Supreme Court New South Wales Medium Neutral Citation: In the matter of 1derful Pty Limited [2024] NSWSC 1414 Hearing dates: 24-25 September, 1, 2, 8, 10-11, 15 October 2024 Date of orders: 8 November 2024 Decision date: 08 November 2024 Jurisdiction: Equity - Corporations List Before: Black J Decision: Parties to submit Short Minutes of Order to give effect to this judgment and as to costs or, if there is no agreement between them, their respective Short Minutes of Order and submissions. Catchwords: EQUITY – Fiduciary duties, statutory unconscionability and conspiracy – whether contraventions established – quantification of loss. Legislation Cited: - Australian Securities & Investments Commission Act 2001 (Cth), ss 12BAB, 12CA-12CC, 12GD, 12GF, 12GM - Australian Consumer Law, ss 21-22, 232, 236, 243 - Conveyancing Act 1919 (NSW), s 37A - Corporations Act 2001 (Cth), ss 420A, 423 - Evidence Act 1995 (NSW), s 140 Cases Cited: - ABN Amro Bank NV v Bathurst Regional Council & Others (2014) 309 ALR 445; [2014] FCAFC 65 - Aequitas Ltd v Sparad No 100 Ltd (formerly Australian European Finance Corp Ltd) (2001) 19 ACLC 1006; [2001] NSWSC 14 - Ancient Order of Foresters in Victoria Friendly Society Ltd v Lifeplan Australia Friendly Society Ltd (2018) 265 CLR 1; [2018] HCA 43 - Anderson v Canaccord Genuity Financial Ltd (2023) 113 NSWLR 151; [2023] NSWCA 294 - Armagas Ltd v Mundogas SA [1985] 1 Ll R 1 - Artistic Builders Pty Ltd v Elliot & Tuthill (Mortgages) Pty Ltd [2002] NSWSC 16 - Australian Competition and Consumer Commission v Quantum Housing Group Pty Ltd (2021) 388 ALR 577; (2021) 151 ACSR 98; [2021] FCAFC 40 - Australian Securities & Investments Commission v Citigroup Global Markets Australia Pty Ltd (No 4) (2007) 160 FCR 35; 62 ACSR 427; [2007] FCA 963 - Australian Securities and Investments Commission v Kobelt (2019) 267 CLR 1; (2019) 368 ALR 1; [2019] HCA 18 - Australian Securities and Investments Commission v National Australia Bank Ltd (2022) 164 ACSR 358; [2022] FCA 1324 - Australian Securities and Investments Commission v Westpac Banking Corp (Omnibus) (2022) 159 ACSR 381; [2022] FCA 515 - Barnes v Addy (1874) LR 9 Ch App 244 - Bathurst City Council v PWC Properties Pty Ltd (1998) 195 CLR 566; [1998] HCA 59 - Bathurst Regional Council v Local Government Financial Services Pty Ltd (No 5) [2012] FCA 1200 - Betfair Pty Ltd v Racing New South Wales (2010) 189 FCR 356; (2010) 273 ALR 664; [2010] FCAFC 133 - Boz One Pty Ltd v McLellan (2015) 105 ACSR 325; [2015] VSCA 68 - Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34 - Bristol & West Building Society v Mothew [1998] Ch 1 - Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64; [1991] HCA 54 - DIF III – Global Co-Investment Fund LP v Babcock & Brown International Pty Limited [2019] NSWSC 527 - ET-China.com International Holdings Ltd v Cheung (2021) 388 ALR 128; [2021] NSWCA 24 - Fatimi Pty Ltd v Bryant (2004) 59 NSWLR 678; [2004] NSWCA 140 - Firmtech Aluminium Pty Ltd v Xie; Zhang v Xu; Xie v Auschn Conveyancing & Associates Pty Ltd [2024] NSWSC 1293 - Gerrard Toltz Pty Ltd v City Garden Australia Pty Ltd (in liq) (No 2) [2024] NSWCA 232 - Giumelli v Giumelli (1999) 196 CLR 101; [1999] HCA 10 - Grimaldi v Chameleon Mining NL (No 2) (2012) 200 FCR 296; [2012] FCAFC 6 - Haiye Developments Pty Ltd v Commercial Business Centre Pty Ltd [2022] NSWSC 937 - Hall v Poolman (2007) 215 FLR 243; [2007] NSWSC 1330 - HBK Master Fund LP v Pivotal Software Inc, Delaware Court of Chancery, 14 August 2023 - Hospital Products Ltd v United States Surgical Corp (1984) 156 CLR 41; [1984] HCA 64 - John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1; [2010] HCA 19 - JR Consulting & Drafting Pty Ltd v Cummings (2016) 329 ALR 625; [2016] FCAFC 20 - K&A Laird (N.S.W.) Pty Ltd (in liq) v Aidzan Pty Ltd (in liq) [2023] NSWSC 603 - Karzi v Toll Pty Ltd [2024] NSWCA 120 - Krakowski v Eurolynx Properties Ltd (1995) 183 CLR 563 at 582; [1995] HCA 68 - Mackinnon as Plaintiff representative of 153 Plaintiff group members v Partnership of Larter, Jones, Miraleste Pty Ltd t/as USG Partner and Johnson, t/as "STC Sports Trading Club" (No 8) [2019] NSWSC 1658 - Marcolongo v Chen (2011) 242 CLR 546; [2011] HCA 3 - McCrohan v Harith [2010] NSWCA 67 - MMAL Rentals Pty Ltd v Bruning (2004) 63 NSWLR 167; [2004] NSWCA 451 - Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 110 ALR 449; [1992] HCA 66 - News Ltd v Australian Rugby Football League Ltd (1996) 64 FCR 410; [1996] FCA 870 - OBG v Allan [2008] 1 AC 1 - Pascoe v Voukidis Holdings Pty Ltd [2024] FCA 915 - Patel v Lal [2011] NSWSC 603 - Porter v Mulcahy & Co Accounting Services Pty Ltd [2021] VSC 572 - Re Alora Davies Developments 104 Pty Ltd (in liq) & Ors v Raphael & Anor [2024] NSWSC 547 - Re Colorado Products Pty Ltd (in prov liq) (2014) 101 ACSR 233; [2014] NSWSC 789 - Re Sirrah Pty Ltd (In Prov Liq) (2021) 152 ACSR 212; [2021] NSWSC 413 - Ridge Estate Pty Ltd v Fairfield Pastoral Holdings Pty Ltd (2024) 302 FCR 375; [2024] FCAFC 17 - Sangha v Baxter [2009] NSWCA 78 - Spencer v Commonwealth of Australia (1907) 5 CLR 418; [1907] HCA 82 - Talacko v Talacko (2021) 272 CLR 478; [2021] HCA 15 - Troulis v Vamvoukakis [1998] NSWCA 237 - Vanguard Financial Planners Pty Ltd v Ale (2018) 354 ALR 711; [2018] NSWSC 314 - Varma v Varma [2010] NSWSC 786 - Watson v Foxman (1995) 49 NSWLR 315 - Wingecarribee Shire Council v Lehman Bros Australia Ltd (in liq) (2012) 301 ALR 1; [2012] FCA 1028 - Zreika v Royal (2019) 271 FCR 65; [2019] FCAFC 82 Texts Cited: - W Bratton, "Fair Value as Process: A Retrospective Reconsideration of Delaware Appraisal" (2023) Del J Corp L 497 - A Damoradan, "Valuing Young, Start-up and Growth Companies: Estimation Issues and Valuation Challenges" (June 12, 2009; SSRN: https://ssrn.com/abstract=1418687) - E Dubiansky, "An Analysis for the Valuation of Venture Capital-Funded Startup Firm Patents" (2006) 12 BU J Sci and Tech L 170 - P D Finn, "The Fiduciary Principle" in T G Youdan (ed) Equity, Fiduciaries and Trusts (1989) - BK Krumm, "Fostering Innovation and Entrepreneurship: Shark Tank shouldn't be a Model (2017) 70 Ark L Rev 553 - A Lynch, "Believing in Unicorns: How to Value Unicorn Companies and Intellectual Property while Encouraging Continuing Innovations and Public Disclosure" (2021) 72 Case Wes L Rev 421 - AF Tuch, "Fairness Opinions and SPAC Reform" (2023) 100 Wash UL Rev 1793 - E Mantell & E Shea, "Development and Application of Business Valuation Methods by the Delaware Courts" (2021) 17 Hastings Business LJ 335 - C Sappideen & Ors, Fleming's The Law of Torts, 11th ed, Lawbook Co 2024 Category: Principal judgment Parties: Luke Bunbury (First Plaintiff) St. Jean CF Pty Ltd (Second Plaintiff) 1derful Pty Ltd (receiver appointed) (Third Plaintiff) The 1derful Group Pty Ltd (receiver appointed) (Fourth Plaintiff) Fletch Capital Pty Ltd (First Defendant) Craig Seymour (Second Defendant) Michael Birch (Third Defendant) Mitchell Warren Ball (Fourth Defendant) Representation: Counsel: B DeBuse (Plaintiff) E A Walker/A H Schatz (First and Second Defendants) A P Cheshire SC (Third Defendant) Solicitors: Vobis Law (Plaintiff) Teneo Commercial Lawyers (First and Second Defendants) SM Law (Third Defendant) File Number(s): 2023/353008 Judgment Nature of the proceedings and background 1. By Originating Process filed on 7 November 2023 ("OP"), the Plaintiffs, Mr Bunbury and others, seek a wide range of relief against the Defendants, Fletch Capital Pty Ltd ("Fletch"), Mr Craig Seymour and Mr Michael Birch. 2. The First Plaintiff, Mr Bunbury, is a director of each of the Third Plaintiff ("1derful") and Fourth Plaintiff ("1derful Group") (together, "Companies") since 15 June 2021 and owns, with his wife, 17,500 shares each in 1derful Group. He also claims (Statement of Claim ("SOC") [4]) that the Companies are indebted to him for, inter alia, deferred wages in an amount not less than $437,500.05 (gross) and other loaned monies. He brings these proceedings, by leave, as a derivative action. The Second Plaintiff ("St Jean") owns 10,000,000 of the 13,130,540 shares issued in 1derful Group, representing approximately 76.16% of its total shares. 3. The Plaintiffs allege (SOC [9]) and I find that business operated by the Companies involved proprietary technology and a licensing arrangement with Mastercard and other partners which, subject to regulatory approval, would permit the provision of branded debit and credit products for particular businesses that allowed clients to use branded debit and credit cards to provide instalment and hybrid payment options. Importantly, an agreement dated 25 January 2023 with Mastercard ("Mastercard Agreement") provided for the payment of performance-based incentives by Mastercard to 1derful, although I will recognise the suspension of that agreement and its significance for the value of the Companies' business below. A wholly-owned subsidiary of 1derful, 1derful Lending Pty Ltd ("1derful Lending) held an Australian credit licence from the Australian Securities and Investments Commission ("ASIC") (SOC [10]). The Defendants claim not to know what business the Companies operated and do not admit these paragraphs; those pleadings are plainly improper, where the Defendants had detailed knowledge of the Companies' business by reason of the conduct to which I refer below and procured the transfer of that credit licence to an entity associated with Fletch. 4. The Second Defendant, Mr Seymour, is the sole director of Fletch and a director of Jigsaw Works Pty Ltd ("Jigsaw Works") which is a shareholder in Fletch. The Third Defendant, Mr Birch, is a director of Midialel Pty Ltd ("Midialel") which is also a shareholder in Fletch. The Fourth Defendant, Mr Ball, was at one point purportedly appointed as receiver to the assets of the Companies. The Plaintiffs do not press a claim for relief against Mr Ball who was excused from attendance at the hearing. 5. I will set out the Plaintiffs' claims, which involve allegations of impropriety against the Defendants, below. In determining these claims, I have regard to the approach identified in Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34 ("Briginshaw") and its equivalent under s 140 of the Evidence Act 1995 (NSW) ("Evidence Act"). Where a party advances allegations of impropriety, the Court must take account of the gravity of the matters alleged in deciding whether the inference should be drawn and, although the standard of proof remains proof on the balance of probabilities, the strength of the evidence necessary to establish a given fact to the civil standard may vary according to the nature of what it is sought to be proved. In Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 110 ALR 449 at 449-450; [1992] HCA 66, the plurality observed that: "The ordinary standard of proof required of a party who bears the onus in civil litigation in this country is proof on the balance of probabilities. That remains so even where the matter to be proved involves criminal conduct or fraud. On the other hand, the strength of the evidence necessary to establish a fact or facts on the balance of probabilities may vary according to the nature of what it is sought to prove. Thus, authoritative statements have often been made to the effect that clear or cogent or strict proof is necessary 'where so serious a matter as fraud is to be found'. Statements to that effect should not, however, be understood as directed to the standard of proof. Rather, they should be understood as merely reflecting a conventional perception that members of our society do not ordinarily engage in fraudulent or criminal conduct and a judicial approach that a court should not lightly make a finding that, on the balance of probabilities, a party to civil litigation has been guilty of such conduct." [citations omitted] 1. Section 140 of the Evidence Act similarly provides that, in a civil proceeding, the Court must find the case of a party proved if it is so satisfied on the balance of probabilities and that, without limiting the matters that the Court may take into account in deciding whether it is so satisfied, it is to take into account the nature of the cause of action or defence, the nature of the subject matter of the proceeding and the gravity of the matters alleged. I approach the evidence in the Plaintiffs' claim on that basis. Affidavit evidence 1. I now turn to the affidavit evidence and cross-examination. In addressing that evidence, I have regard to the fallibility of human memory which increases with the passage of time, particularly where disputes or litigation intervene: Watson v Foxman (1995) 49 NSWLR 315 at 318-319; Varma v Varma [2010] NSWSC 786 at [424]-[425]. I also have regard to the fact that objective evidence, where available, is likely to be the most reliable basis for determining matters of credit that arise as to the affidavit evidence: Armagas Ltd v Mundogas SA [1985] 1 Ll R 1 at 57; Re Colorado Products Pty Ltd (in prov liq) (2014) 101 ACSR 233; [2014] NSWSC 789 ("Colorado") at [10]. 2. I also bear in mind the observations of Bell P (as the Chief Justice then was, with whom Bathurst CJ agreed) in ET-China.com International Holdings Ltd v Cheung (2021) 388 ALR 128; [2021] NSWCA 24 at [27]-[28]: "Whilst the quality and accuracy of oral recollection of actual conversations should be treated with care and caution given the fallibility of human memory (of which there has been a growing appreciation within the judiciary in recent decades), oral testimony may still be of value and importance, as was recognised in the nuanced observations of Leggatt J (as his Lordship then was) in Gestmin SGPS SA v Credit Suisse (UK) Ltd [2013] EWHC (Comm) 3560 at [22] (Gestmin): "the best approach for a judge to adopt in the trial of a commercial case is, in my view, to place little if any reliance at all on witnesses' recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts. This does not mean that oral testimony serves no useful purpose – though its utility is often disproportionate to its length. But its value lies largely, as I see it, in the opportunity which cross-examination affords to subject the documentary record to critical scrutiny and to gauge the personality, motivations and working practices of a witness, rather than in testimony of what the witness recalls of particular conversations and events. Above all, it is important to avoid the fallacy of supposing that, because a witness has confidence in his or her recollection and is honest, evidence based on that recollection provides any reliable guide to the truth." [emphasis added] Documents and events have to be understood in their context, and evidence of context will often be furnished by witnesses in their oral evidence. Documents, moreover, will not always present a complete picture of events. Indeed it would be rare that they do. Nor do contemporaneous documents necessarily or invariably convey or record the background or context in which events took place. That background or context will be familiar to the actors at the time of those events but may not always emerge from documents." 1. I have here drawn on my summary of the applicable principles in K&A Laird (N.S.W.) Pty Ltd (in liq) v Aidzan Pty Ltd (in liq) [2023] NSWSC 603 at [40]ff and Re Alora Davies Developments 104 Pty Ltd (in liq) & Ors v Raphael & Anor [2024] NSWSC 547 at [49]ff. I will reach findings as to several of the events addressed in the affidavit evidence in the chronology set out below. 2. While I have also addressed issues of credit of witnesses below, both generally and in respect of particular issues, I have borne in mind the cautionary observations of Basten JA (Handley JA agreeing) in Sangha v Baxter [2009] NSWCA 78 at [155], applied by Nixon J in Firmtech Aluminium Pty Ltd v Xie; Zhang v Xu; Xie v Auschn Conveyancing & Associates Pty Ltd [2024] NSWSC 1293 at [42] ("Firmtech"), that: "Because a witness has not told the truth with respect to a particular matter does not mean that other parts of his or her evidence are untruthful. Where possible, an assessment should be made of the reasons for the untruthfulness in order to see if other aspects of the evidence are likely to be infected by the same concern. Further, evidence may be rejected because it is apparently unreliable, possibly mistaken or deliberately untruthful or capable of being categorised in a variety of ways which are unlikely to be capable of clear delineation in some cases. Further, findings of credibility are not usually findings with respect to factual issues in the case, but are rather subsidiary findings on the way to determination of issues. Like many aspects of the evidence in a trial, the evidence of a witness who is believed to have lied in a particular respect, will nevertheless be able to bear some weight and should be placed into a balance, with other material evidence, before a conclusion is reached in relation to a critical fact. The rejection of a witness in total, absent corroboration is likely to mean that, even where corroborated, little attention will be paid to the evidence of the witness and less to the possible consequences which might flow from the fact that particular evidence is shown to be truthful: see generally, R v Collins [2007] NSWCA 122 at [44]." 1. By his affidavit dated 6 November 2023, initially read in respect of an application for leave to bring derivative proceedings, Mr Bunbury refers to his and his wife's shareholdings in St Jean and his claim to be a creditor of the Companies in respect of unpaid wages and other monies and to his being a shareholder in the Companies. His evidence, led without objection, was that the Companies conducted a financial technology business in which valuable technology and relationships with credit card service provider Mastercard and other business partners and service providers were developed (Bunbury 6.11.23 [6(a)]). He refers to the Companies' need for further capital and the risk of default in relation to existing debtor finance and, in evidence admitted with a limiting order under s 136 of the Evidence Act as submission and as his understanding, to the engagement of Messrs Seymour and Birch to assist the Companies in relation to resolving demands made on them and locate further equity or debt finance. Mr Bunbury there outlined (Bunbury [6]) the steps, now apparent from the documentary evidence, by which Fletch took an assignment of the debt owed by the Companies to PI Lorica Pty Ltd ("PIL"), demanded payment of that debt by the Companies and, on the same day, purported to take possession of the Companies' business and then purported to sell the Companies' business to itself. 2. Mr Bunbury then provides a more detailed outline of 1derful's business (Bunbury 6.11.23 [18]ff), in evidence led without objection, and of Messrs Seymour's and Birch's role, in evidence that was partly admitted with a limiting order under s 136 of the Evidence Act as submission or in respect of his understanding. Again, little turns upon Mr Bunbury's account of those matters where they are established by the documentary evidence which I address below. I will address Mr Bunbury's evidence of several dealings with Mr Seymour below. Mr Bunbury also there addressed steps taken by Fletch and a receiver that it purportedly appointed, after it had acquired PIL's debt and purportedly sold 1derful's business to itself. 3. By a second affidavit dated 4 December 2023, Mr Bunbury led evidence as to the Company's creditors and previous capital raisings and, in evidence admitted with a limitation under s 136 of the Evidence Act, as to the valuations which were implied by those previous capital raisings in substantial amounts. That affidavit exhibited the investor slide decks that formed part of the discussions with investors in respect of those capital raisings. Mr Bunbury also there referred to the appointment of a third party, Bayleaf Capital Pty Ltd ("Bayleaf Capital"), to assist in raising debt and equity for the 1derful Group and, in evidence partly admitted with a limiting order under s 136 of the Evidence Act as submission and partly as Mr Bunbury's understanding, to valuation work undertaken by Bayleaf Capital in respect of the capital raisings. Mr Bunbury also referred to other funding and revenue of the Companies, including a convertible note arrangement with a third party and the receipt of research and development tax incentive rebates from the Australian Government, and revenues from business "partners" including implementation fees, interchange fees, debt interest margin fees, and incentive payments which were payable by Mastercard under the arrangement between 1derful and Mastercard. 4. By a third affidavit dated 16 February 2024, substantial parts of which were admitted with limiting orders under s 136 of the Evidence Act as submission or Mr Bunbury's understanding, Mr Bunbury addressed additional emails which he contended demonstrated Mr Seymour's involvement in 1derful's work in assisting the Companies in refinancing the PIL debt and in raising equity and debt, including the financing of secured debt. Little turns on Mr Bunbury's understanding of those matters, where the course of events is evident in emails and text messages which I address below. Mr Bunbury also there addressed the Companies' creditors, in evidence largely admitted by way of submission or his understanding, broadly directed to establishing creditors' continued support for the Companies. He also addressed, in evidence also largely admitted as evidence of his understanding or as submission, matters on which he relied to contend that 1derful's business was likely to succeed, although there was plainly substantial uncertainty as to that question given its financial position in 2023, the suspension of its relationship with Mastercard and its inability to pay a large amount due to Mastercard, which I will address below, and the early stage of its business. 5. By his further affidavit dated 21 June 2024 Mr Bunbury takes issue with significant aspects of Mr Seymour's evidence. By a further affidavit dated 18 September 2024, Mr Bunbury addressed aspects of the first expert report of Mr Kompos on which the Defendants rely. His evidence, admitted with a limiting order as submission under s 136 of the Evidence Act, was that Mr Kompos had misunderstood various sources of the Companies' revenue and their nature and classification. His evidence was that the revenue that the Companies received from Mastercard was a marketing incentive paid by Mastercard, not a proportion of transaction values associated with throughputs on cards, and that Mr Kompos had incorrectly assumed that Douugh Australia Pty Ltd ("Douugh") was the only customer of 1derful by August 2023. 6. Mr Bunbury also there addressed the circumstances in which Mastercard had suspended its licence agreement with 1derful and the steps which had to be taken before Mastercard would exercise a discretion whether to renew that licence agreement which included, critically, the repayment of a substantial amount to Mastercard, as well as other steps relating to matters such as the provision of corporate structure and other information to Mastercard, implementing an automatic direct debt facility from the Companies' bank account in Mastercard's favour (which would presumably only have had utility if the Companies had sufficient funds to make the relevant payments), the provision of financial information and a detailed sales pipeline and addressing other matters. Mr Bunbury also set out the steps that he contended the Companies had taken to complete the requests from Mastercard and identified several other steps that he claimed the Companies were in the process of finalising. He was cross-examined at length as to those matters; limited documentation was produced in respect of them; and Mr Bunbury conceded that the relevant information had not been submitted to or accepted by Mastercard at the point at which Fletch acquired the Companies' business in the manner that I set out below. As Mr Bunbury fairly recognised, those issues were of lesser significance where, without additional funding, the Companies plainly could not repay the amount due to Mastercard, which Mr Bunbury acknowledged was a significant matter for Mastercard. Mr Bunbury also there led further evidence as to the revenue received by the Companies by way of R&D tax rebates. 7. Mr Bunbury was cross-examined briefly by Mr Walker, with whom Mr Schatz appears for Mr Seymour and Fletch, largely in relation to the dealings between Mr Bunbury and Mr Dahan concerning a winding up application that were brought against 1derful and then dismissed when a company associated with Mr Dahan, Hennesey Capital Partners Pty Ltd ("HCP"), acquired the debt owed to those creditors; HCP's engagement of Green Jigsaw Pty Ltd ("Green Jigsaw"), a company associated with Mr Seymour; the Companies' payment of the invoice rendered by Green Jigsaw; and the terms in which Mr Seymour had informed Mr Bunbury that CK Advisory Group Pty Ltd trading as Fifo Capital Northern Beaches ("FIFO Capital") had engaged Mr Seymour or an associated company. 8. Mr Bunbury was also cross-examined, at greater length, by Mr Cheshire who appears for Mr Birch in respect of matters largely related to the value of its business and, in particular, the state of its relationship with Mastercard. Mr Bunbury acknowledged (T114) the significance of Mastercard to the Companies' business and acknowledged (T120) the receipt of a breach notice from Mastercard in May 2023 and a suspension notice on 1 July 2023. He also acknowledged the risk that the Companies' access to Mastercard facilities would be lost by reason of these matters (T122). Mr Bunbury also acknowledged (T123) that 1derful had not addressed all of the matters that Mastercard required it to address by 3 October 2023, when Fletch acquired the Companies' business. It was plain that Mr Bunbury's evidence in chief, and to a lesser extent his evidence in cross-examination, significantly overstated the extent of the Companies' progress in addressing those issues. It was also plain, as Mr Bunbury ultimately recognised in cross-examination (T134) that the issues between the Companies and Mastercard had existed long before the appointment of a receiver by Fletch to the Companies' business. Mr Bunbury did not accept the significance of the matters raised in the correspondence from Mastercard for the value of the Companies' business (T141); it seems to me that those matters would plainly be relevant to a valuation of that business, although any purchaser of the business would likely purchase it only if it had sufficient confidence it could resolve those matters commencing with payment of the amount due to Mastercard, which was the approach taken by Fletch when it acquired that business. Mr Bunbury rightly acknowledged that any failure to reinstate the Mastercard Agreement would have a significant impact upon the Companies' business (T141). 9. Mr Cheshire also cross-examined Mr Bunbury as to the preparation of documents which were produced to the Court on 1 October 2024 (Ex P5), which purported to record progress in addressing the issues between the Companies and Mastercard; it is not necessary to address the position in respect of those documents, where it is plain enough that the issues with Mastercard were not close to resolution when the Companies lost control of their business, not least because the Companies did not then have access to the funds necessary to repay the amount then due to Mastercard. Mr Bunbury claimed to have addressed matters with Mastercard in oral discussions, but the optimistic account he gave of those discussions was not consistent with correspondence between the Companies and Mastercard in the relevant period and I approach Mr Bunbury's evidence in that respect with caution. Mr Bunbury fairly accepted (T164) that "the most critical factor" for Mastercard was funding, and that Mastercard required the repayment of the balance owing to them and was concerned as to the Companies' ability to "forward fund obligations". I accept that evidence and there is no suggestion that the Companies then had the capacity to address their funding difficulties, other than by the efforts that were then purportedly being made by Mr Seymour and Mr Birch. Mr Bunbury was also cross-examined as to the fact that several staff had left the Companies prior to October 2023 (T173ff); I accept that that is a significant matter, although I bear in mind that a purchaser of the Companies' business would likely either already have qualified staff who could work in such a business or would employ such staff. 10. Mr Cheshire cross-examined Mr Bunbury further as to his dealings with Mr Birch and as to steps taken to seek to address the application to wind up 1derful brought by Think Grow Pty Ltd ("Think Grow"), in which Quadiq Pty Ltd ("Quadiq") joined as supporting creditor, and a threatened winding up application by Techwondoe Limited ("Techwondoe"). Mr Bunbury did not accept that the issues with Techwondoe were unresolved (T102) and it is not necessary to resolve that question in order to determine these proceedings. Mr Cheshire also cross-examined Mr Bunbury as to the arrangements with PIL, and I accept his evidence that he understood that Mr Birch and Mr Seymour were working to refinance the PIL facility on the basis that a new financier would acquire PIL's debt (T205); that is, importantly, an entirely different proposition to an acquisition of PIL's debt for the purpose of immediately relying on an existing default, exercising the security, and selling the Companies' assets to the securityholder, which were the steps taken by Fletch which I address below. 11. I recognise that Mr Bunbury has an obvious economic interest in the outcome of the proceedings and his evidence is likely affected, consciously or unconsciously, by that interest. I generally accept his evidence, so far as it goes to the question whether Messrs Seymour and Birch had led him and the Companies to believe that they were working to advance the Companies' interests, where that evidence is consistent with the position as it emerges from the contemporaneous documents. Mr Bunbury either did not himself recognise, or was not frank about, the extent of the difficulties facing the Companies in their relationship with Mastercard or the depth of the Companies' and his own financial difficulties at the relevant time. At the same time, I recognise that companies that are financially vulnerable or on the brink of failure are no less entitled to honest assistance from those who claim to be working in their interests than companies which are in a strong position and have less need for such assistance. 12. Mr Seymour and Fletch read Mr Seymour's affidavit dated 10 April 2024. Mr Seymour's evidence is that he is a director and shareholder of Jigsaw Works which owns shares in a number of businesses including Green Jigsaw and Fletch. Mr Seymour denies that he was engaged by Mr Bunbury or any of the companies associated with Mr Bunbury including the Companies (Seymour 10.4.24 [16]). He contends that Green Jigsaw was engaged by HCP from 20 June 2023 to assist in dealing with the winding up application brought against 1derful in order to give HCP and Murray Darling Capital ("MDC") "control of the process" and avoid a winding up of 1derful. He also contends that Jigsaw Works was engaged by FIFO Capital from around 18 July 2023 until September 2023 to provide advice to FIFO Capital in respect of FIFO Capital's position as a secured creditor of the Companies (Seymour 10.4.24 [18]). The existence of those arrangements would not, of course, necessarily exclude the existence of an undertaking given by Mr Seymour to act in the interests of the Companies and/or Mr Bunbury in the relevant circumstances, nor does a fiduciary duty owed by Mr Seymour depend upon the existence of a contractual engagement by Mr Seymour by the Companies. Mr Seymour addresses further steps taken by him and others in respect of the winding up application and his dealings with Mr Bunbury in respect of that winding up application, although the detail of those steps are not material to any matter that I decide. 13. Mr Seymour's evidence, first given in cross-examination, was also that Mr Dahan (through HCP) had sought to acquire the Companies' debt at least "in part" for the purpose of subsequently acquiring the Companies' business. His evidence in cross-examination, apparently in respect of HCP's purpose, was that: "It was put to me that Mr Bunbury was an outstanding salesman, the thing was insolvent, it was in trouble, they were going to restructure it, recapitalise it, and put it into a new entity, and that's how the capital was going to be done. That's how it was put to me." (T264) That answer, and many of the answers given by Mr Seymour in cross-examination, did not adequately distinguish between a "refinancing" of a company's debt, which allows the company to retain its assets with a new lender in place, and the acquisition of debt and security by a party which then exercises its security to acquire the company's assets for itself. 1. Mr Seymour also claimed in cross-examination (T265) that the "term sheets" for refinancings issued by Mr Bunbury and his solicitor had the same effect as the transaction later executed by Fletch. That proposition was plainly not correct, where those term sheets were directed to a refinancing of the Companies by which they retained their assets, and not the forced sale of those assets by the securityholder to itself. Mr Seymour, in cross-examination, also sought to rebut criticism of the acquisition of the Companies' assets on the basis that the Business Sale Agreement ("BSA") executed by Fletch as controller of the Companies and Fletch as purchaser contemplated a valuation of the business to be completed after its transfer to Fletch (T266); however, that proposition had the obvious difficulties that Fletch would control how and whether that valuation took place and, in the event, Fletch did not complete that valuation. It is no answer to those difficulties that Fletch chose not to do so because Mr Bunbury had asserted a lien over critical assets to prevent its acquisition of those assets, where it had not in fact paid their fair value. It also appears from Mr Seymour's cross-examination (T267) that this is not the first occasion on which steps of this kind have been taken, since he referred to HCP having taken the same approach with his assistance in respect of a third party "a couple of years ago." 2. I recognise that Mr Seymour pointed in cross-examination to a likely explanation for the concealment of aspects of the transaction from the Companies and Mr Bunbury, namely a concern that Mr Bunbury would remove assets from the Companies (T324), and I recognise that Mr Bunbury later asserted a lien over the Companies' assets to avoid providing them to the receiver appointed by Fletch. Mr Seymour acknowledged in cross-examination that he took the view that it would be possible to lift the suspension of the Companies' Mastercard privileges and rebuild the relationship with Mastercard using Fletch, although he claimed that it would cost "millions of dollars" to do so (T331). His evidence (T331-332) was also that Fletch later did not obtain a valuation of the Companies business, as contemplated by the BSA, because it had not acquired the assets or necessary passwords and could not obtain a specialist report to assess the technology; he understood that Mr Bunbury trusted him and continued to trust him into September 2023, in the context that he was working on the overall engagement from HCP; he understood that Mr Bunbury had involved him in the Company's finances and Mr Bunbury's personal finances and given him information about those finances, in the context of that engagement; he acknowledged that he had not disclosed Mr Birch's intention to acquire the assets of the Companies through Fletch to Mr Bunbury; he denied that he intended to acquire the Companies' assets at less than true value or anticipated that such an acquisition would not later be challenged because Mr Bunbury would by then be bankrupt and the Companies in liquidation; and he denied that he intended those assets be acquired in a manner that would damage the Companies or their creditors. 3. I should also record that, at the conclusion of Mr Seymour's cross-examination, I raised several matters with Mr Seymour, including the possibility that the Court may refer the matter to ASIC for it to consider whether to make a banning order against him, and I afforded him the opportunity to respond to that possibility. He responded as follows (T335): "Your Honour throughout this process I was initially engaged to keep 1derful alive, and have the winding up proceeds dealt with, and I did that. The secondary part of that engagement was to assist in recovering creditors' money. I am very familiar with the insolvency provisions of the Corporations Act, and the requirements or [sic] the situation that a director of an insolvent company's first obligation is to creditors and not to shareholders. My actions throughout this whole process were absolutely directed at assisting creditors to recover as much as possible. I took advice and ensured that processes were put in place that I would run if I was running this as an insolvency file. I had significant concerns about what would happen to the assets of the company if I made disclosures to Mr Bunbury that in hindsight perhaps I should have made. But I believed that my actions were going to maximise the outcome for the creditors of the company at every step, and that was the basis on which I took the action." 1. I should make two observations as to that answer. The first is that, even if Mr Seymour's concerns that Mr Bunbury would take or secure the Companies' assets if he had been made aware of Fletch's plans were well-founded, that provides no justification for non-disclosure to the Companies or Mr Bunbury in the relevant circumstances. Disclosure which is required by law or commercial morality is often practically disadvantageous to a party who complies with that obligation. Second, this was, at best, a belated acknowledgment of the substantial issues arising from non-disclosure in this matter. 2. Mr DeBuse, who appears for the Plaintiffs, submitted that: "Mr Seymour should not be believed, nor should his narrative even in documents of which he is the author because he showed himself incapable of giving an account which did not include new allegations evasions or disclaimers of responsibility that is in addition to his many denials of matters self-evident on the face of documents. Eventually and perhaps most importantly, was the secrecy involved in the performance of the scheme which at first he denied although admitting he never sent the road map but confronted with his own account from documents produced by him he admitted critically that Mr Bunbury was unaware of the fact that the charge was to be acquired through the assignment of the debt and that assets were to be transferred in accordance with the "road map"." 1. Mr Seymour was generally accurate in respect of the chronology of events and his affidavit evidence had plainly been prepared with close attention to the contemporaneous documents. He was otherwise an unsatisfactory witness. His evidence was replete with non-responsive answers and attacks on the Companies and Mr Bunbury, which he plainly perceived would advance his interest in showing that, because they were not forthcoming as to the extent of their financial difficulties or were likely to fail in any event, there was no difficulty with the course he had adopted. He sought to maintain that his associated company was in reality working for FIFO Capital from mid-July 2023, where I will find below that he had engineered such a retainer in order to promote his own and Mr Birch's interests to the disadvantage of FIFO Capital and the Companies. Mr Seymour, in cross-examination, also did not frankly acknowledge the extent to which, from at least mid-July 2023, he was working to advance his own interests to the potential (and ultimately actual) detriment of the Companies and FIFO Capital, with the exception of the concessions that he made at T331-332 and T335. I largely accept his evidence his identification of the chronology of events but I largely do not accept his evidence as to the content of conversations or the purpose or commercial substance of steps that he and Mr Birch took unless it is corroborated by contemporaneous documents. I will refer to several events addressed by Mr Seymour's evidence in the chronology below. 