au-Yeung that Mr Au-Yeung had discussed with Mr Eric Ng, the sole director of Shan Pei, certain proposals to the effect that Bellpac would transfer the convertible bonds to Shan Pei in partial reduction of Bellpac's indebtedness under a deed of loan and that Shan Pei would then immediately transfer all of the bonds to Mr Alfred Wong. Mr Wong deposed in that affidavit that the consideration for such transfer was that he agreed to pay Shan Pei the full face value and all accrued interest in respect of the convertible bonds as and when they became progressively eligible for conversion. Mr Wong further deposed that Mr Ng had accepted those proposals. 178 It is to be recalled that Mr Wong did not give evidence in this proceeding here and the evidence given by Mr Wong as summarised above was hearsay evidence in the context of the earlier and separate proceeding before Emmett J. That remains the case here even though the plaintiffs included a copy of Mr Wong's affidavit as an annexure to Mr Warner's affidavit in the current proceeding. Although no objection was taken by any of the defendants to the admissibility of Mr Wong's affidavit, I give it no weight. Although he is a defendant in the proceedings here, Mr Wong did not file any evidence, nor did he appear as a witness. I do not consider that any Jones v Dunkel inference should be drawn from the fact that the plaintiffs did not call Mr Wong, as he is not someone in their camp. Having regard to the controversial nature of the hearsay evidence presented by Mr Wong's affidavit in the earlier proceedings and its inconsistency with the findings of fact made by Emmett J (which, of course, are not binding on me), I am not prepared to give that hearsay evidence any weight in circumstances where there was no opportunity to cross-examine him on that material. Finally, in assessing the weight to be given to Mr Wong's affidavit in the proceedings before Emmett J, it is also relevant to note his Honour's finding, having heard Mr Wong give evidence, that he was an unimpressive witness. 179 The other evidence relied upon by Mr Tzovaras as demonstrating that Mr Wong had title to the bonds which he transferred to the defendants is not probative. He relied on the Deed of Compromise dated 16 July 2007. Mr Tzovaras did not explain how this document supported his submission. Justice Emmett analysed the same Deed at some length in Warner v Hung (No 2) at [11]. I respectfully agree with and adopt his Honour's analysis of that and other related documents, as well as his Honour's conclusion at [19] that the relationship between Shan Pei, the other GPC Creditors and the record of unit holdings in the GPC Creditors Trust is not satisfactorily explained. Obviously that conclusion was based upon the evidence before Emmett J, but it was not suggested that any of the evidence before me affected his Honour's findings about the obscurity of events relating to and arising from the Deed of Compromise. Although the relevant defendants were not parties before Emmett J, they had the opportunity to say whatever they wished about the documentary evidence relied upon by Emmett J, which material was also in evidence before me. 180 The same can be said in respect of Bellpac's balance sheets as at June 2007, June 2008 and April 2009, upon which Mr Tzovaras also relied. Mr Tzovaras did not explain how these financial records supported his submission. Mr Warner was cross-examined in relation to them. In respect of the June 2007 balance sheet, Mr Warner was unable to say whether a figure of $7,218,800, which was recorded under "Liabilities" as "Suspense", was an amount of interest or reflected borrowing from Compromise Creditors. Mr Warner also drew attention to the fact that there was no entry for "Suspense" in the June 2008 balance sheet. 181 Justice Emmett noted in [94] that while each of the Bellpac balance sheets as of June 2007, June 2008, April 2009 (and June 2009) recorded borrowings from Compromise Creditors, none of the documents made any reference to Shan Pei. His Honour concluded at [99] that although entries in those balance sheets as well as in various records of Shan Pei may have been consistent with Mr Wong's claim that the Impugned Transactions had occurred, however, "a mere book entry cannot by itself give rise to indebtedness or its discharge" and "can do no more than record the effect of a transaction that has otherwise taken effect according to law". I respectfully agree with and adopt that analysis, as well as his Honour's broader conclusions concerning ownership of the Bellpac Indebtedness insofar as those findings were based on the same evidence as before me. 182 I reject Mr Tzovaras's contention that the plaintiffs carried the onus of establishing that the alleged transactions between Bellpac, Shan Pei and Alfred Wong were not effective. That was not part of the plaintiffs' case, as the plantiffs repeatedly emphasised. Nor do I accept his submission that the plaintiffs should have called witnesses such as Alfred Wong, Danny Au-Yeung and other persons associated with Shan Pei and Compromise Creditors for them to give evidence relating to the relevant transactions. I do not consider any of those witnesses to be within the plaintiffs' camp and there is no scope for the Jones v Dunkel principle to apply. 183 As to the plaintiffs' reliance on ss 12 and/or 23C of the Conveyancing Act and the alleged lack of writing and express written notice in respect of the assignment of the convertible bonds, Mr Tzovaras submitted that the lodgement of the transfer forms with Gujarat by Great Investments and Mr Xu, the registration of the transfers and the subsequent issuance of the convertible bonds in the name of the assignees constituted evidence from which an inference could be drawn that the requisite notice had been given and received by Gujarat. Thus, he submitted, the requirements of ss 12 and 23C were satisfied. These submissions will be considered in a later section. 184 Turning to the plaintiffs' alternative case based on the provisions of the Corporations Act dealing with uncommercial, insolvent and voidable transactions, Mr Tzovaras's submissions may be summarised as follows (I will deal with them later). 185 First, as to the relief sought under s 588FF of the Corporations Act, Mr Warner's opinion that Bellpac was insolvent as at 23 June 2008 and from at least December 2007 was challenged. The challenge was not taken any further by Mr Tzovaras other than to suggest that the matters upon which Mr Warner relied in reaching those opinions were merely indicative of, and did not prove, insolvency. 186 Secondly, in response to the plaintiffs' claims that the transfers were unreasonable director-related transactions within s 588FDA or, alternatively, uncommercial transactions within the meaning of s 588FB, the relevant defendants: (a) denied that Bellpac is the true owner of the relevant convertible bonds; (b) averred that Bellpac is estopped from denying that they are the legal and beneficial owners of the convertible bonds; (c) denied that Great Investments and Mr Xu hold the convertible bonds in trust for Bellpac; and (d) denied the allegations of unreasonable director-related transactions and uncommercial transactions. 187 In oral address, however, Mr Tzovaras frankly acknowledged that, despite the denials in the relevant defendants' defences, he had "some difficulties in making submissions that they were not uncommercial", on the assumption that the transfers were between Bellpac and the relevant defendants, as opposed to being between Mr Wong and the relevant defendants. Mr Tzovaras also submitted that s 588FDA had no application to the circumstances here because the relevant defendants were not a director or close associate of a director of Bellpac. 188 Thirdly, in the alternative, Mr Tzovaras submitted that if the transfers were director-related transactions and were void or ineffective to pass title, or were found to be insolvent or voidable transactions: (a) the orders sought under s 588FF would materially prejudice the rights or interests of Great Investments and Mr Xu, who were not a party to those transactions; and (b) neither Great Investments nor Mr Xu received any benefit or, alternatively, if they did, it was received in good faith and they had no reasonable grounds for believing that Bellpac was insolvent at the relevant time, nor would a reasonable person in their circumstances. 189 In support of their estoppel argument, the relevant defendants submitted that Bellpac is estopped from denying that Great Investments and Mr Xu are the legal and beneficial owners of the relevant convertible bonds because: (a) at all relevant times, Mr Alfred Wong was a director and attorney under the registered power of attorney dated 7 May 2008; (b) at all relevant times, Mr Wong had in his possession or custody the relevant bond certificates; and (c) pursuant to the power of attorney, Mr Wong executed and delivered each of the transfers to Great Investments and Mr Xu, which were accepted in good faith and in circumstances where there were no reasonable grounds to doubt Mr Wong's authority to execute and deliver the transfers. 190 In response to any contention that Shan Pei held the convertible bonds as constructive trustee for Bellpac, the relevant defendants contended that no such constructive trust arose in circumstances where the plaintiffs had been on notice of the facts underpinning the alleged constructive trust since their appointment as liquidators on 3 September 2009 and yet no action was taken until 19 July 2010, when the claim was first raised in the amended statement of claim in the proceedings before Emmett J. Furthermore, they contended that Great Investments and Mr Xu were bona fide purchasers of value without notice of any equitable interest that Bellpac may have had in the relevant convertible bonds. 191 The relevant defendants emphasised that the plaintiffs carried the onus of establishing all facts necessary to support the declaratory relief sought by them. They submitted that the onus had not been discharged in circumstances where: (a) the plaintiffs sought to rely on evidence in the proceedings before Emmett J, but that evidence was admitted for non-hearsay purposes only; and (b) no evidence was adduced by the plaintiffs to support their claim that the Bellpac/Shan Pei/Wong transactions were ineffective and, in particular, they did not call as witnesses Alfred Wong, Mr Au-Yeung, Hollis Ho (Compromise Creditors' director), Thomas Lo (Shan Pei's director) or Eric Ng, which attracted the principle in Jones v Dunkel. 192 Each of the relevant defendants emphasised that they did not have an opportunity to test the evidence which was adduced in the proceedings before Emmett J, in circumstances where the foreshadowed joinder application against them was belatedly abandoned by the plaintiffs. As noted above, however, they had that opportunity in the present proceeding in relation to the documentary evidence which was in evidence here as well as before Emmett J. 193 On the issue of constructive notice, the relevant defendants submitted that the Court should accept their evidence that they had no knowledge of Bellpac's existence prior to their involvement in the foreshadowed joinder application in the proceedings before Emmett J. They contended that, on that basis, they were not put on notice by reason of Bellpac's name appearing on the transfer forms as transferor, particularly where each of the relevant defendants believed that the convertible bonds were Mr Wong's property which he was assigning to them. They argued that Reckitt was distinguishable because, here, the execution of each of the transfers by Mr Wong pursuant to Bellpac's power of attorney was well within the limits of his authority, as opposed to the position in Reckitt where depositing the principal's script with the attorney's lender to secure the attorney's borrowing was beyond the limits of the particular power of attorney. 194 Furthermore, they contended that Mr Wong had either actual or ostensible authority to deal with the convertible bonds in the way that he did (citing Dixon J in Tobin at 401 and Kitto J in Latec Investments Ltd v Hotel Terrigal Pty Ltd (in liq) [1965] HCA 17; (1965) 113 CLR 265 at 278). They emphasised that in the previous proceedings Emmett J did not find that Mr Ken Hung had constructive notice by reason of Bellpac's name appearing on the transfer form and Mr Wong executing that transfer pursuant to the power of attorney from Bellpac. Notwithstanding that Mr Tzovaras repeatedly submitted that the Court was not bound to make the same findings of fact as those found by Emmett J, he submitted that the Court should adopt Emmett J's findings in respect of Mr Hung not having constructive notice because, he submitted, the form of the transfer signed by Mr Wong as attorney for Bellpac in respect of Mr Hung was "relevantly identical" to each of the transfers affecting his clients in the current proceeding. He urged the Court to make a similar finding here, a matter which will be dealt with below. 195 In response to the plaintiffs' contention that the Court should find that Mr Hong did not advance any monies to Mr Wong through an arrangement with his friend because of the absence of documentation, the relevant defendants submitted that the annexures to Mr Hong's affidavit of 4 March 2015 constituted sufficient evidence of such a loan having been made. 196 As to Mr Wong's power of attorney from Bellpac, Mr Tzovaras submitted that cl 6 operated to validate Mr Wong's actions even if, on the alternative case, he executed the transfers for his own benefit, a submission which will be dealt with below. 197 Finally, it was submitted on behalf of Mr Hong that the Court should find that he was a credible witness, particularly taking into account his frank evidence concerning Mr Wong "having stolen the money from their joint venture company, and yet he was not prepared to allow that one incident to negate his friendship with Alfred Wong who (sic) he continues to trust".

