Supreme Court New South Wales Medium Neutral Citation: McMillan v Coolah Home Base [2020] NSWSC 935 Hearing dates: 3 and 10 July 2020 Date of orders: 23 July 2020 Decision date: 23 July 2020 Jurisdiction: Equity Before: Ward CJ in Eq Decision: 1. Strike out the amended statement of claim as against the fifth and sixth defendants. 2. Direct the plaintiffs to serve on the parties by no later than 13 August 2020 any further amended statement of claim on which they seek to rely as against the fifth and sixth defendants. 3. Note that the liberty to serve the further amended statement of claim referred to in Order 2, as against the fifth and sixth defendants, does not extend to: (a) any claim of a contravention by the fifth and sixth defendants of s 420A of the Corporations Act 2001 (Cth); and (b) any claim of contravention(s) by the fifth and sixth defendants of the company constitution of the first defendant. 4. Order that, failing consent of the fifth and sixth defendants by 20 August 2020 to the filing of the proposed further amended pleading served pursuant to Order 2, direct the plaintiffs to file and serve on or before 3 September 2020 a notice of motion and affidavit in support seeking leave further to amend their pleading, such motion to be returnable before me for directions at 8.30am on 8 September 2020. 5. Reserve costs of the fifth and sixth defendants' notice of motion. 6. List the matter generally for directions at 8.30am on 8 September 2020. 7. Liberty to apply on three days' notice. Catchwords: CIVIL PROCEDURE — Pleadings — Form and content of pleading — Defects — Striking out — Whether no reasonable cause of action or defence CIVIL PROCEDURE — Summary disposal — Dismissal of proceedings — Whether no reasonable cause of action disclosed Legislation Cited: Australian Securities and Investments Commission Act 2001 (Cth), ss 12CB, 12DA, 12FG, 12GM Civil Procedure Act 2005 (NSW), s 56(1) Competition and Consumer Act 2010 (Cth), Sch 2, ss 4, 18, 21, 30, 50, 236, 237 Corporations Act 2001 (Cth), ss 180, 181, 182, 183, 232, 236, 247A, 420A, 438D, 442C(1)(b), 444G, 1041H, 1324, Pts 5.2, 5.3A, 9.5, Sch 2 s 90-15 Uniform Civil Procedure Rules 2005 (NSW), rr 13.4, 14.28 Cases Cited: Agar v Hyde (2000) 201 CLR 552; [2000] HCA 41 Barnes v Addy (1874) LR 9 Ch App 244 Baumgartner v Baumgartner (1987) 164 CLR 137; [1987] HCA 59 Brand v Monks [2009] NSWSC 1454 Brunninghausen v Glavanics (1999) 46 NSWLR 538; [1999] NSWCA 199 Burbank Trading Pty Ltd v Allmere Pty Ltd (2009) 22 VR 633; [2009] VSCA 82 Consolaro v Consolaro [2009] WASC 240 Cox v Journeaux (No 2) (1935) 52 CLR 713; [1935] HCA 48 Crawley v Short [2009] NSWCA 410 Dougall v Melville [2017] NSWCA 309 Energy & Resource Conservation Co Ltd (in liq) v Abigroup Contractors Pty Ltd (1997) 41 NSWLR 169 Expo International Pty Ltd (in liq) v Chant [1979] 2 NSWLR 820 Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22 General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125; [1964] HCA 69 Gissing v Gissing [1971] AC 886; [1970] 2 All ER 780 Giumelli v Giumelli (1999) 196 CLR 101; [1999] HCA 10 Harris v Harris [2020] VSC 256 Hausmann v Smith [2006] NSWSC 682; (2006) 24 ACLC 688 Hospital Products Ltd v United States Surgical Corp (1984) 156 CLR 41; [1984] HCA 64 In re Charnley Davies Ltd (No 2) [1990] BCLC 760; [1990] BCC 605 MYT Engineering Pty Ltd v Mulcon Pty Ltd (1999) 195 CLR 636; [1999] HCA 24 O'Brien v Bank of Western Australia Ltd [2013] NSWCA 71 Re Australasian Barrister Chambers Pty Ltd (In Liq) [2017] NSWSC 597 Re Colorado Products Pty Ltd (in prov liq) [2013] NSWSC 1613 Re Smith in his capacity as administrator of Berowra RSL Bowling and Community Club Ltd [2006] NSWSC 780; (2006) 58 ACSR 410 Re Spargold Enterprises Pty Ltd; Ex parte McDonald [1999] NSWSC 623; (1999) 32 ACSR 363 Shalhoub Holdings Pty Ltd v Commonwealth Bank of Australia [2006] NSWSC 607 Shaw v New South Wales [2012] NSWCA 102; (2012) 219 IR 87 Smith v Australian Executor Trustees Ltd [2017] NSWSC 1406 Spencer v Commonwealth (2010) 241 CLR 118; [2010] HCA 28 THC Holding Pty Ltd v CMA Recycling Pty Ltd [2014] NSWSC 1136; (2014) 101 ACSR 202 The Owners - Strata Plan No 1731 v Bailey [2014] NSWSC 875 Tittman v Traill (1957) 74 WN (NSW) 284 Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387; [1988] HCA 7 Wickstead v Browne (1992) 30 NSWLR 1; [1992] NSWCA 272 Wilson v Meudon Pty Ltd [2005] NSWCA 448 Category: Procedural and other rulings Parties: Cameron Hamish Gray (First Applicant) Ronald Dean-Willcocks (Second Applicant) Geoffrey Ian McMillan (First Respondent) David Arthur Darch (Second Respondent) Helen Dawn Waugh (Third Respondent) Margaret Joy Vale (Fourth Respondent) Jill Cook (Fifth Respondent) Lee Marilyn Tait (Sixth Respondent) Representation: Counsel: D Krochmalik (Applicants/Fifth and Sixth Defendants) P King (Respondents/Plaintiffs) Solicitors: Brown Wright Stein Lawyers (Applicants/Fifth and Sixth Defendants) People's Solicitors (Respondents/Plaintiffs) File Number(s): 2020/00044327 Publication restriction: Nil Judgment 1. HER HONOUR: By notice of motion filed on 11 June 2020, the fifth and sixth defendants to these proceedings (the Deed Administrators and the first and second applicants on this motion) seek orders pursuant to r 13.4(1)(b) of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) for the summary dismissal of the proceedings as against them or, in the alternative, pursuant to r 14.28(1)(a) of the UCPR for the amended statement of claim to be struck out as against them (with no leave to re-plead any claim against them) on the basis that the pleading discloses no tenable cause of action against them. 2. There was a further issue raised by the notice of motion (namely, an application by the Deed Administrators to set aside a notice to produce dated 26 May 2020 which had been served on them by the plaintiffs' solicitors on 27 May 2020). However, the plaintiffs did not press for production under that notice to produce and so that aspect of the dispute was not agitated before me. 3. For the reasons set out below, I consider that the pleading as against the Deed Administrators should be struck out but that the plaintiffs should have an opportunity to rectify the deficiencies in their pleading against the Deed Administrators. I will make directions to provide that opportunity. 4. However, as also set out below, I accept that several of the pleaded causes of action are untenable against the Deed Administrators in that capacity or as the former voluntary administrators of the first defendant and, accordingly, that leave should not be given to re-plead those claims. The parties 1. The plaintiffs (the respondents to the present application) are some of the Class A shareholders of the first defendant, Coolah Home Base Pty Ltd (subject to deed of company arrangement) (CHB). CHB is the former owner of land at Coolah (the Coolah Land) on which a caravan park is operated (both as a retirement village for retirees and as a tourist caravan park). Each of the plaintiffs, many if not all of whom are retirees (referred to by their Counsel as "grey nomads") acquired from CHB at various times an "allotment" (defined in the constitution of CHB as the "portion of land, including and [sic] buildings constructed thereon…" corresponding to his or her share entitlement) and a share in the company, CHB. On some of the allotments, there was a cabin already constructed and the plaintiff acquiring that allotment also acquired the cabin there situated. On other allotments, the plaintiff acquiring that allotment entered into an agreement with a company related to CHB for the construction (at the plaintiff's cost) of a cabin on the allotment. 2. The Deed Administrators maintain that what the plaintiffs acquired, relevantly, was the right to occupy a portion of the Coolah Land (the allotment) under an arrangement akin to that of company title (consistent, I might add, with the way in which the "CHB Dream" was explained in at least some of the very promotional material on which the plaintiffs here rely – see, for example, the "CHB Dream" flyer (Ex B p 11)). 3. Meanwhile, the plaintiffs maintain that they acquired more than an exclusive right of occupation of their "allotments" and that they in fact acquired an equitable interest in a portion of the Coolah Land (corresponding to the area of their particular allotment). Therein lies the nub of the dispute between the parties, though the dispute is by no means so limited. 4. The second defendant is Coolah Tourist Park Pty Ltd (CTP), the current owner of the Coolah Land, which acquired its interest in the Coolah Land in the circumstances set out below. 5. The third and fourth defendants, Mr Graeme Booker and Ms Janet Kelly (the Directors) are the directors of both CHB and CTP. 6. The fifth and sixth defendants (it will be recalled, the Deed Administrators) are the former voluntary administrators of CHB who became the administrators of a deed of company arrangement executed by CHB on 27 November 2019 (the DOCA). 7. Finally, the seventh defendant, Home Base Solutions Pty Ltd (Home Base Solutions), is the entity which managed the caravan park. Background 1. The background to the present application (based on the material before me and without making any findings as to disputed questions of fact) is briefly as follows. 2. In 2012, the Directors formed CHB, which acquired the Coolah Land on which they operated a retirement village (called Coolah Home Base) and a tourist caravan park business (called Coolah Caravan Park). The Directors were also the managers of CHB. The occupants of the retirement village paid site fees (initially $50 per week) to cover outgoings and wages. CHB was described in the promotional material as a not-for-profit organisation. 3. In April 2014, the Directors issued 22 additional shares in CHB and acquired those shares themselves (thus gaining majority control of CHB). The plaintiffs contend that the additional shares were acquired at less than the value of the allotments; and complain that there was no general meeting of CHB to approve the share issue or allotment sales. 4. A dispute arose amongst the shareholders as to the Directors' accounting for the site fees (by 2016, those being $65 per week, which it is said was far more than the outgoings). 5. In 2018, two of the shareholders (Mr Darch and Mr McMillan, each of whom is a party to the present proceedings) brought an application pursuant to s 247A of the Corporations Act 2001 (Cth) (Corporations Act) for access to the books of CHB. 6. That application was heard on 13 and 14 August 2019 by Black J, when the matter was stood over for written final submissions. 7. On 21 August 2019, before judgment was delivered on the reserved s 247A application, the Directors resolved (apparently without notice to the other shareholders) to appoint the Deed Administrators as the voluntary administrators of CHB. 8. Following the appointment of the Deed Administrators as voluntary administrators of CHB, a valuation was obtained of the Coolah Land. It was prepared for the stated purpose of "disposal purposes only". The valuation dated 29 August 2019 noted that the interest being valued was the unencumbered estate in fee simple in vacant possession (excluding the added value of, inter alia, any business, cabins, shareholders' rights to occupy property, and their moveable dwellings, and any management agreement between CHB and Home Base Solutions). On that basis, the property was valued at market value "as is" at $330,000 excluding GST. I interpose to note that another (earlier) valuation as at 25 January 2017 for first mortgage security purposes valued the land at $130,000 and the buildings (not including cabins or moveable dwellings) at $300,000 (i.e., $430,000 excluding GST, in all.) 9. The plaintiffs emphasise that in the Deed Administrators' report to creditors the assets of CHB, which comprised essentially the land, were valued at a much higher amount. The Deed Administrators say this was based on the value recorded in the books of the company. 