2. Mr Seymour and Fletch also read the affidavit dated 10 April 2024 of Mr Dahan, who is the sole director of HCP. Mr Dahan refers to the circumstances in which Mr Birch introduced him to Mr Bunbury, initially in connection with Mr Bunbury's seeking finance to purchase a property personally, and to the extension of Mr Dahan's involvement to raising funds for the Companies. Mr Dahan's evidence is that he raised $2 million in capital for the Companies from several investors in about June 2020. His evidence is that he became aware of a winding up application in respect of 1derful brought by Think Grow in May 2023 and Mr Bunbury then requested his assistance to raise funds to resolve that winding up application. 3. Mr Dahan's evidence was initially that he had numerous conversations with Mr Bunbury in relation to the winding up application in early June 2023, in which he proposed that HCP would acquire 1derful's debts to Think Grow and Quadiq in order to resolve the winding up application. Mr Dahan accepted in cross-examination that those conversations did not occur until later, after he had engaged Mr Seymour and his associated company in relation to the winding up application, and Mr Seymour had developed that proposition. Mr Dahan then set out a conversation with Mr Birch and Mr Seymour on 20 June 2023, although his evidence in cross-examination was that he had several conversations with Mr Seymour prior to that date, a proposition that Mr Seymour denied. It was plain from Mr Dahan's evidence on cross-examination that he had little real recollection of events and I give little weight to his account of that or other conversations. Mr Dahan also addressed steps which were taken to refinance a personal asset of Mr Bunbury, an expensive motor vehicle, and the way in which the resulting funds were disbursed, although it was not apparent that that matter has any significance for any issue that I have to determine in the proceedings. Mr Bunbury denies aspects of Mr Dahan's affidavit as to the dealings between the Companies and HCP, but it is not necessary to resolve any of the disputed matters in order to determine these proceedings. 4. Mr Dahan was cross-examined at some length. He accepted in cross-examination that the purpose expressed by Mr Birch or Mr Seymour for the meeting held on 16 August 2023 (which I address below) was, among other things, to discuss plans to acquire the Companies' assets (T137). That proposition is significant so far as events had then moved beyond a refinancing of the Companies' debt, which would have involved the acquisition of the debt and the security, to the additional steps which would be involved in enforcing that security so as to acquire those assets. After Fletch had acquired the Companies' assets, Mr Dahan suggested to Mr Bunbury that the latter's having an interest in what remained would be better than nothing (T237); little turns on that, where the Companies had by that point lost their business to Fletch in the manner I set out below. Mr Dahan accepted that, although he became aware of Mr Birch's and Mr Seymour's discussions about acquiring the Companies' assets at an earlier time, he first disclosed that matter to Mr Bunbury in December 2023, after Fletch's forced acquisition of those assets was complete (T240). 5. Mr DeBuse submitted that: "Mr Dahan's account of the events so far as his evidence was relevant should not be accepted. Mr Dahan's evidence was a rambling amalgamated recollection of unparticularised events, of which he provided an opaque review in respect of the only relevant conversation which occurred on 20 June 2023. His failure as a historian and as a witness is best illustrated by an event he described in cross-examination in which he shook the Second Defendant's hand agreeing to be responsible for the fees to be incurred in relation to events the next day, the principal problem with such account being that up to that moment, and in all other accounts, including by him, the relevant conversation took place on the telephone. It is notable that rather than Mr Dahan and Mr Seymour talking because they were both in Melbourne, Mr Seymour's evidence was that Mr Seymour would not take Mr Dahan's calls because he was owed money. The only evidence which Mr Dahan gave that should be accepted is that [a] Mr Seymour introduced the proposal to acquire the debts of Think Grow as a means to control the winding up application; and [b] That Mr Dahan introduced Mr Seymour to 1derful on 20 June 2024 as someone who could assist it dealing with the winding up application; and [c] That he and Mr Birch agreed to be personally responsible for the costs of $20,000." 1. I accept that Mr Dahan's lack of recollection was such that he was able to give little useful evidence in his affidavit or cross-examination. Neither his affidavit nor his cross-examination significantly advanced any issue in the proceedings. 2. Mr Birch relied on his affidavit dated 10 April 2024. His evidence is that he has worked in the financial services industry since his graduation, and that he became a partner of MDC in about October 2019. His evidence is that he also owns a stake in Trilogy, which has been working with The Agency Group Australia Pty Ltd ("The Agency") to acquire and manage residential real estate agencies in New South Wales and Queensland (Birch [9]). He also established Handy Payments Pty Ltd ("Handy Payments") in January 2020 to provide loans for landlords to fund maintenance, renovations and other landlord expenses (Birch [10]). Mr Birch had known Mr Bunbury for about 10 years and his children had attended the same kindergarten and the same school. I will refer to Mr Birch's evidence as to the events in issue in setting out the chronology of events below. 3. Mr Birch, in cross-examination, sought to characterise his role as working for Gibraltar Capital Pty Ltd ("Gibraltar Capital") in its capacity as a trustee which was preparing a fund in which lenders introduced by Mr Bunbury would invest (T369). I do not accept that characterisation, where Gibraltar Capital's role was plainly not, in practice, limited to passively awaiting the arrival of investors introduced by Mr Bunbury and Mr Birch was engaged on an ongoing basis with potential investors. Mr Birch's evidence (T376) was also that he had advised 1derful he was not trying to locate or identify funding for 1derful. I also do not accept that evidence given Gibraltar Capital's description of its role in the contemporaneous correspondence with PIL and Mastercard, which I address below. 4. Mr Birch, in cross-examination, also gave evidence that he had not read (or at least did not recall reading) much of the correspondence directed to him in respect of the latter part of the transaction, including the detailed road maps in respect of the relevant transactions and letters which he had forwarded to third parties which identified him as the contact point. I will address those matters in the chronology below. I also cannot accept Mr Birch's evidence in this regard. It seems to me highly implausible that, for example, Mr Birch would forward letters to third parties that identified him as the contact point, without informing himself as to their content so as to deal with any contact that those third parties then made with him. I also address Mr Birch's claim to have had no substantive involvement in the matter after 25 August 2023 below. Mr Birch did not accept in cross-examination (T404) that it would be commercially unethical if the transaction was intended to bring about Fletch's acquisition of the Companies' assets for itself, or without informing Mr Bunbury or the Companies of that intention, but did accept that it would be commercially unethical if it was undertaken for the purpose of acquiring those assets at less than true value. 5. I recognise that, as I have noted above, it is possible that a witness may be in error in aspects of his or her evidence or to give false evidence in aspects of his or her evidence and nonetheless to give truthful evidence in other aspects of his or her evidence, but there seems to me to be little room for Mr Birch to have been innocently mistaken as to his recollection whether he read correspondence as to critical matters and as to his knowledge of critical aspects of the transaction in the period prior to its implementation; and the unreliability of his evidence as to these matters undermines the reliability of his evidence generally. I largely cannot accept Mr Birch's evidence as to contested matters unless it is corroborated by contemporaneous documents. 6. The Plaintiffs read, in reply, an affidavit dated 18 September 2024 of Mr Kopp, who is a director of FIFO Capital. Mr Kopp was not cross-examined to contest the truth of his evidence which is supported by notes of conversations with Mr Seymour which were unchallenged. I refer to his evidence in the chronology which appears below. Mr Kopp's uncontested evidence, led in response to paragraphs 97-98 of Mr Seymour's affidavit, was also that Mr Seymour had also made several statements to him prior to October 2023 that 1derful was worth at least $2 million and that FIFO Capital would be repaid in respect of the transaction, which has not occurred. Expert and other valuation evidence 1. I now turn to the expert valuation evidence led by the parties and other valuation evidence, which is relevant both to the Plaintiffs' causes of action and to their claim for damages or compensation. The Plaintiffs read an affidavit dated 17 March 2024 of Mr Davies and relied on his report dated 17 March 2024. Mr Davies had used revenue per customer figures and identified the number of customers falling within particular cohorts, based upon a third party's contemporaneous projection, to derive an implied enterprise valuation by reference to the Companies' H1 2024 projected revenues. He reached an unadjusted enterprise value of in excess of $33.7 million by that method, which he then increased by applying a control premium of 27.5% and discounted for a lack of marketability by 19.1%, and applied a further discount factor to take account of, inter alia, the risks attached to the Companies' business to achieve present value of the adjusted enterprise value of the Companies of in excess of $29.7 million. Mr Davies alternatively assessed the current value of the Companies, on the basis the revenues were not evident and the relationship with Mastercard had "stalled", as nil. 2. By a second affidavit dated 23 September 2024, Mr Davies expanded on his qualifications and experience and provided a limited explanation of the basis on which the comparable companies to which he had referred were selected, referring to their "similar profit margin expectations". An immediate difficulty with that approach is that any profit margin expectations of the Companies depended, critically, on their ability to survive their significant financial difficulties By a third affidavit dated 26 September 2024 and a further report attached to that affidavit, Mr Davies expanded on the process which had derived the H1 2024 revenues used in his report, by a method described as "cohort modelling". It is not necessary to address that method at any length, where the assumptions which underlay it were plainly not established for the reasons noted below. Mr Davies also explained the approach to growth adopted in that report, but the basis of that approach was also not established, where it assumed the Companies' ability to acquire further customers which also depended on their capacity to fund their ongoing business. Mr Davies also explained the approach which he had adopted to a control premium and to a discount for lack of marketability, at least to some extent, and the role of a chartered accountant, Mr Tan, who had assisted him with the financial modelling undertaken for the purposes of his report. 3. Mr Cheshire cross-examined Mr Davies as to, inter alia, his failure to adjust the projected revenue of the Companies for the year ended 30 June 2023 by reference to their actual revenue for that period, which would have been known by the valuation date adopted for Mr Davies' report and by the date that report was prepared; and as to the identification of comparable companies from which he derived the revenue multiple which he applied. Both issues undermined Mr Davis approach; as to the latter, companies that were of greater financial strength than the Companies was not appropriate comparators, even if they were in the same line of business as the Companies. Mr Cheshire also cross-examined Mr Davies in respect of the discount rate and the discount for lack of marketability that he had adopted, but it is not necessary to address those matters where the fundamental difficulty with Mr Davies' report is that the Plaintiffs have not established the assumptions upon which it depends. 4. In closing submissions, Mr Cheshire also challenged Mr Davies' expertise. It seemed to me that he had strong expertise as to the particular complexities involved in the valuation of start-up technology companies, although I recognise he is not an accountant and typically values start up technology companies in a commercial context and with the assistance of valuers or chartered financial analysts, as he had done in his report in this matter. I accept that Mr Davies had sufficient expertise to express a view as to the value of the Companies' business. Mr Cheshire also submits that Mr Davies evidence was "partisan and unsatisfactory". I do not share that view and it seemed to me that Mr Davies gave generally reasonable, thoughtful and constructive evidence in cross-examination, within the limits of the assumptions he had been given and the difficulty of the valuation task, in response to a vigorous cross-examination by Mr Cheshire. 5. However, there were fundamental difficulties with the assumptions Mr Davies had made in valuing 1derful's business. First, as I noted above, Mr Davies applies a multiple to a contemporaneous projection made by a third party of 1derful's future sales and revenue for H1 2024 to derive his valuation; however, there is no evidence that supports the correctness of that projection and no evidence of any substantive review or testing of it by the Companies' management. The revenue involves implied assumptions as to the Companies' future customer numbers and revenue per customer, and the same difficulties arise with those assumptions. Second, although Mr Davies was not entirely consistent in his evidence in this respect, he appears to have assumed that the Companies would be able to reinstate their agreement with Mastercard for the purposes of the valuation and the evidence also does not establish a reasonable basis for that assumption, although a third party acquiring the business might well have been able to do so. I recognise that, as I noted above, Mr Cheshire cross-examined Mr Bunbury at length as to the issues in the Mastercard relationship and his closing submissions advance detailed criticisms of Mr Bunbury's evidence and deal, at length, with Mastercard's then unsatisfied requirements before it would exercise any discretion to reinstate that relationship. It is not necessary to address those issues or those submissions at length where, even apart from them, the evidence does not provide a sufficient basis to find that relationship would be reinstated while the Companies retained the business, and were in real financial difficulty, rather than after a sufficiently funded third party had purchased that business. Third, Mr Davies' valuation assumed the continuance of the Companies' business in circumstances that their substantial financial difficulties suggested a probability that it would fail in the short to middle term. Fourth, there is no basis to think that his discount figure was sufficient to adjust for the substantial risk that then existed in the Companies' business. These matters are sufficient, without more, to have the result that I could not accept Mr Davies estimated fair enterprise value of the Companies as at 31 August 2023 in the amount of $29.7 million, or any figure of that magnitude, and I could not adjust that figure in any way that would allow it any reasonable basis. 6. The Defendants read the affidavit dated 3 June 2024 of Mr Kompos and relied on his report of the same date. Mr Kompos set out his background in his report, which indicated that he has insolvency experience and performed a contract role at a financial services provider between 2017 and 2018 and has subsequently undertaken forensic accounting work. Mr Kompos' first report dated 3 June 2024 was relatively short and indicated that his valuation was directed to: "The value of the 1derful Companies' business that was acquired by [Fletch] pursuant to the [BSA] between [Fletch] as controller of the 1derful Companies and [Fletch] ("1derful Business") at 31 August 2023 and 3 October 2023." 1. Mr Kompos indicated, in paragraph 13 of his report, that he had adopted "market value" as the basis for the valuation; that, however, is inconsistent with the statement in Appendix 3 of his report that the report had been prepared in accordance with business valuation standard APES 225 and adopted a "liquidation value" of the relevant assets. That approach likely reflected an assumption that he was asked to make, that the Companies were insolvent. However, that assumption was not proved, although the Companies were at least in significant financial difficulty. Mr Kompos plainly adopted a liquidation value in his report, since he applied an 80% discount to the value of the Companies' assets for insolvency, although the Companies' insolvency had not been proved; the Companies were not in liquidation at the date of the valuation at 31 August 2023 and are not now in liquidation; Fletch as the purchaser of the assets was also not then or now in liquidation; and, contrary to the view asserted by Mr Kompos without any substantial reasoning, it was not apparent that the value of the assets to a potential purchaser would have been affected by a liquidation of the Companies as vendor, still less in a way that warranted an 80% discount. Mr Walker rightly did not seek to defend that important aspect of Mr Walker's report in closing submissions. 2. Mr Kompos defined the concept of market value as follows: "Market value is defined as the price at which a business or equity would change hands between a knowledgeable willing buyer and a knowledgeable willing seller, neither being under a compulsion to buy or sell, and both having reasonable knowledge of relevant facts. Market value, as defined above, is a concept of value which may or may not equal the sale price that could be obtained if the business or equity was sold to a special purchaser in an actual transaction in the open market. Special purchasers may be willing to pay higher prices to gain control or obtain the capacity to reduce or eliminate competition, ensure a source of revenue, or obtain costs savings arising from business competitions following acquisitions or other synergies which could be enjoyed by the purchaser." I note that Mr Kompos' definition of "special purchaser" was there so wide as to extend to many or all purchasers of a business such as the Companies, where it is difficult to imagine a purchaser that would acquire a business other than to reduce or eliminate competition, obtain revenue from it or obtain costs savings or other synergies from it. 1. Mr Kompos' report also referred to an additional instruction that other key personnel had departed 1derful at the valuation dates; I assume that instruction was of some significance for his report, but he did not address its relevance to his reasoning process; or how he had adjusted for the likelihood that a purchaser of the Companies' business would have or employ staff who would provide expertise. In his first report, Mr Kompos made a further assumption, which proved to be incorrect, as to the nature of Mastercard revenue appearing in the Companies' management accounts for the period ended 31 May 2023. He also made a second assumption, which was not established, that Douugh was 1derful's only customer by August 2023. 2. Mr Kompos outlined his valuation methodology, in a broadly orthodox way, although largely without addressing complexities in respect of the valuation of startup businesses which have been recognised in the academic literature that I note below. He fairly recognised that: "A multiple of revenue may be an appropriate approach as a proxy for future earnings in industries where EBITDA is volatile (positive and negative) due to temporary industry or economic factors, the businesses are in early years of operation and have yet to reach the point where they generate positive EBITDA or have not reached full profitability (eg start-ups)." 1. Mr Kompos observed (at [2.2.19]) that he had utilised a multiple of revenue methodology as: "(a) Businesses were in the early years of operation and had yet to reach the point where it generated positive EBITDA. (b) The multi-year future cashflows prepared appear unrealistic based on the performance of 1derful's business, the operational issues being experienced, and the number of 2B customers acquired at the valuation dates. (c) I am not aware of any industry specific methodologies for this type of business." 1. That approach points to the difficulty of relying on historical revenue or forecasting future revenue in respect of a startup business, prior to the point at which that business has achieved a stable revenue stream, when much of the value of its business is likely to be in the prospect of future increased revenue. 2. Mr Kompos then noted (at [3.1.1]) that he had applied a capitalisation revenue approach by assessing 1derful's recurring revenue at the valuation dates in applying an "appropriate multiple" from comparable company data. It seems to me that methodology did not here adequately take account of future increases in revenue, whereas a willing vendor and willing purchaser would likely have had regard to the prospect of increased future revenues in negotiating a purchase price for a start-up business. The multiples adopted by Mr Kompos did not adequately address this issue, where they appear to have been drawn from companies with more established businesses than the Companies, as Mr Kompos recognised (at [3.3.4] of his report). Mr Kompos also identified (at [3.3.13]) further matters which he contended made it inappropriate to value the Companies' business as a "going concern" and expressed the view, by reference to unidentified experience in insolvency administrations, that a purchaser would likely pay in the order of 20% of the value of the assets to acquire them. On that basis, Mr Kompos valued the Companies' business at $343,126, but discounted its market value to $69,000. As I noted above, Mr Walker did not seek to support that discount in closing submissions. I would have given little weight to these aspects of Mr Kompos' first report, where his approach in determining the going concern valuation of the Companies' business seems to me to have had insufficient regard to its prospective character and the insolvency discount to the value of the Companies' business that he adopted did not have any substantial basis. 3. Mr Kompos also advanced several criticisms of Mr Davies' report. He accepted that Mr Davies' use of a "guideline public company methodology" was comparable with Mr Kompos' multiple of revenue methodology, although they seem to have differed in their approach to future earnings, and he accepted that two companies identified by Mr Davies were comparable companies. Mr Kompos criticised Mr Davies' determination of a value based on a 75% percentile of comparable companies and expressed the view that the revenue multiple applied by Mr Davies was too high; expressed the view that the revenue multiples adopted by Mr Davies could not be applied to the projected revenues used in Mr Davies' report; and noted that Mr Davies had not adequately tested whether the Companies' revenue projections were reasonable. These criticisms have considerable force, but the more fundamental difficulty with Mr Davies report is, as I have noted above, that the growth assumptions adopted in Mr Davies' report were not established. 4. The Defendants also relied on a second affidavit of Mr Kompos dated 30 September 2024 and his further report, responding to Mr Bunbury's affidavit dated 18 September 2024 which challenged the factual basis of the assumptions made in his earlier report, and responding to Mr Davies' further reports dated 23 and 26 September 2024. In that further report, Mr Kompos accepted that, having regard to Mr Bunbury's evidence and the terms of the Mastercard Agreement, the assumptions on which he had relied in his earlier report (at [1.3.1]) as to the nature of revenue received by the Companies from Mastercard was incorrect. Mr Kompos expressed the view that that would reduce his assessment of recurrent revenue in the Companies' business and result in a minor reduction in the valuation of the business to $64,000. 5. In his second report, Mr Kompos acknowledged that assumptions which he had been provided and adopted in his first report as to the number of customers of 1derful by August 2023 and its earnings from credit and debit card transactions appeared to be incorrect and indicated that he no longer relied on them, and abandoned the analysis in paragraph 3.2.2 and part of paragraph 3.2.3 in his first report. On that basis, Mr Kompos indicated that he would revise the going concern valuation of the Companies' business upward to $533,072, which he again discounted by 80% on a liquidation basis, to reach a value of $107,000. He conditioned that revision on 1derful's receiving payment of the invoices it had issued, but did not explain why a revenue-based approach would depend on the fact of payment, particularly in the complex factual circumstances of this case, rather than on the Companies' entitlement to payment of those invoices. While Mr Kompos' revised valuation on a going concern basis is somewhat more realistic than his earlier valuations, it still seems to me to have had insufficient regard to the prospective character of the business and the insolvency discount to the value of the Companies' business that he adopted still did not have any substantial basis. 6. In his second report, Mr Kompos also responds to Mr Davies' assessment of comparable companies and to Mr Davies' treatment of revenue and expresses the view that the revenue projections adopted by Mr Davies in his report were unrealistic. I have concluded above that the basis for those revenue projections has not been established. Mr Kompos also addresses the control premium, discount for marketability and use of comparable companies' data in Mr Davies' further evidence. It is not necessary to address his further evidence in that respect, other than to note that I do not accept his evidence that it is not appropriate to take account of synergistic benefits which is, first, a bare assertion; second, implausible, where a willing vendor and willing purchaser would likely negotiate the treatment of those benefits; and, third and for completeness, inconsistent with the view has been expressed by a sophisticated academic commentator in W Bratton, "Fair Value as Process: A Retrospective Reconsideration of Delaware Appraisal" (2023) Del J Corp L 497 at 521-522. 7. Mr Kompos' assessment of the value of the Companies' business was significantly less than Mr Seymour's contemporaneous assessment of its value as not less than $2 million, to which I refer below, and also significantly less than the amount that Fletch and its (then) parent company, Axiom, an apparently informed purchaser which was assisted by Messrs Seymour and Birch who were plainly sophisticated market participants, was prepared to pay PIL to secure the opportunity to acquire the business by the exercise of security. That difference likely reflects the fact that Mr Seymour and Fletch both rightly recognised that the value of the Companies' business to a purchaser was largely a matter of its potential and its technology rather than its then revenue and Mr Kompos' valuation, as I noted above, had not adequately accounted for that potential. Mr Kompos was cross-examined at some length. It emerged, in the course of that cross-examination, that he had a past professional association with Mr Seymour, although I recognise that that association was not recent. I have concluded that Mr Kompos' reports provide little assistance in valuing the Companies' business and are likely a less realistic valuation of that business than Mr Seymour's contemporaneous assessment of the value of the business before the transaction was implemented. 8. For completeness, I should also note that the expert witnesses and the parties paid limited attention to the complexities of the valuation of startup technology companies, which have been recognised in academic literature. Mr DeBuse drew attention in closing submissions to the detailed analysis of these issues in one paper, [1] and to academic commentary and Delaware case law concerning valuation principles generally. [2] The parties did not address other legal commentary as to these matters [3] and I should not do so where the parties have not done so. 9. I have considered whether, notwithstanding that I cannot accept either of the parties' expert evidence, I can proceed by reference to the value of the Companies' business that was recognised by Mr Seymour, when he repeatedly told FIFO Capital that the value of that business was not less than or in excess of $2 million. I should here summarise the evidence as to that matter, which I have addressed in the chronology above. On 28 August 2023, and after a meeting with Mastercard to discuss the proposed acquisition of the Companies' business and potential reinstatement of the Mastercard Agreement, Mr Seymour had advised Mr Kopp of FIFO Capital that, if the valuation of the Companies "comes back at $2 million, then there would be enough money to pay FIFO Capital" and that "[i]f or when Mastercard turns the agreement back on, then the value of the assets is still significantly higher" (emphasis added) (Kopp [11(f)]). Although that observation contemplated a future valuation made under the BSA, which Fletch did not later complete, it was plainly directed to the value of that business before the suspension of the Mastercard Agreement was lifted, likely taking into account the prospect that it would be lifted, which would be increased if and when that Agreement was reinstated. On the same day, Mr Seymour again advised Mr Kopp and another director of FIFO Capital of his assessment that the Companies' assets "are worth at least $2 million every day of the week" and that he could not see the assets "being worth less than $2 million", comprising value for the customers, the strategy, the credit licence, the agreements and the code (Kopp [11(f)]). Mr Kopp's unchallenged evidence (Kopp [14]) is also that Mr Seymour made several statements to him during the months prior to October 2023 that "1derful was worth at least $2 million" and, in an email dated 6 October 2023 (Ex D1/2, CB 2318), Mr Kopp reminded Mr Seymour that he had several times expressed that view and Mr Seymour did not deny doing so in his email in response. 10. This assessment of the value of the Companies' business may be admissible as an admission against Mr Seymour and Fletch; Mr Cheshire rightly points out that it is not admissible as an admission against Mr Birch; in any event, I treat it as evidence of the value of the minimum value of that business, as assessed by a sophisticated participant in the transaction who had a real incentive to reach an accurate commercial valuation; was conscious of the uncertainty arising from the need to reinstate the Mastercard Agreement and of the prospects of its renewal; and must have known that this matter was of real importance to FIFO Capital as a second-ranking creditor whose prospects of recovery depended on the value of that business. I am satisfied that the $2 million figure likely reflected an implicit assessment of the prospect that the renewal of the MasterCard Agreement could be achieved, and recognised that value would be increased (as the conversation with Mr Kopp indicated) when and if that was achieved. Chronology 1. I now set out the chronology of events, for which I have drawn upon the pleadings, the parties chronologies, the affidavit evidence and cross-examination and documents tendered. This chronology incorporates my findings as to contested matters as necessary. 2. The Companies were both incorporated on 3 October 2019 (Ex P1, CB 109-130) and, on 15 June 2021, Mr Bunbury was appointed as the director of each of the Companies. The Companies received both client revenue and refundable R&D tax offset payments over the relevant period. In the financial year ending 30 June 2020, 1derful received a refundable R&D tax offset in the sum of $307,032.57 (Ex P2, CB 640, 646). In the financial year ending 30 June 2021, 1derful received a refundable R&D tax offset in the sum of $977,584.64 (Ex P2, CB 642-643, 646). In the financial year ending 30 June 2022, 1derful received a refundable R&D tax offset in the sum of $1,515,132.41 (Ex P2, CB 645). In the financial year ending 30 June 2023, a Research and Development Tax Incentive Schedule was prepared, estimating the sum of 1derful's 'Refundable R&D tax offset' to be $573,586.22 (Ex P2, CB 647-649). 3. Mr Birch's evidence (Birch [12]) is that he had a conversation with Mr Bunbury in early February 2020 in which Mr Bunbury requested "help with finding short term capital for my new business 1derful", which he described as a "new fintech business", and Mr Bunbury then outlined the services which 1derful was to provide. Mr Bunbury denies (Bunbury 21.6.24 [34]) aspects of that paragraph of Mr Birch's affidavit. Mr Birch's evidence is that he then introduced Mr Bunbury to several of his contacts, including Mr Dahan from HCP and that Mr Dahan helped Mr Bunbury raise capital for 1derful and also for Mr Bunbury's personal purposes. His evidence (Birch [16]) is that, from 2020 to mid-2022, he introduced Mr Bunbury to business contacts, but he was not involved in discussions between Mr Bunbury and those other contacts and that (Birch [17]): "At no time did Mr Bunbury keep me informed as to where his discussions were at with regard to any potential members or investors." 1. In December 2020, Mr Birch and Mr Bunbury had an inconsequential exchange as to the form of Mr Bunbury's business card which referenced other entities, including a company associated with Mr Birch, Handy Payments (Ex P4, CB 1035) and they then had subsequent dealings in respect of Handy Payments (Ex P4, CB 1037, 1115). 2. On 14 October 2021, Mr Birch sent an email to Mr Bunbury enclosing an Engagement Letter from MDC in relation to "Capital Advisory Services", in his capacity as a partner in that firm, and the covering email referred to client opportunities including one with The Agency (Ex P4, CB 1138). The Engagement Letter recorded the services to be provided as: "Advisory services to secure capital for 1derful, by way of debt, equity, and other finance facilities. The Services include but are not limited to: (a) Advising 1derful and its founder Luke Bunbury to source a USD$250,000 loan for 1derful to hold as a deposit against a facility offered to 1derful by its partner Mastercard; and (b) Advising 1derful to secure a warehouse funding facility or other credit lines to fund the growth of its business. Any fees payable to MDC for the Services will initially be limited to Road Night Capital and its related entities or introduction. Any additional introductions made by MDC to 1derful outside of Road Night Capital and its related entities or introductions has to be agreed by both parties in writing for and Fees to be payable to MDC." That engagement letter also required 1derful to provide MDC the information that MDC reasonably requested in connection with its services under the engagement, and MDC undertook to maintain confidentiality in respect of the information provided to it by 1derful. Mr Cheshire submits that Mr Bunbury and the Companies on the one hand and Mr Birch on the other did not then enter into any formal agreement, retainer or engagement. It is not necessary to determine that question in order to determine the proceedings. 1. On 20 January 2022, Mr Birch sent a text message to Mr Bunbury saying "… saw funding came in, glad you got it away" and requesting payment of his fees (Ex P4, CB 1039) and then sent several texts pressing Mr Bunbury for payment of his fees, presumably relating to the earlier engagement (Ex P4, CB 1040). On 13 February 2022, Mr Birch sent Mr Bunbury an invoice (issued in the name of his company, Midialel) for "consulting services" provided between 16 and 19 January 2022 in the sum of $11,000 (Ex P4, CB 1143, 1147) and, in March 2022, he reissued that invoice including an additional late payment fee (Ex P4, CB 1147). Mr Birch then refers in his affidavit evidence (Birch [18]-[19]) to an email dated 2 April 2022 to Mr Bunbury, which he characterises as expressing his "dismay" at Mr Bunbury's "complete disregard for the contacts that I introduced him to", and says that, after that email, he "parted ways" with Mr Bunbury. Mr Birch subsequently sent Mr Bunbury further text messages pressing for payment of fees in April 2022 (Ex P4, CB 1043) and, on 2 May 2022, Mr Birch issued a further invoice to Mr Bunbury for "consulting services provided in August 2021 to secure urgent short term funding for Mastercard facility" in the amount of $4,231.54, also including late payment fees (Ex P4, CB 1148). 2. In July 2022, Mr Birch again pressed Mr Bunbury for payment of fees and there was a suggestion that he would approach lenders in 1derful's refinancing process if he was not paid, by a text message dated 7 July 2022 (Ex P4, CB 1045) as follows: "Mate, please pay my 10K today. I don't want to be a Thorn in your side. It's a small amount, you owe it and having me speak to lenders while you complete your refinance is counter-productive. You have had enough time now, I need it paid today. Thanks Luke. Appreciate your position. I will eject myself from the process once I get confirmation." [emphasis added] Mr Bunbury then responded that: "The best help you can give me at this stage is to stay clear of it all – please. I have a structure now that we are putting in place that will erase most of the financiers with only one or two left in (at their choosing) and total debts will be substantially reduced. This is a delicate balance and having chatter going from various parties is unhelpful. Happy to discuss." Mr Birch then responded expressing scepticism as to 1derful's capacity to refinance and asserted that he was "genuinely trying to help." It appears that Mr Birch was, at least by this time, dissatisfied that Mr Bunbury was not paying the amounts that he had billed to the Companies and the dealings between Mr Birch and Mr Bunbury then ceased for a period. These matters are, at best, background to the events that followed. 1. In August 2022, Mastercard provided the Companies with a "1derful & Mastercard B2B Revised Commercial Offer" which included details on the "Key Components of Commercial Offer" and "Incentive Breakdown" (Ex P2, CB 656). 2. Mr Birch's evidence (Birch [25]) is that he had taken steps with a third party ("Volt") to seek to develop a payment and lending platform for the residential property industry; Volt then went into voluntary administration in late 2022; and he then "had to find another entity who could provide a payment platform that Handy Payments could work with to provide a solution for landlords and tenants." His evidence is that he then approached Douugh in that regard and was told that Douugh was using 1derful to back its platform. 3. Earlier winding up proceedings brought against 1derful were dismissed on or about 20 January 2023 (Ex P1, CB 113). 4. On 25 January 2023, Mastercard and 1derful entered into the Mastercard Agreement (Bunbury 4.12.23 [31]; Bunbury 16.2.24 [17(b)]; Ex J1, CB 3301). 5. On 31 January 2023, 1derful entered a Facility Agreement and General Security Deed ("Security Deed") with PIL by which 1derful borrowed $322,000 from PIL (SOC [11], largely admitted D1/2 Defence [11], D3 Defence [11]; Ex P1, CB 146, as amended); 1derful Group and Mr Bunbury guaranteed 1derful's indebtedness to PIL; and the Companies granted PIL a security interest in all of their present and after-acquired property, as security for all money owing by them to PIL from time to time (Security Deed, cl 2.1, Ex P1, CB 211). Under cl 6 of the Facility Agreement (as amended), 1derful was required to repay the loans on the 'Termination Date', 31 March 2023 (Ex P1, CB 159). It was also a term of the Facility Agreement that PIL would only assign any of its rights and obligations under the finance documents including the Facility Agreement and Security Deed to another bank or financial institution or to a trust fund or other entity which is regularly engaged in or established for the purpose of making or purchasing or investing in loan securities or other financial assets including credit derivatives (SOC [12], denied D1/2 Defence [12], D3 Defence [12]). 