Dr Kwok's submissions summarised 198 I will now summarise the submissions made by Mr Stapleton on Dr Kwok's behalf (the submissions will be addressed later in these reasons for judgment). In broad terms, Dr Kwok contended that both Reckitt and Tobin were distinguishable because in neither of these cases were the legal or equitable interests in the subject property transferred and registered, as happened here (relying on ss 12 and 23C of the Conveyancing Act). The convertible bonds were transferred and registered in Dr Kwok's name which makes him the presumptive owner, which the plaintiffs have failed to rebut. Furthermore, counsel submitted, Dr Kwok is in a different position from the parties in those two cases because Dr Kwok trusted his wife and she trusted Mr Wong. Mr Wong told her that he would transfer the convertible bonds to Dr Kwok and even if Dr Kwok or his wife had seen the name Bellpac on the transfer form, they expected Mr Wong to have an interest in the convertible bonds which he was capable of assigning and they would not have made any further inquiries. 199 In response to the plaintiffs' contention that Dr Kwok did not give valuable consideration for the convertible bonds and could not therefore be a bona fide purchaser for value without notice, Mr Stapleton pointed to the evidence of both Dr Kwok and his wife that they had an agreed debt of $2 million with Mr Wong and they agreed to give up that debt in consideration of Mr Wong transferring the convertible bonds to Dr Kwok. It was further contended that the position was unaltered by the agreement made with Mr Wong that Mr Wong would have to make up any shortfall if conversion of the bonds did not ultimately yield $2 million of cash. 200 In support of the contention that the transfer form and registration of the assignment constituted sufficient notice for the purpose of s 12 of the Conveyancing Act, Mr Stapleton relied on various extracts from J G Starke, Assignments of Choses of Action in Australia (1972) Butterworths, and, in particular, [61]: No particular form of assignment is required, but whatever its form, the document must be such as amounts to an absolute assignment and be in writing under the hand of the assignor, signed by him. 201 Mr Stapleton submitted that Dr Kwok did not have actual or constructive notice of any interest of Bellpac in the convertible bonds which became registered in Dr Kwok's name. He submitted that Dr Kwok was not to know and did not know whether the bonds were in Mr Wong's name or, if they were not, that Mr Wong was not able to assign his interest in them to satisfy his personal debts. 202 As to the plaintiffs' alternative case, which sought relief under s 588FF of the Corporations Act, Mr Stapleton's submissions may be summarised as follows: (a) there was no relevant transaction for the purposes of s 588FE and 588FG(1), because Dr Kwok honestly believed that he was involved in a transaction with Mr Wong in his personal capacity and not in a transaction with Bellpac; (b) Dr Kwok had no reason to believe that Bellpac was insolvent; (c) in any event, Dr Kwok was entitled to rely on the defence under s 588FG(1)(b) because: • he was not a party to any "transaction" within the meaning of the earlier provisions; • an order under s 588FF would materially prejudice Dr Kwok's interest because he would lose the benefit of the $2 million being the value of the convertible bonds which he received in part satisfaction of his loan to Alfred Wong; • Dr Kwok received the benefit of the bonds in good faith and with the honest belief that Alfred Wong owned the bonds and/or was entitled to assign his own beneficial interest in them; and • Dr Kwok had no reasonable grounds for suspecting that Bellpac was insolvent at the time or would become insolvent and a reasonable person in Dr Kwok's personal circumstances at that time would have had no such reasonable grounds for so suspecting; and (d) Dr Kwok was also entitled to raise a defence under s 588FG(2) because the relevant transaction was not an unreasonable director-related transaction of the company within the meaning of the relevant provisions of the legislation. 203 Finally, Mr Stapleton submitted that Dr Kwok was an innocent party and any redress to which Bellpac was entitled should be obtained from Alfred Wong and not Dr Kwok.

No submissions by other relevant defendants 204 As noted above, no submissions were made by Mr Lee in support of his defence. Although Alfred Wong sought to rely upon an outline of written submissions which was filed very late in the proceedings, his application was refused (see [12]-[13] above).

Consideration 205 It is desirable to restate in broad terms the plaintiffs' alternative cases before turning to consider and determine each of them.

The plaintiffs' primary case 206 Bellpac's primary case does not require any finding to be made as to whether there was a valid assignment of any of the convertible bonds from Bellpac to Shan Pei (which is to be contrasted with the proceedings before Emmett J). The key issues for determination which arise under the primary case appear to be: (a) Do the principles established by cases such as Reckitt and Tobin apply in the circumstances here, such that Bellpac is entitled to be restored as legal owner of the convertible bonds which were transferred to each of the relevant defendants? (b) What is the relevance, if any, of the fact that, of the relevant defendants to whom Mr Wong transferred the convertible bonds, all but Mr Lee is currently recorded in Gujarat's register of bondholders as the owner of the relevant bonds? (c) Do each of the relevant defendants to whom Mr Wong transferred the convertible bonds acting as attorney for Bellpac hold those bonds under a constructive trust in favour of Bellpac? (d) Do either ss 12 or 23C of the Conveyancing Act apply in the circumstances here and, if so, what are the ramifications? (e) Were any of the relevant defendants to whom the convertible bonds were transferred a bona fide purchaser for value without notice of Bellpac's legal and/or equitable interest in the bonds? (f) Are the plaintiffs estopped from denying that all or any of the relevant defendants are the legal and/or beneficial owners of the convertible bonds?

The plaintiffs' alternative case 207 The alternative case is predicated on the Court finding that there has been an assignment of a legal and/or equitable interest in the convertible bonds to one or more of the relevant defendants. The key issues for determination appear to be: (a) If there has been an assignment of a legal and/or equitable interest in the convertible bonds to any of the relevant defendants, was the transaction underpinning such assignment in respect of each of the relevant defendants: • an uncommercial transaction within the meaning of s 588FB of the Corporations Act and voidable; • an insolvent transaction within the mean of s 588FC of the Corporations Act and voidable under either ss 588FE(2) or (3); and/or • an unreasonable director-related transaction within the meaning of s 588FDA of the Corporations Act and voidable under s 588FE(4)? (b) Are the plaintiffs entitled to relief under s 588FF of the Corporations Act or does s 588FG(1) apply to any of the relevant defendants?

The plaintiffs' further alternative case 208 On the assumption that the Court were to find that Bellpac's interest in the convertible bonds was validly assigned to the relevant defendants and the Court declined to order that the bonds be transferred back to Bellpac, did Mr Wong breach the fiduciary and/or statutory duties he owed to Bellpac and is he liable to pay damages commensurate with the face value of the relevant convertible bonds? 209 Each of these key issues will now be considered in turn.

