Supreme Court New South Wales Medium Neutral Citation: In the matter of Colorado Products Pty Ltd (in prov liq) [2014] NSWSC 789 Hearing dates: 19 - 22, 26 - 29 November 2013; 29 - 31 January 2014, 6 February 2014, 19 - 21 February 2014, 5, 7, 10 March 2014 Decision date: 16 June 2014 Jurisdiction: Equity Division - Corporations List Before: Black J Decision: Plaintiffs required to make an election between equitable compensation and account of profits in respect of diversion of business. Parties to be heard as form of orders and costs. Catchwords: TRADE PRACTICES - misleading or deceptive conduct - whether alleged representations were made by relevant defendant - representations as to future matters - whether relevant representations were misleading or deceptive or likely to mislead or deceive - whether defendant had reasonable grounds in making alleged representations - whether plaintiffs had relied on alleged representations - whether it can be established that loss and damage suffered by plaintiffs was caused by alleged representations - application of Corporations Act ss 1041, 1041E and 1041H, Fair Trading Act 1987 (NSW) ss 41, 42, 68 and Trade Practices Act 1974 (Cth). CONTRACTS - construction - where parties relevantly entered into share sale deed and shareholders agreement - where claims have been made in respect of, inter alia, misappropriation of monies, diversion of business and misuse of confidential information - whether relevant defendant had breached provisions under relevant agreements - post-contractual conduct - whether post-contractual conduct admissible to prove existence of relevant setoff agreement. CONTRACTS - restraint of trade - where relevant clauses contained in share sale deed and shareholders agreement prohibited parties from being involved in business which is the same or similar type of business conducted by relevant company - whether relevant clause is void for uncertainty - requirement to offer participation to company before taking up opportunity - whether relevant clause can be characterised as a restraint of trade clause - whether relevant clauses were reasonable as between parties - whether relevant clauses protected a legitimate interest - whether relevant clauses are contrary to public policy under Restraint of Trades Act 1976 (NSW) - whether relevant defendant had breached restraint of trade provisions. CORPORATIONS - assignment of choses in actions - where provisional liquidator had assigned equitable and statutory causes of action of company to relevant plaintiffs under Corporations Act s 477(2)(c) - whether assignment by provisional liquidator was effective - whether causes of action constituted 'property' so as to be capable of assignment by liquidator. CORPORATIONS - management and administration - duties and liabilities of officers of corporation - directors' duties - claim for breach of fiduciary duties and breach of directors' duties at general law - where relevant defendant was non-executive director of relevant company and director of other competing companies - conflict of interest - whether informed consent can be established - whether existing management structure narrowed scope of relevant defendant's fiduciary duties - where claims have been made in respect of, inter alia, misappropriation of monies, diversion of business and misuse of confidential information - whether relevant defendant's conduct amounted to breach of fiduciary duties. CORPORATIONS - management and administration - duties and liabilities of officers of corporation - claim for breach of Corporations Act 2001 (Cth) ss 180, 181, 182, 183 and 191 - duty of care and diligence - duty to act in good faith in the company's best interests - duty to not improperly use position to gain advantage or cause detriment to company - duty of disclosure - where claims have been made in respect of, inter alia, misappropriation of monies, diversion of business and misuse of confidential information - whether conduct of relevant defendants amounted to breach of statutory duties - accessorial liability - whether it can be established that relevant parties were knowingly concerned and involved in alleged contraventions of statutory duties under