Federal Court of Australia Dixon (Liquidator), in the matter of Victoria Project Pty Ltd v Austhome Group Pty Ltd [2023] FCA 42 File number(s): VID 105 of 2021 Judgment of: MCELWAINE J Date of judgment: 1 February 2023 Catchwords: CORPORATIONS – application by liquidator pursuant to s 90-15 of the Insolvency Practice Schedule (Corporations) – liquidator remuneration – interpretation of deed of settlement and release - meaning of the phrase "costs of the liquidation" CONSUMER LAW – claim for misleading or deceptive or unconscionable conduct pursuant to the Australian Consumer Law – where liquidator made representations as to the remuneration for his appointment as liquidator – whether liquidator had reasonable grounds for making the remuneration representations Legislation: Competition and Consumer Act 2010 (Cth) Sch 2 (Australian Consumer Law) ss 4, 18, 21 Corporations Act 2001 (Cth) ss 232, 233, 491, 494, 495, Sch 2 (Insolvency Practice Schedule (Corporations)) ss 60-10, 90-15 Federal Court Rules 2011 (Cth) rr 28.62-28.67 Australian Restructuring Insolvency and Turnaround Association (ARITA) Code of Professional Practice, 3rd edition from 1 January 2014 Cases cited: Australia Pacific LNG Pty Ltd v Sooner Insurance Company [2021] QSC 43 Australian Competition and Consumer Commission v ACM Group Ltd (No 2) [2018] FCA 1115 Australian Competition and Consumer Commission v Henry Kaye and National Investment Institute Pty Ltd [2004] FCA 1363 Australian Competition and Consumer Commission v Quantum Housing Group Pty Ltd (2021) 285 FCR 133; [2021] FCAFC 40 Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640; [2013] HCA 54 Australian Competition and Consumer Commission v Woolworths Group Ltd (formerly called Woolworths Limited) (2020) 281 FCR 108; [2020] FCAFC 162 Australian Competition and Consumer Commission v Woolworths Ltd [2019] FCA 1039 Australian Securities and Investments Commission v Dover Financial Advisers Pty Ltd (2019) 140 ACSR 561; [2019] FCA 1932 Bofinger v Kingsway Group Ltd (2009) 239 CLR 269; [2009] HCA 44 Brown v Gould [1972] 1 Ch 53 Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592; [2004] HCA 60 Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; [2009] HCA 25 Codelfa Constructions Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 Council of the Upper Hunter County District v Australian Chilling and Freezing Co Ltd (1968) 118 CLR 429 Good Living Company Pty Ltd v Kingsmede Pty Ltd (2021) 284 FCR 424; [2021] FCAFC 33 Google Inc v Australian Competition and Consumer Commission (2013) 249 CLR 435; [2013] HCA 1 Harvard Nominees Pty Ltd v Tiller (2020) 282 FCR 530; [2020] FCAFC 229 In the matter of RMGA Pty Ltd [2012] NSWSC 678 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37 Sykes v Reserve Bank of Australia (1998) 88 FCR 511 Unique International College Pty Ltd v Australian Competition and Consumer Commission (2018) 266 FCR 631; [2018] FCAFC 155 Wheeler Grace & Pierucci Pty Ltd v Wright (1989) 16 IPR 189 Division: General Division Registry: Victoria National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Number of paragraphs: 163 Date of hearing: 24-26 October 2022, 7 November 2022 Counsel for the Plaintiffs: Mr CR Brown Solicitor for the Plaintiffs: CLH Lawyers Counsel for the First and Second Defendants: Mr L Currie Solicitor for the First and Second Defendants: Aitken Partners Counsel for the Third, Fourth, Fifth, Sixth and Seventh Defendants: Mr AA Segal Solicitor for the Third, Fourth, Fifth, Sixth and Seventh Defendants: Hunt & Hunt Lawyers Counsel for the Cross-Defendants: Ms CM Pierce Solicitor for the Cross-Defendants: Moray & Agnew ORDERS VID 105 of 2021 IN THE MATTER OF VICTORIA PROJECT PTY LTD (IN LIQUIDATION) BETWEEN: STEPHEN ROBERT DIXON AS LIQUIDATOR OF VICTORIA PROJECT PTY LTD (IN LIQUIDATION) (ACN 142 329 155) First Plaintiff VICTORIA PROJECT PTY LTD (ACN 142 329 155) (IN LIQUIDATION) Second Plaintiff AND: AUSTHOME GROUP PTY LTD (ACN 091 589 089) First Defendant DAVID WU Second Defendant LING & YU PTY LTD (ACN 126 062 833) (and others named in the Schedule) Third Defendant AND BETWEEN: XUE BIN (DAVID) WU (and another named in the Schedule) First Cross-Claimant AND: STEPHEN ROBERT DIXON (and another named in the Schedule) First Cross-Defendant order made by: MCELWAINE J DATE OF ORDER: 1 February 2023 THE COURT ORDERS AND DECLARES THAT: 1. Upon a proper construction of the deed of settlement and release dated 29 August 2019 made between: (a) Victoria Project Pty Ltd (ACN 142 329 155); (b) Xin Zhang; (c) Xue Bin Wu; (d) Wei Jing Lin; (e) Fei Wen; (f) Yu Zheng; (g) Austhome Group Pty Ltd (ACN 091 589 089); (h) Rising Fortune Pty Ltd (ACN 141 982 738); (i) Jia Wen Su; (j) Ling & Yu Pty Ltd (ACN 126 062 833); (k) Australia Morning Pty Ltd (ACN 126 644 086)); (l) Winston & Glen Zheng Pty Ltd (ACN 141 136 656); and (m) Jia Feng Pty Ltd (ACN 148 196 196); the costs of the liquidation of Victoria Project Pty Ltd (the company) at clauses 2(j), (k) and (l) is limited to the remuneration, costs and expenses of the liquidator and the costs of any third party engaged by the liquidator whether for or on behalf of the company or in his capacity as liquidator incurred in consequence of the appointment of Mr Stephen Robert Dixon as liquidator of the company on 23 October 2019 and does not include expenses, costs or other liabilities that the company would have incurred in any event in the conduct of its business as a property developer and landlord if a liquidator not been appointed, even where such expenses are incurred during the period of the liquidation. 2. The cross-claim is dismissed. 3. The matter is adjourned for further submissions or hearing, if necessary, of all questions of consequential orders and relief, including costs. 4. The parties have leave to file submissions limited to 3 pages as to consequential orders and relief, including costs, by 4pm on 15 February 2023. 5. Subject to any further order of the Court, the determination of all consequential orders will proceed on the papers. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT MCELWAINE J: 1 This proceeding began life on 9 March 2021 as an orthodox application for judicial advice and for determination of remuneration by Stephen Dixon as liquidator of Victoria Project Pty Ltd (in liquidation) (VPPL) pursuant to ss 90-15 and 60-10 of the Insolvency Practice Schedule (Corporations), being Schedule 2 to the Corporations Act 2001 (Cth) (Insolvency Practice Schedule). Thereafter it underwent a metamorphic transformation. Orders were made by consent on 23 April 2021 for the joinder of parties and for separate determination of the liquidator's remuneration claim by a judicial registrar. The result was that on 8 October 2021, Judicial Registrar Allaway fixed the remuneration claim in the amount of $273,584.50 plus GST for the period 14 January 2020 to 31 October 2020. That left unresolved larger issues between the parties concerning the construction of a deed of settlement and release dated 29 August 2019 (the Deed), claims that Mr Dixon had agreed to cap his fees for the liquidation at $50,000 plus GST and disbursements and the potential liability of some of the parties to indemnify other parties for costs of the liquidation in excess of $60,000 plus GST. 2 On 24 November 2021, further orders were made by consent to facilitate resolution of the broader disputes by pleadings. From those orders the parties, with considerable enthusiasm, have put in issue the construction of the indemnity clauses of the Deed, together with a cross-claim for misleading or deceptive conduct or unconscionable conduct by Mr Dixon in making certain representations in relation to his fees. 3 The genesis of the dispute is that the directors and shareholders of VPPL had a falling out in 2014. VPPL was established as the vehicle for a joint venture to undertake the development of a residential apartment complex at 212 Victoria Street, Carlton, Victoria (development), comprising 283 residential apartments, 4 retail shops, 63 car spaces and 22 storage cages. The joint venture participants are: (a) Xin Zhang, a director of VPPL (Mr Zhang); (b) Xue Bin Wu, a director of VPPL (Mr Wu); (c) Wei Jing Lin, a director of VPPL (Mr Lin); (d) Fei Wen, a director of VPPL (Ms Wen); (e) Yu Zheng, a director of VPPL (Mr Zheng); (f) Austhome Group Pty Ltd, a shareholder of VPPL which is controlled by Mr Wu (Austhome); (g) Rising Fortune Pty Ltd, a shareholder of VPPL; (h) Jia Wen Su, a shareholder of VPPL; (i) Ling & Yu Pty Ltd, a shareholder of VPPL; (j) Australia Morning Pty Ltd, a shareholder of VPPL; (k) Winston & Glen Zheng Pty Ltd, a shareholder of VPPL; and (l) Jia Feng Pty Ltd, a shareholder of VPPL. 4 In these reasons it is convenient to refer to each of the parties, save for Mr Wu and Austhome, as the majority shareholders. 5 The development progressed and was completed. VPPL was profitable. But there were disputes which resulted in Austhome, on 5 December 2014, making an application to the Supreme Court of Victoria to resolve claims relating to the operation of VPPL and payment of outstanding project management fees. Austhome engaged the jurisdiction to make orders upon a finding of oppressive conduct at ss 232 and 233 of the Corporations Act. Certain offers of compromise were made and accepted in that proceeding with the result that on 10 February 2017, orders were made that the proceeding be struck out, with a right of reinstatement in the event of default in compliance with the terms of the compromise and for VPPL to pay certain costs to, inter alia, Mr Wu and Austhome, to be taxed in default of agreement. 6 Regrettably, those orders did not resolve the dispute about costs. On 24 April 2018, VPPL filed a summons in the Supreme Court of Victoria to progress the taxation. Further procedural orders were made upon that application, but they did not result in a taxation. There were other legal proceedings. In April 2015, a Ms Agelakis commenced a proceeding in the Supreme Court of Victoria concerning the enforceability of a contract of sale for a shop within the development. She, as the purchaser, sought specific performance. Mr Wu, Austhome and VPPL were joined as parties to that proceeding. In February 2017, Ms Agelakis and Mr Wu accepted an offer to resolve that proceeding on certain terms whereby Mr Wu, or his nominee, would purchase the shop. The parties became disputants as to the performance of certain terms of that compromise. 7 Eventually, the parties agreed in principle to settle each of their disputes and ultimately did so (or so they thought) in the form of the Deed. Inter alia, the Deed required that following a declaration of solvency, the members would meet for the purpose of considering and voting upon a special resolution in accordance with s 491 of the Corporations Act that VPPL be wound up and that Mr Dixon be appointed as liquidator pursuant to s 495. Assuming the passing of those resolutions, the Deed provides for Mr Dixon, at the request of the relevant parties, to conduct an in specie distribution of the unsold lots in the development in order to achieve an "equitable distribution" amongst the members of their share entitlements. 8 The Deed includes a clause which is central to the construction question raised upon this application. It concerns the "costs of the liquidation" of VPPL. The Deed provides for a cost cap of $60,000 plus GST payable by VPPL. If the costs of the liquidation exceed that, Mr Wu and Austhome become responsible for them, must indemnify VPPL to that extent and are obliged to pay the excess to the liquidator. The parties are in dispute as to what is meant by "costs of the liquidation." 9 In addition, and separately, Mr Wu and Austhome as cross-claimants contend that certain oral and written representations were made to them by Mr Dixon to the effect that his and his firm's fees, in the event that he were to be appointed as liquidator of VPPL, would be capped at $50,000 plus GST and disbursements (the remuneration representations). In reliance upon those representations, Mr Wu and Austhome contend that they agreed in principle to the terms of settlement and then entered into the Deed. Their case is that but for those representations, they would not have acted to their detriment in this way by accepting the indemnity obligation. They frame their cross-claim as one for misleading or deceptive or unconscionable conduct contrary to ss 18 and 21 of the Australian Consumer Law, being Schedule 2 to the Competition and Consumer Act 2010 (Cth) (ACL). 10 As finally resolved, and in broad compass, the issues for determination are: 1. What is the correct meaning and scope of the phrase "costs of the liquidation" at clauses 2 (j), (k) and (l) of the Deed, and is the meaning so uncertain that the clause is void; 2. Did Mr Dixon engage in misleading or deceptive conduct in making the remuneration representations; 3. Did Mr Dixon engage in unconscionable conduct in making the remuneration representations; 4. Did Mr Wu act in reliance upon any misleading or deceptive or unconscionable conduct of Mr Dixon and if so, did he and/or Austhome suffer damage in consequence and, if so, what remedy should they receive; and 5. Did Mr Wu and/or Austhome fail to take reasonable steps to mitigate any damage that they did suffer? 11 Mr Brown appeared for Mr Dixon upon the trial instructed by CLH Lawyers. Ms Pierce also appeared for Mr Dixon, not with Mr Brown and separately instructed by Moray & Agnew Lawyers. Despite my drawing attention to that unusual method of representation, no party objected. It would seem a common assumption that the interests of Mr Dixon and his firm Hamilton Murphy Advisory Pty Ltd (Hamilton Murphy) as respondents to the cross-claim are sufficiently distinct so as to permit, and indeed require, separate representation. In the absence of any objection, I was content to allow the division of responsibility in that way whereby Mr Brown assumed carriage of the construction question and Ms Pierce dealt with the cross-claim. However, it should not be generally understood that proceeding in this way is appropriate. As noted by Bowskill J in Australia Pacific LNG Pty Ltd v Sooner Insurance Company [2021] QSC 43 (which contains a pellucid summary of the case law), leave may be granted for separate representation as an exception to the general rule that a party may only be singly represented. Dual representation "ought only be permitted when the interests of justice require it": [14]. What is obvious is that a professional indemnity insurer has responded to the cross-claim against Mr Dixon and Hamilton Murphy. For future noting, leave should have been applied for in this matter. 12 Mr Currie appeared for Mr Wu and Austhome and Mr Segal appeared for the majority shareholders. The Court is grateful to each counsel for their efficient presentation of the respective cases. 13 It is not an easy task to move straight to the construction question as much reliance is placed by the majority shareholders upon the background factual matrix that is said to have been known to the parties. It is permissible to refer to this material, as plainly the Deed is ambiguous: Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 at 352, Mason J (Stephen and Wilson JJ concurring). The essential facts 14 The trial evidence comprised several affidavits made by Mr Dixon (some portions of which were not read) respectively dated 18 December 2020, 23 February 2021, 31 March 2021, 23 April 2021, 21 June 2021 and 1 July 2022, an affidavit of Mr Milne made on 16 June 2021, two affidavits of Mr Wu made on 28 May 2021 and 14 July 2022, two affidavits of Mr Scott made on 18 June 2021 and 5 May 2022 and an electronic court book of agreed documents. Each of Mr Dixon and Mr Wu were cross-examined. Mr Milne and Mr Scott were not. Save for the content of discussions between Mr Dixon and Mr Wu and the state of mind of each as to the scope of the task to be performed by Mr Dixon, there is broad agreement as to the material facts. What follows are my findings of fact, unless otherwise indicated. 15 VPPL was incorporated on 1 March 2010 as the joint venture vehicle to undertake the development. Practical completion was achieved in March 2014. Of the 283 residential apartments, 37 remained unsold as at 18 December 2020. From March 2014, VPPL conducted business as a property developer (to effect a sale of lots within the development) and as a landlord of components of the development. The combined shareholding of the majority shareholders is 65% and the shareholding of Austhome is 35% of the issued capital of VPPL. Mr Wu is the sole director of Austhome and at all material times was and is a director of VPPL together with Mr Zhang, Ms Lin, Mr Ling and Mr Zheng. Disputes first arose between the directors and shareholders of VPPL in 2014. Various proceedings were commenced in the Supreme Court of Victoria which are summarised in the recitals to the Deed and earlier in these reasons. Those disputes were brought to a head, so to speak, when on 20 December 2017, Austhome commenced a proceeding in the Supreme Court of Victoria and sought, amongst other things, that VPPL be wound up. That application was opposed by each of the majority shareholders. 16 In March 2018, Mr Wu had a brief introductory telephone discussion with Mr Dixon. In general terms, he informed Mr Dixon that the shareholders of VPPL were considering a proposal that it be wound up and that a liquidator be appointed. He requested an appointment with Mr Dixon to discuss the matter in more detail. 17 On 16 April 2018, Mr Wu met with Mr Dixon at the offices of Grant Thornton, the firm with which Mr Dixon was then associated. The recollection of what was discussed by the participants differs. The evidence in chief from Mr Wu as set out in his affidavit of 28 May 2021 is: 10. On 16 April 2018, at approximately 2:00pm, I met with the Liquidator at the offices of Grant Thornton. The meeting lasted approximately one hour, during which I explained in detail VPPL's history, the various disputes between its shareholders, and why the potential winding up was being considered. While I cannot recall the exact words exchanged during this meeting, the topics we discussed included the following: (a) VPPL's ownership of 37 residential units, 7 car parks and 15 storage units, which needed to be sold and/or distributed amongst the shareholders; (b) the key complaints made by Austhome and me against Mr Zhang (another director of VPPL), Rising Fortune Pty Ltd (the Fourth Defendant in this proceeding) (Rising Fortune) and VPPL in the Austhome Proceeding (as that term is defined in Recital D of the Second Deed of Settlement): (c) my opinion that the other directors of VPPL may have breached their duties and caused loss to VPPL, both by the conduct which precipitated the Austhome Proceeding and in causing VPPL to defend the Austhome Proceeding unreasonably; (d) my need to access the records of VPPL to investigate potential claims against the other directors of VPPL breaches of their duties; (e) the fact that Austhome Proceeding resolved in February 2017, save for the quantification of costs payable by VPPL to Austhome (and the other plaintiffs), which were required to be taxed in default of agreement. The parties to the Austhome Proceeding had not agreed on the quantum of costs payable; (f) the issues I expected the Liquidator would need to deal with if he were appointed to VPPL, including: (i) the sale and/or distribution of the unsold lots, carparks and storage units; (ii) the settlement of disputes in respect of Shop 1, which related to the payment of a commission, an acknowledgment required from Consumer Affairs Victoria, and the return of a deposit and interest paid by the first purchaser (my wife); (iii) the resolution of a dispute regarding the settlement of Shop 2, which related to its size; (iv) complaints regarding potential building defects made against VPPL as the building developer; (v) obtaining VPPL's books and records from the other directors; and (vi) investigating potential claims against the other directors for breaches of their duties to VPPL. 11. At the conclusion of this meeting, I said to the Liquidator words to the effect of "what will be your fee for the appointment?". The Liquidator then said words to the effect of "$50,000 plus GST and disbursements". (Original emphasis.) 18 Mr Dixon did not address that discussion in his affidavits of 18 December 2020, 23 February 2021 or 23 April 2021. Despite the criticisms of Mr Currrie, his omission is explicable by the fact that the importance of this meeting was not first raised until Mr Wu made his affidavit on 28 May 2021, and nor was it sharply brought into focus until the first iteration of the cross-claim of Mr Wu and Austhome as filed on 23 December 2021. Mr Dixon in his affidavit of 21 June 2021 first dealt with this conversation as follows: 4. In response to paragraph 10 of Wu's affidavit I say: 4.1 My recollection is that the meeting lasted for approximately 30 minutes. 4.2 I don't agree that we discussed the Austhome proceeding. 4.3 I don't recall the specifics of the discussion. 4.4 I regularly meet with prospective directors or shareholders with respect to possible appointments. I rely on what I am told by the prospective client for the purposes of providing any estimated quote of my fees. 5. In response to paragraph 11 of Wu's affidavit, I agree that I estimated fees at $50,000 plus GST plus Disbursements based upon information that I had been provided with until that point in time. 6. In response to paragraph 12 of Wu's affidavit, I had understood from Mr Wu that quotes from other Liquidators would be obtained. (Original emphasis.) 19 Mr Dixon gave a more detailed account of his recollection of the meeting in his affidavit of 1 July 2022, together with his recollection of the earlier telephone discussion in March 2018: 4. I did not know of and had not met Mr Wu before he telephoned me in late March 2018 to discuss the proposed voluntary winding up of Victoria Project Pty Ltd (VPPL). 5. During our telephone conversation, Mr Wu told me to the effect that there had been a dispute between the directors of VPPL and that he wanted a liquidator for a voluntary winding up to distribute its assets among the shareholders, and that the lawyers at Mills Oakley and another firm at the time had recommended me to him. Towards the end of the conversation, I made an appointment to meet with Mr Wu. I did not ask him to send me any documents in advance of the meeting and he did not send me any documents. My first meeting with David Wu on 16 April 2018 6. I refer to the Wu affidavit at [10] to [12] and to my affidavit in response at [4] to [6]. I elaborate on that response below. 7. My first meeting with Mr Wu occurred at Grant Thornton's offices at around 2:00 pm on 16 April 2018. The meeting lasted around half an hour. Mr Wu brought no documents with him to the meeting. 8. Mr Wu told me to the effect that VPPL owned a building in Carlton in which some apartments, shops and car spaces remained unsold. Mr Wu told me that he wanted to appoint a liquidator to VPPL. Mr Wu told me that he wanted a liquidator to distribute the assets of VPPL to its shareholders. Mr Wu did not say that VPPL had any liabilities. I understood this to mean that he wanted a liquidator to make in specie distribution of the company's assets to the shareholders. Mr Wu said to the effect that the shareholders had had a conversation about making a distribution of VPPL's assets to its shareholders. 9. In response, I told Mr Wu to the effect that distributing the assets of VPPL to its shareholders through an in specie distribution was a relatively straightforward process, involving distributing the assets of the Company in proportion with the shareholding to the shareholders and that depending on the shareholding, tax liability and the level of cash at bank, it could be done by selling none (or the minimum required number to enable an in specie distribution) of apartments and/or car spaces. … 15. Mr Wu told me to the effect that the directors and shareholders of VPPL were involved in a dispute and asked me what my powers as liquidator were to investigate matters related to a company or its directors. I told Mr Wu to the effect that I did not have authority to investigate those matters; and that in a solvent liquidation, my role was not to investigate but to realise assets, distribute assets and walk away. I also told Mr Wu to the effect that there was a difference between a members' voluntary winding up and an insolvent winding up and that, in an insolvent winding up, the liquidator had the power to investigate certain matters where there might have been breaches of duty owed to a company. 