(a) Do the principles established by cases such as Reckitt and Tobin apply to the circumstances here, such that Bellpac is entitled to be restored as legal owner of the convertible bonds which were transferred to each of the relevant defendants? 210 In view of the plaintiffs' prominent reliance on the decisions in Reckitt and Tobin, it is desirable to look closely at those decisions with a view, in particular, to determining whether or not the principles they establish apply here. 211 In Reckitt, Sir Harold Reckitt gave a power of attorney to Lord Terrington (a solicitor) to manage his affairs while he was abroad and, for that purpose, to serve and execute all documents which might be necessary or such as Lord Terrington might think fit. After Sir Harold's bank queried whether the power of attorney authorised Lord Terrington to draw cheques, Sir Harold confirmed by letter that he intended that it do so. Lord Terrington drew a cheque upon Sir Harold's bank, which was payable to the respondents, and signed the cheque as Sir Harold's attorney in circumstances where the respondents knew that he was doing so in payment of a debt of his own and not that of Sir Harold. The respondents accepted the cheque without inquiry. When Sir Harold learned of Lord Terrington's actions, he sued the respondents to recover the amount of the cheque as damages for conversion or as money had and received. 212 In reversing the decision of the Court of Appeal and in upholding Russell J's dissenting decision, the House of Lords held that: (a) the power of attorney, as amplified by the letter, conferred no authority on Lord Terrington to use Sir Harold's money for the purpose of paying Lord Terrington's personal debts; and (b) in the absence of actual authority, the respondents, having noticed that Sir Harold's money was being applied for Lord Terrington's private purposes, were not entitled to retain the proceeds of the cheque. 213 The House of Lords held that Lord Terrington had acted outside his authority even though, under the terms of the power of attorney, his authority insofar as cheques were concerned was without restriction. Viscount Sumner explained at 189: Assuming that the express power to draw carries with it an implied power to issue cheques, when drawn, still what is unrestricted is only the drawing of cheques and the subsequent issue must be subject, as the general power itself is, to the exercise of the power being for the purposes of the principal. It is unreasonable so to interpret the words that, although he can only use the power of attorney for the principal's benefit, he can under the letter, by drawing enough cheques on the appellant's account, transfer all the principal's property into his own pocket or apply it to his own use. We know that in fact nothing of this sort could have been meant by the parties to the power, for such self-sacrificing trust would be beyond the limits even of romance and it would be wrong to attach to words, which at most are ambiguous, a meaning which bears no relation to the realities of life. 214 Tobin involved a similar misuse of a power of attorney which had been granted by Dr Tobin to his stockbroker, Mr Hodgetts. Relevantly, the power of attorney authorised Mr Hodgetts to do all or any of the acts, deeds and things specified in the Schedule. The Schedule included the power to sell all or any of Dr Tobin's stocks or shares. 215 While Dr Tobin was overseas, Mr Hodgetts pledged certain of Dr Tobin's share certificates with the defendant, another stockbroker, as part of a security for an advance made by the defendant to Mr Hodgetts and in circumstances where Dr Tobin was not in any way indebted to Mr Hodgetts. The share certificates were endorsed with transfers in blank signed by Mr Hodgetts as attorney for Dr Tobin and were further endorsed as saying that the power of attorney had been produced to the companies in which the shares were held. The defendant did not inspect the power of attorney and made no inquiry into Mr Hodgetts' authority to pledge the shares. Dr Tobin sought the return of the share certificates. 216 The High Court held that the power of attorney conferred no actual authority on Mr Hodgetts to borrow on his own account by pledging shares which were Dr Tobin's property and, further, that Mr Hodgetts had no ostensible authority to deal with Dr Tobin's share certificates in this manner. 217 The following observations of Dixon J at 401 might be noted (which partly relied on what was held by Russell J in dissent in the Court of Appeal and upheld by the House of Lords in Reckitt): Prima facie, a power, however widely its general words may be expressed, should not be construed as authorizing the attorney to deal with the property of his principal for the attorney's own benefit. Something more specific and quite unambiguous is needed to justify an interpretation… "An attorney cannot, in the absence of a clear power so to do, make presents to himself or to others of his principal's property". 218 On the issue of the attorney's ostensible authority, Dixon J made the following observations at 406: Now the scrip in the present case is not negotiable. It is true that it is in a form by which title can, in effect, be transferred by delivery. But the vital distinction is that the scrip assumed that form only by the use by Hodgetts of his authority under his power of attorney. On the face of the scrip their condition as indicia of title transferable by delivery depended entirely on the authority taken by his client. His possession of these documents, therefore, justified no assumption that his client had authorized him to deal with them. That depended on his actual authority as attorney under power. Moreover, at the time of the loan from the defendant the plaintiffs were not indebted to Hodgetts and the latter had no authority of any sort to pledge or mortgage the scrip even for a limited interest or amount or for a special purpose. The scrip was in his hands only for safe custody and to enable him to sell if he saw fit or was so instructed. 219 The relief which was granted in Tobin included an order that the share certificates be returned to their rightful owner and, alternatively, an award of damages in the amount of the value of the shares. 220 I consider that the principles established in Reckitt and Tobin are applicable here. Subject to a consideration of the terms of cl 6 of the power of attorney granted by Bellpac to Mr Alfred Wong (see further below), Mr Wong had no authority to use Bellpac's convertible bonds to pay off his own personal debts. Furthermore, it was or ought reasonably to have been apparent to each of the relevant defendants from the terms of the transfer forms and the convertible bonds themselves that Bellpac was the legal owner, yet no reasonable inquiries were made as to Mr Wong's right to use Bellpac's property to pay his personal debts. These matters were sufficient to put the relevant defendants on notice of the need to make reasonable inquiries as to Mr Wong's entitlement to transfer the bonds to the transferees irrespective of what the transferees were told by Alfred Wong about his ability to deal with the bonds to pay his personal debts. None of the relevant defendants has established that Mr Wong had a beneficial interest in the bonds. 221 I accept the plaintiffs' submissions that the relevant facts in Reckitt are indistinguishable from here and, in particular: (a) just as Lord Terrington drew a cheque upon Sir Harold's bank to liquidate Lord Terrington's private debt, so Alfred Wong used his power of attorney to transfer Bellpac's bonds to liquidate his private debts; (b) just as the bank knew that Lord Terrington was using his power of attorney from Sir Harold to liquidate his private debt, so all the relevant defendants here had knowledge that Alfred Wong was transferring Bellpac's bonds to each of them in respect of his private debts; and (c) just as the form of the cheque gave the bank notice that the money was not Lord Terrington's, the form of the transfer together with the terms of the bonds made clear that the bonds were not Alfred Wong's, but Bellpac's. 222 Several submissions were advanced on behalf of Dr Kwok, and separately on behalf of Great Investments, Mr Xu and Mr Hong (some of which have been considered and rejected above), with a view to distinguishing Reckitt and Tobin. None of those submissions is persuasive. 223 First, Mr Stapleton contended on behalf of Dr Kwok that, unlike the position in both Reckitt and Tobin, the circumstances here did not give rise to any actual or constructive notice. Reliance was placed on the evidence of both Dr and Mrs Kwok that they believed what they were told by Alfred Wong that the bonds were his and neither had any knowledge of the existence of Bellpac or its interest in the bonds at the relevant time. The difficulty with this contention is that, even if that evidence is accepted (and I see no reason why it should not be accepted), it does not avoid the fact that Dr Kwok's attorney, Mr Ivan Wong, saw (or, alternatively, ought reasonably to have seen) the terms of the transfer form and the convertible bonds themselves. Those documents revealed that Alfred Wong executed the transfer form as attorney for Bellpac and that Bellpac was the registered holder of the bonds. It can also be inferred that Ivan Wong was aware that the bonds were being transferred to Dr Kwok in payment of the outstanding loans which Alfred Wong had taken from the Kwoks. As noted in [119] above, Ivan Wong was aware of the existence of those loans. It is reasonable also to infer that he was told by either Dr Kwok or, more likely, Mrs Kwok that Alfred Wong was transferring the bonds to Dr Kwok in respect of those loans. Those inferences may more confidently be drawn in circumstances where Ivan Wong was available to give evidence but was not called by Dr Kwok. I consider that it is more probable than not that Mrs Kwok and not Dr Kwok gave instructions to Ivan Wong to attend to the execution of the transfer form and registration of the bonds and that in the course of their discussions she mentioned to Ivan Wong that these matters related to Alfred Wong's repayment of his outstanding loans with the Kwok family. As noted above, Ivan Wong was aware of those loans not the least because he had corresponded with his sister about them. 224 In my view, these matters were sufficient to put Ivan Wong on notice of the need for reasonable inquiries to be made concerning Alfred Wong's entitlement to use Bellpac's assets to pay his personal debts. As Ivan Wong's principal, Dr Kwok is to be attributed with the notice which Ivan Wong had. As previously noted, it was open to Dr Kwok to call his brother-in-law, Ivan Wong, to give evidence in Dr Kwok's case but he did not do so notwithstanding that Ivan Wong was available to give evidence if required. In my view, it can be assumed that Ivan Wong would not have given evidence in contradiction to the inferences and findings made above concerning his involvement in the transaction. 225 The application in these circumstances of the principle in Jones v Dunkel is not avoided by the fact that both Dr Kwok and Mrs Kwok themselves gave evidence. Neither of them was physically involved in the processes which took place in Sydney which must have involved Ivan Wong reviewing the transfer form and the bonds, executing the transfer form and attending to registration. Only Ivan Wong, as attorney and agent for Dr Kwok, could give evidence as to whether or not he saw that Alfred Wong had signed the transfer form as attorney for Bellpac and that the bonds were not in Alfred Wong's name, but Bellpac's. Mr Stapleton sought to downplay, if not avoid all together, Ivan Wong's notice concerning these matters by contending that he had simply and faithfully carried out the terms of his instruction as attorney, which was to execute the transfer. But, as Dr Kwok himself frankly and correctly acknowledged in his evidence, which I accept, he expected Ivan Wong to do everything that he would have done if he were personally present in Sydney to sign the transfer. Plainly, that would include carefully reviewing the transfer form and the terms of the relevant convertible bonds, which would put any reasonable person on notice of the fact that the bonds were in Bellpac's name and Alfred Wong had executed the transfer form as attorney for that company and not in his own right. This fact gave rise to a requirement that reasonable inquiries be made, which did not occur here. 226 The second contended basis for distinguishing Reckitt and Tobin, which was advanced by both Mr Stapleton and Mr Tzovaras, relied on the terms of cl 6 of Alfred Wong's power of attorney. It was submitted that, on its proper construction, this clause meant that Alfred Wong had actual authority to do what he did because it empowered him to use his power of attorney for Bellpac notwithstanding that he had a conflict of interest or had a direct personal interest in the result of the transfer of the bonds. For the following reasons, I reject these contentions. 227 The general principle that an attorney is not empowered to deal with the principal's property for the attorney's own benefit is subject to an express provision to the contrary in the formal power of attorney. A strict construction of powers of attorney is generally appropriate (see, for example, Attwood v Munnings 108 ER 727; (1827) 7 B & C 278; Tobin at 390-391 per Latham CJ; Spina v Permanent Custodians Ltd [2008] NSWSC 561; (2008) 13 BPR 25,463 at [108] per Hammerschlag J (reversed on appeal in [2009] NSWCA 206; (2009) 14 BPR 26,923, but not on this issue) and, see generally, G E Dal Pont, Powers of Attorney, 2nd Edition (2015) LexisNexis Butterworths at [6.25] and [6.36]. 228 Some of these principles of general law are now encapsulated and restated in s 12 of the Powers of Attorney Act 2003 (NSW): 12 Prescribed power of attorney does not generally confer authority to confer benefits on attorneys (1) A prescribed power of attorney does not authorise an attorney to execute an assurance or other document, or to do any other act, as a result of which a benefit would be conferred on the attorney unless the instrument creating the power expressly authorises the conferral of the benefit. Note: This subsection restates a rule of the general law. Accordingly, whether the conferral of a benefit on an attorney is expressly authorised by a prescribed power of attorney is to be determined by reference to the general principles and rules of the common law and equity concerning the interpretation of powers of attorney. (2) Without limiting subsection (1), a prescribed power of attorney that includes the prescribed expression for the purposes of this subsection set out in Schedule 3 authorises an attorney to confer on the attorney the kinds of benefits that are specified by that Schedule for that expression. 229 The power of attorney given by Bellpac to Mr Wong, was not a "prescribed power of attorney" within the meaning of that Act (see s 8). Thus, the general common law principles apply. 230 Clause 6 of the power of attorney granted by Bellpac to Mr Wong is set out in [66] above. I do not accept the submission that, properly construed, this clause meant that Mr Wong had actual authority to transfer Bellpac's convertible bonds to his personal creditors. It is one thing to say that the provision authorised Mr Wong to exercise a power granted by the power of attorney even though he may have a conflict of interest in its exercise or a direct or personal interest in the outcome. It is quite another thing to say that the provision should be construed so as to authorise the attorney to exercise a power so as to divest the donor of its asset without any benefit to the donor and for the exclusive personal benefit of the attorney. Justice Dixon's observations in Tobin (see [218] above) are directly in point. Clause 6 should not be construed as authorising Mr Wong to deal with Bellpac's property as though it was his own. 231 The issue also arises as to whether each of the relevant defendants was entitled to rely on Mr Wong having ostensible authority to bind Bellpac by executing the transfers in the exercise of his power of attorney. As noted above, the transfers were executed by Mr Wong with express reference to that power of attorney, and the registration details of the power of attorney were provided. The applicable principles are reflected in the following extract from Dal Pont, supra at [9.31] (citations omitted): There are occasions in the case law where, even without the opportunity to view the power of attorney itself, it has been held that the third party should be treated as having had notice that the attorney's actions were unauthorised. The most common scenario where this has occurred is where the attorney purported to effect a dealing that was for the attorney's own benefit, and so prima facie in breach of fiduciary duty (unless authorised expressly by the power). It has been judicially observed, to this end, that: …a third party who enters into a transaction which is, apparently in the interest of the agent exclusively, without reference to the principal or the authorising document to ascertain the transaction's legitimacy, cannot appeal to the law of agency for protection. Whether the above statement of principle should be confined to transactions 'exclusively' for the benefit of the attorney may be queried. A third party arguably takes a risk where the transaction is primarily for the attorney's benefit too. Ultimately it may depend on the facts of each case, which would be influenced by the sensible precautions, and the sophistication and experience of the third party in dealings of this kind. 232 In Sweeney v Howard [2007] NSWSC 852 at [56], Windeyer J made the following relevant observations: It is to be remembered that a third party who reasonably relies on the wording of the power of attorney or the representations of the principal is still protected by the doctrine of ostensible authority. However, a third party who enters into a transaction which is, apparently in the interest of the agent exclusively, without reference to the principal or the authorising document to ascertain the transaction's legitimacy, cannot appeal to the law of agency for protection. (Emphasis added). 233 His Honour's statements of principle were expressly approved by the Court of Appeal of New South Wales in Siahos v J P Morgan Trust Australia Limited [2009] NSWCA 20 at [27] per Macfarlan JA (Giles and McColl JJA agreeing). At [28] Macfarlan JA added the following qualification: I would add a caveat as to whether it is necessary that the third party be on notice that the transaction is apparently in the interests of the agent "exclusively". Consideration of the position that would obtain if the act was seen to be partly for the benefit of the attorney and partly for that of the donor is not necessary in the present case. 234 I respectfully agree with those statements. 235 Mr Stapleton relied on the fact that the power of attorney had been drafted by a law firm and was also signed by two Bellpac directors, which, he submitted, meant that the document was binding on Bellpac as provided in s 127(1)(a) of the Corporations Act. This further meant, so it was submitted, that Ivan Wong would have been entitled to make various assumptions under ss 128 and 129 of the Corporations Act. Mr Stapleton then submitted that these matters were relevant to the question of what Ivan Wong ought to have done when he reviewed the transfer form and the bond certificates, noting that Ivan Wong was not a solicitor. He submitted that, having regard to these matters, Ivan Wong would have been justified in believing that the power of attorney was valid and authorised Alfred Wong to do what he did. Accordingly, Mr Stapleton submitted that even if Ivan Wong had made reasonable inquiries he would not have acted any differently to how he actually did. 236 Mr Stapleton contended that Ivan Wong was entitled to make the following assumptions: (a) that Alfred Wong had been duly appointed as Bellpac's attorney (s 129(3)(a)); (b) that Alfred Wong had authority to exercise and perform the powers customarily exercised or performed by such an agent of the company (s 129(3)(b)); and (c) that Alfred Wong properly performed the duties which he owed to Bellpac as its attorney (s 129(4)). 237 For the following reasons I reject these submissions. Section 128(1) of the Corporations Act provides that a person is entitled to make the assumptions in s 129 in relation to the person's dealings with a company. Section 128(2) provides that a person is entitled to make those same assumptions in relation to dealings with another person who has, or purports to have, directly or indirectly acquired title to property from a company. In either case the company is not entitled to assert in proceedings in relation to such dealings that any of the assumptions is incorrect. 238 Mr Stapleton's contentions beg the question as to what were the duties which Mr Alfred Wong owed to Bellpac as its attorney. The implicit assumption in his contentions is that, on its proper construction, cl 6 of the power of attorney authorised Alfred Wong to use Bellpac's property for his personal debts. That assumption is incorrect, for the reasons given above. That provision, properly construed, did not have the effect of giving Alfred Wong carte blanche to do whatever he wished with Bellpac's property and, in particular, to use that property for purely personal reasons which had nothing to do with the company's affairs. Sections 127 to 129 of the Corporations Act do not operate to modify or amend the proper construction of cl 6 of the power of attorney. Or to put the matter another way, the limited scope of cl 6 cannot be circumvented by resort to ss 127 to 129 in isolation from the need properly to construe that provision in order to ascertain the nature and scope of the duties which it created for Alfred Wong as Bellpac's attorney.