Corporations Act s 79. LANDLORD AND TENANT - agreement for lease - rent - claim for outstanding rent - whether claim for rent can be established - whether entry into lease was induced by misleading or deceptive conduct or breach of fiduciary or statutory duties - whether landlord is estopped from claiming rent - public policy considerations - whether lease was wrongfully terminated. REMEDIES - where relevant plaintiffs have been assigned causes of action in respect of breach of statutory duties by provisional liquidator of relevant company - whether relevant plaintiffs have standing to obtain compensatory relief under Corporations Act 2001 (Cth) s 1317H - whether plaintiffs are entitled to damages in respect of contravention of civil liability provisions under Corporations Act s 1324(10) - whether jurisdiction for granting injunction sufficiently enlivened for award of damages under s 1324(10). REMEDIES - equitable compensation - account of profits - whether plaintiffs entitled to await judgment before proceeding with election of remedies - whether plaintiffs or relevant company suffered loss and damage as result of any established breach - loss of business and opportunity - whether there was a diminution in value of company's business in respect of diversion of sales. Legislation Cited: - Australian Consumer Law s 18 - Companies (SA) Code s 229(4), 574(8) - Competition and Consumer Act 2010 (Cth) Sch 2 - Corporations Act 2001 (Cth) ss 57A, 79, 79(a), 79(c), 180, 180(1), 181, 181(1), 182, 182(1), 183, 183(1), 191, 232, 440D, 471B, 477, 477(2)(c), 477(2B), 601AB, 769C, 1041E, 1041F, 1041H, 1041I(1), 1317H, 1317H(1), 1317J, 1317J(2), 1317J(4), 1332, 1324, 1324(10) - Corporations Law ss 232(2), 232(4), 232(5), 232(6) - Evidence Act 1990 (NSW) ss 128, 140 - Fair Trading Act 1987 (NSW) ss 41, 42, 68 - Restraint of Trades Act 1976 (NSW) ss 4, 4(1), 4(2) Cases Cited: - Adler v Australian Securities and Investments Commission [2003] NSWCA 131; (2003) 179 FLR 1 - Al Raied v Minister for Immigration & Multicultural Affairs [2000] FCA 1357 - Angas Law Services Pty Ltd (in liq) v Carabelas [2005] HCA 23; (2005) 226 CLR 507 - Armagas Ltd v Mundogas SA [1985] 1 Ll R 1 - Artistic Builders Pty Ltd v Elliot and Tuthill (Mortgages) Pty Ltd [2002] NSWSC 16 - Australian Competition and Consumer Commission v Jewellery Group Pty Ltd [2012] FCA 848; (2012) 293 ALR 335 - Australian Competition and Consumer Commission v Telstra Corporation Ltd [2007] FCA 1904; (2007) 244 ALR 470 - Australian Growth Resources Corp Pty Ltd v Van Reesema (1988) 13 ACLR 261; (1988) 6 ACLC 529 - Australian Securities Commission v Gallagher (1993) 11 WAR 105; 10 ACSR 43 - Australian Securities & Investments Commission v Adler [2002] NSWSC 171; (2002) 168 FLR 253 - Australian Securities and Investments Commission v Cycclone Magnetic Engines Inc [2009] QSC 58; (2009) 224 FLR 50 - Australian Securities and Investments Commission v Hellicar [2012] HCA 17; (2012) 247 CLR 345 - Australian Securities and Investments Commission v Rich [2009] NSWSC 1229; (2009) 236 FLR 1 - Australian Securities & Investments Commission v Vines [2005] NSWSC 738; (2005) 55 ACSR 617 - Austress-Freyssinet Pty Ltd v Kowalski [2007] NSWSC 399 - Ballard v Multiplex Ltd [2008] NSWSC 1019; (2008) 68 ACSR 208 - Bank of Melbourne Ltd v HPM Pty Ltd (in liq) (1997) 26 ACSR 110 - Barescape Pty Ltd as Trustee for the V's Family Trust v Bacchus Holdings Pty Ltd as Trustee for the Bacchus Holdings Trust (No 9) [2012] NSWSC 984 - Barnes v Addy (1874) LR 9 Ch App 244 - Birtchnell v Equity Trustees, Executors & Agency Co Ltd [1929] HCA 24; (1929) 42 CLR 384 - Blatch v Archer (1774) 1 Cowp 63; 98 ER 969 - Boardman v Phipps [1967] 2 AC 46; [1966] 3 All ER 721 - Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61; (2001) 53 NSWLR 153 - Bray v Ford [1896] AC 44 - Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 - Buckley v Tutty [1971] HCA 71; (1971) 125 CLR 353 - Bull v Lee (No 2) [2009] NSWCA 362 - Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; (2004) 218 CLR 592 - Cactus Imaging Pty Ltd v Peters [2006] NSWSC 717; (2006) 71 NSWLR 9 - Camden v McKenzie [2007] QCA 136; [2008] 1 Qd R 39 - Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304 - Carey v Freehills [2013] FCA 954; (2013) 303 ALR 445 - Carr v Finance Corp of Australia Ltd (No 1) [1981] HCA 20; (1981) 147 CLR 246 - Celermajer Holdings Pty Ltd v Kopas [2011] NSWSC 40 - Chan v Zacharia [1984] HCA 36; (1984) 154 CLR 178 - Chen v Karandonis [2002] NSWCA 412 - Chew v R (1991) 4 WAR 21; 5 ACSR 473 - Chew v R [1992] HCA 18; (1992) 173 CLR 626 - Colour Control Centre Pty Ltd v Ty [1995] NSWSC 96 - Commissioner for Corporate Affairs v Green [1978] VR 505 - Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54; (1991) 174 CLR 64 - Cook's Constructions Pty Ltd v Brown [2004] NSWCA 105; (2004) 49 ACSR 62 - County Securities Pty Ltd v Challenger Group Holdings Pty Ltd [2008] NSWCA 193 - Craig v Silverbrook [2013] NSWSC 1687 - Diamond Hill Mining Pty Ltd v Huang Jin Mining Pty Ltd [2011] VSC 288; (2011) 84 ACSR 616 - Dib Group Pty Ltd v Ventouris Enterprises Pty Ltd [2011] NSWCA 300; (2011) 284 ALR 601 - Dilosa v Latec Finance Pty Ltd (1966) 84 WN (Pt 1) (NSW) 557 - Doyle v Australian Securities and Investments Commission [2005] HCA 78; (2005) 227 CLR 18 - EC Dawson Investments Pty Ltd v Crystal Finance Pty Ltd (No 3) [2013] WASC 183 - Executor Trustee Australia Ltd v Deloitte Haskins & Sells (1996) 135 FLR 314; (1996) 22 ACSR 270 - Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89 - Fawcett Properties Ltd v Buckingham County Council [1961] AC 636; [1960] 3 All ER 503 - Forge v Australian Securities and Investments Commission [2004] NSWCA 448; (2004) 213 ALR 574 - Forkserve Pty Ltd v Jack [2000] NSWSC 1064; (2000) 19 ACLC 299 - Forty Two International Pty Ltd v Barnes [2014] FCA 85; (2014) 97 ACSR 450 - Furs Ltd v Tomkies [1936] HCA 3; (1936) 54 CLR 583 - GE Capital Australia v Davis [2002] NSWSC 1146; (2002) 180 FLR 250 - GM & AM Pearce & Co Pty Ltd v Australian Tallow Producers [2005] VSCA 113 - Georgiadis v Australian and Overseas Telecommunications Corporation [1994] HCA 6; (1994) 179 CLR 297 - Grimaldi v Chameleon Mining NL (No 2) [2012] FCAFC 6; (2012) 200 FCR 296 - Hanave Pty Ltd v LFOT Pty Ltd [1999] FCA 357, (1999) 43 IPR 545 - Grove v Flavel (1986) 43 SASR 410; (1986) 11 ACLR 161 - Henville v Walker [2001] HCA 52; (2001) 206 CLR 459 - Holyoake Industries (Vic) Pty Ltd v V-Flow Pty Ltd [2011] FCA 1154; (2011) 86 ACSR 393 - Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41 - Howard v Commissioner of Taxation [2014] HCA 21 - Hoy Mobile Pty Ltd v Allphones Retail Pty Ltd (No 2) [2008] FCA 810 - Hydrocool Pty Ltd v Hepburn (No 4) [2011] FCA 495; (2011) 279 ALR 646 - Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Market Ltd [2008] NSWCA 206; (2008) 73 NSWLR 653 - In the matter of Colorado Products Pty Ltd (in prov liq) [2013] NSWSC 1613 - In the matter of Colorado Products Pty Ltd (in prov liq) [2014] NSWSC 64 - Jackson v Conway [2000] FCA 1530 - Johnston v Brightstars Holding Company Pty Ltd [2014] NSWCA 150 - Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298 - JT International SA v Commonwealth [2012] HCA 43; (2012) 86 ALJR 1297 - Kosciuszko Thredbo Pty Ltd v ThredboNet Marketing Pty Ltd [2013] FCA 563 - Krishell Pty Ltd v Nilant [2006] WASCA 223; (2006) 32 WAR 540 - Kuhl v Zurich Financial Services Australia Ltd [2011] HCA 11; (2011) 243 CLR 361 - Macquarie Developments Pty Ltd v Forrester [2005] NSWSC 674 - Malec v JC Hutton Pty Ltd [1990] HCA 20; (1990) 169 CLR 638 - McCracken v Phoenix Constructions (Qld) Pty Ltd [2012] QCA 129; [2013] 2 Qd R 27 - McGraddie v McGraddie [2013] UKSC 58; [2013] 1 WLR 2477 - McHugh v Australian Jockey Club Ltd [2014] FCAFC 45 - McNamara v Flavel (1988) 13 ACLR 619; (1988) 6 ACLC 802 - Mernda Developments Pty Ltd (in liq) v Alamanda Property Investments No 2 Pty Ltd [2011] VSCA 392; (2011) 86 ACSR 277 - MG Corrosion Consultants Pty Ltd v Gilmour [2012] FCA 383; (2012) 202 FCR 354 - Mijac Investments Pty Ltd v Graham (No 2) [2009] FCA 773; (2009) 72 ACSR 684 - Morley v Australian Securities and Investments Commission [2010] NSWCA 331; (2010) 81 ACSR 285 - MSPR Pty Ltd v Advanced Braking Technology Ltd [2013] NSWCA 4 - Nifsan Developments Pty Ltd v Buskey [2011] QSC 314 - Nocton v Lord Ashburton [1914] AC 932 - Noranda Australia Ltd v Lachlan Resources