New South Wales Supreme Court CITATION : OzEcom & Anor v Hudson Investment Group & Ors [2007] NSWSC 719 HEARING DATE(S) : 23, 26, 27, 30 April 2007 and 1, 2 May 2007 JUDGMENT DATE : 3 August 2007 JURISDICTION : Equity Division Commercial List JUDGMENT OF : McDougall J at [1] DECISION : See paras [365] to [368] of judgment CATCHWORDS : CORPORATIONS - Capital raising - Underwriting agreement - First defendant agreed to underwrite IPO of shares in first plaintiff – Second plaintiff agreed to act as manager and lead broker – Public offering failed – Achievement of spread necessary for plaintiff to be listed on ASX - Whether first defendant breached obligations in relation to spread and to underwrite the issue – 'Best endeavours' obligation - Whether first defendant used 'best endeavours' to procure spread required by ASX – Delegation of performance to second defendant - whether delegator liable if delegate fails to use best endeavours – agreed extensions of time in accordance with underwriting agreement – Whether further extensions made either formally or on ad hoc basis. - CONTRACT - Whether agreement to extend closing date can be inferred from conduct – Offer and acceptance – Whether 'best endeavours' used to do all that could reasonably be done to achieve the contractual object. - ESTOPPEL – By representation – Whether evidence of reliance – Whether any detriment suffered if reliance on any representations - Whether unconscionable for first defendant not to comply with underwriting obligations where agreements allegedly made to extend – Whether plaintiff refrained from enforcing its rights due to alleged representation of extension. - NEGLIGENCE – Duties of care in negligence – Whether second defendant owed to plaintiff duties of care relating to its activities as sponsoring broker – Assumption of responsibility. - DAMAGES – Claim against first defendant for pure economic loss - Whether failure of IPO amounted to a loss to the company of the capital sum not raised – Whether wasted expenditure recoverable – Whether expenditure made or liability incurred on the faith of first defendant's using its 'best endeavours' to achieve spread LEGISLATION CITED : Evidence Act 1995 Adelaide Petroleum NL and Others v Poseidon Ltd and Others (1990) 98 ALR 431. Astley And Others v Austrust Limited (1999) 197 CLR 1 Australian Broadcasting Commission v Australasian Performing Right Association Limited (1973) 129 CLR 99 Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153 Commonwealth v Verwayen (1990) 170 CLR 394 Commonwealth of Australia v Crothall Hospital Services (Aust) Ltd (1981) 36 ALR 567 Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523 Esanda Finance Corporation Limited v Peat Marwick Hungerfords (1997) 188 CLR 241 Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22 Hadley v Baxendale (1854) 9 Ex 341; 156 ER 145 Hexiver Pty Ltd v Lederer [2006] NSWSC 1129 Hospital Products Limited v United States Surgical Corporation (1985) 156 CLR 41 Ingot Capital Investments & Ors v Macquarie Equity Capital Markets & Ors [No 6] [2007] NSWSC 124 Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11, 110 J. & H. Manktelow Pty Ltd v Alloway Grazing Pty Ltd (1975) 1 NSWLR 385 CASES CITED : Jones v Barkley (1781) 2 Dougl 684; 99 ER 434 Jones v Dunkel (1959) 101 CLR 298 McRae And Another v Commonwealth Disposals Commission And Others (1951) 84 CLR 377 Perre And Others v Apand Pty Limited (1999) 198 CLR 180 Peter Turnbull and Company Proprietary Limited v Mundus Trading Company (Australasia) Proprietary Limited (1954) 90 CLR 235 Phillips v Ellinson Brothers Proprietary Limited (1941) 65 CLR 221 Pilmer And Ors v Duke Group Limited (In Liquidation) And Others (2001) 207 CLR 165 Poseidon Ltd and Another v Adelaide Petroleum NL and Others (1991) 105 ALR 25 Sargent v A.S.L Developments Limited (1974) 131 CLR 634 Segenhoe Ltd v Akins And Others (1990) 29 NSWLR 569 Sheffield District Railway Co v Great Central Railway Co (1911) 27 TLR 451 Strategic Minerals Corporation NL v Basham & Ors (1997) 15 ACLC 1,155 Sullivan v Moody And Others (2001) 207 CLR 562 Terrell v Mabie Todd & Coy Ld (1952) 69 RPC 234 Transfield Proprietary Limited v Arlo International Limited (1980) 144 CLR 83 Williams And Another v Natural Life Health Foods Ltd [1998] 1 WLR 83 Woolcock Street Investments Pty Ltd v CDG Pty Ltd And Another (2004) 216 CLR 515 OzEcom Limited (In Liquidation) (First Plaintiff) Andrew Hugh Jenner Wiley (Second Plaintiff) Hudson Investment Group Limited (First Defendant) PARTIES : Hudson Securities Pty Limited (Second Defendant) Vincent See Yin Tan (Third Defendant) David Sutton (First Cross Defendant to the Fourth Cross Claim) Bruce McLeod (Second Defendant to Fourth Cross Claim) FILE NUMBER(S) : SC 50080/05 N A Cotman SC/M A Izzo (Plaintiffs) A I Tonking (First Defendants) COUNSEL : A Leopold (Second Defendant) J R J Lockhart (Third Defendant) B A Coles QC/Ms M Painter (First Defendant to the Fourth Cross Claim - David Sutton) D Cook (Second Defendant to the Fourth Cross Claim - Bruce McLeod) K P Farmer & Associates (Plaintiff) Thompson Eslick Solicitors (First Defendant)Watson Mangioni Lawyers Pty Ltd (Second Defendant) SOLICITORS : Allens Arthur Robinson Solicitors (Third Defendant) Peter Kemp Solicitors (First Cross Defendant to the Fourth Cross Claim) Wordsworth Lawyers (Second Cross Defendant to the Fourth Cross Claim) IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION COMMERCIAL LIST McDOUGALL J 3 August 2007 50080/05 OZECOM LIMITED (IN LIQUIDATION) & ANOR v HUDSON INVESTMENT GROUP LIMITED & ORS JUDGMENT 1 HIS HONOUR: The first defendant (Hudson Investment) agreed to underwrite an initial public offering (IPO) of shares in the first plaintiff (ozEcom). Hudson Investment agreed with its subsidiary the second defendant (Hudson Securities) that Hudson Securities would act as the sponsoring broker for the IPO and, in that capacity, use its best endeavours to undertake and manage the listing of ozEcom on the Australian Stock Exchange (ASX) and arrange the required "spread" of shareholders. (At that time, the listing rules of the ASX required a listed company to have at least 500 shareholders each holding at least $2,000 in share capital. Hudson Investment had agreed with ozEcom to use its best endeavours to achieve the required spread.) The IPO was a failure. OzEcom claims that Hudson Investment has breached its obligations in relation to spread and to underwrite the issue. It claims further that Hudson Securities owed it duties of care, relating to its activities as sponsoring broker, and breached those duties of care. The parties and their respective roles 2 The relevant transactions occurred during 1999. At that time, ozEcom was an unlisted public company. It is now in liquidation; and the second plaintiff is its liquidator. OzEcom was seeking to develop a business, the detail of which I have to say I find somewhat obscure. It is simplest to quote from the prospectus for the IPO: "The "principal product" is "a business-to-business transaction service" known as the ozEcom Rewards Program. The ozEcom Rewards Program is a service that enables businesses to outsource the administration and processing of the sales of their end product. The Program provides: order entry, order tracing, order fulfilment, logistic services and the facilitation of purchaser credit, trade credit, and debt management services." 3 Ms Rowena Sylvester was a non executive director of and consultant to ozEcom. Mr Campbell Corfe was its chief financial officer. Mr Ross Breadman was a solicitor who advised ozEcom from time to time on the capital raising, although he was not the solicitor named in the prospectus. That office fell to the firm then known as Barker Gosling. Mr Philip Stevens, a partner in that firm, was a non executive director of ozEcom. Other directors of ozEcom were Mr Robert Cleland (non executive) and Mr Ross Smyth-Kirk (the executive chairman of the board of directors). Ms Sylvester, Mr Corfe and Mr Breadman each gave evidence and each was cross-examined. 4 OzEcom formed a due diligence committee (DDC) in connection with the IPO. Ms Sylvester chaired that committee. Its members included Messrs Corfe and Stevens. There were other members (including representatives of ozEcom's accountants and auditors) and Mr David Sutton. Mr Sutton was at the time a director of Hudson Investment and the chairman of its board of directors. 5 Hudson Investment was a listed public company. It carried on, through subsidiaries, a number of separate businesses. It carried on no separate business in its own right, unless the task of overseeing its subsidiaries can be described as a separate business. It is convenient to refer to Hudson Investment and its subsidiaries together as the Hudson Investment Group. 6 Mr Allan Scadden, who was the joint company secretary of the Hudson Investment Group from April 2001 until recently, gave evidence and was cross-examined. Mr Scadden's only knowledge of relevant events was derived from enquiries made of others or from his investigation of the books and records of the Hudson Investment Group. No other officer or employee of the Hudson Investment Group gave evidence. It was not suggested that there was any reason why those who were actually involved in the relevant transactions could not have given evidence. 7 Hudson Investment did not hold a security dealer's licence. Hudson Securities, which at the time was a wholly owned subsidiary of Hudson Investment, did. Mr Bruce McLeod was the managing director and (I think) the chief executive officer of Hudson Securities. Initially, it was Mr Sutton who directed Hudson Securities' activities in relation to the IPO. Mr Sutton went overseas in mid September 1999 and, thereafter, Mr McLeod oversaw the relevant activities and was the point of contact. Mr McLeod was not a member of the DDC. As I have indicated neither Mr Sutton nor Mr McLeod gave evidence (although each had sworn, and there were filed and served, an affidavit or affidavits). There was no suggestion that either was unable to give evidence. 8 Standing behind Hudson Investment and (at least at the time) Hudson Securities was Mr Vincent Tan. Mr Tan appears to have been the principal shareholder in Hudson Investment, controlling in excess of 20 percent of its issued capital. He was not (at least in terms of formal appointment) a director of Hudson Investment or Hudson Securities, although ozEcom alleged that he was a shadow director of Hudson Investment. Mr Tan was a consultant to the Hudson Investment Group. OzEcom alleged that it was he who was responsible for a number of the decisions relevant to these proceedings. Mr Tan did not give evidence, although, as is now common ground, he attended most of the hearing. It was not suggested that there was any reason why he could not have given evidence. 9 There were a number of cross-claims for contribution or indemnity. Those cross-claims included a somewhat unusual cross-claim – the fourth cross-claim – brought by Hudson Investment against Messrs Sutton and McLeod (as directors at the time) and Mr Tan. The issues 10 The simplest way to explain in more detail ozEcom's case and the various cross-claims is to set out the issues agreed by the parties: '' 1. Contractual claims A. Hudson Investment's underwriting obligation (i) Having regard to: (a) any extension made under the Underwriting Agreement; (b) any variation of the Underwriting Agreement; and (c) any operative estoppel, waiver or unconscionable conduct which would preclude Hudson Investment from relying on an earlier date, what was the date which under the Underwriting Agreement was finally the Closing Date for the IPO? (ii) Did OzEcom deliver to Hudson Investment a Shortfall Notice on or before 10am 1 Business Day after the final Closing Date, in conformity with the requirements of clause 6? (iii) Did OzEcom deliver to Hudson Investment a Closing Certificate and certified copy of a unanimous board resolution at the time of the delivery of the Shortfall Notice, in conformity with the requirements of clause 8.1? (iv) If the answer to (ii) or (iii) is no, did Hudson Investment waive any right to rely on the requirements of clauses 6 or 8.1 so as to relieve OzEcom of the obligation to comply to that extent with the requirement? (v) Did clause 13.6 absolve Hudson Investments of any obligation to comply with clause 7 by reason of the fact that any allotment or issue of shares would be void under s 1031 of the Corporations Law on the ground that: (a) Permission to list was not granted before the end of 6 weeks after the date of issue of the prospectus or such longer period as was notified to the ASX within s 1031(1)(b); (b) The ASX spread requirement was not satisfied? (vi) Was OzEcom incapable of giving, in conformity with clause 8.1 of the Underwriting Agreement, a Closing Certificate complying with clause 8.2 of the Underwriting Agreement on the ground that: (a) It had failed to use its best endeavours to procure the grant of official quotation as required by clause 3.6? (b) It had made in the prospectus the statements pleaded in paragraph 59I of Hudson Investments' Second Further Amended Defence and paragraph 34 of Hudson Securities' Defence (the "IAMA Statement") and those statements were misleading and deceptive within s 995 of the Corporations Law, section 12DA of the ASIC Act , s 52 of the Trade Practices Act or s 42 of the Fair Trading Act ? (c) It had made any of the representations pleaded in paragraph 59A of Hudson Investments' Second Further Amended Defence (the "Spread Representations") and those representations were misleading and deceptive within s 995 of the Corporations Law , section 12DA of the ASIC Act , s 52 of the Trade Practices Act or s 42 of the Fair Trading Act and were relied on by Hudson Investments in entering the Underwriting Agreement? (d) It had made the representation pleaded in paragraph 59B of Hudson Investments' Second Further Amended Defence (the "IAMA Investment Representations") and that representation was misleading and deceptive within s 995 of the Corporations Law , section 12DA of the ASIC Act , s 52 of the Trade Practices Act or s 42 of the Fair Trading Act and were relied on by Hudson Investments in entering the Underwriting Agreement? (vii) Is Hudson Investments precluded from relying on any misleading and deceptive statements in fact contained in the prospectus by reason of Mr Sutton's participation in the due diligence process? (viii) Did Hudson Investments validly terminate the Underwriting Agreement? (ix) In the light of the answers to the foregoing questions, was Hudson Investments obliged to subscribe for Shortfall Shares in accordance with clause 7? (x) If so, is OzEcom entitled to recover from Hudson Investments the damages claimed in the Further Amended Summons? B. Other contractual obligations owed by Hudson Investments to OzEcom (i) Did the Underwriting Agreement contain the terms pleaded at paragraph 10 of the Further Amended Summons? (ii) If so, did Hudson Investments breach the terms identified in (i) above? (iii) Did Hudson Investments breach clause 3.5 of the Underwriting Agreement? (iv) If the answer to (ii) and (iii) is yes, is OzEcom entitled to recover from Hudson Investments the damages claimed in the Further Amended Summons? C. The obligation to pay the underwriting fee (i) In the events that occurred, was OzEcom obliged to pay Hudson Investments the underwriting fee and commission stipulated in clause 12? 2. Duties of care in negligence A. Duty owed to OzEcom by Hudson Investments (i) Did Hudson Investments owe OzEcom a duty of care in relation to the conduct of the underwriting? (ii) If so, what was the scope of that duty? (iii) If the alleged duty was owed, did Hudson Investments breach the duty by failing to exercise the requisite standard of care, having regard to the scope of the duty? B. Duty owed to OzEcom by Hudson Securities (i) Did Hudson Securities owe to ozEcom a duty of care in relation to the management of the Initial Public Offering and arranging the shareholder spread specified by the ASX. (ii) If so, what was the scope of that duty? (iii) To the extent that Hudson Securities did owe a duty of care to ozEcom, did the duty cease to be owed from about early September 1999, in the light of the adverse aspects of the IPO identified in paragraph 30A(e) of Hudson Securities' Defence? (iv) If the alleged duty was owed, what was the requisite standard of care? (v) If the alleged duty was owed, did Hudson Securities breach the duty by failing to exercise the requisite standard of care, having regard to the scope of the duty? C. Causation (i) Was any loss or damage suffered by OzEcom in breach of the duties identified above caused by OzEcom's own negligence or failure to take care by reason of: (a) Any failure by OzEcom to comply with the requirements of clauses 6 or 8.1; (b) Any inability by OzEcom to give a Closing Certificate in conformity with clause 8.2; (c) The fact (if it be so) that any allotment or issue of shares would have been void under s 1031 of the Corporations Law? (ii) In so far as the breaches of duty alleged against Hudson Securities are concerned: (a) Would the spread have been achieved if Hudson Securities had exercised the requisite standard of care; (b) Would performance by Hudson Securities of its duty in a lawful manner have resulted in any potential applicant for Offer Shares OzEcom not proceeding with any application for Offer Shares having regard to the matters identified in paragraph 30A(e) of the Hudson Securities' Defence to the Further Amended Summons, and if so is the period from about early September 1999 irrelevant to any allegation of breach of duty against Hudson Securities? D. Damages (i) In consequence of the breaches of duty identified above, is OzEcom entitled to recover from Hudson Investments or Hudson Securities the damages claimed in the Further Amended Summons? (ii) If so, has it failed properly to mitigate its loss and, if so, to what extent? (iii) Should any damages recoverable by OzEcom be reduced by reason of its contributory negligence constituted by: (a) Any failure to comply with clauses 6 and 8.1; (b) Any misleading and deceptive conduct engaged in by it, and if so to what extent? (iv) If Hudson Securities is liable to OzEcom for breach of duty: (a) Did ozEcom convey the Spread Representations pleaded in paragraph 33(d) of Hudson Securities' Defence; (b) If so, did the Spread Representations materially contribute to Hudson Securities having a liability or liabilities which it would not have had absent the Spread Representations; (c) If so, is the liability of Hudson Securities to ozEcom extinguished by equitable set-off, having regard to the equivalent liability of ozEcom to Hudson Securities for misleading or deceptive conduct? 3. Unconscionable conduct (i) Is Hudson Investment's reliance on the requirements clauses 6 and 8.1 conduct that is, in all the circumstances, unconscionable within s 51AC Trade Practices Act , s 43 Fair Trading Act , s 12CB Australian Securities and Investments Commission Act ? (ii) If so, is OzEcom entitled to recover from Hudson Investments the damages claimed in the Further Amended Summons? 4. Misleading and deceptive conduct by Hudson Investments (i) Did Hudson Investments make the representations pleaded at paragraph 6 of the Further Amended Summons (the "Underwriting Representations")? (ii) If so, were the Underwriting Representations misleading and deceptive within s 52 of the Trade Practices Act , s 42 of the Fair Trading Act , s 995 of the Corporations Law and s 12DA of the ASIC Act ? (iii) If so, has OzEcom suffered the damage particularised at paragraph 33 [?35] [sic] of the Further Amended Summons in reliance on those representations? (iv) Did Hudson Investments make the representation pleaded at paragraph 67 of the Further Amended Summons (the "Extension Representation")? (v) If so, was the Extension Representation misleading and deceptive within s 52 of the Trade Practices Act , s 42 of the Fair Trading Act , s 995 of the Corporations Law and s 12DA of the ASIC Act ? (vi) If so, has OzEcom suffered the damage particularised at paragraph 33 [?35] [sic] of the Further Amended Summons in reliance on that representation? 5. OzEcom's claims against Mr Tan (i) To the extent that the Underwriting and Extension representations were made by Mr Tan, did he have the authority to make them? (ii) If not, did Mr Tan warrant that he had the authority to make those representations? (iii) If so, as a consequence of Mr Tan's breach of warranty is OzEcom entitled to recover from Mr Tan the damages claimed in the Further Amended Summons? (iv) Was Mr Tan a person "involved" in making the Underwriting and Extension representations within the meaning of s 75B Trade Practices Act , s 61 Fair Trading Act , s 79 Corporations Law and as that term is used in s 12GF of the ASIC Act ? (v) If so, is OzEcom entitled to recover from Mr Tan the damages claimed in the Further Amended Summons? 6. Misleading and deceptive conduct by OzEcom (i) Did OzEcom make the representations pleaded in paragraph 59A of Hudson Investments' Second Further Amended Defence? (ii) If so, was any of these representations misleading and deceptive within the terms of 52 of the Trade Practices Act , s 42 of the Fair Trading Act , s 995 of the Corporations Law and s 12DA of the ASIC Act ? (iii) Did OzEcom make the representations pleaded in paragraph 59B of Hudson Investments' Second Further Amended Defence (the "IAMA Investment Representations")? (iv) If so, was any of these representations misleading and deceptive within the terms of 52 of the Trade Practices Act , s 42 of the Fair Trading Act , s 995 of the Corporations Law and s 12DA of the ASIC Act ? (v) Did Hudson Investment rely on either the Spread Representations or the IAMA Investment Representations in entering the Underwriting Agreement? (vi) If so, is Hudson Investment entitled to any of the orders sought in its Amended Cross-Claim against OzEcom? 7. Hudson Investment's Third Cross-Claim against Hudson Securities (i) Is Hudson Investment liable to ozEcom and, if so, is such liability of a kind which may be sheeted home to Hudson Securities by Hudson Investment pursuant to the alleged breach of contract by Hudson Securities (in respect of which alleged breach the issues referred to below arise)? (ii) Was it a term, whether express or implied, of any agreement between Hudson Securities and Hudson Investment (whether that agreement was in the form of the unsigned 18 June 1999 letter or the unsigned 18 July 1999 letter or otherwise) that Hudson Securities would use best endeavours to arrange the Spread? (iii) If so, did Hudson Securities breach that term? (iv) If so, did that breach give rise to a liability on the part of Hudson Investment to ozEcom which Hudson Investment would not otherwise have had? 8. Hudson Securities' Second Cross-Claim against Hudson Investment (i) Did the agreement between Hudson Securities and Hudson Investment contain the implied terms pleaded in paragraphs 5(b) and/or 5(c) of the Defence by Hudson Investment to the Second Cross-Claim? (ii) If not, is Hudson Securities entitled to the payment of $100,000 by Hudson Investment pursuant to the agreement (described in 7(ii) above) between them? 9. Hudson Investment's Fourth Cross-Claim against Mr Sutton, Mr McLeod and Mr Tan (i) Assuming the plaintiff's claim is established against the First Defendant and the Cross Claimant, Hudson Investment, by engaging in the conduct as pleaded has Sutton, McLeod or Tan breached one or more of the duties identified in the Cross Claim and said to be owing by Sutton, McLeod or Tan to Hudson Investment? (ii) Whether a breach of any such duties on that basis is causally linked to any damages suffered by Hudson Investment. (iii) If Hudson Investment is found to have any liability to ozEcom, the respective levels of responsibility (if any) of Hudson Investment, Sutton, Tan and McLeod in relation to that loss or damage. 10. Issues of contribution/indemnity generally (i) If ozEcom establishes any loss or damage which is claimable, then what were the respective levels of responsibility (if any) of each of Hudson Investment, Hudson Securities, Mr Tan, Mr McLeod and Mr Sutton in relation to that loss or damage (i.e., an issue as to contribution or indemnity re ozEcom's claims)? (ii) If Hudson Investment is found to have any liability to ozEcom, then what were the respective levels of responsibility (if any) of each of Hudson Investment, Hudson Securities, Mr Tan, Mr McLeod and Mr Sutton in relation to that loss or damage (i.e., an issue as to contribution or indemnity re Hudson Investment's claims)?" Credibility 11 Before I turn to the relevant facts, I shall deal briefly with the question of credibility. 12 In my view, each witness who gave evidence sought to do so truthfully and accurately to the best of her or his ability. In general, I concluded that I could rely on each as a witness of truth whose evidence was in substance acceptable. 13 There were problems with some aspects of the evidence given by Ms Sylvester and Mr Corfe. I shall deal with two. Firstly, each of them gave evidence of a meeting (in person) with Mr McLeod on 17 September 1999. Mr McLeod's passport was tendered. It is clear (and, ultimately, ozEcom accepted) that he was then overseas. Thus, the meeting could not have happened on that day. I think it likely that the meeting occurred a few days earlier. I was a little perplexed as to why Ms Sylvester and Mr Corfe should remain so firm on the date of the meeting even when confronted with the passport. However, on reflection, I see no reason in this not to accept the substance of the rest of their evidence. I conclude that Mr McLeod did use words substantially to the effect of those attributed to him by Ms Sylvester and Mr Corfe, but that he did so in a meeting that occurred approximately two days earlier than the date that they assign. Nothing turns on the precise date; the words in question are not (for example) words that could not have been said two days earlier; and, perhaps more importantly, Mr McLeod was not called to deny that he did at any time use words to the effect of those attributed to him. 14 The second problem relates only to Ms Sylvester: in particular, to her evidence regarding the due diligence process. I deal with this in paras [39] to [43] below. For the reasons that I give there, I do not regard this aspect of her evidence as reflecting adversely on her credibility. 15 Thus, I accept as truthful the substance of the evidence given by Ms Sylvester and Mr Corfe. I am comforted in that by the circumstance that no relevant witness was called to contradict them. 16 I deal with Mr Breadman's evidence in paras [77] to [79] below. As I indicate in the last of those paragraphs, I accept the substance of his evidence. 17 There was no attack on the credibility of Mr Scadden. He gave evidence in a clear and confident way. So far as his evidence goes (and I repeat that he had no personal knowledge of the events in question) I accept it. 18 To the extent that inferences in favour of the plaintiffs are available from the evidence as it stands, I am more confident in drawing those inferences because of the unexplained failure of the defendants to call the relevant witnesses: Messrs Sutton, McLeod and Tan. ozEcom's relationship with IAMA 19 IAMA Limited (IAMA) was described in the prospectus variously as a "listed, rural merchandising organisation" and "a major agribusiness inputs supplier". OzEcom and IAMA signed a "letter of commitment" on 24 May 1999. The object of the relationship thereby documented was, from paragraph 3 of that letter, "to facilitate the implementation and development of the ozEcom Rewards System, so that all IAMA's customers can purchase their agricultural requirements from IAMA through the ozEcom Rewards System." To that end, according to paragraph 15, ozEcom and IAMA agreed to "use their best endeavours to develop a plan for the implementation of the ozEcom Rewards System as discussed in this letter." 