(b) What is the relevance, if any, of the fact that, of the relevant defendants to whom Mr Wong transferred the convertible bonds, all but Mr Lee is currently recorded in Gujarat's register of bondholders as the owner of the relevant bonds? 239 As stated above, the defendants who are recorded on the Gujarat register as holder of the bonds placed heavy emphasis on the fact that, under the terms and conditions of the convertible bonds, title to a bond was stated to be "vested absolutely in the person entered in the register as the holder of the Bond (the "bondholder") and passes by transfer and registration". No party drew the Court's attention to any provision in the Corporations Act or in any other legislation relating to the effect of registration of a convertible bond which might be relevant to this matter. 240 It may be accepted that the fact of being recorded on the register as a bondholder gives rise to a presumption of legal ownership of the relevant bonds (see Emmett J in Warner v Hung (No 2) at [55]). However, in accordance with general principle (see GE Dal Pont, Equity and Trusts in Australia, 5th Edition (2011) Thomson Reuters at [2.125] to [2.135] and the cases cited therein), the fact of registration as legal owner of the bonds does not defeat a prior relevant and valid competing equitable interest, such as one which gives rise to a constructive trust or some other equitable obligation to restore the bonds to their rightful owner. The same could be said in respect of a case, such as Warner v Hung (No 2), where a person with an alleged equitable interest seeks to become a registered bondholder notwithstanding that someone else is recorded as the legal bondholder in the register. Nor does registration defeat the operation of relevant provisions in Pt 5.7B of the Corporations Act, which deal with the recovery of property or compensation for the benefit of creditors, subject to provisions such as s 588FG (see generally below). 241 Each of the relevant defendants (apart from Mr Lee) is listed on Gujarat's register by virtue of the transfers executed by Alfred Wong as attorney for Bellpac and in payment of his personal debts. None of the relevant defendants has pleaded that their title to the bonds results from a valid assignment by Alfred Wong as part of a chain of title whereby the bonds were assigned by Bellpac, to Shan Pei, who then assigned the bonds to Alfred Wong. Even if they had, I would have found, consistently with Emmett J's conclusion and reasons, that no such case is made out.