16. I do not recall the specifics of the discussion I had with Mr Wu, in the sense that I cannot recall exactly the detail of the words spoken by him and me, but I recall what topics were discussed, including the topics I have described above in paragraphs 8, 9, 14 and 15. I am confident that Mr Wu did not mention the existence of a dispute in relation to Shop 2, because had Mr Wu told me during our first meeting that there were disputes ongoing in relation to the shops to be sold, I would have become concerned that there were more issues than what he was telling me; I would have asked for more background information before I proposed a fee for the conduct of the members' voluntary winding up. 17. I am confident that Mr Wu did not tell me to the effect that an issue for me to investigate as liquidator was the presence of defects in the property. Had Mr Wu said words to that effect, this would have raised significant concerns for me because of the complexity it would add to the liquidation process, including: complexities with valuing the assets to determine the in specie distribution; the complexity associated with the liquidator engaging builders and/or tradespeople to rectify defects; having to have the building works certified; and having to obtain insurance to cover any defects liability period. 18. Based on Mr Wu telling me to the effect that VPPL wanted to appoint me to make an in specie distribution of the assets of VPPL under a members' voluntary winding up, as there had been litigation between directors and shareholders of the company, I understood that the in specie distribution was the basis upon which the parties to the litigation had agreed to settle their dispute and bring an end to their involvement with VPPL. 19. It is also my practice at every first meeting with a prospective client for a voluntary winding up to ask for the name of the external accountant of the relevant company, as I know that I will need to deal with that person in relation to the company's financial statements and final income tax returns. In accordance with that practice, I asked Mr Wu who was in charge of the company's financial accounts and Mr Wu replied to the effect that a fellow director, Mr Zhang, took care of that. To the best of my recollection, Mr Wu also told me the name and location of the company's external accountant. Mr Wu did not say anything about the state of the company's financial accounts. 20 Mr Currie submits that I should find in accordance with the evidence of Mr Wu and that I should reject the conflicting evidence of Mr Dixon as implausible, a convenient reconstruction and, in part, contradicted by contemporaneous documents. My task of resolving conflicts in this evidence was not greatly assisted in that Mr Dixon was not directly challenged in cross-examination about his recollection of this specific meeting. As an introductory question it was put to Mr Dixon, and he accepted, that "a prudent and responsible insolvency practitioner" when requested to provide a fee estimate would first take steps to be satisfied that he or she had received all relevant information in order to give an accurate estimate. Having laid that foundation, counsel limited his cross-examination about Mr Dixon's recall of this meeting to one matter: whether Mr Dixon had incorrectly stated to Mr Wu that, if appointed as liquidator in a solvent liquidation, he would not have the authority to investigate disputes between the directors and shareholders. In answer, Mr Dixon accepted that this statement was contrary to his then understanding of the powers of a liquidator, his advice was wrong and given mistakenly. 21 At an earlier point, counsel challenged Mr Dixon's recollection of several discussions with Mr Wu between August 2018 and April 2019 as mistaken in part, not supported by contemporaneous records and that as a consequence: I suggest to you, Mr Dixon, that the Court and his Honour can have no confidence in your recollection of what was said during your communications with Mr Wu and the majority shareholders in that nine-month period. 22 Although no objection was taken to that question, I intervened: HIS HONOUR: Well, that's a matter for me, isn't it? You can put [to] me a submission about that, but whether the witness thinks I can have confidence in his evidence or not doesn't help me, Mr Currie. MR CURRIE: I will withdraw it. 23 Counsel then moved to another topic, being the experience and knowledge acquired by Mr Dixon in his 25-year career as an insolvency practitioner. Whether I should have confidence in the evidence of Mr Dixon turns largely on resolving conflicts in his evidence with that of Mr Wu, which is ordinarily assisted by direct questioning and challenge in cross-examination. Proceeding in that way is forensically distinct from an ultimate submission that evidence should not be accepted. I do not, therefore, accept the submission that was put in closing that counsel did not perform that task either because of my interjection or that, by reason of the filing and service of affidavits, Mr Dixon was on notice of the competing evidence. 24 The difficulty with the way in which the cross-examination was conducted is that Mr Dixon was not distinctly challenged in his evidence that at the meeting on 16 April 2018: (a) Mr Wu did not disclose that VPPL had any liabilities; (b) Mr Wu said to the effect that the shareholders had discussed a distribution of the assets of VPPL amongst themselves; (c) Mr Wu did not mention building defects; (d) Mr Dixon told Mr Wu to the effect that an in specie distribution of assets amongst shareholders would be a relatively straightforward process and that, depending upon their shareholdings and any tax liability and cash at bank, it could be achieved without selling any of the apartments or by limiting the sale to the minimum required to enable the distribution to occur; (e) Mr Dixon told Mr Wu to the effect that a members voluntary winding up involves valuing the assets and distributing them and preparing and lodging financial statements and final income tax returns; (f) Mr Wu did not mention the existence of disputes in relation to shops 1 or 2 or potential claims arising out of building defects; and (g) Mr Dixon asked Mr Wu as to who was in charge of the financial accounts of the company and was informed that it was Mr Zhang. 25 In contrast, the evidence of Mr Wu about this meeting was directly challenged by Ms Pierce in her cross-examination, which also probed the inconsistency of his evidence with subsequent documents that he authored about which I make separate findings of fact later in these reasons. Presently, focusing on the meeting of 16 April 2018, Mr Wu accepted that he told Mr Dixon that the shareholders proposed to settle their disputes by the appointment of an independent liquidator with the intent of having that person distribute the assets of VPPL to its shareholders. He told Mr Dixon that the shareholders were not in dispute that the assets of VPPL should be distributed. He initially denied the proposition that Mr Dixon said that a distribution of assets "would be a relatively straightforward process", responding in part: "I actually told Dixon it is quite a simple process, because if no one [disputes it], it bears on the proportion of the shareholding". 26 Further, Mr Wu accepted that Mr Dixon told him that his fees would be $50,000, excluding GST and disbursements, "fixed at that point in time", but he was unable to recollect if this was put on the basis of a fee cap. He was then questioned to the effect that he told Mr Dixon that a distribution to shareholders would be a relatively simple process but if there were disputes relating to the shops that would complicate the process. In a non-responsive answer, he said: "I actually briefed what's the dispute for shop 1, what are the dispute for shop 2, and shop 1 is – everyone had mentioned a lot already." Counsel refocused the attention of the witness on her question, and it was put again and Mr Wu agreed. Next it was put to him that if the development suffered from building defects that too would complicate a distribution process to which his answer was: "not exactly". On the evidence of Mr Wu, building defects were a matter for the builder and not the developer. 27 He was next questioned about the extent of financial liabilities of VPPL. He accepted that liabilities of that sort might also complicate the distribution process answering: "only if it's identified. If it's not identified, you cannot be assuming there is a liability there". Later in the cross-examination, Mr Wu accepted that he did not inform Mr Dixon of potential liabilities relating to building defects. 28 Overall, I accept the evidence of Mr Dixon and I find accordingly, as to what was discussed with Mr Wu at the meeting on 16 April 2018. Whilst Mr Dixon is criticised for stating in his affidavit of 21 June 2021 that he did not "recall the specifics of the discussion" but later, in his affidavit of 1 July 2022, he was able to recall the discussion in considerable detail, I find his explanation given in cross-examination to the effect that he had more time to "think about what had happened" plausible. I am not prepared to make findings of fact inconsistent with his evidence on matters that were not challenged in cross-examination, despite the fact that much was made in opening submissions that his evidence should be regarded as an unreliable reconstruction. At no point in the cross-examination was that fairly put to Mr Dixon. 29 Further, and as I explain below, the evidence of Mr Wu as to the content of the discussion on 16 April 2018 is difficult to reconcile with his later correspondence that was prepared after Mr Dixon had informed him that his fees would greatly exceed $50,000 plus GST and disbursements. As I will demonstrate, I have concluded that the contemporaneous documents and subsequent conduct of Mr Wu is inconsistent with his evidence that he told Mr Dixon during the meeting about the "key complaints" which he had against Mr Zhang and Rising Fortune Pty Ltd, his concern that other directors of VPPL may have breached their duties and had caused loss to the company, that the scope of work would include the investigation of potential claims against those persons, that disputes existed in relation to shops 1 and 2 which required resolution and that there were potential liabilities flowing from building defects. 30 In part I also base my acceptance of the evidence of Mr Dixon in preference to that of Mr Wu, where there is inconsistency, upon my assessment of their respective demeanour in the witness box. Mr Dixon presented as a careful witness who answered questions directly and who was prepared to make concessions. I find that his evidence was truthful and reliable. I do not find that Mr Wu was untruthful. Although on many occasions he requested that relatively straightforward questions be put again before providing his answer that is not a matter which counts against the reliability of his evidence in that it is explicable by the fact that English is not his first language. However, he clearly embellished a portion of his evidence when told by Mr Dixon in writing on 13 January 2020 that the fee would exceed the fee cap. I analyse this evidence in chronological order below and explain why I reject the evidence of Mr Wu, but in brief Mr Wu contended that he had informed Mr Dixon, prior to April 2019, that the scope of work included the seven stages of tasks that he listed in a memorandum prepared on or about 20 January 2020. When pressed, he accepted that the first time he had mentioned this evidence was in the course of his cross-examination. He denied doing so in order to have me accept that the advised scope of work was far broader "than it really was", and is a recent invention, but which denials, as I explain, I do not accept. 31 This was not peripheral or inconsequential evidence. Central to the cross-claim is whether Mr Wu made full disclosure to Mr Dixon of all that he knew as relevant to the fee cap, if he did not, whether in that circumstance the fee cap representations made by Mr Dixon were objectively misleading or deceptive or unconscionable and whether I should accept that Mr Wu and Austhome relied upon those representations in their decision to enter into the Deed and with it to accept the fee indemnity obligation. That Mr Wu would claim before me that the scope of the work that he informed Mr Dixon about was as extensive as the seven stages that he subsequently identified causes me to doubt the credibility of his evidence as to his knowledge of the issues that Mr Dixon would likely need to deal with if appointed as liquidator, the extent to which Mr Wu disclosed that knowledge to Mr Dixon and, more particularly, what in fact was disclosed to Mr Dixon at the initial meeting on 16 April 2018 and subsequently. My overall conclusion is that where the evidence of Mr Dixon and Mr Wu conflicts on these issues, I prefer Mr Dixon as the more reliable and intuitive witness. And as I further explain below, his evidence is more consistent with the contemporaneous documents which I assess as more reliable than the recollection of oral discussions some years after the relevant events. 32 It is not in issue on the pleadings that Mr Dixon said during the meeting of 16 April 2018 that if he were to be appointed as liquidator of VPPL his remuneration would be capped at $50,000 plus GST and disbursements. My acceptance of the evidence of Mr Dixon as to what occurred during that meeting extends to my further finding that I also accept the basis on which he calculated his fee. That is, he assessed it based on the scope of work that Mr Wu disclosed to him and then proceeded as follows (which he explained in chief in his affidavit of 1 July 2022): 10. In my experience, undertaking an in specie distribution of VPPL's assets would be a relatively simple process for me and my staff, as there would be either no need to engage in marketing campaigns for each of the properties or to engage lawyers for conveyancing purposes, or if there was such a need, only for a limited number of properties. Rather, I understood that a liquidator would need to engage a valuer on behalf of VPPL to provide a sworn valuation of the properties to determine their value as part of the step outlined in (d) below. Based on the information provided by Mr Wu during our telephone conversation in March 2018 and our meeting on 16 April 2018, the tasks required of a liquidator to undertake an in specie distribution for a company such as VPPL are as follows: (a) Confirm the company's shareholding and the distribution rights; (b) Deal with cash at bank including any term deposits; (c) Deal with relevant parties regarding the discharge of security interests registered against the company (if applicable); (d) Determine and value the company's asset base; (e) Arrange for the company's accountant to prepare financial accounts and lodge income tax returns for the period up to the date of liquidation and for the liquidation period (if taxable income will be derived) and thereafter seek an exemption from lodging any further income tax returns; (f) Obtain a clearance from the ATO for the distribution of the surplus assets to the company's shareholders; (g) Calculate the distribution to the members by way of cash and/or distribution in specie; (h) Distribute the assets and provide shareholders with the Liquidator's Minute and the Distribution and Appropriation the Surplus Assets of the winding up of the company; and (i) Complying with the Corporations Act 2001 (Cth) in finalising the liquidation. 11. Based on my previous experience, I expected that a valuation of the property required for the step outlined in 10(d) above would cost around $3,000 or $4,000 because all lots (units, shops and car spaces) could be inspected on the one occasion, and because the properties within each category would be similar. My practice is to disburse the valuer's fees to the company. To the best of my recollection, I did not tell Mr Wu that this expense would be disbursed. 12. In the course of my career up to early 2018, I had conducted around 25-30 members voluntary windings up. It was common for me when at Grant Thornton, and remains common for me now that I am at Hamilton Murphy Advisory, to charge around $5,000 for a members' voluntary winding up. For a fee in that amount or close to that amount, my staff and I attend to various tasks which include preparing a Form 520 for its directors to complete; filing that form with the ASIC; preparing resolutions of shareholders to give effect to the winding up based on precedent forms maintained by the firm; and overseeing the lodgement of final tax returns. In estimating a fee of around $5,000, I would expect the company to have a clean balance sheet, by which I mean that it would have minimal (if any) outstanding liabilities. 13. As a number of lots within the property owned by VPPL would need to be valued and final accounts and tax returns completed, I considered that $50,000 would be an appropriate figure to propose for my fees of the winding up, as it reflected around ten times what I would ordinarily charge to conduct a members' voluntary winding up, as set out above. 33 The fee advised by Mr Dixon was not immediately acted upon by Mr Wu. There were two brief telephone discussions on 21 June 2018, during which Mr Wu provided an update as to the progress of the proceedings in the Supreme Court of Victoria so that, in accordance with Mr Wu's account, Mr Dixon if appointed "would not have to waste time getting up to speed". Mr Wu does not say that he then provided any additional information as to the scope of the likely work that may be required to be undertaken by Mr Dixon if he were to be appointed as the liquidator of VPPL. I find that he did not. 34 On 3 August 2018, Mr Dixon received a telephone call from Mr Scott, a solicitor from the firm Hall & Wilcox, then acting for the majority shareholders. Each was known professionally to the other. They conversed for approximately 10 minutes. Mr Scott disclosed the clients for whom his firm acted, confirmed that VPPL was solvent, stated that the shareholders and directors were in dispute but had agreed upon an in specie distribution of the corporate property pursuant to a deed of settlement which would conclude the litigation. They discussed the possible appointment of Mr Dixon as liquidator should the members resolve to wind up VPPL. Mr Scott told Mr Dixon that he would provide a memorandum containing more information which he asked Mr Dixon to consider and respond to in due course. 35 At 10.20 am that day, Mr Scott sent an email to Mr Dixon and copied it to a number of other legal practitioners, including those then acting for Mr Wu and Austhome. Mr Wu accepts that he received it and read it on or about 3 August 2018. The email simply read: "Please find attached Memorandum and enclosures for your attention." The memorandum is an important document. It is dated 1August 2018 and reads: To Mr Stephen Dixon Date 1 August 2018 Subject Victoria Project Pty Ltd You have been nominated to act as liquidator in the event the members of Victoria Project Pty Ltd (VPPL) resolve that it be wound up. 1 VPPL 1.1 VPPL purchased and developed land situated at 212 Victoria Street, Carlton, Victoria (The Vic). The Vic involved the construction of an 18-level apartment building comprising approximately 280 residential units and four shops. Construction of the Vic commenced in March 2012 and was completed in March 2014. 1.2 Attached are- (a) an ASIC search of VPPL; and (b) plan of the development. 1.3 There are 37 residential units, 14 storage lots, 9 car spaces, and two shops (Shop 1 and Shop 2) which remain unsold (Remaining Units). Each of Shop 1 and Shop 2 are subject to a contract of sale, however settlement has not occurred. The units have sold for amounts ranging between approximately 296,000 - $745,000. 2 Proceedings 2.1 On 20 December 2017, Austhome Group Pty Ltd commenced proceedings (S ECI 2017 00294) in the Supreme Court of Victoria seeking orders including that VPPL be wound up. 2.2 The parties agreed to settle the proceeding on terms including that the members consider a resolution that VPPL be wound up. Relevantly, the notice of meeting must be sent to members by no later than 1 August 2018. A copy of the deed of settlement is enclosed for your information. We note that the parties have agreed to keep the terms of the deed of settlement confidential until the conditions in clauses 7.2 and 8.2 have been satisfied. Accordingly, we request that you not distribute a copy of the deed of settlement to, or discuss its terms with, any other person until the aforementioned conditions have been satisfied. 2.3 Prior to the notice of meeting, the directors of VPPL must convene a meeting to consider and declare they have enquired into the company's affairs and formed the opinion that the company can pay its debts in full within 12 months from the commencement of the members' voluntary winding up. 2.4 The declaration of solvency must include an estimate of the expenses of winding up. 3 Estimate of Costs 3.1 The directors require an estimate of the likely costs of a winding up. 3.2 It is envisaged that you will be tasked with:- (a) arranging the distribution, sale and settlement of the Remaining Units; (b) conducting proceeding Supreme Court of Victoria Costs Court proceeding S Cl 2018 01517, being a proceeding issued by the company on 23 April 2018; and (c) conducting such further tasks and enquiries as the liquidator, acting reasonably, deems necessary to complete the winding up of VPPL. 4 Information and contact 4.1 If you require further information or wish to meet with the parties to assist in your deliberations, please notify all contacts copied to the covering email. Dated: 1 August 2018 36 The memorandum references attachments, one of which was a copy of a deed of settlement between the parties dated 19 July 2018. That deed provided for a settlement of the various proceedings between the parties by, inter alia, the passing of a resolution to voluntarily wind up VPPL and the appointment of Mr Dixon as liquidator. It contained two conditions precedent: that Mr Dixon or another named individual is appointed as liquidator and for dismissal of the winding up proceeding. In the events that occurred, the members ultimately failed to pass the required resolution with the consequence that the settlement lapsed. 37 The extensive recitals to that deed mention the Agelakis proceeding (and record its resolution), the winding up proceeding, the commencement and resolution of the 2014 Supreme Court proceeding and records the agreement of the parties: …without any admission of liability, to settle the [winding up proceeding], and release all Claims in any way arising out of or in relation to each of Victoria Project Pty Ltd, its business, and the development at 212 Victoria Street, Carlton, in the manner and on the terms and subject to the conditions and exclusions set out in this Deed. 38 The Deed provides for covenants not to sue and for releases from all claims in the usual form. Mr Dixon said that when he considered this document, he understood it as "a deed of settlement that was going to settle everything", that "the legal proceedings were going to finish" and that the legal proceedings "had nothing to do with…my remuneration…" Mr Dixon was correct to make those assessments, based on the Deed. 39 Notably, that Deed makes no reference to disputes about shops 1 and 2, save for settlement of the Agelakis proceeding; building defect claims; disputes about the keeping of company records and importantly, it does not contain any reference to the fees for the liquidation or an indemnity from Mr Wu and Austhome for liquidation costs. Mr Dixon did not become aware of the liquidation costs and indemnity clauses, which find expression in the Deed, until after his appointment as liquidator on 23 October 2019. 40 The final paragraph of the memorandum invites inquiry from Mr Dixon should he require further information. Mr Dixon did not seek further information from Mr Scott. Why is explained in his affidavit of 1 July 2022: he had known Mr Scott professionally for approximately 10 years and he considered him a competent and honest practitioner. Further, he still considered that a fee of $50,000 for professional remuneration was appropriate because what Mr Scott had told him, and the memorandum, were consistent with the scope of work that Mr Wu had earlier advised. Mr Dixon was cross-examined on this evidence, although limited to acceptance of the general proposition that a prudent and responsible insolvency practitioner, if asked to give a fee estimate, would first need to be satisfied that he or she had all relevant information so as to provide an informed and accurate estimate. He was not challenged as to his stated reason, which I accept 41 At 11:15 am on 3 August 2018, Mr Scott sent another email to Mr Dixon and requested that he provide "an estimate of the costs of the winding up as a matter of urgency". Mr Dixon responded by email on 6 August 2018 at 9:51 am. He wrote: Hi Graeme Thanks for your email. I advise that my remuneration for this particular appointment will be capped at $50,000 plus out of pocket expenses and GST. I further advise that if there is some form of litigation involving myself this sum may change. This would obviously require further approval of the parties involved and would be discussed with all the parties if and when this occurs. Please call me if you have any queries. Thank you for the opportunity. 