20 It is plain both from the prospectus and otherwise that ozEcom regarded its relationship with IAMA as the key to its success. This is apparent from, among other things: (1) The chairman's letter to investors, in which it is stated: "My board is in the fortunate position of being able to report that we have achieved a key milestone in the deployment of the Program. This milestone was the signing of a Letter of Commitment with our first "billion dollar turnover" suppliers - the listed, rural merchandising organisation, IAMA." (2) The "Overview": "ozEcom's business plan anticipates that a significant portion of IAMA's turnover will be transacted through the Rewards Program by 30 June 2000." (3) In the discussion of the ozEcom Rewards Program in section 2 of the prospectus, IAMA was referred to as an (or the) "INITIAL PARTICIPANT" and reference was made to the letter of commitment. That may be contrasted with the following heading, which referred to "POTENTIAL PARTICIPANTS". (4) In the same section of the prospectus, the following was said: "The Company plans to launch its Program in conjunction with the initial participant, IAMA, in October 1999. The company intends to target the top 1000 of IAMA's Buyer community in terms of dollar turnover. … Once the IAMA project's mobilisation stage has been completed, the Company intends to develop other specific programs for the potential participants." (5) In section 4 of the prospectus, dealing with financial information, the following was stated under the heading "SPECIFIC ASSUMPTIONS": "(b) SPECIFIC ASSUMPTIONS Launch Date The Group will commence its Program launch, processing live transactions on the ozEcom Rewards Program in conjunction with its initial supplier participant, IAMA from October 1999. Other potential rollout participants are assumed to follow: … Basis of Revenue Model The service fee revenue model is based on the IAMA relationship and is anticipated to be followed by the other potential rollout participants." (6) The importance of IAMA was further confirmed in the same section as follows: "ozEcom's initial participant is IAMA. OzEcom will target the top 1,000 customers of IAMA. These customers account for a significant portion of IAMA's turnover." 21 In the discussion of material contracts, the following was said: " IAMA (LETTER OF COMMITMENT) ozEcom Limited and IAMA Limited A.C.N. 008 724 052 exchanged a Letter of Commitment on the 24th May 1999. This letter proposes a "close working relationship between IAMA and ozEcom to facilitate the implementation and development of the ozEcom Rewards System, so that all IAMA's customers can purchase their agricultural requirements from IAMA through the ozEcom Rewards System"." 22 There was no binding agreement in place between ozEcom and IAMA whereby IAMA undertook to avail itself of ozEcom's services, and whereby ozEcom would derive revenue. Indeed, it would appear that the letter of commitment was revised (or a further letter of commitment was prepared) following a meeting on 27 September 1999. There is no evidence that the revised letter was executed; but an e-mail pursuant to which it was sent asserts that it was prepared following, and in accordance with discussions at, the meeting to which I have referred. That assertion has not been rebutted. The revised letter says among other things that what is to be undertaken is "the management of the process of review of the Program in order to establish the feasibility of its application for IAMA in a cost effective manner and to ensure that, in the opinion of IAMA's board of directors, it has an acceptable impact on the processes, procedure and culture of IAMA's business." 23 The second letter recognised that the outcomes would be "to either continue the relationship between the parties by establishing a further contractual relationship or terminate the relationship between the parties." The underwriting agreement 24 Ms Sylvester and Mr Corfe gave evidence of the events leading up to and following the making of the underwriting agreement. For the reasons that I have indicated, I accept the substance of their evidence. What follows on those topics is drawn in substance from their accounts. 25 Ms Sylvester and Mr Cleland met Mr Sutton at ozEcom's premises in early May 1999. Mr Cleland described ozEcom and its business to Mr Sutton and showed him a list of prospective investors. Mr Cleland said that ozEcom sought to raise $10 million, and asked whether "Hudsons" would act as underwriter and lead manager. 26 Mr Sutton replied, according to Ms Sylvester, that "a $10 million float is not difficult for us to do". He said that: o "Hudsons" had the necessary infrastructure and could meet preconditions for listing; o "We should be able to meet the shareholder spread of 500 investors from our own client bases"; o Hudson Investment would be the underwriter because it had the asset backing, and "will be more than able to meet any shortfall if we can't raise sufficient capital from the public and our own client bases"; o Hudson Securities would be the broker because it held the necessary licence; o he would have to speak to Mr Tan; and o "it's Vincent's decision in the end". 27 Ms Sylvester said that she and Mr Cleland had lunch with Messrs Sutton and Tan "a few days after the meeting" to which I have just referred. Mr Cleland provided "an overview" of ozEcom's Rewards Program. He said that ozEcom had a list of prospective investors, including some from London, which he thought would cover the $10 million required. Mr Tan replied that he did not need details, but that he wanted the list with telephone numbers so he could check it. He said "once I am comfortable we draw up underwriting agreement. Me [sic] fee is 5 per cent plus options." 28 Shortly thereafter, Mr Cleland sent a letter dated 21 May 1997 to Mr Sutton as chairman of Hudson Investment. The letter confirmed "our discussion today regarding the underwriting of an initial public offering of $10 million for ozEcom Limited". Mr Cleland confirmed that: o OzEcom would provide its list of potential subscribers, and Hudson could take steps to substantiate what was said in the list. o The fee would be 5%, or $500,000, together with 1.5 million options. o "A substantiated heads of agreement from a major client will be provided before the underwriting agreement is signed." o The parties should work towards signing an underwriting agreement by 26 May 1999. 29 The list of prospective investors was sent to Mr Sutton, to pass on to Mr Tan, the following day (it is not clear whether this means the day following the lunch or the day following 21 May 1999). The list showed some 551 prospective applicants, seeking a possible total in excess of 25 million shares (which, at the issue price of 50 cents, would oversubscribe the offer). The letter was signed by Mr Sutton on behalf of Hudson Securities (not Hudson Investment): presumably, to indicate agreement with its contents. 30 The underwriting agreement was indeed made on 26 May 1999. There is nothing in it that is particularly surprising. It is however necessary to set out a number of its provisions: " … 2. AGREEMENT TO UNDERWRITE 2.1 Agreement to Underwrite and Manage The Underwriter will underwrite the subscription of all the Underwritten Shares at the Offer Price on the terms of this Agreement and in compliance with the Corporations Law subject to: (a) the registration by the ASIC of the Prospectus prior to 5.00 pm on the Registration Date in a form in relation to which the Underwriter has given its consent to be name [sic]; and (b) the issue of the Prospectus referred to in clause 2.1(a) on or before the Despatch Date. If any of these conditions precedent are not satisfied by the relevant date, the Underwriter may terminate this Agreement by notice in writing to the Company. 3. TIMETABLE AND LISTING 3.1 Timetable Subject to clause [sic] 3.2 to 3.4, the Company shall ensure that the Offers are made in compliance with the Timetable. 3.2 Company Variations to the Timetable The Company may vary any date specified in the Timetable by up to three (3) Business Days from the date specified in the Timetable without the consent of the Underwriter, provided that at least two (2) Business Days' notice is given to the Underwriter [of] the proposed variation. 3.3 Underwriter Variations to the Timetable The Underwriter may vary the Closing Date by extending that date without the consent of the Company provided that: (a) at least two (2) Business Days' notice is given to the Company; and (b) the Closing Date is not extended for a period in excess of fourteen (14) days. 3.4 Other Variations to the Timetable Other than as provided in clauses 3.2 and 3.3, any variation of the Timetable requires the consent of both the Company and the Underwriter. 3.5 Spread The Underwriter must use its best endeavours to procure the minimum number of shareholder spread as may be required by the ASX Listing Rules current as at the expected date of the Company listing on the ASX. 3.6 Quotation by ASX The Company must use its best endeavours to procure that the official quotation is granted for the Offer Shares by the ASX as soon as practicable and in accordance with s.1031 of the Corporations Law and the Prospectus. 4. THE OFFERS 4.1 Compliance with the Agreement and the Prospectus The Company shall make the Offers and issue the Offer Shares in accordance with and subject to the terms of this Agreement and the Prospectus. … 6. SHORTFALL NOTICE The Company shall, at or before 10.00 am on the day which is one (1) Business Day after the Closing Date, provide the Underwriter with a notice in writing of the number of Offer Shares for which Valid Applications have been received. 7. OBLIGATIONS OF THE UNDERWRITER 7.1 Underwriter Applications (a) Subject to clauses 2.1, 6 and 8 the Underwriter will lodge or cause to be lodged with the Company at or before the Shortfall Payment Date, Valid Applications for all of the Shortfall Shares. The Price for the Shortfall Shares is fifty (.50c) cents each. (b) The Underwriter has the exclusive right to nominate subscribers for all of the Shortfall Shares. 7.2 Allotment of Shortfall Shares The Company shall, on or before the Allotment Date, allot the Shortfall Shares in accordance with Valid Applications lodged or caused to be lodged by the Underwriter with the Company under clause 7.1. 7.3 Sub-Underwriters The Underwriter may at any time appoint sub-underwriters of its choice but will take into consideration such sub-underwriters as may be nominated by the Company to underwrite up to the total number of Offer Shares and may nominate the allottees of all or any of the Shortfall Shares. 8. CLOSING CERTIFICATE 8.1 Receipt of a Closing Certificate The Underwriter's obligation to subscribe for Shortfall Shares under this Agreement is conditional on the receipt by the Underwriter of a certificate, which complies with clause 8.2, approved by all of the directors of the Company by a unanimous resolution and signed by at least two (2) directors of the Company. This certificate shall be delivered by the Company to the Underwriter at the time of delivery of the Shortfall Notice and shall be accompanied by a certified copy of the unanimous resolution. 8.2 Content of Closing Certificate The Closing Certificate will certify to the Underwriter that, as at the date of the Certificate and as at the Allotment Date, to the best of the knowledge and information of all of the directors of the Company after having made all reasonable enquiries: … (c) none of the events set out in clause 13.1 has occurred; … (e) the warranties set out in clause 9 are true and correct. … 9. WARRANTIES BY THE COMPANY 9.1 The Company warrants to the Underwriter that: … (d) on and from the Despatch Date, the Prospectus will not contain any material statements that are false or misleading including, without limitation, misleading representations within the meaning of s.765 of the Corporations Law and the Prospectus will not have any material omissions and the issue and distribution of the Prospectus will not involve any conduct that is misleading or deceptive; … 9.2 Continuance of Warranties The Company warrants that each of the warranties set out in clause 9.1 is as at the date of this Agreement and will at all times up to and including Completion be true and correct in every respect. … 13. TERMINATION OF UNDERWRITER'S OBLIGATIONS 13.1 The Underwriter may terminate this Agreement without cost or liability to the Underwriter by written notice to the Company if any of the following happen [sic] between the signing of this Agreement and the Offers being fully subscribed. … (c) the Underwriter becomes aware that there is a material statement in the Prospectus that is false or misleading or that there is a material omission from the Prospectus; … (e) the Company or its officers materially contravenes any of: … (ii) the listing Rules; … and the contravention is materially adverse to the Offers in the Underwriter's reasonable opinion; … (r) an event occurs in relation to the Prospectus that is a significant change or a significant new matter within the meaning of s.1024(1) of the Corporations Law in the Underwriter's reasonable opinion and the Company does not lodge a Supplementary Prospectus containing particulars of the change or matter within a reasonable time; … 13.6 Quotation of Shares by the ASX Notwithstanding any other provision of this Agreement, the Underwriter shall have no obligation to subscribe for the Shortfall Shares under clause 7 if: (a) any allotment or issue of Offered Shares would be void including, without limitation, by reason of s.1031(1) of the Corporations Law; or (b) any undertaking give [sic] by the directors of the Company under s.1031(7) of the Corporations Law is contravened. … 16. NOTICES 16.1 Form of Notice A notice, approval, consent or other communication in connection with this Agreement: (a) shall be in writing; … 17. MISCELLANEOUS … 17.2 Waiver and Variation (a) A provision of or a right created under this Agreement may not be: (i) waived except in writing signed by the Party granting the waiver; or (ii) varied except in writing signed by the Parties. … 17.10 Amendment This Agreement may only be amended in writing signed by the Parties. … " 31 The "Timetable" in clause 1.1 of the underwriting agreement was defined to mean "the Timetable set out in the Schedule as it may be varied under clause 3". That Timetable included the following: "Event Date Registration Date – Last date for registration of Prospectus by ASIC 22 June 1999 Despatch Date – Last date for despatch of Prospectus to potential investors 29 June 1999 Listing Approval Date – Last date for ASX to give listing approval Allotment Date Closing Date – Date of closing of Offers Registration plus 30 days … Allotment Date – Last date for allotment of Offer Shares Closing date plus 14 days … " 32 Otherwise, I think, defined terms in the agreement (indicated by the use of initial capital letters) are generally self-explanatory. The engagement of Hudson Securities 33 It is clear enough that ozEcom and Hudson Investment accepted that Hudson Securities would act as the broker to the IPO. On 21 June 1999, Mr Stevens (apparently acting in his capacity as ozEcom's legal representative) wrote to Mr Sutton. He asked "if you would forward to us consenting and confirming [sic] Hudson Securities Pty Limited as being engaged by ozEcom Limited [sic] as the Lead Brokers to the issue." The evidence does not show that Mr Stevens received a reply to that request. 34 The evidence included at least two drafts (in the sense that the documents proved were not on letterhead and were not signed) of a letter of engagement from Hudson Investment to Hudson Securities. Each draft made provision for signature by Mr McLeod on behalf of Hudson Investment and Mr Sutton on behalf of Hudson Securities. One bore the date 5 July 1999. The other bore the date 18 July 1999. 35 The draft dated 18 July 1999 was proved through the evidence of Mr Scadden to have been created on 6 August 1999. It reads as follows (omitting formal parts): "We wish to confirm that Hudson Securities has been mandated to act as the sponsoring broker for the proposed ozEcom Limited IPO. The second interim fee payable to Hudson Securities Pty Limited will be $100,000, for which Hudson Securities will, on a best endeavours basis: (i) undertake and manage the application of listing of ozEcom on the ASX; and (ii) arrange shareholder spread, being at least 500 shareholders holding $2,000 or more of shares at listing. If agreed please sign and confirm in the appropriate position as shown below." 36 The draft dated 5 July 1999 was proved through the evidence of Mr Scadden to have been created on 12 October 1999. It reads as follows (again omitting formal parts): "We confirm our letter dated the 8th July 1999 whereby Hudson Investment Group Limited will offer Hudson Securities 50% ($250,000) of the negotiated fee for the proposed Initial Public Offering of ozEcom Limited. As agreed, Hudson Securities will undertake all IPO coordination, marketing, distribution and customer presentations. The fee earned for the services undertaken by Hudson Securities will in no way commit or imply an underwriting obligation by Hudson Securities under the Underwriting Agreement entered into between Hudson Investment Group Limited and ozEcom Limited dated 26 May 1999. We look forward to working with you on this basis and for the successful listing of ozEcom on the ASX. I await your confirmation by the attached letter." 37 No letter of 8 July 1999 from Hudson Investment to Hudson Securities was proved; nor was there proved any letter (of whatever date) whereby Hudson Investment offered Hudson Securities 50 percent of the negotiated fee for the IPO in exchange for the services set out in the draft dated 5 July 1999. 38 There is no doubt that Hudson Securities was engaged, on some basis, as lead broker. There was evidence, to which it will be necessary to return in considering the "best endeavours" aspect of ozEcom's case, of activities undertaken by Hudson Securities, presumably in its capacity as lead broker to the IPO. The DDC 39 Preparation for the due diligence process began in about March 1999. On 19 March 1999, Clayton Utz (who were retained by ozEcom in relation to the IPO) wrote to Mr Cleland enclosing "a barely customised version of our pro forma Due Diligence Planning Memorandum". Thereafter, Clayton Utz undertook work on various tasks connected with the due diligence process. That work appears to have been undertaken at the same time as Barker Gosling was undertaking work in relation to the preparation of the prospectus. 40 In her affidavit sworn on 27 September 2005, Ms Sylvester said (para 17) that the DDC "met at least once a week, if not more, to review the current draft of the prospectus and make amendments to it". The meetings commenced in early April 1999 and ceased in late September 1999. 41 The evidence disclosed only three documented meetings of the DDC. They were described as meeting #1, meeting #2 and meeting #3. They took place (according to the minutes) on 1, 4 and 6 June 1999 respectively. The minutes of those meetings show that Mr Sutton (among others) attended each of them. The minutes of the third meeting indicate that there was to be another the following day. The "realistic timetable for completion" given in the minutes of the third meeting referred to activities occurring after 7 June, and up until 15 June (this date appearing against the item "DDC Final Report") and contemplated lodgement of the prospectus on 17 June, with registration perhaps on 22 June. 42 It is clear enough that the first formal meeting of the DDC occurred on 1 June 1999; the form and contents of the minutes of that meeting confirm this. It is equally clear that due diligence work had been under way for some time before 1 June. I suspect that when Ms Sylvester referred to meetings as commencing in early April 1999, she was referring to informal due diligence activities and not to formal meetings of the DDC as it was finally constituted (the membership of that committee was not finalised until some time in May 1999). 43 However, I think, it is more than likely that there were also meetings of the DDC after 6 June 1999. There were certainly a number of activities to be undertaken. I do not think that those activities would have been completed, or that the DDC would have produced its "Final Report", without further meetings. 44 I do not regard this aspect of Ms Sylvester's evidence, either in isolation or considered in the context of the totality of her evidence (including what I think to be her erroneous evidence as to a meeting with Mr McLeod on 17 September 1999), as having an adverse impact on her credibility or on the general acceptability of her evidence. 45 Ms Sylvester said (para 19 of her affidavit sworn on 27 September 2005) that at "almost every" meeting of the DDC, Mr Sutton would be asked words to the effect "have you got the spread organised?" and that he would reply with words to the effect of "it is going well"; and that he did not indicate that there was any problem. She said further that, on one occasion, Mr Sutton said words to the effect that "we have a group of individuals on our books to place shares with to achieve the spread if we need to. There is no need to worry. It's something we do all the time." 46 Further, Ms Sylvester said (para 20 of the same affidavit) that she and Mr Cleland reported to the DDC on presentations that Mr Cleland had made to potential investors. At one meeting of the DDC, she asked Mr Sutton whether he had any suggestions of interested investors and Mr Sutton replied in words to the effect that "no, you have covered a lot of investors and everything seems to be under control." 47 Whilst preparation of the prospectus was in progress, the ASX changed its "spread" requirements from a minimum of 500 investors to a minimum of 400 investors (in each case with each investor taking at least $2,000 worth of securities). Ms Sylvester discussed with Mr Sutton whether the change would apply to the ozEcom IPO. She said (para 21 of the same affidavit) that at one meeting of the DDC, Mr Sutton said that he had confirmed with the ASX that the minimum subscription would be 400 rather than 500; that he was then asked whether he could achieve 400; and that he replied "yes". Extensions of time; registration 48 On 23 June 1999, Hudson Investment wrote to ozEcom confirming that it agreed to extend the Registration Date to 14 July 1999 (from 22 June 1999) and the Despatch Date to 20 July 1999 (from 29 June 1999). 49 The evidence includes unsigned copies of what purports to be a letter dated 22 July 1999 prepared for signature by Messrs Sutton and McLeod and addressed to Mr Cleland. If a letter in those terms were sent, it would have confirmed that Hudson Investment agreed to extend the Registration Date to 2 August 1999 and the Despatch Date to 6 August 1999. The evidence does not, I think, include any signed copy of the letter on Hudson Investment's letterhead. The copies to which I have referred are – at least in part – on ozEcom's stationery. They bear a footer "cc 90722-Dft to Hudsons". 50 The prospectus was registered on 5 August 1999. On that day, Hudson Investment wrote to ozEcom confirming that it agreed to extend the Registration Date "to on or before 13 August 1999" and the Despatch Date "to on or before 18 August 1999". Each letter was signed by Mr Sutton as chairman and Mr McLeod as CEO. The "Closing Date" and closing the offer 51 The Timetable in the Schedule to the underwriting agreement refers, among other things, to a "Registration Date" and a "Closing Date". The Registration Date (an event for which a calendar date is specified) is the "Last Day for registration of Prospectus by ASIC". The Closing Date is not fixed by reference to a calendar date. It is "Registration plus 30 days". Clearly, in this context, "Registration" means the date on which "registration of Prospectus by ASIC" is achieved. So long as that event occurred before the Registration Date (the last day specified, as from time to time extended), the condition precedent set out in clause 2.1(a) would be met and the event of registration would be effective to start the clock ticking for the calculation of the Closing Date. 52 The Closing Date is not specified as something to be calculated by reference to the Registration Date (as that might be fixed, or varied, from time to time). I do not think that it is possible, as a matter of construction, to read the Timetable in this way. The concept of a "Registration Date", as defined, has its own work to do: defining (or confining) the condition precedent set out in clause 2.1(a). There does not seem to be any reason to extend that concept to something quite separate: namely, calculation of the Closing Date (which only becomes a live issue if clause 2.1(a), among other things, has been satisfied). 53 For the reasons that I have given, it follows from clause 3.1 of and the schedule to the underwriting agreement that the Closing Date of the offer was a date 30 days after 5 August 1999. However, in his letter of 27 September 1999 (see para [90] below), Mr McLeod appears to have treated the calculation of the Closing Date as running from 13 August 1999 (the last date for registration) rather than from 5 August 1999 (the date on which registration was achieved). On the correct view (that time ran from 5 August 1999), the Closing Date would have been 4 September 1999. On the other (and as a matter of interpretation of the agreement incorrect) view, the Closing Date would have been 12 September 1999. At this point by way of an aside, I note that (Hudson Securities raised as an issue whether the letters to which I have referred in paras [48] to [50] above were intended to be letters extending the Closing Date, or that had that effect. I deal with that issue in paras [122] to [125] below and conclude that the letters should be treated as having had that effect. 54 OzEcom submitted that, as 12 September 1999 was a Sunday, the Closing Date would have been the next day, 13 September 1999. The other parties, although they disputed that the Closing Date was (or would have been) 12 September, appeared to accept that if it did fall on that date, it should be taken to have been the next day. Presumably, if 4 September 1999 (a Saturday) were the nominal Closing Date, the same logic would take it on to Monday 6 September 1999. 55 The prospectus also contains references to the closing of the offer. Under the heading "IMPORTANT DATES" on page 3, information is given including the following: "Offer Opens 9 August 1999 Offer Closes on or Before 30 August 1999 … ". 56 In section 1 of the prospectus, dealing with "THE OFFER" and under the heading "TIMETABLE", the following appears: "TIMETABLE Applications for Shares may be lodged at any time after the issue of this Prospectus. The Offer will open at 9:00 am (AEST) on 9 August 1999 and will remain open until 5:00 pm (AEST) on 30 August 1999 subject to the right of the Directors to close the Public Offer at an earlier or later date with or without prior notice. Applicants are encouraged to submit their Public Offer Application Forms and accompanying Application Monies as early as possible." 