(c) Do each of the relevant defendants to whom Mr Wong transferred the convertible bonds acting as attorney for Bellpac hold those bonds under a constructive trust in favour of Bellpac? 242 It is notable that in neither Reckitt or Tobin was any explicit finding made to the effect that a constructive trust needed to be established in order for the plaintiffs in those proceedings to obtain relief. Consistently with that approach and on the basis that the principles established by these authorities apply to the circumstances here, it may be unnecessary for the purposes of determining the plaintiffs' primary case to make any finding as to whether the relevant defendants hold the bonds under a constructive trust in favour of Bellpac. Acknowledging, however, that the issue was the subject of detailed submissions and that it also has some bearing on issue (d) I would determine the issue as follows. 243 Each of the relevant defendants was put on notice by the explicit terms of the transfer forms and the related certificates that Bellpac was the transferor and registered owner of the bonds. Furthermore, each of the relevant defendants was aware that Mr Wong was transferring the relevant convertible bonds not for any reason associated with Bellpac's affairs but rather for his own personal reasons, i.e. to satisfy personal debts which he had with his various creditors. 244 In common with other agents, a donee of a power of attorney who exercises that power impermissibly to make presents to himself or herself or to others of the principal's property is not only liable at common law, but also becomes a constructive trustee of the misapplied property (see G E Dal Pont, Law of Agency, 3rd Edition (2014) LexisNexis Butterworths at [10.10]). 245 A further issue arises as to whether, in the circumstances here, the relevant defendant to whom Mr Wong transferred the convertible bonds are also constructive trustees. The applicable principles may be summarised as follows. As is evident from decisions such as Reckitt and Tobin a third party who receives property from an attorney acting outside the scope of his authority is obliged to return the property to its rightful owner subject to the availability of various equitable defences. It is evident that in those cases, the plaintiffs' primary remedies were at common law and were based on such causes of action as conversion or money had and received. Neither Reckitt nor Tobin raised the question which arises here of the significance, if any, of the fact that the third party recipient of the relevant property became its registered owner by having the details of the transfer recorded in Gujarat's bond register. That suggests that the relevant defendants obtained legal title to the relevant convertible bonds and, in those circumstances, having lost its legal title, Bellpac lost its right at common law to trace that property (see G E Dal Pont, Equity and Trusts in Australia, 5th Edition (2011) Thompson Reuters at [39.10]). The position is different, however, with tracing in equity. For reasons given above, Mr Wong exceeded his authority under the power of attorney and breached the fiduciary duty he owed to Bellpac as attorney in transferring the convertible bonds to the relevant defendants for the purpose of his personal debts. 246 Following the High Court's decision in Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89 (Farah), a third party's liability for breach of another person's fiduciary duty requires more than constructive notice of the breach of trust or fiduciary duty. Constructive knowledge is required, which may be established by: (a) actual knowledge; (b) wilful shutting of the eyes to the obvious; (c) wilful and reckless failure to make inquiries that an honest and reasonable person would make; (d) knowledge of circumstances that would indicate the facts to an honest and reasonable person; and (e) knowledge of circumstances which would put an honest and reasonable man on inquiry. 247 A person who receives property knowing that its transfer is in breach of trust or fiduciary duty will be made a constructive trustee of that property for the benefit of the principal (see G E Dal Pont, Equity and Trusts, supra at [38.90], citing Farah at [113]). 248 It is convenient to consider both ways in which the plaintiffs contend that each of the relevant defendants hold their respective convertible bonds on a constructive trust in favour of Bellpac. First, they contend that a constructive trust arose by reason of each of the relevant defendants having notice of Mr Wong transferring Bellpac's property by way of payment of his personal debts to each of them. All relevant defendants had either actual or constructive notice that Bellpac was the transferor because that information appeared on the face of the transfers, as well as on the certificates. Each was also aware that Mr Wong was purporting to use a power of attorney from Bellpac to satisfy a private debt by transferring Bellpac's property. I accept the plaintiffs' submission that these circumstances were sufficient to give rise to a constructive trust and also to put each of the relevant defendants on notice of Bellpac's prior interest and required them to make reasonable inquiries, which they did not do. 249 As Mason CJ observed in Northside Developments Pty Ltd v Registrar-General [1990] HCA 32; (1989) 170 CLR 146 at [25]-[26]: However, there is no reason why a third party should be entitled to rely on the formal validity of the instrument and to assume that the seal has been regularly affixed if the very nature of the transaction is such as to put him upon inquiry. If the nature of the transaction is such as to excite a reasonable apprehension that the transaction is entered into for purposes apparently unrelated to the company's business, it will put the person dealing with the company upon inquiry. It is one thing to assume that the common seal has been regularly affixed to an instrument apparently executed for the purposes of the company's business; it is quite another thing to assume that the seal has been regularly affixed when the transaction is apparently entered into otherwise than for those purposes. The decision in E.B.M Co. Ltd. v. Dominion Bank illustrates the point. The seal of the company had been affixed to a charge of certain of its property to secure an advance by the bank to three directors of the company. On the face of the charge the seal appeared to have been affixed in accordance with the articles of association as it bore the signatures of two of the borrowers as president and secretary respectively. However, no resolution had been passed authorizing the creation of the charge. The Judicial Committee held that the transaction was unenforceable on the ground that the bank had notice of an extraordinary dealing whereby directors were using their powers to cause the company to apply its property for their benefit, there being no indication that the company stood to gain from the transaction. 250 If the relevant defendants had made reasonable inquiries concerning Bellpac, they would have learned that Alfred Wong was a director of that company but that he was not a shareholder. A company search would also have revealed that Bellpac was a subsidiary of a publicly listed company whose assets were all secured by fixed and floating charges in favour of LM Investment. I accept the plaintiffs' submissions that these matters alone would have made it impossible to consider that Bellpac could properly be dealing with its own assets when its attorney transferred assets out of the company in relation to a debt which was entirely unrelated to the company's affairs and, as the relevant defendants knew, related solely to Mr Wong's personal financial affairs. 251 As Emmett J noted in Warner v Hung (No 2) at [214]: Receipt from Alfred Wong, as seller, of a transfer of convertible bonds registered in the name of Bellpac, and signed by him as attorney for Bellpac, of which he was a director, would be sufficient to put the recipient of the transfer on notice of enquiry as to the circumstances in which Alfred Wong came to be beneficial owner of those convertible bonds. 252 None of the relevant defendants initiated any inquiries in relation to these matters even though each of them had either actual or constructive notice from the transfer forms and bond certificates that Bellpac was the transferor and registered holder of the bonds which Mr Wong was purporting to transfer as Bellpac's attorney for his own personal purposes. 253 It is desirable to say something more in this context about each of the relevant defendants' circumstances.