10. On 16 September 2019, the Deed Administrators (then in their capacity as voluntary administrators of CHB) issued an interim report to creditors, Administrators' Report and Statement of Opinion to Creditors (the September 2019 Interim Report to Creditors). A meeting of creditors was convened on 25 September 2019. 11. The Deed Administrators say that, during the course of the voluntary administration of CHB, they (as voluntary administrators) regularly communicated with creditors and shareholders of CHB (including the plaintiffs, who as noted are some but not all of the Class A shareholders of the company). 12. As adverted to above, during the course of the administration, a deed of company arrangement was proposed by the Directors (referred to above as the DOCA), which proposal provided, inter alia, for: the sale of the Coolah Land and for the net proceeds of sale to form part of the fund that was to be distributed in accordance with the terms of the DOCA; control of CHB to remain with the Deed Administrators until completion of the sale of the Coolah Land; and control of CHB to revert to the Directors upon completion of the sale of the Coolah Land. The 25 September 2019 creditors' meeting was adjourned to enable the Deed Administrators to receive and consider a final form of the DOCA proposal from the Directors. 13. By letter dated 14 November 2019, the Deed Administrators (still, I note, in their then capacity as voluntary administrators) notified shareholders that they proposed to recommend execution of the DOCA and advised shareholders, inter alia, that it would be up to individual shareholders and the purchaser under the sale contract (CTP) to make arrangements as to the continued occupation of shareholder cabins on the Coolah Land. 14. At the second creditors' meeting of CHB held on 27 November 2019, the creditors of CHB resolved that CHB should enter into the proposed DOCA and, following that meeting, the DOCA was executed and the Deed Administrators became the administrators of the DOCA (at risk of belabouring the obvious, their actions prior to that time were as voluntary administrators, not deed administrators). 15. On 27 November 2019, a contract for the sale of the Coolah Land (the Sale Contract) was executed by the Deed Administrators on behalf of CHB (as vendor) with CTP (as purchaser) for the purchase price of $430,000 plus GST. The Sale Contract specified that the sale was subject to existing tenancies. The Sale Contract contained an acknowledgment by CHB as to the express exclusion from the sale of the "Shareholder Improvements" (see cl 51.3) and that, in accordance with the Vendor's constitution, shareholders have exclusive use of a portion of the property (see cl 51.2). 16. On 17 December 2019, completion of the sale of the Coolah Land occurred. The Deed Administrators received the proceeds of the sale (after payment of sale costs and the amount necessary to repay to the registered mortgagee and secured creditor of CHB) which formed part of the funds available to be distributed in accordance with the DOCA. In accordance with the DOCA, control of CHB then reverted to the Directors (who the Deed Administrators point out have thereafter remained in control and stewardship of CHB). 17. The Deed Administrators say that it is not in dispute that they did not cause CHB to sell or interfere with the plaintiffs' personalty or chattels. They point out that the terms of the Sale Contract made clear that any improvements that were situated on the Coolah Land (such as caravans or other transportable chattels of the plaintiffs) were not sold or transferred to CTP (see cl 51, to which I have already referred). 18. After completion of the sale, the residents were informed in December 2019 by the Directors that the "old" site agreement between CHB and the shareholders was "void" and that residents were required to enter into a new site arrangement (at $185 per week). The plaintiffs say that the Directors now claim that they own the plaintiffs' houses because they are fixtures to the Coolah Land, which they now own through their new company (it will be recalled, CTP). 19. In February 2020, the plaintiffs commenced the present proceedings. Since then, there have been several interlocutory stoushes involving various of the parties. In particular, the plaintiffs point to the consideration by Emmett AJA of the pleading on complaints raised by others of the defendants and the consideration of the matter by Rein J in the context of an application for injunctive relief. However, as noted by the Deed Administrators, those applications did not involve the Deed Administrators (and there can be no issue estoppel against the Deed Administrators as a result of any findings made on those applications). 20. As adverted to above, the plaintiffs contend that they have an equitable interest in the Coolah Land on which the caravan park is situated. They allege that a series of misrepresentations were made by CHB and the Directors as to their interest in the Coolah Land; and they accuse the Directors, inter alia, of fraud and unconscionable conduct. 21. In their pleading, the plaintiffs also allege against the Deed Administrators that: the Deed Administrators breached their fiduciary duties "as trustees" (see [11] of the amended statement of claim); the Deed Administrators contravened s 442C(1)(b) of the Corporations Act by virtue of their involvement in the sale of the Coolah Land (see [12] of the amended statement of claim); and the Deed Administrators managed CHB's affairs in a way that is prejudicial to the interests of the members and inconsistent with s 420A of the Corporations Act (see [14] of the amended statement of claim). Furthermore, although the Deed Administrators say that the balance of the allegations such as unconscionable conduct (see [35]ff of the amended statement of claim) are not made against the Deed Administrators, this appears to be disputed by the plaintiffs, as I explain shortly. 22. For presently relevant purposes, the complaint by the Deed Administrators is that the plaintiffs' pleaded claim against them (to which they have admittedly been able to file a defence) makes a "series of broad, rolled up and unsupported allegations" that the Deed Administrators, in their capacity as administrators of CHB, breached various duties. It is said that the gravamen of the plaintiffs' complaint is that their right to occupy the Coolah Land on the terms that operated hitherto came to an end upon the administration of the CHB and that the subsequent sale of the Coolah Land to CTP led to a change in the conditions of the plaintiffs' occupation (such as higher site fees). The Deed Administrators say that none of those matters provides the plaintiffs with any reasonably arguable claim against them. 23. It is convenient at this point to turn to the relief sought in the amended statement of claim. Relief sought by plaintiffs 1. The relief claimed in the amended statement of claim is, relevantly, as follows: 1. Declaration that all steps taken by the Defendants to terminate the residential site agreements between each Plaintiff and the First Defendant and/or to evict or dispossess the Plaintiffs are void and of no effect and unlawful. 2. Declaration that the first defendant repudiated the residential site agreements between each Plaintiff and the First Defendant. 3. Declaration that the third and fourth defendants induced the first defendant to breach the residential site agreements between each Plaintiff and the First Defendant. 4. Declaration that the First and/or Second Defendants held or hold 38 Cunningham Street Coolah contained in Folio Identifier 130 and 131 DP728787 ("the Land") on trust with respect to Allotments granted to the Plaintiffs under the sale and purchase agreements with the First Defendant or otherwise. 5. Order restraining the Defendants and each of them by their servants or agents or otherwise from interfering with the quiet enjoyment of the Plaintiffs and each of them in and with respect to the Allotments including their cabins on the Land. 6. Declaration that the Defendants have contravened ss 4,18 and 21, 30, 50 and 152 Australian Consumer Law, Divn. 2 of Part 2 of the Australian Securities and Investments Commission Act 2001 ("ASIC Act") and/or s 1041H Corporations Act 2001 (Cth) ("CA") by misrepresenting the nature and effect of the Plaintiffs' interest in the First Defendant and/or in the Land and/or in abusing their position as directors and managers and/or in acting unconscionably in relation to the sale of the Land including the Plaintiffs' interests therein. 7. Declaration that the First, Third and Fourth Defendants have contravened CA s 232 by abusing their position as directors and managers of the First Defendant and otherwise, such conduct being contrary to the interests of the members as a whole or oppressive to, unfairly prejudicial to, or unfairly discriminatory against the plaintiffs. 8. Orders pursuant to Corporations Act 2001 section 233: (a) restraining the Third and Fourth Defendants from being directors of the First Defendant; (b) cancelling or surrendering the allocation or issue of shares registered by ASIC document No 7E5981013; (c) such further or other orders as to the Court sees fit. 9. Declaration that the Fifth and Sixth Defendants contravened CA s 442C by wrongfully disposing of the Land which was equitably owned as to part being their individual allotments and their shares in the First Defendant and held in trust by the First Defendant for the Plaintiffs being property that is used or occupied by or is in the possession of the company being the First Defendant but of which someone else is the owner. 10. Declaration that the agreement for sale of the Land dated 27 November 2019 between the First and Second Defendants is void ab initio and of no effect and an order that the First Defendant transfer all of its right, title and interest in the portion of the Land which is not common property to the shareholders of the First Defendant as tenants in common. Or, in the alternative: Order that the First and Second Defendants transfer all of their right, title and Interest in the portion of the Land which is not common property to the shareholders of the First Defendant as tenants in common and transfer the said land and control to the First Defendant or hold same in trust for the Plaintiffs. 11. Order pursuant to sections 233 or 1324 Corporations Act 2001 that the directors of the First and/or Second Defendant be replaced by three directors elected by members. 12. An order pursuant to Schedule 2 to the Corporations Act 2001 (Cth) s 90-15 that the Fifth and Sixth Defendants pay compensation to the Plaintiffs in respect of the loss and damage suffered by them as a result of the said Defendants as administrators of the First Defendant managing the First Defendant in a way that is prejudicial to the interests of its members, in particular the Plaintiffs, or have done an act or made on omission that is or would be prejudicial to such interests. 13. Orders pursuant to CA section 1324 and/or Part 5.2 having the effect of putting the Plaintiffs back into the position they would be in but for the misconduct of the Defendants and each of them their servants or agents. 14. Order for compensation and/or damages against the Defendants and each of them their servants or agents pursuant to Australian Consumer Law Part 5-2, ASIC Act Part 2 Divn. 2, and/or CA Part 9.5, damages for breach of contract and in tort, and/or equitable compensation. 15. Declaration that the shareholders' homes situated on the Land are not, for any purpose, to be regarded as a fixture, regardless of the manner in which it is attached to the land. 16. To the extent necessary grant leave to the plaintiffs and each of them to seek the relief herein under Corporations Act 2001. … [sic] 1. It is convenient next to outline to the basis on which the above relief is sought. The pleading 1. The pleaded claims (and the particulars thereto), relevantly, is set out in the amended statement of claim as follows: … 5. The Plaintiffs entered into agreements which by their terms provided that for payment of consideration they purchased allotments of land at premises known as Coolah Home Base and one A class share in the First Defendant; … 6. The allotments purchased by the Plaintiffs were not transferred to the Plaintiffs in the circumstances but in circumstances where their equitable interests in the land arising by reason of the foregoing including any statutory rights under Retirement Villages Act 1999 are held in trust by the First Defendant. 