42 There was no further contact until 23 November 2018, when Mr Wu telephoned Mr Dixon and they spoke for approximately 10 minutes. Although Mr Wu cannot recall the precise words used, the substance of his evidence is that Mr Dixon said he had met with the other shareholders, had discussed the scope of the work, including the need to arrange the sale of rented units, car spaces and storage cages, the resolution of disputes regarding the settlement of shop 1 concerning a commission claim and the return of the deposit paid by the first purchaser, the wife of Mr Wu, the resolution of the dispute regarding the settlement of shop 2 related to its size, the resolution of a claim for costs by Austhome in relation to various legal proceedings and that he would still cap his fees at $50,000 plus GST and disbursements. 43 Mr Dixon does not specifically recall what was discussed during that telephone call. However, his evidence is that it was "unlikely" there was a discussion about the disputes for shops 1 and 2 for the reason that he did not have information about those disputes at that stage. When cross-examined, Mr Dixon affirmed that he does not recall this conversation. However, the relative weight of this evidence is diminished by several considerations. Mr Wu was not present at the meeting between Mr Dixon and some of the majority shareholders. He cannot therefore be taken to have relied on the content of the discussion. His evidence as to how Mr Dixon related the matters discussed is expressed without the benefit of the context in which each subject matter was discussed, particularly the extent of factual disclosure made by the shareholders who were present. Mr Wu's evidence is also inconsistent with the content of detailed correspondence sent by Mr Dixon to Mr Wu dated 20 January 2020 (which I set out below) in which, inter alia, Mr Dixon listed, and I find truthfully, a number of matters of which he became aware after his appointment, which significantly differed from the pre-appointment disclosure that had been made. Those matters included building defect claims, the management of the business of VPPL as a trading enterprise, issues that prevented the timely completion of the sale of shops 1 and 2 and the finalisation of the outstanding year end accounts and tax returns. In my assessment of the whole of the evidence, that contemporaneous document is reliable evidence as to the detail of disclosure made to Mr Dixon prior to his appointment. 44 Although Mr Wu was not directly challenged on his evidence about this telephone discussion, it does not follow that I must accept his evidence uncritically. For the reasons I have given, I do not attribute significant weight to it. 45 Mr Wu attended a meeting of shareholders on 28 November 2018 and proposed a resolution that VPPL be wound up and that a liquidator be appointed. That resolution was put to a vote but did not carry. There is hearsay evidence (that was not objected to) to the effect that Mr Ling advised that he and the other shareholders would not vote in favour of the resolution because they were concerned about the likely fee of the liquidator as extending only "to the current legal proceedings", which fee may increase if there were new disputes. 46 Mr Wu had another telephone discussion with Mr Dixon on 29 November 2018. Mr Wu says they spoke for approximately 15 minutes, and although he cannot recall the exact words used, he advised Mr Dixon that the resolution to wind up VPPL did not pass the previous day because other shareholders were concerned that the fees might exceed the fee cap. In response, Mr Dixon said to the effect that "there was no reason for the shareholders to be concerned" in that his fee would only be $50,000 plus out-of-pocket expenses and GST and the current disputes between the shareholders were "factored into his fee cap". The fee would only be exceeded if new proceedings were issued against him personally and that he could only increase his fee if he obtained approval from a majority of the shareholders. 47 In his first response to this evidence, Mr Dixon in his affidavit of 21 June 2021 acknowledged that he had a discussion with Mr Wu on 29 November 2018, denied that he had said there was no reason for the shareholders to be concerned and that his fee would only be $50,000 plus disbursements and GST and further denied that the current disputes between the shareholders had been factored into that fee. He did not deny advising that his fee would increase if proceedings were commenced involving him personally and nor did he dispute that he could only increase his fee with approval from a majority of the shareholders. 48 In his second response to this evidence of Mr Wu, Mr Dixon in his affidavit of 1 July 2022, "elaborated" on his earlier evidence stating that he "would not have" told Mr Wu that the current shareholder disputes were factored into his fee because "it was not part of [his] role as liquidator in a members voluntary winding up to investigate disputes between shareholders". Further, he set out his understanding, based on his discussions with Mr Wu and Mr Scott, that a winding up of VPPL including an in specie distribution would "finalise the settlement of the dispute between the shareholders pursuant to a deed of settlement". 49 As I have explained, Mr Dixon accepted in cross-examination that his powers as liquidator, as he then understood them, did permit him to investigate disputes between shareholders in a voluntary winding up and that he made a mistake when he told Mr Wu that he could not do so. Beyond that, Mr Dixon was not challenged in cross-examination on this evidence. 50 Mr Wu was cross-examined on his recollection of this discussion. He denied an understanding on his part that the agreed fee of Mr Dixon had been determined based on the settlement terms of 19 July 2018 and the memorandum of 3 August 2018. He accepted he did not say to Mr Dixon that there might be a need to increase his fee dramatically because of disputes relating to the shops, adding: "at that point of time, Dixon is already aware of that issue". Counsel then directly challenged his evidence that these disputes had been disclosed prior to or during the discussion on 29 November 2018, which Mr Wu disputed. 51 The foundation for that challenge was laid a little earlier in the cross-examination. Mr Wu was taken to the minutes of the shareholders meeting of 23 November 2018. The original minutes are written in Mandarin. Mr Wu, at some point in time, prepared an English translation. He confirmed that he had taken care in preparing the translation and that it is accurate. He also accepted that he was concerned to ensure that the minutes were an accurate record of what was discussed. The translation reads (without correcting for spelling or grammar): Translation of Victoria Project Pty Ltd (CAN 142 329 155) general Meeting Minutes held on 28 November 2018 translated by David Wu Discussion Bill Ling spoke first and he briefly told the shareholders about the discussions held at Dixon Office on Wednesday 21 November 2018. Bill is concerned about Dixon's service fee. He was satisfied with Mr Dixon's response in relation to his fixed fee with current matters at $50,000; but he understood $50,000 only covering "the current Legal proceedings" (as my understanding referred to "current matters"). In another word, any new matter raised in the future could cause the dramatic increase in fee. Under current VPPL's circumstances, what Bill especially concerned about was the liquidator's fee might increase dramatically if one of member starts the new proceeding and raises new disputes after Dixon is appointed. Bill did not agree to appoint the liquidator at present. Bill also stated he would agree to vote in favour to appoint Dixon if there was a shareholder agreement which all shareholders agreed whatever who causes the new disputes (mew proceedings and issues) will pay Dixon's service fee over $50,000. Bill also stated he wish VPPL to sell or distribute unsold lots and distribute all proceeds to shareholders except keeping approx. $1.2 m for payment of David Wu's legal cost and other legal cost & service fee. After completing the distribution, Bill would reconsider his position in relation to the appointment of liquidator to winding up VPPL. Linda agreed with Bill's all statement including his proposal above. David Wu disagree for his proposal. Voting results: David Wu 35%, Derrick Zhang 34% in favour to appoint the liquidator. Bill Ling 16%, Linda Lin 10% agaist. Outcome David Wu's motion failed. Meeting was closed at 6:45pm 28 Nov.2018 Minutes submitted by: Bill Zheng Ling Signed as correct record Derrick Zhang Chair 52 The minutes do not mention disputes about the shops as a matter affecting the advised fee. They confirm that the majority shareholders' concern as expressed to Mr Dixon at the meeting on 21 November 2018 related to a fixed fee in the context of the current legal proceedings and not extending to any new proceedings. Nor do the minutes record any discussion regarding disputes relating to Shops 1 and 2. The evidence of Mr Wu that he did not mention the disputes relating to the shops during his discussion on 29 November 2018 because Mr Dixon was already aware of those disputes, is contrary to my findings as to what was disclosed to Mr Dixon to that point in time and Mr Wu was not questioned in re-examination as to the basis for this evidence. For these reasons, I reject his evidence to this extent. I accept, however, his evidence that Mr Dixon did say, to the effect, that the shareholders should not be concerned about his fee and that the current disputes had been taken into account in setting it, for the reason that this evidence is consistent with earlier evidence of Mr Dixon, which I have accepted, to the effect that he believed that the extant disputes between the shareholders would be resolved entirely in accordance with the deed of 19 July 2018 and by reason of the fact that there is no mention of any continuing disputes that required resolution in the memorandum of 1 August 2018. 53 On 13 December 2018, Mr Wu sent an email to each of the other shareholders, called for a meeting to be held that day and which, omitting formal parts, reads (without correcting for spelling and grammar): There are serious concerns in relation to proposed resolution of distribution or sale of the unsold lots of VPPL. The background of this proposal is the minority shareholder just rejected appointment of independent liquidator to do exactly the same job armed with overall knowledge of company and independent power to act. The main concerns are as below: 1. What is the possible liability (reserve) of the company? (a) VPPL currently involved three legal proceedings and the cost & possible payout (claim and compensation) of these proceedings are unknown. Especially current oppression proceeding it is possible VPPL will pay the proceeding on indemnity basis as VPPL had breached its deed of settlement. (b) Defects liability of the Vic is unknown, many repairs and underground water leaking are not repaired yet (as I know). The cost of repair is unknown. (c) May have other claim against VPPL by other party in relation to breach of contract terms. 2. For last five years, there is no detailed company information provided to its directors or to me at least including all financial information. We need independent liquidator to go through all documents to give a proper closure to VPPL. 3. Without independent liquidator's auditing, I will not agree on any distribution to shareholders unless there is agreed reserve and terms that overpaid distribution can be called back. Future court appointed liquidator's decision in relation to overpayment and damage caused due to any director's negligence can be enforced (agree to pay back). 4. "engaging an independent third party to conduct in specie distribution", what kind third party is this and what is their legal right and responsibility? Does he have the power that is the same as liquidator and required insurance? 5. With all the above concerns, Wish all directors consider this matter seriously with duty of care. 54 This email is clear evidence that as at 13 December 2018, Mr Wu was concerned about a number of aspects of the business of VPPL which had not, to that date, been disclosed by him to Mr Dixon. Those matters were the building defects liability claim and the associated cost of repair, claims by VPPL against third parties for breach of contract, a failure to provide detailed company information to the directors including all financial information for five years and the need for the liquidator to examine "all documents" in order to provide "proper closure" to the affairs of VPPL. He did not copy this email to Mr Dixon and did not separately email him in order to alert Mr Dixon to its content, which is difficult to understand. Why, for example accepting the detailed knowledge of Mr Wu as to the scope of the disputes as set out in this email, did he not make disclosure to Mr Dixon, as material clearly relevant to the scope of the tasks that a liquidator would be required to undertake? No satisfactory explanation for this failure was given by Mr Wu. 55 On 17 December 2018, Mr Wu spoke with Mr Dixon by telephone. He cannot recall the precise words used, but he said words to the effect that the shareholders had recently passed a resolution to distribute the unsold lots in the development and that his solicitors had filed an application to wind up VPPL. In response, Mr Dixon said to the effect that if appointed as liquidator, he would make the company records available to each of the directors, as they had a right to receive them under the Corporations Act, he would ask Mr Wu to help him identify possible breaches of duty or negligence by the directors and that: If a director was found to have acted dishonestly or negligently, he could potentially deduct the loss suffered by VPPL from any distribution. However, if all of the assets of VPPL were distributed, it would be very hard for him to claw back those losses from the directors. And so I should apply for an injunction to stop the distribution to prevent this outcome. 56 Mr Dixon in his first response to this evidence agreed that he said he would make the company records available to the directors, but denied the other statements attributed to him. To his recollection, he told Mr Wu that any allegations against the other directors would need to be in writing and supported by evidence. In his second response to this evidence, he confirmed his denial that he would seek the assistance of Mr Wu to identify possible breaches of duty or negligence by the directors, stated that it was Mr Wu who had advised that he was thinking of applying for an injunction and elaborated upon his denial that he did not say that he, as liquidator, could deduct loss suffered in consequence of a breach of duty by a director from any component of the proposed in specie distribution to a shareholder. Amongst other things, Mr Dixon made the obvious point (which is really an argument but was not objected to) that he did not have power to make determinations of that character and he does not give legal advice. 57 Apart from brief cross-examination of Mr Dixon to the effect that he did not disclose this conversation in earlier affidavits, he was not challenged on this evidence and nor was Mr Wu challenged on his version of this conversation, which makes my task of fact-finding somewhat difficult. I find that Mr Wu did tell Mr Dixon about the resolution passed by the shareholders and the fact that his solicitors had filed an application to wind up VPPL as these matters were not disputed by Mr Dixon. I further find that Mr Dixon told Mr Wu that if appointed he would make the company records available to the directors for inspection as that is also not disputed by Mr Dixon. I reject Mr Wu's evidence that Mr Dixon told him that he would request Mr Wu to assist him to identify possible breaches of duty or negligence by the directors. That evidence does not objectively withstand scrutiny. I cannot accept that Mr Dixon, as a registered liquidator of considerable standing, would enlist one director to assist him in investigating negligence or breach of duty by another. And further, it is preposterous that Mr Dixon told Mr Wu that he could potentially deduct loss suffered by reason of dishonesty or negligence on the part of the director, from any distribution to a shareholder, an exercise of judicial power not possessed of a liquidator. That evidence substantially undermines Mr Wu's credibility as to what was said in the entirety of this discussion, and I reject the balance of his evidence as to this discussion. 58 Between January and early April 2019, Mr Wu gives evidence of further short telephone discussions with Mr Dixon, the dates and precise content of which he is not able to recall save for general evidence to the effect that he informed Mr Dixon on or about 27 March 2019 that he had applied for an injunction to prevent the distribution of the assets of VPPL and that in early April 2019, the Supreme Court had made certain orders permitting inspection of the records of VPPL. Mr Dixon does not deny these conversations. The fact that they occurred is not said to be material by any party in this proceeding. 59 The winding up proceeding was the subject of a procedural directions hearing before Justice Sifris on 5 April 2019. His Honour made an order referring the parties to mediation, which occurred on 24 April 2019. It is not in dispute that during the course of the mediation Mr Wu agreed to settle various disputes in principle, that he requested Mr Dixon confirm in writing that if appointed liquidator his fee would be $50,000 plus disbursements and GST and that Mr Dixon provided that confirmation in writing. I will return to the detail of this evidence later in these reasons. An issue of significant importance that arose in the trial concerns the state of mind of Mr Wu as to the scope of the work that was likely to be required to be performed by Mr Dixon, whether that scope had materially altered since the first meeting between Mr Wu and Mr Dixon on 16 April 2018 and, perhaps more importantly, since the memorandum of 1 August 2018 and Mr Dixon's response thereto. Ms Pierce submits that I should make a number of findings as to what concerns were held by Mr Wu between December 2018 and the conduct of the mediation on 24 April 2019. 60 The first is that Mr Wu, despite his position as a director, did not know the liability position of VPPL and was concerned about the possible extent of liabilities. The evidence relied upon commences with a transcript of submissions made for Mr Wu by his then counsel in the wind up proceeding before Sifris J on 5 April 2019. It was submitted that a mediation should only be ordered if Mr Wu and each of the other shareholders were fully informed as to the financial position of VPPL. It was put to the court that Mr Wu did not know the basis for an estimated tax liability, asserted that no tax returns had been filed for the financial years 2017 or 2018 and that Mr Zhang, who was responsible for running the company, was "making it up as he goes along in terms of what the liabilities of the company are". It was further put that Mr Wu did not understand how the company could have an estimated loss for the financial years 2017 and 2018 when it was receiving a rental income of $700,000 per annum; a loss which "beggars belief". It was also put that Mr Zhang had not been forthcoming in disclosing the financial position of the company. 61 These submissions were the subject of cross-examination of Mr Wu. He was taken to the transcript. Mr Wu accepted that these submissions were made with his authority. He did not say that those submissions were falsely put on his instructions. Accordingly, I find that as at 5 April 2019, Mr Wu was concerned about the financial position of VPPL, did not know the extent of its liabilities (and in particular the extent of potential taxation liabilities), believed that Mr Zhang had not been forthcoming in making full disclosure of the financial position of the company to his fellow directors and could not understand the apparent disconnect between gross revenue and the assertion that the company had made net losses. 62 The second is that Mr Wu had not seen the financial statements of VPPL for the year ended 30 June 2017. That fact was also put in submissions by counsel for Mr Wu to Sifris J and I find according to it. 63 The third is that Mr Zhang had not disclosed to Mr Wu the 2017 financial year income tax returns and financial statements. That submission was also made to Sifris J and I find accordingly. 64 The fourth is that as at April 2019, Mr Wu was not in a position to reliably inform Mr Dixon as to the liabilities of VPPL, the evidence for which is to be found in the cross-examination. Mr Wu accepted that as at 24 April 2019, his concerns about the records of the company, its financial position and his inability to access information had not been addressed. He accepted that he knew that no tax returns had been filed for the 2017 and 2018 financial years because he had not been provided with those documents. When questioned as to whether in April 2019 he was in a position "reliably to tell anybody what the financial position of the company was", he answered: "I would say I'm not confident to tell anybody at that point in time what exactly company financial position are". When pressed further as to that answer, he acknowledged that he was concerned about the financial position but denied that he was greatly or gravely concerned "because nothing I can do about it, whether I concerned or not concerned. There's not much I can do." Unsurprisingly, he was challenged on that answer. Counsel reminded Mr Wu that he commenced a proceeding in the Supreme Court of Victoria alleging oppressive conduct, including by denial of access to financial records and sought an order that VPPL the wound-up. 65 Mr Wu further accepted that as at April 2019 his relationship with Mr Zhang was "a little bit strained" and had been so since 2013. He accepted that he was concerned that Mr Zhang had been untruthful and not open in providing information as to the financial position of the company. He further accepted that he could not state as at April 2019 whether the company had in fact incurred losses or made profits in the 2017 and 2018 financial years. 66 Based on this evidence, I find that Mr Wu was not in a position to reliably provide information to Mr Dixon as to the financial position of VPPL in April 2019 or earlier in April 2018 and further that he held material concerns about the management and operation of the company, from at least 20 December 2017 when he caused to be commenced the winding up proceeding based on oppressive conduct, including the withholding of financial information. 67 The fifth is that as at April 2019, Mr Wu, given his other concerns about the affairs of VPPL, was then concerned about the accuracy of the fee as advised by Mr Dixon. Returning to the transcript of submissions before Sifris J, counsel for Mr Wu in addressing his Honour as to the difficulties caused by the failure to provide the 2017 financial statements and taxation estimates and the asserted fact that Mr Zhang had caused the company to incur costs exceeding $200,000 in connection with the wind up proceeding said: And the concern about fees, Your Honour – we haven't got to this, but the liquidator has agreed to cap his fees at $50,000. Mr Segal: No, he hasn't. There's no evidence of that, Your Honour. His Honour: Very well. Mr McAloon: I take your Honour to the evidence and that's what I intended to do when I thought the matter was going to be heard today. 68 Mr Wu was taken to these submissions in cross-examination and he gave the following evidence: MS PIERCE: So, Mr Wu, what's happening here is that your barrister and Austhome's barrister is identifying to a judge of the Supreme Court that one of the concerns that arises because of the uncertainties with VPPL's financial position is that there's a liquidator who has agreed to cap his fees. So the concern arises precisely – that is, the concern about the fee cap arises precisely because of the lack of information available about the state of affairs of VPPL and that's what your barrister, I suggest to you, was expressing on your behalf and Austhome's behalf, to Sifris J. HIS HONOUR: Well, do you agree that that? Yes, I agree to that. MS PIERCE: And so because you held that concern about the fee cap in circumstances where the financial circumstances of VPPL were unknown to you, you were not in a position to say, reliably, whether a fee cap of $50,000 was accurate or in any way within the realm of something likely to reflect the work needed to be done. You just couldn't have known that, could you, and that's the concern that your barrister expressed to Sifris J, wasn't it?