Mr Hong and Great Investments 254 Mr Hong was on notice of these matters because he reviewed the transfer forms personally. He ultimately agreed in cross-examination that he saw that Bellpac's name was on the transfer form, yet he made no inquiries about the company. It is also clear that his wife, Ms Zhang, reviewed the transfer form not once, but twice, as she was asked by Gujarat to resign the transfer form in the correct place. Ms Zhang acted at all relevant times on her husband's instructions and made no independent decisions on behalf of Great Investments notwithstanding that she was its sole director. Ms Zhang accepted in cross-examination that she noticed Bellpac's name as transferor on the transfer form, which she had collected from Bellpac's holding company's office at Angel Place, together with the bundle of bond certificates. 255 In these circumstances, I find that Great Investments and Mr Hong were on constructive notice that the convertible bonds were owned by Bellpac and not Mr Wong. Furthermore, in circumstances where both were aware that Mr Wong was transferring the convertible bonds in order to discharge a personal debt owing to Mr Hong and notwithstanding that he purported to sign the transfer forms as attorney for Bellpac, the circumstances were such as to oblige Great Investments and/or Mr Hong (as well as Ms Zhang) to make reasonable inquiries, which they failed to do. I should make it clear that, despite the plaintiffs' submissions to the contrary, I consider that there is sufficient evidence to find that Alfred Wong did have a personal debt to Mr Hong and that the bonds which were transferred to him by Mr Wong were in respect of that debt. I also find that Ms Zhang had actual knowledge of the fact that Bellpac was named as transferor on the transfer form. Consequently, Great Investments had constructive notice of that information given that she was the company's sole director.

Mr Xu 256 The evidence is clear that Mr Xu had actual notice that, prior to the transfer, Bellpac was the registered holder of the convertible bonds. The second loan agreement which he signed with Mr Wong revealed as much. Furthermore, Mr Xu agreed that he had read the transfer form carefully when he signed it. Juxtaposing the second agreement together with the transfer documentation itself, I find that Mr Xu either did see, or ought reasonably to have seen, that Bellpac was the transferor. 257 Accordingly, I find that Mr Xu had either actual or constructive notice that Bellpac owned the bonds. He ought reasonably to have made appropriate inquiries about the matter notwithstanding that Mr Wong declared that he was executing the transfer as Bellpac's attorney. But the transaction was one which, to Mr Xu's personal knowledge, was being carried out to discharge Mr Wong's personal debt to Mr Xu. 258 Great Investments, Mr Hong and Mr Xu sought to rely on the fact that Emmett J did not find that Mr Hung had constructive notice by reason of Bellpac's name appearing on the transfer form and Mr Wong having executed it for Bellpac pursuant to the power of attorney. It is not easy to reconcile their reliance on this aspect of Emmett J's decision in Warner v Hung (No 2) with their earlier submission "that the Court ought not to adopt as evidence in this proceeding any evidence adduced in the First Bellpac Proceeding, nor any factual finding or related pronouncement made by his Honour in the First Bellpac Proceeding". Plainly, I am not bound to come to the same conclusion on this factual matter as did Emmett J, which reflected the different evidence in that proceeding and, significantly, was expressed as an obiter finding by his Honour. 259 Having regard to the evidence before me, including the evidence given by Ms Zhang, Mr Hong and Mr Xu, I find that each of the three relevant defendants had actual or constructive notice that Bellpac was the legal owner of the bonds and each ought to have made reasonable inquiries into the matter in circumstances where the transfers were executed by Alfred Wong as Bellpac's attorney but in relation to his own personal debt.

Dr Kwok 260 Both Dr Kwok and his wife gave evidence, which I accept, that they believed that Alfred Wong owned the bonds. However, Dr Kwok should be attributed with the knowledge which his attorney, Ivan Wong, must or ought reasonably to have acquired when he reviewed the transfer form and certificates and either noted or ought reasonably to have noted the same information as that described above in respect of the other relevant defendants. It was open to Dr Kwok to call Ivan Wong as a witness to rebut that inference but he elected not to do so. As noted above, Ivan Wong attended Court on several days of the hearing. In the circumstances, I consider that the principle in Jones v Dunkel applies.

Good Team Investments 261 As stated above, apart from filing a defence, Good Team Investments did not actively participate in the proceeding. A notice of ceasing to act for that company was filed by its solicitors on 14 August 2014. As ordered by the Court on 7 October 2014, the plaintiffs attempted to inform the company of the hearing but they were unable to contact the company at their last known address or through their former solicitors. It is evident, however, from the fact that Good Team Investments filed a defence that they were well aware of the proceeding. 262 As noted above at [155] Good Team Investments is recorded in the Gujarat register as the owner of $1 million dollars' worth of bonds (Series IV, no. 4000001-4000020). Bellpac is stated to be the transferor on the transfer form, which was executed by Alfred Wong as attorney for Bellpac on 5 December 2008. The transfer form was signed by Good Team Investment's director, Mr Luk. 263 In a letter dated 30 January 2012, which was written in response to a notice under s 530A of the Corporations Act, Mr Alfred Wong advised Mr Warner that he transferred bonds to Good Team Investments as a creditor. Mr Wong also advised that he was unable at that point to locate any documents establishing the existence of a debtor/creditor relationship between him and the company. He also said that he had dealt with the company through their solicitor, Lui & Co, whose offices were at Suite 1104, Level 11, 84 Pitt Street Sydney. 264 Email correspondence between the plaintiff's solicitors and Lui & Co also established that that law firm did not act for Good Team Investments in the current proceeding. 265 In the circumstances, I would accept the plaintiffs' submission that, despite the limited nature of the evidence, a finding should be made that a constructive trust was created in favour of Bellpac because Good Team Investments' title arose through Mr Wong executing the transfer as attorney for Bellpac. If it be the case that in fact that there was no debt (i.e. contrary to Mr Wong's statement that he transferred the bonds to the company as a creditor), the transfer amounted to a gift from Mr Wong of Bellpac's property. If in fact there was a debt, (consistently with Mr Wong's statement in his letter dated 30 January 2012), Mr Wong impermissibly used his power as Bellpac's attorney to utilise its property to pay his personal debt to the company.

Mr Lee 266 As stated above, Mr Lee is in a different position from the other relevant defendants because he is not recorded on the Gujarat register as the owner of the relevant bonds. Rather, Bellpac is recorded as the owner of convertible bonds, Series III, no. 3000011-3000030 and Series IV, no. 4000031-4000050, but Mr Lee claimed in [30] of his defence that he is the owner of those bonds. 267 In his letter dated 30 January 2012 to Mr Warner, Mr Wong said that Mr Lee was one of the creditors to whom he transferred bonds. Mr Wong also stated that he had a debtor/creditor relationship with Mr Lee, which was said to be evidenced in emails dated 9 March 2008 and 15 November 2008. The former email from Mr Lee to Mr Wong confirms that they were proposing to enter into a short term loan agreement. The loan agreement was prepared by Mr Wong's solicitor and Mr Lee made certain comments on it. A copy of the loan agreement was not in evidence. 268 The email dated 15 November 2008 from Mr Lee to Mr Wong confirms that Mr Lee received from Mr Wong transfer documents in relation to $2 million worth of Gujarat convertible bonds. These documents were not in evidence. Mr Lee complained in the email that his Singapore bankers had informed him that the bonds were worth only $50,000. He complained to Mr Wong that the security offered by him in respect of the US$1 million loan he had taken out from Mr Lee was "grossly inadequate" and that he had not executed any of the transfer documents. Mr Lee asked Mr Wong to contact him urgently so that they could "resolve this loan matter". 269 Bellpac remains recorded in Gujarat's register as the legal owner of the relevant bonds, however, it appears that Mr Lee has possession of those bonds. I respectively agree with [55] of Emmett J's decision in Warner v Hung (No 2), in which his Honour concluded that, having regard to the terms on which the convertible bonds were issued, which included a provision that title in the bonds was vested absolutely in the person entered in the register as the holder of the bond, there is a presumption that the registered holder of the bonds is its owner at law and the owner of any beneficial interest (absent relevant evidence to the contrary). Although he filed a defence, Mr Lee elected to not otherwise take an active role in the proceeding. I am not prepared to infer the existence of any beneficial interest on the part of Mr Lee merely on the basis of the statements made by Mr Wong in his letter dated 30 January 2012 to Mr Warner or in the emails which are referred to therein concerning the loan agreement. As stated above, neither Mr Wong nor Mr Lee gave evidence in the proceeding. In all these circumstances I find that Mr Lee (along with each of the other relevant defendants) holds the relevant bond certificates under a constructive trust in favour of Bellpac. 270 The second way in which the plaintiffs allege that one or more constructive trusts have arisen relates to their claim that Shan Pei knowingly participated and assisted in Mr Wong's breaches of duty to Bellpac. There is no probative evidence that Shan Pei knowingly participated or assisted Mr Wong in committing any such breach. Accordingly, this aspect of the plaintiffs' case must be rejected.