7. In the circumstances, the Court should make the declaration (4) of the relief claimed; SALE OF PROPERTY HELD IN TRUST 8. On or about the 17th December 2019 the First Defendant sold the Land to the Second Defendant; … 9. By this sale, the First Defendant sold the Plaintiffs' interest in the land which they held in trust, in breach of their fiduciary duties as trustees. PARTICULARS I The First Defendant by its Directors the Third and Fourth Defendants was aware of the interests of the Plaintiffs and each of them at the time of transfer and receipt by them of the Plaintiffs' property: II The First Defendant transferred the land to the Second Defendant owned and controlled by the Third and Fourth Defendants with the purpose of defeating the equitable rights and interests of the Plaintiffs and their statutory rights under Retirement Villages Act 1999 [NSW] to advantage the Second to Fourth Defendants at the expense of the Plaintiffs. 10. As parties to the Deed of Company Arrangement and as Directors of the vendor (the First Defendant) and as Directors of the Purchaser (the Second Defendant) the First, Third and Fourth Defendants have breached their fiduciary duties as trustees. Particulars I. The Plaintiffs repeat the particulars in paragraph 9 11. As parties to the Deed of Company Arrangement (DOCA) the Fifth and Sixth Defendants have breached their fiduciary duties as trustees. Particulars I. At the time of entering into the DOCA and/or the transfer of the Land the Fifth and Sixth Defendants were aware of the facts set out in paragraphs (5), (6) and (8) herein; 12. By their involvement with the sale of property held in trust by the First Defendant, the Fifth and Sixth Defendants have breached CA s 442C(1)(b); PARTICULARS I. By letter of 27th December 2019 from the Plaintiffs' solicitors, the Fifth and Sixth Defendants were put on notice that the members of the First Defendant ("Members") have an interest in the Land; II. If the Fifth and Sixth Defendants did not have actual knowledge of the members' interest in the Land, they had constructive knowledge and should at least have made such inquiries as an honest and reasonable person would make and the circumstances would have put an honest and reasonable person on Inquiry; 13. In the circumstances, the Court should make order (9), (10) and (12) of the relief claimed. CONDUCT OF THE ADMINISTRATION 14. The Fifth and Sixth Defendants managed the company's affairs in a way that is prejudicial to the interests of members and CA s 420A which requires the controller to ensure property is not sold for less than market value: PARTICULARS I. By their involvement with the sale of property equitably owned in part by Members and held in trust by the First, Third and Fourth Defendants; II. By accepting that the First Defendant was insolvent and proceeding with a Deed of Company Arrangement in circumstances where the company was awaiting the outcome of a s 247A application against it. Members were unfairly disadvantaged by the lack of information about their company's financial position, being denied information required to know whether the company was in fact insolvent, whether the company owed them money (e.g. for rental of their properties), whether or not the claimed debts are legitimate, whether or not the company was owed money, etc; Ill. In circumstances where the Third and Fourth Defendants claimed that the First Defendant was "not a trading company", there was no risk of it trading insolvent; IV. In circumstances where the insolvency (if any) occurred under the exclusive control of the Third and Fourth Defendants, it was reckless of the administrators to fail to properly investigate claims by members that the insolvency (if any) would not have occurred had the Third, Fourth and Seventh Defendants, not defrauded the First Defendant; V. By omitting critical information claimed by the Fifth and Sixth Defendants to be commercially sensitive from reports on the affairs of the First Defendant, notably, the book value of "Land, buildings and improvements" and the independent valuation of the Land; VI. By selling the Land including improvements and the business of the First Defendant for $430,000 in circumstances where the First Defendant paid $657,166.80 for the Land and business and a financial statement of the First Defendant in 2018 lists "property plant and equipment" worth $825,065.34; VII. By allowing the Second, Third and Fourth Defendants to take the business of the First Defendant without cost; VIII. By failing to observe provisions of the Constitution of the First Defendant which provide that, in the event of a sale of the whole of the Land, Class A shareholders are entitled to a share in the proceeds; IX. By failing to observe provisions of the Constitution of the First Defendant which provide that the Land could not be sold without a resolution of 80% of members; X. By proceeding with a deed of company arrangement hastily in circumstances where the primary creditors of the company were the directors or related parties and the prudent course would have been to wait until the pending 247A application had been resolved; XI. By failing to adequately investigate apparent fraudulent transactions and breaches of directors' duties; 15. In the circumstances, the Court should make the order (12) and (13) of the relief sought and/or make such orders against the Defendants and/or each of them having that result or consequence as set out in the said paragraphs. 16. The Second Defendant was party to fraud by being in knowing receipt of trust property being the Plaintiffs' equitable interests respectively in the land and their rights or interests as shareholders; … 17. The Second Defendant is in the premises now a constructive trustee who holds the Members' interests in the Land in trust for them; 18. The Court should make order (10) of the relief claimed. … MISLEADING AND DECEPTIVE CONDUCT 24. First, Third and Fourth Defendant have misled and deceived the Plaintiffs and others in breach of s 4 of the Australian Consumer Law ("AGL"), ACL s 18, ACL s 30, ACL s 152, ASIC Act Part 2 Div. 2 or CA s 1041H: … 25. Notwithstanding conduct in relation to the Land, the First, Second, Third and Fourth Defendants have misled and deceived the Plaintiffs and others in breach of ACL s 18 or ASIC Act Part 2 Div. 2: … 26. By conduct of the First, Second, Third and Fourth Defendants the Plaintiffs have suffered loss and damage. 27. In the circumstances, the Court should make order (6), (10), (14) and (15) of the relief claimed. HARRASSMENT AND COERCION 28. The Second, Third and Fourth Defendants, in breach of ACL s 50 or ASIC Act Part 2 Div. 2, harassed and coerced the Plaintiffs and others in relation to the supply or possible supply of goods or services; or the payment for goods or services; or the sale or grant, or the possible sale or grant. of an interest in land; or the payment for an interest in land: … 29. By conduct of the Second, Third and Fourth Defendants the Plaintiffs have suffered loss and damage. 30. In the circumstances, the court should make orders (6) and (14) of the relief claimed. OPPRESSION 31. The Third and Fourth Defendants by their servants or agents or otherwise have conducted the First and/or Second Defendant's affairs in a manner oppressive to, unfairly prejudicial to, and unfairly discriminatory against the Plaintiffs and members other than the Third and Fourth Defendants and their related entities, in breach of CA s 232 (a) and (e): … 32. The Third and Fourth Defendants further defrauded the First Defendant by failing to pay site fees and misappropriating money received for purchase of shares and otherwise: … 33. By the aforesaid conduct of the Third and Fourth Defendants the Plaintiffs have suffered loss and damage. 34. The cumulative effect of this conduct of the company's affairs by the Third and Fourth Defendants was and is oppressive to, unfairly prejudicial to, and unfairly discriminatory against the Plaintiffs in their capacity as members, as land owners, and as residents of the village operated by the First Defendant, and the Court should make orders (7), (8), (11); UNCONSCIONABLE CONDUCT 35. The First, Third, Fourth and Seventh Defendants, in trade or commerce, in connection with the supply or possible supply of goods or services to another person, engaged in conduct that is, in all the circumstances, unconscionable: PARTICULARS I. The Third and Fourth Defendants, in connection with supplying or offering to supply cabins and residential services to the Plaintiffs and others, pursuant to the Constitution of the First Defendant, engaged in conduct particularised in paragraphs 5-8, 24-25, 28-32 above that is, in all the circumstances, unconscionable; II. The Fifth and Sixth Defendants, in connection with supplying or offering to supply services to the First Defendant as voluntary administrators and deed administrators, engaged in conduct particularised in paragraphs 8-12 and 14 above that is, in all the circumstances, unconscionable; Ill. It is unconscionable for the First, Third, Fourth and Seventh Defendants to assert that cabins are fixtures which now belong to the Second Defendant in circumstances where the Fourth and Seventh Defendants supplied the cabins to members either as vendor of existing cabins or builder of new cabins; IV. Having assured members many times, over several years, in print and orally, that the Land could not be sold unless 80% of members agreed, it was unconscionable for the First, Third, Fourth and Seventh Defendants to propose and participate in the sale of the Land; 36. By conduct aforesaid of the First, Third, Fourth and Seventh Defendants the Plaintiffs have suffered loss and damage. 37. In the circumstances, the court should make orders (10), (14) and (15) of the relief claimed. 38 The Second, Third and Fourth Defendants in connection with offering to supply services to the Plaintiffs and others as operators of a Residential Land Lease Community, engaged in conduct that is, in all the circumstances, unconscionable: … [sic] 1. It is convenient next to consider the relationship between the relief sought and the pleadings. Relationship between prayers for relief to pleadings and particulars 1. In their supplementary written submissions, the plaintiffs link their prayers for relief to the pleaded claims as follows: * Prayer 6: declarations of contraventions of Competition and Consumer Act 2010 (Cth), Sch 2 (Australian Consumer Law), Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) and Corporations Act in relation to the sale of land (referring to [5], [6], [8], [9], [10], [11], [12] of the amended statement of claim); specifically, it is said that an available case against the Deed Administrators arises under: s 236 of the Australian Consumer Law, ss 12DA, 12CB, 12FG, 12GM of the ASIC Act and s 1324 of the Corporations Act; * Prayer 7: involvement in a contravention of s 232 of the Corporations Act (oppression) (referring to prayers 12 and 14 and [14] of the amended statement of claim); * Prayer 12: compensation under Sch 2 s 90-15 of the Corporations Act (Insolvency Practice Schedule (Corporations)) for managing CHB (as voluntary administrators and as deed administrators) in a way that is prejudicial to members; * Prayer 13: orders under s 1324 of the Corporations Act for compensation (which relief the plaintiffs say is sought against all defendants, including the Deed Administrators); this is said to relate to the Corporations Act contraventions (referring to [12] (sale of property not owned by CHB), [14] (managing affairs in a prejudicial way), [31] (oppression) of the amended statement of claim). * Prayer 14: orders for compensation under the Australian Consumer Law (which it said is relief also sought against the Deed Administrators) (referring to s 236 of the Australian Consumer Law (actions for damages against any person involved in the contravention)); it is said that this relates to Australian Consumer Law contraventions (referring to [35], [38] (unconscionable conduct) of the amended statement of claim). Relevant principles 1. The relevant principles on a summary dismissal application were not in dispute. 