57 Thus, as to the various ways in which the concept of Closing Date or some analogous verbiage is employed in the underwriting agreement and the prospectus, there are the following possibilities: (1) To the extent that the reference is clearly to the underwriting agreement and the Timetable in it: (a) OzEcom could vary the Closing Date without the consent of Hudson Investment by employing the mechanism of clause 3.2; (b) There is no reason why ozEcom could not have employed that mechanism successively, by giving successive notices, so as to achieve an overall extension in excess of three Business Days comprised of a number of individual extensions each of three Business Days; (c) Hudson Investment could vary the Closing Date without the consent of ozEcom in accordance with clause 3.3; (d) At least arguably (clause 3.3(b)), Hudson Investment could not extend the Closing Date under clause 3.3 by more than 14 days in all; but (e) The parties could extend the Closing Date by consent pursuant to clause 3.4; at least prima facie, any such variation would need to be in writing signed by the parties (clause 17.2(a)(ii)). (2) As to the closing of the public offer: (a) The directors of ozEcom could close it early, or extend the date of the offer, with or without prior notice; (b) That extension did not require the consent of Hudson Investment; but (c) As a matter of construction of the underwriting agreement, any such extension effected by the directors would not affect whatever was the Closing Date last fixed under the agreement unless the mechanism of clause 3.2 had been employed or Hudson Investment had consented. Events up to 27 September 1999 58 In the narrative sections that follow, I draw once more substantially on the evidence of Ms Sylvester and Mr Corfe. I accept the substance of their accounts of the relevant events; and I am comforted in doing so because none of the defendants or cross-defendants has taken the stand to controvert their accounts. 59 Ms Sylvester said that from mid August 1999, she and others from ozEcom were seeking subscriptions for the IPO. In particular, they were conducting discussions with Messrs Rodney Adler and René Rivkin, and seeking to negotiate a facility with the Commonwealth Bank of Australia to provide funds to enable investors to subscribe for shares in ozEcom. 60 Ms Sylvester gave hearsay evidence of a conversation in mid-August 1999 with Mr Cleland that involved, as well, Messrs Stevens, Corfe and Smyth-Kirk. Mr Cleland reported on discussions that, he said, he had had with Mr Sutton. According to Ms Sylvester, Mr Cleland said that he had agreed with Mr Sutton "that we will not formally extend the offer. We're just going to see how we go so that if we get Adler or Rivkin tomorrow then we can close it off. We're just going to keep it open on an ad hoc basis until we can reduce the shortfall amount." On Ms Sylvester's evidence, those discussions occurred before the Closing Date of 4 (or 6) September 1999. 61 Mr Cleland was not called to give evidence of those discussions. His absence from the witness box was not explained. No application was made pursuant to s 64 (or, for that matter, s 63) of the Evidence Act 1995. Ms Sylvester's evidence of what Mr Cleland had said was admitted on a limited basis, but not as evidence of the fact or content of his alleged discussions with Mr Sutton. 62 On 9 September 1999, Mr Corfe had a discussion with Messrs Tan and Sutton. Mr Sutton confirmed that the required shareholder spread was now 400 and not 500, and that "we will be able to use the names from our client list". 63 Thereafter, Mr Corfe said, he had a telephone discussion with Mr Sutton in which Mr Sutton referred to the shareholder spread requirement and said "we should issue applications for the required names as soon as possible. I will issue instructions to Suzzanne [sic: Mr Sutton's personal assistant] on the way to the airport." 64 Mr Corfe made a file note of his discussions with Mr Sutton. Although Mr Corfe was cross-examined at some length on his evidence, I accept the substance of it. I note that on a number of occasions Mr Corfe's evidence was supported by file notes. The veracity of those file notes was not impugned; specifically, it was not put to Mr Corfe that they had been fabricated or that they were anything other than an honest attempt to record accurately the events to which they referred. 65 By mid September 1998, ozEcom had attracted about $6 million in subscriptions. However, Ms Sylvester said (para 31 of her affidavit sworn 27 September 2005) "the market for "dot.com" companies … was starting to experience a downturn" and subscribers started to request withdrawals of their applications. 66 Ms Sylvester said (para 32 of the same affidavit) that on 15 September 1999 she and Mr Cleland had a discussion, by speaker phone, with Mr Sutton. Mr Cleland asked what was the ability of Hudson Investment to underwrite $2 million if required. Mr Sutton replied "that will be too much. We wouldn't want to meet that." He said, in answer to a question from Mr Cleland, that "a shortfall of about $1 million will be more acceptable. We could close off for a $1 million shortfall but I will have to talk to Vincent." The conversation continued with discussions of attempts being made by ozEcom "to close the amount of the shortfall for you". In answer to a request for further suggestions, Mr Sutton said, in effect, that he had none. 67 Ms Sylvester said (para 33 of the same affidavit) that she and Mr Cleland met Mr Sutton the following day, 16 September 1999. Mr Cleland said that "there looks like there will be a shortfall of more than $1 million". Mr Sutton said "Vincent will not want that level of shortfall. It will be better if we worked towards reducing the shortfall before closing the issue." He added that he was going to the United Kingdom the following day and that Mr McLeod would be taking over from him. 68 Ms Sylvester said (para 34 of the same affidavit) that she and Mr Cleland met Messrs Tan, McLeod and Sutton later the same day, at about 6 o'clock. She or Mr Cleland said that the shortfall was "currently at about $2 million". Mr McLeod said "The ANZ will not fund Hudson Securities for a $2 million shortfall." Mr Tan said that ozEcom would have to keep working on its investors, because "I do not want the issue closed if there is going to be that size shortfall." 69 The following day (17 September 1999), Ms Sylvester said (para 35 of the same affidavit), she and Mr Corfe met Messrs Tan and McLeod. Either she or Mr Corfe said that the board of ozEcom had decided "not to issue a formal notice of closure for the time being." There were then discussions of the ways in which the shortfall might be narrowed, including by Hudson Investment's lending money to ozEcom to enable it to pay out pre-float creditors, who would invest the money so repaid in applications for shares. Mr McLeod requested that this be put in writing. There was then discussion of other matters to be taken, and of the position between ozEcom and Mr Adler. 70 It is plain that this meeting could not have occurred on 17 September 1999, because Mr McLeod was overseas on that day. I think that both Ms Sylvester and Mr Corfe must have mistaken the date of the meeting. Having said that, I accept that there was a discussion with Mr McLeod shortly before 17 September 1999 in which words to the effect of those attributed to him were said. 71 OzEcom sent three letters to Hudson Investment after that meeting. The first letter was addressed to Mr Tan. It started with the words: "Further to our meeting this morning I wish to confirm our understanding of the applications received to date and the actions required to effectively close the Issue today." 72 The letter then discussed the ways in which the shortfall could be reduced. 73 Mr Corfe said that, after he sent this letter, Mr Tan rang him, said that he did not want any letters addressed to him, and that the letter should be addressed to Mr McLeod and re-sent. That was done. The version directed to Mr McLeod started with the words: "Further to our various discussions over the last few days with yourself and Messrs Sutton and Tan … ". 74 Again, the letter dealt with the steps being taken to close the shortfall. It said in item 3: "3. We are, as discussed with Mr Tan this morning, in the process of concluding a transaction with Adler Corporation who we understand will provide an application (or applications if appropriate) amounting to 8 million shares ($4 million). This would bring the cumulative total to $9.5 million. Mr Adler has proposed, and Mr Tan agreed in principle, to a Put Option for the shares to Hudson Investment Group Limited, which in turn will request a similar Option to companies associated with Mr Cleland. Further details of this arrangement will follow shortly." 75 According to Mr Corfe, Mr McLeod rang Mr Corfe and said that the letter was still not suitable, and that paragraph 3 should be changed "by taking out the reference to Vincent". (I accept that Mr McLeod was overseas on 17 September 1999; but in an age of almost instantaneous communication, that of itself is no reason for rejecting this aspect of Mr Corfe's evidence.) The requested change was made. The third version of the letter commenced as did the previous ones. However, item 3 stated: "3. We are in the process of concluding a transaction with Adler Corporation who we understand will provide an application (or applications if appropriate) amounting to 3 million shares ($4 million). This would bring the cumulative total to $9.5 million. Mr Adler has proposed, and we seek your agreement in principle, to a Put Option for the shares to Hudson Investment Group Limited, which in turn will request a similar Option to companies associated with Mr Cleland. Further details of this arrangement will follow shortly." 76 As I have said, I accept Mr Corfe as a witness of truth on whose evidence I can rely. I therefore accept: (1) That the letter as drafted (on the first and second occasions) did fairly summarise the discussions that had been held; and (2) The letter was changed (twice) at the express request of firstly Mr Tan and secondly Mr McLeod, as Mr Corfe said had happened. 77 Mr Breadman gave evidence that he and Mr Cleland met Mr Adler on 24 September 1999, to solicit Mr Adler's investment in ozEcom. According to Mr Breadman, Mr Adler agreed to invest $1 million "provided the company is publicly floated". Mr Breadman said that Mr Adler then telephoned Mr Tan and had a discussion by speaker phone. Mr Adler said to Mr Tan that he would be prepared to invest $1 million "but I need your assurance that Hudson Investment will fulfil the underwriting". Mr Tan sought to persuade Mr Adler to commit $2 million. Mr Adler declined, and asked "will Hudsons be good for the shortfall and stand by the underwriting commitment?". Mr Tan said "yes", and Mr Adler said that on that basis he would proceed. 78 Mr Breadman made a file note of that conversation. Relevantly, it referred to Mr Tan's attempts to talk Mr Adler up from $1 million to $2 million and said: "Rodney again reiterated his decision and said words to the effect that Hudsons should be good for the underwriting shortfall if any. After further discussion Tan agreed and left me with the distinct impression that the underwriting agreement was still on foot." 79 Mr Breadman was challenged vigorously in cross-examination on this evidence. The challenge did not extend to a suggestion that the file note was fabricated, or that it was anything other than an honest attempt to record the events to which it referred. Mr Breadman adhered to the substance of his evidence, although his formulation of the conversation varied slightly both from what he had said in his affidavit and what he had said in his file note. I do not regard this as surprising, having regard to both the passage of time and the relatively general wording of the file note. By way of example, Mr Breadman said (T70.18-.25): "I can remember the conversation with Mr Tan in Rodney's office and I remember him saying yes, because there was a lot of discussion and the phone – and the conversation finished very quickly. It was, "will you underwrite it?". "Yes." "I'm in." and then when I got back to the office, I wrote the file note and I was left with the distinct impression that the underwriting was on foot." 80 I accept the substance of Mr Breadman's evidence. For the reasons that I have given, I do not regard the variations between his accounts of it as in any way detracting from its overall acceptability. I therefore conclude that Mr Adler did have a discussion with Mr Tan on 24 September 1999 in which, among other things, Mr Adler said that he would invest $1 million if Hudson Investment stood by its commitment to underwrite, that Mr Tan said Hudson Investment would, and that Mr Adler thereupon confirmed his commitment. Although it is not essential to my acceptance of the substance of Mr Breadman's evidence, I am comforted in my acceptance of it by the fact that Mr Tan, who as I have said was in Court for much of the hearing, chose not to rebut it. 81 In the meantime, Ms Sylvester had continued her discussions with Mr McLeod in relation to the advance of a sum of money to ozEcom, to enable ozEcom to repay certain creditors and thereby to enable those creditors to subscribe for shares. On 21 September 2005, and as requested by Mr McLeod, she sent a draft loan agreement to him. Mr McLeod said that he would ask his legal department to look at it. 82 The evidence included a minute of a meeting of ozEcom's board at which the following resolutions were passed: "1. Resolved that the Public Offer of shares in ozEcom Limited dated 23 July 1999 be closed at 5pm on Friday, 24 September 1999. 2. That ozEcom having completed all necessary steps as provided for in the Underwriting Agreement proceed with the issuing of a Closing Certificate. 3. That Robert Cleland in his capacity as Executive Chairman is empowered to issue such notices without further reference to the Board." 83 That minute was signed as a true record by Mr Cleland (as chairman) and Ms Sylvester (as director). On its face, that minute relates to a meeting that occurred on or prior to 24 September 1999. 84 In para 10 of her affidavit sworn 19 December 2006, Ms Sylvester suggested that the minute to which I have referred was a minute of the meeting that, she said, took place on the morning of 28 September 1999. However, I think, she was mistaken in this; indeed, she accepted in cross-examination that the relevant resolution was one that she thought was "passed on the 24th … it would appear to be on the 24th." 85 On 27 September 1999, Mr Cleland sent five letters to Mr McLeod. The first of those letters reads as follows (omitting formal parts): "We note our earlier discussion concerning Hudsons providing sufficient names for it to meet the ASX's determination on 'spread', and enclose the copy of the amended ruling. We note that this request was initiated by your Mr David Sutton." 86 The second letter (I should perhaps note that in attributing an order to them, I am simply following their order in the court book) reads as follows (again omitting formal parts): "As noted in our earlier correspondence we are using our best endeavours to secure an application for the additional 2,000,000 shares, to enable a smooth and immediate closing of the Offer. We note that as time is of the essence, the applicant may need to take up a Put Option to Hudsons at 180-220 days for the said shares as previously agreed. While we will use our best endeavours the exercise price will be between 0.53c and 0.55c. We will keep you advised of progress." 87 The third reads (again omitting formal parts): "We note our earlier discussion concerning Hudsons providing sufficient names for it to meet the ASX's determination on 'spread', and enclose the copy of the amended ruling. We note that this request was initiated by your Mr David Sutton." 88 The fourth reads (so far as is relevant, and again omitting formal parts): "Please find attached a standard letter confirming that the ozEcom Limited Share Offer will close tonight at 5pm. This in effect gives ozEcom Limited and Hudson Investment Group Limited until the close of business on Wednesday, 29 September 1999 to fully satisfy the Offer and avoid the necessity to declare a shortfall. We confirm the advice of yourself, Mr David Sutton and Mr Vincent Tan, in his capacity as a controlling shareholder to Mr Rodney Adler, Mr Ross Breadman and myself that Hudsons can and will standby [sic] its obligations as the Underwriter, to enable an immediate closing before there is a further erosion of the applicants. We note that Mr Rodney Adler has agreed to take up 2,000,000 shares on the basis of this warranty. We note Mr Tan's advise [sic] to Mr Adler, and our own conversation at the close of business on Friday, that it would have been 'more convenient' if Mr Adler had elected to take up 4,000,000 shares. In this regard we advise that we will continue to use our own best endeavours to secure applications for additional shares before the close of business on Wednesday. … Finally we confirm your advice that you will ensure that the Offer closes "fully subscribed" which will lay the best foundation for the future trading of the script. … " 89 The fifth was enclosed with the fourth. Relevantly, it reads as follows: " … ozEcom confirms that the closing date nominated in the Prospectus issued on 23 July 1999 has been extended on an ad hoc basis by mutual consent. We now confirm that by agreement between Hudson Investment Group Limited and ozEcom Limited, the Offer will close at 5pm on Monday, 27 September 1999. Preparations for the normal administration of the closing of the Offer and the admission of the Company to the Official List of the ASX as provided for in the Underwriting Agreement will now commence. May we take this opportunity of expressing our sincere appreciation and respect for your assistance." 90 Mr McLeod responded promptly to those letters, later on the same day. His response said (omitting formal parts): "I refer to the four letters received from you earlier today. We are a little surprised at why you saw fit to send us four letters today. We are also concerned with the content of those letters and in particular several self serving statements contained in those letters which do not reflect the actual position. We will respond in more detail in due course. As you are aware, David Sutton is presently overseas. While we have looked through his file we do not appear to have a copy of any consent from Hudson Investment Group Limited to the extension of the offer period and the closing of the offer period at 5pm today. Would you please provide us with a copy as a matter of urgency." 91 Two draft letters from Hudson Investment to Mr Cleland were in evidence. One of those drafts stated, relevantly (and omitting formal parts): " … 2. Discussions with Mr Rodney Adler. As above our only discussion with Mr Adler was for Mr Adler or Adler Corporation Limited to take up 4 million shares. It should also be noted in our discussion with Mr Adler that he indicated that $6 million of the IPO had been completed and that he would take $2 million of the Issue leaving $2 million to be completed by Hudson Investment Group. It was agreed with Mr Adler that Hudson Investment Group would commit to placing the $2 million with its clients. There was not discussion at all in relation to Hudson Investment Group taking up $2 million as a shortfall under the Underwriting Agreement. It was shown at the end of the day that only $4.9 million of the Issue had been completed, Adler Corporation taken [sic] up $1 million only. Hudson Investment Group continues to seek investors for the balance. … 4. Offer closer. The agreed closing date between the parties 13 September 1999. This was further extended to 17 September 1999 by consent of both parties. Due to the lack of success as at 17 September 1999 it was agreed by the parties that the issue would be extended and that the management and major shareholders of ozEcom Limited were finalising a loan facility from Commonwealth Bank for $3 million. This was taking a longer period for finalisation than initially thought by the directors of ozEcom Limited. In addition an agreement was being finalised with Adler Corporation to subscribe for up to $4 million of shares with the remaining balance coming from either the CBA loan or from Hudson clients. This was to be completed by Monday 20 September 1999 as per your letter dated 17 September." 92 The other stated, relevantly (and again omitting formal parts): " … The previous agreement between the two parties was as per our letter dated 5 August 1999 whereby Registration for the Prospectus was 13 August 1999. Under the Underwriting Agreement the Closing Date was to be 30 days later, being 12 September 1999, which was a Sunday with the next business day being 13 September 1999. As per your schedule of funds raised as at 13 September 1999 the Offer was still less than 50% subscribed for and total shareholders were substantially less than the 500 required. No Shortfall Notification was issued on the understanding that the Offer was extended on an [sic] "best endeavours basis" while endeavour basis" [sic] while you finalised your discussions [with the] Commonwealth Bank Limited and Adler Corporation Limited to issue the remaining $5 million." 93 The latter draft was adorned with some handwritten notes. It was not proved by whom those notes were made, or when. One would have expected that evidence to come from the defendants or the cross-defendants had it been desired to rely on the truth of what was stated in those notes. The events of 28 September 1999 and following 94 Ms Sylvester telephoned Mr McLeod on 28 September 1999, to ask whether he had received the letters referred to in paras [85] to [89] above. Mr McLeod confirmed that he had received them. Ms Sylvester said that she had a conversation with Mr McLeod to the following effect: "Me: "Are there any changes you would like to have made as we are happy to discuss anything which will progress closing the issue? Would you be able to take up a put arrangement with IAMA?" I then discussed how the put arrangement would work and that IAMA was interested in this type of arrangement. Bruce McLeod: "I am not sure we can enter into a put arrangement or what disclosure requirements there are under the prospectus regulations." Me: "I will get some advice from Clayton Utz and get back to you. Have you seen a letter from IAMA confirming their interest to take up a shareholding?" Bruce McLeod: "No, I have not." Me: "I will fax a copy to you. Have you covered the minimum shareholder's spread of 400 in the float?" Bruce McLeod: "I am not familiar with that issue." Me: "We have discussed it several times with David about obtaining sufficient names for the spread requirement. Every time he has been asked he has said "that's under control, we have a list of 400 investors."" Bruce McLeod: "I will look into it." Me: "I will get back to you with the IAMA letter and get advice from Clayton Utz"." 95 After the conversation, Ms Sylvester: (1) Sent Mr McLeod a copy of the revised or further letter of commitment referred to in paras [23] and [24] above; and (2) Made a file note of her conversation with Mr McLeod. 96 In substance, the file note supports Ms Sylvester's account of the conversation. It was not put to Ms Sylvester that her file note was fabricated, or anything other than an honest attempt to record accurately the conversation to which it referred. I accept Ms Sylvester's account of the conversation. 97 Ms Sylvester said that later on 28 September 1999, she met Messrs Cleland and Stevens. They had a discussion, in which Mr Smyth-Kirk participated by telephone. I infer that the discussion was an informal meeting of ozEcom's board (informal, in the sense that it was called without prior notice and without any formal agenda). Ms Sylvester said (in para 45 of her affidavit sworn 27 September 2005) that "[w]e made a decision to issue a closing notice and shortfall notice." No minute or other record of that resolution was proved. On the evidence, the only minute of any meeting of ozEcom's board in which the closing of the offer was discussed is that referred to in para [82] above. 98 Mr Corfe said that he had a conversation with Mr McLeod on 28 September 1999, in the course of which Mr Corfe told Mr McLeod that ozEcom was going to close the offer "as at 5.00 pm on 27 September" and said that "[y]ou will need to provide an additional 130 names and funds to meet the spread requirement." 99 Mr Corfe said that he had a conversation by telephone with Mr Sutton (who was still in London) later on the same day. Mr Corfe advised Mr Sutton that ozEcom had sent a letter advising of the closing of the offer and requiring Hudson to meet its obligations, which he quantified at "about three million dollars". Mr Sutton replied: "I don't believe Hudsons thought they would have to come up with three million dollars. I am not sure they will be able to finance that. I have not spoken with Bruce since Sunday but I will give him a call straight away." 100 Mr Corfe made a file note of his conversation with Mr Sutton. He then rang Mr McLeod who said that he was still reviewing the file, and had other commitments requiring his attention. He said that there was to be a further meeting with lawyers the following day, but that this was to do with other matters. 101 Ms Sylvester and Mr Corfe met Mr McLeod in the afternoon of 29 September. Mr Corfe made a file note of that meeting. It reads: "Discussed all options. Conclude that unlikely Hudsons would cover shortfall. Both parties agreed to consider overnight, including finding additional financings." (Emphasis in the original.) 102 OzEcom had prepared a "Shortfall Notice" and "Closing Certificate" (see clauses 6 and 8 of the underwriting agreement) each dated 28 September 1999, and each signed by Mr Cleland and Ms Sylvester. The shortfall notice asserted that the "Shortfall Shares" totalled 9,236,000. 103 On 30 September 1999, Ms Sylvester and Mr Corfe attended on Mr McLeod. Mr Corfe gave Mr McLeod a copy of the shortfall notice and closing certificate, together with a copy of the underwriting agreement. There was discussion of ways in which the shortfall might be met. Mr McLeod said that he could not see any other way of doing this. Mr Corfe or Ms Sylvester said that ozEcom was still "pursuing all alternatives", including Messrs Adler and Rivkin. There was some discussion of a put arrangement in relation to Mr Rivkin; Mr McLeod said that Hudson Securities would not or could not enter into any such arrangement. According to Ms Sylvester, Mr McLeod said: "Vincent thought it [the shortfall] was going to be two million dollars. He isn't going to fund that size shortfall. We have already sent out a letter to our investors advising that Adler was going to invest two million dollars as a way to encourage other investors. By the way, Hudson Investment has no intention of holding stock itself." 104 Other matters were then discussed, and Mr McLeod (after leaving the room to seek legal advice) endorsed each of the documents given to him to record receipt by hand at 10.45 am on 30 September 1999. The meeting finished. Mr Corfe made a file note of the meeting. 105 Ms Sylvester and Mr Corfe had a further meeting with Mr McLeod later the same day. They asked whether they could speak to Mr Tan. Mr McLeod said "Vincent is not here." That was incorrect (if not false): Ms Sylvester said that she "saw Vincent walk towards the meeting room through the glass wall that I was facing. He saw me and turned and walked away." Ms Sylvester identified Mr Tan in Court. I accept that Mr Tan was present at the premises of the Hudson Investment Group when the second meeting of 30 September 1999 took place. 