NL (1988) 14 NSWLR 1 - Notaras v Waverley Council [2007] NSWCA 333 - O'Halloran v RT Thomas & Family Pty Ltd (1998) 45 NSWLR 262; 29 ACSR 148 - Omnilab Media Pty Ltd v Digital Cinema Network Pty Ltd [2011] FCAFC 166; (2011) 285 ALR 63 - On the Street Pty Ltd v Cott (1990) 101 FLR 234; (1990) 3 ACSR 54 - Osgaig Pty Ltd v Ajisen (Melbourne) Pty Ltd [2004] FCA 1394; (2004) 213 ALR 153 - Owners of Strata Plan 5290 v CGS & Co Pty Ltd [2011] NSWCA 168; (2011) 81 NSWLR 285 - Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; (1982) 149 CLR 191 - Parker v Tucker [2010] FCA 263; (2010) 77 ACSR 525 - Permanent Building Society (in liq) v Wheeler (1994) 11 WAR 187; 14 ACSR 109 - Personal Representatives of Tang Man Sit v Capacious Investments Ltd [1996] AC 514; 1 All ER 193 - Peters (WA) Ltd v Petersville Ltd [2001] HCA 45; (2001) 205 CLR 126 - Petrofina (Great Britain) Ltd v Martin [1966] Ch 146 - Pilmer v Duke Group Ltd (in liq) [2001] HCA 31; (2001) 207 CLR 165 - Potts v Miller [1940] HCA 43; (1940) 64 CLR 282 - R v Byrnes [1995] HCA 1; (1995) 183 CLR 501 - R v Towey (1996) 132 FLR 434; 21 ACSR 46 - Re Cant (in his capacity as liquidator of Novaline Pty Ltd (ACN 006 622 933) (in liq)) [2011] FCA 898; (2011) 282 ALR 49 - Re Dawson (deceased); Union Fidelity Trustee Co Ltd v Perpetual Trustee Co Ltd [1966] 2 NSWR 211; (1966) 84 WN (Pt 1) (NSW) 399 - Re HIH Insurance Ltd and HIH Casualty and General Insurance Ltd; Australian Securities and Investments Commission v Adler [2002] NSWSC 171; (2002) 168 FLR 253 - Re Movitor Pty Ltd (in liq) (1996) 64 FCR 380; 19 ACSR 440 - Re New Tel (in liq); Evans v Wainter Pty Ltd [2005] FCAFC 114; (2005) 145 FCR 176 - Re Park Gate Waggon Works Company (1881) 17 Ch D 234 - Re Rossfield Group Operations Pty Ltd and Morton Holdings (ACT) Pty Ltd [1981] Qd R 372; (1980) 5 ACLR 237 - Re Wan Ze Property Development (Aust) Pty Ltd [2012] NSWSC 722; (2012) 90 ACSR 593 - Reed Business Information Pty Ltd v Seymour [2010] NSWSC 790 - Regal (Hastings) Ltd v Gulliver [1967] 2 AC 134; [1942] 1 All ER 378 - Rosebanner Pty Ltd v Energy Australia [2009] NSWSC 43; (2009) 223 FLR 460 - Rosetex Co Pty Ltd v Licata (1994) 12 ACSR 779; 12 ACLC 269 - Sagacious Legal Pty Ltd v Wesfarmers General Insurance Ltd [2011] FCAFC 53 - Seamez v McLaughlin [1999] NSWSC 9 - Sellars v Adelaide Petroleum NL [1994] HCA 4; (1994) 179 CLR 332 - Seven Network (Operations) Ltd v Warburton (No 2) [2011] NSWSC 386 - Shears v Chisholm [1994] 2 VR 535; (1994) 9 ACSR 691 - Societe d'Avances Commerciales (Societe Anonyme Egyptienne) v Merchants' Marine Insurance Co (The "Palitana") [1924] 20 Ll L Rep 140 - State of New South Wales v Hunt [2014] NSWCA 47 - Streeter v Western Areas Exploration Pty Ltd (No 2) [2011] WASCA 17; (2011) 278 ALR 291 - Sutherland v Pascoe (No 2) [2012] FCA 1361; (2012) 297 ALR 328 - Trendtex Trading Corp v Credit Suisse [1982] AC 679; [1981] 3 All ER 520 - United Dominions Corporation Ltd v Brian Pty Ltd [1985] HCA 49; (1985) 157 CLR 1 - UTSA Pty Ltd (in liq) v Ultra Tune Australia Pty Ltd (1996) 21 ACSR 457 - UTSA Pty Ltd (in liq) v Ultra Tune Australia Pty Ltd [1997] 1 VR 667; (1996) 132 FLR 363 - Varma v Varma [2010] NSWSC 786 Vines v Australian Securities & Investments Commission [2007] NSWCA 75; (2007) 73 NSWLR 451 - Visnic v Sywak [2009] NSWCA 173; (2009) 257 ALR 517 - Vrisakis v Australian Securities Commission (1993) 9 WAR 395; 11 ACSR 162 - VPlus Holdings Pty Ltd v Bank of Western Australia Ltd [2012] NSWSC 1327; (2012) 91 ACSR 545 - Wardley Australia Ltd v Western Australia [1992] HCA 55; (1992) 175 CLR 514 - Warman International Ltd v Dwyer [1995] HCA 18; (1995) 182 CLR 544 - Waterhouse v Waterhouse (1999) 148 FLR 312; 46 NSWLR 449 - Watson v Foxman (1995) 49 NSWLR 315 - Westpac Banking Corporation v Bell Group Ltd (in liq) (No 3) [2012] WASCA 157; (2012) 44 WAR 1 - Woolworths Ltd v Kelly (1991) 22 NSWLR 189; 4 ACSR 431 - Zomojo Pty Ltd v Hurd (No 2) [2012] FCA 1458; (2012) 299 ALR 621 Texts Cited: - J D Heydon, The Restraint of Trade Doctrine (3rd ed 2008, LexisNexis Butterworths) - Meagher, Gummow & Lehane, Equity: Doctrines and Remedies (4th ed 2002, Butterworths) - R P Austin, 'Fiduciary Accountability for Business