---I don't agree barrister is concerned liquidator's fee of 50,000. Yes?---Barrister's concern is he – we don't know the financial situation of the company but he didn't express here – I don't read it that way – he concern the fee for liquidator is not adequate. Well - - -?---I don't read that way. All right. You well knew, when you asked in April 2019, two weeks after this hearing, that Mr Dixon confirm his fee cap, that there were great uncertainties about the financial accounts; yes?---Sorry. What's your question? You well understood, on 24 April 2019, when asking Mr Dixon to confirm his fee cap, that there were concerns about the financial accounts and their accuracy?---Sorry. I'm still confused your question. That's all right. Okay?---You're asking me - - - So I don't mean to confuse you?---You're asking me is Dixon concerned - - - No. I'm not asking you - - -?--- - - - or - - - HIS HONOUR: Rather than. "You well knew", why don't you say, "Did you know". MS PIERCE: Your Honour – sorry. Thank you. Mr Wu, I'm asking you to turn your mind back to 24 April 2019?---Okay. That's the day of the mediation?---Yes. And that's when you asked Mr Wu to cap his fees at $50,000. What I'm suggesting to you, when you asked him to confirm the fee cap when you were at the mediation – you sent the text messages. When you did that, you knew that you and Austhome had concerns about the uncertainty of the financial accounts?---Yes. And the uncertainty about status of tax returns for 2017 and 2018?---Yes. And - - -?---We're concerned we don't the details of any of that. Yes. That's right. You didn't know the details of any of that?---Yes. And so you couldn't tell Mr Dixon anything concrete about the financial position of the company?---Yes. He know that. Well, no. That's not quite what I'm putting to you?---Okay. You didn't know about the financial position of the company; that's quite clear?---That's clear. And so you couldn't tell anybody else about the financial position of the 35 company?---Yes. And you couldn't certainly tell Mr Dixon about the financial position of the company?---Yes. 69 In accordance with this evidence I find that as at 24 April 2019, Mr Wu was concerned about the accuracy and reliability of the fee proposed by Mr Dixon, based on his uncertainty as to the financial position of the company, the failure of Mr Zhang to provide financial information to his satisfaction, the failure to lodge income tax returns for the 2017 and 2018 financial years and his overall concern as to why, apparently, the company was not profitable given its gross income. And I further find that as at 24 April 2019, Mr Wu was not in a position to advise Mr Dixon as to the financial position of the company or its then current state of affairs and did not do so. 70 The sixth is that Mr Wu did not disclose to Mr Dixon prior to 24 April 2019, liabilities that may arise due to potential building defects and relatedly company funds held on trust. In cross-examination, Mr Wu accepted that as an experienced property developer he knew that building defect claims may create a potential liability for a developer, but which liability he characterised as "very unlikely". Despite that qualification, he thought it sufficiently concerning to mention it in a memorandum that he provided to his fellow shareholders on 13 December 2018. In any event, he accepted that he did not inform Mr Dixon of potential building defect liabilities before 24 April 2019. As to money held on trust, there was limited exploration of this matter in submissions. There is evidence from Mr Dixon that funds were held in trust by two law firms, which fact was not disclosed to Mr Dixon prior to his appointment. Those funds were held pending the resolution of claims made by purchasers of apartments in the development. In any event, Mr Wu clearly understood that trust money was held and volunteered in his cross-examination that the existence of the fund was not disclosed to Mr Dixon before his appointment. 71 I now turn to the evidence as to what occurred during the course of the mediation on 24 April 2019, which is not disputed. Mr Wu's evidence in chief as to his exchanges with Mr Dixon was: 36. The text messages I exchanged with the Liquidator were as follows: 10:12am (me to Liquidator): Hi Stephen, Can you please confirm that your fees for being appointed as liquidator for VPPL will be capped at $50,000 plus out of pocket disbursements and GST provided that you will not be involved in litigation in relation to the liquidation? I'm in a mediation of the VPPL matter at the moment so your prompt response would be good. Liquidator to me: David I confirm that I will charge $50,000 plus any out of pockets plus GST, I will fix this at this sum, it will only change if litigation is pursued against me only thanks Stephen me to Liquidator: Can you also confirm whether you will distribute the unsold lots to the shareholders (as opposed to sale) without the need for court approval if majority of shareholders agree to this course Liquidator to me: Yes I will, as long as shareholders agree 11:57am (me to Liquidator): Stephen, can you cap your out of pocket disbursements of the liquidation assuming that there will not be a challenge to your decisions by the shareholders? If so, what is the cap? Liquidator to me: Happy to cap at $5,000, in case of legal fees, otherwise $1,000 [3:01 pm] (me to Liquidator): Thanks Stephen. Can you please send me an email confirming the capping of your fees and disbursements and the in specie distribution with shareholder approval? My email is david@paragon.com.au. Please let me know when you've sent the email as I'm waiting on it to settle the VPPL dispute Liquidator to me: I will send it now A copy of this text message exchange is at pages 103 of DW-1. 37. A few hours later, I received an email from the Liquidator which stated (emphasis added): David I refer to your call earlier this afternoon. I confirm I am willing to limit my professional costs to $50,000 plus gst and disbursements to $5,000 for legal and other out of pocket expenses. This will only change if l am litigated against personally. l am also willing to agree to an in specie distribution to the shareholders of the assets on the basis of their consent to same. Please call if you need to clarify anything. Thanks and Regards A copy of the email from the Liquidator dated 24 April 2018 is at pages 108 of DW-1. 72 What is in issue is whether this was misleading or deceptive or unconscionable conduct and whether Mr Wu's evidence that he relied on this advice, together with the earlier statements of the fee made by Mr Dixon, in his decision-making to agree in principle to the settlement that was negotiated at the mediation and which included an obligation to the effect that Mr Wu and Austhome must indemnify the company for liquidation costs in excess of $60,000 plus GST, which reliance continued until the terms of the settlement were documented and signed by the parties in the form of the Deed on 29 August 2019. 73 It took some time for the parties to document the settlement that was discussed at the mediation but which was not agreed to in principle until 9 May 2019. The solicitors exchanged drafts of a deed of settlement until resolving its final form in early August 2019. It was signed on 29 August 2019. Clause 2 of the Deed provides that within three business days of execution, Mr Wu will issue a notice to each of the other directors to attend a meeting for the purpose of making a declaration of solvency in accordance with s 494 of the Corporations Act and to nominate one of their number to lodge that document as required by s 494(3)(b). It further provides that within three business days of the declaration of solvency having been lodged with ASIC, the members will meet for the purpose of considering and voting upon a special resolution in accordance with s 491 that the company be wound up voluntarily and that Mr Dixon be appointed as the liquidator pursuant to s 495. Those steps were taken. The resolution was passed, and Mr Dixon was appointed on 23 October 2019. 74 Relevantly for this proceeding, the operative clauses that are in dispute relate to the costs of the liquidation and provide: 2 Settlement … Payment of the Liquidator's costs (j) The parties will use their best endeavours to cap the costs of the liquidation of VPPL at $60,000 (plus GST) (Costs Cap). For the sake of clarity, the costs of the liquidation shall include (without limitation) the Liquidator's remuneration, disbursements and expenses, and the costs of any third party engaged by the Liquidator (whether for or on behalf of VPPL or in his capacity as the Liquidator) (Costs of the Liquidation). (k) Subject to clause (l) below, if the Costs of the Liquidation exceed the Cost Cap, Wu and Austhome will bear the excess costs jointly and severally and: (i) indemnify VPPL in respect of any amount by which the Costs of the Liquidation exceed the Costs Cap; and (ii) pay the Liquidator or VPPL (as the case may be) such sum as may exceed the Costs Cap within seven (7) days of receipt by either one of them of a notice for payment in writing. (l) Clause (k) above will not apply, and Wu and Austhome will incur no liability for the Costs of the Liquidation: (i) to the extent that the Costs of the Liquidation comprise costs incurred as a result of a challenge to a decision of a Liquidator referred to in clauses (p) to (r) (inclusive) below; and (ii) if Dixon is not appointed as the Liquidator, or is appointed but later replaced as the Liquidator, and such non-appointment or replacement was brought about by application of a Member or Director other than Wu or Austhome. (m) This deed may be relied upon by the Liquidator or VPPL (as the case may be) in enforcing any default in payment in accordance with clause (k) above by Wu or Austhome. In Specie Distribution (n) By entering into this deed, the Members and Directors will request the Liquidator to conduct an in specie distribution of the Unsold Lots in such manner, at such time and on such terms as the Liquidator in his unfettered discretion thinks fit so as to ensure an equitable distribution of the Unsold Units. (o) In the exercise of the Liquidator's discretion in clause (n) above (including as to whether to conduct an in specie distribution of the Unsold Lots), the parties to this deed: (i) acknowledge that the Liquidator may make such enquires of any Member or Director or any other person as he thinks fit; and (ii) shall respond promptly to any such inquiry by the Liquidator. No Challenge to Liquidator (p) The Members and Directors must not challenge any of the Liquidator's decisions. A decision includes any decision, act or thing done by the Liquidator in the discharge of his duties as liquidator of VPPL. (q) However, if contrary to their agreement not to do so, in the event that any Member or Director challenges a decision of the Liquidator, that Member or Director will be liable for his, her or their own costs and the costs of VPPL and the Liquidator of and incidental to that challenge. (r) For the purposes of this deed, a "challenge" is defined as an application to a court appealing an act or omission of the Liquidator but does not affect the rights of the parties in the Costs Proceeding (namely, Wu, Paragon, Austhome and VPPL). 75 One of the first steps taken by Mr Dixon upon his appointment was to arrange a meeting with the directors, some of whom attended, on 6 November 2019. Mr Wu attended. Mr Milne, an employee of Hamilton & Murphy, sent an email summarising the issues discussed on 8 November 2019. It lists the following "issues for investigation" as raised by Mr Wu: 1. Investigating building defects that require repair. 2. Investigating basement water leaks. 3. Settlement of VPPL costs proceedings. 4. A deposit for the sale of shop 1 (and accumulated interest) should be refunded (there are apparently two contracts of sale and 10% deposits have been paid on each). 5. Owners Corporation fees for the shops were allegedly four times higher than disclosed in the contracts of sale. 6. Whoever is responsible for the delays in settling the sale of shop 1 (settlement of the sale is proposed for January 2020[sic] should be liable for the company's holding costs. 7. Before any distribution to shareholders is made, the liquidator provides an opportunity for shareholders to scrutinise payments made by the company from 1 July 2014 until 23 October 2019 and emails exchanged with Mills Oakley. 76 As is evident from my fact finding, none of those matters were disclosed by Mr Wu to Mr Dixon prior to 24 April 2019, save that he was aware of the need to resolve the VPPL costs claim, which fact was disclosed in the memorandum of 1 August 2018. The email also lists nine "issues to be addressed" and ten "action points". The first required, inter alia, delivery to Mr Dixon of all of the records of VPPL, an assessment of building defects and a reconciliation of the apparent discrepancy in owners corporation management fees. The second included the provision of full details of receipts and payments from 1 July 2014 to the date of appointment to be made available to each of the shareholders and lodgement of outstanding tax returns and BAS statements. 77 Mr Wu was cross-examined about the matters recorded in this email. It was put to him that a person who did not have the information requested in the email would not have been in the position to propose a set fee, which Mr Wu disputed. His evidence was to the effect that Mr Dixon already possessed the relevant information since an unidentified point in time. I accept the submission of Ms Pierce that this evidence cannot be reconciled with Mr Wu's later evidence that he could not estimate the likely financial liabilities of VPPL that may arise from the building defects, he did not disclose that money was held on trust pending the resolution of disputes about two contracts of sale and, more fundamentally, he did not know the financial position of VPPL as at 24 April 2019 due to a failure to provide financial accounts and tax returns and his distrust of Mr Zhang. 78 I find that Mr Wu was aware of the seven issues for investigation that he raised on 6 November 2019 when he sought confirmation of Mr Dixon's fee on 24 April 2019. Further, and importantly, I find that Mr Wu knew that these issues were, or were likely, to be relevant to Mr Dixon's assessment of his fee in the event that he was appointed as liquidator and that he did not disclose these matters, save for resolution of the costs claim of VPPL, to Mr Dixon prior to his appointment as liquidator. 79 Mr Wu had a conversation with Mr Milne on 12 December 2019. It is referenced in an email that Mr Wu sent to Mr Milne and copied to Mr Dixon the following day titled: "The costs to fix up any mistakes." Relevantly Mr Wu said: Nice to have a discussion with you yesterday. As you mentioned, there are possible extra costs to rectify past mistakes made by director of VPPL (for example, entitlements and liability for shops and lodgement of tax returns for years etc.), my proposal is to ask responsible director to pay all the costs to rectify the mistakes including your costs. If I understood correctly, liquidator has the power to pursue any director who made or caused damages to the company. 80 When questioned or cross-examination about this email, Mr Wu explained that his intent was not to refer to the costs of investigating mistakes, but rather the costs of rectification. But he then accepted that past mistakes could not be rectified unless they were first identified and investigated by Mr Dixon, which is what Mr Wu required of Mr Dixon adding: "my understanding is covered by the cap". In response to a question from me, Mr Wu confirmed his understanding that investigations of that sort if undertaken by Mr Dixon were covered by the notified fee, but the cost of "fixing" such mistakes if identified was not. Significantly, Mr Wu did not in his email raise objection to "extra costs" beyond the fixed fee. 81 Counsel then directed the attention of Mr Wu to an email sent by him to Mr Milne and Mr Dixon on 6 January 2020. It references an on-site inspection earlier that day, attaches a list of "issues that need to be addressed" and continues: The liquidator has the power to chase damages caused by directors acting wrongly regardless of the Deed. I think the damages caused by directors are too substantial to ignore. I am happy to have a meeting to discuss in detail with some related documents. 82 The evidence does not permit me to make a finding as to what was the attachment to this email, though on its face there clearly was one described as "issues for liquidatordocx.dox". It would appear that this document was omitted from the agreed court book. Initially, by mistake, Mr Wu was cross-examined as if another document, prepared on or about 20 January 2020, was the attachment. Perhaps coincidentally, that document is also titled: "The issues to be discussed". Mr Wu insisted that this was not the attachment to his email of 6 January 2020, and I accept his evidence on this point. Hence, one needs to be careful in analysing the cross-examination upon it, which proceeded upon a misapprehension. Viewed in the correct chronological sequence, this list was prepared by Mr Wu after he received correspondence from Mr Dixon on 13 January 2020 (inadvertently dated 13 January 2021). That correspondence references a telephone discussion between Mr Wu and Mr Milne on 12 December and Mr Wu's subsequent email of 13 December 2019. Mr Dixon responds to Mr Wu's request that he should investigate "past mistakes" made by other directors and pursue claims for compensation. Mr Dixon explained that in the ordinary course he will investigate the affairs of the company, will consider whether directors may have breached their statutory duties, comments that a director might not be liable to compensate the company for making a mistake and then draws attention to the broad scope of the releases as set out in the Deed. Mr Dixon then sets out clause 2 (j) and (k) of the Deed and his correspondence relevantly continues: Notwithstanding the terms of the Deed, as Liquidator I require shareholder approval for my remuneration pursuant to rule 70-45 Insolvency Practice Rules (Corporations) 2016. A report is being prepared for shareholders setting out the investigations completed to date, the results of those investigations and details of my claim for remuneration. My report has not been finalised. However, my costs will exceed the Costs Cap pursuant to the Deed. 83 On 14 January 2020, Mr Wu responded by email. He requested "a short meeting to work out a plan to move forward". Notably, he did not at the first opportunity following unequivocal advice that the advised fee would be exceeded, raise objection to the effect that Mr Dixon was bound by it. 84 Mr Dixon sent further correspondence to Mr Wu on 20 January 2020. The letter reads, omitting formal parts: I refer to my pre-appointment contact with you with respect to my estimate of Liquidator's costs and expenses for the winding up of the Company as a Members Voluntary Liquidation ("MVL"). The estimate I provided was based on your verbal advice to me regarding the Company's affairs. It has become apparent that the Company's affairs are much more complex than indicated and consequently actual costs will exceed my estimate. In a typical MVL: • The Company's assets have been realised and the only assets available for distribution amongst shareholders are cash and reserves; • The Company's creditors have been discharged; and • The Company's tax returns are up to date and there is no impediment to the Australian Taxation Office ("ATO") issuing a clearance allowing the liquidator to make a distribution to shareholders. In such circumstances, a liquidator has a limited range of tasks to perform. Receipt of a clearance from the ATO is of critical importance, being a pre-requisite prior to a distribution to shareholders. The clearance is confirmation by the ATO that the ATO is satisfied that the returns required from the Company have been received, tax assessed and any applicable penalties applied by the ATO and, after payment to the ATO, no further returns are required or tax is payable. The Company's circumstances are significantly different to a typical MVL and as described to me pre-appointment notably, that: • You have claimed that defects exist in relation to the Company's building, claimed that Company funds were utilised unnecessarily on litigation and that litigation was conducted when the legal advice received by the Company was that the Company did not have a defence, further you claimed that directors have made mistakes and they should be asked to pay for any rectification costs and you have asked me to investigate the matters referred by you to me and to undertake recovery action; • The Company is a trading enterprise with 38 apartments available for rent and work will necessarily be required to manage trading including rent collection, supervising the real estate agents and making payments to trade creditors, keeping books of account and whatever other records are required with respect to trading, drafting and submitting returns to the ATO; • There are significant issues to resolve that prevent completion of the sales of Shops 1 and 2; • I will be required to deal with the Costs Orders payable to you and Austhome Pty Ltd that have not been fixed and the other matters that were excluded from release pursuant to the Deed of Settlement and Release ("Deed"); • Developing a strategy for dealing with the Company's apartments whether by distribution in specie to shareholders or sale and distributions in cash and dealing with the consequent income tax, Capital Gains Tax and GST issues that will arise; • There are significant amounts recoverable from and payable to the Company's shareholders that were not disclosed to me; • The Company's solicitors (Mills Oakley and Burke and Associates) hold significant funds and investigations are required to ascertain ownership of the funds each holds; • There are arrears in income tax returns and Business Activity Statements ("BAS") that must be prepared and filed with the ATO; • I am informed that the Company's financial accounts and income tax returns for the year ended 30 June 2016 do not accurately report the Company's profits or financial position and consequently amended returns must be prepared and submitted to the ATO; • BAS and income tax returns must be prepared and lodged with the ATO in relation to post-appointment transactions; • Engaging expert advisors is required in relation to legal, taxation, insurance and property issues that have arisen. In my view, the briefing I received did not adequately advise of or explain the above issues and the complexity of the Company's affairs when I was asked to estimate Liquidator's costs and the actual Company position was materially different to that which I based my costs estimate on. Further, notwithstanding the terms of the Deed, as Liquidator I require shareholder approval for my remuneration pursuant to Rule 70-45 Insolvency Practice Rules (Corporations) 2016. I will shortly convene a meeting of the Company's shareholders to obtain approval for my remuneration. You and your solicitors will be sent copies of my report to shareholders. Should you have any further queries in this matter, please do not hesitate to contact Hugh Milne of this office. 85 This letter is a centrally important contemporaneous document. It sets out in considerable detail matters which Mr Dixon claims were not disclosed prior to his appointment and the consequential effect on his advised fee. However, Mr Dixon was not challenged by counsel for Mr Wu as to the statements made in it. It was not put to Mr Dixon that the statements were incomplete or inaccurate. No allegation of reconstruction was made. And most importantly, it was not put to Mr Dixon that his statement to the effect that significant matters were not disclosed prior to appointment, or that "the actual Company position was materially different to that which I based my costs estimate on" was false. Mr Segal did take Mr Dixon in cross-examination to this correspondence, only to have him confirm its accuracy. That evidence in material respects directly conflicts with the disclosure that Mr Wu claims was made. I find in accordance with the correspondence of 20 January 2020, that each of the matters stated by Mr Dixon as not disclosed were not prior to his appointment for three reasons: it is a contemporaneous document, Mr Dixon was not challenged as to its accuracy and, as I explain below, Mr Dixon's evidence in material respects is consistent with the behaviour of and documents authored by Mr Wu after he became aware that the advised fee would be exceeded. To the extent that Mr Wu's later oral evidence is inconsistent with it, I reject it as less reliable. 