6. On 13 February 2023, 1derful entered into a Heads of Agreement with Douugh (Ex J1, CB 3296) providing for it to assist Douugh with the launch of an account and card program in the Australian market by offering a "Credit-as-a-Service" ("CaaS") white-label product and additional services. 7. On 2 March 2023, the Companies, Mr Bunbury and PIL executed a First Deed of Amendment and Restatement of the Facility Agreement in respect of the PIL facility ("Amended Facility Agreement") (Ex P1, CB 146, 234), and the Companies borrowed an additional $261,000 from PIL. 8. On 16 March 2023, PIL requested copies of the latest available balance sheets prepared for the Companies and, by 31 March 2023,1derful had defaulted on the terms of the Amended Facility Agreement as it failed to repay the loan on the termination date of the Amended Facility Agreement (Bunbury 7.11.23 [6(c)], accepting the fact of default). 9. Mr Birch's evidence (Birch [26]) is that he received a telephone call from Mr Dahan on about 21 April 2023 where Mr Dahan advised that he was "looking to help 1derful raise some short term capital"; pointed to Mr Bunbury's poor reputation in the debt markets and to his significant personal borrowings; and advised that: "… The capability of 1derful has improved significantly and I think you should give it another go now that Volt has handed back its licence. Would you consider going back on board with 1derful? The company is doing really well. It's got big deals with banks overseas and other big players. The pipeline is huge and it is advanced with a capital round which is being run by a firm called Bay Leaf. Perhaps you would be keen to get involved and use the platform for Handy Payments." Mr Birch also refers to having indicated a concern in dealing with Mr Bunbury and to Mr Dahan's response to that concern (Birch [26]). Mr Birch also refers to an email dated 21 April 2023 from Mr Dahan attaching an email from Mr Bunbury, which included details of 1derful's clients and "showed a significant pipeline of new deals" (Birch [27]). 1. On 24 April 2023, Think Grow brought an application to wind up 1derful in the Supreme Court of Victoria (Seymour [339]; Ex P1, CB 113), and Quadiq subsequently appeared as a supporting creditor in that application. 2. By letter dated 4 May 2023, (Ex P1, CB 370; Ex D1/2, CB 1706), PIL notified the Companies and Mr Bunbury that there had been continuing defaults, including a failure to repay the loan by the due date, and the fact that a winding-up application had been brought against 1derful, and advised that PIL reserved its rights and 1derful was not permitted to operate or withdraw money from its bank accounts. 3. Mr Birch refers (Birch [30]-[31]) to his attending a meeting on 5 May 2023 with Mr Bunbury and another employee of 1derful to run through its capabilities and customer pipeline, although he does not address what occurred at that meeting; and he refer to a further telephone conversation with Mr Dahan, in which he says he asked whether 1derful was solvent and Mr Dahan referred to his understanding from Mr Bunbury that "the company is in a good spot financially" and offered to send, and subsequently sent, further financial information. 4. Mr Birch's company, Handy Payments, entered into a non-binding Heads of Agreement ("Handy Payments HOA") with 1derful on 9 May 2023 (Birch [31]; Ex P1, CB 138), which identified the parties' objectives and their proposed commercial relationship as follows: "(a) To explore, model and build a solution to extend a card (Card Facility) and Mobile App (App) solution for HP clients in Australia to be used by both agents, Tenants and Landlords. (b) To establish a margin sharing arrangement in relation to the Card Facility. (c) To preserve HP ownership of the customer relationship as between the parties, by restricting 1derful's rights to cross-sell products or services independent of this Agreement. (d) To establish practical and comprehensive policies and procedures to meet or exceed industry standards. (e) To work with 1derful to deliver a suite of lending products which compliment the card and payment facilities." 1. Mr Birch's evidence (Birch [34]-[35]) is that he received an information memorandum and "pitch deck" from Mr Bunbury on 10 May 2023 and he says that he noted that the debt to PIL (which was known to Mr Birch) was not mentioned in that pitch deck and there was no mention of any winding up proceedings being on foot and no mention that 1derful was in financial distress. Mr Birch also refers to a further conversation, on 10 May 2023, with Mr Bunbury, where Mr Birch referred to the Companies' "large debt" to PIL and the other funding that Mr Dahan had sourced for Mr Bunbury personally and, on Mr Birch's account, Mr Bunbury advised that "[t]he company is in a great spot and I am fine" and that Mr Dahan was "sorting out investors" with Sequoia Financial Group Ltd ("Sequoia") and another listed entity. Mr Birch's evidence (Birch [38]) is that Mr Bunbury also advised him that: "I am putting together a financial model which I will send you as soon as complete which will highlight the financial solvency of 1derful and that the very strong customer pipeline will convert to revenue growth." Mr Birch then refers (Birch 39]-[40]) to further information that Mr Dahan sent to him in that respect. 1. Further correspondence as to the relationship between the Companies and Handy Payments followed in mid-May 2023 (Ex P3, CB 738). 2. It appears that, about this time, Mr Bunbury told Mr Birch that he needed to raise more money for 1derful and Mr Birch again made introductions to his business contacts. Mr Cheshire submits and I accept that, given the project contemplated by the Handy Payments HOA, it was in Mr Birch's interests that 1derful be able to survive so that it could develop the technology and provide it commercially, including to Handy Payments. It was also in Mr Birch's interests that he be remunerated for his financial work and I will refer to issues that arose in respect of that remuneration below. It again appears there was no formal agreement, retainer or engagement of Mr Birch in this regard. 3. On 19 May 2023, Mr Birch emailed an application for short-term debt funding for 1derful to a potential lender (Ex P4, CB 1048). He advised the potential lender that: "Company is 1derful, I have only sent this through to you today as I signed a Heads of Agreement with 1derful last night as my technology partner to deliver an end-to-end payment and lending solution to estate agents, landlords and tenants. I am looking to roll this out for The Agency Real Estate Group by August this year. Given that we are looking like having almost 20,000 landlords and tenants by the end of the year and 600 real estate agents, it is huge opportunity for 1derful. So I am a believer in 1derful and a client (not yet mentioned in the deck attached). 1derful currently has a facility with a first ranking charge held by [PIL]. Given recent customer signings and expected growth, 1derful is looking to refinance this facility out and increase it to $2m. This also being handled by Sequoia Corporate Finance. Whilst this is being set up, 1de[r]ful requires some short term funding to cover some immediate expenses and that is the ask today. This is the $200K he is asking for. 1derful also has a receivable finance facility which is backed by payments from Mastercard – 1derful's payment partner. The key differentiator from other fintechs with 1derful is that it is a B2B offering and so is not spending in-ordinate amounts of capital on customer acquisitions. For me it offers speed to market, one of the best UX I have seen and allows us to offer our clients a unique financial services product that will make them stickier and hopefully attract new clients through the wards feature also available on the 1derful platform. The principal on 1derful – who I have known for the last 12 years (our daughters star[t]ed school together) is looking to raise some short term funding for his business growth as a pre-cursor to a broader recapitalisation of his business which is being managed by Sequoia Corporate Finance. With regard to the capital raise, I have attached a recent IM and investor deck for your information. I can arrange Luke Bunbury to run through if your investor is keen to do some additional due diligence." Mr Birch then referred to the proposed terms of the short term debt raising, including a high interest rate that plainly indicated that it involved significant risk and added: "Rationale: Mastercard has a contract with 1derful which we can show you backing these payments, examples of invoices previously paid etc (under NDA). Mastercard take a while to make these payments which is why 1derful gets these financed because they are milestone driven." 1. On 22 May 2023, Mr Birch organised a conference with Mr Bunbury at The Agency's offices (Ex P3, CB 798) and, on 24 and 25 May, exchanged emails with Mr Bunbury relating to capital raising for 1derful and the relationship between 1derful and Handy Payments (Ex P1, CB 142). Mr Bunbury there proposed that Mr Birch be appointed as head of capital and funding for 1derful on a contract basis for 3 – 6 months and Mr Birch responded proposing that he acted in the capacity of "adviser" or "director". Mr Bunbury advised Mr Birch of 1derful's capital raising objectives as follows: "1 Up to $2m secured debt (with first charge) to replace existing facilities and provide some additional working capital until we close out the larger capital raise that is also under way. ● Timing: $250K immediate; balance of $1m this week, balance of $2m by end of next week. 2 $5m - $10m warehouse using secured note structure paying 12% coupon NB all documentation and process is established so this just a matter of securing the investors …. ● Timing: First $1m ideally this week; next $1m by end May; further $3m in June. 3 Assistance with the capital raise for up to $10m – already in market so let's discuss how you can assist. 4 Assistance with larger non-bank warehousing – discussions under way so let's discuss how you can assist." The timings requested in this email would plainly have indicated to Mr Birch that 1derful then had urgent financial needs. 1. Mr Birch's evidence is also that, on 23 May 2023, he received a telephone call from Mr Bunbury requesting his assistance to "raise further capital for 1derful" and advising that the Companies "need more cash injection to deliver the tech for Handy Payments" and suggesting that Mr Birch could be given the role of the Companies' head of capital and funding. Mr Birch also refers to a further conversation with Mr Bunbury in May 2023 (Birch [44]) in which he again sought confirmation of the Companies' solvency and Mr Bunbury informed him that: "Yes the [C]ompany is all good and my personal financial circumstance will not impact 1derful. The technology is good, you don't have to worry about that. I am telling you the [C]ompany is not insolvent but we do need to raise further capital to keep us going forward." Mr Bunbury denies that conversation (Bunbury 21.6.24 [44]). It is also not necessary to resolve the dispute as to this conversation in order to determine the proceedings. 1. In cross-examination, Mr Birch denied that he was working on a capital raising for the Companies as at 24 May 2023, although he then retreated from that denial. It seems to me that the correspondence at this time is only consistent with an involvement of that kind. 2. By letter dated 25 May 2023, Mastercard advised Mr Bunbury that 1derful was operating in breach of the Mastercard rules and obligations of a Principal Member and that entitled Mastercard to take action, including termination of membership, and demanded payment of an outstanding amount of $871,000. The evidence does not indicate that the Companies made any substantial progress in making that payment and I do not accept Mr Bunbury's evidence that they had significantly advanced resolution of the other issues to which Mastercard had referred. 3. Mr Birch refers to a meeting with Mr Bunbury, an employee of 1derful and Mr Nardone of The Agency in June 2023 where Mr Birch introduced 1derful as a potential provider of card services for The Agency through Handy Payments (Birch [46]). Further meetings concerning that matter with The Agency took place from June until early July 2023 (Birch [47]). 4. On 5 June 2023 (Ex P1, CB 255), Mr Birch advised Mr Dowsett, a representative of another potential funder, that: "Company, 1derful, is are [sic] a Fintech platform – see attached IM and Investor Deck. They are one of the first Australian fintechs to lock in with Mastercard. Volumes are going through a ramp up and this is straining cashflows requiring increased funding. It is worth starting [sic] that 1derful is after funding along two lines: Some relatively immediate short term funding to fund Mastercard receivables. The Co has some immediate requirements for this facility given its volumes are ramping up and the cash cycle with Mastercard is putting pressure on up from cashflows. Refinance of the long term facility which has includes [sic] receivables funding and working capital as per the below, which would take out the first ranking holder and be the primary funder for expansion capital for 1derful. There is a current lender with a first ranking charge that will be discharged, there is also a guy with a second ranking but he is fine to remain subordinate given the current pipeline of the Companies. The payout figure is in the order of $800K. I can show bank accounts showing that there has been $400K-$500K per month over the last five months – which backs the receivables funding requirements. The Mastercard Agreement attached illustrates the milestone and cashflow payments due back to 1derful from Mastercard as well. I have included some proposed rates below FYI where the funding is currently sitting – obviously scope to negotiate these given time pressure on the borrower." The email continues with further information as to the funding request. 1. Mr Birch's evidence is that he was also "getting in contact with potential investors in respect of raising capital for 1derful" and that, in June 2023, he contacted Saltbush Capital to discuss financing 1derful, and he refers to a statement of assets and liabilities sent by Mr Bunbury to Saltbush Capital on 6 June 2023 and says (Birch [53]): "From reviewing the statement of assets and liabilities, it appeared that 1derful had significantly more liabilities than assets. This did not give me any reassurance as to its solvency. But there was also a Personal Asset and Liability Statement from Mr Bunbury showing a significant personal net worth of $25,190,300.90 which I thought was a stretch but it gave me some comfort." I do not accept Mr Birch's evidence that a participant in the financial services industry, with Mr Birch's experience, would have drawn any comfort from that statement of assets and liabilities, which was plainly implausible in the extreme. 1. Mr Birch then refers (Birch [54]ff) to his further dealings with Saltbush Capital and his evidence is that he subsequently became aware of the winding up application in respect of 1derful from Mr Brydges of Saltbush Capital who had learned of the application from a client which was undertaking due diligence on 1derful. His evidence is that he advised Mr Bunbury of his view that the Companies were "un-investable" (Birch [58]). Mr Bunbury denies (Bunbury 21.6.24 [48(c)]) that Mr Birch advised him of that view. It is not necessary to resolve that dispute to determine the proceedings. 2. In any event, Mr Birch was still seeking to raise funds for the Companies in the second half of June 2023. On 19 June 2023, he sent a text message to Mr Dahan (Ex D3/8, CB 2607) advising that: "Luke [Bunbury] wants me to call [Mr Isbell] for these funds which he needs by Wednesday – we must have someone else to approach for short term funds. I only just found out today there is a winding up order our [sic] against him which has been lodged which has scared 2 of my guys away as I did not disclose this – I did not know it!! Can we do a quick call and try and come up with a solution … Once [Mr Isbell] is involved – I am on the hook too – if [Mr Isbell] can take security over [Mr Bunbury's] car then we might have a chance getting it through him." 1. By an email on that date (Ex P1, CB 253) Mr Birch advised Mr Isbell that: "I am in the process of locking down a $3m refinance of the existing first ranking charge over the [Companies'] business. By way of background, I am working with Luke Bunbury from 1derful group (attached) – details of 1derful are attached in the two decks, 1derful is currently in the process of raising equity and refinancing an existing facility. In the interim given business growth 1derful requires $250K in funding in the next 24 hours until a broader funding arrangement is completed. 1derful has done receivables funding against receivables from Master[c]ard in the past and I can share details/documentation of this with you if of interest. I am helping Luke [Bunbury] out with both of these transactions, we are in final discussions with two lenders who will provide term sheets for the broader $3m facility with a first ranking charge. Please let me know if this is something you are able to help with. Appreciate you taking a look, please call with any questions." 1. That email then suggested the potential terms for short term receivable funding for the Companies and also described the "rationale" for the transaction as that: "Mastercard has a contract with 1derful which we can show you backing these payments, examples of invoices previously paid etc. Mastercard take a while to make these payments which is why 1derful gets these financed." 1. Mr Birch refers (Birch [59]) to a subsequent telephone conversation with Mr Bunbury on 19 June 2023, when he says that he advised Mr Bunbury that: "It is now going to be impossible to raise capital. Anyone who does their due diligence will be able to see the winding up application on foot. I really don't know if I can help you moving forward Luke. 1derful might be trading insolvent. There are too many red flags." That account of that conversation is broadly consistent with a text message sent by Mr Birch to Mr Dahan on that day (Birch [60]). 1. Mr Birch's evidence is that, in late June 2023, he nonetheless formed the view that he "needed to try and aid 1derful to get through the winding up order" in order to manage his relationship with The Agency (Birch [62]) and he refers to Mr Dahan's contact with Mr Seymour and Mr Seymour's involvement from that time (Birch [62]). He also acknowledges (Birch [63]) his long involvement with Mr Seymour, since he and Mr Seymour had been to kindergarten together. Mr Birch refers to HCP's engagement of Mr Seymour and to subsequent dealings with Mr Seymour and Mr Dahan in respect of the winding up. 2. Mr Seymour's evidence (Seymour 10.4.24 [19]ff) is that was approached by Mr Birch and Mr Dahan of HCP in late June 2023 and informed that the Companies were the subject of a winding up application; that HCP was undertaking a capital raising exercise and 1derful needs an urgent strategy to delay or set aside the winding up process so that it could complete the capital raising exercise underway by HCP; that MDC was assisting HCP in raising capital for 1derful by introducing the Companies to potential investors and individuals. Mr Seymour there refers to a statement by Mr Dahan that the fundraising target for 1derful was $2.5 million and that HCP had "$1.5 million committed funds" from Sequoia and was expecting further funding from Sequoia or other venture capital companies within the next two weeks. Mr Seymour attributes further comments to Mr Birch to the effect that 1derful had reasonable "turnovers" but "no substantial revenue", was heavily in debt, and probably could not borrow money in its own right other than from lenders of last resort, and that it was substantially funded by PIL and FIFO Capital which were both secured creditors. Mr Seymour also refers to Mr Dahan's offer that HCP would raise and provide short term funding to deal with the winding up application, provided that there was adequate security for the funds raised, and to his referring to the possibility of Mr Bunbury personally providing security in exchange for funding. 3. Mr Seymour's evidence is that he then raised the possibility of assignment of the debt, in order to avoid a preference claim against funding creditors as follows: "No creditor will want to expose themselves to a preference claim. So, I'll probably have to structure a transaction for HCP or a special purpose company to acquire the debts owed by [1derful] by way of an assignment of debt, in order to avoid creating a preferential payment and the obligation to pay the existing secured creditors of [1derful] out of the funds provided by HCP, if you own the debt, you control the winding up proceedings." 1. Mr Seymour exhibits handwritten notes taken during that conversation (Ex D1/2, CB 1710). Mr Seymour's evidence is that there was no formal letter or written agreement in relation to Green Jigsaw's suggested engagement by MDC and HCP, given time constraints and his previous "close, ongoing relationship" with Mr Birch. As I noted above, Green Jigsaw's engagement by MDC and HCP would not prevent an undertaking by Mr Seymour to act in the Companies' or Mr Bunbury's interests from giving rise to fiduciary obligations owed by him to them. 2. Mr Seymour's evidence is that, on 20 June 2023, he telephoned Mr Bunbury and advised that: "I have been engaged by HCP to assist HCP to purchase the debts of the creditors involved in the winding up, or otherwise deal with them, in order to get control of the winding up proceedings against [1derful]." He refers to a discussion as to the winding up and Mr Bunbury's response that 1derful "can raise debt finance itself and does not need HCP or Mr Dahan's involvement". He also refers to Mr Bunbury's statement that: "The 1derful Companies have revenue of $500,000.00 per calendar month and are raising funds based on an enterprise value of $30 million. I want to approach potential lenders to lend funds to the 1derful Companies in the first instance and, if necessary, to have HCP as the guarantor for the proposed debts of the 1derful Companies." 1. Mr Seymour refers to subsequent telephone conversations with several persons in which he sought loan funds for the Companies; by approaching those third parties on the Companies' behalf, Mr Seymour seems to me to have assumed the role of acting for those Companies in respect of the transaction, notwithstanding any previous engagement with HCP. He also refers to his approach to the solicitor for the party which had brought the winding up application in respect of a proposed acquisition of that party's debt. 2. At about this time, Mr Seymour emailed a third party (Ex D1/2, CB 2029) seeking a short term borrowing of $200,000 for a period of 60 days to pay out Think Grow and Quadiq and setting out potential terms for that borrowing, on the basis that HCP agreed to guarantee it. That email noted that: "The Company is a Fintech … in the middle of a capital raising of $2.5m. [HCP] is doing the raise with Sequoia Capital and has $1.5m committed out of the $2.5m target … [HCP] says they will have funds in – 10 business days but I would say a minimum of 30 days to be safe. The funds will be loaned to take out all existing facilities and Sequoia will take 5% of the Company, so enterprise valuation circa $30m." Mr Birch there noted that the proposal "looks pretty robust" and emphasised HCP's agreement to guarantee it and observed that "they must be pretty confident that they have the $1.5m locked down and noted that "the client has been conditioned to total costs circa $50K (fees and interest) for 60 day lend"; the reference to "client" can only be to the Companies in this context. 1. Mr Seymour's evidence is that he told Mr Bunbury in a telephone conversation on 26 June 2023 (Seymour 10.4.24 [101(b)]) that he was engaged by HCP and not 1derful and that "the pathway to HCP's desired outcome was also 1derful's best outcome". Mr Seymour did not subsequently advise the Companies of any change in that consistent objective when he commenced to advance his and Fletch's interest in a forced acquisition of the Companies' business. Mr Seymour's evidence (Seymour 10.4.24 [101(c)]) is that, on 27 June 2023, he told Mr Bunbury that he "[did] not work for you" and was "not interested in dealing with you any further". Mr Bunbury denies (Bunbury 21.6.24 [23]) aspects of Mr Seymour's account of this conversation. In any event, Mr Seymour subsequently continued to deal with the Companies and Mr Bunbury and (subject to the pleading points that I address below) the relief sought by the Plaintiffs in these proceedings does not require the existence, or continuance, of a contractual relationship between Mr Bunbury (or the Companies) and Mr Seymour. 2. By his email dated 30 June 2023 to Mr Bunbury, copied to Mr Birch (Ex P4, CB 1022), Mr Seymour referred to Mr Dahan's advice to Mr Seymour that Mr Dahan was working with Mr Bunbury and Mr Birch "around security" and observed that: "[Mr Dahan] will want control of the position but, if you need to, feel free to suggest that I have an oversite role (whether as director or in so other way so that you don't get taken advantage of in the process. That way, [Mr Dahan] gets coverage without being given a blank cheque. This is all expensive and stressful enough without people taking the piss … Please be assured I'm on the case." Mr Seymour accepted in cross-examination (T276) (as he plainly had to) that his reference to "get taken advantage of" involved his suggesting to Mr Bunbury that Mr Bunbury could rely upon Mr Seymour as somebody who would be honest and take care of his interests, and the reference to his being "on the case" provided assurance to Mr Bunbury that he was providing assistance to Mr Bunbury and the Companies. It seems to me that this email plainly represented to Mr Bunbury and the Companies that they could rely on Mr Seymour to avoid the Companies being "taken advantage of" and that he was acting for their benefit. That representation was calculated to, and likely to, induce reliance by Mr Bunbury and the Companies on Mr Seymour and displace any concern that he might act against their interests, and nothing later said by Mr Seymour sufficiently displaced that representation. 1. Mr Seymour's evidence (Seymour 10.4.24 [38]) is that, on 6 July 2023, he had a conversation with Mr Bunbury which commenced with a self-serving statement that: "I am not [1derful]'s employee, contractor or agent, and I am providing assistance on the basis that it completed my engagement from HCP." I reject Mr Seymour's evidence as to that aspect of the conversation, which I am comfortably satisfied is false and directed to advancing his interests in the defence of the proceedings. Mr Seymour then refers to conversations with other parties, in which he claims to have stated that he was engaged by HCP to manage the winding up proceedings. 1. By an email dated 10 July 2023 (Ex D1/2, CB 2048) from Mr Bunbury to Mr Singh of Techwondoe (which was providing technology services to the Companies and was also a creditor of the Companies) and copied to Mr Seymour, Mr Bunbury advised Mr Singh that: "I am pleased to introduce you to Craig Seymour who is working with us in an advisory capacity. Craig has deep experience in this area. He would like to speak with you this morning to talk you through the suggested structure to preserve your priority for repayment." I recognise that Mr Seymour claims (Seymour 10.4.24 [41]) to have orally advised Mr Singh that he was "engaged by HCP to manage the winding up proceedings for HCP". However, I find that the Companies and Mr Bunbury at least held Mr Seymour out to third parties as acting as their adviser and Mr Seymour acquiesced in that course. 1. By email dated 10 July 2023 (Ex D1/2, CB 2050), Mr Bunbury sent Mr Seymour a document titled "1derful Secured Debt Overview" which he described as "an overview of the secured debt refinancing we are looking to do" and indicated that the Companies were "happy to make any amendments you require". He also indicated that: "As discussed we would welcome the opportunity to compensate you for help in closing this out and happy to discuss that with you when convenient." 1. On 10 July 2023, Mr Seymour emailed Mr Bunbury with comments and questions concerning that document (Ex P1, CB 288). Mr Seymour refers in his affidavit evidence to his exchange with Mr Bunbury about 10 July 2023 concerning that document and says that his email dated 10 July 2023 was sent "as part of [his] engagement with HCP". He also refers to a conversation with Mr Birch on 10 July 2023, where he expressed pessimism as to the Companies' capacity to raise funds to grow their business. By a further email dated 10 July 2023, Mr Bunbury provided Mr Seymour with a revised draft of the secured debt overview (Ex D1/2, CB 2062) incorporating many of Mr Seymour's suggestions. 2. On 18 July 2023, Mr Seymour emailed Mr Bunbury an invoice dated 18 July 2023 in the name of Green Jigsaw (Ex P1, CB 284) addressed to 1derful Group for the sum of $22,000. The covering email to that invoice plainly recognised the risk to 1derful arising from the winding up application, observing that: "Not being mercenary but I can't be a creditor of 1derful so this has to get paid COD. Obviously, more than anyone else, I am exposed to the risk of a preferential payment recovery." The work set out in that invoice included: "Liaison and negotiation with creditors, solicitors, potential lenders, potential investors and company director as required with regard to winding up application, Refinancing, short term funding and equity investment as required. Preparation of associated documentation and management of key stakeholders." 1. Mr Seymour's affidavit evidence acknowledges that, on 18 July 2023, Green Jigsaw invoiced 1derful for the work that he claims it performed in respect of its engagement with HCP (Seymour [53]). 2. On 19 July 2023, Mr Seymour issued Mr Bunbury a second invoice dated 19 July 2023 in the name of Green Jigsaw for the sum of $15,000 relating to out-of-pocket expenses described as financing charges for a third party and Mr Bunbury responded that "This has also been paid…". (Ex P1, CB 293; Ex J1, CB 3650). 3. Mr Bunbury's evidence (Bunbury 16.2.24 [11]) is that, in mid-July 2023, prior to emails relating to Mr Seymour's engagement by FIFO Capital which I address below, a conversation took place in which Mr Seymour advised Mr Bunbury: "I am going to speak with FIFO [Capital] soon and have them engage me. I want to keep them at bay whilst we complete the refinance of [PIL]. Rest assured, I'll still be working for 1derful to achieve its aims but this will just give me a direct line to the other secured creditor." [emphasis added] 1. Mr Seymour responds (Seymour 10.4.24 [117]) to Mr Bunbury's evidence of this conversation with a lengthy and self-serving conversation set out in direct speech, as follows: "Seymour: "Luke I wanted to let you know that I have been asked to and I have agreed that I will accept an engagement with FIFO Capital. As you are aware, any refinance will require either the repayment or the consent of both secured creditors. [PIL] and FIFO Capital. I am going to accept the engagement with FIFO Capital because I can then play a role in ensuring that FIFO Capital is kept fully informed, and will be less likely to blow it up while HCP completes its capital raising process. I want 1derful to succeed and achieve its aim, and I think having a role with FIFO Capital will keep me in the room. I think it is unlikely any secured creditor would be willing to take a haircut, but by being engaged by FIFO Capital, I will have a mandate to liaise with all creditors, including [PIL], and by preparing my own advice to FIFO Capital, I will have a good idea of what Byrons are saying to [PIL]." [emphasis added] 1. I prefer Mr Bunbury's account of this conversation to Mr Seymour's account of this conversation, where Mr Bunbury's account is consistent with Mr Seymour's email correspondence that confirmed that he remained on 1derful's "team" notwithstanding his engagement by FIFO Capital. Even on Mr Seymour's own account of the conversation, he did not frankly explain to Mr Bunbury that he had initiated the engagement with FIFO Capital and had prepared the terms on which FIFO Capital would engage him; and the proposition that he wanted 1derful "to succeed and achieve its aims" did not disclose an intent to use the FIFO Capital engagement as a means to advance his own interests in respect of a potential acquisition of the Companies' business. Mr Seymour's account of this conversation also provides no explanation of why he had any commercial interest in taking these steps or ensuring that he would remain "in the room" or why he wished to have a mandate to liaise with all creditors including PIL or to have a good idea of what PIL's investigating accountant, Byrons, were saying to PIL. I find that he by then wished to advance his interest in acquiring the 1derful business, without disclosure of that intent to the Companies. When I raised that possible finding with him at the conclusion of his cross-examination, he said he had nothing to say about it; I infer that nothing he could sensibly have said would have assisted in avoiding that finding. 2. Mr Seymour refers to the engagement of Jigsaw Works by FIFO Capital, following his conversation with Mr Birch and Mr Kopp on 14 July 2023. Mr Seymour's evidence (Seymour 10.4.23 [49]) is that, on that date, he telephoned Mr Bunbury as to FIFO Capital's engaging Mr Seymour personally as its "investigating accountant" to keep FIFO Capital informed of the progress of the capital raising process. Mr Bunbury denies Mr Seymour's account of that conversation (Bunbury 21.6.24 [13]) and claims Mr Seymour then approached him "with the idea that he would speak with FIFO Capital to avoid them taking any default or enforcement action against the Companies". Mr Seymour's conduct in respect of these matters had little in common with the ordinary role of an investigating accountant; and Mr Seymour neither sought nor obtained the Companies' or Mr Bunbury's fully informed consent to that engagement. 3. Mr Kopp's evidence (Kopp 18.9.24 [7]) is that he also received a telephone call from Mr Seymour, on 14 July 2023, and he had not previously known Mr Seymour. Mr Seymour referred, in that conversation, to his close relationship with Mr Birch; he told Mr Kopp that he had received a call from Mr Birch and Mr Dahan about 1derful and they had asked him to "manage some creditors of 1derful and assist with a winding up application that had been lodged against 1derful"; and Mr Seymour then said that he knew Mr Bunbury; he knew "details about the 1derful business"; he was "across the financial position of 1derful" and knew about their creditors; and that: "1derful are fundraising at the moment and Birch and HCP have brought me in to help keep all the creditors together and make sure no one does anything silly." 1. Mr Seymour then told Mr Kopp (Kopp 18.9.24 [7(e)]) that Mr Bunbury had asked Mr Seymour if he knew of anyone who would like to invest in 1derful and indicated that he was in discussions with two potential investors, one of which was "very keen", and then said that: "I am not looking for a fee or a job, I just need to be able to get this to work. In an ideal world, I would like FIFO Capital to appoint me and Jigsaw as its investigative accountant for $1 as there needs to be some consideration. Just so you know, I will get paid – not by FIFO Capital, but by 1derful and by [HCP]. I will provide you with a template of the proposed investigative accountant engagement, and you can send it back by email or on a letter." 1. Mr Kopp annexed his notes from that conversation, although it is apparent that they were prepared after that conversation, because they also record subsequent events, including Mr Kopp's recognition that Mr Seymour was not "acting solely for FIFO Capital" and "was primarily engaged by 1derful and/or [HCP] who he had stated on our phone call and on email were the parties paying him". Mr Kopp there recorded the conclusions which he had drawn from that conversation as follows: "Following this initial discussion it was fairly apparent to me that Craig Seymour was already intimately involved with 1[d]erful and the fundraising process and did not really require FIFO Capital to engage him to get involved. This was evidenced by [Mr Seymour] seeming to know the financial position of 1[d]erful, he appears to have access to 1[d]erful information, he knew [Mr Bunbury], he went back a long way with [Mr] Birch from [HCP] who was trying to raise money for 1[d]erful, he knew all the 1[d]erful creditors were, he was already in dialogue with at least two potential investors and knew all the relevant players." 1. I find that, at least by this date, Mr Seymour sought to remain involved in the matter and to appear to be acting for FIFO Capital in the matter so as to advance his interest in an acquisition of the Companies' business without regard to the interests of either FIFO Capital or the Companies and in a manner that was ultimately adverse to both. 2. Mr Kopp referred to subsequent emails by which Mr Seymour had drafted the terms of his suggested engagement by FIFO Capital, which Mr Kopp then adopted. Mr Kopp's evidence (Kopp 18.9.24 [9(d)]), which I accept, was also that: "If I had known that Mr Seymour would eventually become a director of [Fletch] and that Fletch and Mr Seymour would carry out the conduct the subject of the proceedings, I would not have dealt with Mr Seymour on the terms contained in the email dated 18 July 2024." 1. By an email dated 18 July 2023 (Ex D1/2, CB 2073) Mr Kopp of FIFA emailed Mr Seymour, in the terms drafted by Mr Seymour, that: "I confirm that we wish to engage Jigsaw Works to do the following: 1 Conduct an urgent assessment of the current financial status of 1derful; 2 Provide an assessment of the value of our security position; 3 Liaise with the other creditors as required; 4 Liaise with 1derful, its creditors, and officers as required; 5 Liaise with potential investors and/or funders of any nature and all their advisers; 6 Provide us with an urgent recommendation as to the optimal course of action to effect Reco[very] of monies due under the Loan Agreement. In order to conduct the project referred to above, you are authorised to act as our agent under the terms of the Loan Agreement but you specifically do not have the authority or power to accept any compromise or to change the course of action or to alter the terms of the Loan Agreement in any whatsoever [sic]." 1. By email dated 19 July 2023 (Ex P1, CB 292), Mr Seymour advised Mr Bunbury of the substance of that engagement, namely that: "Jigsaw Works has been engaged as Investigating Accountant by FIFO Capital with the following mandate, to: ● Conduct an urgent assessment of the current financial position of 1derful; ● Provide an assessment of the value of our security position; ● Liaise with other creditors as required; ● Liaise with 1derful, its directors and officers as required; ● Liaise with potential investors and/or funders of any nature and/or their advisers; ● Provide us with an urgent recommendation as to the optimal course of action to effect recovery of monies due under the Loan Agreement. In the circumstances, please provide us with the contact details for the first ranking secured creditor and their investigating accountant (Byrons) so that we can urgently liaise with them with a view to ensuring an outcome in the best interests of all parties." [emphasis added] 1. This email did not seek the Companies' consent to Jigsaw Works or Mr Seymour accepting such a retainer but simply advised that it had done so. That email plainly also did not constitute consent to the steps which Mr Seymour later took to advance his own and Fletch's interests at the expense of the Companies, where it referred to "ensuring an outcome in the best interests of all parties". 