106 There was further discussion as to how the shortfall might be resolved. Mr McLeod said that "we've got several projects underway and I haven't been able to focus on ozEcom. I only read the prospectus and file last weekend. … I have been unable to speak to Vincent about the matter and I will have to do that." 107 Mr Corfe made a file note of this second meeting. 108 At some time on 30 September 1999 Atanaskovic & Hartnell, Hudson Investment's lawyers, wrote to ozEcom. The letter made the following points: (1) Hudson Investment did not consent, for the purpose of the underwriting agreement, to any extension of the offer beyond 13 September 1999. (2) On 13 September 1999, the offer was "clearly undersubscribed and the listing requirements of the ASX would not have been met." (3) No shortfall notice was then issued. (4) "Due to the failure of the offer it was agreed between the parties that they would use their respective best endeavours to attempt to locate further investors", notwithstanding that "at 13 September 1999 our client was not obliged to make up the shortfall." (5) The activities of Hudson Investment after 13 September 1999 "cannot re-enliven its underwriting obligations as these had already ended." (6) For a number of reasons (including "that the prospectus does not comply with Corporations Law requirements and is misleading and deceptive … and there has [sic] been material breaches of the Underwriting Agreement … [and] misleading and deceptive conduct in relation to the Underwriting Agreement"), Hudson Investment was entitled to, and would, "terminate its obligations under" that agreement." 109 With a commendable focus on essentials, the substantial part of the letter concluded with the request: "Would you please advise as to when our client can expect to receive the underwriting fee in accordance with the Underwriting Agreement." 110 I do not think that much is to be gained by dealing with the correspondence thereafter. Approach to the issues 111 I think that the simplest way to resolve the extant disputes is to proceed through the statement of issues, dealing with them sequentially except to the extent that a decision on a particular issue is rendered otiose by reason of a decision on some other issue. Issue 1A(i): what was the Closing Date? 112 It will be seen from the formulation of this issue that ozEcom relied variously on: (1) The terms of the underwriting agreement as made, and what it said were agreed extensions of time in accordance with that agreement. (2) A variation to the underwriting agreement (which ozEcom, in its statement of contentions, referred to as the "Extension Agreement"; for convenience but without pre-judgment I will do likewise). (3) Estoppel, waiver and unconscionable conduct. The underwriting agreement and the alleged extensions pursuant to it 113 I have set out relevant extracts from the "Timetable" in para [31] above, and ozEcom's contentions, as to extension of the Closing Date to 13 September 1999, in paras [53] and [54] above. For the reasons that I give in para [53] above, if the letters of 23 June, 22 July (if sent) and 5 August 1999 are properly to be characterised as letters seeking to extend the Closing Date, or having that effect – a matter to which I shall return – then as a matter of construction of the underwriting agreement, the nominal Closing Date would have been 4 September 1999. (For the reasons to which I refer in para [54], it is possible that the calculation of 4 September 1999 as the nominal Closing Date would lead to an actual Closing Date of 6 September 1999. Since absolutely nothing turns on any distinction between 4 and 6 September 1999, I shall as a matter of convention hereafter refer generally to 6 September 1999 as the Closing Date for the purposes of the underwriting agreement.) 114 However, ozEcom submitted that the parties proceeded on the conventional basis that the Closing Date was to be calculated not from the actual date of registration of the prospectus but from the last date for registration (written submissions in reply, paras 5 to 7). (It might be thought rather unusual that, now and later in these reasons, I refer to or quote from ozEcom's submissions in reply rather than its submissions in chief. The precise case that ozEcom sought to put remained unclear – indeed, diffuse – even at the end of its oral submissions in chief. Thus, I directed ozEcom to put its submissions in reply in writing, to address each issue specifically in those submissions, and to indicate, among other things, whether the issue was pressed. The written submissions in reply that were provided in accordance with my direction clarified the way in which ozEcom put its case. I reserved liberty to any other party to apply in respect of those reply submissions, and indicated that this was "intended to encompass the situation where apart from such trespassing beyond the bounds of reply as is necessitated by the precise form of the directions, any party feels that some new case is being mounted against it at the very last moment": T328.20. No party either availed itself of the liberty to apply that was reserved or, without doing so, sought to reply to ozEcom's submissions in reply.) 115 There are at least five difficulties with ozEcom's reliance on the concept of conventional estoppel. The first is that, insofar as it relies on Mr McLeod's draft letters of 27 September 1999 (see paras [91] and [92] above), there is no evidence that those letters, or any letter embodying the relevant part of their texts, was communicated to ozEcom. Thus, even if the draft letters can be regarded as proving or stating an assumption by Hudson Investment as to the basis on which the transaction, and its relations with ozEcom, were conducted – a proposition that is not free from doubt - there is no evidence that the contents of the draft letters were communicated to ozEcom's representatives, let alone that they were accepted by them as setting out a conventional basis on which the parties thereafter approached the question of calculation of the Closing Date. 116 The second problem is that, insofar as the submission relies on Hudson Investment's letter of 27 September 1999 (see para [90] above), that letter can have played no part in producing a conventional approach to the calculation of the Closing Date undertaken at some previous time. 117 The third problem is that, insofar as the submission relies on Atanaskovic & Hartnell's letter of 30 September 1999 (see para [108] above), that letter likewise can have played no part in producing a conventional approach to the calculation of the Closing Date undertaken at some previous time: indeed, a fortiori. 118 The fourth problem is that there was no evidence from any of ozEcom's witnesses that they, either on the basis of anything put to them or before them by Hudson Investment or otherwise, regarded the calculation of the Closing Date as something to be undertaken by reference to the last date of registration of the prospectus rather than the actual date of registration. 119 Finally, conventional estoppel is not pleaded, nor is it raised as a discrete issue in the statement of issues. 120 Further, on the topic of conventional estoppel: Mr Corfe prepared the letters of 23 June and 5 August 1997. He said that it was his intention in each case to extend firstly the Registration Date and secondly the Despatch Date set out in the Timetable that was part of the underwriting agreement; specifically, "to extend the last date for registration of the prospectus and the last date for despatch of the prospectus" (T108.35; see, generally, T107.45-109.5). Mr Corfe was re-examined but not on that evidence. He did not say that he intended by those letters (which, presumably, he sent to Hudson Investment for engrossing and signing) to extend the Closing Date in addition to the other dates. 121 Where the contract is clear (and ozEcom did not submit otherwise), strong evidence would be required to demonstrate that the parties had proceeded on some conventional basis inconsistent with the contract. The matters to which ozEcom pointed in its submission in reply fall far short of that description. 122 In para [53] above, I adverted to an issue as to the purpose or effect of the letters referred to in paras [48] to [50] above. Mr A Leopold of counsel, who appeared for Hudson Securities, submitted that the letters in question "extended the two dates relevant to the conditions precedent set out in clause 2.1 of the Underwriting Agreement. Those documents had nothing to do with extension of the actual Date of Registration (a date which self-evidently could not be extended) or with extension of a Closing Date." (written outline of final submissions, appendix A, para 8). It may be accepted that the purpose of each letter (assuming, for the moment, that the second one was in fact sent) was to extend the Registration Date and the Despatch Date. It may be accepted that the purpose of those extensions was to ensure that the two conditions precedent set out in clause 2.1 of the underwriting agreement were met. It follows that registration of the prospectus on or before the last date for registration (as from time to time extended) was effective to set time running for the purposes of calculation of the Closing Date. It does not follow that either letter extended the Closing Date. 123 The Timetable set out in the Schedule to the underwriting agreement defined the Closing Date by reference to the event of registration of the prospectus. Thus, once and as long as that event occurred within a time "permitted" (a loose but convenient expression) by clause 2.1(a), the Closing Date became fixed, as a calendar date. 124 In that sense, it is inaccurate to talk of the parties (at least prior to registration of the prospectus) as having intended to extend, or as having extended, the Closing Date. Before the prospectus was registered, it would be meaningful to talk of extension of the Closing Date only if the parties had enlarged the period of "Registration plus 30 days" (for example, to "Registration plus 45 days") fixed in the Timetable. After registration of the prospectus, and once the actual Closing Date (in the sense of a calendar date) became ascertainable, the parties could agree to extend it. Indeed, ozEcom appears to accept this; it says they did (see para [126] below). 125 Thus, although it is inappropriate to speak of extension of the Closing Date in this context, registration of the prospectus on 5 August 1999 (see para [53] above), which was within the last extended date for registration to which Hudson Investment had agreed (see para [49] above), led to a Closing Date, for the purposes of the underwriting agreement, of 6 September 1999 (see para [53] above). The "Extension Agreement" 126 That conclusion is not fatal to the way in which ozEcom puts its case, because ozEcom submitted (para 8 of its submissions in reply), that "[f]rom about 3 September 1999, the parties ceased to treat the Closing Date as being dependent on the Last Date for Registration, and proceeded to make changes to the Closing Date itself as an event rather than by extending the Last Date for Registration. The first change was to agree to extend the Closing Date to 17 September 1999." 127 OzEcom relied on both correspondence and conversations to support a case of ad hoc agreements to extend the Closing Date, and to keep the IPO open in an attempt to lessen the shortfall. In essence, the defendants submitted that the correspondence went nowhere; and that the conversations upon which ozEcom relied were referable not to the Closing Date under the underwriting agreement but to the closing of the issue under the prospectus (see para [57(2)] above). 128 There is an immediate difficulty in the way of acceptance of each approach to this problem. The difficulty with ozEcom's submissions is that, even taking the relevant correspondence and conversations at face value, it does not appear that the parties ever turned their minds to the question of extension of the contractual Closing Date. Instead, they appear to have proceeded (I am tempted to say, bumbled on), through either inadvertence or incompetence, on the basis that Hudson Investment's underwriting obligations remained in force after 6 September 1999. Accepting as I do that commercial agreements may be binding without corresponding to the formal contractual discourse of offer and acceptance and the like (a topic to which I return in para [152] below), it is difficult to spell out of the relevant events any agreement, even of the most informal kind, for extension of the Closing Date. 129 The difficulty with the defendants' submission on this point is equally apparent. If – as the defendants would have it – the relevant conversations were directed to the closing of the offer under the prospectus, and if – as the defendants would have it – the Closing Date under the underwriting agreement had passed without further extension, there would be no extant underwriting liability for Hudson Investment to assume. But many of the conversations appear to be predicated on the existence of such a liability: see paras [62] to [80] above. 130 On the defendants' approach, the Closing Date under the underwriting agreement was at the latest 6 September 1999. However, on 9 September 1999, Mr Corfe was discussing with Messrs Tan and Sutton Hudson Investment's performance of its obligations under the underwriting agreement (see paras [62] to [64] above). 131 Then, in a series of conversations from 15 September 1999 on, ozEcom repeatedly asked in effect as to the ability of Hudson Investment to underwrite whatever was seen as likely to be the shortfall from time to time. If there were no such liability (because the Closing Date under the underwriting agreement had not been extended past 6 September 1999), the obvious answer to (for example) Mr Cleland's question of 15 September 1999 (see para [66] above) would have been to the effect that "we don't have to underwrite anything because the Closing Date has expired and you haven't given us a Shortfall Notice or the other documents required to crystallise our liability". 132 Again, whilst Mr Tan's language on 16 September 1999 could be understood to be referable (when talking of the closing of the issue) to the prospectus, his statement (see para [68] above) to the effect that he did not want the issue to be closed if there were going to be a $2 million shortfall suggests a belief on his part that Hudson Investment's underwriting obligations remained on foot. 133 Without wearying the reader by excessive repetition, the same may be said about the subsequent conversations up to and including 24 September 1999. In this context, I think, the telephone conversation between Messrs Adler and Tan on 24 September 1999, as recounted by Mr Breadman (see paras [77] to [79] above), is particularly telling. 134 OzEcom submitted that the relevant minds of the Hudson Investment Group understood that the extensions related to the Closing Date under the underwriting agreement, and not to the closing of the issue in terms of the prospectus. That may be so, as to Mr McLeod: see his draft letters of 27 September 1999 (paras [91] and [92] above). The significance of any such understanding must be assessed having regard to his lack of familiarity with the transaction: see para [106] above. 135 As to Mr Sutton, the position is less clear. In his handwritten note sent by facsimile transmission to Mr McLeod on 27 September 1999, Mr Sutton said, of discussions with Mr Cleland some time earlier: "My discussions with Robert on the closing date had been to discourage him from closing the issue as it would crystallise our liability . Therefore at least up to 16th Sept, while there were prospects of the required funds coming in the issue remained open through inertia." 136 The words that are struck through appear to have been struck through in the photocopy of the facsimile transmission that is in evidence. However, there is no evidence as to when or by whom those words were struck through (if this is what the line through them is intended to mean). There is a line leading up through the text of the document from those words to a blank space on the page, which might suggest that someone had intended to annotate those words. It may be observed that the sentence in which those words appear makes sense with them included, and less with them excluded. 137 In para 10 of its written submissions in reply, ozEcom sets out this passage and includes the expression "Closing Date": no doubt, in an attempt to bolster the proposition that the document refers to the underwriting agreement. I note, however, that the document is printed in block capitals and it is (to put it neutrally) by no means apparent that Mr Sutton intended, by the use of capital letters, to denote without ambiguity that he was referring to the concept of the Closing Date under the underwriting agreement. 138 It should also be noted that, in the immediately following passage of the facsimile transmission, Mr Sutton explained what he meant by "open through inertia": "However there was no agreed change to the terms of the underwriting agreement with regard to the length of the issue. Any such change would need to be signed off by the directors of Hudson Investment Group after discussion by the board and consultants. I do not believe that this occurred." 139 I think that the better view of Mr Sutton's note is that his references to "closing date" or "closing the issue" were to closing the issue under the prospectus. It is quite clear from his explanation of "open through inertia" that he was conscious of the concept of Closing Date under the underwriting agreement: in his view, there was no change to that Closing Date. By inference, therefore, his earlier references to "closing date" and "closing the issue" in the extract set out in para [135] above relate to the closing date for the purpose of, and closing the issue under, the prospectus. If – as clearly Mr Sutton thought was the case – there had been no extension "signed off by the directors of Hudson Investment" to the Closing Date under the underwriting agreement, the "closing date" earlier referred to, and that which "remained open through inertia" must have been the closing date for the purposes of the prospectus. 140 I am somewhat hesitant in drawing inferences in favour of Hudson Investment from the terms of Mr Sutton's note when Mr Sutton was not called to give evidence. But I do not think that any application of the principles in Jones v Dunkel (1959) 101 CLR 298 requires me to construe a document otherwise than in accordance with its terms, or not to draw inferences from it that are clearly available, simply because that construction or those inferences favour the party relying on the document and that party did not call the author. 141 On 3 September 1999, Mr Sutton sent a letter by facsimile transmission to Mr Cleland. Omitting formal parts, it reads: "ozEcom Closing Date It is recommended that the closing date for the issue be set at Friday, 17 September 1999. This timing should permit the required spread to be obtained and funds obtained from institutions. Should the required subscriptions be obtained prior to that date, the issue can be closed at any time." 142 In terms, this document suggests that Mr Sutton was referring to closing the issue in terms of the prospectus. The letter is cast in the language of recommendation: clearly enough, a recommendation made to ozEcom for its consideration. The decision that was recommended seems to have been one for ozEcom to make: again, something consistent with the "closing date" being the closing date under the prospectus. If the document to which I refer in para [145] below is to be taken as showing ozEcom's understanding of, and attitude towards, Mr Sutton's letter, it would suggest that ozEcom thought that the subject of the recommendation was the offer under the prospectus. 143 However, there are some indications the other way. The heading – which I have set out – capitalises the initial letters of the phrase "Closing Date". Further, and perhaps more significantly, it appears that one of the purposes of the proposed extension was to "permit the required spread to be obtained". That was an objective, the achievement of which Hudson Investment was required (clause 3.5 of the underwriting agreement) to use its best endeavours to procure. Thus, the communication may be seen as consistent (or, at least, not inconsistent) with the continuance in force of the underwriting agreement and at least one – a key one – of Hudson Investment's obligations under it. 144 It is correct to say, as the defendants have pointed out, that ozEcom appears to have rejected Mr Sutton's recommendation. So much appears from Mr Sutton's later facsimile transmission to Mr McLeod, parts of which I have set out in paras [135] and [138] above. 145 The defendants pointed also to what they said was ozEcom's reply. That document was a draft, dated 3 September 1999, not shown to have been sent. In terms, it does not appear to be a response to Mr Sutton's facsimile transmission. It does however deal with the topic of the closing of the offer: " … … The company is not willing to formally extend the offer to the 17 September 1999. We advise that the Company will keep the offer open on an ad-hoc basis to enable your organisation, and ozEcom, to mitigate the potential exposure to Hudsons as a result of the apparent under-subscription. We are hopeful that a combination of your own efforts, particularly concerning the 'spread' and our efforts to secure an institutional cornerstone investor will enable the offer to be closed during the week commencing Monday, 6 September 1999. … We are confident that by working together this unforeseen situation can be resolved to our mutual benefits [sic]." 146 To the extent that this document can be taken into account as representing ozEcom's attitude during the weeks leading up to 28 September 1999, it appears to relate to the issue under the prospectus. But there are also clear indications that the author regarded Hudson Investment's underwriting obligations as remaining alive. That is consistent with the attitude evinced in subsequent conversations, to the effect that the offer would not be closed, but would be extended to enable the shortfall, and thereby Hudson Investment's underwriting liability, to be reduced. That can hardly have been of significance to either party if by then that underwriting obligation had expired by effluxion of time. 147 Of course, the significance of such inferences relating to the existence and enforceability of Hudson Investment's underwriting obligations as may be drawn from Mr Sutton's letter of 3 September 1999 and the document referred to in para [145] above must be assessed in the context that, as at the date those documents bear, the Closing Date under the underwriting agreement had not been reached. 148 It is necessary to bear in mind that ozEcom puts this aspect of its case on the basis that there was an enforceable agreement to extend the Closing Date under the underwriting agreement. It is clear that there was no extension of the Closing Date in accordance with clauses 3.2, 3.3 or 3.4 (the last mentioned read in conjunction with the requirements for writing and signature set out in clauses 17.2(a)(ii) and 17.10). OzEcom articulates this aspect of its case thus in paras 22, 24 and 25 of its further amended summons: "22. Between 13 August 1999 and 3 September 1999, pursuant to the underwriting agreement, Hudson Investment agreed with OzEcom to extend the closing date on the application of shares to OzEcom to 17 September 1999. Particulars The agreement was partly express and partly implied. To the extent that the agreement was express it was partly written and partly oral. The written part consists of a letter from Sutton of Hudson Investment to Cleland of OzEcom dated 3 September 1999. The oral part consists of conversations between Cleland and Sylvester of OzEcom and Sutton and Tan of Hudson Investment to the effect of the agreement alleged. To the extent that it was implied, the implication arises from the course of conduct between OzEcom and Hudson Investment, being the continued offering of shares to members of the public and otherwise keeping the offer open. … 24. By conversations between on the one hand Campbell Corfe (" Corfe "), Sylvester and Cleland on behalf of OzEcom and Tan and Sutton on behalf of Hudson Investment on the other, it was expressly agreed: (a) that OzEcom would not close the subscription; (b) that Hudson Investment could continue soliciting investors in order to reduce the then apparent shortfall in public subscription for shares; (c) in particular, Tan could continue negotiations with a Mr Adler and Adler Corporation as to the terms on which that company might invest; and (d) each party would otherwise use their best endeavours to solicit further investors and funds for further investment (" Extension Agreement ".) 25. By the last mentioned conversations and by correspondence on and between 17 September 1999 and 27 September 1999, it was agreed between Hudson Investment and OzEcom pursuant to the Underwriting Agreement to further extend the closing date on the application of shares to OzEcom to 5 pm, 29 September 1999. Particulars The agreement was partly express and partly implied. To the extent that the agreement was express it was partly written and partly oral. The written part consists of a letter from OzEcom to Tan of Hudson Investment and McLeod dated 17 September 1999. The oral part of the agreement consists of conversations between Corfe of OzEcom and Tan and/or McLeod of Hudson Investment to the effect of the letters. To the extent that it was implied, the implication arises from the course of conduct between OzEcom and Hudson Investment." (underlining in original). 149 The real difficulty with this aspect of ozEcom's case is that to which I have referred in para [128] above. Whilst the evidence suggests that the parties conducted their affairs on the basis that Hudson Investment's underwriting obligations were in force from 3 (or 4 or 6) September through 17 September to at least 27 September 1999, it is very difficult to spell out any agreement to the effect of that "pleaded" (to use a convenient but inaccurate term). 150 The parties had stipulated for a substantial degree of formality and precision in relation to amendments to the underwriting agreement. On at least two and perhaps three occasions they had sought to effect variations with the requisite degree of formality. The fact that, in relation to the subsequent alleged extensions, they did not do so requires at the very least that the evidence relied upon to support the alleged extension agreement (to use ozEcom's term) be scrutinised with care. 151 I have the strong impression that, during the period from 3 to 27 September 1999, neither party turned its attention to the status of the underwriting agreement, or its requirements relating to (for example) variation. I have the strong impression both from the documents and from the affidavit and oral evidence (such as it was) that ozEcom at least appears to have acted on the basis of an assumption (if it can be put so high, bearing in mind that assumptions are normally the product of conscious reflection) that the enforceability of Hudson Investment's underwriting obligation under the underwriting agreement was coextensive with the life of the public offer under the prospectus. But assumption is one thing, and agreement another. Accepting as I do the substance of the evidence given by Ms Sylvester and Messrs Corfe and Breadman, none of them gave evidence of any conversation (to which she or he was party) in which the topic of extension of the Closing Date (which, by the time the relevant conversations occurred, had become fixed as a calendar date rather than as a date to be calculated from a specified event) was raised, let alone that there was discussion and consensus. It may well be that some such evidence could have been given (for example) by Mr Cleland: see what I have said in para [60] above as to the hearsay account of his discussions with Mr Sutton. But as I have said, Mr Cleland was not called, and his absence from the witness box was not explained. 