2. In particular, the Deed Administrators accept that the power to dispose of proceedings summarily is one which calls for the exercise of the utmost caution (see General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129 per Barwick CJ; [1964] HCA 69 (General Steel)) and that it is only to be exercised "when the action is clearly without foundation and when to allow it to proceed would impose a hardship upon the defendants which may be avoided without risk of injustice to the plaintiff" (quoting Cox v Journeaux (No 2) (1935) 52 CLR 713 at 720 per Dixon J; [1935] HCA 48). 3. The plaintiffs say that, to succeed in their present application, the Deed Administrators must show that the case against them is "fanciful" (referring to what was said by French CJ and Gummow J in Spencer v Commonwealth (2010) 241 CLR 118; [2010] HCA 28 at [25]ff (Spencer); and to the summary of principles by Macfarlan JA in O'Brien v Bank of Western Australia Ltd [2013] NSWCA 71 at [3] (O'Brien v Bankwest)). 4. That said, the Deed Administrators note that a plaintiff's case may be summarily dismissed even though extensive legal argument may be necessary to demonstrate that the case is so clearly untenable that it cannot possibly succeed (referring to General Steel at 129-130; Dougall v Melville [2017] NSWCA 309 at [64] per McColl JA). Reference is also made by the Deed Administrators to the test in Shaw v New South Wales [2012] NSWCA 102; (2012) 219 IR 87 at [32] per Barrett JA (writing for a five member bench of the Court of Appeal) (Shaw), namely as to whether the claims in question are so obviously untenable or groundless that there is "a high degree of certainty" that they will fail if allowed to go to trial; and whether this is one of the "clearest of cases" in which the court may accordingly intervene to prevent the claims being litigated (and see also Agar v Hyde (2000) 201 CLR 552; [2000] HCA 41 at [57] per Gaudron, McHugh, Gummow and Hayne JJ). 5. As to the inherent jurisdiction to dismiss or strike out a plaintiff's case because it is so weak and/or because it depends upon facts which, on the plaintiff's case, cannot be proven, the Deed Administrators rely on Shalhoub Holdings Pty Ltd v Commonwealth Bank of Australia [2006] NSWSC 607 at [28]-[37] per Rothman JA and The Owners - Strata Plan No 1731 v Bailey [2014] NSWSC 875 at [16] per Black J. In the present case, the Deed Administrators say that the power to dismiss summarily a claim does not arise only where the plaintiff's pleading does not disclose a cause of action known to the law but can also be exercised where the plaintiff is unable to demonstrate a reasonable prospect of success in proving its case on the plaintiff's own evidence. 6. In this connection, emphasis is also placed on the overriding purpose stated in s 56(1) of the Civil Procedure Act 2005 (NSW) (Civil Procedure Act), namely "to facilitate the just, quick and cheap resolution of the real issues in the proceedings" (the Deed Administrators referring to Shaw at [128]ff per Barrett JA; Re Colorado Products Pty Ltd (in prov liq) [2013] NSWSC 1613 at [47] per Black J). 7. Meanwhile, the plaintiffs point to the observation by Macfarlan JA in O'Brien v Bankwest, (at [3](a)) that, on a summary judgment application, the real issue is whether there is an underlying cause of action or defence, not simply whether one is pleaded (referring to Spencer at [23]). Deed Administrators' submissions 1. As to the relevant factual issues (that the plaintiffs had an interest in the Coolah Land; the Coolah Land was sold at an undervalue; and the constitution of CHB prevented the Deed Administrators from selling the Coolah Land and/or required the proceeds to be paid to its shareholders), the Deed Administrators submit that, for the following reasons, none has any basis in fact or law; and accordingly, they say that the proceedings against them must be dismissed. 2. Indeed, the Deed Administrators note that the plaintiffs have served all of their evidence yet there is only one reference in the affidavit evidence to them (in the affidavit of Ms Kelly) and it is submitted that the plaintiffs' evidence does not demonstrate any case at all against them. (I interpose to note that the plaintiffs cavil that all their evidence has been served, noting that there may be reply evidence but, in any event, rely on observations in the cases as to the ability to make out a case based on evidence that may emerge in the course of cross-examination or during the trial - for example, Wickstead v Browne (1992) 30 NSWLR 1; [1992] NSWCA 272.) 3. It is convenient to consider each of those factual issues (noted at [47] above) in turn). Alleged interest in the Coolah Land 1. The Deed Administrators say that establishing that the plaintiffs had an interest in the Coolah Land is a necessary but not sufficient condition of any valid claim against the Deed Administrators because, even if the plaintiffs had a proprietary interest in the Coolah Land, there would only be a claim, or potential claim, against CHB, CTP and/or the Directors. 2. The Deed Administrators maintain that the plaintiffs do not have, and never had, any proprietary interest in the Coolah Land. They note that the Coolah Land was never formally subdivided into the various allotments now claimed to be owned by the plaintiffs; nor was the Coolah Land subject to any strata plan with particular lots and common property. They say that the Coolah Land was, and remains, undivided (subject to there being two lots on the deposited plan). It is further noted that there was no notation on the title of the Coolah Land of any interest, or claimed interest, by the plaintiffs. 3. The Deed Administrators say that the plaintiffs' entitlement to occupy a portion of the Coolah Land (and to maintain their caravans or other residences on those respective portions) was based on their shareholding in CHB, pursuant to the terms of CHB's constitution. Thus, it is said, at its highest, the plaintiffs had no more than a contractual entitlement to occupy the areas on which their respective caravan or transportable building was situated. As adverted to above, the Deed Administrators say that this was akin to a company title arrangement. 4. Reference is made to the authorities that make clear that the entitlement to exclusive use of a particular part of land does not give the occupant any interest in the land (citing Tittman v Traill (1957) 74 WN (NSW) 284 per Walsh J, as his Honour then was; Wilson v Meudon Pty Ltd [2005] NSWCA 448 at [64]-[67] per Bryson JA). 5. Further, the Deed Administrators say that even if the plaintiffs somehow had an interest in the Coolah Land, that does not mean that they "owned" the land (for the purposes of s 442C(1)(b) of the Corporations Act). They say that, plainly, the Coolah Land was at all relevant times owned by CHB. Alleged sale at an undervalue 1. As to the allegation that the sale was at an undervalue, the Deed Administrators say that there is no evidence to support this allegation nor to support an allegation of a failure by the Deed Administrators to take reasonable care in relation to the sale of the Coolah Land. Further, the Deed Administrators say that there are two complete answers to this contention. 2. First, insofar as the allegation is made that the Deed Administrators contravened s 420A of the Corporations Act (see amended statement of claim at [14]), it is noted that this provision applies only to "controllers" (such as receivers and managers) and not to administrators (citing Hausmann v Smith [2006] NSWSC 682; (2006) 24 ACLC 688 at [11] per Barrett JA, as his Honour then was (Hausmann v Smith)). 3. Second, that the Deed Administrators obtained a valuation of the Coolah Land and it was sold for more than the market value as recorded in that valuation. Alleged sale contrary to the terms of the company's constitution 1. The Deed Administrators say that there is no legal basis for the allegation that, based on various provisions in CHB's constitution, the Deed Administrators contravened their duties by causing the Coolah Land to be sold. They say that the terms of a company's constitution cannot constrain the exercise of an administrator's wide statutory powers (citing Burbank Trading Pty Ltd v Allmere Pty Ltd (2009) 22 VR 633; [2009] VSCA 82 at [53] per Dodds-Streeton JA) and therefore that the terms of CHB's constitution give way to the provisions of the Corporations Act. Reference is also made in this regard to the decision of Barrett J (as his Honour then was) in Re Smith in his capacity as administrator of Berowra RSL Bowling and Community Club Ltd [2006] NSWSC 780; (2006) 58 ACSR 410 at [10]-[15] (Berowra RSL Bowling). 2. Further, it is noted that s 444G of the Corporations Act confirms that the terms of a deed of company arrangement also bind the company's members. Thus, it is said that the provisions in the company's constitution dealing with the proceeds of the sale of the Coolah Land cannot overcome the terms of the DOCA (which, in any event, has binding force by reason of statute) (citing MYT Engineering Pty Ltd v Mulcon Pty Ltd (1999) 195 CLR 636; [1999] HCA 24). 3. Thus, it is submitted that the allegation stemming from the terms of CHB's constitution is doomed to fail. Complaint as to the plaintiffs' pleading 1. As adverted to above, in the alternative to their summary dismissal application, the Deed Administrators say that the current amended statement of claim cannot stand by reason of the "sweeping allegations" of breach of duty that are unsupported by clear and precise allegations of fact. 2. Reference is made by way of example to [11] of the amended statement of claim (extracted at [37] above) which pleads that the Deed Administrators were trustees but pleads no facts to support that allegation; and that the Deed Administrators breached their fiduciary duties but with no pleading of the precise fiduciary duties said to have been breached (noting, it is said for the Deed Administrators, that fiduciary duties are proscriptive and not prescriptive) nor as to how it is said that there has not been adherence to those duties. 3. Accordingly, the Deed Administrators say that, if the claim against them is not summarily dismissed, nevertheless the present iteration of the plaintiffs' claim should be struck out as against them. As I understand it, the basis for the contention that there should be no liberty to re-plead rests on the history of the proceedings to date and the depletion to the amount available to creditors if continuing costs are incurred by the Deed Administrators in the proceedings. Plaintiffs' submissions 1. The plaintiffs identify the substance of their claim generally as being that they own their allotments in equity; that CHB held the allotments on trust for them; and that the Directors abused their position as directors and perpetrated a fraud against the minority. 2. As against the Deed Administrators, the plaintiffs say that the substance of their claim is that the Deed Administrators improperly participated in that conduct, being on actual or constructive notice (as I understand it, this being said to be notice of the plaintiffs' claimed interest in the Coolah Land), and did not properly discharge their responsibilities as voluntary administrators or deed administrators, under statute or in equity. 3. In amplification of the pleading itself, the plaintiffs identify their causes of action against the Deed Administrators in relation to the following prayers for relief as follows. 