86 A meeting occurred between Mr Wu, Mr Dixon and Mr Milne on 21 January 2020, and there was produced in evidence a handwritten file note made by Mr Milne of the matters discussed. Mr Milne was not required to be cross-examined upon his evidence. It is clear, in my view, from the sequence of events that I have set out, and the content of the file note made by Mr Milne, that Mr Wu must have produced at that meeting a memorandum titled: "[t]he issues to be discussed", which he accepted in evidence he had prepared on 20 January 2020. There is no reference in Mr Milne's file note to any objection made by Mr Wu to the fact that the fees of Mr Dixon had, would or were likely to be greater than the advised fee. Nor is there any note that Mr Wu requested Mr Dixon to resign. There is no claim that Mr Dixon had misled Mr Wu as to the scope of the work or his fee. The memorandum is important and although lengthy, I set it out: The issues to be discussed: 1. Proposal is to resolve the below matters at different stages. To inform all shareholders for each stage proposed decision and ask for their inputs and comments within 7 days. If no majority shareholders oppose your proposed decision within 7 days, you will proceed with your proposed decision. If at any stage, majority shareholders oppose your proposed decision, then majority shareholders will need to approve required funds for you to obtain legal and expert advice. So you will be able to make final decision based on legal and expert advice. As previous suggested, I am happy to brief Hugh for him to make each decision. See below details. First stage: Shops. (i) Call for settlement of shop 1 and shop 2 by end of February 2020. (ii) Agree to deduct XXX to fix defects of acrostic, insulation around pipes (see photo) (iii) Agree to deduct XXX to cover for exposed wiring in the storeroom. (iv) Agree deduct XXX to check and fix power connection in the store room. Make sure the power connected in the storeroom is connected to the meter of shop 1 (not common area). I am worried it may be connected to the power of common area which will create unfair situation to other lot owners. (v) Agree to deduct XXX for general cleaning and rubbish removal prior to settlement date (XX February 2020). (vi) Refund the deposit plus interests for first purchaser of shop 1 and the first deposit was paid in or around August 2011 of total $116,000. Based on Burke's record, total interest from August 2011 to 5 February 2020 plus deposit should be $116,000 + ??? (under contract conditions) (vii) Refund the interests of second deposit ($100,000) from second purchaser of Shop1 from 27 February 2017 until XX February 2020. Total??? (viii) Agree to pay the fee for lot 1, 2, 3 and 4 to fix up the breach of contract in relation to fee of owners corporation. The fees include possible Vcat, land surveyor and other experts. (ix) Issue of owner corporation fee for shop 1 and 2 after settlement. Proposal to pay½ of owner corporation fee by purchasers and ½ by VPPL until this matter is resolved. Any difference will be adjusted when the matter is finalised. (x) Consent form. There is no writton authority to authorise Paragon to sell any retail shops in Vic development, and did not sell any retail shops. All retail shops were bought by VPPL shareholders. Under item 3 (b) of offer of compromise to settle Kerasina Agelakis & Ors -v- Victoria Project Pty Ltd (ACN 142 329 155) Supreme Court of Victoria proceeding S Cl 2015 01531, it states "Prior to completion of the contract of sale, the Company shall provide its written acknowledgement, in the form approved by the Director of Consumer Affaires Victoria, that .....". I am here to propose to amend the offer of compromise by mutual agreement to delete the consent form requirement and VPPL agree to comply with previous shareholder's purchase agreement. Under the agreement, VPPL agreed to pay 3.3% referred fee to its shareholders for all shareholder's purchase (1.65% had paid to its shareholders and 1.65% agreed to pay at settlement). This agreement have applied to all shareholders privious purchases. (xi) Direct losses and damages caused for breach the contract of sale. a. the cost for PRE office relocation (removal, simple office fitout, building permit fee and connection costs of telephone, internet, power and water) approx. $25,000 b. payment of $22,000 plus legal cost $5 ,500 to enter into the Deed of release for Kerasina Agelakis. Total $27,500. c. loss of opportunity to occupy the premises. Stage two: Appointment of David Wu to liaison with owners corporation, Bonacci and Buildcorp to fix the basement water leaking and any obligation under sale contract to the purchaser with no fee to David Wu. Any other cost will be paid by owner corporation and reimbursed by Buildcorp if possible alternatively VPPL. Stage Three: Settlement of cost proceeding based on Raymond's assessment as agreed by Stephen on 9 September 2019. Stage Four: Distribution of unsold lots. As Stephen agrees all unsold lots will be distributed to shareholders. We can adopt Derrick's plan how all lots to be distributed. Subject to below Stage five to Stage Seven's decision, one or two shareholder's distribution may be deducted or withheld if there is a legal challenge to the decision. Stage Five: List of all payments including all invoices from 1 July 2014 to 28 November 2019. Below items might be spent improperly. (a) Cost of Vcat proceeding in relation to lot 1108 (estimated $50,000). (b) Cost of Vcat proceeding in relation to election of new committee of SGM (estimated $70,000). (c) Cost of oppression proceeding (estimated $200,000). (d) Refund of all interests charged by Derrick (estimated $20,000) Stage Six: Cost of shop proceeding and holding cost of shop 1 & 2 for VPPL for past 6 years (estimated $250,000). a. False claim about my intention to buy shop 1, 3, and 4. b. False claim about an oral agreement. c. False claim about shareholder's purchase arrangement. d. Acted against VPPL's legal advice (Burke's advice) and possible MO. Stage Seven: Cost of management fee proceeding (estimated $2,000,000). a. False claim about the work performed by myself. b. False claim about the JV agreement and falsified company record. c. False claim about the amended JV agreement. d. Possible acted against VPPL's legal advice (May have documents from MO). 2. What is current position in relation to the costs and expenses of liquidation? a. Decision needs to be made by Stephen. What cost should be included or excluded in relation to clause 2(j)? "The Parties will use their best endeavours to cap the costs of the liquidation of VPPL at $60,000 (plus GST) (Costs Cap). For the sake of clarity, the costs of the liquidation shall include (without limitation) the Liquidator's remuneration, disbursements and expenses, and the costs of any third party engaged by the Liquidator (whether for or on behalf of VPPL or in his capacity as the Liquidator)" (i) Cost of valuation? (ii) Cost of property consultant? (iii) Cost of Milles Oakley for the cost proceeding? (iv) Cost of accountant for tax return? (v) Cost of solicitor (Burkes) for units settlement? (vi) Cost of agent management fee for units management? (vii) Any other? b. How much more is required based on above approach? c. Funds under trust account of PRE. 3. Should be noted: Clause Error! Reference source not found. [sic] of the deed will not apply, and Wu and Austhome will incur no liability for the Costs of the Liquidation: 1). to the extent that the Costs of the Liquidation comprise costs incurred as a result of a challenge to a decision of a Liquidator referred to in clauses 0 to Error! Reference source not found. [sic] (inclusive) below; and 2). Clause (n) The Members and Directors must not challenge any of the Liquidator's decisions. A decision includes any decision, act or thing done by the Liquidator in the discharge of his duties as liquidator of VPPL. 3). Clause (o) However, if contrary to their agreement not to do so, in the event that any Member or Director challenges a decision of the Liquidator, that Member or Director will be liable for his, her or their own costs and the costs of VPPL and the Liquidator of and incidental to that challenge. 87 The evidence of Mr Wu is that between 15 and 20 January 2020, he had several telephone calls with Mr Milne during which he contended that the liquidator's fees were capped, and that Mr Dixon should resign to avoid a dispute about his fees. His evidence is that he repeated his resignation request during the meeting on 21 January 2020 and in response Mr Dixon said that he would not resign, but rather would "find a way to deal with" the liquidation costs so that Mr Wu would not be burdened with the costs indemnity pursuant to the Deed. 88 Mr Milne in his affidavit of 16 June 2021, states that he does not recall Mr Wu saying that Mr Dixon should resign during the meeting of 21 January 2020. That evidence was not challenged. Mr Dixon in his affidavit of 21 June 2021 states that Mr Wu did not ask him to resign at the meeting. 89 The file note made by Mr Milne of the matters discussed on 21 January 2020 does not record any objection made by Mr Wu to the effect that Mr Dixon was bound by the advised fee. Nor does it record any request that Mr Dixon resign his appointment. To the contrary, it includes the following (non-sequential notes): David has no problem re being paid fees for work, other shareholders don't see it that way SD go to court re fixing of liquidator's costs if required Costs position in relation to costs + expenses of the liquidation. Ideally shareholders should support costs but don't think they will. Have costs ready by end of week with a view to conversation early next week. The way SD proposing to deal with liquidator's costs then David not to carry the cost. SD/HM to meet with David next week when costs estimates available before it goes to shareholders. 90 There are three further important conflicts in the evidence that I must resolve. The first is whether Mr Wu requested Mr Dixon to resign in January 2020, following Mr Dixon's clear advice of 13 January 2020 that his fees would exceed the advised amount. I do not accept the evidence of Mr Wu. Not only is it contrary to the evidence of Mr Dixon, and the unchallenged evidence of Mr Milne, there is no reference to that request in the central contemporaneous documents where one would expect to see it. If Mr Wu, upon being told that the fees would exceed the advised amount, considered that Mr Dixon should resign so as to avoid or limit his indemnity obligations pursuant to the Deed, it is incredulous that he did not make that request in his email of 14 January 2020 but rather chose to request "a short meeting to work at a plan" to move forward. Moreover, there is no reference to resignation in Mr Wu's memorandum of 20 January 2020 and the seven-stage action plan set out therein could not have been implemented in the event of Mr Dixon's resignation. Further, and as I will show, Mr Wu continued to make requests of Mr Dixon and to meet with him, even suggesting at one point that he should perform additional work. None of that is consistent with a firm resolve by Mr Wu that Mr Dixon should resign. Although Mr Wu maintained his evidence when cross-examined on this question, I do not accept it, as it cannot be reconciled with the contemporaneous documents and the evidence of Mr Dixon and Mr Milne which I accept. 91 The second evidentiary conflict requiring resolution is whether Mr Wu acquiesced or accepted the fact that Mr Dixon's fees would not be confined to the fee cap, which is relevant to the questions of misleading or deceptive conduct, unconscionable conduct and reliance. Mr Wu's evidence is that he would not have agreed to the costs indemnity clause in the Deed for himself and for Austhome "unless the liquidator had confirmed his fees for the liquidation of VPPL would be capped at $50,000 (plus disbursements and GST)", which is a reference to the text messages and emails sent and received on 24 April 2019. Of Mr Dixon's correspondence of 13 January 2020, his evidence is that this "was the first time the liquidator had informed me (or to my knowledge, any of the other members of VPPL) that he proposed to claim more for his remuneration than the $50,000 capped costs…". 92 I accept as a fact that Mr Wu was not told by Mr Dixon that the advised fee would likely be exceeded until receipt of the correspondence of 13 January 2020. However, the important factual issue is not the date on which that fact was revealed, but rather whether Mr Wu was aware as at 24 April 2019, after he received confirmation of the fee from Mr Dixon, but before he agreed in principle to the settlement and to the costs indemnity, that the advised fee was based on a more limited scope of work than was likely to be required of the appointed liquidator. The evidence relating to that fact includes, but is not limited to, the conversations and exchange of correspondence to and including 24 April 2019. If Mr Wu believed that all material facts relevant to the fee assessment had been disclosed prior to the confirmation he received on 24 April 2019, then it is difficult to accept why he did not in a timely way advise Mr Dixon that he was bound by the fee estimate for all of the required work upon receipt of the correspondence of 13 January 2020. It is similarly difficult to accept that he did not, with some conviction, make that point clearly and unequivocally in his memorandum prepared on or about 20 January 2020 or during the meeting with Mr Dixon and Mr Milne on 21 January 2020 at which that memorandum was extensively discussed. And it is the case that the meeting notes record discussions and statements made by him that are not easily reconciled with his evidence. 93 In emphasis of the last point, it should not be overlooked that the memorandum of 20 January 2020 includes extensive reference to the costs and expenses of the liquidation, that Mr Dixon should decide which costs are included within the indemnity clause of the Deed and poses the open question: "how much more is required based on above approach?" It is difficult to accept on the face of this document that if Mr Wu honestly believed in January 2020 that Mr Dixon remained bound by his advised fee, that he would express himself in the way he did. 94 Unsurprisingly, these difficulties were put to Mr Wu in cross-examination: MS PIERCE: Mr Wu, you were told on 13 January that Mr Dixon had exceeded his cost cap. It was a letter addressed directly to you and you were told in that letter he was going to have to seek shareholder approval. One week later, he wrote another letter directly to you to say I didn't know about a lot of things when I accepted my appointment. And then you had a meeting which you had requested to talk about how to go forward and get through the seven stages of work that are set out in detail in this file note of the discussion. Now, I suggest to you that if you truly thought there was a cost cap, you would have mentioned it in this meeting and if you truly had suggested that there – that Stephen should resign his appointment then, knowing that he was going to get shareholder approval, you would have also suggested that?… I actually suggested and I get shareholder approval. I don't know if it's somewhere here. My recollection is I put it to him, say, well, it is likely you will get shareholder approval. But you knew that was required so that's, of course, exactly what you were talking about, shareholder approval for fees in excess of the cap because that's what you knew Dixon was going to do?… Yes. I know Dixon is going to do. Yes. That's correct. Yes? But he also assured me I would carry the indemnity. 95 I consider there is an error in the transcript in the last answer in that the witness said the assurance was that he would "not" carry the indemnity. Even with that correction, Mr Wu's evidence fails to satisfactorily explain why he did not remonstrate with Mr Dixon in an endeavour to hold him to the advised fee and why he prepared a detailed memorandum which specifically referenced the costs of the liquidation, and which objectively construed is an acknowledgement that the costs will exceed the advised fee in order to undertake the required work. 96 The third matter concerns evidence given by Mr Wu that he told Mr Dixon during their meeting of 21 January 2020 that his seven-stage action plan set out the scope of work that he had disclosed to Mr Dixon prior to 24 April 2019. This evidence was not contained in the affidavits of Mr Wu. It emerged in his cross-examination MS PIERCE: : By 20 January Mr Dixon had told you that the work that he was going to have to perform was outside the scope of the work he had been told about when he set his fee cap?---Yes, I disagree. No. Well, he told you it, didn't he, not - - -?---Yes, he told me that. Yes. And you didn't respond to him, saying, no, these issues, these seven stages of issues were always things that you knew about before you took the appointment?---Yes, I respond that. I spoke to him. While we were at the meeting and discussed these issues, at that point of time - - - Mr Wu, you've not given a shred of evidence to his Honour before just now that you said that?---Sorry, what's the question? You said I responded to say it was within the fee cap?---Yes, at the meeting. That's the first time anyone has ever heard evidence from you that you raised this at the meeting, isn't it? This is the first time today, right now, that you've ever said that?---So, sorry, what's the question? HIS HONOUR: No, the question was clear, Mr Wu. What's the answer to it?---Sorry, what's the question? Put it again, please, Ms Pierce. MS PIERCE: You've just told his Honour that you told Mr Wu at a meeting – excuse me. You told Mr Dixon at a meeting that, in fact, all of these issues in your seven stages were part of his original scope of work. You've just told his Honour that. And I'm putting to you that this is the first time that you have ever given evidence of such an important matter to this court. This is the first time we've ever heard it. That's right, isn't it?---Yes. That's right. And I suggest to you that the reason you've just said this is because you want to have his Honour understand that the fee cap was a much – that the scope of work was much broader than in fact it was. You want his Honour to think that the scope of work that you put to Mr Dixon was in fact much broader than it really was. That's why you've just given that evidence for the very first time?---That's not correct. It's a recent invention, Mr Wu?---No, it's not. That's not correct. 97 I reject this evidence. It is incredulous that evidence as important as this was not referenced in any affidavit of Mr Wu. There is no reference to any assertion to that effect in any contemporaneous document, in particular the notes of the meeting as made by Mr Milne. There is no mention of Mr Wu making that claim in the affidavits of Mr Dixon or Mr Milne. There is no mention of this asserted disclosure in Mr Wu's extensive memorandum prepared on or about 20 January 2020. It is inconsistent with Mr Dixon's letter to Mr Wu of 20 January 2020 which I have found to be a truthful account of the material matters that were not disclosed to Mr Dixon. I conclude that this evidence was a recent invention and is false. It significantly undermines the credit of Mr Wu, as I have explained. 98 A further meeting was scheduled for 10 February 2020. Mr Wu prepared another memorandum for discussion. The first paragraph is titled: "Costs of the liquidation", and the discussion items thereunder are the same as those set out in the memorandum of 20 January 2020. Repetition of these questions as issues to be discussed by Mr Wu compounds the difficulties attendant with acceptance of his evidence. The evidence is that this meeting took place between Mr Wu, Mr Dixon and Mr Milne for approximately one- and one-half hours and the parties discussed Mr Wu's memorandum. Mr Wu says that he asked Mr Dixon how much he was proposing to claim for his fees and was told that the information would be provided at a later point in time. Mr Milne made a handwritten note of the matters discussed. It includes this note: David's schedule re issues discussed on 10 February 20. All of these costs over and above what is approved. What was shown to Stephen was not the extent of the position as taken up by the liquidator. 99 In cross-examination, Mr Wu accepted that the discussion included each of these matters but was unsure as to whether it was qualified by the work being "much greater" than the extent disclosed to Mr Dixon. That difference is of no consequence for my purposes: the more important point is that, once again, it is not said by Mr Wu and there is no record in the file note that he contended that Mr Dixon was bound to perform all of the work required in accordance with the advised fee and this is further evidence that the extent of work required to be undertaken was not disclosed prior to Mr Dixon's appointment. 100 On 6 March 2020, Mr Dixon sent a circular to the shareholders which addressed a request by Mr Wu for details of estimated costs and expenses in relation to various aspects of the liquidation. Mr Dixon noted that he would require shareholder approval for his remuneration. Amongst other things he said: I am reserving my position in relation to calling on the indemnity available pursuant to the Deed to claim costs in excess of the costs cap from Mr Wu (and Austhome). The factors I will consider when exercising the discretion pursuant to clause 2 (k) are: (1) It would appear unreasonable to call on the indemnity in relation to costs and expenses that are outside Mr Wu's apparent knowledge or control. (2) Whether the expenditure would be beneficial to all shareholders. (3) Whether the expenditure is consistent with the Deed's goals, being to wind up the company's affairs and distribute the available assets without incurring unnecessary costs and expenses. (4) Whether the expenditure is either to the benefit or the detriment of one shareholder over another shareholder. (5) Any other matter that I consider material. 101 On one view that document is evidence of Mr Dixon's belief that Mr Wu was not aware of the extent of the liquidation costs that were likely to be incurred when he agreed to the indemnity. The only person who asked Mr Dixon a question relevant to this point is Mr Segal, but his focus was limited to the content of remuneration discussions that occurred between Mr Dixon and Mr Wu prior to execution of the Deed. In any event, what might have been Mr Dixon's state of mind as to what Mr Wu believed is not a matter that I find helpful in resolving the questions that are raised in this matter. 102 A meeting of shareholders occurred on 10 March 2020 that was also attended by Mr Dixon and Mr Milne. Mr Dixon provided a liquidator's report and also invited an externally engaged accountant to report as to the preparation of financial reports and tax returns. The minutes of the meeting record that Mr Dixon asked whether "there were any objections to approval for the non-contentious amount of $60,000" of his claim for remuneration. Mr Wu was in attendance. The minutes do not record him expressing objection. No resolution was carried for the determination of the liquidator's remuneration, and the meeting was adjourned to reconvene on 24 March 2020. 103 On 17 March 2020, a solicitor appointed by Mr Dixon sent email correspondence to Mr Wu. He drew attention to the remuneration approval report dated 20 February 2020 and noted that Mr Dixon sought shareholder approval in the amounts of $105,341.50 for the period 23 October 2019 to 13 January 2020 and $194,500 for the period 14 January 2022 until finalisation of the winding up. The correspondence makes it plain that Mr Dixon intended to receive remuneration approval for $60,000 to be paid by VPPL from the shareholders at the next meeting and thereafter to seek the balance of his remuneration and disbursements claim from Mr Wu and or Austhome in accordance with the Deed. 104 In response, on 23 March 2020, Mr Wu advised by email that he did not consent to the payment of any additional fee "in accordance with your client fee proposal and indemnity provided to me by your client on 24 April 2019". On the evidence that I have set out in my findings of fact, that is the first occasion on which Mr Wu raised, in writing, an objection to a claim for remuneration by Mr Dixon in excess of the advised fee or contended that he was bound by the fee cap. Accepting that this was Mr Wu's position on 23 March 2020 does not address the difficulties with his earlier and inconsistent conduct. 