152 I accept that commercial arrangements do not always lend themselves too readily to formal analysis in terms of offer and acceptance, consideration and intention to create legal relations (to paraphrase McHugh JA, with whom Hope and Mahoney JJA agreed, in Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11, 110 at 11, 117). I accept that the existence of a contract may be demonstrated not by reference to formal analysis of offer and acceptance and the like but by asking whether an agreement can be inferred; whether mutual assent has been manifested; or what would a reasonable person in the position of the parties to the alleged contract think as to whether a bargain had been concluded (to paraphrase Heydon JA, with whom on this point Mason P agreed, in Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153 at 179 [81]). 153 Many of the cases dealing with this problem arise from facts where there is an identifiable offer. The problem has been whether there is evidence of acceptance; and in those cases the focus is on the point of inference of acceptance from conduct. Indeed, Brambles was such a case, as was Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523 (a case cited by Heydon JA in Brambles). But in other cases, the analysis is even less clear. As Heydon JA pointed out in Brambles at 177 [74], there is a "possibility of finding that contracts exist even though it is not easy to locate an offer or acceptance". Integrated Computer Services was such a case. 154 In considering whether a contract can be inferred from conduct, where there is no clear evidence of offer and acceptance and the like, it is necessary to bear in mind McHugh JA's warning in Integrated Computer Services at 11,117, that bilateral contracts exist independently of and precede what the parties do. Thus, his Honour said (omitting citations): " … it is an error "to suppose that merely because something has been done then there is therefore some contract in existence which has thereby been executed" … . Nevertheless, a contract may be inferred from the acts and conduct of parties as well as or in the absence of their words … . The question in this class of case is whether the conduct of the parties viewed in the light of the surrounding circumstances shows a tacit understanding or agreement. The conduct of the parties, however, must be capable of proving all the essential elements of an express contract … . Care must also be taken not to infer anterior promises from conduct which represents no more than an adjustment of their relationship in the light of changing circumstances." 155 This last sentence is of substantial significance in the present case. The reason why this is so was explained by McHugh JA in Integrated Computer Services at 11,117-11,118 as follows (again omitting citations): "Research in the United States and Great Britain suggests that probably the majority of people in ongoing business relationships regulate their relationship in accordance with what they consider is fair and reasonable or commercially necessary at particular points of time rather than by reference to a priori rights and duties arising under a contract. … This is the case even where their relationship is governed by a written contract. There is no reason to suppose that the position is any different in Australia. For this reason "action and conduct before the inception of a controversy is of much greater weight than what they said or did after a dispute arose" … ." 156 As his Honour pointed out at 11,118, in the particular facts of that case, a relevant factor is whether what the parties did "is explicable only on the basis of a binding agreement." 157 Even if one analyses the present facts with those statements of principle in mind, it is difficult to see that there was a concluded bargain for extension of the Closing Date beyond, at the latest, 6 September 1999. The reality, on the evidence, is that the parties simply did not turn their minds to the question of extending Hudson Investment's underwriting obligations. They appear to have assumed that the obligations remained in force, or (more probably) to have omitted to check whether or not they did. 158 It is one thing to say that the parties assumed, or acted on the basis, that one of them continued to be bound by obligations under the agreement that they had made. It is quite another to say that they agreed that the time for performance of those obligations should be extended. But this aspect of ozEcom's case (I leave for later consideration the estoppel case) is that there was such an agreement, whereby Hudson Investment bound itself to perform its underwriting obligations up until 29 September 1999. 159 It may be possible to infer, from the fact that the parties (as I think they did) conducted themselves on the basis that Hudson Investment's underwriting obligations remained extant after 6 September 1999, that there was some agreed extension – informal in character – to the Closing Date. But why should the Court draw inferences from obscure and limited facts, when at least one relevant witness, whose testimony could have borne on this question, was not called (Mr Cleland); and other witnesses, who were called, did not advert to it in their evidence? And why should the Court do so when the party alleging the existence of an agreement did not deal with this mode of analysis, or with the cases on which that analysis is based, in its submissions? 160 In this context, I think, the approach to analysis described in para [152] above does not dispense with the need to find consensus. The present case is one where, on the evidence as it stands, there is no evidence of any offer, let alone of acceptance. At the most, the evidence is that the parties comported themselves on the basis that the underwriting agreement remained alive and enforceable after 6 September 1999. The basis upon which they did so remains entirely unexplained: at least, by any direct evidence. 161 The first express reference to extension by mutual consent occurs in Mr Cleland's fifth letter to Mr McLeod of 27 September 1999 (see para [89] above). The "confirmations" in the first two sentences that I have quoted have a self serving appearance, particularly in circumstances where: (1) The author of the letter, Mr Cleland, was not called to give evidence of the "mutual consent" or "agreement" that he purported to confirm; and (2) The evidence of those who were called (relevantly, Ms Sylvester, Mr Corfe and Mr Breadman) did not deal on the basis of direct knowledge with the topics of "agreement", or "mutual consent". At best, that evidence suggests that all relevant actors were labouring under the delusion that Hudson Investment's underwriting obligations had not come to an end. 162 It will be noted that Mr McLeod picked up on the self serving nature of the comments, and denied them (see para [90] above). 163 I do not regard Mr Cleland's correspondence as any evidence of an agreement to extend, whether on an ad hoc basis or otherwise. Nor do I regard it as supplementing the deficiency of proof to which I have adverted. 164 OzEcom relied on the evidence of Ms Sylvester at T79.32-.54: "Q. I think you indicated that you did, to the best of your recollection, discuss with one or more of Mr Cleland and Mr Corfe, on or around 17 September, the possibility of seeking a written extension of the closing date of the underwriting agreement; correct? A. Yes. Q. Did you form a view that Ozecom ought to send such a letter seeking such an extension or not? A. We formed a view that we thought we should, but at the request of Hudsons that was not done, because it was extended on an ad hoc, let's close it as soon as we can, basis. Q. So, you formed a view that you thought you should send a letter seeking a written extension of the closing date under the underwriting agreement; is that your evidence? A. We believed that under the underwriting agreement a formal letter was required, unless they agreed otherwise. Q. You had formed a view, had you, that Hudson Investment had agreed otherwise by 17 September, did you? A. Mr Sutton had a conversation with us to that effect." 165 However, as became apparent (in the immediately following passage of cross-examination, to which ozEcom did not refer) the "conversation … to that effect" was a conversation between Mr Sutton and Mr Cleland, reported by Mr Cleland to (among others) Ms Sylvester (T80.3-.10): "Q. When you say "Mr Sutton had a conversation with us to that effect", when did the conversation take place? A. On the 17th. Q. Were you a party to it? A. It was a conversation between Mr Cleland and Mr Sutton. We were in the room, though, when he got off the phone and told us what conversation had taken place. 166 That evidence was admitted as evidence only of the communication of the contents of the conversation to Ms Sylvester, but not as evidence of the truth of the matters communicated. 167 What is clear from this part of Ms Sylvester's evidence was that she was aware of the requirements of the underwriting agreement as to formality. This is also apparent from her evidence at T80.49-.55: "Q. In your mind, were you conscious of the distinction between closing the IPO and the time line for the obligations under the underwriting agreement? A. Yes. Q. That is a distinction you bore clearly in your mind? A. They were running concurrently, yes." 168 Further, Ms Sylvester was aware that Hudson Investment could have refused to give any written consent to extension of the Closing Date (T81.10). Although she referred to Hudson Investment's "request that we do it on an ad hoc basis and, as soon as we could, try and close the amount of the Shortfall Notice" (T81.25), this again must relate back to her understanding, based on what Mr Cleland had said, as to his discussion with Mr Sutton. 169 This aspect of Ms Sylvester's evidence gave me the strong impression that ozEcom had refrained deliberately from seeking a formal extension of the Closing Date under the underwriting agreement. I can accept that it was prepared (at this stage – 17 September 1999 – notwithstanding its earlier position – 3 September 1999) to consider extending the closing of the IPO. But it is necessary to bear in mind that ozEcom had a very direct commercial interest in extending the closing of the IPO, if thereby the offer could be closed fully subscribed. 170 In short, I do not get from this passage of Ms Sylvester's evidence any sense of actual persuasion (based on direct rather than hearsay evidence) that the parties turned their minds to the question of extending the Closing Date under the underwriting agreement, let alone that they, having done so, agreed to extend it not formally and in writing, but informally on an ad hoc basis. 171 From time to time during the hearing, I expressed a tentative view that the parties did not really know what they were doing (see for example T204.50). A detailed review of the evidence, with the benefit of all parties' submissions, confirms that tentative impression. That, coupled with the failure to follow the contractual procedure for variation (which the parties understood, and which in at least two cases they followed) does nothing to facilitate the drawing of an inference, from the jumbled mass of evidence, as to the making of an informal agreement or agreements for the extension of the Closing Date under the underwriting agreement. 172 As I have indicated, the defendants relied on those provisions of the underwriting agreement that provided, in effect, stipulated modes of variation, and stipulated formalities in relation to variation. I am a little uncertain as to the reliance that the defendants placed on those provisions. It seems to be reasonably plain that the parties to an agreement may agree to vary it; and there is no basis in principle or authority for restricting that power of variation. Nor is there any basis for regarding provisions such as those upon which the defendants relied as "entrenched". 173 OzEcom relied on the decision of Ellicott J in Commonwealth of Australia v Crothall Hospital Services (Aust) Ltd (1981) 36 ALR 567. In that case, the respondent agreed to perform services for the Commonwealth pursuant to a written contract. The contract provided a mechanism for variation of the price, or rate, at which those services were to be performed. Without having gone through that procedure, the respondent submitted claims for payment calculated at a higher rate. The Commonwealth paid those claims. That happened more than once over the years. 174 One of the questions for the Court was whether, notwithstanding that the contractual mechanism for variation of the rate had not been followed, agreements to increase the rate could be inferred. 175 Ellicott J (with whom, on this point, Blackburn and Deane JJ agreed) held that such an inference was available. His Honour noted at 576 the "long established principles of the common law" that "[i]t is open to the parties to a written contract to vary it. This may be done in writing or, except where the contract is required by law to be evidenced in writing, by oral agreement. The agreement to vary may be express or implied from conduct … ." 176 His Honour concluded that agreement could be inferred. As is apparent from what he said at 578, this was because the evidence relating to the variations suggested that: "Independent consideration [was] given each time to the respondent's claim and … a decision [was] made by the officers concerned either to agree to it or to query it. The evidence available relating to cases where the claim was queried indicates that the claim was subsequently accepted and on occasions after consideration lasting some months. … The variations … were of considerable significance to the future operation of the contract and the Commonwealth, in accepting them by payment through its officers, must have been aware of this." 177 His Honour summarised the position as follows at 580: "A variation to the original contract could only take place by agreement, that is, by offer and acceptance. Here the respondent offered to vary the contract by submitting claims specifying an increased contract price based either on increases in wages or changes in areas. The Commonwealth, in each case, except when it was qualified, accepted that offer by making a payment in accordance with the claim. Its action in making this payment in each case was not only performance but constituted acceptance…." 178 The facts of that case are far removed from the facts of the present case. There was an express claim for payment on a basis other than that specified in the contract. The reasons for the variation were specified. The Commonwealth considered them. In some cases it made payment after that consideration. In others it queried them and, after its queries were satisfied, made payment. The facts of that case demonstrated that the parties expressly turned their mind to, and accepted, the varied bases of payment as and when they were propounded. As Ellicott J pointed out at 581, "there is nothing to support a claim that the payments were made by mistake." 179 In this case, on the evidence, the parties never – at last, after 3 September 1999 – turned their minds to the question of variation of the Closing Date. (In phrasing the matter thus, I am assuming that Mr Sutton's letter of 3 September 1999 should be taken as applying to the Closing Date under the underwriting agreement, and not to the closing date under the prospectus.) When (on the same assumption) they did expressly turn their minds to that topic, one of them – ozEcom – rejected the proposal. Thereafter, the parties appear to have proceeded on an understanding (or misunderstanding) of the true contractual position without ever turning their minds to it, or enquiring whether some variation to that position might be required. To adapt the words of McHugh JA in Integrated Computer Services at 11,117, I think that it would be a mistake to suppose that simply because the parties behaved as they did, they were performing some variation of "Extension Agreement" to the underwriting agreement. 180 Thus, I conclude, ozEcom's case based on the "Extension Agreement" must fail. Estoppel, waiver and unconscionability 181 The estoppel on which reliance is placed is an estoppel by representation. The estoppel is said to arise from the making of the "Extension Representation" and ozEcom's reliance on that representation in circumstances where it would be unconscionable for Hudson Investment to depart from the matters represented. 182 There is a simple answer to this aspect of ozEcom's case. There is no evidence of reliance on any representation that is proved to have been made. The only evidence relating to reliance comes from Ms Sylvester. However, the representation was not made to her. Her understanding of what was represented was based on what Mr Cleland had said. Mr Cleland was not called to prove that the relevant representations were made to him. 183 Further, and insofar as the representations are said to have been made not to Mr Cleland (and repeated by him to, among others, Ms Sylvester) but directly to Ms Sylvester, Ms Sylvester gave no evidence of any independent reliance on those representations. 184 In any event, even if Ms Sylvester had so relied (on representations made directly to her) there could be no detriment. For the reasons that I have given in paras [53], [54] and [113] above, the Closing Date was (no later than) 6 September 1999. After that date, and given that I have rejected the case based on both further extensions under the underwriting agreement and the informal "Extension Agreement", Hudson Investment had no extant underwriting obligation. It must follow that even if ozEcom had refrained from delivering a shortfall notice and Closing Certificate in reliance on any representation made to Ms Sylvester (or to Ms Sylvester and Mr Corfe) after 6 September 1999, it did not suffer any relevant detriment. That is because any Shortfall Notice or Closing Certificate delivered after 6 September 1999 (or more than one Business Day after 6 September 1999) would not have been effective to engage Hudson Investment's underwriting obligations. 185 For essentially the same reasons, ozEcom's case based on unconscionability must fail. Although that aspect of its case is pleaded slightly differently to its estoppel case, the essential ingredient is that it was unconscionable for Hudson Investment not to comply with its underwriting obligations in circumstances where it had made the "Extension Agreement" (see para 86 of ozEcom's contentions in its further amended summons, which paragraph calls up, among others, paras 24 and following which allege the making of the "Extension Agreement"). 186 Since I have found that the "Extension Agreement" as pleaded was not made, the unconscionability case that is founded upon it must fail. 187 Further, and to the extent that it is part of the unconscionability case that ozEcom refrained from enforcing its rights because of the "Extension Agreement" or "Extension Representation" (a matter that is not apparent on the pleadings, but that appears to be suggested in the written submission in reply), the unconscionability case must fail because, absent any detriment to ozEcom by reason of the conduct complained of, there can be no unconscionability. 188 The waiver case is more limited. Paragraph 94 of ozEcom's contentions suggests that by reason of certain matters pleaded, "Hudson Investment waived the time and variation terms of the Underwriting Agreement and is not entitled to rely on them." 189 The matters that are called up by para 94 include: (1) Hudson Investment's participation in the DDC and the drafting of the prospectus; (2) The letters agreeing to extend the Registration Date and the Despatch Date; (3) The issue of the prospectus; (4) The alleged agreement to extend the Closing Date to 17 September 1999; (5) The "Extension Agreement" made thereafter; (6) The negotiations with Mr Adler, and other negotiations aimed at reducing the shortfall; and (7) OzEcom's letters to Hudson Investment of 27 September 1999 relating to the closing of the offer (see paras [85] to [89] above). 190 In its written submissions in reply, ozEcom appeared to limit the waiver case to apply only to "the provisions of the Underwriting Agreement relating to variations to the Closing Date stipulated in the timetable" (para 18). I do not know if the omission of the words "time and", which precede the word "variation" in para 94 of the contentions, was intentional. 191 In any event, I think, reliance on the concept of waiver is misguided. As I have said more than once, the Closing Date was (no later than) 6 September 1999. Once that time expired without the delivery of a Shortfall Notice and Closing Certificate, in circumstances where there had been no extension to the Closing Date, Hudson Investment's obligation to underwrite the IPO lapsed. There was no "right" for it to waive. On the findings that I have made, the contractual provisions worked themselves out and Hudson Investment ceased to be bound to underwrite. There was simply nothing, and specifically no right, that was capable thereafter of being the subject of a waiver. Conclusion on issue 1A(i) 192 The Closing Date under the underwriting agreement was either 4 September or 6 September 1999. Issue 1A(ii), (iii): delivery of the Shortfall Notice, Closing Certificate and associated documents 193 The Shortfall Notice and Closing Certificate were delivered on 30 September 1999. A copy of the underwriting agreement was delivered at the same time. No copy, certified or otherwise, of any board resolution of the kind required by clause 8.1 was delivered, then or at all. 194 In fact, there was no board resolution of the kind required by clause 8.1. The only resolution on which ozEcom relied was the resolution apparently passed on 24 September 1999. That resolution did not refer to, let alone express approval of, a Closing Certificate complying with clause 8.2. Instead, it left it to Mr Cleland "to issue such notices without further reference to the Board". That is not sufficient compliance with the requirements of clause 8.1. Hudson Investment was entitled to know that all the directors of ozEcom had turned their minds expressly, and not by some process of anticipatory ratification, to all the matters required to be certified under clause 8.2 and that each of them was prepared to signify, by adhering to the resolution for which clause 8.1 called, that it was appropriate for ozEcom to certify as to the satisfaction of those matters. 195 There is a further problem with this aspect of ozEcom's case. The only evidence of delivery of the board resolution comes from Ms Sylvester. It was however Mr Corfe, not Ms Sylvester, who actually handed documents to Mr McLeod at the meeting on 30 September 1999. 196 Mr Corfe's evidence on the topic was only that he "handed the Shortfall Notice and Closing Notice to Bruce McLeod" (affidavit sworn 11 October 2005, para 32). Mr Corfe identified those documents by reference to an exhibit to his affidavit. The documents that he thus identified are the Shortfall Notice and the Closing Certificate. They do not include any resolution, certified or otherwise, in relation to the Closing Certificate. 197 In her affidavit sworn on 27 September 2005, Ms Sylvester said (para 46) that "Campbell Corfe … handed Bruce McLeod the underwriting agreement, Shortfall Notice and Closing Notice. … I … observed Bruce McLeod endorse on each document that he had received it at 10.45 a.m.". 198 Ms Sylvester too identified, by reference to an exhibit, the documents given to Mr McLeod. The documents that she identified did not include any resolution as to the Closing Certificate. 199 In her second affidavit (sworn 19 December 2006), Ms Sylvester returned to the topic. I rejected part of this aspect of her evidence because it was prefaced with the words "Although I do not now specifically recall", and continued not by way of stating any recollection but by stating a belief, not grounded on any factual basis. 200 Ms Sylvester did say, in so much of the relevant paragraph as I admitted, that she "knew" that three documents – the Shortfall Notice, the Closing Certificate and the resolution relating to the Closing Certificate – "were required under the underwriting agreement to bring about a closing of the offer." OzEcom relied on this evidence, and what it said was the absence of evidence denying receipt, to support the proposition that a certified copy of the resolution had been delivered. I do not accept that submission. There are three reasons: (1) First, on Ms Sylvester's own evidence, three documents were in fact given to Mr McLeod on 30 September 1999, and endorsed by him to acknowledge receipt. They were the Shortfall Notice, the Closing Certificate and a copy of the agreement. Thus, Ms Sylvester's evidence as to "all three" is entirely explicable by reference to what actually happened, and does not require speculation as to what the third document might have been. (2) Second, although there was no express evidence denying receipt, the evidence is that Mr McLeod endorsed his receipt on the documents that were given to him. They were the three to which I have referred. There is no reason – at least none was put – as to why Mr McLeod might have declined to endorse his receipt on a fourth document had he been given four documents and not two (as Mr Corfe suggested) or three (as Ms Sylvester suggested). (3) Third, it is inconsistent with Mr Corfe's evidence. 201 Further, and in case it is not plain from what I have said already, ozEcom did not point in submissions to any document emanating (on discovery or otherwise) from Hudson Investment (or, for that matter, Hudson Securities) meeting the description of a resolution of the kind required by clause 8.1: whether or not endorsed by Mr McLeod to acknowledge receipt. Nor did it put in evidence anything purporting to be its own copy of such a document. The only resolution identified and tendered was that of 24 September 1999 (see paras [82], [83] and [194] above). 202 Thus, I conclude that, on 30 September 1999, the documents delivered by ozEcom to Hudson Investment: (1) Did include (among others) a Closing Certificate purporting to comply with the requirements of clause 8.2 (no defendant submitted that the Certificate that was actually delivered was in any formal way deficient); but (2) Did not include a board resolution in accordance with clause 8.1 relating to the Closing Certificate. Issue 1A(iv): waiver 203 It is not immediately apparent how this issue arises on the pleadings. However, since it was stated as an agreed issue, and since it is relevant to the issue with which I have just dealt, I will deal with it. 204 OzEcom put the position thus in its reply submissions: (1) Mr McLeod accepted without complaint the documents served on him on 30 September 1999. (2) It was incumbent on him then to make any point that the documents were wanting, whilst there was still time for ozEcom to comply. (3) Hudson Investment continued after service of the documents on 30 September to seek to obtain further subscriptions; this was inconsistent with the proposition that it was not obliged to make good any shortfall because of non compliance with clauses 6 and 8.1. (4) In the letter from Atanaskovic & Hartnell dated 30 September 1999, Hudson Investment took the position (already taken by Mr McLeod in his letter of the previous day) that there was no extension of obligation beyond 13 September 1999. (5) That position is " … hardly consistent with the proposition that Hudson Investment was under no obligation to make up the shortfall because clauses 6 and 8.1 had not been complied with." (para 33 of ozEcom's submissions in reply). 