4. As to prayers 1 and 5, the plaintiffs say that the Deed Administrators have failed to enforce compliance with the DOCA, which they say has resulted in the defendants attempting to terminate the residential site agreements and evict and dispossess the plaintiffs (prayer 1) and interfering with their quiet enjoyment (prayer 5). They say that evidence of this failure is detailed in Annexure E to the affidavit of their solicitor, Mr Peter Vogel, of 29 June 2020 and that the conduct is particularised at [1]-[22] of the amended statement of claim). The plaintiffs say that the conduct by CHB which the Deed Administrators are permitting to continue is also unconscionable and that, by being "involved", the Deed Administrators are "liable" under ss 236-237 of the Australian Consumer Law. They say that the Deed Administrators are also involved in the unconscionable conduct particularised at [35] of the amended statement of claim. 5. As to the relief claimed at prayers 6 and 14, it is said that the Deed Administrators are "liable" under ss 236-237 of the Australian Consumer Law by being involved in conduct which contravened a provision of Chs 2 or 3 of the Australian Consumer Law (this conduct being that which is particularised at [25], [28], [35], [38] of the amended statement of claim). 6. As to the relief claimed at prayer 13, it is said that the Deed Administrators are "liable" to orders under s 1324 of the Corporations Act for contraventions of the Act, including Pt 5.2 (as pleaded at [11], [12], [14] of the amended statement of claim). 7. As to the contention by the Deed Administrators that there is no evidence in support of their allegations, the plaintiffs say as follows. Sale of shareholders' land 1. As already adverted to, the plaintiffs submit that they are the equitable owners of their "allotments". They say that this land was sold to CTP as a consequence of the DOCA recommended to creditors by the Deed Administrators. They say that the claims against the Deed Administrators include that they breached their duty to members (see [11] of the amended statement of claim) or procured a breach of duty (see [9] of the amended statement of claim) or breached s 442C(1)(b) of the Corporations Act (see [12] of the amended statement of claim). 2. The plaintiffs say that the evidence that members were equitable owners of their allotments includes the contracts with CHB by which CHB agreed to sell, and the incoming shareholder to purchase, an "allotment". It is submitted that the terms of the contracts (see, for example, that at p 25 of Annexure D to Mr Vogel's of affidavit of 29 June 2020) make clear that CHB promised to sell an allotment comprising a particular area of land for the specified price. They say that "allotment" means land (not a share in the company), referring to the definition of "allotment" in CHB's constitution. That definition is as follows: Allotment means a portion of land, including and [sic] buildings constructed thereon, and being one of the sites designated by numbers 1 to 60 inclusive in the plan set out in Schedule 4. 1. The plaintiffs say that it does not matter that the mechanism by which this sale was to be implemented was not identified, given that there was, as the Deed Administrators say, no subdivision or strata plan or the like. Indeed, the plaintiffs say that there is an express trust, with the intention that the company holds the land on trust for the purchaser until the transfer is "somehow registered". It is submitted that the certainties required for establishing a trust are all here satisfied, namely the certainty of intention, subject matter and beneficiary. 2. It is noted that certainty of intention does not mean that the creator has to be fully aware of the law of trusts before the creator can be found to have intended to create a trust. It is further noted that the parol evidence rule will not apply in situations where the document is ambiguous or created in circumstances of fraud, duress or mistake. 3. The plaintiffs submit that even if an express trust is not found to have been created, there was nevertheless a common intention constructive trust created on the signing of the agreement for sale and purchase of the "allotment". The plaintiffs say that there is extensive evidence to support the common intention, including the advertising materials which promised the plaintiffs that they were buying land as well as shares. (I interpose to observe, as noted above, that those promotional materials also make reference to a company title type of arrangement but the ultimate import of the representation there made, and what they would have conveyed to a reasonable purchaser, would obviously be a matter for trial.) 4. The plaintiffs further maintain that there is evidence that the Deed Administrators were on actual notice that the plaintiffs claimed they owned their allotments, including that: shareholders asserted ownership of the Coolah Land during a telephone conference with the Deed Administrators before the DOCA was recommended; the Deed Administrators had in their possession copies of contracts for sale of allotments which the plaintiffs say a reasonable person in their position should have studied, especially in light of the shareholders' assertions of ownership; and that, on 27 December 2019, the plaintiffs' solicitor wrote to the Deed Administrators claiming that shareholders own their land, that the contracts between shareholders and CHB were still enforceable and that the company's constitution required the consent of shareholders before the Coolah Land could be sold. It is said that the plaintiffs, at the request of the Deed Administrators, provided further evidence to support these claims in a subsequent letter (at which time the consideration for the sale of land had been paid but the transfer was not yet registered). 5. Accordingly, it is contended that, as a result of the sale of the Coolah Land by CHB to CTP, the plaintiffs have breached their duty to members (referring to [11] of the amended statement of claim) or procured or knowingly assisted in a breach of duty (referring to [9] of the amended statement of claim) and have contravened s 442C(1)(b) of the Corporations Act (referring to [12] of the amended statement of claim). 6. In supplementary submissions as to this issue, it is said that this was a sale of property that the company does not own (i.e., the shareholders' equitable interest in land) in breach of s 442C(1)(b) of the Corporations Act (referring to prayer 9; [5], [6], [8], [9], [10], [11], [12] of the amended statement of claim). 7. Reliance is placed by the plaintiffs on THC Holding Pty Ltd v CMA Recycling Pty Ltd [2014] NSWSC 1136; (2014) 101 ACSR 202 (THC Holding); and it is noted that the sixth defendant's affidavit of 1 July 2020 (at [14], [15] and [16]) concedes that there is a conflict in the evidence between that of Ms Kelly and the sixth defendant as to his knowledge, prior to the sale, of the plaintiffs' "unregistered equitable interests" in the land (which it is said is a question that can only be decided at trial). 8. The plaintiffs say that, contrary to the Deed Administrators' submissions, CHB's constitution does not evidence a "classic company title arrangement" but, instead, expressly acknowledges the plaintiff shareholders "as gray nomads, having their individual ownership of the allotments of land upon which their cabins were built by or for them separate from their shareholdings" (referring to Schedule 1 cl 1 of the constitution and the definition of "allotment", which I have already extracted). The plaintiffs also point to the fact that Emmett AJA (see T 4.1 on 17 April 2020) accepted that there was an "arguable cause" on the issue whether or not the plaintiffs have an interest in the land (the only real issue for interim relief to uphold the status quo ante there being seen to be the balance of convenience). Similarly, they say that Rein J proceeded on the same basis when imposing interim injunctive orders on the first to fourth defendants. 9. It is said that a sale by the Deed Administrators of property with knowledge of the interest of shareholders/creditors comes directly within the personal liability provisions of s 442C(1)(b) (citing THC Holding per Campbell J, as his Honour then was). Thus, it is submitted that the Deed Administrators cannot succeed on their r 13.4 UCPR application (citing O'Brien v Bankwest at [3] per Macfarlan JA). Sale of assets for less than market value 1. As to this allegation, reference is made by the plaintiffs to [14](VI) of the amended statement of claim. The plaintiffs say that this pleads breach of s 420A of the Corporations Act, which requires the controller to ensure property is not sold for less than market value. In particular, they maintain that the evidence shows that: the Coolah Land was sold for $430,000, including the existing tenancies, camp kitchen and amenities block; CHB paid $657,166.80 for the Coolah Land and business in 2012; CHB's financial statement for 2018 shows "property plant and equipment" worth $825,065.34; and the "Non-Current Assets" at 30 June 2019 as $1,052,176 (see [4.4] of the Administrators' Report and Statement of Opinion to Creditors of 18 November 2019 (the November 2019 Report to Creditors)); and it is noted that the Deed Administrators' report does not disclose any assets other than the land and improvements. 2. The plaintiffs note that the Deed Administrators', in the September 2019 Report to Creditors, refer to the commission of an independent valuation of the property but includes a notation that "… it is inappropriate to comment on its contents at this point in time" (see at [9.1]); similarly, it is noted that the value is listed as "withheld" the value (as well as other "key figures"); and complaint is made that the Deed Administrators instructed the valuer: … to complete the valuation of the Caravan Park (including the camp kitchen, amenities block and other fixed infrastructure owned by Coolah Home Base Pty Ltd) on a vacant possession basis, excluding the added value of any business, plant and equipment, residence, cabins, shareholders rights to occupy the property (and their movable dwellings) and management agreement between Coolah Home Base Pty Ltd and 'Home Base Solutions'. 1. The plaintiffs contend that the instruction to value the Coolah Land on a vacant possession basis resulted in an "egregiously low" (see T 3.30 on 10 July 2020) valuation of $330,000, in contrast to the pre-sale book value of over $1m including improvements (although, in oral argument it was seemingly accepted that there is no evidence as to whether the Coolah Land would be valued as worth more or less on a vacant possession basis: see T 4.21 on 10 July 2020). 2. The plaintiffs emphasise, however, that the Coolah Land was sold for the valuation price of $430,000 including the existing tenancies and management agreements (i.e., not on a vacant possession basis). It is noted that there are 14 sites with existing agreements with the plaintiffs and other agreements in place with non-plaintiff residents. It is said that this amounts to some $200,000 of annual revenue which was excluded from the valuation in accordance with the Deed Administrators' instructions. The plaintiffs say that the potential income from the other 40-plus sites has also not been valued "and was apparently a gift to the purchaser" at the plaintiffs' loss. 3. The plaintiffs maintain that the sale of the Coolah Land with tenancies and business for $430,000 was well under the market value, in contravention of s 420A of the Corporations Act (as pleaded at [14] of the amended statement of claim). 4. In supplementary submissions, reliance is placed in this context on Re Australasian Barrister Chambers Pty Ltd (In Liq) [2017] NSWSC 597 per Black J (Australasian Barristers); Expo International Pty Ltd (in liq) v Chant [1979] 2 NSWLR 820 at 832 per Needham J (Expo International). 