105 Finally, at the adjourned shareholders meeting on 24 March 2020, as evidenced by minutes ultimately signed by Mr Dixon on 23 April 2020, a resolution approving the liquidator's remuneration for the period 23 October 2019 to 30 January 2020 in the amount of $105,341.50 plus GST was carried. The minutes record that Mr Wu "had not appeared to have voted", despite his attendance. Mr Wu is recorded as then having raised a query and requested that the resolution be put again. When it was, the minutes record that Mr Wu "said that he was also in favour" of the resolution. Mr Wu disputes the accuracy of the minutes in that, on his evidence, they omit to record that his support was conditional: that he would not be liable to indemnify the company in relation to the approved amount. That evidence was challenged in cross-examination. Mr Wu accepted that he understood he could vote against the remuneration resolution or abstain from voting on it. When taken to the minutes he confirmed that they accurately reflected his recollection of what he was asked and what he said at the meeting. The minutes contain no reference to his conditional position, though he qualified this answer by insisting that he expected that the person keeping the minutes would record it. Ultimately, I do not find it necessary to resolve this conflict in the evidence as it does not assist me in the factual determinations that are relevant to the issues in dispute. The construction question 106 The first submission of Mr Brown is that the phrase "costs of the liquidation" in clauses 2 (j), (k) and (l) of the Deed is so uncertain as to be meaningless and void. Primary reliance for that submission is placed upon Brown v Gould [1972] 1 Ch 53 at 61-62, where Megarry J upheld the validity of an option clause in a lease to renew at market value rent after taking into account the advantage to the tenant of any increase in the value of the premises attributable to structural improvements made by the tenant. Legal uncertainty was argued because the clause did not provide a machinery for fixing the rent. Mr Brown relies on the following reasoning: A provision may be void for uncertainty because it is devoid of any meaning. As some critics of certain modern writings might testify, there may be an unintelligible collocation of ordinary English words, or there may be mere gibberish… The present case manifestly does not fall under this head. The other main head is where there is a variety of meanings which can fairly be put on the provision, and it is impossible to say which of them was intended. Mere ambiguities may sometimes be resolved by the application of legal presumptions, and so on: but where the language used is equally consistent with a wide range of different meanings, it may be impossible to discern the concept which the provision was intended to enshrine. 107 In developing his submissions, Mr Brown observes that the parties "cannot even definitively state" their respective positions as to the meaning of the phrase. To illustrate that point, it was noted that Mr Segal submits that all costs and expenses incurred by the liquidator are included, but in contrast Mr Currie submits that only those costs incurred by reason of the appointment of the liquidator are included: costs that would have been incurred in any event are not. 108 I reject the uncertainty submission. The meaning of the phrase does not turn upon the subjective belief of the parties and sometimes the consequence of the objective theory of interpretation is that a contract has a meaning that is contrary to the joint subjective belief of the parties. The settled approach to contractual interpretation was summarised in the plurality reasons of French CJ, Nettle and Gordon JJ in Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37 at [46] – [50]: The rights and liabilities of parties under a provision of a contract are determined objectively, by reference to its text, context (the entire text of the contract as well as any contract, document or statutory provision referred to in the text of the contract) and purpose. In determining the meaning of the terms of a commercial contract, it is necessary to ask what a reasonable businessperson would have understood those terms to mean. That inquiry will require consideration of the language used by the parties in the contract, the circumstances addressed by the contract and the commercial purpose or objects to be secured by the contract. Ordinarily, this process of construction is possible by reference to the contract alone. Indeed, if an expression in a contract is unambiguous or susceptible of only one meaning, evidence of surrounding circumstances (events, circumstances and things external to the contract) cannot be adduced to contradict its plain meaning. However, sometimes, recourse to events, circumstances and things external to the contract is necessary. It may be necessary in identifying the commercial purpose or objects of the contract where that task is facilitated by an understanding "of the genesis of the transaction, the background, the context [and] the market in which the parties are operating". It may be necessary in determining the proper construction where there is a constructional choice. The question whether events, circumstances and things external to the contract may be resorted to, in order to identify the existence of a constructional choice, does not arise in these appeals. Each of the events, circumstances and things external to the contract to which recourse may be had is objective. What may be referred to are events, circumstances and things external to the contract which are known to the parties or which assist in identifying the purpose or object of the transaction, which may include its history, background and context and the market in which the parties were operating. What is inadmissible is evidence of the parties' statements and actions reflecting their actual intentions and expectations. (Footnotes omitted.) 109 I do not consider that there is such a wide variety of differing meanings of the phrase "costs of the liquidation" such that the objective meaning cannot be ascertained. With respect, the argument of Mr Brown conflates the meaning of the phrase with its application to particular costs and expenses, which distinction was drawn by Barwick CJ in Council of the Upper Hunter County District v Australian Chilling and Freezing Co Ltd (1968) 118 CLR 429 (Upper Hunter). That case concerned a bulk electricity supply agreement, a component of which provided for an energy charge at a defined rate per kilowatt hour, with provision for increase or decrease according to changes in the basic wage and the price of coal for generating purposes. Clause 5 of the agreement provided for further variation "if the supplier's costs shall vary in other respects", which the Court held was not void for uncertainty. The reasoning of Barwick CJ at 436-437 is, in my view, directly applicable to the present case: But a contract of which there can be more than one possible meaning or which when construed can produce in its application more than one result is not therefore void for uncertainty. As long as it is capable of a meaning, it will ultimately bear that meaning which the courts, or in an appropriate case, an arbitrator, decides is its proper construction: and the court or arbitrator will decide its application. The question becomes one of construction, of ascertaining the intention of the parties, and of applying it. Lord Tomlin's words in this connexion in Hillas & Co. Ltd. v. Arcos Ltd. ought to be kept in mind. So long as the language employed by the parties, to use Lord Wright's words in Scammell (G.) & Nephew Ltd. v. Ouston is not "so obscure and so incapable of any definite or precise meaning that the Court is unable to attribute to the parties any particular contractual intention", the contract cannot be held to be void or uncertain or meaningless. In the search for that intention, no narrow or pedantic approach is warranted, particularly in the case of commercial arrangements. Thus will uncertainty of meaning, as distinct from absence of meaning or of intention, be resolved. I do not think there is any uncertainty or for that matter ambiguity in the expression "supplier's costs" in cl. 5, however wide may be the area of possible disagreement as to its denotation in a particular case. A contract to build a bridge at cost could not, in my opinion, be held void for uncertainty: it could not properly, in my opinion, be said to be meaningless: nor is it, in my opinion, ambiguous. Endless might be the arguments pro and con as to whether or not in marginal cases some item of expenditure is as claimed a cost, or as to how much of an expenditure is a cost, of the particular activity. But to my mind, generally speaking, the concept of a cost of doing something is certain in the sense that it provides a criterion by reference to which the rights of the parties may ultimately and logically be worked out, if not by the parties then by the courts. There are no elements in the circumstances of this contract to deprive the concept of that certainty. The obiter dictum in York Air Conditioning and Refrigeration (A/asia) Pty. Ltd. v. The Commonwealth may provide an instance where an attempt to limit the concept of a cost may have robbed the concept of its certainty and have introduced uncertainty incapable of resolution by construction. (Footnotes omitted.) 110 In that case, the contract provided for the appointment of an arbitrator to resolve differences over variations in the amounts charged. However, if clause 5 were otherwise meaningless, the arbitration clause could not operate to save it: 438. 111 In my view the meaning of phrase "costs of the liquidation" is not so uncertain as to be meaningless. The background factual matrix is set out in the recitals to the Deed. The parties were in dispute. One mechanism that they identified to resolve their disputes was to settle the wind up proceeding by the passing of a resolution of the members to effect a voluntary winding up and the appointment of a nominated liquidator. The parties also agreed to release various claims against each other. A primary objective of the Deed is that the liquidator would determine the respective entitlements of the shareholders and, at the request of the members and the directors, effect an in specie distribution of unsold lots at such time and on such terms as the liquidator determined. Expressly, the members and the directors agreed not to challenge any decisions made by the liquidator, but if a party did so the risk was that the party would be obliged to pay their own costs. 112 Significant content is given to the meaning of the phrase by cl 2(j). The parties must use their "best endeavours" to cap the costs of the liquidation at $60,000 plus GST. This is the Costs Cap. Then, "for the sake of clarity", the costs of the liquidation shall include (without limitation) the liquidator's remuneration, disbursements and expenses, and the costs of any third party engaged by the liquidator (whether for or on behalf of VPPL or in his capacity as the liquidator). It is each component of that definition which the parties agreed would be the costs of the liquidation. At the time the parties entered into the Deed, VPPL traded as a property developer and landlord. The parties to the Deed were in significant dispute as to how the business had been conducted, as evidenced by the recitals to the Deed. The disputes and differences between the parties had reached the point where Mr Wu and Austhome considered that it was appropriate on 5 December 2017, to commence a proceeding and to allege that the conduct of the affairs of VPPL was contrary to the interests of the members as a whole or repressive to, unfairly prejudicial to or unfairly discriminatory against a member pursuant to s 232 of the Corporations Act and to seek, as a remedy, that VPPL be wound up. The majority shareholders resisted that application. By orders made in the Supreme Court of Victoria, the parties were referred to mediation. At the mediation they agreed in principle to resolve their disputes, and to include as part of the settlement, that the members of VPPL would consider a resolution that it be wound up voluntarily pursuant to s 491 of the Corporations Act. 113 Objectively, what is manifestly clear, is that when the parties entered into the Deed each was aware, to the knowledge of the other, that certain additional costs would be incurred in consequence of the passing of a resolution that VPPL be wound up. They were aware that the costs of appointing a liquidator and the costs of conducting the liquidation were not ordinary business expenses that would have been incurred in any event if the parties had been able to reach an amicable settlement of their disputes by, perhaps, the distribution of the unsold lots in specie to the members or the declaration of a dividend, upon the sale of some or all of those lots. The point is that the parties could not agree to that course, and that is why they contemplated the appointment of an independent liquidator, assuming that they could agree to pass the winding up resolution. 114 Accordingly, the background factual matrix, points to a distinction between the ordinary day to day costs of the conduct of the business of VPPL that would have been incurred in any event and the particular additional costs and expenses caused by the appointment of a liquidator. That background is in my view entirely consistent with the objective meaning of the contractual text in the context of the Deed and accords with what a reasonable businessperson would have understood the phrase to mean having regard to the commercial purpose of the Deed. The focus of the text of the clause is upon the cost consequences of the appointment of a liquidator upon the passing of a resolution by the members to voluntarily wind up VPPL. So much is clear from the inclusive list which follows the definition of the Costs Cap. The clause is concerned with liquidator's remuneration, disbursements and expenses and the costs of any third party engaged by the liquidator, which in my view is confined to a third party engaged for the purpose of assisting the liquidator to perform the liquidation task. 115 The clause does not in my opinion extend to the costs of the business of VPPL that would have been incurred in any event, regardless of the appointment of a liquidator. Why that is so emerges from several considerations. First, if it was the intent of the parties to impose that type of burden upon Mr Wu and Austhome as the indemnifiers pursuant to clause 2(k), one would expect the parties to employ very direct language to achieve it. If the members had failed to resolve to voluntarily wind up VPPL, the result would have been that the parties would remain as disputants and the business of VPPL would continue to be conducted. The costs and expenses of doing so would have been those of VPPL, ultimately reflected in its profitability and the returns, if any, to the shareholders in the form of dividends. Or, if the business of VPPL was unprofitably conducted, the shareholders would have suffered detriment in the form of reduction in their shareholders equity. The language of the relevant clauses is simply inapt in my view to impose upon Mr Wu and Austhome the burden of being responsible for all of the costs of the business of VPPL in excess of the Costs Cap as the minority shareholding parties. 116 Secondly, and as Mr Currie correctly observes, there is another interpretation principle that applies in this case. If there is doubt as to the correct meaning of clauses in a contract of indemnity, a construction in favour of the indemnifier is generally to be preferred: Bofinger v Kingsway Group Ltd (2009) 239 CLR 269; [2009] HCA 44 at [53], Gummow, Hayne, Heydon, Kiefel and Bell JJ: The settled principle in Australia governing the interpretation of contracts of guarantee and indemnity has been stated by this Court in authorities the most recent of which is found in the joint reasons in Andar Transport Pty Ltd v Brambles Ltd. The principle is that a doubt as to the construction of a provision in such a contract should be resolved in favour of the surety or indemnifier. It is implicit in this that the doubt may arise not only from the uncertain meaning of a particular expression but from its apparent width of possible application. (Footnote omitted.) 117 It is to be noticed that this principle applies both as to the interpretation and application of the clause in issue in this proceeding. Thirdly, it is significant that the Deed inclusively lists certain costs of the liquidation "for the sake of clarity". The clarification which follows is limited to the liquidator's remuneration, disbursements and expenses and the costs of any third party engaged by the liquidator. There is a directness of language in the required connexion: the causal event is the appointment of a liquidator and the costs of the liquidation. This clarification does not in its text extend to the general expenses of the conduct of the business of VPPL. 118 Fourthly, I accept a submission made by Mr Currie to the effect that the narrower interpretation that he relies upon is supported by the controlling words of the clause which require focus upon the liquidation, and not the conduct of the broader business of VPPL. As he further submits, correctly in my view, the expression "for the sake of clarity" and that which follows it can rise no higher than the controlling noun. 119 Mr Segal argues for a broader interpretation. According to his submission, the clause means the fair and reasonable remuneration in performing the work that the liquidator was reasonably required to perform to wind up VPPL and distribute its assets, disbursements and expenses incurred in performing that work which were reasonably required for the purposes of the winding up and the costs of any third party engaged by the liquidator. Prima facie, the difficulty with that submission is that it does not draw distinction between remuneration for work done by the liquidator and for tasks performed by the liquidator which would have been required even if the members had not resolved to voluntarily wind up VPPL. This is illustrated by the list of various categories of remuneration and expenses that Mr Segal submits are within the meaning of the costs of the liquidation. The list, as set out in the written submissions is: Further, applying the principles of construction referred to above, the categories of work that the liquidator of VPPL was reasonably required to perform for the purpose of the winding up and distribution of the assets and for which Mr Wu and Austhome indemnify VPPL (except for the first $60,000 plus GST) are: (a) Standard Tasks in a members' voluntary liquidation, including ASIC and other regulatory lodgements, operating VPPL's bank accounts, organising insurance, determining creditor claims, conducting shareholder meetings and reporting to shareholders. (b) Landlord Tasks in managing the properties owned by VPPL, including dealing with the Owners Corporations, engaging property agents, managing the trading and rent collection, supervising the property agents and making payments to trade creditors. (c) Financial Tasks in: (i) obtaining and reviewing VPPL's books and records. (ii) lodging taxation returns, including BAS and income tax returns, as well as bringing VPPL's financial accounts up to date. (iii) obtaining ATO clearance to allow the liquidator to make a distribution to shareholders. (d) Investigation Tasks in: (i) investigating and dealing with building defects, basement water leaks or complaints regarding potential building defects made against VPPL as the building developer. (ii) investigating Mr Wu's complaints about the conduct of other directors. (e) Resolution of existing VPPL issues by: (i) dealing with the claim for Austhome's costs in the Austhome Proceeding and the determination of the costs orders in the Costs Proceeding (as defined by Recital L of the Deed of Settlement) and (ii) dealing with issues concerning Shop 1 and Shop 2, including resolving the disputes with respect to Shops 1 and 2 and the resolution of the dispute regarding the performance of the terms of Recital S(2) and S(3) of the Agelakis Accepted Offer (as defined in Recital R of the Deed of Settlement). (f) In-specie Distribution - attending to the in-specie distribution of VPPL's assets, including obtaining property valuations. 120 The difficulty with identification of a prescriptive list at this stage of the proceeding, is that I do not have detailed evidence from the liquidator as to what work was necessarily performed in undertaking, for example, the "standard tasks" identified in paragraph (a) of the submission. Whilst that component of the submission may appear innocuous on its face and consistent with my analysis, the obvious difficulty is that so-called "standard tasks", might not have been required because Mr Dixon was appointed as the liquidator. An obvious example from the submission is "organising insurance". As a building developer and landlord, one would have thought that VPPL already had in place contracts of indemnity relevant to the various aspects of its business. 121 A further difficulty with the submissions of Mr Segal is that I invited him to state his client's position as to whether land tax (as an example) was within or without the costs of the liquidation. Accepting his primary submission that objectively a reasonable person "would understand that the costs of trading the business of VPPL formed part of the remuneration, costs and expenses which would be incurred in a liquidation of a solvent company", I invited him to identify whether land tax is an expense of that category. With respect to Mr Segal, I did not receive a satisfactory answer. When I first put that proposition to him in closing submissions, I was informed that he would return to answer it at a later point. He did and the following exchange occurred: HIS HONOUR: Look, it must have limits. So let's go back. Is land tax in or out? MR SEGAL: Well, the first is it must – the idea that it must have limits is something that everything has limits in terms of whether it's potentially reasonable or unreasonable. And the fact that it's the company that incurs the cost of the remuneration means that firstly it either needs to be approved by the shareholders or by the court. So that's a limit that the liquidator can't just say, "I'm charging" – as the exercise with Judicial Registrar Allaway indicated, and I think Mr Currie referred to it, some of the items were taxed off. And that is then a charge that's levied to the company and that's what then engages the indemnity. So your Honour has asked me now several times about the costs, and so the – we that the costs of the – would be within the definition of the landlord tasks in managing the properties, dealing with the owners corporation, engaging property agents, managing the trading and rent collection, supervising the property agents and making payments to trade creditors. But to the extent that expenses are incurred in the – in order to obtain the – those exercises, then those expenses do fall within it. Your Honour, that – is asking me whether land tax or other taxes are falling within that exercise, I'm not an accountant to sort of tell you my answer to the – to that particular question. That's a determination that is a question for the referee or registrar. HIS HONOUR: But are you saying that any expense of running the business post the date of the deed is an expense ultimately at the risk of Mr Wu and Austhome? MR SEGAL: Incurred in – if it's – not any expense, if it's incurred in managing the properties. So your Honour might - - - HIS HONOUR: So paying land tax is incurred in managing the properties, isn't it? MR SEGAL: Is it incurred in managing the properties, or is it a consequence of managing the properties. These are distinctions that perhaps need either an accounting or expert advice. I can't – you see, I can't – to your Honour's point - - - HIS HONOUR: But if you can't articulate whether these expenses are within or without your interpretation, why should I accept your interpretation? MR SEGAL: Because – sorry – because the interpretation – firstly, the interpretation is A, B, C and D. They're the four points that are mentioned in, your Honour, what is the proper construction of these clauses. This is at 22 and that is absolutely clear in terms of the proper construction. There is not a schedule to set out each and every item of whether or not an expense is in or out, and the Upper Hunter Valley case – Upper County case is the clear support for that proposition that they can be worked out. We're not engaged in that process now. I say yes or no is neither here nor there to your Honour as to whether or not – or referee – having heard the evidence about, well, in managing a property, these are – expenses are incurred. Are they incurred – are they sent out to each and every person? Do they get charged to the owners' corporation and then remitted on? I don't know those answers, your Honour, as to how those expenses flow down the line and in the theoretical - - - 122 I reject as unhelpful and artificial the distinction drawn by Mr Segal in those submissions between an expense "incurred in managing the properties" and one "a consequence of managing the properties". The most telling consideration is whether there is on the text of the Deed, the background factual matrix, the context of the clause and the surrounding circumstances, a basis to construe the clauses as imposing upon Mr Wu and Austhome the burden of responsibility to indemnify VPPL for the ordinary expenses of the conduct of its business, and where the only engaging event is the liquidator's appointment. The answer provided by Mr Segal is: "that was the bargain that was struck". If that was the intent of the parties, one would have expected to see very direct and precise wording so as to impose this obligation in a contract that is in part an indemnity. 