205 I do not accept those submissions. Mr McLeod had made his position clear on 30 September 1999: there was no extant underwriting obligation. I do not see why in those circumstances it was incumbent on him to check the adequacy of documents given to him to crystallise what he said was a non existent obligation, let alone to inform the giver of those documents that they were insufficient. 206 Nor do I think it relevant that (as the evidence suggests) Hudson Investment continued in the afternoon of 30 September 1999 to seek to find further subscriptions. It had made its position clear the previous day; and it reiterated this position on 30 September 1999. I do not think that a waiver, in relation to what on Hudson Investment's view were ineffective documents, can be spelt out of the fact that, nonetheless, it continued to assist ozEcom. 207 Likewise, I do not accept the last aspect of the way the case was put (as it is stated in the submissions in reply: based on the letters of 29 and 30 September 1999). The letter of 29 September 1999 could hardly have taken the position that documents not then delivered were inadequate for the purposes of clauses 6 or 8.1. The fact that the same point was not taken in a letter written and sent within hours of the delivery of documents the following day is hardly surprising. It cannot be taken to suggest that Hudson Investment, by failing to ensure that this reason was included in its solicitor's letter, has thereby waived the right to rely on it. 208 I have to say that, more fundamentally, I have some difficulty with the application of the concept of waiver in this context. The doctrine of waiver normally applies to, or in the context of, contractual or other rights. The term "waiver" is one frequently used, and almost as frequently abused. There is a notable lack of consistency in what it is used to denote: see Mason J in Sargent v A.S.L Developments Limited (1974) 131 CLR 634 at 655 and Hutley JA in J. & H. Manktelow Pty Ltd v Alloway Grazing Pty Ltd (1975) 1 NSWLR 385 at 389. As Mason CJ indicated in The Commonwealth v Verwayen (1990) 170 CLR 394 at 406-407, the word may be used in different contexts to describe election between inconsistent rights and estoppel against the assertion of a defence otherwise available. 209 In the present case, ozEcom appears to use the word in the former sense. The inconsistent rights between which the election is made are not defined; and, as I have said, I doubt that waiver in this sense is at all relevant. 210 If (a proposal that I would be loathe to accept given the total absence of any reference to it) ozEcom were intending to rely on waiver in the sense of estoppel against the assertion of a defence otherwise available, the submission must fail because its submissions do not address the factor that would be said to make it unconscionable for Hudson Investment to rely on the defence of non compliance with the requirements of clause 8.1. 211 Thus, as the issue was dealt with in ozEcom's written submissions in reply, I would conclude that there was no relevant waiver. 212 However, in oral submissions, Mr NA Cotman SC, who appeared with Mr MA Izzo counsel for the plaintiffs, placed reliance on the decision of the High Court of Australia in Peter Turnbull and Company Proprietary Limited v Mundus Trading Company (Australasia) Proprietary Limited (1954) 90 CLR 235. Mr Cotman put the proposition thus at T229.9-.25, .41-.50: "COTMAN: This is in a sense an extension of the argument I was putting to your Honour yesterday in relation to the damages issue that arises in relation to this contract. First we have the breach in relation to the best endeavours clause in relation to obtaining the spread and therefore satisfying the ASX's listing condition stated in its letter of 8 September, thereby, in effect, cutting out from under the IPO the point of the IPO which is to say to have listed securities for the subscribers, and secondly we have, in clear and unambiguous terms in Mr McLeod's communications, the proposition that even in relation to the idea that the underwriting agreement is still on foot and is still available to provide rights to Ozecom, a denial of that proposition. In our submission, that is tantamount to saying that there is no point in you doing that which the underwriting agreement would require you to do. … HIS HONOUR: --your alternative proposition, that if you didn't, you were discharged from compliance, doesn't appear to be raised? COTMAN: It is really the other way around, with respect. Can a defendant that is in repudiatory breach be heard to set up the breach of the condition as a discharging matter in relation to what would otherwise be its liability for non-performance of the obligation." 213 Mr Cotman restated the point at T230.37-.46: "The second proposition we make is in any event, after at least the 28th and/or the morning of the 29th Hudson Investments is in repudiatory breach of the underwriting agreement by reason of denial of its operative effect; indeed, as we have put in the submissions, wrongful denial of its operative effect, and which proposition is then confirmed by the letters of the 30th so as to disentitle Hudsons for relying on any default under the agreement of any sort as discharging or inhibiting the capacity of Ozecom to sue for damages to the breach." 214 The "Peter Turnbull" point was not pleaded, nor was it raised squarely in the statement of issues. Mr Cotman's only answer to the former proposition point was that " … we do plead … that the defendant is in breach by its repudiation of its denial of its liability in relation to its denial of the operative effect of the underwriting agreement" (T229.35). However, when it was put to him that the "Peter Turnbull" issue was not "squarely raised on the pleadings" and "certainly isn't reflected in the agreed issues" (T229.55), he did not respond, let alone demur. 215 In the circumstances, I have some doubt that I should deal with the point. However, since there is in my view a factual answer to it, I will do so. 216 Peter Turnbull related to a written agreement for the sale and purchase of oats at a specified price FOB Sydney to be loaded on a ship or ships nominated by the plaintiff during January or February 1951. The plaintiff was to give 14 days' notice of ships and dates to the defendant. At no time did the plaintiff do this. However, before the last date for delivery had passed, the defendant on a number of occasions informed the plaintiff that it had no oats and could not perform its contract. The plaintiff bought oats elsewhere at a higher price (to satisfy contracts that it had made onselling the oats to be delivered by the defendant). It sued the defendant for the loss, being the difference between the price it paid for the oats and the price that it would have paid the defendant. The defendant set up in answer to this the plaintiff's failure to nominate any ship and to give 14 days' notice of this and of the shipping date. 217 The Court held by majority that the plaintiff was entitled to succeed. Dixon CJ said at 245 "that the plaintiff is entitled to succeed on the ground that, in so far as there was a non-fulfilment of the condition requiring the nomination of a February ship and the giving of fourteen days' notice of the ship and the shipping date, the defendant dispensed the plaintiff from such fulfilment". His Honour said at 246 that "the defendant clearly intimated to the plaintiff that it was useless to pursue the condition of the contract applicable to shipment in Sydney and that the plaintiff need not do so. The fact that … the plaintiff might have elected to treat the defendant's intimation as a discharge by breach may be disregarded." 218 At 246-247, Dixon CJ explained the matter in terms of effective (although not actual) prevention (I omit citations): " … It was always the law that, if a contracting party prevented the fulfilment by the opposite party to the contract of a condition precedent therein expressed or implied, it was equal to performance thereof … . But a plaintiff may be dispensed from performing a condition by the defendant expressly or impliedly intimating that it is useless for him to perform it and requesting him not to do so. If the plaintiff acts upon the intimation it is just as effective as actual prevention." 219 His Honour referred at 247 to a number of cases as authority for this proposition. One was the decision of Lord Mansfield CJ in Jones v Barkley (1781) 2 Dougl 684; 99 ER 434. In that case, Lord Mansfield said (at 694, 440), in relation to a plea that a condition precedent was not met: "The party [ie, plaintiff] must shew that he was ready; but if the other stops him on the ground of an intention not to perform his part, it is not necessary for the first to go farther, and do a nugatory act." 220 Webb J appeared to adopt the reasons of Dixon CJ. 221 Kitto J, the third member of the majority, reasoned to similar effect. At 251, his Honour referred to the case as being one "where in all the circumstances the refusal necessarily conveys to [the plaintiff] that he need not trouble to fulfil a condition to which [the defendant's] obligations under the contract are subject, because even if he does [the defendant] will still not perform his obligations." 222 In the present case, on the findings that I have made, there was no repudiation, anticipatory or otherwise. That is because, on the findings that I have made, any underwriting obligation (which of course was conditional on delivery of documents under clauses 6 and 8 of the underwriting agreement) terminated after, at the latest, 6 September 1999. The matters to which Mr Cotman pointed as constituting anticipatory repudiation occurred after that date. 223 Secondly, the only relevant conclusive denial of any obligation to underwrite was that comprised in Mr McLeod's letter of 29 September 1999. (I say "conclusive", because the earlier statements, whilst inconsistent with any extant obligation to underwrite, related to the size of the commitment.) It is clear that ozEcom did not regard Mr McLeod's letter as relieving it of the necessity to serve documents in accordance with clauses 6 and 8 of the underwriting agreement, because the very next day it attempted to do so. Thus, to paraphrase the language of Dixon CJ in Peter Turnbull at 247, this is not a case where ozEcom acted on such intimation (as to the inutility of performance) as might have been derived from Mr McLeod's letter of 29 September 1999, either alone or in context. On the contrary, it sought to do what, as it well understood, had to be done to crystallise Hudson Investment's underwriting obligation. 224 Thus, even if the Peter Turnbull argument were open to ozEcom, I would reject it. I conclude that issue 1A(iv) should be answered "no". Issues 1A(v)-(vii): miscellaneous 225 The conclusions to which I have come make it unnecessary to answer these issues, and they should be so answered. Issue 1A(viii): termination of the underwriting agreement 226 I have to say that I do not understand this issue. On the findings that I have made, any underwriting obligation that Hudson Investment had under the underwriting agreement lapsed no later than 6 September 1999; and even if it had not lapsed, but continued (or were continued) thereafter, it was not enlivened, or crystallised, because ozEcom failed on 30 September 1999 to deliver a certified copy of the board resolution required by clause 8.1. Since on any view the issue had closed (both for the purposes of the underwriting agreement and for the purposes of the prospectus) by that date, there was nothing left of Hudson Investment's obligations under the underwriting agreement. In those circumstances, the question of termination is academic. Issue 1A(ix), (x): Hudson Investment's obligations; damages 227 My conclusions mean that each of these issues must be answered "no". Issue 1B(i), (ii): further terms 228 OzEcom did not press these issues, and they should be answered accordingly. Issue 1B(iii): best endeavours 229 This issue remains alive for two reasons. First, it may provide ozEcom with an alternative ground for success. Second, and in any event, it is (at least on ozEcom's submissions) relevant to Hudson Investment's cross-claim for the underwriting fee. Best endeavours: the relevant principles 230 The parties were not in dispute as to the applicable principles. They have been explained in a great number of cases, including Transfield Proprietary Limited v Arlo International Limited (1980) 144 CLR 83 and Hospital Products Limited v United States Surgical Corporation And Others (1985) 156 CLR 41. Brereton J summarised the principles thus in Hexiver Pty Ltd v Lederer [2006] NSWSC 1129 at paras [44], [45]: "44 In construing these provisions, one must consider the whole instrument, and if possible construe the words of every clause harmoniously with each other [ Australian Broadcasting Commission v Australasian Performing Right Association Limited (1973) 129 CLR 99, 109]. 45 While an obligation to use "best endeavours" does not require the person who undertakes it to go beyond the bounds of reason, he or she is required to do all that can reasonably be done in the circumstances to achieve the contractual object (but no more) [ Sheffield District Railway Co v Great Central Railway Co (1911) 27 TLR 451, 452; Terrell v Mabie Todd & Coy Ld (1952) 69 RPC 234, 237; Transfield Proprietary Limited v Arlo International Limited (1980) 144 CLR 83, 101 (Mason J), 107 (Wilson J); Hospital Products Limited v United States Surgical Corporation (1985) 156 CLR 41, 64 (Gibbs CJ)]. As Mason J (as he then was) said in Transfield (at 101), such an obligation describes a standard of endeavour that is measured by what is reasonable in the circumstances. The content of a "best endeavours" clause is influenced by its contractual and factual contexts [ Hospital Products , 64]." 231 The following principles appear from the authorities to which I have referred and others: (1) An obligation to use best endeavours to achieve an outcome is neither an unqualified obligation to achieve that outcome nor a warranty that it will be achieved. (2) The content of the obligation to use "best endeavours" must be measured having regard to the contract as a whole and to the factual context in which the best endeavours fall to be exerted. (3) In ascertaining whether best endeavours have been exerted, the Court should have regard to the qualifications, abilities and responsibilities of the person obliged to exert them. (4) Stipulation of an obligation to use "best endeavours" necessarily carries with it an understanding that the outcome, towards the achievement of which the best endeavours are to be directed, may not in fact be achieved. Delegation 232 A question of particular significance for this case arises where the party bound to use best endeavours delegates the performance of the relevant tasks to another. Is it a sufficient use of best endeavours if the delegator believes, on reasonable grounds, that the delegate has the capacity and will to do what is required to satisfy the obligation? Or does the delegator remain liable if in fact the delegate fails to use its best endeavours? A resolution of those questions may turn on whether it is open to the delegator, as well as the delegate, to do all that reasonably should be done in the exercise of a "best endeavours" obligation. 233 In principle, it seems to me that the answer to these questions will depend upon both the terms of the particular contract and the facts of the particular case. At a level of extreme generality, I incline to the view that where a particular obligation is cast on a party to a contract, that party cannot rely simply on the fact of delegation to an apparently qualified delegate as proof that it has satisfied its own contractual obligation. The party having the benefit of the obligation is entitled to have it performed by the person with whom it made the bargain, in the absence of any contractual term to the contrary. 234 However, where some licence, qualification or authority is required for the performance of some or all of the acts that would normally fall within the description of "best endeavours", and where the parties at the time they made their contract knew that the party promising to use best endeavours did not possess that licence, qualification, or authority, and proposed to delegate to someone who did the performance of the relevant acts, different considerations may arise. 235 As I have said, that is a relevant issue in this case, because it is contended that some of the obligations assumed by Hudson Investment pursuant to the underwriting agreement could only have been performed by the holder of a dealer's licence. The parties appear to have proceeded on this basis, and they appear to have proceeded on the basis that performance of any such obligations would be delegated to Hudson Securities, which as I said did hold the relevant licence. 236 I do not think that it is possible to lay down any hard and fast, or general, rule as to when delegation (of either the whole or a particular aspect of the obligation to use "best endeavours") will of itself satisfy the obligation of the party bound to use its best endeavours. 237 In any event, that question, although relevant, may be of relatively small practical application in this case, given that, on the evidence, Mr Sutton was personally involved in such activities as were undertaken by Hudson Securities on behalf of Hudson Investment. The relevant facts 238 The "spread" was a matter of great significance. Firstly, achievement of the spread was required if ozEcom were to be listed on the ASX – and one of the aims of the IPO was to float ozEcom as a listed public company. Secondly, if the spread were not achieved, Hudson Investment would be relieved of its underwriting obligation (see clause 13.6(a) of the underwriting agreement and s 1031(1)(b) of the Corporations Law as it then stood). In other words, if the spread were not achieved, ozEcom would not receive the capital injection that the IPO was intended to produce. 239 There was a sharp distinction between the differing approaches taken by the parties both as to what was in fact done by Hudson Investment (and Hudson Securities) in exercise of the "best endeavours" obligation, and as to the sufficiency of what was done. 240 Before the underwriting agreement was signed, Hudson Investment requested (through Mr Tan) and received (from Ms Sylvester and Mr Cleland) a list of prospective investors (see para [29] above). One way or another, many – indeed, the majority – of those investors were associated with the principals of ozEcom. Clearly, ozEcom did not think that all those investors would take up shares in the numbers indicated on the list: had they done so, the float would have been oversubscribed and the spread requirement would have been met. 241 There was no evidence in the records of Hudson Investment or Hudson Securities that any check or evaluation had been made of the list of prospective investors supplied on 21 May 1999. 242 The list also contained references to two broking firms: "Lonsdale private clients" and "Merrill Lynch private clients". I will return to the evidence relating to those two brokers. 243 On 16 June 1999, Mr Sutton (on the letterhead of Hudson Securities) sent a memorandum to "advisers". Omitting formal parts, the memorandum reads as follows: "Hudson Investment Group is the underwriter for an issue of 20,000,000 shares in this company, to take place around early to mid July 1999. Hudson Securities is holding application lists for more shares than available, so applications for new shares will be very tight. The business of the company is the provision of finance to corporations against sales generated on the internet. This is a form of electronic factoring and should be very profitable to ozEcom. The company already has signed a Heads of Agreement with a major pastoral supply company which in a full trading year should provide revenue of $1.0bn on which ozEcom should have gross income of $20 million. Unlike most e-commerce businesses, ozEcom is expected to be profitable in its first year and earnings should increase rapidly in later years. Some advisers have already provided lists of prospective applicants and all advisers are requested to provide names for 50,000 shares (at 50c each) to Suzzanne Russell. Spread of shareholders is important in allotting the shares. Advisers will be provided with prospectuses as soon as available." 244 It is apparent from this memorandum that Mr Sutton was well aware of the need to achieve the requisite spread (then 500, later reduced to 400). 245 On 9 August 1999, Mr Sutton sent two further memoranda to advisers. The first of those informed advisers that the prospectus had been registered and the IPO was open. It asked each adviser to submit his or her client list for an initial allocation of 100,000 shares by the following day. 246 The second memorandum of 9 August 1999 informed advisers that they would receive a current client list. It requested them to indicate each client whom they wished to receive a prospectus, and confirmed that each adviser had a firm allocation of 100,000 shares to place with clients. 247 Mr Sutton sent another memorandum to advisers on 10 August 1999. It gave further information about ozEcom (omitting formal parts): " About the Company ozEcom is basically an e-commerce finance company providing funding for client companies against their sales to their customer base over the internet. For example ozEcom has an agreement with a large pastoral company, IAMA Limited. All of IAMA's products will be catalogued on the company's website and customers will be able to purchase goods at a discount over the net. The amount of the discount or "reward" will be determined by the time taken by the customer to pay the account. OzEcom earns revenue by charging a fee based on the dollar value of transactions entered into by its vendor clients. The attractions of the ozEcom system to the vendor clients are reduction in working capital requirements as debtors are all financed within 24 hours of sale, reduction in stock holdings as stocks can be dispatched directly from warehouses to final consumers and reduction in selling costs as sales forces can be substantially reduced by customers ordering on the net. The prospectus forecasts year 1 sales revenue of $14m and a net profit of $485,000. The company's business is expected to grow strongly as many companies are expected to join the system in the coming months." 248 Mr Sutton sent a further memorandum to advisers on 18 August 1999. It reads as follows (omitting formal parts): "There will be a presentation on ozEcom by Robert Cleland, the Executive Chairman, at 4.30pm today in the Boardroom. All advisers are expected to attend the opportunity to discuss the IPO and the company's prospects. The list for addresses is requested by 2pm today so that the labels can be printed. Advisers will receive 1% of the amount of all successful applications." 249 Hudson Securities prepared three draft letters, one dated 17 August 1999, and two dated 19 August 1999. The draft of 17 August 1999 offered the addressee a firm allocation of shares in the IPO. The drafts of 19 August 1999 offered the addressee the opportunity to subscribe for shares. One of the drafts of 19 August 1999 was to be sent to prospective investors whose names and addresses had been supplied by ozEcom. 250 On 18 August 1999, Hudson Securities generated a list of potential investors. (The date comes from the "properties box" for the electronic version of that document.) The list contains some 22 names. 251 The last memorandum to advisers disclosed by the evidence is dated 24 August 1999. Once again omitting formal parts it reads as follows: "The offer is now progressing and in order to ensure that the company has sufficient spread of shareholders the allocation to each adviser has been increased to 200,000 shares or $100,000. The commission rate is 1% nett of the amount raised, so those advisers who fill this allocation receive $1,000. If you need any additional prospectuses sent to clients please see Suzzanne." 252 Mr Scadden's review of the records of Hudson Investment and Hudson Securities disclosed the following: (1) There was no mailing list other than that (containing 22 names) referred to in para [250] above. (2) There was no evidence of any mailout after 19 August 1999. (3) There was no evidence that two directors of Hudson Securities, Mr Dunstan and Mr Andrews (at least the latter of whom was an experienced broker), were involved in the placement. (4) Apart from the documents to which I have referred, there was no evidence of any "selling" activities undertaken by Hudson Securities. (5) There was no evidence of any attempt to obtain subunderwriters to the issue, or of approach to other brokers to introduce their clients to the IPO. 253 The last point is telling. In mid July 1999, Ms Sylvester had approached an acquaintance of hers, Mr Norman Graham, of a broking house known as Lonsdale Securities Limited. She spoke to him about subunderwriting the issue. On 27 July 1999, Mr Graham wrote to Ms Sylvester. The letter reads as follows (omitting formal parts): "After discussions of late I thought that I should pen the following thoughts. Lonsdale Securities Limited (LSL) has just signed an underwriting commitment via an armslength company called Lonsdale Corporate Services (LCS). The issue is for a company called Isis Communications Limited. LCS for the benefit of the issuer places this via a variety of investment advisors. These include: . ASX members via sub-underwriting or placements only . Institutions . Corporates and . Private clients The need for this extends to the requirement by the underwriter to assure itself that an effective after market can be established, and that a broad register of shareholders can be established. Sub-underwriters take on some of the underwriting risk on this is [sic] usually offered to other ASX members and or Institutions with 2 fee structures. 1 a subbing fee and 2 a placement fee. Typically 1% on each. What LSL would be proposing to ozEcom and its underwriter Hudson Securities would be to participate in a placement role with your issue. This placement role would be to place on a best endeavours basis $1,250,000 worth of stock to existing convertible note holders, a predetermining list of investors supplied by your company, and a spread of LSL private clients that would be vetted by myself in the role of Managing Director of LSL. This involvement would include a fair degree of work and administration responsibilities and would subsequently attract a fee paid to us by Hudson Securities of 1% of the position placed, i.e., $1,250,000 x 1% = $12,500. LSL would assure, on a best endeavours basis, that all relevant correspondence was forwarded to the potential investors, cheques and documentation received in our office, photostatted and lodged, and then forwarded on to the registry with our broking stamp appearing on the prospectus form. This would give ozEcom the benefit of having 2 brokers at least involved with after market and hence relinquishing some of the risk of having only one participant who may have the ability to become a little distracted in due course." 