Opportunities' in P D Finn, Equity and Commercial Relationships (1987, Lawbook Co) - Sir Frederick Jordan, Chapters in Equity in New South Wales (6th ed 1947) Category: Principal judgment Parties: HY International (Aust) Pty Ltd (First Plaintiff) Phoenix Explorer Pty Ltd (Second Plaintiff) Clare Shu Rong Huang (First Defendant) CH Design Solutions Pty Ltd (Second Defendant) Gold Label Products Pty Ltd (Third Defendant) ACN 141 843 370 Pty Ltd (Fourth Defendant) Colorado Products Pty Ltd (in prov liq) (Fifth Defendant) Representation: Counsel: R Harper SC/F Assaf (Plaintiffs) P S Braham SC/D Neggo (First, Second and Third Defendants) Solicitors: Jackson Lalic (Plaintiffs) Macpherson & Kelley (First, Second and Third Defendants) File Number(s): 2011/214522 Judgment Introduction 1The Plaintiffs in these proceedings, HY International (Aust) Pty Ltd ("HY International") and Phoenix Explorer Pty Ltd ("Phoenix"), each acquired an interest in the Fifth Defendant, Colorado Products Pty Ltd (in prov liq) ("Colorado"), in mid-2009. 2The First Plaintiff, HY International, is a company associated with Ms Lao Ning Huang (to whom I will refer, without disrespect, as "Helen" to distinguish her from the First Defendant, Ms Clare Huang, who shares the same surname but is not related to Helen) and her husband, Mr Huang Yi ("Mr Huang"), and Helen and Mr Huang were each directors of HY International at relevant times. Prior to its acquisition of its interest in Colorado, HY International conducted various businesses including the export of wine, beef and sheepskin products from Australia to China and importing bathroom wares (Helen 1.3.12 [11], T82). The Second Plaintiff, Phoenix, is a company associated with Mr Kenneth Tan (to whom I will refer, without disrespect, as "Kenneth") and was the trustee of his family trust. Kenneth's wife, Ms Hong Ying Ruan, was and is the sole director of Phoenix. Kenneth was previously employed, on a part-time basis, by HY International from March to September 2009 (T82) and was later employed by Colorado. 3The First Defendant in the proceedings is Ms Clare Huang (to whom I will refer, without disrespect, as "Clare"). The Second Defendant is CH Design Solutions Pty Ltd ("CH Design"). Clare was and is the sole director and shareholder of CH Design (Clare 20.10.2013 [3]) and CH Design was in turn the registered proprietor of the premises occupied by Colorado at relevant times. After the hearing and submissions had been completed, and judgment was reserved, the Court was advised that CH Design had been deregistered by the Australian Securities and Investments Commission ("ASIC") under s 601AB of the Corporations Act 2001 (Cth) on 26 January 2014, apparently as a result of a failure to lodge annual returns. CH Design was subsequently reinstated by ASIC on 9 April 2014 and, by consent of the parties, the Court made orders validating acts of CH Design in respect of the proceedings during the period of its deregistration. That matter therefore has no effect on the position of CH Design in the proceedings. 4The Fourth Defendant is ACN 141 843 370 Pty Ltd, formerly known as Sorrento Kitchens Pty Ltd ("Sorrento Kitchens"), which was incorporated on 4 February 2010 and, until about mid-September 2010, traded under that name. On 1 June 2010, it registered the business name of Black Label Wholesale Kitchens and it traded under that name from mid-September 2010 until late November 2010 or early 2011 when it returned to trading under the name "Sorrento Kitchens". The Third Defendant is Gold Label Products Pty Ltd, which was incorporated in March 2011 under the name Black Label Wholesale Kitchens Pty Ltd and changed its name to Gold Label Products Pty Ltd in November 2011. Clare is now the sole director and holds 90% of the shares in that entity (Clare 20.10.2013 [4]). I will refer to that entity by the somewhat inelegant abbreviation "BL/GLCo", to signify the fact that the single entity traded under both names and to distinguish that entity from "Black Label Wholesale Kitchens" which was, as I noted above, a business name used by Sorrento Kitchens. 