2. Mr Seymour then emailed Mr Bunbury (Ex P1, CB 291; Ex D1/2, CB 2114) that: "Further to the email below, our fee for the FIFO Capital engagement is $1. We have advised FIFO [Capital] that our interest lies in ensuring 1derful's survival, recapitalisation and success and that we will be paid by 1derful and/or [HCP] if we can achieve the stated objectives. The net outcome is the same (because FIFO [Capital] would pass on our costs to 1derful anyway) but this makes sure everyone knows where they stand. Clearly, this is a strategic position that enables me to liaise with the first ranking secured creditor and other creditors from a much stronger position – I am now one of "them" and not "1derful's man". Nothing changes in my approach. All of that expressed, and I have canvassed this with each of you separately, I'd like to get a fee agreement in place for the next stage of this project." [emphasis added] 1. In cross-examination (T279), Mr Seymour sought to characterise his reference to his interest in "ensuring 1derful's survival" as directed to survival of the Companies' business rather than the Companies. I do not accept that he had fairly or frankly drawn that distinction in this email, which would have been understood as communicating his commitment to promoting the Companies' survival. Again, no subsequent disclosure by him displaced that commitment. That email cannot give rise to informed consent (which was in any case not sought) for the conduct that followed, where the suggestion that Mr Seymour would not now be seen as "1derful's man" was put as advantageous rather than disadvantageous to the Companies, and the email also committed to nothing changing in Mr Seymour's approach, necessarily by comparison with his previous work with the Companies. 2. On 20 July 2023, Mr Bunbury and Mr Seymour also exchanged text messages (Ex P1, CB 321-322) and Mr Seymour advised Mr Bunbury that: "Believe me, I want you to succeed on a number of levels – I like the product and I want to get it moving for my own business, can't do that if you're not there. Apart from that, the platform is too good to fail because someone didn't do everything possible to hold it together. I'm on your team – emphasis on YOUR". [emphasis added] 1. Mr DeBuse put to Mr Seymour in cross-examination that he was telling creditors that he was not "1derful's man" but was telling Mr Bunbury and the Companies that he was on their "team". Mr Seymour responded (T287) that in July 2023: "I told Mr Bunbury personally that I was acting in his interests at the same time that I was telling creditors that I was acting on behalf of [HCP] because I considered that both of those interests were completely aligned." I do not accept this proposition. Mr Seymour's claim that he was on the Companies' "team" can only be understood as indicating a commitment to work in the Companies' interests, and not only a commitment to act in Mr Bunbury's interests; and the interests of the Companies' creditors on the one hand and the Companies and Mr Bunbury on the other were only aligned in respect of a potential refinancing, not in respect of an exercise of the security held by PIL to bring about a forced sale of the Companies' assets to any particular creditor or to Fletch. Mr Seymour then sought to bolster his claim for an alignment of interests by contending that Mr Bunbury was critical to the business (T287). I accept that Mr Seymour and Fletch likely perceived that it was desirable that Mr Bunbury remain in the business, after it was acquired by Fletch. However, it was plain that they did not consider that Mr Bunbury was "critical" to the business, where they then made plans that contemplated that he would not be retained in it. 1. Mr Seymour was at that time also dealing with Mr Wang of PIL and Mr Kopp of FIFO Capital in respect of its loan to 1derful and was reporting to Mr Bunbury as to those dealings. Mr Seymour's evidence (Seymour 10.4.24 [62]) is that he contacted Mr Wang of PIL on 20 July 2023 and advised Mr Wang that Jigsaw Works was acting as an investigating accountant engaged by FIFO Capital, a characterisation of its role that I reject, and Mr Wang advised him that 1deful was in default and PIL had appointed an investigating accountant. His account of that conversation is not consistent with his contemporaneous advice to Mr Bunbury (Ex P1, CB 321) that: "Hi Luke, spoke to Greg Wang – extremely receptive to providing time if he has some commercial cover. He's committed to sit tight until next week at least and to call me with any thoughts he has. Want to 'work together so we all get paid' – very light & cooperative chat. I've communicated to Mathias [Kopp of FIFO] and expect that will calm him down a bit too." 1. Mr Seymour's evidence (Seymour 10.4.24 [64]) is that he attended, on 26 July 2023, a video conference with Mr Dahan, Mr Birch, Mr Wallace of Gibraltar Capital Pty Ltd, Mr Hodda of Quest Securities (Australia) Ltd, Mr Robertson of Quest Securities and Mr Fabbri of Sequoia. He refers to Mr Fabbri's advice that his client, Mr Siah, had a "strong interest" in being the "anchor investor" within a funding package, but concerns regarding Mr Bunbury's corporate governance and financial management, and he refers to a suggestion made by Mr Birch that Mr Seymour "s[i]t in the middle". He also refers to the circulation of a draft term sheet for a proposed funding transaction on 27 July 2023 and to his sending Mr Kopp a summary of that meeting and that draft term sheet. Mr Seymour accepted in cross examination (T293) (as he had to) that he was then encouraging Mr Bunbury to believe that Mr Seymour "could be trusted and 1derful could trust [him]". Mr Bunbury then advised on 28 July 2023 that he was "happy with the proposed terms". 2. On 28 July 2023, Mr Birch emailed Mr Bunbury a draft term sheet (Ex D1/2, CB 2152) which he noted was currently with a solicitor, implicitly for legal advice. The draft term sheet referred to the lender as "XYZ Wholesale Fund" referred to a refinancing of debt facility and invoices from Mastercard in the amount of $4 million, with a term of one year, at the very high interest rate of 4% per month, paid monthly in advance and with an "equity kicker". By email dated 28 July 2023 (Ex D1/2, CB 2155), Mr Bunbury told Mr Birch that he was "happy with the term sheet" and requested that it be circulated. Another term sheet with the same date and substantially the same terms was headed "1derful Group Investment Fund" (Ex P2, CB 631). 3. On 31 July 2023, Mastercard suspended the Mastercard Agreement and outlined a "pathway" for 1derful to resume its Principal Membership Activity with Mastercard (Bunbury 18.9.24 [16]; Ex J2, CB 5694). 4. By his email dated 2 August 2023 to Mr Singh of Techwondoe (Ex D1/2, CB 2321), Mr Seymour also referred to his engagement by FIFO Capital and referred to the arrangements by which HCP would take an assignment of debts underpinning the winding up application and put a proposal to Mr Singh as to Techwondoe's debt. Mr Seymour (Seymour 10.4.24 [68]ff) outlines further steps in respect of the winding up in early August 2023 and he refers to a conversation with Mr Bunbury's solicitor on 4 August 2023 concerning Mr Bunbury's personal financial position which is also not material to matters which I need to decide. 5. On 7 August 2023, Mr Birch sent a copy of the term sheet he had prepared on 28 July (to which I referred above) to a third party (Ex P2, CB 627) and, in a subsequent conversation with a representative of that third party, Mr Birch advised him that the Companies had raised approximately $2 million and had an information memorandum in the market; they had made arrangements to register a wholesale managed investment scheme to hold investor capital for the Mastercard arrangement; that he was a "strong supporter" of Mr Bunbury, and the third party agreed that "if they had everything underway to support 1derful" then that third party would work with them rather than run a parallel process (Ex P2, 627). 6. Mr Seymour also refers (Seymour 10.4.24 [75]ff) to subsequent communications from 9 August 2023 concerning the status of the Mastercard Agreement. His evidence suggests that Mr Bunbury had not promptly informed Mr Seymour or Mr Birch of the suspension of that agreement, had occurred on 31 July 2023. 7. Mr Birch refers (Birch [74]) to a telephone conversation with Mr Seymour on 10 August 2023, where Mr Seymour advised Mr Birch that Mr Dahan wanted Mr Seymour "to help [Mr Bunbury] and 1derful to get out of all of the debt" and observed that "[t]he debt situation is pretty bad". The subsequent steps taken by Mr Seymour, Mr Birch and Fletch were not consistent with that request. Mr Birch's evidence is that he then told Mr Seymour: "1derful is insolvent and [Mr Bunbury] is probably bankrupt. I told [Mr Bunbury] about it. I want to set up a meeting of all stakeholders that I know that have something to lose because of [Mr Bunbury]. I will let you know all about it once I set it up." 1. Mr Seymour in turn referred to a proposed meeting with Mr Bunbury and Mr Bunbury's legal adviser to discuss 1derful's solvency and Mr Bunbury's personal financial position and Mr Birch says that Mr Seymour claimed that "I am trying" to assist Mr Bunbury. Again, the subsequent steps taken by Mr Seymour were not consistent with that claim. 2. Mr Birch's evidence (Birch [70]) is also that, on 10 August 2023, he had a telephone conversation with Mr Bunbury as follows: Birch: Luke I no longer believe that there is any prospect of raising capital for 1derful. I think that 1derful is insolvent. From the information that I have at hand, it seems to me that 1derful is going to need to raise over $10 million to survive although I don't know for sure considering that there is a great deal of conflicting information I have seen. Bunbury: OK I am sorry it has come to this. Birch: I will set up a fund structure with … Gibraltar Capital in the event that you can miraculously refinance your debt. But that's it. Then I am out completely. 1. Mr Bunbury denies that conversation (Bunbury 21.6.24 [53]). I am unable to accept that a conversation occurred on that date in those terms, where (as Mr DeBuse put to Mr Birch in cross-examination) that would be wholly inconsistent with Mr Birch's communication with Mr Wang of PIL on the same date, which I address below. I do not accept Mr Birch's attempt to explain that inconsistency in cross-examination. Even if Mr Birch's account of that conversation were accepted, it discloses steps toward a potential financing of the Companies, not a proposal that a company associated with him or Mr Seymour would acquire the PIL debt and use it to undertake a forced acquisition of the Companies' business. 2. By email dated 10 August 2023 (Birch [71]; Ex P1, CB 263, 265), Mr Birch advised Mr Wang of PIL that he was "a member of the Gibraltar Capital team working with [Mr Bunbury] and 1derful on the refinance and new facility" and attached a draft deed of assignment. The draft deed of assignment provided for an assignment to Gibraltar Capital as trustee of 1derful Group Investment Fund. Plainly, the covering email indicated to PIL that this proposal was being put on 1derful's behalf and does not disclose any plan for any new entity associated with Mr Birch and Mr Seymour to bring about the forced acquisition of the Companies' business. 3. Mr Birch refers (Birch [73]) to a conversation with Mr Bunbury on 15 August 2023, when he says he again advised Mr Bunbury that "I want nothing to do with 1derful" and that Handy Payments was also terminating its agreements with 1derful. Mr Birch did not thereafter have nothing to do with 1derful but was instead closely involved with the steps which led to Fletch's forced acquisition of the Companies' business. 4. Shortly after Mr Birch had represented to PIL that he was a member of the Gibraltar Capital team "working with" Mr Bunbury and 1derful on the refinancing, and also shortly after he says he had told Mr Bunbury that he wanted "nothing to do with" 1derful, he sent an email to Mr Beaumont and others to organise a meeting. His evidence (Birch [75]) is that: "The aim of the meeting was to work out how we could bring together the financial resources of Realty Assist [Australia Pty Ltd ("Realty Assist")], Douugh and 1derful to form a profitable self-funded business which would be able to deliver on a Fintech Platform that would be able to service everyone in the room." It is notable that the Companies were not invited to participate in this discussion as to how their assets were to be used. 1. That email (Ex D3/8, CB 2631) was sent to Messrs Beaumont and Ngyuen (who appear to have been advisers to Douugh), Mr Niardone (of The Agency), Mr Rettke (of Realty Assist), Mr Dahan (there described as an investor and corporate adviser with a debt and equity position in 1derful), Mr Seymour (there described as founder of Jigsaw Works, with a corporate and insolvency background and as "Adivsing [sic] 1derful, engaged by 1derful second ranking creditor (FIFO Capital) on recovery" [emphasis added]) and Mr Wallace (associated with a funding warehouse) in relation to a confidential meeting concerning the Companies to be held on 16 August. Mr Birch there described himself by reference to his relationship with The Agency and Handy Payments which he noted "has Agreements with 1derful for provision of payment and lending services across real estate sector etc". His email emphasised that Mr Birch assumed everyone was "under Confidentiality" and referred to the "aim" and agenda of that meeting as follows: "Aim Build a profitable ASX listed financial services conglomerate which leverages scale in Technology/Access to Funding and Financial Services Products initially in Real Estate and then branching into other verticals. Agenda 1. Update privately held 1derful including capability, possible customer base and proposed go forward strategy and strategic options. 2. Update ASX listed Douugh including capability and proposed go forward strategy and strategic options. 3. Update on Realty Assist from CEO understanding where CEO wants to take Realty Assist, where the other participants can be of help and where Realty Assist may sit in the context of the listed opportunity. 4. Allocate responsibilities and establish execution timeline." 1. The stated aim and agenda for this meeting make clear that by this point Mr Birch was no longer seeking to raise funding for 1derful but was instead promoting a proposal by which 1derful would be subsumed within a larger listed entity. There is no suggestion that he had obtained the Companies' consent to that course by that time, on an informed basis or at all, and the Companies were not invited to that meeting. 2. Mr Seymour's evidence (Seymour 10.4.24 [81]) is that he attended this meeting, which he describes as an informal meeting of customers, potential customers and potential investors in the Companies, at Gibraltar Capital's offices on 16 August 2023. His evidence is that Mr Taylor of Douugh advised that "1derful's agreement with Mastercard had been suspended and 1derful has failed to deliver the contracted products to Douugh"; I again note that suspension had occurred on 31 July 2023. He also refers to concerns as to the Companies raised by other persons present at the meeting and to his statement that he was engaged by FIFO Capital and he claims that several potential investors there said that investors would not provide funding to 1derful in its current form. Mr Seymour's evidence in cross-examination was that he first opened the email indicating the meeting was "under confidentiality" while walking to the meeting and he did not consider the meeting to be a "secret". I do not accept that evidence, if it is intended to suggest that Mr Seymour did not recognise that the plan that was discussed at that meeting was to be concealed from, and was in fact concealed from, the Companies and Mr Bunbury. 3. Mr Kopp's evidence (Kopp [11(a)]) is that, on 16 August 2023, Mr Seymour advised him that Mr Birch had already set up a special purpose vehicle and "we have the deed of assignment ready to go" and that special purpose vehicle would purchase the debt of PIL and that: "$2 million would go into the SPV and we will buy the debt from [PIL] for around $1 million, then within an hour we will serve a demand on 1derful, and then we can take possession of all assets of 1derful and have the Mastercard [A]greement assigned to the vehicle. This plan is subject to our meeting with Mastercard tomorrow morning. We have a meeting with them to ensure that Mastercard will repay us the $1 million incentive payment, if they receive their payment of $1 million. If this all works out, it would leave around $1 million in the SPV. There was a $1.2 million R&D claim to be lodged as well. We spoke to a financier who said that they will finance 80% of it within 72 hours of lodgement of R&D claim. It looks good and it would leave us with $2 million in the SPV. We have reached an in-principal [sic] agreement with another ASX listed company to be placed in control and maintain and safeguard the technology under a management contract." 1. Mr Seymour also there referred to the fact that FIFO Capital would be paid out and that the process was "all subject to Mastercard's willingness to engage with the proposed deal" and advised Mr Kopp that: "Our plan would need to be fast so that [Mr Bunbury] does not have time to react." 1. Mr Seymour also then advised Mr Kopp that: "What we are proposing is that the assets are taken out of the 1derful company. This is the safest course to control the assets. The ASX-listed company that I mentioned before will need to make market announcements, and so the most practical way to carry out the deal is with the fund structure that has been established, and then have the SPV take possession of the asset of 1derful and then sell those assets to the ASX-listed company. It would be a double-barrelled process with up to 14 days in between. In the in-between time, we will have the ASX-listed company maintain and secure the assets. We have lawyers working through this right now. … When we execute the plan, everyone will be surprised, and it will all happen in a matter of hours. The plan would mean that the debt to [PIL] would be discharged, and the debt to FIFO Capital would be discharged. The combination of the 1derful business and the ASX-listed company would give the company a future. Don't forget, this is all subject to Mastercard. We have our eyes on two customers who we think could make the company on day one." 1. Mr Kopp also refers to Mr Seymour's advice to him that: "There is no-one around with a business quite like 1derful, I am pretty confident that Mastercard will come through. We would be bringing Mastercard 50,000 cards and customer – how could they not want this deal?" Mr Kopp's affidavit annexes his note of that conversation which is broadly consistent with his account of that conversation. That note also records Mr Seymour's then assessment that "[p]ersonally I can't possibly believe that Mastercard wouldn't want to do this deal." 1. On 18 August 2023 (Ex D3/8, CB 2634) Mr Taylor of Douugh emailed Mr Beaumont and Mr Birch stating that: "Immediate priority as I see it are; 1 Secured creditors get 'control of assets'. 2 Secured creditors appoint Douugh to 'operate assets'. 3 Secured creditors settle Mastercard debt to allow Douugh and other 1derful programs to launch their Card offering. 4 Secured creditors establish warehouse facility to fund loan origination growth. 5 Agree term sheet for Douugh to acquire assets." Mr Taylor offered to "start putting some thinking" concerning Handy Payments' card program but went onto observe that: "I think the immediate priority is to secure the 1derful business, lock down a new business plan to present to Mastercard and come up with a viable commercial plan for the business to make money. As the current plan they are operating is not sustainable." 1. Mr Seymour's evidence (Seymour 10.4.23 [83]; Ex D1/2, CB 2205) is that, on 21 August 2023, he sent an email to Mr Beaumont of Munich Partners Capital which he described as attaching a diagram of "proposed pathways for the [Companies] and all subsidiaries to continue their business operations", which the email described as an "execution road map". Mr Seymour's description of that document was false where it provides, not for the Companies to continue that business, but instead for Fletch to exercise PIL's security so as to acquire that business. Mr Seymour also says that the "road map" assumed that 1derful would be placed in liquidation on a winding up application and that Mr Bunbury would be made bankrupt, based on unidentified information he had obtained as "investigating accountant" for FIFO Capital and unidentified information from the meeting on 16 August 2023. He acknowledged in cross-examination (T302) that he had not sent the road map that he prepared to Mr Bunbury but contended that the arrangement was disclosed at a meeting with Mr Bunbury and Mr Robertson. I do not accept Mr Seymour's evidence in that respect, which again fails to distinguish between, on the one hand, a refinancing of the Companies' borrowings which would have allowed the Companies to retain their assets and, on the other, a third party's acquisition of the loan and security held by PIL so as to exercise rights as a secured creditor and acquire the Companies' assets in a forced sale. 2. By a further email dated 21 August 2023 (Ex D1/2, CB 2319), Mr Seymour sent Mr Birch an email under the heading "1derful Road Map" attaching a diagram for the process by which a new fund associated with Gibraltar Capital would acquire PIL's loan and then take possession of the Companies' business assets. On 22 August 2023, Mr Birch emailed Mr Laurance of Axiom Properties Ltd ("Axiom"), with a copy to Mr Seymour, the "road map" in an attachment titled '1derful – Douugh.pdf' (Ex D3/8, CB 2637). The email stated: "Recap timetable to take assets out and rebirth 1derful. Craig Seymo[u]r the architect of this plan attached – he is in the same boat as me and a potential client of 1derful. He [o]wns Australian Sports Finance which is looking to provide financial servi[c]es to the gold industry. He also has an extensive insolvency background. Still a meeting with Mastercard requiring to step through process there. We can meet with them at the back end of the week." 1. The attachment refers to a proposal for a debt fund, Gibraltar Capital, to acquire a charge over 1derful from PIL and identifies FIFO Capital as the second ranking secured creditor; that debt fund is then to take possession and ownership of 1derful's business assets; and after a "value add" that debt fund is to vend those assets into Douugh. A detailed outline of the relevant steps includes reference to a demand for payment to 1derful following which the "debt fund takes direct possession of ALL 1derful assets" and transfers ownership of 1derful assets to SPV Co (or to itself) and commissions a valuation "based on circumstances in existence (both known and unknown) at time of possession" and "accounts to 1derful for price of business assets, formalises debts with FIFO Capital as second ranking secured creditor, not likely to be anything for unsecured creditors." The road map also identifies unresolved questions, including as to any role of Mr Bunbury with Douugh or as a discrete sales channel, or not at all. It is notable, first, that the steps set out in the road map were largely adopted in Fletch's acquisition of 1derful's assets and, second, that the road map does not contemplate any possibility that 1derful would repay its loan in response to the demand made to it. 2. Mr Birch claimed in cross-examination (T378) that he forwarded the road map prepared by Mr Seymour to Mr Laurance of Axiom but did not have the purpose of Axiom taking up that plan and that: "I was just showing him [the] plan, I wasn't attempting anything else." I reject this evidence. It seems to me that, at that point, Mr Birch was not merely passing on the road map for Mr Laurance's information, indifferent to what Mr Laurance did with it, but was actively promoting the course set out in that road map. 1. Mr Birch also claimed (T379) that he did not read the road map "in detail", although he acknowledged that he was aware of "some elements" of what Mr Seymour put in that document. It seems to me to be highly implausible that Mr Birch would not have carefully reviewed that document given his real commercial interest in the proposal, at least through Handy Payments' interest in obtaining services from the Companies or a third party which acquired their business. I find that Mr Birch was at least aware of the substance of that plan and I do not accept his evidence if he is intending to suggest the contrary. That document would have made clear to Mr Birch, had he read it as I find he did, that what was proposed was a forced acquisition of the Companies' business by a fund associated with Gibraltar Capital, or of which Gibraltar Capital was trustee, which would acquire PIL's security then exercise rights as a securityholder to sell the Companies' business to an associated special purpose vehicle. As I noted above, that approach was subsequently adopted by Fletch. 2. Also on 22 August 2023 (Ex P1, CB 280), Mr Birch emailed Mr Wang of PIL responding to Mr Wang's question whether the parties were "still on track for completion of the debt assignment this week", with a reference to the possible assignment of that debt to Gibraltar Capital which was known to Mr Bunbury, advising that: "Yes Greg, I believe that the team around [Mr Bunbury] is close to locking in the funding to take your facility out." Mr Birch denied in cross-examination (T380) that he was part of the "team around" Mr Bunbury to which reference was made in this email and he claimed that this reference was to the "other people" that Mr Bunbury was then working with to raise capital. I also do not accept that evidence. Mr Birch also suggested that he was then acting for Gibraltar Capital only in its capacity as a potential trustee for a loan arrangement and not in respect of any loan arrangement. I do not accept that evidence. It seems to me that Mr Birch's attempt to distinguish the role of Gibraltar Capital as trustee from the underlying financing arrangement was artificial, particularly where his correspondence at that time was directed to the financing and not to any questions relating to Gibraltar Capital's role as a trustee. 1. Mr Seymour refers (Seymour 10.4.24 [85]) to a video conference with Mr Bunbury and his solicitor, Mr Robertson, on 23 August 2023. By that time, about three weeks had elapsed since Mastercard had suspended the Mastercard Agreement and Mr Bunbury there put the position with Mastercard in optimistic terms. Mr Bunbury there advised Mr Seymour of significant amounts owed by the Companies to third parties, plainly on the assumption that Mr Seymour would use that information for the Companies' benefit and not to advance his personal interests. Mr Seymour refers to his preparation of an Excel spreadsheet addressing the position and to discussions concerning Mr Bunbury's personal financial position that are not relevant to any matter which I need to decide. Mr Bunbury denies (Bunbury 21.6.24 [20]) that Mr Seymour said that he would be "reporting this back to FIFO Capital", but it is not necessary to determine the dispute as to whether that was said. 2. Mr Seymour acknowledged in cross-examination (T311) that, as at 23 August 2023, he understood that Mr Bunbury trusted him and that Mr Bunbury's then perception was that he had been providing assistance to the Companies to deal with their creditors and that he had encouraged that perception. Mr Seymour's evidence in cross-examination was also that he "didn't regard [him]self as having any obligation at all to Mr Bunbury" that he "wasn't working for" Mr Bunbury (T312). The former proposition is inconsistent with the standards of commercial morality that would be expected of a participant in the financial services and credit industries in the relevant circumstances. 3. By an email dated 23 August 2023 (Ex D3/8, CB 2642) titled "Eyes Only – Call Me", Mr Seymour provided Mr Birch with a spreadsheet setting out balance sheets for 1derful and Mr Bunbury. Mr Birch said that he understood from the reference to "eyes only" (Ex D3/8, CB 2642) that Mr Seymour was asking him to keep the information secret and then said that "I'm not sure what he was asking me"; I also do not accept that evidence, where that language was only consistent with a request for secrecy. Mr Birch also denied in cross-examination that he recognised that the information contained in the document which Mr Seymour provided to him had been provided by Mr Bunbury and Mr Robertson to Mr Seymour for the purpose of assisting Mr Bunbury. I do not accept that evidence, where it would have been plain to Mr Birch and to any reasonable person that Mr Bunbury would not have provided detailed information as to his personal financial position to Mr Seymour unless he expected Mr Seymour to use it for his benefit rather than adversely to him. 4. Mr Birch's affidavit evidence is that he identified several "discrepancies" in the attached document from the position that had previously been advised to him by Mr Bunbury. Mr Birch claims (Birch [85]) that: "It was at this point that I realised Mr Bunbury had been feeding myself, investors and consumers I had introduced to 1derful false and misleading financial information." Mr Birch acknowledged in cross-examination (T389) that he was likely to have read the document attached to this email at the time he received it; he said that it was then "desirable" rather than "important" that Handy Payments have access to services which the Companies had acquired through Mastercard; and that it is likely that he read the information relating to the cost of rebuilding the technology stack contained in that document, and formed the view the cost for a new company to recreate that technology would be about $3 million. His evidence was also (T389), sensibly enough, that whether it would be advantageous to a special purpose vehicle to acquire the asset which it had cost $3 million to create for less than that amount depended upon the value of the asset. 1. Mr Birch's affidavit evidence (Birch [88]) is then, in something of a non sequitur, that: "Given that I wished nothing to do with 1derful I agreed to work with Gibraltar Capital in the event that 1derful would be able to raise capital." 1. Between 10 and 24 August 2023, Mr Bunbury sought to contact Mr Birch on many occasions and Mr Birch repeatedly texted that that he would call back but did not do so (Bunbury 6.11.23 [40]; Ex P4, CB 1225ff). 2. On 25 August 2023, Mr Birch sent Mr Wang, with a copy to Mr Seymour, an email titled "1derful debt assignment" which attached the letter dated 25 August 2023 (Ex D3/8, CB 2650) from Gibraltar Capital, signed by Mr Wallace, and that email stated: "Love to discuss further Monday. Appreciate your patience." 1. That letter set out a proposed acquisition and assignment of PIL's debt and the associated first ranking charge; indicated that Gibraltar Capital was satisfied with the proposed deed of assignment and had provided the deed to an unidentified "client principal"; sought further information as to the debt; and stated that: "1derful is wholly aware of our involvement in this matter and, notwithstanding the provisions of clause 20 of the Facility Agreement dated 31 January 2023, is supportive of the proposed Transaction." The letter went on to indicate that Gibraltar Capital was: "liaising with the second ranking secured creditor, FIFO Capital and Mr Craig Seymour of Jigsaw Works in the management of transaction mechanics and the reconstruction of the 1derful business following the completion of the Transaction." That letter also sought confirmation of PIL's willingness to complete the transaction and identified Mr Birch as the contact person. 1. Mr Seymour accepted in cross-examination that he was likely to have drafted that letter, so far as it used the kind of phrasing that he would use; Mr Seymour maintained that 1derful was in fact supportive of the proposal set out in that letter. I accept that the Companies and Mr Bunbury had expressed support for a refinancing of the Companies by Gibraltar Capital or a fund of which it was trustee which would have been in the Companies' interests. I reject any suggestion that the Companies or Mr Bunbury had supported the proposal, in the form that the road map then took, which contemplated a forced acquisition of the Companies' business, where that aspect of the true proposal had not been disclosed to them. Both Mr Seymour and Mr Birch, in cross-examination, repeatedly, but misleadingly, relied on the Companies' suggested support for those aspects of the proposal of which they were aware as justification for those aspects of the proposal that had not been disclosed to the Companies. Mr Birch denied (T382) that he had carefully read this letter and his evidence was that he was "just advised to forward that to Mr Wang". I also do not accept that evidence. 2. Also on 25 August 2023, Mr Birch forwarded a letter dated 25 August 2023 from Mr Wallace of Gibraltar Capital to Mastercard (Birch [90]; Ex D3/8, CB 2653) describing it as "a proposal from the Group looking to work through a proposed recapitalisation of 1derful Group". That letter referred to the contracts between Mastercard and 1derful, which could not have been known to Gibraltar Capital other than by reason of Mr Birch's and Mr Seymour's previous engagements, and stated that: "Gibraltar Capital intends, with the full knowledge of 1derful, to acquire the first ranking secured creditor's debt and charge over 1derful as a precursor to the restructuring, recapitalisation and prosecution of the business of 1derful." 1. The proposition that the Companies knew of the matter would be correct, if that matter was a proposed refinancing where Gibraltar Capital acquired the debt and the security with the intent of the loan then remaining on foot and the Company conducting its business; but that is wholly inconsistent with the transaction that was then contemplated by the road map, which provided that the debt and security would be acquired, the loan called and the security exercised, and the Companies' assets then sold to the special purpose vehicle in a forced sale. 2. Gibraltar Capital also there pointed to the virtues of, and the difficulties facing, the Companies, observing that: "Our view, and that of our investor group, is that: (a) The 1derful business has enormous potential; (b) The 1derful business strategy provides the basis for a successful Fintech operation; (c) The core technology in place, albeit incomplete, provides the base elements for a successful business operation; (d) The 1derful team provides enthusiasm and sales capabilities; (e) The 1derful corporate structure is hopelessly inadequate in terms of management skill, capitalisation, organisational structuring, corporate governance and discipline; (f) 1derful, in its current iteration, is wholly unable to successfully prosecute its strategy and to deliver promised outcomes to B2B and/or B2C customers at any meaningful level; (g) Mastercard is central to any prospects of success for the 1derful business." With all of the above in mind, we have firm commitments for capital sufficient to restructure and recapitalise the 1derful business, wholly subject to some form of ongoing commercial relationship with Mastercard." 1. That letter then set out a fuller explanation of Gibraltar Capital's proposal for a "recapitalisation" of 1derful under its control and solicited Mastercard's involvement with the proposal. That letter did not inform Mastercard of the extent to which the proposal was to be implemented by the forced acquisition of 1derful's business, by taking an assignment of the debt, calling in the loan within a short time and the new lender then transferring 1derful's business to itself. 2. Mr Seymour accepted in cross-examination that he likely drafted this letter. I do not accept Mr Birch's evidence in cross-examination that he forwarded that letter without reading it, where it seemed to me inconceivable that he would have sent a letter that invited Mastercard to contact him without reading the document that set out the proposal that would be the subject of such a contact. Mr Bunbury denies that he had given Mr Birch authority to communicate with Mastercard for or in relation to the Companies and his evidence was that he did not know that Mr Birch was communicating with Mastercard at that time (Bunbury 21.6.24 [58]). As I noted above, I accept that Mr Bunbury knew of aspects of a proposal for Gibraltar Capital as trustee of a fund to refinance the Companies' debt, but he and the Companies plainly did not then know of the intent to undertake a forced sale of the Companies' assets in the manner contemplated by the road maps to which I referred above. 3. Mr Birch claimed (T389) that this letter related to a proposal from Mr Bunbury, Mr Robertson, Gibraltar Capital and Mr Seymour, and not from Axiom, and he denied that the relevant group was Mr Birch, Mr Wallace and Mr Seymour. That answer again highlights the ambiguity that arises from the fact that Gibraltar Capital had, at a prior point, involved itself with a proposal that involved a true refinancing of the Companies but, by this point, the road map was articulating a different proposal, involving the acquisition of PIL's debt and the associated security as a step to the forced acquisition of the Companies' assets. 4. Mr Seymour's evidence (Seymour 10.4.24 [88]) is also that: "On 25 August 2023, Mr Birch had approached Axiom to discuss Axiom's interest in financial services for the property industry, including real estate. Mr Birch and I outlined the 1derful … business model and the potential to acquire business assets of 1derful …, if it either went into liquidation, or the secured creditor took possession of assets, or through the acquisition of debt. We discussed the opportunity for Axiom to invest and for [Mr Seymour] to take an interim role as a director of a new entity, during the acquisition phase, and to then retire once the project was running." By this point, it is plain that Mr Seymour and Mr Birch were advancing their own proposal for the acquisition of PIL's debt and the forced acquisition of the Companies' business in their own interests, without disclosure to the Companies. 1. Mr Birch's evidence in cross-examination (T403) was that he had no substantive involvement in the matter after 25 August 2023, because he had "gone away at that point" and that: "I'd had two transactions settling in my job that I – for my business. And I do a lot of work with my partner's domestic violence charity, and that was in the school holidays, and so I was on the road a lot of September because most of her clients are in regional New South Wales that we need to drive to." (T403) 1. He went on to say (T403-404): "I was on the road at that time and I had two significant transactions I was closing myself, plus I was doing a lot of work with the charity at that time." 1. I do not accept that evidence, if it is intended to suggest that Mr Birch did not pay attention to aspects of the transaction or attempts by Mr Bunbury to contact him, from that time, because he was otherwise occupied with these transactions or activities in regional New South Wales. That evidence is inconsistent with Mr Birch's contact with Mastercard on 28 and 29 August 2023 and with Axiom on 18 September 2023, which I address below. Mr Birch also did not give that explanation when he did not respond, in late August 2023 and September 2023 to numerous messages from Mr Bunbury requesting him to contact Mr Bunbury (Ex P4, CB 1226-1228). He also did not give that explanation when, after the transaction completed, he advised Mr Wang of PIL (Birch [94]-[95]; Ex D3/8, CB 2683) that he "went missing at the end of the process", not because he was busy or in regional New South Wales, but because "the team made decisions that were not consistent with a number of the items we discussed". That advice necessarily implied that Mr Birch knew of those decisions and that he disapproved of them in unidentified ways. I accept that, as Mr Cheshire submits, I should not disbelieve Mr Birch's evidence as to this matter by reason of these possible inconsistencies, which were not squarely put to Mr Birch in cross-examination. I do not accept this evidence because of the view that I have reached as to his credit on other grounds. 2. On 28 August 2023, Mr Wormald of Mastercard emailed Mr Birch with a copy to Mr Seymour (Ex D3/8, CB 2661) advising: "Great connect and we appreciate the thoughtful proposal and constructive way forward. Dan Martin (copied) leads out Digital Partnerships practice and has been closely engaged with 1derful throughout their journey. I'll leave it [to] Dan to connect in the first instance and hopefully we can find a way forward to relaunch together." 