254 Ms Sylvester discussed Mr Graham's letter with Mr Sutton shortly after 27 July 1999. Her unchallenged evidence was that she had a conversation with him to the following effect: "Me: "Have you thought about sub-underwritings. Graham is a good friend of mine. I have told him about OzEcom and he would be prepared to sub-underwrite about $1.25 million for a fee of 1%." David Sutton: "Vincent won't want to give up any of our fee. I don't think we need sub-underwriters. We have a sufficient client base to do this ourselves." 255 Nor is there any evidence that Hudson Investment or Hudson Securities followed up the reference to private clients of Merrill Lynch (see para [242] above). 256 There was no expert evidence as to what an underwriter in the position of Hudson Investment might do to secure sufficient subscriptions to satisfy the ASX's spread requirement. Ms Sylvester, who has substantial experience in business, gave the following evidence in para 14 of her affidavit sworn 27 September 2005: "In my experience, an underwriter is the company that "guarantees" the capital raising and would be obliged to meet any shortfall in subscriptions by taking up any shares not taken up by other members of the investment community or public. A lead broker is often, although not always, the underwriter as well and its role is to work with the company on target investors to sell the stock to the investors. The lead broker usually has someone on a due diligence committee which is responsible within the company to prepare the prospectus and attend to regulatory issues. The lead broker is usually actively involved in all aspects of marketing of the prospectus. In addition, it is a lead broker's responsibility to ensure that a shareholder spread is achieved. It is often the case that the underwriter and its associated broking arm, if any, will appoint a sub-underwriter to reduce their overall risk and enhance marketing reach to investors." 257 There was no relevant challenge to that evidence, and I accept it. 258 The only evidence as to why Hudson Investment did not approach subunderwriters is the inference available from Ms Sylvester's account of her conversation with Mr Sutton on 27 July 1999. Hudson Investment's obligation was to use its best endeavours to secure the spread. Clearly enough, the appointment of subunderwriters may have assisted in that (and Mr A I Tonking of counsel, who appeared for Hudson Investment, did not submit otherwise). It may have been a sufficient reason not to appoint subunderwriters that Hudson Investment had "a sufficient client base" to achieve the spread itself; although the evidence does not show that it did. Mr Tan's apparent unwillingness to share the underwriting fee was not a sufficient reason. Hudson Investment Group's track record 259 The evidence included a "corporate profile" of the "Hudson Group of Companies" as at August 1999. That document said the following of Hudson Investment: " Hudson Investment Group Limited (HGL) 'Hudson' – the name has traded continuously in the timber and building industries in Australia since 1846. In June 1994, the Company gained listing on the Australian Stock Exchange. Over the period 1995 to 1999 the Company has grown rapidly, with two major subsidiaries being spun-off. Hudson Investment Group is now the parent of a diversified group of listed and unlisted companies with four broad areas of operating being timber and hardware, resources and minerals, property management and development and corporate and financial services. Each of these broad areas are highlighted below. The Company is finalising the acquisition of a major timber products manufacturer and is seeking a Distribution Agreement with one of the world's largest appliance and hardware manufacturers. As at 31 December 1998, Hudson Investment Group had total assets of $132 million (over $200 million if revalued to share market prices) and Group consolidated revenue of $183 million. Operating profit for the same period was $4.84 million." 260 Nothing in that profile suggests that Hudson Investment had any prior experience in the underwriting of IPOs. 261 In relation to Hudson Securities, the corporate profile stated the following: " Hudson Securities Pty Limited (HSPL) 100% A Corporate Member of the Australian Stock Exchange Limited, Hudson Securities commenced operation on 2 September 1996 to provide stockbroking and specialist investment services with its focus directed to the following: . Stockbroking services in Australian securities to: - investors in Australia, including private clients and institutions - brokers, corporate and private clients in South East Asia. . Provisions of corporate and financial services to both Asia and Australian companies, particularly in capital raisings and public offerings. . To facilitate the investment of Asian funds into Australia and the provision of strategic services to Asian companies wishing to establish operations in Australia. Total staff, including advisers is 45. In addition to sub underwritings following is a list of companies for which the Company has been instrumental in completing successful capital raising: Hudson Investment Group Placement, 1997 & 98 $8 million Hudson Property Group IPO, 1997 $10 million Hudson Timber & IPO, 1998 $40 million Hardware Reef Mining NL Underwriting 1996 $5.0 million Imperial Mining NL Placement, 1997 & 98 $5.4 million Waiviata International Placement 1999 $1.1 million OzEcom Limited IPO, 1999 $26 million Meekatharra Limited Placement, 1999 $1.2 million In addition the Company has been involved in major IPO's placement of shares including Orica Limited, Telstra Limited, TAB Limited and Colonial Group Limited." 262 The corporate profile then set out details relating to other partly owned subsidiaries of Hudson Investment. They can be disregarded for present purposes, since none of them appears from the document to have had any prior experience in underwriting IPOs. 263 The list of capital raisings for which Hudson Securities claimed full or partial credit was the subject of evidence from Mr Scadden. He said that the first three listed (Hudson Investment, Hudson Property and Hudson Timber and Hardware) were, as the names suggest, placements or IPOs for companies in the Hudson Investment Group (T156.20). A further three (Reef Mining, Imperial Mining and Waiviata) related to companies associated with Mr Sutton or Mr McLeod (T156.30-157.10). Thus, the only "external" capital raisings in the list were those for ozEcom and Meekatharra. Mr Scadden knew nothing of the latter. 264 The reference to a capital raising of $26 million for ozEcom is quite inexplicable. The capital raising actually undertaken through ozEcom's IPO was for $10 million. There was no evidence whatsoever of any proposed (let alone successful) capital raising for $26 million. Mr Scadden confirmed that there was nothing in the records of the Hudson Investment Group that might meet the description given in the corporate profile. 265 There was no evidence of the extent of the nature of Hudson Securities' involvement in the placements for Orica, Telstra, TAB or Colonial Group. Analysis 266 In my view, the evidence falls well short of establishing that Hudson Investment complied with its obligation to use its best endeavours to achieve the requisite spread. There are a number of reasons for this. 267 Firstly, it is apparent on the evidence that Hudson Investment had no prior experience in underwriting IPOs; and such business as it may have carried on itself was remote from that field of endeavour. 268 Secondly, there is no evidence that Mr Sutton had any experience in the underwriting of IPOs. The same may be said of Mr McLeod, to the extent that his experience is in any way relevant. (There are at least two reasons why his experience may not be relevant. The first is that he only came on the scene on 17 September 1999. The second is that, on his own admission – see para [106] above - he did not read the prospectus and file until some time after he became involved.) 269 Thirdly, to the extent that Hudson Investment relies on its delegation to Hudson Securities: (1) Hudson Securities appears to have had minimal experience in capital raisings apart from those undertaken for the Hudson Investment Group or companies associated with its principals. (2) In any event, the narration of Hudson Securities' experience must be suspect, given the reference to an IPO of $26 million for ozEcom. (3) There is no evidence of any systematic process of planning or management on the part of Hudson Securities to promote and "sell" the IPO. (4) There is no evidence that Hudson Securities followed up, in any detailed or systematic way, the list of prospective investors given to it by Mr Cleland. (5) Nor did Hudson Securities follow up the references in that list to Lonsdale Securities or Merrill Lynch. (6) There is no evidence of any attempts made by advisers within Hudson Securities to promote the IPO to their individual clients, despite the somewhat perfunctory exhortations from Mr Sutton to do so. 270 Fourthly, Hudson Investment failed to follow up the reference to other brokers in the list of prospective investors provided to it by Mr Cleland. 271 Fifthly, and following on from the previous point, Hudson Investment rejected the offer of assistance from Mr Graham of Lonsdale Securities. Of the reasons given, one – its own client base – was (as events showed) demonstrably insufficient. The other – unwillingness to share the fee – was no reason at all. 272 There can be no doubt that Hudson Investment appreciated the significance of the obligation to achieve spread. On the evidence of Ms Sylvester and Mr Corfe, it was raised on a number of occasions with Mr Sutton. On each occasion, Mr Sutton indicated that Hudson Investment was paying attention to it. Indeed, it was Mr Sutton who appears to have carried on the discussions with the ASX which led to application to OzEom's IPO of the drop from 500 to 400. 273 Hudson Investment places reliance on its appointment of Hudson Securities. That was a necessary condition – because Hudson Investment did not itself hold a dealer's licence. But it was not sufficient. The obligation was undertaken by Hudson Investment. It was the company with the resources to meet the underwriting obligation if necessary. Whilst, no doubt, the parties expected that a mandate would be given to Hudson Securities to act as lead broker and manager, it does not follow that, by doing so, Hudson Investment could wash its hands of the obligation that it undertook under clause 3.5. 274 This is confirmed by the representations made prior to the signing of the underwriting agreement. Mr Sutton represented to Ms Sylvester and Mr Cleland that "Hudsons": (1) would have no problem underwriting the offer; (2) had the infrastructure and could meet preconditions to listing; (3) should be able to manage the spread from its own client base; and (4) had the asset backing to meet any shortfall if sufficient capital could not be raised. 275 As I have said, achievement of the spread was critical to the success of the IPO. Hudson Investment must have appreciated this. (Mr Tonking did not suggest that it did not; and the level of ignorance, or incompetence, that any such lack of understanding would bespeak, is not something that would tell in Hudson Investment's favour.) But it did very little to achieve the required spread. 276 The evidence as it stands leads inescapably to the inference that Hudson Investment did not use its best endeavours to achieve the spread. I am comforted in drawing that inference by its unexplained failure to call any of the relevant available witnesses (including Messrs Sutton and McLeod) whom one might have expected to be capable of giving evidence to the contrary. Conclusion 277 Issue 1B(iii) should be answered "no". Issue 1B(iv): damages 278 OzEcom puts its claim in three alternative ways: (1) Loss of the amount of the capital raising - $10 million. (2) Loss of the alleged shortfall – said to be $4,618,000. (3) Wasted expenses of the capital raising – said to be $472,372. (1) and (2) – capital losses 279 The defendants submitted that the loss of the amount of capital raising or the shortfall was not of itself a loss to ozEcom. They relied on the decision of French J in Adelaide Petroleum NL and Others v Poseidon Ltd and Others (1990) 98 ALR 431. His Honour's decision was affirmed on appeal: Poseidon Ltd and Another v Adelaide Petroleum NL and Others (1991) 105 ALR 25. The defendants also relied by analogy on the decision of the High Court in Pilmer And Ors v Duke Group Limited (In Liquidation) And Others (2001) 207 CLR 165, and of the Full Court of the Supreme Court of Western Australia in Strategic Minerals Corporation NL v Basham & Ors (1997) 15 ACLC 1,155. 280 OzEcom's submissions appeared somewhat to pass by this point. It summarised the defendants' position as being that the capital sums "are not claimable as loss on the basis that they are capital sums and not claimable as a matter of law" (written submissions in reply, para 63). It relied on the decision of Giles J in Segenhoe Ltd v Akins And Others (1990) 29 NSWLR 569. 281 The defendants' position was not that as a matter of principle capital sums are not recoverable. It was, as I have sought to explain, that the failure to raise capital did not of itself result in a loss to the company of the capital sum foregone. The defendants accepted (as did the authorities on which they relied) that a company would have a claim for the loss of use of the capital. However, as they submitted, ozEcom had not pleaded any case for loss of use of the capital, loss of opportunity, or other consequential loss (apart from the alleged wasted expenses). 282 The facts in Adelaide Petroleum were complex. It is sufficient for present purposes to note that one of the losses particularised by Adelaide Petroleum as a result of the misleading or deceptive conduct on which it relied was said to be loss of the opportunity to raise $5 million by way of a rights issue or placement, resulting in (among other things) loss of the funds that otherwise would have been raised: $5 million less expenses. 283 At first instance, French J dealt with this aspect of the claim at 530-531. His Honour recorded the submission of the respondents that the claim was misconceived; any funds raised would have been shareholders' funds, and Adelaide Petroleum's loss was at most the loss of use of those funds. His Honour accepted the submission (see 530-531): "This element of the calculation was attacked by senior counsel for the respondents on the basis that it was not a loss of capital. The funds raised under any placement would have been shareholders' funds and the most that could be said was that ADP would have lost the use of that money over the relevant period. When it was put to [a witness] that the true loss was simply the loss of use of the money, he agreed. In my opinion, the criticism is well founded and only the revenue element of this loss should be included in the calculations." 284 His Honour then identified "the benefit foregone which may properly found the calculation of loss and damage" arising from the loss of the opportunity to raise the capital. 285 His Honour's decision was upheld on appeal. Burchett J (with whom Sheppard J agreed) dealt with the point at 42. His Honour said that the approach taken by French J was correct: "The principal point raised in the argument on the cross-appeal was the proposition that Adelaide was deprived of some $4 million of capital which would have been raised … . His Honour declined to allow this capital sum, taking the view that the loss was a loss of revenue which might have been obtained by the use of the money, and not a loss of the capital. In my opinion, his Honour's approach was right. There was no evidence that the capital sum was irrevocably lost. It remained open to the company to make a share issue." 286 Lee J (with whom also Sheppard J agreed) dealt with the point at 51. His Honour held that the claim for the capital sum was misconceived. He said: "With regard to the cross-appeal in respect of the failure to include an element for loss of capital, the claim is misconceived and his Honour was plainly right in excluding that sum for his consideration. He included in his assessment the consideration of the value of the loss of revenue to be gained from the use of such capital, a favourable result for the respondents. Adelaide did not suffer a loss by failing to raise the capital involved on subscription or allotment of shares. It was not presented to his Honour that Adelaide lost the opportunity to establish a premium reserve by issue of the shares at a premium … ." 287 The point was not pursued in the High Court (Sellars v Adelaide Petroleum NL And Others (1994) 179 CLR 332). 288 The decision in Pilmer is not directly relevant. One of the questions raised was, what damage did a company suffer by issuing new shares (see the majority judgment of McHugh, Gummow, Hayne and Callinan JJ at 178-179 [18]). Their Honours concluded at 191 [53] that the company itself suffered no loss represented by the sum for which the shares might have been bought by an arm's length purchaser. 289 Strategic Minerals was also a case involving the question of the loss sustained by a company through allotment of shares. White J (with whom Pidgeon J agreed, and Murray J generally agreed) dealt with the Adelaide Petroleum point at 1189-1190. His Honour's consideration of the point was obiter because (as he noted at 1189) he had concluded that the plaintiff had not proved any loss or damage flowing from the alleged negligence of the defendants. 290 As is apparent from the appellant's submission recorded by White J at 1189, there was a question as to the application of the reasoning in Adelaide Petroleum to the facts considered by the Full Court in Strategic Minerals. His Honour said at 1190 that Adelaide Petroleum was authority for the proposition that the loss through failure to issue shares was not the loss of the capital sum, but the loss of use of that sum: "With respect, I am of opinion that Poseidon Ltd v Adelaide Petroleum NL & Ors … is not authority for the proposition that the issue of unallotted share capital by way of acquisition of assets does not represent a loss to the company. Rather, it is authority for the proposition that where a company has agreed to allot shares for consideration pursuant to a transaction which does not proceed, the resultant loss to the company by reason of the failure of that transaction is not the capital sum represented by the shares to be allotted but, rather, the loss of use of the consideration, in other words, the loss of the revenue which might have been derived by the investment of the agreed price." 291 It seems to be clear that his Honour agreed with this aspect of the decision of the Full Court in Adelaide Petroleum. 292 The defendants submitted that I should follow the Full Court decisions to which I have referred unless convinced that they were plainly wrong. OzEcom did not dispute the general principle. Its submission was that those decisions did not lead to the outcome for which the defendants contended. As I have said, it relied on the decision of Giles J in Segenhoe. 293 Segenhoe was a very different case. The plaintiff's draft accounts contained an underprovision for taxation, and thereby overstated the retained profits. The directors resolved to pay a dividend in almost the full amount of the retained profits. The result was that a substantial part of the dividend was paid out of capital. The company claimed that capital amount from the auditors. Giles J held that the loss was recoverable. His Honour's reasoning was in substance that, as a natural and direct result of the defendants' negligence, the plaintiff had paid away a sum of money that, otherwise, would not have been paid. 294 His Honour recorded at 574 the submission of the auditors that "the payment of a dividend out of capital should not be regarded as a loss to the company any more than the payment of a dividend out of profits – in either case it was a payment to, and for the benefit of, shareholders and in that sense for the purposes of the company." 295 His Honour rejected the argument. He held in substance that the payment was no different to any other payment made by reason of negligence. At 580, his Honour cited with approval the statement in the 4th Edition of Halsbury's Laws of England (Vol 7, para 607) that directors and auditors who are parties to the payment of a dividend out of capital are liable to make good the amount improperly paid away with interest. Later on the same page, his Honour said that the principle did not depend on the solvency (or otherwise) of the company. 296 His Honour's decision does not relate to the facts of the present case. OzEcom's reliance upon it appears to stem from what seems to be a misunderstanding of the precise point that the defendants put. 297 In circumstances where the precise point relied upon is supported by the authority of intermediate appellate courts of another State and the Commonwealth, I think that I should follow those decisions unless persuaded that they were plainly wrong: Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22 at para [135]. I do not think that they are plainly wrong, nor did ozEcom submit that they were. 298 The view for which ozEcom contends would lead to the position that ozEcom would receive the full benefit of the capital that (for argument's sake) should have been raised, together with interest for the intervening eight years. That amount would be available for the payment of creditors. Any surplus, after the claims of creditors and the costs of liquidation had been met, would be repaid to the shareholders of ozEcom. But if the capital had been raised, it would not have been sterilised. It would have been used for the company's purposes. It might have been dissipated. It might have increased. And there would have been substantially more – one might think, at least 400 more – shareholders. The anomalous situation that would flow from acceptance of ozEcom's submission is a clear illustration of the point that the capital raised should be treated (in the words of French J) as shareholders' funds, and of the failure to appreciate that the company would have had and (for argument's sake) has lost only the use of those funds. 299 Thus, the first two ways in which ozEcom puts its claim for damages must fail. (3) – wasted expenses 300 The third claim relates to wasted expenditure. As I understand the defendants' submissions, they accepted that in some circumstances wasted expenditure may be recoverable. However, they relied on the decision of the High Court in McRae And Another v Commonwealth Disposals Commission And Others (1951) 84 CLR 377 to support a submission that the wasted expenditure recoverable should be limited to that incurred on the faith of the relevant promise. That submission should be accepted. 301 The facts in McRae may be simply stated. The plaintiff tendered for the purchase of an oil tanker said to be lying on Jourmaund Reef. His tender was accepted and he was given a sales advice note confirming the purchase. The plaintiff could not locate the reef on a map. He made inquiry of the Commission. It gave him the latitude and longitude of the position at which the tanker was said to be. The plaintiff incurred expense in fitting out and undertaking a salvage expedition. There was no tanker at the reference point given or in the vicinity. 302 Webb J dismissed the action for damages for breach of contract, but awarded the plaintiff damages (less than those claimed) for deceit. There was an appeal and a cross-appeal. Dixon and Fullagar JJ held that the action for damages for breach of contract should succeed. They said at 410 that there was a contract, that the Commission contracted that a tanker existed at the position specified, and that because there was no such tanker, the Commission was in breach of its contract. 303 Their Honours then considered the question of damages. At 412 they noted that the real grievance of the plaintiffs was the wasted expenditure, and the question was whether that wasted expenditure could be recovered as damages for breach of contract. Their Honours concluded at 413 that the claim fell within the second rule in Hadley v Baxendale (1854) 9 Ex 341; 156 ER 145. At 414, their Honours rejected the argument that no damage had been suffered because the expense would have been incurred even had there been a tanker at the specified location. They said that the argument was fallacious because it assumed "that, if there had been a tanker, the expense incurred would equally have been wasted." Thus, their Honours concluded at 415, the damages were to be measured by reference to expenditure incurred and wasted in reliance on the promise that a tanker existed at the specified place. 304 The claim for wasted expenditure was made by a further amendment to the summons made shortly before the commencement of the hearing. The relevant amendments were to the prayers for relief and to the particulars of loss and damage. The amendment to the particulars consisted of adding the following: "Alternatively, ozEcom has suffered loss and damage in that it incurred expenditure on professional costs and ASX filing fees in relation to the failed share capital raising as set out in annexure "A"". 305 Annexure "A" referred to costs and expenses paid to solicitors, accountants and auditors and unrefunded listing fees. 306 There is no allegation that the expenses in question were incurred on the basis of, or in reliance upon, any promise made by Hudson Investment to ozEcom. Nor was there any evidence that this was so. Further, there could have been no such reliance in respect of anything spent, or incurred, before 26 May 1999 at the very earliest. (In the case of Hudson Securities, the "start date" may be later, given that any duty of care – see paras [320] and following below – would arise, at the earliest, when it accepted appointment as lead broker and manager. On the evidence, this did not happen until, at the earliest, 5 July 1999 – see paras [34] to [37] above.) 307 It is clear that ozEcom would not have proceeded with the IPO had it not entered into an underwriting agreement of the kind that was in fact made with Hudson Investment. Thus, it might be possible to infer that some expenditure made, or liabilities incurred, after 26 May 1999 were made, or incurred, on the faith of Hudson Investment's promises set out in the underwriting agreement. But the problem of dissection was not addressed in submissions, and is not something that is capable of easy resolution on the evidence as it stands. For example, some expenditures made or liabilities incurred after 26 May 1999 might have been made or incurred for ongoing services provided under a contract made before 26 May 1999. Even if Hudson Investment had declined to underwrite the IPO, ozEcom might have continued to incur those expenses in the hope that it would find someone else to do so. Indeed, given that substantial expense on any view had been incurred prior to 26 May 1999, in preparation for the IPO (and with the knowledge that it would have to be underwritten), I think that this is a reasonable inference. 308 The defendants did not address these problems in the cross-examination of Ms Sylvester and Mr Corfe. That is hardly surprising, given the absence of any pleading of "McRae" reliance. In those circumstances, I do not feel inclined to draw in favour of ozEcom any but the clearest inferences from such evidence as there is. 309 A similar, and in some ways more acute, problem of dissection arises in the case of Hudson Securities. 