5The Fifth Defendant, Colorado, at relevant times, imported vanities, basins, mirrors, sinks and laundry tubs to Australia for distribution and sale on a wholesale basis. There is a dispute as to whether Colorado also imported bathroom accessories, laundry accessories and toilet products at the relevant time, which it is not necessary to determine for the purposes of these proceedings. Clare incorporated Colorado (under a different name) in August 1994 and it commenced importing and selling sinks, including sinks that she had designed, on a wholesale basis in late 1995 or early 1996 (Clare 20.10.2013 [17]-[21]). Colorado subsequently expanded the range of kitchen sinks that it imported and, from about 1998, its business expanded to include laundry tubs and laundry cabinets (Clare 20.10.2013 [28]), and further expanded to include bathroom vanities and basins in about 2003 (Clare 20.10.2013 [30]ff). Colorado's business was conducted at premises owned by CH Design at Rydalmere from at least December 1997 until it ceased to trade in early 2011. 6Clare was a director and also managing director of Colorado from its incorporation until HY International and Phoenix acquired their shares in Colorado in July 2009. Clare was also appointed as the General Manager of Colorado from about June 2009 to about 31 December 2009 under cl 3.5 of a Shareholders Agreement (to which I will refer below), although the Defendants contend that Kenneth and Helen were also involved in the day-to-day management of the business and affairs of Colorado in that period and that Kenneth and Helen exclusively managed Colorado's business and affairs for 3 weeks in August/September 2009 when she was overseas (Further Amended Statement of Claim ("FASC") [9], Amended Defence [9]). Colorado was placed in provisional liquidation in October 2011. 7Another entity ("Sorrento China"), which was not party to the proceedings, was involved in important aspects of the dealings in issue in the proceedings. Sorrento China manufactured, sourced and exported products including vanities, "man-made" (polymarble) basins and cabinets including to Colorado. The issues in the proceedings and the parties' evidence 8The Plaintiffs' FASC filed on 6 June 2011 is complex and seeks a wide range of relief including declaratory relief, orders that certain transaction documents be declared void, compensation, damages for breach of contract, an accounting, remedies in tracing and other relief. The comprehensibility of that pleading is not assisted by the fact that relevant material facts, the alleged duties, the alleged breaches of them and any damage or loss suffered as a result of them are frequently widely separated in different parts of the pleading. The parties have reached a degree of agreement as to the issues in the proceedings. I have structured this judgment by reference both to the pleadings and the parties' agreement as to the relevant issues. 9Several pleaded issues are no longer pressed. These are, first, several matters which were initially said to impugn the Share Sale Deed by which the Plaintiffs acquired shares in Colorado, namely, the conditions precedent pleaded at FASC [22] - [27] and [93] - [101], and paragraphs [22] - [23], [25] - [27] and [93] - [101] of the Amended Defence no longer arise in consequence; second, matters which were said to impugn a lease between Colorado and CH Design, namely, issues as to the authority of Kenneth and Helen to execute the lease on behalf of Colorado (FASC [33] - [34]) and the consequential pleading of invalidity of the lease (FASC [37(a)]); and, third, estoppels in relation to a debt claimed by CH Design (FASC [166] - [170]). I have also sought to identify below various claims pleaded that were not expressly abandoned but, as far as I can tell, were not the subject of substantive submissions. The witnesses and applicable evidentiary principles 10The evidence given by Clare, on the one hand, and Helen and Kenneth, on the other hand, was starkly inconsistent in numerous respects. I have been conscious of the importance of the credit of witnesses in cases where a trial judge is faced with a stark choice between irreconcilable accounts: McGraddie v McGraddie [2013] UKSC 58; [2013] 1 WLR 2477 at [28]; Craig v Silverbrook [2013] NSWSC 1687 at [142] per Sackar