(d) Do either ss 12 or 23C of the Conveyancing Act apply in the circumstances here and, if so, what are the ramifications? 271 As noted above, the plaintiffs sought to avoid the transfers of the relevant bonds by Alfred Wong to the relevant defendants by alleging that there was non-compliance with the requirements of ss 12 and/or 23C of the Conveyancing Act on the grounds that: (a) the transactions were not in writing; and (b) express written notice of the purported assignments was not given. They contended that, consequently, Alfred Wong never had any legal or equitable title in the bonds which he was capable of assigning. 272 Both Mr Stapleton and Mr Tzovaras contended that there had been compliance with these provisions of the Conveyancing Act. Mr Stapleton argued that, where there was compliance with ss 12 and 23C, it is to be presumed that Dr Kwok became the true legal and beneficial owner of the bonds when they were registered in his name. 273 Section 12 of the Conveyancing Act provided: 12 Assignments of debts and choses in action Any absolute assignment by writing under the hand of the assignor (not purporting to be by way of charge only) of any debt or other legal chose in action, of which express notice in writing has been given to the debtor, trustee, or other person from whom the assignor would have been entitled to receive or claim such debt or chose in action, shall be, and be deemed to have been effectual in law (subject to all equities which would have been entitled to priority over the right of the assignee if this Act had not passed) to pass and transfer the legal right to such debt or chose in action from the date of such notice, and all legal and other remedies for the same, and the power to give a good discharge for the same without the concurrence of the assignor: Provided always that if the debtor, trustee, or other person liable in respect of such debt or chose in action has had notice that such assignment is disputed by the assignor or anyone claiming under the assignor, or of any other opposing or conflicting claims to such debt or chose in action, the debtor, trustee or other person liable shall be entitled, if he or she thinks fit, to call upon the several persons making claim thereto to interplead concerning the same, or he or she may, if he or she thinks fit, pay the same into court under and in conformity with the provisions of the Acts for the relief of trustees. (Emphasis added). 274 Section 23C of the Conveyancing Act provided: 23C Instruments required to be in writing (1) Subject to the provisions of this Act with respect to the creation of interests in land by parol: (a) no interest in land can be created or disposed of except by writing signed by the person creating or conveying the same, or by the person's agent thereunto lawfully authorised in writing, or by will, or by operation of law, (b) a declaration of trust respecting any land or any interest therein must be manifested and proved by some writing signed by some person who is able to declare such trust or by the person's will, (c) a disposition of an equitable interest or trust subsisting at the time of the disposition, must be in writing signed by the person disposing of the same or by the person's will, or by the person's agent thereunto lawfully authorised in writing. (2) This section does not affect the creation or operation of resulting, implied, or constructive trusts. (Emphasis added). 275 It is significant that both ss 12 and 23C are subject to the creation or operation of a constructive trust. 276 For the reasons given above, I have found that each of the relevant defendants held the Bellpac bonds under a constructive trust in favour of Bellpac. Accordingly, the requirements and effect of ss 12 and 23C have no relevance in the circumstances here. It is therefore unnecessary to determine whether the requirements of those provisions were satisfied and, if they were, what consequences would flow. 277 In his defence, Mr Lee did not rely upon ss 12 and/or 23C of the Conveyancing Act. The evidence in respect of the dealings between Mr Alfred Wong and Mr Lee is severely limited. The critical fact is that Bellpac remains the registered holder of the bonds to which Mr Lee claims to have ownership. Mr Lee has not established any beneficial interest in those bonds. It is evident, however, that he has in his possession copies of the relevant bonds which are in the name of Bellpac. An appropriate order should be made directing him to return those bonds to their legal owner, Bellpac and requiring Gujarat to rectify the register.

(e) Were any of the relevant defendants to whom the convertible bonds were transferred a bona fide purchaser for value without notice of Bellpac's legal and/or equitable interest in the bonds? 278 For the following reasons, none of the relevant defendants has established the necessary elements of this defence. 279 As noted above, the relevant defendants did not plead that there was any transaction that gave Alfred Wong a beneficial interest in the bonds which he was capable of assigning for the purposes of satisfying his personal debts. Mr Tzovaras' belated attempt to raise such contention on behalf of his clients has been rejected (see [37] above). Therefore, the purported transfers which were executed by Mr Alfred Wong acting as Bellpac's attorney must be viewed as involving a transaction between Bellpac and the relevant defendants. The fact that some of the relevant defendants believed that Alfred Wong had some interest in the bonds which entitled him to transfer them in the manner which he did cannot displace the fact that it was clear on the face of the transfer forms and the convertible bonds themselves that Alfred Wong was not the transferor, but Bellpac was. These defendants had either actual or constructive notice of Bellpac's legal interest in the bonds yet, as noted above, they initiated no reasonable inquiry into how it was that Alfred Wong could treat Bellpac's property as his own in order to settle his debts. 280 Additionally, I do not accept that the relevant defendants were bona fide purchasers for value. They paid no consideration to Bellpac in circumstances where the transaction documents reveal that Bellpac was the legal owner of the bonds. On one view consideration may have been paid to Mr Alfred Wong, but he was not the legal owner of the bonds nor was it established that he had any beneficial interest in them. Thus, any consideration received by him personally in respect of the transactions is irrelevant.

(f) Are the plaintiffs estopped from denying that all or any of the relevant defendants are the legal and/or beneficial owners of the convertible bonds? 281 The basis for the estoppel argument is summarised in [190] above. In my view, no estoppel arises which prevents the plaintiffs from denying that the relevant defendants who are registered as bondholders on the Gujarat register are the legal and beneficial owners of the relevant bonds. In particular, I do not accept the contention that there were no reasonable grounds to doubt Mr Alfred Wong's authority as Bellpac's attorney to execute and deliver the transfers. That is because each of the relevant defendants had actual or constructive knowledge or notice that the transfers were executed by Mr Wong using his power of attorney from Bellpac so as to deploy Bellpac's property in payment of Mr Wong's personal debts.

(a) If there has been an assignment of a legal and/or equitable interest in the convertible bonds to any of the relevant defendants, was the transaction underpinning such assignment in respect of each of the relevant defendants:

• an uncommercial transaction within the meaning of s 588FB of the Corporations Act and voidable;

• an insolvent transaction within the mean of s 588FC of the Corporations Act and voidable under either ss 588FE(2) or (3); and/or