5. In particular, the plaintiffs say that the obligation "to take reasonable steps to sell the property for not less than its market value" was disregarded by the Deed Administrators by eliminating the tenancies from the valuation and selling to a related party without offering it to the wider market by auction or otherwise (referring to Australasian Barristers). It is noted that the general law imposes a duty on the donee of a power (here, the plaintiffs say, the administrators) to exercise the powers and duties granted to him or her in good faith and for a proper purpose, which it is said did not here happen (citing Expo International at 832). Managing the company's affairs in a way that is prejudicial to the interests of members 1. As to the allegation at [14] of the amended statement of claim, and the pleading that the Deed Administrators "managed the company's affairs in a way that is prejudicial to the interests of members", the plaintiffs say that the interests of the members were partly financial (in that in many cases they had invested their life savings in buying their land and homes at Coolah Home Base) but that, importantly, the way the Deed Administrators managed the company's affairs also prejudiced not only the members' investments but also their emotional and physical wellbeing which was harmed by the consequences of their mismanagement. The plaintiffs say that the Deed Administrators' reports to creditors provide sufficient evidence to sustain this claim, including the following. 2. First, that the Deed Administrators recommended and assisted with implementation of the DOCA. It is said that (as pleaded at [14](III) of the amended statement of claim) CHB was a "non trading entity" (see p 7 of the November 2019 Report to Creditors), so there was no risk of it being or becoming insolvent. 3. Second, that the financial reports of CHB for 2016 and 2917 (Annexures A and B to the affidavit of the sixth defendant of 1 July 2020), which the sixth defendant deposes that the administrators reviewed, contain "conspicuous blank spaces" (including as to "Operating result - profit"). The plaintiffs say that a reasonable administrator would not have accepted that the company was insolvent and proceeded to sell its assets to a related party while aware of such irregularities. 4. Third, that the Deed Administrators' represented that the Deed Administrators would report to Australian Securities and Investments Commission (ASIC) under s 438D (which requires the administrator to report "as soon as practicable" if it appears to the administrator that an officer may have been guilty of negligence, default, breach of duty or breach of trust). It is noted that ASIC records show no such report was made. 5. The plaintiffs assert that, "well before the DOCA was signed", they had alleged that the Directors had defrauded the company and members by failing to pay site fees for the sites they owned personally or through related parties (see the discussion by the Deed Administrators in the November 2019 Report to Creditors at [4.6.5](a), noting a deficiency of $180,000 in site fees collected). It is said that the administrators have "uncritically" accepted the Directors' assurances that this was offset by some contributions they had made to other shortfalls. 6. It is also noted that the plaintiffs had alleged that the Directors of CHB had defrauded the company and members by issuing themselves sufficient shares at non-commercial rates to gain majority control of the company (see the discussion of this issue by the Deed Administrators in the November 2019 Report to Creditors at [4.6.5](e), where it is noted that the Directors issued 19 shares to themselves at $550.74 but, in the circumstances, it was then too difficult and expensive to establish a fair market price). The plaintiffs say that a reasonable administrator would "simply have looked at the many other comparable sales at the time and noticed that similar sites were sold at more than ten times that amount". 7. The plaintiffs say that the conclusion by the Deed Administrators that it was not in the interests of the administration to investigate these irregularities because "it is unlikely that there will be any surplus available for distribution to shareholders in the event of a winding up" is "flawed" and "prejudicial to members' rights". 8. As to the failure to investigate claims of fraud against the Directors and breaches of Directors' duties (see prayers 12, 13 and 14; [1]-[12], [14](iv) and (xi) of the amended statement of claim), it is said in supplementary submissions that an available case against the Deed Administrators arises under s 90-15 of the Insolvency Practice Schedule (Corporations) and under ss 180-183 of the Corporations Act, and/or s 21 of the Australian Consumer Law and/or ss 12CB and 12GM of the ASIC Act, in managing the company's affairs in a way that has been prejudicial to the interests of members. 9. The plaintiffs note, again, the allegation in relation to share issues; and that the Directors did not pay site fees for sites owned by them or companies they owned, resulting in $300,000 to $400,000 owing to CHB by December 2019. In this regard, reliance is again placed on the shareholders' letter to the Deed Administrators of 6 November 2019. 10. Furthermore, complaint is also made as to the alleged failure to share the proceeds of the sale of land with members (referring to prayers 12, 13 and 14; [1]-[12] and [14](viii)). It is said that a further available case against the Deed Administrators arises through a duty under the general law to exercise their powers and duties in good faith and for a proper purpose, to manage the company's affairs in a way that is not prejudicial to the interests of members, for unconscionable conduct (referring to s 21 of the Australian Consumer Law) and for breach of directors' duties (referring to ss 180-183 of the Corporations Act), to be remedied by orders under s 90-15 of the Insolvency Practice Schedule (Corporations). 11. The plaintiffs note that CHB's constitution purportedly provides that the proceeds of the sale of land must be shared pro rata to shareholders' allotment sizes. It is said that this is a contractual obligation unrelated to the distribution of the company's surplus (if any) on winding up. It is said that the proceeds of the sale were distributed preferentially to the Directors as unsecured creditors, in breach of the contract between shareholders and CHB. In this connection, reliance is placed on cl 3.1(b) of Schedule 2 of CHB's constitution 12. Finally, complaint is made that the Deed Administrators accepted that CHB was insolvent, and hence entitled to appoint them, in spite of evidence that CHB was plainly solvent (see prayers 12, 13 and 14; [1]-[12], [14](ii), (iii), (iv)). It is said that an available case against the Deed Administrators arises through a duty under general law to exercise their powers and duties in good faith and for a proper purpose, with further remedies available by orders under s 90-15 of the Insolvency Practice Schedule (Corporations) and under Pt 5.2 and Pt 9.5 of the Corporations Act. 13. As for evidence of this, it again is noted that (see [14](III) of the amended statement of claim) CHB was a "non trading entity" (see p 7 of the November 2019 Report to Creditors), so it is said that there was no risk of it being or becoming insolvent. Reference is also made to CHB's 2014 financial report that says, "[t]here is no profit and loss statement as CHB does not trade at all. HBS does all financial transactions. This is to ensure that CHB is never put at risk of insolvency". 14. Complaint is made as to the sixth defendant's evidence in his affidavit of 1 July 2020 at [21] that the Deed Administrators "reviewed" the financial reports of CHB for 2016 and 2017, noting (as above) that these reports have "conspicuous blank spaces") in "most key places", such as "Operating result - profit"; and that the Directors signed those reports and declared that the company was solvent. As above, it is submitted that a reasonable administrator would not have accepted that the company was insolvent and proceeded to sell its assets to a related party while aware of such blatant irregularities. 15. While it is noted that the Directors claimed to be the majority creditors in the administration, the plaintiffs say that shareholders should also have been considered creditors and should share in the distribution of sale proceeds. It is noted that one shareholder/resident (Ms Susan Kelly, the 11th plaintiff) has lodged a formal proof of debt claiming, inter alia, "$8,916 Entitlement to share of sale proceeds under 3.1(b) of Schedule 2 CHB Constitution". 16. The plaintiffs say that, as controllers of CHB during the administration, a reasonable person would have ended the s 247A application, provided the books the shareholders had been seeking, pursued the debts owed by the Directors in relation to unpaid site fees, voided the issue of shares made in clear breach of directors duties and returned control of CHB to the majority of shareholders. 17. Again, it is said that, if the assets were to be sold, they should have been advertised on the open market. The plaintiffs say that the administrators' attention had been drawn to the fact that, in 2016, the Directors had attempted to sell the business of CHB and had advertised that the net profit for 2015/16 was $107,172. It is said that this is evidence that a reasonable administrator would have sought to realise the business as well as the land as valuable assets. 18. The plaintiffs say that, as deed administrators, the fifth and sixth defendants still continue to manage the affairs of the company in a way that is prejudicial to the interests of members by failing to ensure that the parties to the Sale Contract comply with the terms of it, including by enforcing the personal guarantees of "due performance of the obligations of the Purchasers under the Contract", signed by the Directors. 19. In supplementary submissions, complaint is again made as to the sale of the Coolah Land, or being involved in selling the Coolah Land, when on notice of the shareholder/residents' equitable interest. It is said that the Deed Administrators, as external administrators with knowledge of the plaintiffs' equitable interests in the land of CHB, breached their fiduciary duties as trustees, their duties under the Corporations Act generally, and their duty under the general law to exercise their powers and duties in good faith and for a proper purpose (referring in this regard to prayers 10, 13 and 14; [1]-[12] of the amended statement of claim). 20. Reliance is placed on well-known authorities for the allegation of constructive trust (citing Giumelli v Giumelli (1999) 196 CLR 101; [1999] HCA 10, Gissing v Gissing [1971] AC 886; [1970] 2 All ER 780, Consolaro v Consolaro [2009] WASC 240 and also Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387; [1988] HCA 7); as well as the recent decision of the Supreme Court of Victoria in Harris v Harris [2020] VSC 256). Reference is also made to Baumgartner v Baumgartner (1987) 164 CLR 137; [1987] HCA 59 and it is noted that a constructive trust may be imposed, even though the person on whom the trust is imposed had no intention to create a trust or to hold the property on trust. 21. It is said that, whether or not they were trustees, the Deed Administrators have fiduciary duties to the members, noting that: a fiduciary duty is owed by directors to the shareholders where there are negotiations for a take-over or an acquisition of the company's undertaking which would require the directors loyally to promote the joint interests of all shareholders; and that a conflict would arise if they sought to prefer their personal interests to the joint interest (referring to Brunninghausen v Glavanics (1999) 46 NSWLR 538; [1999] NSWCA 199, Crawley v Short [2009] NSWCA 410). Unconscionable conduct and oppression 1. As to the claim (at [35] of the amended statement of claim) that the defendants' conduct was and is, in all the circumstances, unconscionable, the plaintiffs note that at [31] of the amended statement of claim it is alleged that the defendants' conduct was and is, oppressive to, unfairly prejudicial to and unfairly discriminatory against the plaintiffs. 