310 Because the matter was not addressed in ozEcom's evidence – except by tender of invoices and the like said to support the claim for wasted expenditure, but in fact going only to its quantification – I do not propose to make an arbitrary assessment of some fraction of the overall expenditure that might be recoverable on the views that I have expressed. 311 The very problem that has arisen was foreseen at the outset of the hearing. When I granted ozEcom leave further to amend its summons I said the following (T4.9-.17): "To the extent that it may be necessary to do so to accommodate the position of the defendants who may be taken by surprise, I reserve for further consideration the amendments to the particulars at paragraph 35. My present view is that if the case gets to the point where that is a head of damage claimable by the plaintiff then, unless the relevant defendants or cross-defendants consent, the quantification of that head of damage may need to be dealt with after the principal issues in the proceedings." 312 In the circumstances, I think, the appropriate course is to allow the parties to consider these reasons and to allow ozEcom to decide whether, having regard to what I have said as to the basis on which any wasted expenditure should be assessed, it wishes to press the claim. Conclusion on damages 313 I conclude that damages for the capital loss (whether expressed as the whole amount of the capital raising or as the amount said to be the shortfall) is not sustainable. In principle, the claim for wasted expenditure is; but only in respect of such expenditure as was incurred on the faith of Hudson Investment's promises in the underwriting agreement. In the present context, that means expenditure incurred on the faith of Hudson Investment's promise to use its best endeavours to achieve the necessary spread. In the case of Hudson Securities, the claim would be limited by reference to the date of inception of the duty of care. 314 Issue 1B(iv) should be answered accordingly. I would add that, had it been necessary to answer issue 1A(x), substantially the same answer – adapted to take account of the different nature of the relevant promises – would have been given. Issue 1C(i): Hudson Investment's fee 315 Hudson Investment claims the fee payable to it under the underwriting agreement. That fee was payable for all the services to be performed by Hudson Investment, including its obligations under clause 3.5. Hudson Investment accepts this. In its final written submissions it says, at para 55, that the fee: " … was clearly a payment for services, being the assumption of risk in underwriting the IPO and the discharge of the obligation in clause 3.5. In the absence of a finding that the latter obligation was not discharged, HIG should be entitled to its fee, regardless of whether the IPO achieved its objective." 316 I have found that Hudson Investment did breach its obligations under clause 3.5. It follows, as Hudson Investment would appear to accept, that it is not entitled to the fee. 317 In these circumstances, it is not necessary to go in detail to the case of Phillips v Ellinson Brothers Proprietary Limited (1941) 65 CLR 221, on which ozEcom placed reliance. It is I think sufficient to note that the proposition for which ozEcom contends, and which I have said should be decided in its favour, is supported by the judgment of Starke J at 233-234 (omitting citations): "It is a principle of English law that parties having contracted to do an entire work for a specific sum can recover nothing unless the work be done or it can be shown that it was the other party's fault that the work was incomplete or that there is something to justify the conclusion that the parties have entered into a fresh contract … . If the contract be indivisible and not severable, then nothing can be recovered under the contract unless it be completed according to its terms or a new contract is made or is to be implied from the acts of the parties, giving rise to new rights … ." 318 Thus, I conclude, issue 1C(i) should be answered "no". Issue 2A: Hudson Investment's duty of care 319 OzEcom did not press this issue. Issue 2B(i), (ii) and (iv): Hudson Securities' duty of care 320 OzEcom submitted that Hudson Securities did owe it a duty of care. Hudson Securities submitted that no such duty was owed. It was common ground that if a duty of care were owed, its content was as stated by Hudson Securities in paras 87 and 88 of its outline of submissions dated 30 April 2007. Those paragraphs read as follows (omitting citations): "If a duty of care was owed by Hudson Securities, then the standard of reasonable care required of Hudson Securities was that of the "ordinary" skilled broker: … In other words, the standard required of Hudson Securities would not vary from the standard expected of "the ordinary skilled practitioner within the field" - it would be sufficient if Hudson Securities showed "only average skill". … Accordingly, if Hudson Securities did owe a duty of care, it only required Hudson Securities "to bring to the task the competence and skill that was usual amongst" brokers … ". 321 OzEcom's claim is one for pure economic loss. I considered the relevant principles in Ingot Capital Investments & Ors v Macquarie Equity Capital Markets & Ors [No 6] [2007] NSWSC 124, and summarised relevant factors as follows in para [540]: "[540] Recent decisions of the High Court make it plain, in the context of a claim for pure economic loss, that: (1) Reasonable foreseeability of loss is not of itself a sufficient basis to impose a duty of care: Tame v New South Wales (2002) 211 CLR 317, 329 [6] (Gleeson CJ; Tame was a case of alleged psychiatric injury, but what his Honour said applies a fortiori to a case of pure economic loss); Sullivan v Moody And Others (2001) 207 CLR 562, 576 [420] (another case of alleged psychiatric and other injury; the comment just made in relation to Tame applies). (2) Nonetheless, reasonable foreseeability is a necessary condition of duty: Tame at 355 [103] (McHugh J). (3) The absence of reasonable foreseeability negates the existence of a duty of care (following from (2)). (4) A plaintiff's "vulnerability", in the sense of its inability to protect itself from the consequences of a defendant's want of reasonable care, is an important requirement in analysing whether any such duty of care is owed: Woolcock Street Investments Pty Ltd v CDG Pty Ltd And Another (2004) 216 CLR 515, 530 [23] (Gleeson CJ, Gummow, Hayne and Heydon JJ). (5) Another important consideration is assumption of responsibility coupled with known reliance: Woolcock Street at 531 [24] (ibid). (6) The existence and terms of any relevant contract may bear upon the existence and content of a duty of care: Astley And Others v Austrust Limited (1999) 197 CLR 1, 22 [47] (Gleeson CJ, McHugh, Gummow and Hayne JJ). To adapt the words of Lord Steyn (with whom the rest of the House of Lords agreed) in Williams And Another v Natural Life Health Foods Ltd [1998] 1 WLR 830 at 857, the role of the law of tort is to fill gaps where other remedies are not available. (7) The relevant statutory and common law context, including the allocation of responsibilities and the provision of remedies, is relevant to the determination, whether a duty of care should be imposed in a particular case: Esanda Finance Corporation Limited v Peat Marwick Hungerfords (1997) 188 CLR 241, 282, 286 (Mc Hugh J); and see Perre And Others v Apand Pty Limited (1999) 198 CLR 180, 192 [5] (Gleeson CJ; his Honour repeated this sentiment in Tame at 329 [6]), 226 [120] (McHugh J)." 322 As I observed in para [541], of the same judgment the material relevant to those headings might overlap to some extent. 323 OzEcom's pleadings provide little enlightenment as to the basis on which, it is said, Hudson Securities owed a duty of care. Paragraph 40 of its contentions reads as follows: "40. Hudson Securities owed a duty to OzEcom to take reasonable care and to exercise professional care, skill and diligence so as to prevent the occurrence of any loss or damage to OzEcom in the conduct of the underwriting." 324 A request for particulars of that bald assertion was met with the response that the duty of care was owed "as a matter of law". That cannot be correct as a complete response; the ascertainment of the existence of a duty of care to avoid economic loss necessarily involves examination of the facts of a particular case. See Gummow J in Perre And Others v Apand Pty Limited (1999) 198 CLR 180 at 253 [198]. 325 Presumably, what was meant was that the law imposed a duty of care on Hudson Securities in, or by reason of, the circumstances alleged elsewhere in the contentions. From the way that ozEcom put its closing submissions, that would appear to be the case; and since Hudson Securities was content to meet the case thus argued, I shall move on to consider the competing submissions. 326 It is clear that, from the outset, Hudson Securities was to be involved. That is apparent from the conversation that Ms Sylvester and Mr Corfe had with Mr Sutton early in May 1999, in the course of which Mr Sutton said that Hudson Securities would be the broker because it held the licence, and Hudson Investment would be the underwriter because it had the assets. It is also apparent from Mr Cleland's letter to Mr Sutton of 21 May 1999 which, as I have noted in para [30] above, was sent to Mr Sutton in his capacity as chairman of Hudson Investment but signed, apparently to indicate acceptance, by him on behalf of Hudson Securities. 327 Mr Sutton was a director of Hudson Securities and appears, from his exhortations to advisers, to have had some executive role in the company. 328 The duties undertaken by Hudson Securities pursuant to its retainer as lead broker and manager included managing the float and seeking to procure the necessary spread. OzEcom could not market the securities. Nor could Hudson Investment (as Mr Sutton had made plain to Ms Sylvester and Mr Corfe at the outset). Hudson Securities could (as, again, Mr Sutton had made plain to Ms Sylvester and Mr Corfe at the outset). 329 It is correct to say that as between ozEcom and Hudson Investment, it was Hudson Investment that assumed responsibility for the use of best endeavours to achieve the spread (through clause 3.5 of the underwriting agreement). But, as both ozEcom and Hudson Investment knew, the practical responsibility for that task was to be assigned to Hudson Securities. Hudson Securities knew that. It either held itself out as capable of performing that task, or permitted itself to be held out in that way (depending upon the identification of the hat that Mr Sutton wore in his initial discussions with Ms Sylvester and Mr Corfe). 330 Further, after the underwriting agreement was signed, Hudson Securities either represented that it was working towards achieving the spread, or permitted Hudson Investment to represent that it was doing so (again, depending on the identification of the hat that Mr Sutton was wearing from time to time when, as I have recounted above, he assured Ms Sylvester and others that steps were being taken to ensure that the requisite spread would be obtained). 331 The outcome that ozEcom wished to secure was twofold: raising $10 million in capital and listing on the ASX. Achieving the spread was critical to the attainment of each outcome. 332 In my view, the facts demonstrate that: (1) Hudson Securities assumed the responsibility for the performance of Hudson Investment's obligations in relation to spread; (2) OzEcom (and Hudson Investment) knew that Hudson Securities would do so; (3) OzEcom relied on Hudson Securities' assumption of responsibility; and (4) Hudson Securities knew that ozEcom would so rely on it. 333 Those circumstances – which do fall within ozEcom's pleaded case at para 16 of its contentions – are sufficient in my view to give rise to a duty of care on the part of Hudson Securities. That duty would arise upon the assumption of responsibility: as to which, see paras [34] to [37] above. As I have said, the content of that duty (if found to exist) was agreed. 334 There was some difference between the parties relating to what they called the scope of the duty of care. Hudson Securities submitted that the scope of the duty did not extend to achieving the spread (or using best endeavours to do so) or managing the listing. Those obligations, Hudson Securities submitted, were undertaken by it to Hudson Investment pursuant to whichever (if either) of the letters referred to in paras [34] to [37] above was the letter of engagement. 335 I do not accept that submission. For the reasons that I have given, the assumption of responsibility is a key factor in my conclusion that a duty of care was imposed on Hudson Securities. It would be anomalous if the extent or scope of the duty was not also to be determined by reference to the responsibilities that were assumed. 336 Issues 2B(i), (ii) and (iv) should be answered accordingly. Issue 2B(iii): did the duty of care lapse in early September 1999? 337 This issue is founded on para 30A of Hudson Securities' defence. The unwieldy nature of the allegations in that paragraph were addressed thus in Hudson Securities' written submissions at paras 80 to 82: " No duty owed from early September 1999 80. Further, a duty of care will not be found to have been owed by a person if that duty would not be compatible with other duties which that person owed: … 81. Accordingly, no duty of care would be imposed on Hudson Securities if it required Hudson Securities to act unlawfully. There is a tension between exercising "reasonable care" to achieve the Spread, on the one hand, and ensuring that the risks associated with an investment in ozEcom were fully explained to clients/potential applicants by Hudson Securities, in order to avoid any contravention of the statutory misleading or deceptive conduct provisions. In this regard - (a) By 30 August 1999 it was likely that there would be a substantial shortfall in the shares necessary for the IPO to close fully subscribed [CB2/763, 2nd para; CB3/866]; (b) As submitted in paragraphs 97 to 101 below, the evidence shows that the market for dot.com companies retreated from the initial enthusiasm in and before May 1999, to the extent that by September 1999 the Public Offer was regarded by ozEcom as no longer appropriate [CB2/755, 2nd para, but see further the evidentiary references in paragraphs 97 to 101 below]. Hudson Securities would have been acting misleadingly if it were to hold out investment in ozEcom as a relative attractive investment in such an environment; (c) By about mid September 1999 persons who had made applications for Offer Shares in ozEcom were withdrawing their applications and doing so in increasing numbers [CB3/866]. That is a matter which, again, would bear on the likely demand for the stock and would be a matter which ought to be brought to the attention of potential applicants for shares. Each of these pieces of information must have been of significance to a potential applicant, because they all would have suggested a lack of demand for the stock. 82. It follows that, from about the time when these matters became evident, the law would not impose any duty on Hudson Securities to exercise "reasonable care" to achieve the Spread. At the very least, the exercise of "reasonable care" from time to time must have accommodated the need to apprise potential applicants of the risks associated with an acquisition of shares in ozEcom, namely that it may well have turned out to be a poor investment. Since these matters were becoming evident by the end of August 1999, and since the Prospectus was only first disseminated between 11 and 18 August 1999 (see above), Hudson Securities had only a couple of weeks at most (if any period at all) during which it could lawfully have sold the stock without explicitly referring to such adverse features of the float". 338 I am not sure that the submissions reflect the full extent of para 30A of the defence. But this does not matter because, on the findings that I have made, Hudson Investment's breach of its obligations under clause 3.5 cannot have extended beyond the Closing Date of 6 September 1999. Given that the scope of Hudson Securities' duty, as I have found it, related to the performance of the obligations undertaken by Hudson Investment in relation to spread, the same must be true of the duty of care. 339 Since nothing in the pleadings or submissions identifies any relevant event or circumstance prior to the Closing Date, it is unnecessary to deal further with issue 2(b)(iii). Issue 2B(v): breach 340 For the reasons that I have given in relation to issue 1B(iii), this issue must be answered "yes". Issue 2C: causation 341 It is possible to deal relatively briefly with the various sub issues. The only breach (whether of contract or of a duty of care) that I have found relates to the issue of spread. In a sense, the case is one of loss of an opportunity, in that it cannot be said with certainty that, had Hudson Investment used its best endeavours, or had Hudson Securities used reasonable care and skill, the requisite spread must have been achieved. However, Hudson Investment represented on numerous occasions that the spread could be and would be achieved. Hudson Securities either made the same representations or permitted them to be made (again, depending upon the identification of Mr Sutton's hat from time to time). I do not find persuasive the argument that, in the face of those repeated representations, nonetheless the spread would not have been achieved. 342 Insofar as the other causation issues are concerned (relating to clauses 8.1, 8.2 and s 1031), it is sufficient to say that the breaches of duty in relation to spread, coupled with the conclusion that, but for those breaches of duty the spread would have been achieved, renders them irrelevant. They would be, at the most, hypothetical subsequent alternative causes of loss. Issue 2D: damages 343 For the reasons that I have given above, the only sustainable claim for damages is that relating to wasted expenses. 344 There is a defence of mitigation of loss, relating to the fact that ozEcom did in fact raise some $5 million in capital through a private placement early in 2000. Hudson Securities submits (written submissions dated 30 April 2007, para 121) that "[i]t may be inferred that its ability to do that would have been diminished very significantly if it had raised the $10 million it had hoped to raise in September 1999." 345 There is no evidence in support of that proposition. It is not one of self evident truth. Indeed, one might think, the completion of a successful capital raising, coupled with the development of ozEcom's business model through the employment of the capital thus raised, might have enhanced its ability to raise capital at a later time. 346 There are raised also issues of contributory negligence, based on the same matters identified in relation to causation. I do not think that any failure by ozEcom to comply with its obligations under clauses 6 and 8.1 of the underwriting agreement, or any misleading or deceptive conduct in which it may have engaged, relevantly caused or contributed to the wasted expenditure which is the measure of the loss that it has sustained by reason of Hudson Investment's breach of clause 3.5 and Hudson Securities' breach of its duty of care. That loss was complete by 6 September 1999, on the findings that I have made. Issue 2D(iv): the "Spread Representations" 347 Hudson Securities does not press this issue. Issues 3 and 4: unconscionable conduct and misleading or deceptive conduct 348 For the reasons that I have given in paras [181] to [187] above, these issues do not arise. Issue 5: claim against Mr Tan 349 These claims relate to the underwriting and extension representations alleged by ozEcom against Hudson Investment. Since I have found that this aspect of its case fails, it follows that there can be no case against Mr Tan based on breach of warranty of authority. Issue 6: misleading or deceptive conduct by ozEcom 350 This issue relates to the following representations pleaded by Hudson Investment in its amended cross-claim against ozEcom at paras 59A and 59B (I omit the particulars): "59A. In or about May 1999, the First Plaintiff represented to Sutton (in his capacity as an officer of HIG or alternatively in his capacity as an officer of the Second Defendant) (the " Spread Representations") that: (a) the First Plaintiff could provide the spread of shareholders to take up the offer of the proposed IPO; (b) the First Plaintiff had received expressions of interest from investors wanting to subscribe for shares to invest in the First Plaintiff up to or beyond $10 million; (c) the First Plaintiff would procure the shareholder spread required to make an IPO successful. … 59B. Further, and in the alternative, the First Plaintiff represented to Sutton (in his capacity as an officer of HIG or alternatively in his capacity as an officer of the Second Defendant) that IAMA Limited would subscribe for five million shares in the First Plaintiff in the IPO, either in its own right or through its employee, Phillip Hepburn (" The IAMA Investment Representation). … " 351 The representation pleaded in para 59B was made, at the latest on about 21 May 1999 when Mr Cleland wrote to Mr Sutton enclosing the list of subscribers to which I have referred in para [29] above. The representation was correct: on the evidence, ozEcom had received expressions of interest from prospective investors wishing to subscribe for at least $10 million worth of shares. The representation was not misleading or deceptive. 352 The list was given to Mr Tan to check. As I have said, little if anything was done to check it. Ms Sylvester's evidence supports the conclusion that the para 59A(b) representation was of interest to Mr Tan, and I am prepared to conclude that he, and through him Hudson Investment, relied on it in deciding to enter into the underwriting agreement. That goes nowhere since, as I have said, the representation was not misleading or deceptive. 353 There is no evidence that the other representations were made. 354 Issue 6(i) should be answered "yes" as to the representation pleaded in para 59A(b), but "no" otherwise. 355 Issue 6(ii) should be answered "no as to the representation that was made". 356 Issue 6(iii) should be answered "no". 357 Issue 6 (iv) should be answered "does not arise". 358 Issue 6(v) should be answered "yes, as to the representation alleged in para 59A(b), but not otherwise." 359 Issue 6 should be answered "no". Issues 7 and 8: cross-claims between Hudson Investment and Hudson Securities 360 These cross-claims relate to contribution or indemnity for any liability that the cross-claimant may be found to have to ozEcom. In addition, Hudson Securities seeks payment of its agreed fee of $100,000. 361 So far as the claims for contribution or indemnity are concerned, they can attach only in respect of the breach of the obligations (contractual or in negligence) relating to spread. In circumstances where Mr Sutton seems to have been involved very heavily both on behalf of Hudson Investment and on behalf of Hudson Securities, and seems to have taken responsibility for co-ordinating (if that is the right word) the activities of Hudson Securities, I think that the appropriate conclusion is that they should each be held, as between themselves, liable to contribute equally to whatever loss ozEcom may prove. 362 The claim to recover the fee falls into a different category. It was a fee payable for performance of the obligations that, the relevant parties appear to agree, were summarised in the unsigned letter of 18 July 1999 that was apparently created on 6 August 1999 (see para [35] above). The fee was payable for Hudson Securities' undertaking, on a best endeavours basis, two activities: undertaking and managing the application of the listing, and arranging shareholder spread. It was an entire consideration, not divisible between the two activities. On my findings, Hudson Securities failed singularly to use its best endeavours to arrange shareholder spread. For essentially the same reasons as I have given above in relation to the underwriting fee and commission (issue 1C(i)), Hudson Securities' claim for payment of its fee must fail. Issue 9: Hudson Investment's fourth cross-claim against Messrs Sutton, McLeod and Tan 363 So far as I understand this cross-claim (and I have to say that the submissions in support of it have not greatly assisted me to do so), it is predicated on a finding that the Extension Representations or Extension Agreements were made, or that Mr Tan separately somehow agreed to extend the Closing Date or represented that this would occur (see paras 83, 85, 92, 96 and 98 of Hudson Investment's written submissions dated 30 April 2007). Since I have found that Hudson Investment has no liability to ozEcom in respect of those matters, and since (as appears to be articulated in the written submissions to which I have referred) the fourth cross-claim does not relate to the breaches that I have found in relation to spread, the fourth cross-claim requires no further consideration. Issue 10: contribution or indemnity generally 364 It is not necessary to add to what I have said in relation to issues 6 to 9. Conclusions 365 OzEcom is entitled, should it wish to pursue the matter, to judgment for damages to be assessed in respect of wasted expenses incurred in reliance upon Hudson Investment's promise in clause 3.5 of the underwriting agreement or referable to Hudson Securities' breach of its duty of care. If that claim is pursued, and if the parties cannot agree on its quantification, it will be necessary for the question of quantification to be dealt with either by an Associate Justice of the Court or by a referee. OzEcom's claims should be dismissed otherwise. 366 The first cross-claim – by Hudson Investment against ozEcom, for recovery of the underwriting fee – fails, and it should be dismissed. 367 As between Hudson Investment and Hudson Securities, there should be judgments on the second and third cross-claims to achieve the result that each is liable for one half of such damages as ozEcom may prove should it pursue the matter. The fourth cross-claim should be dismissed. 368 I make the following orders: (1) Stand the proceedings over to 9.30 am on 31 August 2007 before me for directions. (2) Direct the plaintiffs to notify the defendants by 17 August 2007 of the orders that they seek to give effect to these reasons. (3) Direct the defendants to notify the plaintiffs by 24 August 2007 of the orders that each of them seeks to give effect to these reasons. (4) Direct any party seeking an order for costs to notify the party against whom a costs order is sought by 17 August 2007 of the costs order sought and, in brief, the reasons why it is sought. (5) Direct any party against whom a costs order is sought who disputes that the order as sought should be made to notify the party seeking the costs order by 24 August 2007 of that fact and, in brief, the reasons why the costs order sought is opposed. (6) Direct copies of all documents exchanged pursuant to orders (2) to (5) to be delivered to my associate at the same time as they are sent to their respective recipients. (7) Reserve for further consideration: (a) the orders to be made including, if necessary, for the further conduct of these proceedings; and (b) the questions of costs. (8) Reserve liberty to apply on 7 days' notice. – o0o - 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.