• an unreasonable director-related transaction within the meaning of s 588FDA of the Corporations Act and voidable under s 588FE(4)? 282 In view of my acceptance of Bellpac's primary case, it is strictly unnecessary to make findings in respect of this alterative case. Under Pt 5.7B of the Corporations Act, a liquidator may seek a wide range of relief from the Court in respect of inter alia an "uncommercial transaction", and which is a "voidable transaction" for the purposes of the legislation. Relevantly s 588FE(3) provides that a company's transaction is voidable if it is an insolvent transaction and uncommercial transaction of the company, and it was entered into during the two years ending on the "relation-back day". Separate provisions in Pt 5.7B deal with voidable transactions which are "unreasonable director-related transactions", which were entered into during the period of four years ending on the relation-back day. There is no contest that the transfers or other relevant matters the subject of this proceeding took place within the prescribed periods. 283 By way of introduction, it might also be noted that the relief which might otherwise be available in respect of an uncommercial transaction or an unreasonable director-related transaction may not be available if another party can demonstrate under s 588FG that: (a) they became a party to the transaction in good faith; (b) they lacked objective reasonable grounds for suspecting that the company was insolvent or would become insolvent; and (c) they provided valuable consideration or changed position in reliance on the transaction. 284 The relevant statutory provisions should now be set out. 285 Section 588FB of the Corporations Act, which deals with uncommercial transactions, provides: 588FB Uncommercial transactions (1) A transaction of a company is an uncommercial transaction of the company if, and only if, it may be expected that a reasonable person in the company's circumstances would not have entered into the transaction, having regard to: (a) the benefits (if any) to the company of entering into the transaction; and (b) the detriment to the company of entering into the transaction; and (c) the respective benefits to other parties to the transaction of entering into it; and (d) any other relevant matter. (2) A transaction may be an uncommercial transaction of a company because of subsection (1): (a) whether or not a creditor of the company is a party to the transaction; and (b) even if the transaction is given effect to, or is required to be given effect to, because of an order of an Australian court or a direction by an agency. 286 Section 588FC of the Corporations Act deals with insolvent transactions. It provides: 588FC Insolvent transactions A transaction of a company is an insolvent transaction of the company if, and only if, it is an unfair preference given by the company, or an uncommercial transaction of the company, and: (a) any of the following happens at a time when the company is insolvent: (i) the transaction is entered into; or (ii) an act is done, or an omission is made, for the purpose of giving effect to the transaction; or (b) the company becomes insolvent because of, or because of matters including: (i) entering into the transaction; or (ii) a person doing an act, or making an omission, for the purpose of giving effect to the transaction. 287 Section 588FDA of the Corporations Act deals with unreasonable director-related transactions. It provides: 588FDA Unreasonable director-related transactions (1) A transaction of a company is an unreasonable director-related transaction of the company if, and only if: (a) the transaction is: (i) a payment made by the company; or (ii) a conveyance, transfer or other disposition by the company of property of the company; or (iii) the issue of securities by the company; or (iv) the incurring by the company of an obligation to make such a payment, disposition or issue; and (b) the payment, disposition or issue is, or is to be, made to: (i) a director of the company; or (ii) a close associate of a director of the company; or (iii) a person on behalf of, or for the benefit of, a person mentioned in subparagraph (i) or (ii); and (c) it may be expected that a reasonable person in the company's circumstances would not have entered into the transaction, having regard to: (i) the benefits (if any) to the company of entering into the transaction; and (ii) the detriment to the company of entering into the transaction; and (iii) the respective benefits to other parties to the transaction of entering into it; and (iv) any other relevant matter. The obligation referred to in subparagraph (a)(iv) may be a contingent obligation. Note: Subparagraph (a)(iv) - This would include, for example, granting options over shares in the company. (2) To avoid doubt, if: (a) the transaction is a payment, disposition or issue; and (b) the transaction is entered into for the purpose of meeting an obligation the company has incurred; the test in paragraph (1)(c) applies to the transaction taking into account the circumstances as they exist at the time when the transaction is entered into (rather than as they existed at the time when the obligation was incurred). (3) A transaction may be an unreasonable director-related transaction because of subsection (1): (a) whether or not a creditor of the company is a party to the transaction; and (b) even if the transaction is given effect to, or is required to be given effect to, because of an order of an Australian court or a direction by an agency. 288 Section 588FE deals with voidable transactions. It relevantly provides: 588FE Voidable transactions … (2) The transaction is voidable if: (a) it is an insolvent transaction of the company; and (b) it was entered into, or an act was done for the purpose of giving effect to it: (i) during the 6 months ending on the relation-back day; or (ii) after that day but on or before the day when the winding up began. … (3) The transaction is voidable if: (a) it is an insolvent transaction, and also an uncommercial transaction, of the company; and (b) it was entered into, or an act was done for the purpose of giving effect to it, during the 2 years ending on the relation-back day. … (6A) The transaction is voidable if: (a) it is an unreasonable director-related transaction of the company; and (b) it was entered into, or an act was done for the purposes of giving effect to it: (i) during the 4 years ending on the relation-back day; or (ii) after that day but on or before the day when the winding up began. 289 The power of the Court to make orders in respect of a voidable transaction is set out in s 588FF. The orders which may be made include an order directing a person to transfer to the company property that the company has transferred under a voidable transaction (see s 588FF(1)(b)). In the case of a transaction which is voidable solely because it is an unreasonable director-related transaction, the Court is empowered to make an order under s 588FF(1) only for the purposes of recovering for the benefit of the creditors of the company the difference between the total value of the benefits provided by the company under the transaction and the value (if any) that it may be expected that a reasonable person in the company's circumstances would have provided having regard to the matters referred to in s 588FDA(1)(c) (see s 588FF(4)). 290 Section 588FG of the Corporations Act deals with circumstances in which orders cannot be made by the Court under s 588FF in respect of certain persons. It relevantly provides: 588FG Transaction not voidable as against certain persons (1) A court is not to make under section 588FF an order materially prejudicing a right or interest of a person other than a party to the transaction if it is proved that: (a) the person received no benefit because of the transaction; or (b) in relation to each benefit that the person received because of the transaction: (i) the person received the benefit in good faith; and (ii) at the time when the person received the benefit: (A) the person had no reasonable grounds for suspecting that the company was insolvent at that time or would become insolvent as mentioned in paragraph 588FC(b); and (B) a reasonable person in the person's circumstances would have had no such grounds for so suspecting. … (Emphasis added). 291 The first issue is whether the plaintiffs have established that Bellpac was insolvent at the relevant times when Mr Wong purported to transfer the convertible bonds to each of the relevant defendants. 292 As stated above, Mr Warner opined that Bellpac was insolvent as at 23 July 2008 and had been insolvent from at least December 2007 and that its insolvency continued up to the appointment of the liquidators. The basis for those opinions is summarised in [57] above. Having regard to that evidence, which I accept, I am satisfied that Bellpac was insolvent from at least December 2007. 293 It might also be noted that Emmett J concluded, on the basis of the evidence before him in Warner v Hung (No 2), that Bellpac was insolvent as at August 2008 (see [26] above). In reaching that conclusion, his Honour placed particular reliance on Bellpac's balance sheet as at June 2008, which suggested that it did not have cash available to meet interest payments which continued to accrue in respect of the loan from LM Investment. Furthermore, Emmett J drew attention to the fact that a substantial majority of what his Honour described as "the Bellpac Indebtedness" remained owing notwithstanding the reduction in that indebtedness, and that Bellpac was in default of the remaining Bellpac Indebtedness as at August 2008. I respectfully adopt that reasoning. 294 Mr Warner's opinion regarding Bellpac's insolvency also took into account additional matters, as outlined in [57] above. 295 Having regard to all these matters, I find that Bellpac was insolvent from at least December 2007 onwards, including at the time the relevant transactions occurred. It might be noted that none of the relevant defendants seriously contested that issue. Mr Tzovaras acknowledged that Mr Warner relied on a number of matters in opining that Bellpac was insolvent from that time, but he said nothing more than that those matters, despite their number, were "insufficient to establish insolvency at the requisite standard of proof". I disagree. 296 Mr Stapleton did not contest Mr Warner's evidence and opinion and was content to rely on his submission that neither Dr nor Mrs Kwok had any basis for suspecting that Bellpac was insolvent in circumstances where neither of them was even aware of the existence of the company at the time of the relevant transactions. 297 I consider that the plaintiffs have also established that the transfer of the bonds to the relevant defendants was uncommercial within the meaning of s 588FB. That is because a reasonable person in Bellpac's circumstances would not have entered into a transaction by which the company's convertible bonds were assigned to the relevant defendants, in circumstances where: (a) Bellpac received no benefits from the transactions; (b) the company was divested of bonds with a face value of $6 million and plainly suffered detriment from the transactions; and (c) other parties, namely Alfred Wong and the relevant defendants, derived some benefit from the transactions. 298 None of the relevant defendants contended that the transactions were not "uncommercial" within the meaning of s 588FB. Indeed, as noted above at [188], Mr Tzovaras candidly acknowledged that he had "some difficulties" in making submissions that the transactions were not uncommercial. In my view, that acknowledgement was correctly made. 299 Having regard to the findings that the transactions were both insolvent transactions under s 588FC as well as uncommercial transactions under s 588FB, it is unnecessary to also determine whether they constituted unreasonable director-related transactions under s 588FDA.

(b) Are the plaintiffs entitled to relief under s 588FF of the Corporations Act or does s 588FG(1) apply? 300 Having regard to the findings above, the critical issue is whether relief should be granted under s 588FF, which turns on whether the requirements of s 588FG are satisfied. 301 As the plaintiffs pointed out, there is a fundamental difficulty with the relevant defendants bringing themselves within s 588FG(1) because that provision has no application to a person who is a party to the relevant transaction. In my view the relevant transactions for this purpose are those between Bellpac as transferor (through its attorney Mr Alfred Wong) and each of the relevant defendants as transferee. That characterisation of the transaction is consistent with the relevant documentation. I do not accept Mr Stapleton's submission that the relevant transaction is that between Alfred Wong and, in the case of his client, Dr Kwok. That is sufficient to conclude that s 588FG(1) has no application in respect of any of the relevant defendants. 302 In any event, I would also find that other relevant requirements in s 588FG(1) are not satisfied here. In particular, contrary to s 588FG(1)(b)(i), each of the transfer transactions did not involve the transferee receiving a benefit in good faith because, as has been repeatedly emphasised, it was clear on the face of the transfer forms and bond certificates that Alfred Wong was not the transferor and that he was using his power of attorney to have Bellpac's property. That provides another reason why the defence under s 588FG(1) is inapplicable here. For that defence to be available the relevant defendants need to establish that the requirements of both s 588FG(1)(b)(i) and (ii) are satisfied. As the first of those provisions has not been established it is moot whether the relevant defendants could establish that they satisfied the requirements of the second of those provisions. 303 Accordingly, for these reasons, if it were necessary to do so, I would have found that the plaintiffs are entitled to appropriate relief under s 588FF of the Corporations Act.

The further alternative case On the assumption that the Court were to find that Bellpac's interest in the convertible bonds was validly assigned to the relevant defendants and the Court declined to order that the bonds be transferred back to Bellpac, did Mr Wong breach his fiduciary and statutory duties owed to Bellpac and is he liable to pay damages commensurate with the face value of the relevant convertible bonds? 304 The plaintiffs only sought relief from Mr Wong in the event that the Court found that there had been a valid assignment of Bellpac's interest in the bonds to the relevant defendants and the bonds were not transferred back to Bellpac. The plaintiffs have succeeded in their primary case and appropriate relief will be granted accordingly. Accordingly, it is unnecessary to make any findings or related orders in respect of the plaintiffs' further alternative case which relates to Mr Alfred Wong personally.

Conclusion 305 For the reasons given above the plaintiffs have succeeded in their primary case. Within the next fourteen days, the affected parties should seek to agree orders which give effect to these reasons, including as to costs (noting that no party sought to contest the proposition raised by the Court at the end of the hearing that costs should follow the event). If the parties are unable to agree orders, each should within that time file and serve a copy of their proposed orders, together with a brief outline of submissions (not to exceed five pages) in support of their preferred orders. It may be possible for the Court to determine final orders on the papers, however, any party who seeks a further oral hearing should say so in their outline of submissions and briefly explain why it considers that is necessary. I certify that the preceding three hundred and five (305) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Griffiths.