1. Mr Seymour then sent an email dated 28 August 2023 (Ex D1/2, CB 2210) to Mr Kopp and another representative of FIFO Capital which he says outlined his recommended approach and his assessment of the situation. That email addressed the likely position if 1derful was placed in liquidation and PIL appointed a receiver or some other type of controller or took direct possession of all of its assets; the position if PIL acted before a liquidation; and the possibility of action by FIFO Capital with the result that PIL would likely then exercise its rights to protect its position. Mr Seymour then observed that: "We believe that the most likely transaction is that a new consortium will buy the debt off [PIL]. Defaults are evident and irretrievable, and all documentation is in place. Let's call that an SPV for the purposes of this analysis. The SPV will then demand repayment and, when that does not occur, will seize the assets of 1derful one way or another (receiver, controller or direct). As a matter of prudence, they will then commission a valuation of the assets. Now, to rebuild the Code will cost about $1.5 million, so that's the value of the asset pool, less any issues with Code such as being buggy or incomplete. The questions are 'what is the brand worth' and 'what are the customers worth'? This gives a guide to the enterprise value. The core problem is that Luke Bunbury is so well known and the 1derful brand is heavily tainted. As a B2B business, the brand value is limited. This leaves the customers. Douugh has may be 60 days of funds left before it becomes insolvent. 1deful has not yet turned on [Handy Payments]. MyBudget looks like a commercially strong deal but is probably a year (and several funding steps) away from being profitable. On balance, the customers will be valued on a discounted cashflows methodology and an assessment of risk. Right now that is very high because Mastercard is turned off. So that brings us back to Mastercard. The Australian President of Mastercard, Richard Wormald, has directly advised us today that Mastercard will negotiate with the first ranking secured creditor if there is a plan for the future of the business involving a new management team, demonstrated capital and appropriate corporate governance and discipline. We understand they have lost interest in attempting to deal with 1derful because [Mr Bunbury] simply has not been able to deliver promised outcomes. As we've discussed previously, the Singapore team is separate but we understand that, with Richard Wormald's personal involvement, this is no longer an impediment to an overall solution. Those discussions are expected to progress further tomorrow and there are really only three options, of which two have any merit to FIFO [Capital]." 1. Mr Seymour then dealt with the possibility that Mastercard would reinstate the Mastercard Agreement on the basis that $1 million was paid to Mastercard and Mastercard then paid $1 million back in the form of incentive payments and observed that "[t]his is extremely plausible and would be expected as the default position" and observed that the Mastercard Agreement would then need to be assigned to the SPV. He identified a second possibility that Mastercard would reach a new agreement with the SPV and a third possibility that Mastercard refused to enter into a new agreement, which he assessed as "unlikely" but "the worst possible case". By this point, Mr Seymour was plainly in direct communication with Mastercard and developing a proposal which would lead to the Companies' loss of their businesses and, in his continuing dealings with the Companies, he concealed both of those matters. 2. Mr Kopp's evidence (Kopp [11(f)]) is that, on 28 August 2023, Mr Seymour advised him that Mastercard had responded to Mr Seymour and Mr Birch and that they "expect to put our foot on the company tomorrow". Mr Kopp asked what was meant by that and Mr Seymour responded: "We would acquire the debt from [PIL] and exercise our rights under that charge to take all of the assets of the company." 1. Mr Seymour then advised Mr Kopp that, if the valuation of the Companies "comes back at $2 million, then there would be enough money to pay FIFO Capital" and that: "If or when Mastercard turns the agreement back on, then the value of the assets is still significantly higher." 1. Mr Kopp's evidence (Kopp [11((i)]) is that, in a follow up call between Mr Kopp, another director of FIFO Capital and Mr Seymour on that day, Mr Seymour again referred to his assessment that the Companies' "assets are worth at least $2m every day of the week" and that: "… I can't see this being worth less than $2 million. So the customers are worth something, the strategy is worth something, the credit licence, the agreements, there is the code … Clearly, the Mastercard licence agreement is worth money because, otherwise, why would everyone be chasing it. That increases the enterprise value of the whole thing and it is patently ludicrous to suggest that the Mastercard [A]greement was worth nothing 2 days ago and now it has been turned back on all that value has accrued to the first charge holder and it wasn't part of the company assets." There was then further discussion of FIFO Capital's position following the transaction. Mr Kopp also annexed his note of that conversation which recorded Mr Seymour's advice that: "Just to be clear the assets will be seized. 1derful won't be a party to this transaction, it will happen to them, not with them." 1. On 29 August 2023, Mr Birch followed up with Mr Martin of Mastercard, with a copy to Mr Seymour, advising that: "Please [sic] to meet with you. We are very keen to get in front of you and run through our vision for 1derful. Are you free for a quick call today so we can get a sense of your thoughts of this current situation? Following this call we would then like the opportunity to present out future strategy, funding plan and key people. Given the current situation with 1derful we are keen to get something back to you as soon as possible." 1. Mr Martin responded (Ex D3/8, CB 2664) on the same day, thanking Mr Birch for the "outreach" and indicating that he could call later that day and "share initial thoughts on path forward". 2. Mr Birch's evidence (Birch [87]) is also that, at the end of August 2023: "… I formed the view that 1derful was trading whilst insolvent and had no value and that Mr Bunbury was bankrupt." It should be noted, first, that this view is incomplete, so far as it is directed to the value of 1derful rather than the value of the Companies' business, and is inconsistent with Mr Seymour's assessment that the Companies' business had a value of at least $2 million, and in excess of that amount if Mastercard could be persuaded to revoke the suspension of the Mastercard Agreement; and the statement that Mr Bunbury was bankrupt also overstated the position, although Mr Bunbury was plainly under significant financial stress. 1. An information memorandum was prepared for 1derful in September 2023 (Ex P2, CB 550ff) which sought further investment in 1derful, in a manner that was wholly inconsistent with the approach then being promoted by Mr Birch and Mr Seymour and their associates. 2. Mr Kopp also addresses (Kopp [13]) a further telephone conversation with Mr Seymour on 7 September 2023, where Mr Seymour advised him that Axiom was buying the PIL debt. Mr Seymour's affidavit evidence (Seymour 10.4.24 [88]) is that, by 12 September 2023, Axiom had agreed to invest and establish Fletch. 3. On 13 September 2023, Mr Seymour sent an email to Mr Laurance Towey of Axiom and Mr Birch (Ex P9) advising that: "This is the 1derful structure now. I have done company searches of each entity and looked at the various pieces that comprise what we want and what we want to avoid. In summary, it is this: 1. Mastercard Agreements (such as they are) are assets and we assign/novate them with the process of turning them back on. 2. The Australian credit licence and (for now) Amplus AFSL sit in Lending and we take 100% of the shares in lending, so preserving both the ACL and the AFSL intact – this makes the future with Mastercard infinitely easier and quicker. Obviously there will be some administrative stuff to do with nominated managers etc. 3. The software/text stack is used by 1derful Pty Ltd (Operations) but we think is "owned" by Group – either way we carve it out and take possession. 4. The customers (such as they are) are owned by Operations – from a valuation perspective [Handy Payments] should terminate the relationship today, Douugh is really the only one that we preserve. Those contacts get assigned/novated." 1. It is plain enough that the intent of the suggested termination of the relationship between Handy Payments and the Companies (which Mr Birch claims to have previously terminated orally) was to depress the value of the Companies, so far as it was proposed that Fletch exercise the security rights and sell the Companies' business to itself. 2. Also on 13 September 2023, Mr Seymour emailed Mr Laurence and Mr Towey of Axiom and Mr Birch an updated version of the road map enclosed with the email sent by Mr Birch on 22 August 2023 (Ex P10). That email referred to a previous meeting with, inter alia, the Chief Financial Officer at Douugh and attached an updated road map which noted that "[s]o far as Douugh is concerned, there are a number of stages that must NOT be done out of sequence." Mr Birch's evidence was that he could not recall looking at that email. I do not accept that he did not review that email, given his previous involvement in events and the significance of the transaction for Handy Payments and for him. 3. In a subsequent conversation, on 14 September 2023, Mr Seymour advised Mr Kopp that Mr Seymour would "sit over the top of the transaction" and that "Axiom would have to follow the road map that [he] had previously articulated regarding accounting back to other creditors" and, later, that Axiom were not prepared to pay out PIL in full, they would be making a "low-ball" offer to PIL and that "this wasn't good for FIFO Capital". 4. At least by 18 September 2023, Mr Birch and Handy Payments committed themselves to participation in Fletch's forced acquisition of the Companies' business. A letter dated 18 September 2023 to Axiom (Birch [93]; Ex D3/8, CB 2669), signed by Mr Birch stated that: "I refer to our recent discussions and confirm [Handy Payment's] agreement to participate in Project Fletch via the progressive sale of [Handy Payment's] business to [Fletch], [Axiom's] majority owned vehicle, based on the understanding that Fletch will acquire and develop the business assets of the 1derful Group such that Fletch will be able to deliver both debit and credit products as envisaged in Handy Payments and my own original commercial negotiations with 1derful. I confirm that through my various interests, I have existing commercial relationships with The Agency and MDC Trilogy encompassing some 11,000 property managements, and that MDC Trilogy has an objective of expanding its own rent roll business to around 20,000 properties by the end of calendar 2004. I confirm that I will continue to maintain and develop The Agency relationship pending the completion of the full sale of the Handy Payments business to Fletch, and will otherwise seek to expand both Handy Payments and my own business in accordance with Fletch's stated strategic objectives, provided only that Handy Payments and myself can deliver the intended 1derful product range." 1. On 22 September 2023, Fletch was incorporated (SOC [22]; Ex P1, CB 105) with Mr Seymour as its sole director and company secretary. Mr Seymour's evidence (Seymour 10.4.24 [88]) seeks to explain why Fletch was incorporated, in order to implement an assignment of PIL's debt to Fletch. Mr Seymour's company, Jigsaw Works, then held 5 of its 80 shares; Mr Birch's company, Midialel, held 5 of its 80 shares and Axiom held 70 of its 80 shares (SOC [22]-[23], admitted D1/2 Defence [22]-[23], D3 Defence [22]-[23]). I accept that Fletch did not have a banking or financial institution licence nor was it regularly engaged in or established for the purpose of making or purchasing or investing in loan securities or other financial assets, including credit derivatives (SOC [24], partly admitted and partly not admitted D1/2 Defence [24], D3 Defence [24]). 2. The Plaintiffs plead (SOC [25], denied D1/2 Defence [25], D3 Defence [25]) and I find that Mr Seymour and Mr Birch developed a plan for Fletch to acquire the Companies' business by, first, acquiring at a discount the debt of PIL owed by the Companies; then demanding payment of the debt within a very short time, knowing (through Messrs Seymour and Birch) that the Companies could not pay that debt within that short time; then purportedly exercising the power of controller to sell the Companies' business to itself without marketing or taking any steps to identify the value of that business; then transferring the shareholding held by 1derful in 1derful Lending to Fletch, to allow it to obtain its Australian credit licence, and then causing that Australian credit licence to be reissued to 1derful Lending under the changed name of APL Lending Pty Ltd ("APL Lending"); and finally appointing a receiver to the Companies knowing that no assets remained in them so that no steps could be easily taken to recover those assets. I recognise that plan was developed, and steps added and modified, over time. The Plaintiffs refer to these steps as "the Scheme"; I will also use that term although it has a pejorative implication, where that implication is supported by the findings that I have reached. The Plaintiffs plead (SOC [26]) and I accept that each of Fletch and Messrs Seymour and Birch took part in the Scheme. 3. By a Deed of Assignment dated 25 September 2023 (SOC [29(a)], admitted D1/2 Defence [29(a)], D3 Defence [29(a)]; Ex D3/8, CB 2671, 2676) between PIL and Fletch, PIL assigned to Fletch all of its rights, title and interest in relation to the Facility Agreement and Security Deed for the sum of $700,000 and there recorded the secured loan balance as $942,326. The Plaintiffs plead (SOC [35], denied D1/2 Defence [35], D3 Defence [35]) and I accept that the assignment of the debt from PIL to Fletch was not authorised by the terms of the Facility Agreement and Fletch received the assignment in knowledge of that breach and intending to take advantage of that breach, although that conclusion is not necessary to the outcome of these proceedings. On 26 September 2023, PIL gave notice of that assignment to the Companies and Mr Bunbury (Ex P1, CB 344). 4. On 27 September 2023, the winding up application brought by Think Grow was dismissed (Ex P1, CB 346). Mr Seymour pleads that, on the same day, his engagement with FIFO Capital ceased (D1/2 Defence [17.3(a)]). Also on that day, (at 11.21am) Fletch gave the Companies notice of the assignment, and demanded payment of the outstanding $942,326 by 4pm on that same day (Ex P1, CB 339). At 4.29pm on that day, Fletch gave the Companies notice that because its demand had not been met, it was entering into possession and taking control of the Companies' assets, including its business, pursuant to cl 8.1 of the Security Deed (SOC [29(b)], admitted D1/2 Defence [29], D3 Defence [29]); Bunbury 6.11.23, [6(f)-(g)]; Ex P1, CB 340, 348, 350) and notified the ASIC that Fletch was now the controller of the Companies' property (Ex P1, CB 354). Mr Seymour's affidavit refers (Seymour 10.4.24 [93]ff) to these events but does not address their obvious intent to ensure that the Companies had no prospect of making the relevant payments, however unlikely it may have been that they could have funded those payments in any case. 5. Mr Bunbury refers in his affidavit evidence (Bunbury 6.11.23 [42]) to an exchange of text messages with Mr Seymour on 27 September 2023 and to a subsequent telephone conversation with Mr Seymour, in which Mr Seymour did not disclose his role in relation to the proposed acquisition of PIL's debt by Fletch. Mr Seymour responds (Seymour 10.4.24 [110]) that he told Mr Bunbury in that conversation that: "1derful failed to deliver the product to [The Agency] and this has caused a level of frustration between Mr Birch and Trilogy Funds, who are backing Mr Birch on his rent roll project, and my view is that 1derful has no prospect of being able to raise enough capital to survive, as you and I discussed in August with Mr Robertson. Fletch … is buying [H]andy [P]ayments from Mr Birch and the funders have provided separate funding to Realty Assist, and are focusing on delivering a Fintech Product into the property space. Luke, I want to sit down with you and explore options for you to be involved in the process, and the best pathway forward". Mr Seymour says that he responded to Mr Bunbury that the latter was "going to be bankrupt" but "we are still happy to explore an engagement [of Mr Bunbury] potentially via your wife's company or some other process" and that the Companies would be receiving a letter of demand from Fletch's lawyers. Even if this were an accurate account of the conversation, it again did not provide a frank disclosure to the Companies or Mr Bunbury of the extent of Mr Seymour's or Mr Birch's involvement with Fletch, or the extent to which he and Mr Birch were the architects of the transactions which he there described. Mr Bunbury denies (Bunbury 21.6.24 [27]) Mr Seymour's account of that conversation. 1. Mr Seymour also send a text on that date (Ex P8), the addressees of which are not identified, as follows: "Hi all, FYI – Bunbury claims he has the $$$. No-one thinks he really does. His lawyers are trying to get proof – through back channels, they don't think he has it. Ironically, even if he does and pays us, we could do the same thing tomorrow with FIFO. We are full steam ahead – just keeping you all in the loop". 1. Mr DeBuse submits that: "It is relevant to note that at or around that period of time financial accommodation was in the process of being arranged for the 1derful Companies. An amount of $1.5 million was in the process of becoming available from a company Teaminvest Private Financial Services Ltd, an ASX listed wealth management service [Bunbury 4.12.23 [22]-[23]]. Bayleaf Capital had also been engaged for some six months and was well advanced in securing both debt and equity funding for the 1derful Companies. Substantial tax credits of were also owing from the Australian Tax Office (ATO) and New Zealand Inland Revenue Department in excess of one million dollars" ... It appears unlikely that the Companies could have raised funds to make the repayment even if they had been allowed a reasonable time to do so; however, they were not allowed any real opportunity to do so and that was plainly intentional on the part of at least Mr Seymour and Fletch. 1. On 3 October 2023, by the BSA (Ex P1, CB 410), Fletch, in its capacity as controller, purportedly sold to Fletch the assets of the Companies, including their business, for the sum of $757,273 exclusive of GST. Under cl 7 of the BSA, the sale price was subject to adjustment upon a valuation of the Companies' assets by which, if the value of the assets exceeds the $757,273 purchase price, Fletch was to apply the difference towards repayment of the amounts owing to it (Ex P1, CB 418). That valuation was never undertaken. That sale also took place without any marketing campaign or attempts at a sale to other potential purchasers (SOC [29(c)], admitted D1/2 Defence [29], D3 Defence [29]). All receivables that were or that became due were to be assigned to Fletch (cl 9) and the agreement provided for the novation and assignment of all continuing contracts to Fletch (cl 6.2). 2. Also on 3 October 2023, Fletch passed a written resolution purportedly as sole shareholder appointing Mr Seymour in place of Mr Bunbury as sole director of 1derful Lending (Ex P1, CB 430) and Fletch, as controller, transferred the shares of 1derful Lending to itself (Ex D1/2, CB 2286); on 10 October 2023, 1derful Lending was renamed APL Lending (Ex P1, CB 437); on 13 October 2023, Fletch and PIL jointly appointed Mr Ball as receiver of the Companies' assets (Bunbury 6.11.23 [16]; Ex P1, CB 131-134); and, on 16 October 2023, the Australian credit licence held by 1derful Lending was reissued in the name of APL Lending (SOC [29(d)-(f)], admitted D1/2 Defence [29], D3 Defence [29]; Bunbury 6.11.23, [71]; Ex P1, CB 448). 3. By an email dated 4 October 2023, Mr Birch advised Mr Wang of PIL (Birch [95]; Ex D3/8, CB 2683) as follows: "Thanks for working with [Mr Seymour] and the team on the debt assignment. I apologise that I went missing at the end of the process, but the team made decisions that were not consistent with a number of the items we discussed and so I felt it better to step aside as I was not an ultimate decisionmaker on these points." Mr Birch did not disclose, in his evidence, the items that had been discussed with PIL, or who made decisions that were not consistent with them, or the aspects in which those decisions were not consistent with those items, and I infer that the evidence as to those matters would not have assisted his defence of the proceedings. His disclaimer of involvement, at that late stage, does not assist him given the evidence to which I have referred above. 1. Shortly after the purported sale, Axiom, which was the majority shareholder in Fletch, made an announcement (Ex P2, CB 661) to the Australian Stock Exchange which emphasised the benefits of the forced acquisition of the Companies' business by Fletch as follows: "Fletch Capital Axiom interest up to $2m loan for 70% – 87.5% Fletch Capital is a new business seeded and funded by Axiom by way of an initial loan facility of up to $2m. The core objective of Fletch Capital is to provide strategic direction, human resources and financial capital to develop fintech business opportunities consistent with Axiom's recent employment of Rob Towey as CEO of Axiom's prop tech business. Fletch has been able to secure the ownership of financial and lending software technology and payment platforms as well as an Australian Credit Licence (ACL) and preferential supply-side partnerships. These assets are expected to form the backbone of Fletch Capital's new architecture and payment platform and will be supplemented by further investments into strategic product and technology development to deliver a comprehensive business model. Initially, Fletch Capital has secured a conditional Preferred Provider Status with the rent roll payment platforms of two major groups. Combined, the 2 platforms represent ~12,500 properties and approximately $500m of rental payments per annum, placing them amongst the highest processors of aggregated rent rolls in Australia. Having secured a conditional Preferred Provider Status, the Fletch Capital business is currently engaged in a process to deliver a highly compliant, robust B2B platform, with the aim of commencing the on-boarding of the first B2B customers for the processing of rental payments in the coming quarters. After establishing the rental payments platform as described above, the next stage for Fletch Capital involves offering multi-layered, higher yielding financial products encompassing KYC / AML capabilities, credit decisioning and recovery, credit and debit cards, and other consumer credit products, capable of fuelling new growth and revenue opportunities for Fletch Capital and its B2B customers within the property industry and into new markets and verticals both domestically and internationally. Fletch Capital is also exploring wider opportunities in the global digital lending and payments sector, with a view towards providing new and innovative solutions to overcoming various strategic and operational inefficiencies now evident in the fintech environment." 1. The annual report of Axiom for the financial year 2023-2024 also referred to the acquisition of the Companies by Fletch and observed (Ex P11, p 7) that: "The Group's newly established Payments Division is expected to be a key driver of the Companies' future earnings, underpinned by some major, key customer relationships with the potential to transform the profile of the Companies' business model into a substantial, recurring revenue business through strategic investment and support of this Division." The reference to intangible assets in Note 11 (at p 11) of the accounts recorded the acquisition of "a technology stack that is capable of providing payments, credit and card issuance capabilities to various entities requiring these services" although it also recognised the existence of a legal dispute and noted that the value of the technology application intangible had been impaired to nil pending the resolution of that dispute. That reference was plainly to the assets acquired by Fletch by the process that I have set out above. Claim for breach of fiduciary duty by Mr Seymour 1. The Plaintiffs seek (OP [8], SOC [1]) a declaration that, relevantly, Mr Seymour breached fiduciary obligations owed to the Companies. The Plaintiffs plead that Mr Seymour was engaged for reward by the Companies and possibly Mr Bunbury from in or around July 2023 to provide advice and assistance in relation to solvency refinancing and capital raising for the Companies (SOC [17]). Mr Seymour and Fletch deny this claim and plead that Green Jigsaw was engaged jointly by MDC and HCP from 20 June 2023 to 17 July 2023, and Jigsaw Works was then engaged by FIFO Capital (D1/2 Defence [17]). 2. This first step of the Plaintiffs' claim for breach of fiduciary duty against Mr Seymour is somewhat narrowly pleaded, with the claim that Mr Seymour was engaged "for reward" by the Companies. Mr Walker submits, in closing, that the Plaintiffs have departed from their pleaded case in closing submissions by contending that, between April and September 2023, Mr Seymour was engaged by the Companies to act for them in relation to corporate advice, raising funds, and other issues and that the sale of the Companies' business to Fletch was at a known undervalue and in breach of Mr Seymour's fiduciary duties. Mr Walker submits that the Plaintiffs have not sought to amend their case, and no departure from the pleaded case has been "agreed to or permitted". 3. It is therefore necessary to addresses the function of pleadings here. I proceed on the basis that the role of the pleadings is to promote the just resolution of the proceedings. That proposition emerges clearly enough from the judgment of the Full Court of the Federal Court in Betfair Pty Ltd v Racing New South Wales (2010) 189 FCR 356; (2010) 273 ALR 664; [2010] FCAFC 133 at [49]ff ("Betfair"), as follows: "The basic function of pleadings is to identify the issues which require a court's attention and determination (see Banque Commerciale SA (in liq) v Akhil Holdings Ltd (1990) 169 CLR 279 (Banque Commerciale) per Brennan J quoting Jessel MR in Thorp v Holdsworth (1876) 3 Ch D 637 at 639). In Kernel Holdings Pty Ltd v Rothmans of Pall Mall (Australia) Pty Ltd (1991) 217 ALR 171 French J, when a member of this Court, said (at 173): "A material fact is one which is necessary to formulate a complete cause of action. It is to be distinguished from particulars which are not part of the pleading. Material facts must be pleaded with the degree of specificity necessary to define the issues and inform the parties in advance of the case they have to meet. There are certain levels of generality in pleading which while they may bring in all facts necessary to establish a cause of action, are insufficient for that purpose: Bruce v Odhams Press Ltd [1936] 1 KB 697 at 705, 712; [1936] 1 All ER 282 at 289, 294; Ratcliffe v Evans [1892] 2 QB 524 at 532; [1891–4] All ER Rep 699 at 704; Farrell (formerly McLaughlin) v Secretary of State for Defence [1980] 1 WLR 172 at 179–80; Charlie Carter Pty Ltd v SDAEA (WA) (1987) 13 FCR 413." … Pleadings provide a structure for a proceeding for the purpose of the attainment of justice. The pleadings identify the material facts upon which the parties rely and the issues the parties seek to have determined. Because the pleadings require the parties to identify all material facts and issues, the pleadings provide the benchmark for discovery before trial and the admissibility of evidence at trial. Parties are required to plead the material facts upon which the party relies and the issues which that party seeks to have resolved for the further purpose of giving the opposing party fair notice of the case to be met at trial thereby minimising any risk of injustice by taking the opposing party by surprise. Pleadings incidentally are the record of the proceeding for the purpose of any subsequent arguments relating to res judicata or issue estoppel or any like issue. At trial a party is entitled to have the opposing party confined to that party's pleadings because the first party is entitled to come to trial to meet only the issues raised on the pleadings. However, if the first party does not seek to so confine the opposing party but allows the other party to raise other material facts and issues for the determination of the Court, then in our opinion the Court is permitted and possibly obliged to decide the proceeding on the further material facts and issues raised and addressed at trial: Banque Commerciale at 296–297; Gould v Mount Oxide Mines Ltd (in liq) (1916) 22 CLR 490 at 517. If it were otherwise, the party who has failed to plead all of the material facts or issues upon which the party's case relies, but has brought those material facts or issues to the attention of his or her opponent at trial, would be denied natural justice if at the end of the trial the Court decided the proceeding on the pleadings without notice to that party. The first party in those circumstances would have been denied the opportunity to apply to amend those pleadings so as to formalise what was in fact addressed at the trial. Pleadings are a means to an end and not an end in themselves (Banque Commerciale per Dawson J at 292–293). As early as 1916 Isaacs and Rich JJ said, in Gould (at 517): "Undoubtedly, as a general rule of fair play, and one resting on the fundamental principle that no man ought to be put to loss without having a proper opportunity of meeting the case against him, pleadings should state with sufficient clearness the case of the party whose averments they are. That is their function. Their function is discharged when the case is presented with reasonable clearness. Any want of clearness can be cured by amendment or particulars. But pleadings are only a means to an end, and if the parties in fighting their legal battles choose to restrict them, or to enlarge them, or to disregard them and meet each other on issues fairly fought out, it is impossible for either of them to hark back to the pleadings and treat them as governing the area of contest."" 1. The Court then observed (at [55]ff) that the relevant question is whether the respondents knew the case they had to meet. In dealing with a similar position to that taken by Mr Seymour and Fletch here (and elsewhere by Mr Birch), the Full Court observed that: "An announcement of that kind by a party [that the other party will be 'held' to its pleaded case] misstates that party's capacity to direct the course of the proceedings. The course of proceedings is in the control of the Court. That control is to be exercised for the attainment of a just outcome. There will obviously be cases where a pleaded case does not raise an important fact for attention. If that remains the position at the end of the case, the case may be lost on that basis, so far as it depends on that fact. Sometimes it would be unfair to allow a party to amend a case, or a pleading, to raise a new matter which could have been, but was not, raised earlier. On the other hand, mere infelicity of drafting will rarely be allowed to defeat a case on its merits if the merits of the case have been made apparent on the evidence without unfairness to the other party. … The obligation on the Court to deal with the "real controversy" between the parties was emphasised recently in Vale v Sutherland (2009) 237 CLR 638 where the High Court at [41] cited with approval the following statement of Dawson J in Banque Commerciale: "But modern pleadings have never imposed so rigid a framework that if evidence which raises fresh issues is admitted without objection at trial, the case is to be decided upon a basis which does not embrace the real controversy between the parties … cases are determined on the evidence, not the pleadings."" 1. In Betfair the Court concluded (at [59]) that the relevant issue was "clearly in play" in those proceedings and that "any deficiency in the premise upon which that issue was pleaded should have been dealt with by the trial judge as a matter of substance rather than as a point of pleading". There should be no surprise in that proposition. These propositions have subsequently been approved and applied by the Full Court of the Federal Court (on an appeal from a case involving, inter alia, copyright heard in this Court) in JR Consulting & Drafting Pty Ltd v Cummings (2016) 329 ALR 625; [2016] FCAFC 20 at [410]ff and again in Ridge Estate Pty Ltd v Fairfield Pastoral Holdings Pty Ltd (2024) 302 FCR 375; [2024] FCAFC 17 at [236]ff. 2. Consistent with authority, I do not read the Plaintiffs' pleading of breach of fiduciary duty narrowly or technically. Notwithstanding the evidence directed to the question whether HCP and FIFO Capital had engaged Green Jigsaw and Jigsaw Works, by contrast with the Companies or Mr Bunbury engaging Mr Seymour, it was plain that the Plaintiffs' case extended to a claim for breach of fiduciary duty arising from the dealings between Mr Seymour, the Companies and Mr Bunbury, and was not limited to a duty arising from a formal contract between the Companies or Mr Bunbury and Mr Seymour personally. I have no doubt that Mr Seymour knew that he needed to meet a wider case that he had undertaken to act in the Companies' and Mr Bunbury's interests, even if not by a formal contract, and had thereby assumed fiduciary duties to the Companies and Mr Bunbury and had breached them, even if he hoped to take a successful pleading point to avoid a determination of that wider case on its merits. He was not caught by surprise although his hope to hold the Plaintiffs to a narrow case that may fail on technical grounds has been disappointed. I am comfortably satisfied that there is here no denial of procedural fairness and no practical injustice (using the language in Gerrard Toltz Pty Ltd v City Garden Australia Pty Ltd (in liq) (No 2) [2024] NSWCA 232 ("Gerrard Toltz") at [103]-[108]) in determining this claim by reference to the dealings between Mr Seymour, the Companies and Mr Bunbury that were in issue at the hearing. 3. Now returning to the Plaintiffs' pleaded case, they also plead (SOC [18], largely denied D1/2 Defence [18]) that Mr Seymour only became aware of the details of the existence of the Companies' debts, the nature and financial circumstances of its business and the opportunity that it involved, by reason of his engagement to provide assistance to the Companies. Given the findings that I reach on other grounds, it is not necessary to decide that question, although I accept that he plainly obtained information about the Companies as a purported adviser to them and representative for them. The Plaintiffs also allege (SOC [19], denied D1/2 Defence [19]) that Mr Seymour did not inform Mr Bunbury or the Companies that he had ceased working to achieve a capital or debt raising for the benefit of the Companies; or to negotiate with PIL on their behalf. I accept that, as has emerged from the chronology above, Mr Seymour did not frankly or fairly inform them of that matter or advise them when he chose to advance his own, and then Fletch's, interest in a forced acquisition of the Companies' assets. 4. The Plaintiffs plead (SOC [20]; denied D1/2 Defence [20]) that, by reason of the circumstances of their retainer and the trust and confidence reposed in, relevantly, Mr Seymour of which he was aware or should have been aware, he owed a fiduciary obligation to Mr Bunbury and the Companies. They plead (SOC [21]; denied D1/2 Defence [21]) that those fiduciary obligations included obligations not to take advantage for their personal profit of the confidential information of the Companies of which they were allegedly aware; not to prefer their personal interests to that of Mr Bunbury and the Companies; and not to let their duty as agents and confidants of Mr Bunbury and the Companies conflict with their obligations to other third parties. The Plaintiffs also plead (SOC [33], denied D1/2 Defence [33], D3 Defence [33]) that, relevantly, Mr Seymour aided and abetted, procured and counselled or was knowingly involved in the Scheme in breach of, inter alia, his fiduciary obligations. While this pleading is oddly phrased, I understand it to be an allegation of breach of fiduciary duties owed by him, not an allegation of knowing assistance in a breach of fiduciary duty owed by a third party. The applicable principles 1. I now address the applicable principles in respect of the claims for breach of fiduciary duty. In Hospital Products Ltd v United States Surgical Corp (1984) 156 CLR 41; [1984] HCA 64 ("Hospital Products"), Mason J observed (at 96-97) that "the critical feature" of the traditional fiduciary relationship was the undertaking or agreement by the fiduciary to "act for or on behalf of or in the interests of another person in the exercise of a power or discretion which will affect the interests of that other person in a legal or practical sense" and that: "The relationship between the parties is therefore one which gives the fiduciary a special opportunity to exercise the power or discretion to the detriment of that other person who is accordingly vulnerable to abuse by the fiduciary of his position … It is partly because the fiduciary's exercise of the power or discretion can adversely affect the interests of the person to whom the duty is owed and because the latter is at the mercy of the former that the fiduciary comes under a duty to exercise his power or discretion in the interests of the person to whom it is owed …" Deane J similarly there observed (at 141-142) that, although no single test would identify a fiduciary relationship: "There is, however, the notion underlying all the cases of fiduciary obligation that inherent in the nature of the relationship itself is a position of disadvantage or vulnerability on the part of one of the parties which causes him to place reliance upon the other and requires the protection of equity acting upon the conscience of that other ..." 1. Professor Finn subsequently observed in his essay, "The Fiduciary Principle" in T G Youdan (ed) Equity, Fiduciaries and Trusts (1989) at 46, in a passage cited with approval by the Full Court of the Federal Court in News Ltd v Australian Rugby Football League Ltd (1996) 64 FCR 410 at 541; [1996] FCA 870, and by Ball J in DIF III – Global Co-Investment Fund LP v Babcock & Brown International Pty Limited [2019] NSWSC 527 ("DIF III") at [145], that fiduciary duties can arise where: "[T]he actual circumstances of a relationship are such that one party is entitled to expect that the other will act in his interests in and for the purposes of the relationship. Ascendancy, influence, vulnerability, trust, confidence or dependence doubtless will be of importance in making this out, but they will be important only to the extent that they evidence a relationship suggesting that entitlement." 1. In Bristol & West Building Society v Mothew [1998] Ch 1, Millett LJ similarly observed (at 18) that: "A fiduciary is someone who has undertaken to act for or on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence. The distinguishing obligation of a fiduciary is the obligation of loyalty. The principal is entitled to the single-minded loyalty of the fiduciary." 1. Although the relationship between a party providing services to a client in the financial sector and that client is not a status-based relationship, the Courts have readily found that fiduciary duties can arise in that context. In Aequitas Ltd v Sparad No 100 Ltd (formerly Australian European Finance Corp Ltd) (2001) 19 ACLC 1006; [2001] NSWSC 14, Austin J held that an adviser owed fiduciary duties where it undertook to act in the interests of the client and not solely in its own interests, and the client was in a position of vulnerability (at [310]); and the client trusted the adviser and had placed itself in the adviser's hands on the assumption that the adviser would not act in its sole best interest but would act in the interests of the client (at [313]); that approach was approved and applied by Jagot J (then sitting in the Federal Court of Australia) in Bathurst Regional Council v Local Government Financial Services Pty Ltd (No 5) [2012] FCA 1200 ("Bathurst Regional Council"). 