J. I recognise that, as the Plaintiffs point out, the credibility of a witness and his or her veracity may be tested by reference to the objective facts proved independently of the testimony given, in particular by reference to the documents in the case, by paying particular regard to his or her motives, and to the overall probabilities: Armagas Ltd v Mundogas SA [1985] 1 Ll R 1 at 57. I have also had regard to Atkin LJ's observation in Societe d'Avances Commerciales (Societe Anonyme Egyptienne) v Merchants' Marine Insurance Co (The "Palitana") [1924] 20 LI L Rep 140 at 152 that "an ounce of intrinsic merit or demerit in the evidence, that is to say, the value of the comparison of evidence with known facts, is worth pounds of demeanour", recently cited by Sackar J in Craig above at [141]. In Camden v McKenzie [2007] QCA 136; [2008] 1 Qd R 39 at [34], Keane JA (as his Honour then was) similarly noted that: "[u]sually, the rational resolution of an issue involving the credibility of witnesses will require reference to, and analysis of, any evidence independent of the parties which is apt to cast light on the probabilities of the situation." That observation was recently cited with approval by Leeming JA (with whom Barrett JA and Tobias AJA agreed) in State of New South Wales v Hunt [2014] NSWCA 47 at [56]. 11I also recognise that all lay witnesses' evidence relates to events which commenced several years ago in mid-2009. Apart from other difficulties to which I will refer below in respect of Helen's, Kenneth's and Clare's evidence, it is important to have regard to the fallibility of human memory which increases with the passage of time, particularly where disputes or litigation intervene: Watson v Foxman (1995) 49 NSWLR 315 at 318-319 per McLelland CJ in Eq; Hoy Mobile Pty Ltd v Allphones Retail Pty Ltd (No 2) [2008] FCA 810 at [41] per Rares J; Varma v Varma [2010] NSWSC 786 at [424]-[425] per Ward J. That difficulty is exacerbated where there are substantial issues as to the credit of the three primary witnesses' evidence, in a case which depends in large part on conversations not confirmed in writing and on a document sent by Kenneth, part of which is in error and other parts of which (as I will note below) may have been exaggerated to advance his personal interests. 12The Plaintiffs' submissions also rightly draw attention to well-established principles concerning the application of s 140 of the Evidence Act 1995 (NSW) and s 1332 of the Corporations Act and to the authorities concerning the application of those sections where serious allegations are made: Briginshaw v Briginshaw [1938] HCA 34, (1938) 60 CLR 336 at 362 per Dixon J; Morley v Australian Securities and Investments Commission [2010] NSWCA 331; (2010) 81 ACSR 285 at [750]-[754]. I have had regard to those principles in finding the facts set out below. 13The Plaintiffs rely on Helen's affidavits dated 1 March 2012, 30 August 2013, 7 November 2013 and 20 November 2013. Helen's fourth affidavit of 20 November 2013 largely addressed matters that had been dealt with in her first affidavit as to which her evidence had not been admitted by reason of its form. Helen's affidavits were sworn without the assistance of a registered translator (although it appears she had some other assistance in that regard) and her evidence was that the conversations referred to in her affidavit were conducted in Mandarin, Cantonese, English or a combination of those languages and that she was proficient in Mandarin and Cantonese and functional in English. 14Helen's cross-examination was conducted with the assistance of an interpreter and, although Helen answered some simpler questions, particularly earlier in her cross-examination, in English, she largely sought to have more complex questions and answers translated for her. That course is readily understandable where the process of cross-examination is plainly a stressful one for all witnesses, and presumably particularly so for a witness who is being cross-examined in a language which is not her first language. Helen's evidence acknowledged, in some respects, the involvement of her husband, Mr Huang, in events but was not forthcoming as to other