123 During argument I requested counsel to consider the decision of Black J in The Matter of RMGA Pty Ltd [2012] NSWSC 678 (RMGA), which concerned an application by a liquidator for, inter alia, approval of remuneration. At [7] His Honour succinctly summarised the entitlement of the liquidator and the review function of the court: A liquidator is entitled to fair and reasonable remuneration but it is a matter for the liquidator to establish that entitlement: Venetian Nominees Pty Ltd v Conlan (1998) 20 WAR 96 at 102; Onefone Australia Pty Ltd v One.Tel Ltd [2010] NSWSC 1120 at [24]. The Court has power to fix the liquidator's remuneration under s 473(3)(b)(ii) of the Corporations Act. Section 473(10) specifies matters to which the Court must have regard in determining whether remuneration is reasonable, which include the extent to which the work performed by the liquidator was reasonably necessary; the period during which the work was performed by the liquidator; the complexity of the work performed; the value and nature of any property dealt with or likely to be dealt with by the liquidator; the number, attributes and behaviour of the company's creditors and; if the remuneration is ascertained, in whole or in part, on a time basis, the time properly taken by the liquidator in performing the work; and any other relevant matters. The Court, constituted by a judge, deals with matters of principle rather than conducting a review of quantum: Ide v Ide [2004] NSWSC 751; (2004) 50 ACSR 324 at [39]. If the Court determines that it is appropriate to fix that remuneration, then the usual course is for the question of the quantum of that remuneration to be referred to a Registrar in order to determine that amount. 124 I invited submissions from counsel as to why the Deed should not be similarly construed as confined to remuneration and disbursements incurred for work performed that was reasonably necessary for the conduct of the voluntary liquidation and the distribution in specie as contemplated by the Deed and as not extending to the costs of conducting the business of VPPL generally. Mr Brown submits that whilst this interpretation "sounds sensible", the difficulty is that it fails to identify what remuneration and disbursements are within or without the clause. The formulation was not addressed by other counsel. As Barwick CJ pointed out in Upper Hunter, dispute at the edges as to whether a particular charge is within or without the indemnity should be able to be logically worked out by the parties, or if not, by the Court. The mechanism for the latter is s 90-15 of the Insolvency Practice Schedule. 125 For these reasons, I reject the interpretation urged by Mr Segal and I generally accept the interpretation of Mr Currie which finds support in the alternative submission of Mr Brown. The phrase "costs of the liquidation" in clauses 2(j), (k) and (l) is limited to the remuneration, costs and expenses incurred as a consequence of the appointment of the liquidator and it excludes costs that VPPL would have incurred in any event. And it follows, by application of the established principles, that the remuneration costs and expenses of the liquidator are limited in the way summarised by Black J in RMGA. 126 I am not asked upon this application to individually determine the claims made by Mr Dixon for remuneration, disbursements and expenses. Counsel agreed that, depending upon my decision as to the meaning of the clauses, residual issues as to which claims are within and without the meaning of the clauses can be the subject of the appointment of a registrar of this Court as a referee for inquiry and report pursuant to rules 28.62-28.67 of the Federal Court Rules 2011 (Cth). I agree. The cross-claim 127 Mr Wu and Austhome as cross-claimants contended that Mr Dixon and Hamilton Murphy in making the remuneration representations engaged in misleading or deceptive conduct and or unconscionable conduct contrary to ss 18 and 21 of the ACL. As I have noted, it is not in dispute that Mr Dixon made each of the remuneration representations. What is in issue is whether in context they were misleading or deceptive or likely to mislead or deceive and whether there was reliance and damage. Properly, Ms Pierce ultimately accepted in argument that if I were to find against Mr Dixon on the first two matters, damage was suffered in that Mr Wu and Austhome entered into a contract pursuant to which they accepted a potentially disadvantageous obligation which they would not otherwise have agreed to but for the conduct: Harvard Nominees Pty Ltd v Tiller (2020) 282 FCR 530; [2020] FCAFC 229. 128 As finally resolved on the pleadings, in the form of the amended cross-claim filed on 6 May 2022, the misleading and deceptive conduct claim is framed as follows: B REMUNERATION REPRESENTATIONS 5. Prior to his appointment as liquidator of VPPL, Dixon represented to Wu and Austhome that: (a) the remuneration for his appointment as liquidator of VPPL would be capped at $50,000 (plus GST and disbursements) (Fee Cap); (b) the Fee Cap would only change if he were litigated against personally, (Remuneration Representations). Particulars The Remuneration Representations made in writing and orally. Insofar as the Remuneration Representations were in writing, they were made: (1) on 6 August 2018 by email from Dixon to Graeme Scott of Hall & Wilcox (copied to Wu); (2) on 24 April 2019 by text messages from Dixon to Wu; (3) on 24 April 2019 by email from Dixon to Wu. Insofar as the Remuneration Representations were made orally, they were made: (4) on 16 April 2018, in a meeting between Dixon and Wu at the offices of Grant Thornton, during which: (a) Wu said to Dixon words to the effect of "what will be your fee for the appointment?"; (b) Dixon then said to Wu words to the effect of "$50,000 plus GST and disbursements"; (5) on 23 November 2018, in a telephone conversation between Dixon and Wu, during which Dixon said to Wu words to the effect that he "would still cap his fees at $50,000 (plus GST) and disbursements"; (6) on 29 November 2018, in a telephone call between Dixon and Wu, during which Dixon said words to the effect that: (a) "there was no reason for the shareholders to be concerned. His fee would only be $50,000 plus out of pocket expenses and GST"; (b) "the current disputes between the shareholders were factored into his fee cap"; (c) "his fee cap would be exceeded only if new proceedings were issued against him personally"; (d) "he could only increase his fee cap if he obtained approval from the majority of VPPL's members". The Cross-Claimants refer to and rely upon the findings made by Judicial Registrar Allaway at paragraph [34] of his reasons for decision dated 8 October 2021 (Remuneration Determination). C MISLEADING OR DECEPTIVE CONDUCT C.1 Dixon's Misleading Representations 6. Dixon did not cap the remuneration for his appointment as liquidator of VPPL at $50,000 (plus GST and disbursements). Particulars (1) On 24 February 2020, Dixon issued his first Remuneration Approval Report in the liquidation of VPPL seeking approval for remuneration in the total amount of $299,841.50 (plus GST). (2) At a meeting of members of VPPL on 24 March 2020, the Third to Eighth Defendants (Majority Shareholders) resolved to approve Dixon's remuneration for the period 23 October 2019 to 13 January 2020 up to a limit of $105,341.50 (plus GST). (3) By the Originating Process filed in this proceeding on 9 March 2021, Dixon sought (among things) an order that he be entitled to remuneration for work performed in his capacity as liquidator of VPPL between 14 January 2020 and 31 October 2020 on a time-cost basis in the sum of $319,738.50 (plus GST). (4) By the Remuneration Determination dated 8 October 2021, Judicial Registrar Allaway determined and fixed the remuneration of Dixon as liquidator of VPPL for the period from 14 January 2020 to 31 October 2020 in the amount of $273,584.50 (plus GST). 7. By reason of the matters pleaded in paragraph 6 above, the Remuneration Representations were false, misleading or deceptive or likely to mislead or deceive. 8. Further or alternatively, the Remuneration Representations were representations with respect to future matters within the meaning of s 4 of the Australian Consumer Law. 9. Dixon did not have reasonable grounds for making the Remuneration Representations. Particulars (1) When Dixon made the Remuneration Representations, he should have but did not follow the guidelines published by the Australian Restructuring Insolvency & Turnaround Association in the fourth edition of the Code of Professional Practice for Insolvency Practitioners as to the matters that should be settled before an insolvency practitioner agrees to a fixed fee. (2) From around 16 April 2018, alternatively, by 24 April 2019, Dixon knew or ought to have known that the work involved in the liquidation of VPPL would, on a time-cost basis, substantially exceed $50,000 (plus GST and disbursements). (3) Further and better particulars may be provided following discovery. 129 The response as framed by the second further amended defence is: 5. They admit the allegations in paragraph 5 and say further in response to the allegation in paragraph 5(b) that the Remuneration Representations were based on the following information provided to Dixon: 5.1 A memorandum provided to Dixon by solicitors for Austhome dated 1 August 2018 which stated that the work required in the winding up of VPPL would involve: 5.1.1 Arranging the distribution, sale and settlement of the remaining units; 5.1.2 Conducting the costs proceeding (SCI 2018 0517); and 5.1.3 Conducting such further work as the liquidator deems necessary. (1 August 2018 Representations) 5.2 Statements made by Mr Wu to Dixon prior to 24 April 2019 to the effect that there had been a dispute among the shareholders of VPPL and that he wanted a liquidator to distribute the assets of VPPL to its shareholders under a voluntary winding up of VPPL. (Wu Representations) PARTICULARS The Wu Representations were made to Dixon in: a) a conversation between Dixon and Mr Wu at the offices of Grant Thornton in Melbourne on 16 April 2018; b) a telephone conversation between Dixon and Mr Wu on 21 June 2018; c) a telephone conversation between Dixon and Mr Wu on 23 November 2018; d) a telephone conversation between Dixon and Mr Wu on 29 November 2018; e) a telephone conversation between Dixon and Mr Wu on 17 December 2018. 6. They admit the allegations in paragraph 6. 7. They deny that the Remuneration Representations were false, misleading or deceptive or likely to mislead or deceive. PARTICULARS 7.1 Dixon made the Remuneration Representations in reliance on the Wu Representations and the 1 August 2018 Representations; and 7.2 the Wu Representations and the 1 August 2018 Representations did not disclose the full scope of the work to be conducted by Dixon as liquidator of VPPL; and 7.3 Mr Wu and Austhome knew, or ought reasonably to have known that the Wu Representations and the 1 August 2018 Representations did not disclose the full scope of the work to be conducted by Dixon as liquidator of VPPL; and consequently 7.4 Mr Wu and Austhome were aware or ought to have been aware that the Remuneration Representations did not accurately reflect the true value of work that would be required in the winding up of VPPL. 8. Except that he admits the Remuneration Representations were representations with respect to future matters, Dixon denies the allegations in paragraph 8. 9. They deny the allegations in paragraph 9 because Dixon had reasonable grounds for making the Remuneration Representations. 9.1 The Remuneration Representations were made in reliance on the Wu Representations and the 1 August 2018 Representations; and 9.2 it was reasonable for Dixon to rely on the Wu Representations and the 1 August 2018 Representations at the time of making the Remuneration Representations because Mr Wu was and remains a director of VPPL. 130 It is common ground that the remuneration representations were made by Mr Dixon with respect to a future matter, being his statement of the liquidator's remuneration plus GST and disbursements that would be charged in the event that he was appointed as liquidator of VPPL to conduct a voluntary winding up, so as to engage s 4 of the ACL. 131 The effect of s 4(1) of the ACL is that if a representation is made with respect to any future matter and the maker does not have reasonable grounds for making it, then it is taken to be misleading and by s 4(2) Mr Dixon is taken not to have had reasonable grounds for making the representation, unless he adduces evidence to the contrary, although he does not carry the onus of proving that he had reasonable grounds: s 4(3)(b). As explained by the Full Court in Australian Competition and Consumer Commission v Woolworths Group Ltd (formerly called Woolworths Limited) (2020) 281 FCR 108; [2020] FCAFC 162, Foster, Wigney and Jackson JJ, the provision is concerned with "predictions, promises, forecasts and other like statements which are directed to circumstances or events which may or may not happen in the future but which cannot be proven to be true or false at the time when they are made": [121]. It is insufficient that the representor subjectively believes in a particular state of affairs: there must be reasonable grounds for that belief which is judged at the time of the making of each representation: see generally Sykes v Reserve Bank of Australia (1998) 88 FCR 511 at 513-514, Heerey J. 132 Justice Mortimer comprehensively (and if I may say so with erudition) considered the operation of this provision in Australian Competition and Consumer Commission v Woolworths Ltd [2019] FCA 1039. The Full Court dismissed the appeal from her Honour's orders. Her Honour's analysis at [129]-[131] bears repeating: Most importantly in my opinion, the text of s 4(1), read with s 4(2), clearly supports the position for which the ACCC contends. Subsection (1) is concerned with whether the person making the representation "does not have" reasonable grounds. The only sensible way to understand that phrase is that at the time of making the representation, the representor herself or himself, or through its corporate actors, "had" – as in fact possessed – a basis which can be objectively described as reasonable, for what was represented. The text directs attention to the information which in fact provided the basis for the statements or conduct. It does not direct attention to whether there were reasonable grounds for the making of the representation. Rather, the text focuses on whether the representor "had" such grounds. In that sense, the debate over whether the representor needs to adduce evidence of "reliance" might be something of a distraction from the statutory text of s 4. Reliance might be implicit, or inferred. Using the language I have used above in an attempt to explain the meaning of the provision as I understand it, the question asked by the text of s 4(1) (read with the effect of s 4(2)) is: Did the person who made the representation about a future matter possess information which, assessed objectively, gave that person a reasonable basis for making the representation? This does not gainsay the proposition put by Woolworths that reasonable grounds might be established by adducing evidence that the representor relied on information from a "trusted and reliable source" for the representation it made: see Danoz Direct at [174] (Dowsett J). That may well be one way to discharge the evidentiary burden, and such evidence may well be sufficient to satisfy a Court that the applicant has not proven absence of reasonable grounds. These matters will depend on the particular circumstances. 133 In accordance with my earlier findings, Mr Dixon initially calculated his remuneration fee and disbursements based on his extensive experience as a liquidator, which included experience in undertaking an in specie distribution of assets together with the information that Mr Wu disclosed to him during their discussions in March and April 2018. He determined that the scope of the tasks required were relatively straightforward, steps (a)-(i) which I have set out at [32]. To the date of calculation of his fee, he had personally conducted between 25 and 30 member voluntary winding ups. His usual fee was to charge approximately $5,000 for his professional remuneration plus disbursements. Importantly, in the case of a voluntary winding up, the corporate entity is by definition solvent. In anticipating the likely disbursements at between $3,000 and $4,000, he based it on his experience of engaging a valuer on other matters. He ultimately calculated his remuneration fee at $50,000 based on a multiplier of his usual fee of $5,000 times 10 which he anticipated would be sufficient based on the number of unsold lots, the need to obtain valuations and to lodge final tax returns. 134 Importantly, he calculated his remuneration fee and disbursements based on the extent of the task that Mr Wu had disclosed to him. As I have found, I am satisfied that Mr Wu did not disclose material concerns relating to the finances of VPPL, the fact that income tax return had not been prepared and lodged for the 2017 financial year (or at the time of the latter representations the 2018 year), the content of the disputes about shops 1 and 2, the existence or extent of liabilities and the potential building defects claims. Mr Wu also told him that an in specie distribution would be a relatively straightforward process. No new material or additional information was disclosed by Mr Wu to Mr Dixon between 6 April 2018 and 24 April 2019. 135 When Mr Dixon was formally requested on 3 August 2018 to provide his estimate "of the likely costs of a winding up", he did so expressly on the basis of the material disclosed in the memorandum of 1 August 2018. On his assessment, which I find was correct, that memorandum was consistent with the information that had to that point in time been disclosed by Mr Wu to Mr Dixon. There was nothing contained in the memorandum or its attachments which caused Mr Dixon to consider that he should review his proposed fee. It was objectively reasonable for Mr Dixon to calculate his fee and to estimate the likely disbursements based on his understanding of the extent of the tasks required which in turn was centrally informed by his discussions with Mr Wu and, more importantly in my view, the content of the memorandum of 1 August 2018. 136 Mr Currie made two submissions as to why Mr Dixon did not have reasonable grounds. One, that a prudent and responsible liquidator would satisfy themselves that they had all relevant information they considered necessary if requested, in the circumstances in which Mr Dixon was, to make an accurate fee estimate. This submission was supported by reference to the Australian Restructuring Insolvency and Turnaround Association (ARITA) Code of Professional Practice, 3rd edition from 1 January 2014 (the Code). In part, the Code deals with fixed fee engagements. It defines a cap as an upper limit for the amount of remuneration or internal disbursements approved for a prospective fee. It is not a fixed fee. A purpose of the Code is to set standards of conduct for insolvency practitioners. Clause 6.13 notes that there is no mandatory requirement to provide an estimate for the costs of an administration, but where one is, it advises that practitioners "must exercise care in providing an unconditional quote or fixed fee", in writing and which clearly details any variables that may affect the estimate. 137 All of that may be accepted, indeed one might consider that this was a matter of good professional conduct without the Code, but it does not undermine the basis that Mr Dixon in this particular case calculated his fee and whether, objectively, that was reasonable. It must not be overlooked that s 4 of the ACL operates only as to require Mr Dixon to adduce evidence as to what were his reasonable grounds and that the onus falls on the cross-claimants to prove that Mr Dixon did not have reasonable grounds to make the calculation based on the information as supplied to him. They did not call expert evidence as to reasonable, prudent or accepted professional practice amongst insolvency practitioners at the time as to what, if anything, further should have been done. The reliance that they place on the general provisions of the Code does not answer the reasonableness question in the particular circumstances of this case. 138 The other is that in response to the invitation contained in the final paragraph of the memorandum of 1 August 2018, Mr Dixon should have sought further information from Mr Scott. I reject that submission. Whilst it was open to Mr Dixon to seek further information, his explanation, which I accept, is that he did not consider it necessary to do so in that he believed, and I find reasonably, that all material facts relevant to his estimate of likely costs had been disclosed in the memorandum. Mr Dixon was provided with a detailed memorandum from a competent solicitor which he was entitled to assume set out all material facts relevant to the question asked. That he did so is further evidence adduced as to his reasonable grounds for confirming his earlier advised fee. 139 The issue is, based on the entirety of the evidence relevant to the matters relied on by Mr Dixon in calculating the fee, whether I am satisfied first that Mr Dixon relied on this material, and I most certainly am, and secondly whether those facts, at the time of making of each of the representations, were: "sufficient to induce in the mind of a reasonable person a basis for making the representation, which is to be assessed objectively and not merely by reference to the maker's subjective state of mind": Australian Competition and Consumer Commission v ACM Group Ltd (No 2) [2018] FCA 1115 at [173], Griffiths J. 140 Based on my findings as to the matters discussed between Mr Dixon and Mr Wu, the material facts that I have found were known to Mr Wu and which were not disclosed to Mr Dixon, the methodology of the calculation and the formal nature of the request to provide a fee estimate as set out in the memorandum of 1 August 2018 with its attachments, I am satisfied that Mr Dixon has adduced evidence of his reasonable grounds for calculating and providing the fee estimate. And I am further satisfied that the cross-claimants have not discharged the onus of establishing that reasonable grounds did not exist at the relevant times. 