2. In Australian Securities & Investments Commission v Citigroup Global Markets Australia Pty Ltd (No 4) (2007) 160 FCR 35; 62 ACSR 427; [2007] FCA 963 ("Citigroup"), Jacobson J referred, inter alia, to Hospital Products and observed (at [272]) that: "Apart from the established categories, perhaps the most that can be said is that a fiduciary relationship exists where a person has undertaken to act in the interests of another and not in his or her own interests but all of the facts and circumstances must be carefully examined to see whether the relationship is, in substance, fiduciary ..." His Honour there also identified pre-contract dealings between Citigroup and its client which contained all the indicia of a fiduciary relationship including giving strategic advice which involved the use of financial acumen, judgment and expertise to further the client's interests, although he found that a fiduciary relationship was excluded by the express terms of the mandate letter signed in that case. 1. In John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1; [2010] HCA 19 ("John Alexander's Clubs") at [87], a unanimous High Court in turn identified the "critical feature" of fiduciary relationships as being that: "'the fiduciary undertakes or agrees to act for or on behalf of or in the interests of another person in the exercise of a power or discretion which will affect the interest of that other person in a legal or practical sense.' From this power or discretion comes the duty to exercise it in the interests of the person to whom it is owed." 1. In Grimaldi v Chameleon Mining NL (No 2) (2012) 200 FCR 296; [2012] FCAFC 6 ("Grimaldi"), the Full Court of the Federal Court observed (at [177]) that a fiduciary duty may exist: "when and insofar as that person has undertaken to perform such a function for, or has assumed such a responsibility to, another as would thereby reasonably entitle that other to expect that he or she will act in that other's interest to the exclusion of his or her own or a third party's interest." Their Honours also noted (at [174]) that the relevant fiduciary duties were: "concerned with the setting of standards of conduct for persons in fiduciary positions. Its burden, put shortly, is with exacting disinterested and undivided loyalty from a fiduciary – hence, for example, its focus on conflicts between duty and undisclosed personal interest, conflicts between duty and duty and misuse of a fiduciary position for personal gain or benefit." 1. In Wingecarribee Shire Council v Lehman Bros Australia Ltd (in liq) (2012) 301 ALR 1; [2012] FCA 1028, Rares J held that Grange Securities Limited, which advised local councils in respect of their purchase of complex financial products, owed them fiduciary duties as a financial adviser and breached the prohibition on conflicts of interest by reason of a conflict between its duty to give sound financial advice to, or make investment decisions on behalf of, the councils and an undisclosed interest in earning large fees or profits in sales of those products. 2. In Bathurst Regional Council, Jagot J similarly held that a financial adviser to local councils owed them fiduciary duties and breached the prohibition on conflict of interest by reason of undisclosed commercial pressures upon it to distribute relevant products in order to restore the success of its business. The Full Court of the Federal Court dismissed an appeal from that decision in ABN Amro Bank NV v Bathurst Regional Council & Others (2014) 309 ALR 445; [2014] FCAFC 65 and, as Mr Walker notes, there summarised the applicable principles (at [1066]) as follows: "1. The "critical feature is that the fiduciary undertakes or agrees to act for or on behalf of or in the interests of another person": Hospital Products Pty Ltd v United States Surgical Corp (1984) 156 CLR 41 at 96–97; Pilmer v Duke Group Ltd (2001) 207 CLR 165 at 196–197 [70]–[71] and Australian Securities and Investments Commission v Citigroup Global Markets Australia Pty Ltd (No 4) (2007) 160 FCR 35 at 76 [270]–[275] and 77 [283]. 2. It is the element of undertaking (from the point of view of the fiduciary) or obligation (for and on behalf of the beneficiary) that has the consequence that equity insists that the principal must act in the "interests of" or "for the benefit of" the beneficiary rather than in the principal's own interests: Breen v Williams (1996) 186 CLR 71 at 113, approved in Pilmer at 196–198 [70] and [74]. 3. Whether a fiduciary relationship exists in a particular case, and if so, the scope of that fiduciary relationship, are matters which depend critically upon the particular circumstances of the case: In Re Coomber [1911] 1 Ch 723 at 728–729, approved in Hospital Products at 102; see also Pilmer at 198–199 [77]–[78] and Citigroup at 76 [285], 78 [287]–[288]. 4. The characteristics which define a fiduciary relationship cannot be exhaustively defined. It is inappropriate to treat the existence of a fiduciary obligation as being dependent upon whether the principal and beneficiary fall into a particular status relationship: James Edelman, "The Role of Status in the Law of Obligations: Common Callings, Implied Terms and Lessons for Fiduciary Duties" (Paper presented at the University of Alberta, 18 July 2013, and DePaul University conference, Chicago, 19–20 July 2013). 5. Similarly, whether a fiduciary relationship has come into existence does not depend upon the motivation or desire of one party to establish a relationship of trust or confidence. What matters is whether there is a relationship involving the requisite undertaking, determined as a matter of objective characterisation, rather than by having regard to the subjective expectations of the parties: Beach Petroleum NL v Kennedy (1999) 48 NSWLR 1 at 45 [188] and 46 [194]; P D Finn, Fiduciary Obligations (Law Book Company, 2nd ed, 1977), para 14ff; James Edelman "The Importance of the Fiduciary Undertaking" (2013) 7 Journal of Equity 128 (see also, James Edelman "When Do Fiduciary Duties Arise" (2010) 126 Law Quarterly Review 302) and, in the context of a contractual relationship, Citigroup at 77 [281]." 1. Mr Walker also refers to my summary of the relevant principles in Vanguard Financial Planners Pty Ltd v Ale (2018) 354 ALR 711; [2018] NSWSC 314 at [51]–[60] and submits that, for a fiduciary relationship to be established, there must be an express or implied undertaking or agreement given by a person to act in the interests of another in the conduct of the relationship between them. Mr Cheshire refers to Ball J's observation in DIF III at [146]–[147], where his Honour held that a promoter in respect of an ongoing business did not owe fiduciary duties, and observed that: "Consistently with what Mason J said in Hospital Products, courts are disinclined to impose fiduciary obligations where parties have entered into ordinary and arm's length commercial relationships that fully prescribe the respective powers and duties of those parties: see Paul Dainty Corp Pty Ltd v National Tennis Centre Trust (1990) 22 FCR 495 at 515. … Where the fiduciary duties have their foundation in contract, their scope depends on the terms of the contract. As Mason J explained in Hospital Products (at 108) in a passage cited with approval by the High Court in John Alexander Clubs Pty Ltd v White City Tennis Club Limited (2010) 241 CLR 1; [2010] HCA 19 at [91]: "In these situations it is the contractual foundation which is all important because it is the contract that regulates the basic rights and liabilities of the parties. The fiduciary relationship, if it is to exist at all, must accommodate itself to the terms of the contact so that it is consistent with, and conforms to, them. The fiduciary relationship cannot be superimposed upon the contract in such a way as to alter the operation which the contract was intended to have according to its true construction."" 1. In Ancient Order of Foresters in Victoria Friendly Society Ltd v Lifeplan Australia Friendly Society Ltd (2018) 265 CLR 1; [2018] HCA 43 ("Ancient Order of Foresters") at [67] to [70], Gageler J in turn explained that the duty of loyalty is imposed, in equity, on fiduciaries "by means of two overlapping 'proscriptive obligations'", observing that (footnotes omitted): "'The first', often referred to as the 'conflict rule', 'is that which appropriates for the benefit of the person to whom the fiduciary duty is owed any benefit or gain obtained or received by the fiduciary in circumstances where there existed a conflict of personal interest and fiduciary duty or a significant possibility of such conflict: the objective is to preclude the fiduciary from being swayed by considerations of personal interest.' The unconscionability which attracts equitable remedies in circumstances where the conflict rule alone is invoked lies not so much in receipt by the fiduciary of the benefit or gain (over which the fiduciary need not have control) as in retention by the fiduciary of the benefit or gain which in conscience ought to be disgorged to the principal. 'The second', often referred to as the 'profit rule', 'is that which requires the fiduciary to account for any benefit or gain obtained or received by reason of or by use of [the] fiduciary position or of opportunity or knowledge resulting from it: the objective is to preclude the fiduciary from actually misusing [the fiduciary's] position for [the fiduciary's] personal advantage.' The unconscionability which attracts equitable remedies in such circumstances lies in pursuit by the fiduciary of self-interest, or, more precisely, in pursuit of an interest other than the exclusive interest of the principal. Consistently with the objective of imposing each obligation, in neither case does the benefit or gain to the fiduciary need to be at the expense of the principal, though it may be. And in neither case does the fiduciary need to act dishonestly or fraudulently, or otherwise than in good faith, though again the fiduciary may do so…" 1. In Porter v Mulcahy & Co Accounting Services Pty Ltd [2021] VSC 572 at [488], in the context of a claim for breach of fiduciary duties against an accountant, Delaney J observed that: "The relationship between a professional advisor and client, including that of accountant and client, does not fall within one of the established categories of fiduciary relationships. However, the categories of fiduciary relationships are not closed. The relationship between accountant and client may give rise to a fiduciary relationship where the 'critical features of those established relationships' are found to exist. Ad hoc fiduciary relationships are 'infinitely varied', with the scope of the duties owed pursuant to such relationships determined by the facts. A fiduciary relationship can be found or implied from the circumstances. There is no requirement that there be any form of contract (such as a retainer) or formal legal relationship between the parties to establish a fiduciary duty." 1. I recognise that, even if the Court holds that there was a fiduciary duty, the scope of that obligation must be considered, and I will also address that question below. In Anderson v Canaccord Genuity Financial Ltd (2023) 113 NSWLR 151; [2023] NSWCA 294 at [152]ff, the Court of Appeal observed that the "scope" of fiduciary obligations refers to the scope, or subject matter, of the area within which the fiduciary is not free to act self-interestedly and approved the statement in Grimaldi at [143] that: "The concept of 'duty' in the 'conflict of duty and interest' formula of the first of these is convenient shorthand. It refers simply to the function, the responsibility, the fiduciary has assumed or undertaken to perform for, or on behalf of, his or her beneficiary. What that function or responsibility is, is a question of fact. It may be narrow and circumscribed, as is often the case with specific agencies; it may be broad and general, as is characteristically the case with the functions of company directors; its scope may have been antecedently defined or determined; it may have been ordained by past practice; it may be left to the fiduciary's discretion to determine; and it may evolve over time as is commonly the case with partnerships." Submissions as to the claim for breach of fiduciary duty against Mr Seymour 1. Mr DeBuse recognises that the existence of a retainer is disputed by, relevantly, Mr Seymour, notwithstanding references to payment and invoices rendered to the Companies in his affidavit evidence. As I noted above, the existence of a retainer is not necessary to the existence of fiduciary obligations owed by Mr Seymour to the Plaintiffs, and I have found that Mr Seymour was not caught by surprise by the wider case that was brought against him. Mr DeBuse submits that there is evidence that the Plaintiffs reposed trust and confidence in Mr Seymour, of which he knew, and that trust and confidence was sufficient to require him to act in a manner which did not permit him to take advantage for his personal profit of the confidential information of the Companies of which he was aware; prefer his personal interests to that of Mr Bunbury and the Companies; and let his duty as agent and confidant of Mr Bunbury and the Companies conflict with his obligations to other third parties. 2. As I noted above, Mr Walker responds that the Plaintiffs' breach of fiduciary duty case is brought against Mr Seymour on the basis that he was "engaged" by the Companies "for reward" in or around July 2023 to advise and assist them in relation to solvency, refinancing and capital raising (SOC [17]) and the Plaintiffs contend that Mr Seymour became aware of the nature of the Companies' business and its financial circumstances in that way (SOC [18]) and I have addressed that pleading point above. Mr Walker also submits that there is no contract or other contemporaneous record of the terms of the alleged engagement or the reward said to have been offered to Mr Seymour on his engagement, although he acknowledges that, as I noted above, on 10 July 2023, Mr Bunbury advised Mr Seymour that he "would welcome an opportunity to compensate you for your help" (Ex D1/2, CB 2050) and, I should add, Mr Seymour invoiced the Companies for the work he had done in respect of the winding up. Mr Walker also submits that Mr Seymour's involvement with the Companies, and the information he discovered about the Companies, came about through the appointment of Green Jigsaw by HCP in June-July 2023 and Jigsaw Works by FIFO Capital from 18 July 2023 until 27 September 2023. I have addressed the evidence concerning those matters above. 3. Mr Walker also submits that Mr Seymour informed Mr Bunbury of his engagement by HCP on 20 June 2023, and reiterated that again on 6 July 2023 and also advised third parties of his engagement by HCP. Mr Walker also points to the email drafted by Mr Seymour then sent by Mr Kopp for FIFO Capital to Mr Seymour on 18 July 2023. Mr Walker also draws attention to an email from Mr Seymour to Mr Bunbury on 1 September 2023 attaching a letter sent by Mr Seymour to a third party, Techwondoe, which advised that "Jigsaw Works is engaged by FIFO Capital" and to other communications referring to FIFO Capital and sent to FIFO Capital. I have addressed these engagements above. 4. Mr Walker submits that the Plaintiffs' subjective trust and confidence in Mr Seymour will not establish a fiduciary duty; that the true question is whether, determined objectively, the requisite undertaking was given by Mr Seymour; and that an engagement of Mr Seymour would also not be enough, of itself, to establish the existence of a fiduciary relationship. He submits that: "The relationship between Mr Seymour and the [P]laintiffs is not one where there was an undertaking or agreement in the form of an 'engagement' in July 2023 which required Mr Seymour to act solely in the interests of the [P]laintiffs rather than with regard also to his own and/or third-party interests when those matters are considered. There was no fiduciary relationship with Mr Seymour." 1. Mr Walker also addresses the question of the scope of any duty owed by Mr Seymour if, contrary to his submission, such a duty existed. He contends, inter alia, that "[t]he [P]laintiffs have not identified the particular functions and responsibilities over which they contend the obligations are said to extend in the circumstances of their particular relationship with Mr Seymour"; Mr Seymour had acquired information about the Companies from Mr Dahan before the time of his alleged engagement; Mr Seymour was engaged by FIFO Capital and Mr Bunbury asked Mr Seymour to act on the mandate, although I note that Mr Seymour had emphasised the distinction between Green Jigsaw and himself in that regard; and Mr Bunbury's evidence was that Mr Seymour was seeking to advance his own plans to commercialise various ideas he had using 1derful's product and technology platform. None of these matters narrow the scope of the fiduciary duties that arise from the wider undertakings given by Mr Seymour to act in the Companies' interests which I address below. 2. I have summarised the early work done by Mr Seymour to assist the Companies, in connection with HCP's engagement of Green Jigsaw, above. By his email dated 30 June 2023 to Mr Bunbury, copied to Mr Birch (Ex P4, CB 1022), Mr Seymour offered to assume an oversight role "so that you don't get taken advantage of" in dealing with HCP and "assured" Mr Bunbury that he was "on the case." I noted above that Mr Seymour accepted in cross-examination (T276) that his reference to "get taken advantage of" involved his suggesting to Mr Bunbury that Mr Bunbury could rely upon Mr Seymour as somebody who would be honest and take care of his interests, and the reference to his being "on the case" provided assurance to Mr Bunbury that he was providing assistance to Mr Bunbury and the Companies. I have found that, in mid-July 2023, Mr Seymour advised Mr Bunbury that, although he was attempting to have FIFO Capital engage him, he would "still be working for 1derful to achieve its aims". I have also found above that, by his email dated 19 July 2023 to Mr Bunbury (Ex P1, CB 291; Ex D1/2, CB 2114) in connection with the engagement that he sought out for Jigsaw Works by FIFO Capital, Mr Seymour represented to Mr Bunbury that "our interest lies in ensuring 1derful's survival, recapitalisation and success"; and that, notwithstanding that creditors would perceive him as "one of "them" and not "1derful's man … [n]othing changes in my approach." I have also found above that, by his text message on 20 July 2023 (Ex P1, CB 321-322), Mr Seymour advised Mr Bunbury that, inter alia, "I'm on your team – emphasis on YOUR". I have rejected Mr Seymour's attempt in cross-examination (T287) to limit this commitment to Mr Bunbury personally rather than the Companies. I also noted above that Mr Seymour ultimately accepted in cross-examination (T331-332) that Mr Bunbury trusted him and continued to trust him into September 2023, although he sought to place that trust in the context that he was working on the overall engagement from HCP. While a party's trust in another is not sufficient to establish a fiduciary duty without more, it here plainly arose from the undertakings that Mr Seymour had in fact given to act in the Companies' and Mr Bunbury's interests which I have noted above. 3. These matters provide sufficient basis to find, and I find, that Mr Seymour had undertaken to act in the interests of at least the Companies, and possibly also Mr Bunbury, to the exclusion of his own, despite his companies' engagement by third parties, and thereby displaced the concern that might well otherwise have arisen that he had accepted several conflicting obligations and could not be trusted to act in the Companies' interests. Once that undertaking was given, none of Mr Seymour's references to Green Jigsaw's or Jigsaw Works' engagement for HCP or FIFO Capital sought or obtained the Companies' or Mr Bunbury's consent to Mr Seymour preferring the interests of those third parties or his own interests to the Companies' or Mr Bunbury's interests or made the full and frank disclosure that would be necessary to avoid a breach of a fiduciary duty. Although Mr Walker rightly recognises that fiduciary duties extend only to the scope of the engagement, Mr Seymour's undertaking to act in the Companies' interests was plainly given in respect of refinancing of the Companies and dealing with their creditors, and was sufficiently wide that the steps that he took, with Fletch and Mr Birch, to bring about the forced acquisition of 1derful's business breached both the no conflict and the no profit rules. 4. The Plaintiffs also plead (SOC [37(a)], partly not admitted and partly denied D1/2 Defence [37]) that, at all material times between the beginning of September 2023 and the acquisition of the Companies' business by Fletch, relevantly, Mr Seymour was using his knowledge of the Companies' business including confidential knowledge to obtain an advantage for himself, Mr Birch or Fletch in breach of his fiduciary obligations. It is not necessary to determine this claim where I have found the breach of fiduciary duties to be established on other grounds. Claim for breach of fiduciary duty by Mr Birch 1. The Plaintiffs seek (OP [8], SOC [1]) a declaration that, relevantly, Mr Birch breached fiduciary obligations owed to the Companies. The Plaintiffs plead (SOC [13]-[14], denied D3 Defence [13]-[14]) that, between April and May 2023, the Companies and Mr Bunbury in his personal capacity engaged Mr Birch for reward to provide advice and assistance in the raising of debt and equity and to develop business for the Companies and that Mr Birch was engaged to negotiate with PIL and to find alternative finance for the Companies, until August 2023 when Mr Birch failed to respond to communications from the Companies. I accept that Mr Birch's engagement, although in informal terms, contemplated that he would be paid for his services and he was, at least once, paid for those services. The Plaintiffs also plead (SOC [15]) that Mr Birch did not inform them that he had ceased working to achieve a capital or debt raising or negotiating with PIL for the benefit of the Companies. I have not accepted Mr Birch's evidence that he did tell Mr Bunbury of that matter above and I have found that, at least by mid-August 2023, Mr Birch was advancing his own and the other Defendants' interest in achieving a forced acquisition of the Companies' assets, rather than any refinancing proposal in any usual sense. 2. The Plaintiffs also allege (SOC [16], largely denied D3 Defence [16]) that Mr Birch only became aware of the details of the existence of the Companies' debts, the nature and financial circumstances of its business and the opportunity that it involved, by reason of his engagement to provide assistance to them. It is not necessary to determine that question, given the findings that I reach on other grounds, although I accept that he plainly obtained information about the Companies in dealing with them. 3. The Plaintiffs plead (SOC [20]; denied D3 Defence [20]) that, by reason of the circumstances of their retainer and the trust and confidence reposed in, relevantly, Mr Birch of which he was aware or should have been aware, he owed a fiduciary obligation to Mr Bunbury and the Companies. They plead (SOC [21]; denied D3 Defence [21]) that those fiduciary obligations included obligations not to take advantage for their personal profit of the confidential information of the Companies of which they were allegedly aware; not to prefer their personal interests to that of Mr Bunbury and the Companies; and not to let their duty as agents and confidants of Mr Bunbury and the Companies conflict with their obligations to other third parties. They also plead (SOC [33], denied D3 Defence [33]) that, relevantly, Mr Birch aided and abetted, procured and counselled or was knowingly involved in the Scheme in breach of, inter alia, his fiduciary obligations. While this pleading is oddly phrased, I understand it to be an allegation of breach of fiduciary duties owed by him, not an allegation of knowing assistance in a breach of fiduciary duty owed by a third party. 4. Mr DeBuse recognises that the existence of a retainer is disputed by, relevantly, Mr Birch, notwithstanding references to payment and invoices rendered to the Companies in his affidavit evidence. The existence of a retainer is not, of course, necessary to the existence of fiduciary obligations owed by Mr Birch to the Plaintiffs, and I have addressed the role of pleadings in this regard in dealing above with the claim for breach of fiduciary duty against Mr Seymour. Mr DeBuse submits that there is evidence that the Plaintiffs reposed trust and confidence in, relevantly, Mr Birch, of which he was aware, and that trust and confidence was sufficient to require him to act in a manner which did not permit him to take advantage for his personal profit of the confidential information of the Companies of which he was aware; prefer his personal interests to that of Mr Bunbury and the Companies; and let his duty as agent and confidant of Mr Bunbury and the Companies conflict with his obligations to other third parties. 5. Mr Cheshire responds that Mr Birch denies that the relationship between him and the Plaintiffs gave rise to fiduciary duties; that he breached an obligation within the scope of any fiduciary duty; that any breach on his part caused loss to any of the Plaintiffs; that the Plaintiffs have suffered any loss, generally and also having regard to the provision for adjustment of the purchase price in cl 7 of the BSA; the Plaintiffs' claim to avoid the transfer and thus have the business returned; and he also relies, at least in the case of Mr Bunbury, on the reflective loss principle. 6. It seems to me that, although Mr Birch worked with the Companies on financing proposals, the dealings between Mr Birch on the one hand and Mr Bunbury and the Companies on the other simply do not show any undertaking by Mr Birch to act in the interests of the Companies (or Mr Bunbury) to the exclusion of his own or third parties' conflicting interests, or to subordinate his own interests to those of the Companies or Mr Bunbury, so as to give rise to fiduciary duties that he owed to the Company or Mr Bunbury. The Plaintiffs' claim for breach of fiduciary duty against Mr Birch fails for that reason. Had I reached the contrary view, it would have been plain that the steps which Mr Birch, together with Mr Seymour and Fletch, took to bring about the forced acquisition of 1derful's business would have breached the no profit and the no conflict rules. 7. The Plaintiffs also plead (SOC [37(a)]), partly not admitted and partly denied D3 Defence [37]) that, at all material times between the beginning of September 2023 and the acquisition of the Companies' business by Fletch, relevantly, Mr Birch was using his knowledge of the Companies' business including confidential knowledge to obtain an advantage for himself or Mr Seymour or the First Defendant in breach of his fiduciary obligations. It is not necessary to determine this claim where the existence of fiduciary duties is not established. Claim against Fletch for knowing assistance or knowing receipt 1. The Plaintiffs also seek a declaration (OP [2]), SOC [2]) that Fletch was knowingly concerned or has knowingly benefitted from breach of fiduciary obligations owed by Messrs Seymour and Birch to the Companies. They plead (SOC [37(b)], partly not admitted and partly denied D1/2 Defence [37], D3 Defence [37]) that Fletch's acquisition of the Companies' business was obtained by it in circumstances where it knew that it had acquired the business through the breach by Messrs Seymour and Birch of their fiduciary duties. I have held above that Mr Seymour had assumed and breached such duties. 2. In Ancient Order of Foresters at [71], Gageler J observed that liability for knowing assistance will arise under the second limb of Barnes v Addy (1874) LR 9 Ch App 244 where the conduct which constitutes the breach transgresses ordinary standards of honest behaviour, and the participant has knowledge of circumstances which would indicate the fact of the dishonesty on behalf of the fiduciary to an honest and reasonable person. I also summarised the applicable principles in Re Sirrah Pty Ltd (In Prov Liq) (2021) 152 ACSR 212; [2021] NSWSC 413 at [151]-[152] as follows: "There is, of course, a considerable body of authority as to the circumstances in which liability for knowing receipt may arise ... Broadly, under the first limb of the rule in Barnes v Addy (1874) LR 9 Ch App 244 (Barnes), a person who receives company property from a director will hold it on trust for the company if he or she knows, or the circumstances are such that he or she ought to know, that the director is acting in breach of duty in respect of the relevant transaction. In Kalls Enterprises (NSWCA) above at [152]–[159], the Court of Appeal examined the case law in which the first limb of Barnes above had been applied to breach of fiduciary duty by a company director. In order to succeed in a claim for knowing receipt, the Plaintiffs must establish the relevant breach of fiduciary duty by WH and that HHC received the relevant property by reason of the breach of duty and, at the time of receiving that property, knew of the relevant duty and of the misapplication of the relevant property: Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; 236 ALR 209; [2007] HCA 22 (Farah Constructions); Westpac Banking Corporation v Bell Group Ltd (in liq) (No 3) (2012) 44 WAR 1; 89 ACSR 1; [2012] WASCA 157; Grimaldi v Chameleon Mining NL (No 2) (2012) 200 FCR 296; 287 ALR 22; 87 ACSR 260; [2012] FCAFC 6 (Grimaldi). I have drawn on my summary of the relevant principles in Gordon (in his capacity as liquidator of Lyon Form Pty Ltd (in liq) v Leon Plant Hire Pty Ltd (in liq) [2015] NSWSC 397 at [61] in this respect. A third party may be held liable under the second limb of the rule in Barnes above if he or she knowingly assists a director in a transaction which is in breach of duty to the company. In Farah Constructions above, the High Court emphasised (at [179], [183]) that its earlier decision in Consul Development Pty Ltd v DPC Estates Pty Ltd (1975) 132 CLR 373; 5 ALR 231 (Consul Development) established a requirement that any breach of trust or breach of fiduciary duty relied on to establish liability for knowing assistance must be dishonest and fraudulent, so that the impugned conduct must involve circumstances attracting a degree of opprobrium beyond an innocent breach of trust or duty. In Ramsay v BigTinCan Pty Ltd (2014) 101 ACSR 415; [2014] NSWCA 324 at [30], Macfarlan JA (with whom McColl and Gleeson JJA generally agreed) referred, without disapproval, to the trial judge's treatment of Farah Constructions above as authority that the elements of a knowing assistance claim were (1) a dishonest and fraudulent breach of duty by the fiduciary; (2) knowledge of that dishonest and fraudulent breach by a third party; and (3) assistance in that breach by that third party, and also referred to Consul Development above as authority that conduct may be "dishonest and fraudulent" for the purposes of liability for knowing assistance where it can be described, in ordinary language, as morally reprehensible. In Hasler v Singtel Optus Pty Ltd (2014) 87 NSWLR 609; 311 ALR 494; 101 ACSR 167; [2014] NSWCA 266 at [124], Leeming JA held (Barrett and Gleeson JJA agreeing) that, in order to establish knowing assistance, a breach of trust must be dishonest as well as fraudulent, with dishonesty amounting to "a transgression of ordinary standards of honest behaviour", although it is not necessary to demonstrate that the relevant individual "thought about what those standards were". I have drawn on my summary of the relevant principles in Australian Worldwide Pty Ltd (in liq) v AW Exports Pty Ltd [2019] NSWSC 1475 at [87] for this summary." 1. Here, Mr Seymour's conduct constituted a breach of fiduciary duty which was dishonest in the relevant sense and Fletch assisted with that breach, by involving itself in the acquisition of the Companies' business in the manner I have set out above. Fletch had knowledge of circumstances which would indicate the fact of and nature of that breach to an honest and reasonable person where it knew, through Mr Seymour, of Mr Seymour's dealings with the Companies, the obligations that he had assumed to them and the conduct that amounted to a breach of fiduciary duty on his part: Krakowski v Eurolynx Properties Ltd (1995) 183 CLR 563 at 582; [1995] HCA 68; Firmtech at [539]. I find that Fletch was knowingly involved in Mr Seymour's breach of fiduciary duty on that basis. 2. The Plaintiffs seek (OP [3], SOC [3]) a consequential order that Fletch holds on trust or constructive trust for the Companies the whole of the business purportedly transferred to it by the Companies. They plead (SOC [38], denied D1/2 Defence [38], D3 Defence [38]) that, by reason of Fletch's knowing involvement and receipt of the business and, alternatively, by its involvement in the Scheme, Fletch holds the Companies' business on constructive trust for the Companies. 3. I bear in mind that a constructive trust is not necessarily imposed as a remedy for breach of fiduciary duty: Bathurst City Council v PWC Properties Pty Ltd (1998) 195 CLR 566; [1998] HCA 59 at [42]; Giumelli v Giumelli (1999) 196 CLR 101; [1999] HCA 10 at [10]. In John Alexander's Clubs at [128]-[129], in a case of alleged breach of fiduciary duty, the High Court observed that a constructive trust "ought not to be imposed if there are other orders capable of doing full justice" and that: "[I]t is not a complete answer to … reliance on Giumelli that remedies other than a constructive trust may lack practical utility because of the impecuniosity of those against whom they are sought. One point made in the Giumelli line of cases is that care must be taken to avoid granting equitable relief which goes beyond the necessities of the case. Another point in those cases is that third party interests must be borne in mind in deciding whether a constructive trust should be granted …" 1. In Grimaldi at [567], the Full Court of the Federal Court observed that a Court would ordinarily award proprietary relief against a knowing recipient where the property received was still extant, although it added that: "[W]e consider that, both as a matter of binding authority and of proper principle, the Court is not obliged to do so. The circumstances may be such as to make it appropriate to leave the company to its personal remedies of an account of profits or compensation in equity. As a practical matter, these are the remedies most commonly given in misuse of corporate property cases for the reason that the recipient no longer holds traceable proceeds of the property received." 1. I am satisfied that remedy is available and appropriate here given the findings that I have reached above. There may be a question, which may need to be subject of further submissions in respect of orders, as to whether a proprietary remedy by way of constructive trust is inconsistent with the Companies recovering further compensation for the loss of value of the business while it was in Fletch's hands. It may not be necessary to determine that issue, where it appears that the Court could order both the return of the business and compensation by way of statutory remedies for the contraventions of s 12CB of the Australian Securities and Investment Commission Act 2001 (Cth) ("ASIC Act") or the corresponding provision in s 21 of the Australian Consumer Law ("ACL") which I address below. 2. The Plaintiffs also seek an order (OP [4(b)], SOC [4(b)]) that the transfer of the business of the Companies to Fletch is void or voidable pursuant to a breach of the self-dealing rule. It is not necessary to determine that claim where the Plaintiffs have succeeded on other grounds. Claim under s 37A of the Conveyancing Act 1. The Plaintiffs also seek (OP [4(a), SOC [4(a)]) an order that the transfer of the business of the Companies to Fletch is void or voidable pursuant to s 37A of the Conveyancing Act 1919 (NSW) ("Conveyancing Act"). The Plaintiffs plead (SOC [31], denied D1/2 Defence [31], D3 Defence [31]), inter alia, that the Scheme was in breach of s 37A of the Conveyancing Act. 2. Section 37A of the Conveyancing Act relevantly provides that: "(1) Save as provided in this section, every alienation of property, made whether before or after the commencement of the Conveyancing (Amendment) Act 1930, with intent to defraud creditors, shall be voidable at the instance of any person thereby prejudiced. (2) This section does not affect the law of bankruptcy for the time being in force. (3) This section does not extend to any estate or interest in property alienated to a purchaser in good faith not having, at the time of the alienation, notice of the intent to defraud creditors." 1. In Marcolongo v Chen (2011) 242 CLR 546; [2011] HCA 3, the High Court observed (at [20], [31]-[32]) that the section is to be accorded a "liberal construction" and extends to prohibit conduct which may "delay, hinder or defraud" a creditor or potential creditor, and the Court may infer an intention by the transferor of property to defeat or delay creditors, even in the absence of direct evidence of that intention where that outcome was the necessary consequence of a voluntary settlement. 2. In Patel v Lal [2011] NSWSC 603 at [6], Biscoe AJ similarly observed that: "Section 37A should receive a liberal construction in effecting its purpose of suppressing fraud. The term "defraud" in s 37A means to delay, hinder or otherwise defraud: Marcolongo v Chen [above] at [19], [20], [58]. It is unnecessary to show that the debtor wanted creditors to suffer a loss or that the debtor had a purpose of causing loss. It is necessary to show the existence of an intention to hinder, delay or defeat creditors and in that sense to show that accordingly the debtor had acted dishonestly. If the debtor disposes of an asset which would be available to creditors with the intention of prejudicing them by putting it, or its worth, beyond their reach, he is in the ordinary case acting in a fashion not honest in the context of the relationship of debtor and creditor. In cases of voluntary disposition that intention may be inferred: at [32]. A person may have acted dishonestly, judged by the standards of ordinary, decent people, without appreciating that the act in question was dishonest: at [33]. The party seeking to avoid the disposition bears the onus of proving an intent to defraud. While the existence of the intent may be inferred from the evidence, it is to be found as a fact: at [34]. Sections [sic] 37A does not require the intent to defraud to be the sole or predominant intent: at [57]." 1. Mr DeBuse submits that: "… the sale was undertaken with the purpose of defrauding creditors. Section 37A of the Conveyancing Act 1919 makes voidable such a transfer. Unusually in the present circumstances the alienation is achieved by the proposed recipient taking control of the asset (albeit until sale it remains the property of the debtor) and going into possession of it and alienating it to themselves. The property remains beneficially that of the debtor though the fraud practiced on the creditors is achieved through the actions of the secured creditor. Nothing in section 37A requires that the alienation by the willful [sic] act of the owner." 1. Mr Walker responds that the elements of s 37A of the Conveyancing Act are that there must be an "alienation" which must be of "property" and the alienation must be made with the "intention to defraud creditors". He refers to Hall v Poolman (2007) 215 FLR 243; [2007] NSWSC 1330 at [550]-[553], where Austin J recognised that a person who acts "collusively" with a debtor may be held accountable under s 37A of the Conveyancing Act, and to the same view taken by the Full Court of Federal Court in Zreika v Royal (2019) 271 FCR 65 at [303]; [2019] FCAFC 82, where the Court stated that the alienation "need not occur solely by reason of acts by the fraudulent debtor". Mr Walker submits that the transfer of the business by Fletch occurred after it took the assignment from PIL and submits that, where Fletch acted in accordance with the rights assigned to it by taking control of the assets, those steps cannot have been taken to defraud creditors of the Companies. 