2. It is submitted that, by their conduct and by their assistance and involvement with the conduct of the other defendants, the Deed Administrators are also liable for the unconscionable and oppressive conduct. The plaintiffs say that remedies include orders under s 1324 of the Corporations Act and ss 236-237 of the Australian Consumer Law. Determination 1. At the outset, and as I have mentioned above, it is relevant to note that the Deed Administrators were first appointed as voluntary administrators and then as deed administrators. They have never occupied the role of liquidators or "controllers" of CHB (which is fatal to the claim for breach of s 420A of the Corporations Act). It is relevant to reflect upon the position of a deed administrator. An administrator of a deed of company arrangement acts as an "officer" of the company. The administrator is obliged to adhere to those duties imposed on company officers (including, for example, duties of care and diligence under s 180 and of good faith under s 181 of the Corporations Act). Furthermore, administrators are subject to the duty not to use their positions improperly to gain an advantage or cause a detriment to the company (see s 182 of the Corporations Act). 2. In addition to the provisions of Pt 5.3A, administrators may owe a duty of impartiality to creditors (see, for example, Re Spargold Enterprises Pty Ltd; Ex parte McDonald [1999] NSWSC 623; (1999) 32 ACSR 363 at [12] per Santow J, as his Honour then was). 3. In this regard, while an administrator generally does not owe duties by statute or at general law to individual creditors, duties are owed to the company in administration (see, for example, Hausmann v Smith at [12]-[13] per Barrett J, as his Honour then was). I interpose to note that leave, however, would be necessary for a shareholder to be permitted to bring a statutory derivative suit in the company's name in respect of any alleged breach by the Deed Administrators of their duties to the company – and none has here been sought. 4. More generally, in the scheme of Pt 5.3A, administrators are acting for the benefit of others and their powers and discretions are held in the representative capacity. It is to be noted that these are standard indicia of the fiduciary status (see, for example, Hospital Products Ltd v United States Surgical Corp (1984) 156 CLR 41 at 71-73 per Gibbs CJ; [1984] HCA 64 (Hospital Products)). 5. Furthermore, an administrator acts as the company's agent when performing a function or exercising a power as administrator (see, for example, Energy & Resource Conservation Co Ltd (in liq) v Abigroup Contractors Pty Ltd (1997) 41 NSWLR 169 at 171 per McLelland CJ in Eq). Again, it may be noted that the relationship of agent and principal is one commonly listed among those established categories of fiduciary relationship (see, for example, Hospital Products at 68 per Gibbs CJ, at 96 per Mason J (as his Honour then was), at 123 per Deane J, and at 141 per Dawson J). 6. It might be said that the relations between the company (including creditors and members) and administrators are cognate to the company and director relationship. Indeed, receivers, voluntary administrators and liquidators, at general law, have each been held to be "fiduciaries" (or subject to analogous duties) in at least one aspect of the roles that they fulfil. 7. That said, the specific obligations owed by a fiduciary are of differing scope and intensity. In this connection, the nature (and, indeed, the existence) of fiduciary duties will depend upon a close examination of the circumstances in any particular case (see, for example, Hospital Products at 71-72 per Gibbs CJ). 8. In In re Charnley Davies Ltd (No 2) [1990] BCLC 760; [1990] BCC 605, Millett J, as his Lordship then was, doubted (see at 624–625) the appropriateness of the breach of fiduciary duty characterisation of a wrong committed in a voluntary administration. That case concerned the United Kingdom equivalent to s 447E of the Corporations Act (the primary remedial provision under Pt 5.3A, which empowers the courts to make orders when an administrator acts in a way which is "prejudicial" to the interests of creditors). Specifically, Millett J observed that there was no utility in so labelling an administrator's misconduct because, in his Honour's view, it did not matter that the administrators had committed breaches of fiduciary duty or torts in the course of their duties; rather, mismanagement and prejudice were the categories of relief sought such that the characterisation of the acts complained of as "misconduct" is superfluous to the main remedial provision in the voluntary administration scheme. 9. The above illustrates the difficulties with a broad allegation (of the kind here pleaded at, for example, [11] of the amended statement of claim) that the Deed Administrators breached their "fiduciary duties" as "trustees". In this regard, there is force to the Deed Administrators' complaint that the allegations made against them in this context are broad sweeping allegations without sufficient identification of the material facts on which the relevant cause, or causes, of action is, or are, based (and hence the case they have to meet). 10. The first direct allegation against the Deed Administrators is at [11] of the amended statement of claim. As adverted to, this is a pleading of breach of "fiduciary duties as trustees". There is no pleading of the circumstances giving rise to the alleged "trust" nor of the content of the fiduciary duties alleged to have been breached. Similarly, there is no pleading of how (other than by being a party to the DOCA) those unidentified fiduciary duties are said to have been breached (leaving aside for the moment the particulars set out to [11] of the amended statement of claim). The mere fact that the Deed Administrators are parties to the DOCA (assuming that that is what is intended by the pleading that "[a]s parties to the DOCA" the Deed Administrators have breached their fiduciary duties as trustees) does not identify a tenable cause of action for breach of fiduciary duties. Rather, more would need to be pleaded as to the material facts by reference to which entry into the DOCA is alleged to be a breach of the alleged fiduciary duties. 11. If the allegation is that the breach of fiduciary duty arises by reason of some conduct in relation to the DOCA other than by the mere fact of entry into the DOCA, then this must be properly pleaded. 12. The only particular provided to this paragraph (and, I emphasise here that it is well-known that it is not sufficient to rely on particulars to cure deficiencies in a pleading – see, for example, the authorities referred to in Brand v Monks [2009] NSWSC 1454) is one that asserts that the Deed Administrators were aware (as at the time of entry into the DOCA and/or the transfer of the Coolah Land) of the facts alleged at [5], [6] and [8] of the amended statement of claim (i.e., relevantly, of the alleged "equitable interests" of the plaintiffs in the Coolah Land by virtue of their acquisition of their "allotments of land"). 13. It is also trite to note that allegations of awareness, or knowledge, must be properly pleaded. In the plaintiffs' submissions on the present application, the awareness of the Deed Administrators of the claimed equitable interests as at the time of entry into the contract for sale seems to be limited to what was allegedly said at the meeting of creditors (unless it is being suggested that some form of constructive awareness was sufficient – see, for example, the assertion in particular II to [12] of constructive knowledge based on the unspecified enquiries that an honest and reasonable person would have made and the unspecified circumstances that it is said would have put an honest and reasonable person on enquiry; though this is a particular to a quite different allegation to that of breach of fiduciary duties). 14. As above, the plaintiffs' position as to the allegation of breach of fiduciary duties (and any relevant awareness of the Deed Administrators) should be made clear and properly pleaded. 15. The second direct allegation pleaded against the Deed Administrators is that of a breach of s 442C(1)(b) of the Corporations Act (at [12] of the amended statement of claim). Again, the broad allegation that there has been a breach "[b]y their involvement with the sale of property held in trust by [CHB]" is an inadequate pleading. The concept of "involvement" with the sale of the property is no more than a broad generalisation, without specifying the conduct of which complaint is made. The particulars to this allegation refer to a letter sent by the plaintiffs' solicitors (after the entry into the contract for sale and, indeed, after completion of the sale of the Coolah Land – although the plaintiffs say that it was before the transfer was registered), raising some form of constructive notice argument (as noted above). 16. As I have said, it is not an answer to point to particulars provided in the pleading. As I have had cause to say elsewhere (regrettably, more than once), particulars do not serve the same function as pleadings. The material facts on which the plaintiffs rely for the allegation that the Deed Administrators were trustees and/or owed fiduciary duties, what those duties were and how it is alleged they were breached need to be clearly pleaded, as do the material facts on which it is alleged that there was a breach of s 442C(1)(b) of the Corporations Act. 17. The third direct allegation against the Deed Administrators is that pleaded at [14] of the amended statement of claim. The allegation is that the Deed Administrators managed the company's affairs in a way that was prejudicial to the interests of the members and (presumably this means and in breach of) s 420A of the Corporations Act "which requires the controller to ensure property is not sold for less than market value". In its terms, therefore, the allegation at [14] seems to focus on a failure to ensure the Coolah Land was not sold for less than market value. 18. Quite apart from the fact that [14] raises a claim which is simply not tenable against the Deed Administrators who were not "controllers', there are obvious difficulties in the way in which it is so broadly pleaded in conclusory terms (seemingly relying on the series of particulars appended to [14] in place of pleading of the material facts and circumstances giving rise to the claim). 19. Particular I is the broad allegation of (unspecified) "involvement with the sale of property equitably owned in part by Members and held in trust by [the first, third and fourth defendants]". 20. Particular II seems to be a complaint that the Deed Administrators proceeded with the DOCA in circumstances where the s 247A application had been reserved. As is pointed out by the Deed Administrators, on their appointment as administrators there was a duty on their part to comply with the timetable set out in the Corporations Act with respect to the administration process (and, I interpose to observe that there has been no application to set aside the DOCA at any time). The particular also raises complaint as to the acceptance that CHB was insolvent and a complaint as to the denial (seemingly as a result of the s 247A application not have then been determined) to the members of information as to whether the company was in fact insolvent. I agree with the complaint by the Deed Administrators that the particular is confusing and embarrassing as that epithet is understood in the context of pleadings (though, of course, it does not rise as to be a pleading). 21. Particular III appears to be a complaint as to whether the company was insolvent. It is not clear how this relates to any claim against the Deed Administrators. 22. Particular IV asserts that it was reckless of the Deed Administrators to fail properly to investigate claims by members that the insolvency (if any) would not have occurred had the third, fourth and seventh defendants not defrauded the company. Insofar as this is a complaint as to a deficient investigation by the Deed Administrators (in their then capacity as administrators) to investigate the company's affairs (and, in particular, the allegation of fraud), the Deed Administrators say that this would not give rise to a cause of action against them other than perhaps as part of an application to set aside the DOCA (which has not been made) (see T 24.14 on 3 July 2020). 