141 In reaching that conclusion, I should add that I reject the submission made by Mr Currie to the effect that Mr Dixon is confined by the terms of the pleadings to the two particulars pleaded to paragraph 9 of the second further amended defence to the cross-claim. That submission overlooks where the ultimate onus lies: Mr Dixon does not carry the onus to prove that he had reasonable grounds for making the remuneration representations: s 4(3)(b). Further, no objection was made by Mr Currie to adducing all of the evidence of reasonable grounds relied upon by Mr Dixon and as his obligation was limited to adducing evidence, it was not necessary to plead paragraph 9 in the way that it was. 142 The submissions of Mr Currie proceed only by reference to the contention that Mr Dixon failed to establish reasonable grounds for making the remuneration representations, with the consequence that the deeming effect of s 4 is sufficient to establish misleading or deceptive conduct on the cross-claim. Given my findings, it is not necessary that I decide that point although I observe that there is authority (pursuant to the predecessor provision) to the effect that the phrase "is taken… to be misleading" does not deem a representation as to a future matter to be misleading or deceptive conduct contrary to the statutory mandate.: Wheeler Grace & Pierucci Pty Ltd v Wright (1989) 16 IPR 189 at 205-206, Lee J (Neaves and Burchett JJ not deciding); Australian Competition and Consumer Commission v Henry Kaye and National Investment Institute Pty Ltd [2004] FCA 1363 at [133]-[135], Kenny J. 143 Properly understood, the pleaded case of the cross-claimants is not confined to reliance on the effect of s 4 of the ACL, although the submissions of Mr Currie did not emphasise the distinction that is drawn. The second aspect to the case is that by making the remuneration representations, Mr Dixon engaged in conduct that was misleading or deceptive or likely to mislead or deceive and that "further or alternatively" the remuneration representations were made with respect to a future matter within the meaning of s 4. This invites close attention to all of the conduct of Mr Dixon and to the relevant circumstances viewed objectively as a whole: Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592; [2004] HCA 60 at [109], McHugh J. 144 As Hayne J has explained in Google Inc v Australian Competition and Consumer Commission (2013) 249 CLR 435; [2013] HCA 1 at [92]-[94], one must focus on the conduct that is said to be misleading or deceptive: Much more often than not, the simpler the description of the conduct that is said to be misleading or deceptive or likely to be so, the easier it will be to focus upon whether that conduct has the requisite character It will often be possible to identify the relevant conduct as the making of one or more representations, but it is necessary to bear in mind that s 52 was not confined to the prohibition of misrepresentations. It follows that a claim of contravention of s 52 need not be pleaded or argued by reference to the making of some representation. "It suffices that [the conduct] leads or is likely to lead into error". Melding the two issues of conduct and characterisation is apt to distract and confuse. Especially is that so if the melding is achieved by using the language of misrepresentation to give a single composite description of both the conduct and its character. Describing the alleged misleading or deceptive conduct as "making a misrepresentation" is distracting and confusing for at least three reasons. First, it paraphrases the statutory words in language redolent of a body of legal principle which is not engaged. The dangers of doing that are self-evident. (Footnotes omitted.) 145 In this case it is necessary to distinguish between conduct that is considered at a high level of analysis, such as where it concerns the general public and conduct that is focused upon an individual or an identified small group of individuals. The analysis proceeds in the manner summarised by O'Bryan J in Australian Securities and Investments Commission v Dover Financial Advisers Pty Ltd (2019) 140 ACSR 561; [2019] FCA 1932 at [99]: In assessing whether conduct is likely to mislead or deceive, the courts have distinguished between two broad categories of conduct, being conduct that is directed to the public generally or a section of the public, and conduct that is directed to an identified individual. As explained by the High Court in Campomar, the question whether conduct in the former category is likely to mislead or deceive has to be approached at a level of abstraction, where the Court must consider the likely characteristics of the persons who comprise the relevant class of persons to whom the conduct is directed and consider the likely effect of the conduct on ordinary or reasonable members of the class, disregarding reactions that might be regarded as extreme or fanciful (at [101]-[105]). In Google Inc v ACCC (2013) 249 CLR 435, French CJ and Crennan and Kiefel JJ (as her Honour then was) confirmed that, in assessing the effect of conduct on a class of persons such as consumers who may range from the gullible to the astute, the Court must consider whether the "ordinary" or "reasonable" members of that class would be misled or deceived (at [7]). In the case of conduct directed to an identified individual, it is unnecessary to approach the question at an abstract level; the Court is able to assess whether the conduct is likely to mislead or deceive in light of the objective circumstances, including the known characteristics of the individual concerned. However, in both cases, the relevant question is objective: whether the conduct has a sufficient tendency to induce error. Even in the case of an express representation to an identified individual, it is not necessary (for the purposes of establishing liability) to show that the individual was in fact misled... 146 I do not read the final sentence in that paragraph as displacing the necessity to establish that, objectively assessed, the impugned conduct in this case induced or was capable of inducing error in Mr Wu as this is an essential element to establish liability: see for example Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640; [2013] HCA 54 at [39] and [49], French CJ, Crennan, Bell and Keane JJ. The conduct of Mr Dixon viewed objectively "generally requires consideration of whether the impugned conduct viewed as a whole has a tendency to lead a person into error": Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; [2009] HCA 25 at [25], French CJ. 147 I am not satisfied on the facts that I have found that the remuneration representations, viewed individually on each occasion that they were made, or collectively, were objectively misleading or deceptive in that they did not have a tendency to, nor did they in fact, lead Mr Wu into relevant error: specifically a belief that all of the tasks required to be performed in the administration of VPPL would be within the scope of the advised fee. Mr Wu did not disclose all material facts that were known to him as relevant to the fee assessment when he met with Mr Dixon on 16 April 2018. He did not at any time between that meeting and 24 April 2019 disclose material facts of which he was aware from time to time as relevant to the likely scope of work to be undertaken and relevant to the fee assessment. Some matters were discussed at a meeting between Mr Dixon and representatives of the majority shareholders (at which Mr Wu was not present) on 12 November 2018, however as I have explained, I do not place material weight on this evidence in my overall assessment of all of the evidence. Mr Wu's solicitor was copied into the email from Mr Scott to Mr Dixon of 3 August 2018 which attached a memorandum of 1 August 2018. Mr Wu became aware of the content of that memorandum on or about that day. The disclosure of relevant facts in that memorandum was incomplete, and I find that Mr Wu knew it was incomplete. The extent of the matters relevant to the conduct of the liquidation, and therefore the assessment of the fee, that were not known to Mr Dixon is as set out in his correspondence to the shareholders sent after his appointment on 20 January 2020. In accordance with my earlier findings, I am satisfied that Mr Dixon truthfully summarised the material matters that were not disclosed to him before he advised his fee in April 2018 and confirmed it in August 2018 and April 2019. Each is clearly relevant to scope of the work required to be undertaken and the calculation of his remuneration and estimate of likely disbursements. 148 I find that the matters not disclosed were not only known to Mr Wu, but that he was aware that they were important, which is evidenced by the detailed manner in which Mr Wu addressed the issues in his memorandum prepared on or about 20 January 2020 and which he repeated in his memorandum prepared for the meeting of 10 February 2020. It follows that objectively assessed, in all of the circumstances, the making of the remuneration representations either singularly or collectively throughout the relevant period, was not misleading or deceptive conduct on the part of Mr Dixon for the reason that Mr Wu knew that the fee estimate had been calculated on a limited set of information, he knew that the tasks required to be undertaken by Mr Dixon were materially greater in extent and complexity than he disclosed and that in consequence he was not induced into error in thinking and believing that all of the required tasks were capable of being performed by Mr Dixon at a remuneration fee of no more than $50,000 plus disbursements and GST. 149 For these reasons, the claim for misleading or deceptive conduct fails. 150 Separately, there is the unconscionable conduct claim pursuant to s 21 of the ACL. The amended statement of cross-claim pleads the claim as follows: 21. Further or alternatively, when making the Remuneration Representations on 24 April 2019, Dixon was aware that Wu and Austhome: (a) were engaged in litigation with the Majority Shareholders regarding (among other things) the management of VPPL (Shareholder Dispute); (b) were in negotiations with the Majority Shareholders regarding the potential resolution of the Shareholder Dispute; (c) were considering the appointment of Dixon as liquidator of VPPL as part of a potential resolution to the Shareholder Dispute; (d) would rely upon the Remuneration Representations in negotiating and settling the Shareholder Dispute. 22. Dixon's conduct as pleaded in paragraphs 5 and 6 above was conduct engaged in by Dixon in trade or commerce in connection with the supply or possible supply of services to Wu, Austhome and/or VPPL within the meaning of section 21 of the Australian Consumer Law. 23. By reason of the matters pleaded in paragraphs 21 and 22 above, Dixon's conduct as pleaded in paragraph 6 above was unconscionable within the meaning of section 21 of the Australian Consumer Law. 24. By reason of the matters pleaded in paragraph 20 above, Dixon contravened section 21 of the Australian Consumer Law (Dixon Unconscionable Conduct Contravention). 151 It is to be noticed that this claim turns only upon the representations made by Mr Dixon on 24 April 2019 and the knowledge attributed to him at that time. The defence to this aspect of the cross-claim consists of a series of denials and repetition of the contentions that Mr Dixon made the remuneration representations in reliance upon the information provided by Mr Wu and the consequences which flow therefrom. 152 Section 21 of the ACL provides: Unconscionable conduct in connection with goods or services (1) A person must not, in trade or commerce, in connection with: (a) the supply or possible supply of goods or services to a person; or (b) the acquisition or possible acquisition of goods or services from a person; engage in conduct that is, in all the circumstances, unconscionable. (2) This section does not apply to conduct that is engaged in only because the person engaging in the conduct: (a) institutes legal proceedings in relation to the supply or possible supply, or in relation to the acquisition or possible acquisition; or (b) refers to arbitration a dispute or claim in relation to the supply or possible supply, or in relation to the acquisition or possible acquisition. (3) For the purpose of determining whether a person has contravened subsection (1): (a) the court must not have regard to any circumstances that were not reasonably foreseeable at the time of the alleged contravention; and (b) the court may have regard to conduct engaged in, or circumstances existing, before the commencement of this section. (4) It is the intention of the Parliament that: (a) this section is not limited by the unwritten law relating to unconscionable conduct; and (b) this section is capable of applying to a system of conduct or pattern of behaviour, whether or not a particular individual is identified as having been disadvantaged by the conduct or behaviour; and (c) in considering whether conduct to which a contract relates is unconscionable, a court's consideration of the contract may include consideration of: (i) the terms of the contract; and (ii) the manner in which and the extent to which the contract is carried out; and is not limited to consideration of the circumstances relating to formation of the contract. 153 Although it is not admitted that the conduct of Mr Dixon was in connection with the supply or possible supply of services, clearly it was: the prospective professional services of Mr Dixon and his firm in the conduct of a contemplated liquidation. The statutory concept of unconscionable conduct within the meaning of s 21 is not, unlike s 20, limited to the unwritten law: Australian Competition and Consumer Commission v Quantum Housing Group Pty Ltd (2021) 285 FCR 133; [2021] FCAFC 40 at [78]-[79] and [83], Allsop CJ, Besanko and McKerracher JJ. Consideration of this claim requires analysis of all of the relevant connected circumstances and is evaluative. As Allsop CJ has recently explained in Good Living Company Pty Ltd v Kingsmede Pty Ltd (2021) 284 FCR 424; [2021] FCAFC 33, the "technique of equity" is employed, and it is not necessary to identify a pre-existing disability or vulnerability that is exploited: [2] and [7]. At [6], his Honour repeated the reasoning of the Full Court in Unique International College Pty Ltd v Australian Competition and Consumer Commission (2018) 266 FCR 631; [2018] FCAFC 155 (Unique International) at [155] where he, Middleton and Mortimer JJ said: …To behave unconscionably should be seen, as part of its essential conception, as serious, often involving dishonesty, predation, exploitation, sharp practice, unfairness of a significant order, a lack of good faith, or the exercise of economic power in a way worthy of criticism. None of these terms is definitional. The Shorter Oxford Dictionary on Historical Principles (1973) gives various definitions including "having no conscience, irreconcilable with what is right or reasonable". The Macquarie Dictionary (1985) gives the definition "unreasonably excessive; not in accordance with what is just or reasonable". (The search for an easy aphorism to substitute for the words chosen by Parliament (unconscionable conduct) should not, however, be encouraged: see Paciocco at 266 [262]). These are descriptions and expressions of the kinds of behaviour that, viewed in all the circumstances, may lead to an articulated evaluation (and criticism) of unconscionability. It is a serious conclusion to be drawn about the conduct of a businessperson or enterprise. It is a conclusion that does the subject of the evaluation no credit. This is because he, she or it has, in a human sense, acted against conscience. The level of seriousness and the gravity of the matters alleged will depend on the circumstances. Courts are generally aware of the character of a finding of unconscionable conduct and take that into account in determining whether an applicant has discharged its civil burden of proof. We see no reason to doubt the primary judge was conscious of this: so much is apparent from some of the passages in his Honour's reasons to which we have earlier referred. We reject Unique's invitation to make some broader statement of principle about Briginshaw in the context of alleged contraventions of s 21… 154 Mr Currie submits that a consideration of all of the relevant circumstances requires the conclusion that the conduct of Mr Dixon on 24 April 2019 "offended or was against the norms of acceptable commercial behaviour" so as to justify the label of unconscionable conduct within the meaning of the statutory provision. He emphasises three particular matters. First, that Mr Dixon knew that Mr Wu and Austhome would rely upon his representations in negotiating and resolving the various disputes with the majority shareholders. In evidence Mr Dixon denied this. When questioned about this evidence in cross-examination, Mr Dixon accepted that he knew that the parties were involved in litigation, but qualified this answer by observing that his understanding was that the deed of settlement as then disclosed to him would "settle everything". When pressed further, he accepted that he knew Mr Wu and Austhome were in negotiations with the majority shareholders to potentially resolve their disputes. He accepted that he knew that a component of the proposed resolution was that the members would resolve to wind up VPPL, and thereupon that he would most likely be appointed as the liquidator. He emphatically denied the direct proposition, put in the form of a question that he was aware on 24 April 2019 that Mr Wu and Austhome would rely upon his representations in negotiating and settling the shareholder dispute, answering: "No. No one told me that". I do not accept that evidence. It is certainly the case that Mr Dixon was not informed about the intention of the parties to include a liquidation Costs Cap in their settlement agreement and nor was he informed about the indemnity required of Mr Wu and Austhome in the event that the cap was exceeded. These matters were not expressed in the earlier deed of settlement attached to the memorandum of 1 August 2018 and there is no suggestion that Mr Wu disclosed these facts to Mr Dixon subsequently. 155 However, it is clearly the case that Mr Dixon was aware that Mr Wu made contact with him on 24 April 2019 during the course of a mediation with the majority shareholders and about their disputes. It follows that Mr Dixon was aware that it was at least likely that his response to Mr Wu would be relied upon in the context of negotiating a settlement of those disputes. 156 When I raised these matters with Ms Pierce during her closing address, she accepted that her strongest submission on this point is that I should find that Mr Dixon did not know that Mr Wu intended to bind himself and Austhome "to a fairly open-ended indemnity". Conformably with my reasoning, I so find. But that does not result in rejection of the more general reliance proposition in support of the claim of unconscionable conduct. 157 Secondly, Mr Currie submits that the failure of Mr Dixon to follow the guidance contained in the Code is supportive of a conclusion of unconscionable conduct. I have found that non-compliance with the guide to good practice as relevantly set out in the Code does not undermine the basis on which Mr Dixon calculated his likely fee and disbursements and more so, does not affect the conclusion that he had a reasonable basis for doing so on 16 April 2018 and, as relevant to this claim, 24 April 2019. This is not a negligence case where the issue is whether Mr Dixon failed to exercise a reasonable degree of skill, care or competence in the way in which he calculated the fee. I accept the submission of Mr Currie that this case is not assisted by drawing fine distinctions between the concepts of fixing and capping fees. The text message that Mr Dixon sent to Mr Wu on 24 April 2019 employs direct language: "I will fix this at this sum" and the subsequent email confirms: "I am willing to limit my professional costs". When cross-examined on this topic, Mr Dixon accepted that "a prudent and responsible insolvency practitioner", if requested to give an estimate of fees, would first need to be satisfied that he or she "had all of the relevant information". In retrospect, what is clear in this case is that Mr Dixon did not have all of the information relevant to the scope of the work that was likely to be required upon his appointment as liquidator for the reason that Mr Wu did not make full disclosure of all material matters that were known to him. The analysis is not, however, retrospective. 158 It must not be overlooked that this claim is limited to the written representations made by text message and email sent and received between Mr Dixon and Mr Wu on 24 April 2019. The primary source of relevant information that Mr Dixon relied upon remained the memorandum of 1 August 2018. Mr Dixon gave evidence that he then believed that the scope of the required work was as stated in that memorandum. He received no information to the contrary between 1 August 2018 and 24 April 2019. In the particular circumstances of this case, any failure by Mr Dixon to apply the good practice guidelines of the Code is not evidence from which one may find that he acted unconscionably. 159 The third matter relied upon is advice from Mr Dixon to Mr Wu at a meeting on 21 January 2020 at which Mr Wu gave evidence that Mr Dixon said words to the effect that he would not resign as liquidator but "he would find a way to deal with the liquidation costs so I would not have to carry the cost of the indemnity". Mr Dixon does not deny this though he does deny that he was requested to resign. Mr Wu emphasised this conversation several times in cross-examination and was not directly challenged on it, save for the resignation request, which he adamantly maintained. This is certainly evidence that Mr Dixon, after the event, felt at least a degree of sympathy for the position in which Mr Wu had found himself. However, this hindsight reflection of Mr Dixon is not evidence that in the circumstances as they were known to him on 24 April 2019, his conduct was contrary to standards of what was right or reasonable so as to be unconscionable. 160 This claim and the submissions in support of it must be considered in the light of my findings that Mr Wu did not disclose material matters that were known to him as relevant to the fee assessment, the memorandum of 1 August 2018 did not disclose all relevant facts and Mr Dixon, in consequence, calculated and estimated his professional fee and likely disbursements based on his overall understanding that the matters in dispute between the shareholders would be resolved by a deed of settlement and that his task, if appointed as liquidator, would be relatively straightforward. Understood in this way, I am not satisfied that the cross-claimants have established to the civil standard that the conduct of Mr Dixon was unconscionable as a serious departure from acceptable standards of commercial behaviour, and it most certainly does not attract any of the characterisations exampled in Unique International at [155]. Accordingly, this claim fails. 161 For these reasons, the cross-claim must be dismissed. Conclusion and orders 162 On Mr Dixon's application for judicial advice, the appropriate remedy is a declaration as to the proper meaning of the phrase "the costs of the liquidation" pursuant to the Deed. Thereafter, as foreshadowed in closing submissions, it would seem appropriate to make further orders appointing a registrar of this Court to act as a referee to inquire and report as to which particular claims for remuneration and disbursements are costs of the liquidation within the meaning of the Deed and which are not. The parties should have an opportunity, upon considering these reasons, to make further submissions as to the form of those orders together with any consequential orders, including as to costs. The cross-claim should be dismissed. 163 Accordingly, I declare and order as follows: 1. Upon a proper construction of the deed of settlement and release dated 29 August 2019 made between: (a) Victoria Project Pty Ltd (ACN 142 329 155); (b) Xin Zhang; (c) Xue Bin Wu; (d) Wei Jing Lin; (e) Fei Wen; (f) Yu Zheng; (g) Austhome Group Pty Ltd (ACN 091 589 089); (h) Rising Fortune Pty Ltd (ACN 141 982 738); (i) Jia Wen Su; (j) Ling & Yu Pty Ltd (ACN 126 062 833); (k) Australia Morning Pty Ltd (ACN 126 644 086)); (l) Winston & Glen Zheng Pty Ltd (ACN 141 136 656); and (m) Jia Feng Pty Ltd (ACN 148 196 196); the costs of the liquidation of Victoria Project Pty Ltd (the company) at clauses 2(j), (k) and (l) is limited to the remuneration, costs and expenses of the liquidator and the costs of any third party engaged by the liquidator whether for or on behalf of the company or in his capacity as liquidator incurred in consequence of the appointment of Mr Stephen Robert Dixon as liquidator of the company on 23 October 2019 and does not include expenses, costs or other liabilities that the company would have incurred in any event in the conduct of its business as a property developer and landlord if a liquidator not been appointed even where such expenses are incurred during the period of the liquidation. 2. The cross-claim is dismissed. 3. The matter is adjourned for further submissions or hearing, if necessary, of all questions of consequential orders and relief, including costs. 4. The parties have leave to file submissions limited to 3 pages as to consequential orders and relief, including costs, by 4pm on 15 February 2023. 5. Subject to any further order of the Court, the determination of all consequential orders will proceed on the papers. I certify that the preceding one hundred and sixty-three (163) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice McElwaine. Associate: Dated: 1 February 2023 SCHEDULE OF PARTIES VID 105 of 2021 Defendants Fourth Defendant: RISING FORTUNE PTY LTD (ACN 141 982 738) Fifth Defendant: JIA WEN SU Sixth Defendant: AUSTRALIA MORNING PTY LTD (ACN 126 644 086) Seventh Defendant: JIA FENG PTY LTD (ACN 148 196 196) Eighth Defendant: WINSTON & GLEN ZHANG PTY LTD (ACN 141 136 656) Cross-Claimants Second Cross-Claimant: AUSTHOME GROUP PTY LTD (ACN 091 589 089) Cross-Defendants Second Cross-Defendant HAMILTON MURPHY ADVISORY PTY LTD