2. Mr Walker accepted in closing submissions that the relevant disposition was undertaken by the Companies, albeit under the control of Fletch as their controller. Mr Walker submitted that no intention to defraud creditors was established, by reason of the contractual mechanism to determine the value of the assets in the BSA. However, the BSA had the result that the amount of that payment was determined, the information and assumptions provided to a valuer and, in consequence, the amount of that valuation were all in Fletch's control and, as events demonstrated, whether that clause was complied with was also in Fletch's control. The arrangement operated, in effect, and it must have been apparent to Fletch that it operated, to allow Fletch to pay less than the value of the business by controlling, or abandoning, the valuation process and additional payment as it wished. 3. Mr Cheshire also addresses this claim, although it is only made against Mr Birch, as an element of the claim in conspiracy against him. He submits that the Plaintiffs do not plead any material facts or provide particulars to support an allegation of an intent to defraud creditors and that the pleading in respect of the claim under s 37A of the Conveyancing Act is of a "device" to acquire the debt and the business at an undervalue (SOC [25], [28]). He also submits that the alienation was of interests of the business and at least Mr Bunbury has no actionable remedy to found this cause of action, where his position is no more than an impermissible claim for reflective loss, and he refers to Haiye Developments Pty Ltd v The Commercial Business Centre Pty Ltd [2022] NSWSC 937 ("Haiye") at [442]ff in this regard. 4. I accept that it would ordinarily not be the case that the sale of secured property by or on behalf of a secured creditor at market value in exercising its security rights could be attacked under s 37A of the Conveyancing Act as made with the intent to defraud lower ranking secured or unsecured creditors. I have recognised above that the BSA was structured in a manner that allowed Fletch control over the valuation process and any additional payment and over whether that payment was made. I will find below that that had the consequence that the sale of the Companies' business could be, and was, implemented in a manner that contravened s 420A of the Corporations Act 2001 (Cth) ("Corporations Act") and amounted to statutory unconscionability under s 12CB of the ASIC Act or the corresponding provision in s 21 of the ACL. I am not persuaded that the sale of the Companies' business had the requisite intent to defraud creditors, including an intent to defeat creditors, even reading that concept broadly, where what occurred was no more than Fletch's exercise of its rights as secured creditor and controller to its advantage in a manner that was calculated to, and did, give rise to a sale of the Companies' business at undervalue. The sale of the Companies' business cannot be set aside on that basis, although it can be set aside as a result of the contravention of s 12CB of the ASIC Act or the corresponding provision in s 21 of the ACL. The statutory unconscionability claim in respect of Mr Seymour 1. The Plaintiffs also seek (OP [5]-[6], SOC [5]-[6]) an order setting aside the BSA. and an order (or possibly more precisely a declaration) that the BSA between the Companies and Fletch was the result of unconscionable conduct either at general law or under the ASIC Act. The Plaintiffs relevantly plead (SOC [19]) that Mr Seymour did not inform them that, relevantly, he had ceased working to achieve a capital or debt raising for the Companies; and that (SOC [31], denied D1/2 Defence [31], D3 Defence [31]) the Scheme was unconscionable (within the meaning in the ASIC Act) both at general law and by virtue of s 12CC of the ASIC Act. The latter reference plainly should have been to s 12CB of the ASIC Act, as Mr Walker rightly recognised. 2. Mr DeBuse submits that: "in all the circumstances the transfer was unconscionable. In respect of this contention all of the earlier grounds are relied upon but additionally the fact that the [S]cheme until implemented was conducted in secret by [Fletch, Mr Seymour and Mr Birch] is an additional factor with respect to its unconscionability." 1. Mr Walker submits, for Mr Seymour and Fletch, that the Plaintiffs make a bare assertion in the SOC that the Scheme was unconscionable within the meaning of s 12CC of the ASIC Act (SOC [31(b)]) and rightly points out that the relevant section is in fact s 12CB of the ASIC Act. He submits the Plaintiffs have not identified whether the impugned conduct relates to the supply or possible supply of "financial services" to a person, the acquisition or possible acquisition of "financial services" from a person, who the relevant parties to the relationship of supplier and acquirer are said to be, or what the "financial service" is said to be having regard to the variety of forms of "financial service" contained in s 12BAB of the ASIC Act. Mr Walker rightly anticipated in his opening submissions that the Court would also have regard to the corresponding provisions contained in s 21 of the ACL, although he retreated from that recognition in closing submissions. He submits that any assessment of unconscionable conduct under the ASIC Act will involve a wide-ranging inquiry because the section stipulates that the conduct must be unconscionable in all the circumstances. Mr Walker also submits that that necessitates a person alleging unconscionable conduct to plead, with clarity, the factual basis on which section 12CB of the ASIC Act is said to apply and, it is suggested, that requires that the unconscionable conduct claim under s 12CB of the ASIC Act must be dismissed. 2. In closing submissions, Mr Walker presses the pleading point in respect of this claim. He submits that the Plaintiffs fail to plead the nature of the "financial services" that is said to have been provided unconscionably by Mr Seymour (or Fletch) under the ASIC Act (T95). He accepts that: "… it may not be necessary to determine whether the ASIC Act applies in circumstances where the unconscionable conduct is also pleaded as arising under other substantially identical legislation, such as the [ACL], and/or Fair Trading Act, as was the case in GPG (Australia Trading) Pty Ltd v GIO Australia Holdings Ltd [2001] FCA 1761 at [100]. However, in these proceedings the [P]laintiffs have limited their case under statute to the ASIC Act. Accordingly, the [P]laintiffs must plead and establish the various elements of their case under the ASIC Act." 1. Mr Walker's submission that the Court cannot have regard to the corresponding provisions in the ACL would have the result that, if a legal representative pleads the ASIC Act and the ACL in the alternative, a claim can succeed; but the claim would fail if the alternative is not pleaded, even where there is no suggestion that Mr Walker and those instructing him did not know that the provisions in ss 12CB-12CC of the ASIC Act were substantially identical to ss 21-22 of the ACL; and there is no plausible basis to put, and Mr Walker did not put, that Mr Seymour or Fletch would have led different evidence or conducted the case in any way differently if the claim against them was pleaded by reference to ss 21-22 of the ACL rather than by reference to ss 12CB-12CC of the ASIC Act. That submission would have the consequence that the claim under ss 21-22 of the ACL could succeed if Counsel for the Plaintiffs had sought to amend the SOC to include it even in reply submissions, where that amendment would likely have been allowed where it would cause no prejudice to Mr Seymour and Fletch, other than by exposing them to a determination on the merits [4] ; but that claim would fail if Counsel for the Plaintiffs failed to do so. That result would hardly promote the just resolution of these proceedings. 2. Mr Walker also submits that: "The pleading deficiencies were drawn to the [P]laintiffs' attention in [31(c)] of the [D]efence filed by the [F]irst and [S]econd [D]efendants on 23 January 2024 … They have not been remedied." 1. It is to the credit of Mr Seymour's and Fletch's legal representatives that they were alert to the subtleties of the definition of "financial services" in s 12BAB of the ASIC Act, which might have escaped the attention of many other practitioners, and a prompt (or even a late) amendment by the Plaintiffs to plead reliance on ss 21-22 of the ACL would no doubt have been preferable to the less formal course that they adopted. However, Mr Walker's submission begs a fundamental question: how would the interests of justice be promoted by leaving the Plaintiffs to fail, if they would have succeeded on the merits, because their legal representatives could have but did not cure the pleading "deficiencies" by including reference to the corresponding provisions in the ACL, and their doing so would not have affected the conduct of the Defendants' case? 2. Mr Walker also makes submissions as to whether the services provided by Mr Seymour were a "financial service" within s 12BAB of the ASIC Act. I need not address those submissions, where they were plainly services within the scope of ss 21-22 of the ACL, and I do not accept that the pleading prevents the Plaintiffs relying on those provisions. Mr Walker also submits that: "Instead, in the Plaintiff's Closing Submissions at [67], the [P]laintiffs depart further from their pleadings by asserting that Mr Seymour engaged in unconscionable conduct in 'all the circumstances', relying on 'all of the earlier grounds' (it is not clear in this regard whether the other causes of action alleged are said to be the grounds for unconscionability), and additionally relying on secrecy as a ground of unconscionability. That should not be allowed." 1. I do not accept that the pleading of this claim prevents its determination on its merits. The material facts that are said to give rise to the Scheme were pleaded and the parties' conduct addressed in the affidavit evidence and Mr DeBuse provided a detailed opening by reference to the documents which would not have caused the slightest surprise to the Defendants. It does not seem to me that there was ever any real doubt as to the facts is issue in the unconscionability case against Mr Seymour and Fletch. I am comfortably satisfied that there is here no denial of procedural fairness and no practical injustice (using the language in Gerrard Toltz at [103]-[108]) in determining the claim for statutory unconscionability under both ss 12CB-12CC of the ASIC Act and the corresponding provisions in ss 21-22 of the ACL, and the contrary approach would not promote the just determination of the proceedings. 2. It is convenient to first deal with the claim against Mr Seymour and then the claim against Fletch. I have referred above to the Plaintiffs' pleading (SOC [19]) that Mr Seymour did not inform the Plaintiffs that, relevantly, he had ceased working to achieve a capital or debt raising for the Companies and their pleading (SOC [31], denied D1/2 Defence [31]) that the Scheme was unconscionable within the meaning in the ASIC Act both at general law and by virtue of s 12CC of the ASIC Act. The Plaintiffs also plead (SOC [33], denied D1/2 Defence [33]) that Mr Seymour aided and abetted, procured and counselled or was knowingly involved in the Scheme "so as to through [his] unconscientious conduct result in injury to the Plaintiffs" [emphasis added]. While this pleading is again oddly phrased, I understand it to be allegation of unconscionable conduct on Mr Seymour's part arising from his involvement with the Scheme. 3. Dealing first with Mr Seymour's position generally, he knew the content of the successive road maps which he had prepared, the fact that the transaction was structured (as he had advised Mr Kopp) to catch Mr Bunbury and the Companies by surprise, the fact (as he recognised in cross-examination) that Mr Bunbury then trusted him and that he had not disclosed the fact that he had ceased to seek funds for the benefit of the Companies and was now advancing his (and later Fletch's) interests rather than the Companies' interests. He knew that he had assessed the value of the Companies' business, as he had told Mr Kopp, as not less than $2 million. He knew, where he signed the BSA for Fletch as controller of the Companies and vendor of the business and as purchaser of that business that it would be sold and acquired at substantially less than the value he understood it to have. He knew that the BSA was structured so that the amount of any additional payment would be determined by the information and assumptions that Fletch (under his control) provided to a valuer and he knew that whether that clause would be complied with, and whether any further amount would be paid to the Companies, was also in Fletch's (and his) control. It must also have been apparent to Mr Seymour that that clause would allow Fletch to pay less than the value of the business by limiting the information provided to a valuer or abandoning the valuation process and additional payment as it wished. Mr Seymour was also closely involved in planning and implementing the sale of the Companies' business to Fletch in the manner I have set out above. 4. Turning now to the applicable provisions and the case law, s 12CB of the ASIC Act prohibits a person, in trade or commerce, engaging in conduct that is, in all the circumstances, unconscionable, in connection with, relevantly, the supply or possible supply of financial services to a person. The scope of the prohibition is clarified by the statement of legislative purpose in s 12CB(4) which provides, inter alia, that it is Parliament's intention that this section is not limited by the unwritten law of the States and Territories relating to unconscionable conduct. The term "financial services" is defined in s 12BAB of the ASIC Act and there is an open question whether the services that Mr Seymour provided to the Companies had the nature of financial services; however, little turns on that question where the corresponding provision in s 21 of the ACL applies if Mr Seymour provided services to the Companies and s 12CB of the ASIC Act does not apply. Section 21 of the ACL in turn prohibits a person, in trade or commerce, in connection with the supply or possible supply of services to a person engaging in conduct that is, in all the circumstances, unconscionable. 5. It seems to me that Mr Seymour supplied financial services or services to the Companies, at least on an informal basis, where, from 20 June 2023, he approached third parties to obtain loan funds for the Companies and held out that he was doing so on the Companies' behalf; on 14 July 2023, he advised Mr Bunbury that he would be working for the Companies although he would be engaged by FIFO Capital for a nominal fee, and he advised Mr Bunbury that he would assist the Companies to achieve their aims; and on 20 July 2023, he affirmed his role as part of the Companies' "team", although he ultimately acted inconsistently with that role. 6. I now turn to the relevant case law. The scope of s 21 of the ACL was considered by the High Court of Australia in Australian Securities and Investments Commission v Kobelt (2019) 267 CLR 1; (2019) 368 ALR 1; [2019] HCA 18. The several judgments there recognise that the section requires the Court to have regard to specified factors, which will be relevant to whether statutory unconscionability will be found. Keane J there held the section was not limited to conduct that was "unconscionable" under the general law, but the term "unconscionable" in the section had its ordinary meaning, including exploiting or unconscientiously taking advantage of a special disadvantage; and Gageler J held that the section was not limited by equitable standards, but the use of the term "unconscionability" nonetheless "signif[ied] the gravity of the conduct necessary to be found by a Court in order to be satisfied of a breach of that standard", and the section was not confined to circumstances where the defendant had exploited a special disadvantage. His Honour observed (at [87], [93]) that: "The correct perspective is that s 12CB operates to prescribe a normative standard of conduct which the section itself marks out and makes applicable in connection with the supply or possible supply of financial services. The function of a court exercising jurisdiction in a matter arising under the section is to recognise and administer that normative standard of conduct. The court needs to administer that standard in the totality of the circumstances taking account of each of the considerations identified in s 12CC if and to the extent that those considerations are applicable in the circumstances. The judgment required of a court exercising jurisdiction in a matter arising under s 12CB is a heavy one. For a court to pronounce conduct unconscionable is for the court to denounce that conduct as offensive to a conscience informed by a sense of what is right and proper according to values which can be recognised by the court to prevail within contemporary Australian society. Those values are not entirely confined to, or entirely removed from, the values which historically informed courts administering equity in the development of the unwritten law of unconscionable conduct. ..." 1. The minority, Nettle and Gordon JJ (in a joint judgment) and Edelman J, arguably read the scope of the section more widely; Nettle and Gordon JJ treated the list of factors in s 12CC of the ASIC Act as indicative that statutory unconscionability is wider than unconscionability under the general law; and Edelman J emphasised that statutory unconscionability could be established by conduct that would not establish unconscionability in equity. 2. In Australian Competition and Consumer Commission v Quantum Housing Group Pty Ltd (2021) 388 ALR 577; (2021) 151 ACSR 98; [2021] FCAFC 40, the Full Court of the Federal Court held that it was not necessary to establish a pre-existing disability, vulnerability or disadvantage, or that a party took advantage of such a disability, vulnerability or disadvantage, in order to establish statutory unconscionability, which could be established if the conduct was against conscience, as informed by the norms and values of acceptable commercial behaviour, including honesty, fairness in dealing with customers in the performance of commercial bargains. The Court also observed (at [80]-[83]; [91]) that the exploitation of a pre-existing vulnerability or disadvantage is often a feature of unconscionable conduct but is not necessary to establish such conduct and also observed (at [92]) that: "The task is an evaluation of the impugned conduct to assess whether it is to be characterised as a sufficient departure from the norms of acceptable commercial behaviour as to be against conscience or to offend conscience and so be characterised as unconscionable. In any particular case, it should be recognised that if the evaluative answer be "no: it is not unconscionable", the court is concluding that by an Australian business conscience the conduct was conscionable and is not to be deterred by penalty." 1. In Australian Securities and Investments Commission v National Australia Bank Ltd (2022) 164 ACSR 358; [2022] FCA 1324 at [299], Derrington J summarised the applicable principles as follows: "(a) Neither the boundaries nor content of the equitable doctrine of unconscionability defines or limits the scope of statutory unconscionable conduct. (b) The requirement in s 12CB that the evaluative judgment is to take place in "all the circumstances" necessitates a close consideration of the facts in light of the factors identified in s 12CC. That said, an atomistic approach, which only considers each of the factors separately, is inappropriate. (c) The application of an appropriate value construct to the evaluation of conduct requires that attention be paid to the "values explicitly or implicitly enshrined in the text, context and purpose of the ASIC Act, the Corporations Act and any other relevant statutory framework". That, however, does not exclude the relevance of societal or community values to the determination. (d) Section 12CB imposes a normative standard of conduct which the section itself marks out in relation to the supply or possible supply of goods and services. It is the task of the court to apply that standard to the circumstances of the particular case. (e) The judicial exegesis of "moral obloquy" should not be a substitute for the words of s 12CB. At best, statutory unconscionability may accommodate a flavour of it in the sense that it means more than "unjust", "unfair" or "unreasonable". (f) The underpinning values and conceptions in s 12CC(1) are fairness and equality, asymmetry of power and information, a lack of understanding or ignorance of a party, the risk and worth of the bargain, and good faith and fair dealing: Paciocco v Australia and New Zealand Banking Group Ltd (2015) 236 FCR 199 , 265–276 [259]–[306]. (g) Unfair conduct does not, alone, amount to unconscionable conduct, even if establishing its presence is a step along the way to demonstrating unconscionability where it results in the exploitation of a person's vulnerability and amounts to unjustifiable self-interest. Similarly, establishing hardship is not alone sufficient although it, too, may constitute a step in the evaluative process. (h) The actual state of mind of the alleged contravener is relevant to the question of whether they have engaged in unconscionable conduct, although it should not be the sole focus. What is required is a broader evaluation of the behaviour, including its causes and reasons for it, and its effects or likely effects. … (j) The boundaries and content of any applicable statutory regime beyond that of the ASIC Act and the Corporations Act is an important contextual matter. (k) It is not necessary to show that a person who is subject to the alleged conduct is under a disadvantage or that any particular person has been disadvantaged by conduct (s 12CB(4)(b)). Further, an inequality of bargaining power does not automatically lead to the conclusion that one person is in a position of substantial disadvantage, nor does it establish that the party which enjoys the superior power acts unconscionably by exercising it. (l) In the technical application of s 12CC(1) it is necessary to consider each of the non-exhaustive matters set out in s 12CC(1) to the extent to which each might be relevant. It is inappropriate to focus on one or more of those matters to the exclusion or unjustifiable expense of others. (m) Conduct which attracts the operation of s 12CB is assumed to be of sufficient seriousness to warrant the imposition of a pecuniary penalty. That perspective is not irrelevant to the construction and application of ss 12CB and 12CC(1)." 1. The question whether conduct is unconscionable will be determined by reference to the ordinary meaning of the term, having regard to the factors specified in s 12CC of the ASIC Act (and the corresponding provision in s 22 of the ACL) which identify a non-exhaustive set of factors relevant to whether the conduct is unconscionable: Australian Securities and Investments Commission v Westpac Banking Corp (Omnibus) (2022) 159 ACSR 381; [2022] FCA 515 at [19]. I here have regard to those factors. 2. The Court may have regard, for the purposes of s 12CC of the ASIC Act and s 22 of the ACL respectively, to the relative strengths of the bargaining positions of the supplier and the service recipient or customer. I am satisfied that the Companies were here in a position of significant disadvantage, because of their vulnerable financial position, the connection which Mr Seymour had developed with the Companies' creditors, and the inequality of information which arose from Mr Seymour's non-disclosure of his dealings with the Companies' creditors, and the fact that he had ceased to work in the Companies' interests from at least mid-August 2023. 3. The Court may also have regard, for the purposes of s 12CC of the ASIC Act and s 22 of the ACL respectively, to whether any unfair tactics were used against the service recipient or customer or a person acting on behalf of the service recipient or customer by the supplier or a person acting on behalf of the supplier in relation to the supply or possible supply of the services. I am comfortably satisfied that Mr Seymour here used unfair tactics in his dealings with the Companies. I find that, at least by 14 July 2023, Mr Seymour engineered a continued engagement with FIFO Capital after representing to them that he would be paid by HCP or the Companies, in order to advance his (and later Fletch's) interests in an acquisition of the Companies' business without regard to the interests of either FIFO Capital or the Companies and in a manner that was ultimately adverse to both. He falsely advised Mr Bunbury, at the time that he sought an engagement with FIFO Capital, that he was then working to advance the Companies' aims; he committed to act as part of the Companies' "team" and then acted contrary to their interests; he concealed the approach to Mastercard and the meeting on 16 August 2023 from the Companies; and he concealed the fact that, at least from that time, he was working not to advance the Companies' aims or interests but to purchase the PIL debt through a special purpose vehicle (later Fletch) and then exercise rights as a creditor in a manner that would catch the Companies by surprise and deprive them of any opportunity to respond to the seizure of their assets. 4. The Court may also have regard, for the purposes of s 12CC of the ASIC Act and s 22 of the ACL respectively, to the extent to which the supplier unreasonably failed to disclose to the service recipient or customer any intended conduct of the supplier that might affect the interests of the service recipient or customer and any risks to the service recipient or customer arising from the supplier's intended conduct (being risks that the supplier should have foreseen would not be apparent to the service recipient). Mr Seymour here failed to disclose to the Companies his intended conduct in respect of the matters referred to above and the Scheme and the risks that the Companies would be deprived of their assets in a transaction at undervalue, where they had no reason to foresee that Mr Seymour, who had committed to act as part of their "team" and advance their aims, would seek to bring about that result. The Court may also have regard, for the purposes of s 12CC of the ASIC Act and s 22 of the ACL respectively, to the extent to which the supplier and the service recipient or customer acted in good faith. I am satisfied, for the reasons noted above, that Mr Seymour did not act in good faith in respect of these matters. 5. I am satisfied that, generally and having regard to these matters, the conduct of Mr Seymour contravened ss 12CB of the ASIC Act or the corresponding provision in s 21 of the ACL. The matters which give rise to unconscionability include the matters that I have noted above, that Mr Seymour had represented to the Companies and Mr Bunbury that he was working as part of the Companies' team to advance their interests, notwithstanding other engagements, including for FIFO Capital, and concealed the extent to which he was pursuing his own interests in a manner that was detrimental to the Companies and Mr Bunbury; he then caused Fletch to take an assignment of PIL's rights in the loan and the security and caused Fletch to exercise the rights available to the lender on default in a manner that was calculated to ensure that the Companies lost any opportunity to repay the loan and appropriate the Companies' assets; and he made no attempt, at the time of the acquisition or subsequently, to cause Fletch to assess or pay the fair value of the assets rather than acquiring them at the price that it was prepared to pay. Mr Walker did not make any submission to the contrary, if his submission that the claims under s 12CB of the ASIC Act or the corresponding provision in s 21 of the ACL were not available to the Plaintiffs was not accepted. The statutory unconscionability claim against Fletch 1. Turning now to the position in respect of Fletch, it knew, from the date of its incorporation on 22 September 2023 with Mr Seymour as its sole director and company secretary, the matters then known to Mr Seymour. However, it seems to me clear that Fletch did not provide financial services or services to the Company, where it was established to acquire the Companies' business and had no other relationship with the Companies or Mr Bunbury. The claim under s 12CB of the ASIC Act (or s 21 of the ACL) against Fletch must fail on that basis. The statutory unconscionability claim in respect of Mr Birch 1. Turning now to the position in respect of Mr Birch, I have referred above to the Plaintiffs' pleading (SOC [15]) that Mr Birch did not inform the Plaintiffs that, relevantly, he had ceased working to achieve a capital or debt raising for the Companies and their pleading (SOC [31], denied D1/2 Defence [31], D3 Defence [31]) that the Scheme was unconscionable (within the meaning in the ASIC Act) both at general law and by virtue of s 12CC of the ASIC Act. The Plaintiffs plead (SOC [33], denied D3 Defence [33]) (in the same form as the corresponding allegation against Mr Seymour) that Mr Birch aided and abetted, procured and counselled or was knowingly involved in the Scheme "so as through [his] unconscientious conduct result in injury to the Plaintiffs." While this pleading is again oddly phrased, I understand this to be an allegation of unconscionable conduct on Mr Birch's part arising from his involvement with the Scheme. 2. I have referred to Mr DeBuse's submissions above. Mr Cheshire submits that the Plaintiffs' case is no more than a pleading of unconscionability without identifying the relevant material facts and particulars; as to unconscionability under the general law, there is no pleading (with the necessary material facts and particulars) of a special disadvantage under which any of the Plaintiffs were suffering or of any of the Defendants having unconscientiously taken advantage of it; and, as to unconscionability under the ASIC Act, there is no pleading (with the necessary material facts and particulars) of each of the ingredients of s 12CB of the ASIC Act. He also submits that Mr Bunbury would have no actionable remedy to found this cause of action, because his position is no more than an impermissible claim for reflective loss. 3. Mr Cheshire also submits that: "Insofar as [Mr Birch] maintains an objection based upon a lack of pleading, he is entitled to do so, not having been put on notice of the case he has to meet and not having consented to any expansion of the case against him (T31) (Karzi v Toll Pty Ltd [2024] NSWCA 120 [("Karzi")]; Harris v Harris [2021] NSWCA 329; Stefanovski v Digital Central Australia (Assets) Pty Ltd (2018) 368 ALR 607, [2018] FCAFC 31)." 1. I understand the decisions to which Mr Cheshire refers to reflect familiar and well-established principles as to the function of pleadings; for example, in Karzi, Leeming JA observed (at [7]) that an issue was plainly not pleaded; Adamson JA (at [130]) defined the role of pleadings in uncontroversial terms by reference to well-established case law; and Basten J accepted (at [176]) that a matter was not pleaded. Here, by contrast, the relief sought in the Originating Process identified a claim for unconscionability under the ASIC Act; relevant facts including non-disclosures by Mr Birch and the elements of the alleged Scheme were pleaded, albeit briefly; a claim that the Scheme was unconscionable under s 12CC of the ASIC Act was pleaded, and it was not hard to recognise (as Mr Walker did) that this was intended to be a reference to s 12CB of the ASIC Act; it was also not hard to recognise (as Mr Walker also did in opening submissions) that there were corresponding provisions in the ACL; and the real question is whether the claim was sufficiently pleaded to give fair notice of the case that Mr Birch had to meet. However, that question turns upon the matters addressed in the case law to which I have referred above and depends upon questions of procedural fairness and practical injustice identified by the Court of Appeal in Gerrard Toltz to which I also referred above. Mr Birch cannot establish that he lacked fair notice of the case against him, or a lack of procedural fairness or practical injustice, by merely asserting his intent to hold the Plaintiffs to their pleading at the commencement of the hearing, for the reasons I have also noted above. It does not seem to me that there was ever any real doubt as to the scope of the unconscionability case against Mr Birch or the conduct which underpinned it. 2. I have addressed the scope of ss 12BAB, 12CB and 12CC of the ASIC Act and ss 21-22 of the ACL above in dealing with the claims against Mr Seymour and Fletch. It seems to me that Mr Birch supplied financial services or services to the Companies, although he did not have a concluded contract to do so, where he approached third parties to provide funding to the Companies with their authority and I have not accepted his evidence that he terminated that arrangement on 10 August 2023. 3. The findings that I have reached above establish that Mr Birch knew the matters discussed at the meeting on 16 August 2023 which he had organised; he knew, from 18 August 2023, that Douugh had recognised that the first step in the proposed transaction was for secured creditors to take control of the Companies' business; he knew, from 21 or 22 August 2023, the content of the road maps where I have not accepted his evidence to the contrary; he knew that he had not disclosed these matters to Mr Bunbury or the Companies and was not returning Mr Bunbury's calls at least from 10 to 24 August 2023; he took active steps to promote the transaction by contact with PIL and Mastercard on 25 August 2023, where I have not accepted his denial that he knew the content of the letters that he had forwarded to them; he knew of the updated version of the road map sent to him on 13 September 2023, where I have not accepted his denial of that matter; and, at least by 18 September 2023, Mr Birch and Handy Payments committed themselves to participation in Fletch's forced acquisition of the Companies' business, by taking up an interest in Fletch through Mr Birch's company, Midialel. 4. As I noted above, the Court may have regard, for the purposes of s 12CC of the ASIC Act and s 22 of the ACL respectively, to the relative strengths of the bargaining positions of the supplier and the service recipient or customer. I am satisfied that the Companies were here in a position of significant disadvantage in respect of Mr Birch for the same reasons they were in such a position in respect of Mr Seymour. As I also noted above, the Court may have regard, for the purposes of s 12CC of the ASIC Act and s 22 of the ACL respectively, to whether any unfair tactics were used against the service recipient or customer or a person acting on behalf of the service recipient or customer by the supplier or a person acting on behalf of the supplier in relation to the supply or possible supply of the services. I am satisfied that Mr Birch here used unfair tactics in his dealings with the Companies, where he took advantage of Mr Bunbury's apparent reliance on him and Mr Seymour to progress fund raising efforts; on 10 August 2023, he falsely represented to PIL that he, with Gibraltar Capital, was working with Mr Bunbury (and, by exclusion, not against their interests on the refinance and new facility); he concealed his dealings with third parties including dealings with Mastercard and the meeting on 15 August 2023 from the Companies; and he concealed the fact that, at least from 16 August 2023 if not before, he and Mr Seymour were working not to advance the Companies' aims or interests but to purchase the PIL debt through a special purpose vehicle and then exercise rights as a creditor in a manner that would catch the Companies by surprise and deprive them of any opportunity to respond to the seizure of their assets. 5. The Court may also have regard, for the purposes of s 12CC of the ASIC Act and s 22 of the ACL respectively, to the extent to which the supplier unreasonably failed to disclose to the service recipient or customer any intended conduct of the supplier that might affect the interests of the service recipient or customer and any risks to the service recipient or customer arising from the supplier's intended conduct (being risks that the supplier should have foreseen that would not be apparent to the service recipient). I am comfortably satisfied that Mr Birch also here failed to disclose to the Companies his intended conduct in respect of the matters referred to above and the Scheme and the risks that the Companies would be deprived of their assets in a transaction at undervalue, and deprived of any prospect of benefit from the future success of their business, where they had no reason to foresee that Mr Birch, who was apparently working to advance their aims, would bring about that result. As I also noted above, the Court may also have regard, for the purposes of s 12CC of the ASIC Act and s 22 of the ACL respectively, to the extent to which the supplier and the service recipient or customer acted in good faith. I am comfortably satisfied, for the reasons noted above, that Mr Birch did not act in good faith in respect of these matters. 6. On the basis of the principles I have set out above and the findings as to Mr Birch's conduct that I have summarised in paragraph 285, it seems to me that his knowledge and involvement in these matters was sufficient to contravene s 12CB of the ASIC Act or the corresponding provision in s 21 of the ACL. Applicable relief for statutory unconscionability 1. The Court may grant an injunction in respect of conduct which would contravene ASIC Act s 12CB (or the corresponding provision in s 21 of the ACL) under s 12GD of the ASIC Act (or the corresponding provision in s 232 of the ACL), against a person who contravened the sections or a person who was knowingly involved in the contravention. A person who suffers loss or damage by conduct of another person that contravenes s 12CB of the ASIC Act (or the corresponding provisions in s 21 of the ACL) may recover the amount of the loss or damage by action against that other person or any other person involved in the contravention under s 12GF of the ASIC Act (or the corresponding provisions in s 236 of the ACL). The Court may also order relief under s 12GM of the ASIC Act (or the corresponding provisions in s 243 of the ACL) in respect of a contravention of ss 12CB of the ASIC Act (or the corresponding provisions in s 21 of the ACL) including, importantly, making an order declaring a contract void or varied. An order may also be made against a person who was involved in the contravention. 2. Mr DeBuse submits that: "The consequence of setting aside of the transfer of the business to Fletch is that a severely damaged business will be returned to the control of the 1derful Companies. … Any complaint that Fletch has paid for the security should be disregarded because it did so in the circumstances, which if established, show that [Fletch] was prepared to act unconscionably, mala fide and for an improper purpose. If it has paid consideration to third parties for the opportunity to carry out the [S]cheme, then it bore the risk and any loss which was occasioned by it. Additionally, if the ultimate conclusion is that there was a [S]cheme as alleged the Court is entitled to treat this as a situation where the court would not lend its assistance to the recovery of the purchase price by Fletch. If the ultimate conclusion is that the sale agreement is unenforceable by reason of the entry into a contract that was against conscience/was unlawfully conducted/had as its object unlawful economic harm or was the use of a power of sale for an object other than satisfying a security but for another purpose then the First Defendant should be enjoined from pursuing its alleged debt." 1. I accept that the assignment of the loan from PIL to Fletch cannot be set aside, where PIL has not been joined as party to the proceedings, and the Plaintiffs no longer pursue that relief. However, an order could be made under s 12GM of the ASIC Act (or the corresponding provision in s 243 of the ACL) setting aside the BSA so that the Companies regain control of their business and Fletch is reinstated as a lender to the Companies and any consequential orders necessary to bring about the retransfer of assets from Fletch to 1derful could be made, although that order would potentially be inconsistent with the equitable relief by way of constructive trust that is also sought by the Plaintiffs. I address the question of the Companies' claim for damages against the Defendants below. Alleged contravention of s 420A of the Corporations Act 1. The Plaintiffs also seek (OP [7]) a declaration that, in exercising a purported power of sale as a controller of the Companies' business and the transfer of credit licenses held by 1derful Lending, Fletch breached its obligations to the Companies as a controller pursuant to s 420A of the Corporations Act and acted mala fide and against good faith and without a proper purpose. They plead (SOC [27], not admitted D1/2 Defence [27], D3 Defence [27]) that the Scheme has resulted in the business of the Companies being transferred to Fletch at less than its market value and (SOC [28], denied D1/2 Defence [28]) that the Scheme had, as its object, the defrauding of the other creditors and members of the Companies; the acquisition of the business of the Companies at an undervalue; and the breach of the obligations of a controller pursuant to s 420A of the Corporations Act. 2. The Plaintiffs also plead (SOC [34], denied D1/2 Defence [34]) that the sale of the business was undertaken by Fletch as a controller in breach of the duty of care imposed by s 420A of the Corporations Act. They particularise that allegation on the basis that: "The sale occurred without any marketing campaign, attempts at sale to other potential purchasers, or seeking advice or inquiry of [Mr Bunbury or the Companies] as to potential buyers." 