23. Particular V raises complaint as to the lack of disclosure by the Deed Administrators of "critical information" ("notably", the book value of the Coolah Land, buildings and improvements and the independent valuation of the Coolah Land). It is not clear how the fact that the valuation was not disclosed supports any claim against the Deed Administrators. 24. Particular VI is the allegation of sale at an undervalue (about which the Deed Administrators have made the submissions already summarised above). The Deed Administrators argue that, even at its highest, the 2017 valuation does not put the value of the property at more than it was sold for under the contract of sale. Similarly, particular VII is a complaint as to the second, third and fourth defendants taking the business of CHB without cost. 25. Particular VIII is the complaint as to failure to observe the provisions of CHB's constitution as to the entitlement to a share of proceeds on the sale of the land and particular IX is as to a failure to observe the provisions of the constitution in relation to a resolution of members. To my mind, the answer to those complaints lies in the decision in Berowra RSL Bowling (see at [13] per Barrett J) to which reference has been made above: "… an administrator, in exercising the specific and statutory power to terminate part of the company's business and to sell part of its property, is neither constrained by nor bound to have regard to provisions of the constitution (being provisions of the statutory contract that arises under s 140(1)(a) of the Corporations Act between the company and its members) which may regulate — or even prohibit — those steps. The administrator, when exercising statutory powers, is a stranger to that statutory contract. And the administrator's acts are not acts of the company, even though they are to be regarded as having been performed by an agent of the company." 1. Particular X raises the same complaint about not waiting until the pending s 247A application had been resolved (see particular II). 2. Particular XI again is a complaint as to a failure adequately to investigate fraudulent transactions and breaches of directors' duties. 3. To my mind, the complaints made in the particulars to [14] go nowhere given that the cause of action to which they are particulars is not tenable against the Deed Administrators. Even if various of the particularised conduct could sustain a properly pleaded claim against the Deed Administrators, others (such as the complaint in not proceeding with or awaiting a determination of the s 247A application or not observing the provisions of CHB's constitution) are not tenable. 4. There are no other claims pleaded specifically against the Deed Administrators. For example, while the second of the particulars to the allegation of unconscionable conduct at [35] contain an assertion of unconscionable conduct on their part, it is clear from the pleading at [35] that (contrary to the submissions made by the plaintiffs) the allegation of unconscionable conduct is levelled at parties other than the Deed Administrators. 5. The necessity for proper attention to the pleading is clear from the submissions on the present application, which seem to raise allegations of knowing assistance in breach of fiduciary duty (the second limb of the rule in Barnes v Addy (1874) LR 9 Ch App 244 (Barnes v Addy) (see below)), though nowhere is such a claim pleaded against the Deed Administrators. 6. A person may, of course, be held liable where that person has participated wrongfully in the breach of fiduciary duty. The circumstances in which a third party or stranger will be held liable may be generally stated as follows (see Barnes v Addy at 251 per Lord Selborne LC): first, by intermeddling in the affairs of a trust so as to qualify as a trustee de son tort; second, by receiving and becoming chargeable with trust property; and third, by knowingly assisting in a dishonest and fraudulent design on the part of the trustee or fiduciary. In a case of the third category, the requirements of knowledge are generally seen as more stringent than in the other two categories of case (see, for example, Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22 at [171]-[179] per Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ). 7. The difficulty I have with the present pleading insofar as it applies to the Deed Administrators is that the pleading (and the relief sought consequent thereon) conflates, to a substantial extent, rights of members and rights as beneficiaries of an alleged trust (see, for example, [5] and [6]; [16]). 8. As noted above, the alleged trust is not properly pleaded – there is no sufficient pleading of the material facts said to give rise to the trust or the subject of the trust. It is not clear how it is said that the administrators owed duties to the individual members, as opposed to the company itself. 9. Insofar as the pleading appears to contend that CHB held its interest in the Coolah Land as trustee for the plaintiffs (i.e., not merely as trustee of the rights of those members) (see at [6]-[9]), this does not explain how it is alleged that the Deed Administrators came to owe fiduciary duties to the members. 10. Likewise, if the claim is a Barnes v Addy claim then there needs to be a proper pleading of the elements of that cause of action. 11. Similarly, to the extent that a claim is sought to be made against the Deed Administrators for accessorial liability for the conduct of others of the defendants (as seemingly raised in relation to the unconscionable conduct claim), then this needs to be made clear. 12. As to the claim based on breach of s 420A of the Corporations Act, and any claim based on a failure to observe the provisions of the constitution of CHB, I accept that this is untenable (for the reasons articulated by the Deed Administrators) (i.e., broadly, that s 420A concerns liquidators and controllers, not administrators, and that a claim for breach of the contractual provisions of the company's constitution must give way to the statutory regime applicable on appointment of the Deed Administrators as voluntary administrators). It is further to be noted that, since the effectuation of the DOCA, the Deed Administrators have not had the control of the company, so that any claim against them based on their conduct as administrators or deed administrators cannot extend beyond that time. 13. I have considered in some detail elsewhere the requirements for a properly pleaded claim (see for example Smith v Australian Executor Trustees Ltd [2017] NSWSC 1406 at [71]-[73]) and I do not propose here to repeat them. Nor do I here need to repeat the well-known caution, which I noted above, attendant on the summary dismissal (without a hearing on the merits) of a plaintiff's claim. 14. Conscious of the heavy burden that the Deed Administrators have in this regard, I consider that it is met in relation to the s 420A claims and those predicated on a breach by the Deed Administrators of the CHB constitution. 15. As to the allegation that the plaintiffs held an equitable interest in that portion of the Coolah Land represented by their allotments, while I consider that the arguments by the Deed Administrators have considerable force (i.e., that there is no more than an exclusive right to occupy akin to company title; as was explained in, for example, the promotional material at the time), I cannot conclude at this stage that an argument to the contrary could not be maintained. Nor am I persuaded that no reasonably arguable cause of action could be properly pleaded by the plaintiffs as to the claims sought to be advanced against the Deed Administrators for knowing assistance in fiduciary duties by other parties or for accessorial liability in relation to the misleading or deceptive conduct or other unconscionable conduct claims (although I accept that there is not yet a proper pleading of those claims). 16. I accept that it is no real answer, to the Deed Administrators' complaint as to the current pleading, that the Deed Administrators have already pleaded a defence to the current pleading. This is not least because the matter is not yet listed for hearing and it is not in accordance with the just, quick and cheap resolution of the real issues in dispute that there would remain uncertainty at the final hearing as to what issues do in fact arise on the pleadings. The Deed Administrators in their oral submissions explained that a forensic decision had been taken at an earlier stage not to press this issue in the interests of a quick final hearing but that has not eventuated. They are, in my opinion, entitled not to be left in doubt as to the claim that they have to meet. 17. The most egregious defect in the pleading is illustrated by the submission that compensation or orders are sought from the Deed Administrators for being knowingly involved in unconscionable conduct (or, perhaps, fraudulent conduct) on the part of the Directors or others. There simply is no allegation at all in the pleading itself of any accessional liability of the kind adverted to in the submissions made for the plaintiffs on the present occasion. Rather, what appears is a particular (at [35]) to an allegation of unconscionable conduct that is not pleaded against the Deed Administrators. If the plaintiffs were to be confined to their claim as pleaded (as, on a final hearing, they should be), this particular goes nowhere. 18. That said, again, I would not deprive the plaintiffs of a final opportunity properly to plead their claim. I accept that there is a legitimate basis for the Deed Administrators to resist such a course (particularly since, it would seem, their entitlement to an indemnity for the costs of the administration will no doubt mean that ultimately the creditors of the company – including those of the plaintiffs whose claims against the company have now been extinguished on the effectuation of the DOCA and who now would have only a claim to a share in the deed fund – will bear the cost of the proceedings). Nevertheless, Counsel for the plaintiffs was adamant in the course of argument that if there were found to be pleading defects (which he by no means conceded there were) then the plaintiffs would seek such an opportunity. Such liberty will not, however, extend to the causes of action that I have found to be clearly untenable (including the claim based on an alleged breach of s 420A of the Corporations Act). Further, I will not give leave to file a further amended pleading as of right; rather, I will put in place a regime whereby there is an opportunity for the Deed Administrators to resist further amendment in the event that the proposed further amended pleading suffers from the same or similar pleading defects such as to warrant a refusal of leave to re-plead. 19. Finally, as to costs, I consider that costs should be reserved at least until the pleading argument is finally determined. Orders 1. For the above reasons, I make the following orders: 1. Strike out the amended statement of claim as against the fifth and sixth defendants. 2. Direct the plaintiffs to serve on the parties by no later than 13 August 2020 any further amended statement of claim on which they seek to rely as against the fifth and sixth defendants. 3. Note that the liberty to serve the further amended statement of claim referred to in Order 2, as against the fifth and sixth defendants, does not extend to: 1. any claim of a contravention by the fifth and sixth defendants of s 420A of the Corporations Act 2001 (Cth); and 2. any claim of contravention(s) by the fifth and sixth defendants of the company constitution of the first defendant. 1. Order that, failing consent of the fifth and sixth defendants by 20 August 2020 to the filing of the proposed further amended pleading served pursuant to Order 2, direct the plaintiffs to file and serve on or before 3 September 2020 a notice of motion and affidavit in support seeking leave further to amend their pleading, such motion to be returnable before me for directions at 8.30am on 8 September 2020. 2. Reserve costs of the fifth and sixth defendants' notice of motion. 3. List the matter generally for directions at 8.30am on 8 September 2020. 4. Liberty to apply on three days' notice. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 23 July 2020