1. Mr DeBuse also draws attention to the observations of the Court of Appeal in Boz One Pty Ltd v McLellan (2015) 105 ACSR 325; [2015] VSCA 68 at [167] that: "In deciding whether there has been a breach of s 420A, a court assesses the process that a controller has undertaken in selling the property. The inquiry is whether, in the course of that process, the controller has taken all reasonable care to sell the property for not less than its market value. However, it is not necessary for the court to decide what actually was the market value of the property in order to find that s 420A(1)(a) has been breached — all that the court needs to decide is that the process that was followed was not one where all reasonable care was taken to sell the property for its market value, whatever that market value might be." The Court also there noted (at [168]) that a breach of s 420A(1)(a) of the Corporations Act is not established merely because a receiver fails to realise the property for its market value; but, if it is proved that the price obtained at sale was substantially below the market value of the property, this may be evidence that proper steps were not taken. Obviously enough, this section also invokes the concept of market value and I have regard to the well-established case law as to that concept, including Spencer v Commonwealth of Australia (1907) 5 CLR 418 at 432; [1907] HCA 82 and MMAL Rentals Pty Ltd v Bruning (2004) 63 NSWLR 167; [2004] NSWCA 451 at [55], where Spigelman CJ (with whom Mason P and Hodgson JA agreed) described the nature of a "market value" test as follows: "A test of a "market value", whether in a statutory or contractual context, usually invokes the test long established and frequently applied in Spencer v The Commonwealth of Australia (1907) 5 CLR 418 esp at 432 and 440–441 of a willing but not anxious purchaser and vendor, bargaining with each other. This approach was most recently expressed in a joint judgment of three judges of the High Court in Marks v GIO Australia Holdings Ltd [1988] HCA 69; (1998) 196 CLR 494 at 514: "… The value … is to be identified according to what price freely contracting, fully informed parties would have offered and accepted for it."" 1. Mr DeBuse submits that: "… the transfer was undertaken in breach of the obligations of a controller provided by Section 420A of the Corporations Act 2001. Reference has already been made to the absence of any consideration of the steps usually involved in selling an asset to achieve its best price such as advertisement inquiry as to the existence of other potential buyers or time to sell. A further factor relevant both to the claim under the section 420A and as to the unconscionability of the transaction is that only a minimum price is fixed by the agreement, but the true purchase price is not required to be paid (see clause 7.2) until it is determined that is the asset is the purchasers but it has not been required to pay the price for acquiring the asset." 1. Mr Walker recognises that, where property has a market value, s 420A(1)(a) of the Corporations Act requires a controller to take all reasonable care to sell the property for not less than its market value and it appears to be common ground that the Companies' business had such a market value. Mr Walker submits and I proceed on the basis that a controller need not necessarily take all of the steps particularised by the Plaintiffs, namely a marketing campaign, seeking other potential buyers, or seeking the Plaintiffs' advice about potential buyers, to meet the requirements of s 420A of the Corporations Act and the Plaintiffs bear the onus of establishing a breach of that section: ABCD Corporation Pty Ltd v Sampson [2017] NSWSC 597 at [33]-[34], [38], [47]-[51]. Mr Walker also submits that Fletch caused the BSA to expressly provide for market value consideration to be given through the adjustment mechanism provided in cl 7 and that that was a prudent step for a controller to take when selling to itself. However, Fletch here failed to undertake the process to which it had committed to achieve a sale at market value. 2. Mr Walker initially submitted that the evidence in these proceedings shows the $757,273 in consideration already given for the business significantly exceeds the market value of $69,000 which is attributed to it in Mr Kompos' first report, although he subsequently abandoned reliance on that figure. As I have noted above, I do not accept Mr Kompos' evidence as to the value of the business in that report, which takes no account of the fact that a willing but not anxious purchaser would plainly have regard to the prospects of the business, including with adequate funding, in determining its market value. Mr Walker also submitted, in closing, that the requirement in s 420A is to take all reasonable care to sell for market value; if the market value is achieved, the inquiry goes no further; and a finding that the value of the business when it was sold on 3 October 2023 was equal to or less than $757,273 means this case must fail as that sum of money was the minimum consideration to be given under the BSA. I have not reached that finding for the reasons noted above. 3. I am satisfied that Fletch did not take all reasonable care to sell the Companies' business to itself for market value, where it made no attempt to market the business or ascertain its true market value and cl 7 of the BSA does not assist it where that process would have been undertaken under its control and was not in any case implemented. I am also satisfied that the business was in fact sold at undervalue. It seems to me that the then market value of the business was not less than Mr Seymour's contemporaneous assessment of that value as not less than $2 million, and a vendor would not have sold that business in a market transaction for a price that did not recognise its prospects, notwithstanding that the Companies were then in very difficult financial circumstances. I am reinforced in that view by the fact that the Defendants' witnesses, including Mr Dahan and Mr Seymour, themselves recognised the strong prospects of the Companies' underlying business. 4. Mr DeBuse accepts that the loss suffered by a contravention of s 420A of the Corporations Act is usually the equity of redemption and the usual remedy of a mortgagor in respect of property sold by a controller is the taking of accounts: Artistic Builders Pty Ltd v Elliot & Tuthill (Mortgages) Pty Ltd [2002] NSWSC 16 at [105]-[106]. Mr Walker similarly submits that the primary remedy for breach of s 420A is the equivalent of an account to recover surplus proceeds of sale where a mortgagee breaches its duties to a mortgagor: Ultimate Property Group Pty Ltd v Lord (2004) 60 NSWLR 646 at [94]. The parties accepted that no formal taking of accounts would be required where the mathematics of an account was simple. Here, the amount recoverable as surplus proceeds would be the value of the business as assessed by Mr Seymour, quantified as $2 million, less the debt of $942,326 due to Fletch as a result of the assignment. However, the Companies will need to elect between that remedy, which would be inconsistent with the return of the business to them, and the orders for a constructive trust over the business or the return of the business and compensation for the loss of its value to which they would be entitled on other grounds. 5. For completeness, although there was reference in correspondence between the parties' legal representatives and in submissions to the Court's powers in an inquiry as to a controller's conduct under s 423 of the Corporations Act, Counsel accepted that there was no need to address any question whether relief was available under that section. Claim in respect of APL Lending 1. The Plaintiffs also seek an order (OP [9], SOC [9]) that the Australian credit licence now held by APL Lending be transferred to the Companies and (SOC [10]) an order that Mr Seymour and Fletch do all things necessary to transfer the shares in APL Lending to 1derful. I would make that order against Mr Seymour and Fletch under s 12GF of the ASIC Act or the corresponding provision of the ACL given the findings I have reached above, but for the fact that APL Lending is not party to the proceedings. The proper course in these circumstances will be now to make an order joining APL Lending as party to the proceedings and relist the matter to allow it to lead evidence and make submissions if it resists such an order. Claim for further injunctive relief 1. The Plaintiffs seek (OP [10]-[11], SOC [11]-[12]) an order that Fletch and Messrs Seymour and Birch be permanently restrained from using or transferring any proprietary code developed for or by the Companies and that they destroy and provide an affidavit to the Court attesting to the destruction of any proprietary code developed for or by the Companies. That order should be made under s 12GD of the ASIC Act or the corresponding provision of the ACL in order to support the return of the Companies' business to the Companies, if the Plaintiffs elect for that remedy. Claim in conspiracy 1. The Plaintiffs seek (OP [12], SOC [8]) a declaration that Fletch and Messrs Seymour and Birch engaged in a conspiracy to unlawfully injure the Plaintiffs. The Plaintiffs plead (SOC [31], denied D1/2 Defence [31], D3 Defence [31]) that the Scheme was unlawful and was in breach of s 37A of the Conveyancing Act and was carried out to defraud creditors and was unconscionable within the meaning in the ASIC Act both at general law and by virtue of s 12CC of the ASIC Act. The Plaintiffs then plead (SOC [32], denied D1/2 Defence [32], D3 Defence [32]) that the Scheme was a conspiracy between Fletch, Mr Seymour and Mr Birch to injure the Plaintiffs by unlawful means. In oral closing submissions, Mr DeBuse pressed this claim (T498) although recognised a possible overlap of damages awarded for conspiracy with compensation that may be order for breach of fiduciary duty. 2. Mr Walker submits, in opening, that the elements of such a conspiracy are summarised in Haiye at [510] as the entry into an agreement or combination to perform unlawful acts; by the agreement or combination, an intention to injure the plaintiff; that the agreement or combination be executed in whole or in part; and by their execution of the agreement or combination the defendants have caused loss or damage to the plaintiff. Mr Cheshire also refers to the observations of the High Court in Talacko v Talacko (2021) 272 CLR 478 at [25]; [2021] HCA 15 (omitting citations) as follows: "[i]f two or more persons agree to effect an unlawful purpose, whether as an end or a means to an end, and in the carrying out of that agreement damage is caused to another, then those who have agreed are parties to a tortious conspiracy". The agreement or common design between the parties is necessary for them to be jointly liable for the unlawful means. ... The agreement which is carried out must be "aimed or directed" at the plaintiff." 1. Mr Cheshire also submits that the relevant acts must be unlawful towards, and therefore actionable by, the plaintiff and the plaintiff must establish that the defendant knew both that the conduct in question was unlawful and that it was the unlawful part of it that would cause loss to the plaintiff: OBG v Allan [2008] 1 AC 1 at 32; C Sappideen & Ors, Fleming's The Law of Torts, 11th ed, Lawbook Co 2024 at [28.230] and the cases there cited. 2. Mr Walker submits that conspiracy, like fraud, is an allegation which should not be lightly made, and ought to be pleaded with precision. I bear in mind that, in Haiye at [495], Kunc J observed that: "Conspiracy, much like fraud, is not an allegation that should lightly be made and ought to be pleaded with precision and particularity: Hughes v Western Australian Cricket Association Inc (1986) 19 FCR 10 at 54; [1986] FCA 465 per Toohey J; Australian Wool Innovation Ltd v Newkirk [2005] FCA 290 at [59] per Hely J ("Australian Wool Innovation"); Andrianakis v Uber Technologies (Ruling No 1) [2019] VSC 850 at [39] per Macaulay J; see also Uber Australia Pty Ltd v Andrianakis (2020) 61 VR 580 at [51]-[52]; [2020] VSCA 186 per Niall, Hargrave and Emerton JJA ("Uber"). …" 1. Mr Walker also submits that, although the pleaded Scheme is here alleged to have been unlawful on the basis of an alleged breach of s 37A of the Conveyancing Act and a contravention of the prohibition on unconscionable conduct under the ASIC Act, the failure to properly plead the claim of conspiracy will justify its rejection. In opening submissions, Mr Walker also submits that the conspiracy claim also fails because it is not open to plead, as an alternative to a substantive cause of action, the tort of conspiracy to commit that substantive wrong: Haiye at [503]-[504], and [511]. 2. Mr Cheshire also criticises the pleading of the Plaintiffs' conspiracy claim and submits that there is a pleading that the Defendants took part in the Scheme (SOC [26]), "but not of any agreement between them, let alone one to act by unlawful means and with the intent of damaging the Plaintiffs (let alone of the necessary material facts and particulars)"; that there is no pleading (with the necessary material facts and particulars) that each of the Defendants knew both that the conduct in question was unlawful and that it was the unlawful part of it that would cause loss to the Plaintiffs, or any pleaded material facts and particulars to support such allegations; and no loss is pleaded beyond an unspecified and conclusory loss and damage (SOC [39]). Mr Cheshire also submits that s 37A of the Conveyancing Act does not make an alienation of property unlawful (for the purposes of the tort of conspiracy or at all), but provides a specific remedy, namely that it is voidable, and thus cannot be relied upon as the basis of a conspiracy by unlawful means; although he acknowledges an observation to the contrary in Fatimi Pty Ltd v Bryant (2004) 59 NSWLR 678 at [32]; [2004] NSWCA 140. 3. I note that, in Mackinnon as Plaintiff representative of 153 Plaintiff group members v Partnership of Larter, Jones, Miraleste Pty Ltd t/as USG Partner and Johnson, t/as "STC Sports Trading Club" (No 8) [2019] NSWSC 1658 at [45], Stevenson J observed that the tort of conspiracy may take two forms, the second of which was: "an agreement or combination between two or more persons to commit an unlawful act with an intention to injure a plaintiff, and the act is carried out and the intention achieved: Williams v Hursey (1959) 103 CLR 30; [1959] HCA 51 (Fullagar J at 78 with Dixon CJ and Kitto J agreeing, Taylor J at 108-109, Menzies J at 125)." 1. As I noted above, Counsel also drew attention to Kunc J's helpful review of the applicable principles in Haiye which I adopt with gratitude. His Honour there noted (at [408]-[410]) that: "In Ward v Lewis [1955] 1 WLR 9 ("Ward v Lewis"), the Court of Appeal heard an appeal from a decision granting leave to amend a statement of claim alleging slander and conspiracy to commit slander. In allowing the appeal and striking out the paragraphs that pertained to the alleged conspiracy, Lord Denning (with whom Lord Morris agreed) relevantly said (at 11): "It is important to remember … that when a tort has been committed by two or more persons an allegation of a prior conspiracy to commit the tort adds nothing. The prior agreement merges in the tort. A party is not allowed to gain an added advantage by charging conspiracy when the agreement has become merged in the tort. It is sometimes sought, by charging conspiracy, to get an added advantage, for instance in proceedings for discovery, or by getting in evidence which would not be admissible in a straight action in tort, or to overcome substantive rules of law, such as here, the rules about republication of slanders. When the court sees attempts of that kind being made, it will discourage them by striking out the allegation of conspiracy, on the simple ground that the conspiracy adds nothing when the tort has in fact been committed." A similar conclusion was reached by Adam J in Rubenstein v Truth & Sportsman Ltd [1960] VR 473 where, in an action predominately alleging libel yet also alleging conspiracy to commit libel, his Honour struck out paragraphs of a statement of claim alleging conspiracy to commit libel. See also Sorrell v Smith [1925] AC 700 at 716 per Lord Dunedin; Cabasi v Vila (1940) 64 CLR \130 at 142-143; [1940] HCA 41 per McTiernan J, 151 per Williams J; O'Brien v Dawson (1942) 66 CLR 18 at 27; [1942] HCA 8 per Starke J. In Trade Practices Commission v Allied Mills Industries Pty Ltd (1980) 32 ALR 570 ("Allied Mills"), Sheppard J also reached a similar conclusion. …" 1. Kunc J also there observed (at [417]), in respect of the statutory liability for conspiracy under the Trade Practices Act 1974 (Cth) or the ACL that: "Where two parties conspire (i.e. agree) to effect a contravention of s 18(1) of the ACL, and only one party in fact contravenes s 18(1) of the ACL, only the former party will be liable for conspiring to effect a contravention. The action for conspiracy against the latter party will merge with the principal contravention. I would reach the same conclusion, and apply the same rationale, to s 45(2) of the TPA, albeit I accept that it is far more difficult conceptually to distinguish between an agreement to contravene s 45(2) and the contravention itself given the nature of the prohibited conduct." 1. His Honour returned to these issues (at [503]ff) and observed that: "The second submission advanced by Counsel for the Active Defendants rests on what I have canvassed in [407]-[417] above, although Counsel also drew the Court's attention the following additional passage from Weinberg J's judgment in McKellar v Container Terminal Management Services Limited [1999] FCA 1101; (1999) 165 ALR 409 at 445-6 ("McKellar"): 'It is not open to a party to plead as an alternative to a substantive cause of action already pleaded the tort of conspiracy to commit that substantive wrong: Galland v Mineral Underwriters Ltd [1977] WAR 116 at 119–20 per Burt CJ (with whom Wallace J agreed): "But the question, as it seems to me, which arises upon this appeal is whether a conspiracy to commit a tort when carried into effect is actionable both as an independent tort, that is, the tort of conspiracy, as well as being actionable simply as a tort committed by a number of people acting together to that common end. In the instant case, if it be the fact that the appellant and the other defendants or some of them entered into an agreement to convert the respondent's money, and if it be the fact that the respondent's money was converted in the performance of that agreement and in the manner pleaded, has the appellant committed two actionable torts — conversion and conspiracy — or only one, and if one, which one? I know of no authority which directly supports my opinion, but it seems to me that the answer to that question should be that on those assumptions the appellant has committed one tort and that is the tort of conversion."'" 1. His Honour also helpfully summarised the elements of a claim for an unlawful means conspiracy as follows: "(1) Two or more persons have entered into an agreement or combination to perform unlawful acts: see Lonrho Ltd v Shell Petroleum Co Ltd (No 2) [1982] AC 173 at 188 per Lord Diplock ("Lonrho (No 2)"); McKernan v Fraser (1931) 46 CLR 343 at 362; [1931] HCA 54 per Dixon J (with whom Rich and McTeirnan JJ agreed), 378 per Evatt J; Dresna Pty Ltd v Misu Nominees Pty Ltd [2003] FCA 1537 at [99]-[104] per Weinberg J ("Dresna FCA"); Uber at [31]. It is not necessary that the agreement be contractual (see Fatimi at [104(1)]), nor that there be evidence of an express agreement. As Hely J said in Australian Wool Innovation at [62] (see also Uber at [55]): "A court is entitled to have regard to the overt acts pleaded, and to infer from those acts that there was an express agreement to further the common object of the combination." (2) By the agreement or combination, the defendants intended to injure the plaintiff: Dresna FCAFC at [7]. It has, at least since Lonrho Ltd v Shell Petroleum Co Ltd [1981] 1 QB 358; Com LR 74 ("Lonrho"), been accepted that the intention to injure need not be the sole or predominant motive. As his Lordship said in Lonrho (at 75): "I would suggest that a conspiracy to do an unlawful act — when there is no intent to injure the plaintiff and it is not aimed or directed at him — is not actionable ... But if there is an intent to injure him then it is actionable. The intent to injure may not be the predominant motive. It may be mixed with other motives ... It is sufficient if the conspiracy is aimed or directed at the plaintiff, and it can reasonably be foreseen that it may injure him, and does in fact injure him." His Lordship's observations have since been endorsed in this country on several occasions including by the Victorian Court of Appeal in Uber, where the Court said (at [42]): "…to establish an unlawful means conspiracy, a plaintiff is required to establish that the purpose of the defendants in combining to engage in or to be complicit in the unlawful conduct included an intention to injure the plaintiff, and that the plaintiff in fact suffered injury by reason of the unlawful conduct. The defendants' intention to injure the plaintiff need not be the predominant motive for engaging in the unlawful conduct, but may be mixed with other purposes or motives — such as the pursuit of gain for the defendant or others — which may be the predominant motive." (3) Quite unlike its criminal law counterpart, the agreement or combination to injure ought to have been executed in whole or in part: see Lonrho (No 2) at 188 per Lord Diplock. (4) By their execution of the agreement or combination, the defendants have caused loss or damage to the plaintiff: see Fatimi at [104(3)], quoting Marrinan v Vibart [1963] 1 QB 234 at 238 per Salmon J." 1. His Honour then held (at [511]) that: "The Plaintiffs do not have an actionable claim for conspiracy to commit the tort of deceit in circumstances where they rely upon that substantive wrong as a separate, individual cause of action. I have already canvassed the legal principles applicable to this reasoning and will not repeat them here (see [407]-[417] above)." 1. I will reach the same result below in respect of the claims for conspiracy against Mr Seymour and Birch, against whom the Plaintiffs had actionable claims for contraventions of s 12CB of the ASIC Act (or the corresponding provision in s 21 of the ACL) but not in respect of Fletch, where no such claim was available for the reasons noted above. 2. I bear in mind the serious character of this allegation and the application of the Briginshaw standard and s 140 of the Evidence Act in determining it. I also recognise the fact that an intention to injure the Plaintiffs, or some of them, is an essential element of the claim. I have not found that a contravention of s 37A of the Conveyancing Act is established here. I have found that a contravention of the statutory prohibition on unconscionable conduct, under s 12CB of the ASIC Act or s 21 of the ACL is established on the part of Messrs Seymour and Birch. The claim for conspiracy goes no further than the matters alleged to give rise to statutory unconscionability on their part and does not support a finding of conspiracy against them that is coincident with their substantive wrong. 3. However, I have held above that Fletch did not contravene s 12CB of the ASIC Act (or the corresponding provision in s 21 of the ACL) because it did not provide financial services or services to the Companies and those sections did not apply to it, and that leaves open the possibility that the Companies can succeed in their claim for conspiracy against Fletch. I am satisfied that Fletch knew, from the date of its incorporation on 22 September 2023 with Mr Seymour as its sole director and company secretary, the matters then known to Mr Seymour which I have set out above, both in the chronology and in dealing with the claim for statutory unconscionability against him. I have also reached findings as to Fletch's conduct in the chronology set out above, and I find that it joined with Mr Seymour and Mr Birch in the plan that it take an assignment of PIL's rights in the loan and the security and then in exercising its rights as secured creditor in a manner that was calculated to ensure that the Companies lost any opportunity to repay the loan and allow it to appropriate the Companies' assets; at the time of the acquisition or subsequently, in its capacity as controller, it did not cause Fletch to assess or pay the fair value of the assets rather than acquiring them at the price that it was prepared to pay; and it knew through Mr Seymour, that these matters were being concealed by Mr Seymour from the Companies. 4. I am satisfied that the entry by Fletch into a combination with at least Mr Seymour to perform unlawful acts, by way of contraventions of the statutory prohibition on unconscionable conduct, under s 12CB of the ASIC Act or the corresponding provision in s 21 of the ACL, is established. I am satisfied that Fletch's intention, through Mr Seymour, to injure the Plaintiffs by that combination is established, where that was the necessary and obvious consequence of concealing its and Mr Seymour's intentions and implementing a forced acquisition of the Companies' business by surprise and at undervalue. It is plain that the agreement or combination was executed in whole or in large part, and largely in accordance with the plans which had been made by Mr Seymour to implement it. I am satisfied that by their execution of that combination, Fletch and at least Mr Seymour have caused loss or damage to the Companies, being at least the loss of a business which then had a value of at least $2 million (in Mr Seymour's own assessment) and the loss of any prospect that the Companies could have raised further funding, restored their relationship with Mastercard and then increased the value of that business. I am therefore satisfied that the claim in conspiracy is established against Fletch. I will return to the Plaintiffs' claim for exemplary damages arising from this claim below. Claim for invalidity of appointment of receiver to 1derful 1. The Plaintiffs also sought (OP [13], SOC [13]) an order that the appointment of Mr Ball as receiver is void or voidable and invalid. The Plaintiffs plead (SOC [43], denied D1/2 Defence [43], D3 Defence [43]) that the power to appoint a receiver contained in the general security documents purportedly assigned by PIL to Fletch was to be used in good faith and for a proper purpose and, in appointing Mr Ball as receiver, Fletch did not act in good faith or for a proper purpose. The appointment of Mr Ball as receiver was part of the course of conduct that I have found contravened s 12CB of the ASIC Act or the corresponding provision in s 21 of the ACL. My preliminary view is that that appointment should be set aside to give effective relief against that conduct, but I should allow Mr Ball a further opportunity to be heard prior to making that order, where he has not actively participated in this hearing. The Plaintiffs' claim for damages 1. The Plaintiffs claim (OP [14]-[16], SOC [14]-[16]) damages against each of the Defendants, including for trespass and exemplary damages; compensation pursuant to s 1317H of the Corporations Act and equitable compensation, or alternatively, an account of profits. The Plaintiffs plead (SOC [39]-[40], denied D1/2 Defence [39]-[40], D3 Defence [39]-[40]) that, by reason of the Scheme, the alleged breach of fiduciary obligations or the unlawful conspiracy, they have suffered loss and damage and they are entitled to damages or account or equitable compensation from the Defendants. I assume this claim extends to a claim for damages arising from the alleged breach of s 12CB of the ASIC Act (and, by extension, the corresponding provision in s 21 of the ACL) by way of statutory unconscionability. The Plaintiffs also plead (SOC [41], denied D1/2 Defence [41], D3 Defence [41]) that there should be an inquiry as to such amount as is due as damages or equitable compensation following the reconveyance of the business from Fletch to the Companies. The parties ultimately accepted that there would be no need for a separate inquiry as to loss so long as the loss following from a sale of the business at undervalue could be readily calculated. 2. Mr DeBuse draws attention to the observations of Mason CJ and Dawson J in Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 at [83]; [1991] HCA 54 that: "The settled rule, both here and in England, is that mere difficulty in estimating damages does not relieve a court from the responsibility of estimating them as best it can: Fink v Fink (1946) 74 CLR 127, at p 143; McRae v Commonwealth Disposals Commission (1951) 84 CLR 377, at pp 411–412; Chaplin v Hicks (1911) 2 KB 786 , at p 792. Indeed, in Jones v Schiffmann (1971) 124 CLR 303, Menzies J. went so far as to say that the assessment of damages … does sometimes, of necessity involve what is guess work rather than estimation": at p 308. Where precise evidence is not available the court must do the best it can: Biggin and Co Ltd v Permanite Ltd (1951) 1 KB 422, per Devlin J. at p 438. And uncertainty as to the profits to be derived from a business by reason of contingencies is not a reason for a court refusing to assess damages: see McGregor on Damages, 15th ed. (1988), pars 357–359." 1. I accept that this is not a case where an assessment of the amount of damages recoverable by the Companies has no rational basis or would be a mere guess, although that assessment will be made on incomplete or imperfect evidence where, for the reasons noted above, I do not accept the valuations of the Companies' business made by Mr Davies or Mr Kompos and prefer Mr Seymour's contemporaneous assessment of its value as not less than $2 million: contrast the position where no rational basis for an assessment of damages is available, recognised in Troulis v Vamvoukakis [1998] NSWCA 237 and McCrohan v Harith [2010] NSWCA 67 at [128]. 2. I consider that I can properly take a robust approach as to damages where the Defendants' conduct took the business out of the Companies hands and had the result that its future performance in the Companies' hands, which would have underpinned its then value, cannot now be known with certainty. I have not neglected Mr Cheshire's submission that Mr Davies (whose evidence I addressed above) did not identify any difficulty in "working out damages" by identifying "records that ought to have been available but were not." That submission does give sufficient weight to the real difficulty that, obviously enough, a start up company could never have records of, or know as a fact, the future growth in the revenue of a business that it was prevented from conducting. For these reasons, I accept that Mr Seymour's contemporaneous assessment of the value of the business as at least $2 million as sufficiently reliable evidence of its then value and I adopt that figure in preference to the much higher value derived by Mr Davies and the lower values derived by Mr Kompos. I am left with a lingering unease that I should have been more robust and adopted a higher value to reflect the potential of that business, notwithstanding the then suspension of the Mastercard Agreement and the Companies' critical financial difficulties. An appellate court may have the opportunity to address that question, and possibly the wider difficulties in the valuation of start-up technology companies, if an appeal is brought from this judgment. 3. For the reasons set out above, I would make the order sought by the Plaintiffs (depending on their election) that would bring about the return of the Companies business to the Companies, albeit in a degraded state where that business currently likely has no value and where the development of that business will likely be significantly delayed or may now be impossible. Fletch would then be reinstated as a lender to the Companies, where the transfer of the business to it was set aside, but the amount of damages (including any exemplary damages, to which I return below) awarded against it may well exceed the amount of that loan. That order would not be inconsistent with an order for damages or compensation in favour of the Companies calculated by reference to the loss suffered by the Companies on the transfer of business at an undervalue, where that loss is not reduced by the return of the business after its value is lost. 4. On that basis, the amount recoverable by the Plaintiffs in addition to an order setting aside the BSA and providing for the return of the business, whether as equitable compensation for breach of fiduciary duty and knowing assistance against Mr Seymour and Fletch, or damages for contravention of s 12CB of the ASIC Act (or s 21 of the ACL) against Mr Seymour and Mr Birch, or as compensatory damages for conspiracy against Fletch, would be in each case $2 million derived from Mr Seymour's contemporaneous assessment of the value of the business. The Plaintiffs cannot recover damages for trespass since they did not bring or establish a claim for trespass. They have also not established a basis for damages under s 1317H of the Corporations Act, either by way of compensatory damages or any loss of profits. 5. The Plaintiffs could notionally have also sought to quantify their loss arising from a delay in developing that business, which would have involved the complex exercise of modelling the value or profit of the business but for the wrongful conduct to a date in the middle term; modelling any lesser value or profit of the business to that date, where the wrongful conduct has occurred; and then calculating the loss to that date and discounting it to its present value. There would likely have been real practical difficulties in the Plaintiffs establishing loss on that basis here, given the level of speculation that would be involved in doing so where the Companies' then start-up business, and they did not do so. Exemplary damages, set-off and other matters 1. The Plaintiffs have established their claim for conspiracy against Fletch and exemplary damages may be ordered against Fletch on that basis, as sought by the Plaintiffs. However, I should allow submissions as an award of exemplary damages and its quantum, prior to making orders, where that issue was not sufficiently addressed by the parties in closing submissions. 2. The Plaintiffs also plead (SOC [42], denied D1/2 Defence [42], D3 Defence [42]) a set-off of such damages or equitable compensation as are due from Fletch in equity against any amount that may be found by this Court to be due in respect of the debt assigned to Fletch by PIL. No submission was put that set-off would not be available and the amount of damages awarded to the Companies substantially exceed the amount of that loan. 3. Mr Bunbury also claims (SOC [44], not admitted D1/2 Defence [44], D3 Defence [44]) a lien on all of the information and knowledge he has acquired by reason of his employment with the Companies, as against Mr Ball as receiver who it is alleged continues to seek such information, where Mr Bunbury has not been paid his deferred wages and other loaned monies and the disclosure of further information to the receiver will assist in the Scheme. It is not necessary to determine this claim, at least if Mr Ball's appointment as receiver will be set aside in any event. Whether the matter should be referred to ASIC 1. It appears that Messrs Seymour and Birch are active participants in the Australian financial services or Australian credit industries. I raised with each of them, at the close of their cross-examination, the possibility that findings might be made, inter alia, that they had not acted honestly or in accordance with their moral obligations. Findings of that kind would be relevant to the question whether a banning order could or should be made by ASIC in respect of either of them. I have considered the question whether this judgment should be referred to ASIC and allowed the parties an opportunity to be heard in that regard. I have ultimately concluded that it is not necessary to do where the judgment, the affidavits that were read and the evidence that was tendered are now all matters of public record. It is open to the Plaintiffs to draw this judgment to ASIC's attention if they wish to do so and then open to ASIC to take such steps as it considers appropriate in respect of the matters addressed in this judgment. There is no need for the Court to take any further steps in that regard. Orders 1. The Companies will need to elect between potentially inconsistent remedies, for example, a constructive trust or an injunction requiring return of the business and compensation for the loss of value of the business while it has been in Fletch's hands, or an account arising from a breach of s 420A of the Corporations Act as quantified above. I understand it to be common ground that, where the Companies recover their loss, it will not be necessary to determine Mr Bunbury's claims since he would have no recoverable loss other than that deriving from the Companies' loss. 2. I direct the parties to submit to my Associate agreed short minutes of order to give effect to this judgment (including as to any election between remedies, any consequential steps and exemplary damages) and as to costs or, if there is no agreement between them, their respective short minutes of order and submissions not exceeding 15 pages (in Arial font 12, one and a half spacing) by 4pm on 22 November 2024, and their respective submissions in reply not exceeding 8 pages (in Arial font 12, one and a half spacing) by 4pm on 29 November 2024. ********** Endnotes 1. A Damoradan, "Valuing Young, Start-up and Growth Companies: Estimation Issues and Valuation Challenges" (June 12, 2009; SSRN: https://ssrn.com/abstract=1418687). 2. E Mantell & E Shea, "Development and Application of Business Valuation Methods by the Delaware Courts" (2021) 17 Hastings Business LJ 335; HBK Master Fund LP v Pivotal Software Inc, Delaware Court of Chancery, 14 August 2023. 3. For example, E Dubiansky, "An Analysis for the Valuation of Venture Capital-Funded Startup Firm Patents" (2006) 12 BU J Sci and Tech L 170; BK Krumm, "Fostering Innovation and Entrepreneurship: Shark Tank shouldn't be a Model (2017) 70 Ark L Rev 553 at 573; A Lynch, "Believing in Unicorns: How to Value Unicorn Companies and Intellectual Property while Encouraging Continuing Innovations and Public Disclosure" (2021) 72 Case Wes L Rev 421 at 430-431; AF Tuch, "Fairness Opinions and SPAC Reform" (2023) 100 Wash UL Rev 1793 at 1817-1819 and note the valuation commentary cited at footnote 92. 4. 1 For example, in Pascoe v Voukidis Holdings Pty Ltd [2024] FCA 915 at [170], Button J permitted a plaintiff who sought relief under 12CA of the ASIC Act, on an oral application, to rely on the equivalent provisions of the ACL, if the respondents in that case were correct in their contention that the ASIC Act provisions did not apply because the company did not provide a "financial service" pursuant to s 12BAB of the ASIC Act. Counsel in that case rightly did not resist that approach. 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: 12 November 2024