aspects of her husband's and his staff's involvement in matters to which I will refer below. Helen set out lengthy, detailed and precise accounts of conversations in her affidavits but she was frequently uncertain of the content of conversations and other matters in cross-examination, frequently indicating in cross-examination that she was "not clear" about matters that may have given rise to difficulty for the Plaintiffs' case. 15The Plaintiffs also rely on Kenneth's affidavits dated 22 August 2011, 29 August 2013, 4 November 2013 and 27 November 2013. Many aspects of Kenneth's affidavit evidence were consistent with Helen's affidavit evidence. However, Kenneth's evidence does not corroborate Helen's evidence in any meaningful way, because it is clear that large parts of Helen's affidavit and Kenneth's affidavit had been copied, generally word for word, from each other, and the copied passages include many of the critical disputed conversations. For example, the critical evidence of a disputed conversation at a meeting on 1 June 2009 between Clare, Helen, Kenneth and Mr Huang appears in substantially identical form in paragraph 20 of Kenneth's affidavit dated 22 August 2011 and paragraph 16 of Helen's affidavit dated 1 March 2012; evidence as to a meeting on 29 June 2009 appears in substantially identical form in paragraph 35 of Kenneth's affidavit and paragraph 30 of Helen's affidavit; evidence of a critical meeting in Hong Kong on 10 July 2009 appears in substantially identical form in paragraph 38 of Kenneth's and paragraph 38 of Helen's affidavit; evidence of a discussion of a Supply and Buy Agreement and Lease Agreement at a suggested meeting on 23 July 2009 (which, as will emerge below, did not occur on that date) appears in the same form in paragraph 40 of Kenneth's affidavit and paragraph 41 of Helen's affidavit and, perhaps not surprisingly in those circumstances, Helen and Kenneth make the same error as to the date of the meeting; paragraph 43 of Kenneth's affidavit and paragraph 45 of Helen's affidavit deal with a meeting on 28 July 2009 and contain several sentences in the same form; and the words attributed to Helen in respect of a conversation concerning rent in early December 2010 in paragraph 78 of Kenneth's affidavit are identical to those which appear in paragraph 172 of Helen's affidavit. 16I raised this matter with Mr Harper, who appeared with Mr Assaf for the Plaintiffs, in the course of submissions but no satisfactory explanation of it was given. I recognise that Helen's evidence was that she had not seen Kenneth's affidavit sworn in the proceedings and had not discussed her evidence or Kenneth's evidence in the proceedings with him (T274-275) and Kenneth's evidence was also that he had not discussed his evidence in the proceedings with Helen (T320). However, that provides no explanation of how substantial passages of her and Kenneth's affidavit as to critical disputed conversations came to be in the same form. An inference may be available that the Plaintiffs' solicitors copied passages from one affidavit to the other, but they did not seek to provide any explanation of those matters, by contrast with the position in some other cases in which issues of this kind have arisen: for example, Macquarie Developments Pty Ltd v Forrester [2005] NSWSC 674 at [85]ff per Palmer J. It does not seem to me to matter whether the identical passages in Helen's and Kenneth's affidavit evidence was the result of collusion between the witnesses personally or was the result of Helen's adopting evidence that had been copied from Kenneth's affidavit, or Kenneth's adopting evidence that had been copied from Helen's affidavit, since each substantially devalues both witnesses' affidavit evidence where no explanation has been given of what occurred. It is not possible for the Court to be satisfied in this situation, in my view, that Helen's and Kenneth's evidence reflects a genuine recollection of events. The Plaintiffs sought to mitigate the impact of the identical passages in the affidavit evidence of Helen and Kenneth by pointing to the fact that successive affidavits of Clare had also included identical paragraphs. With respect, it seems to me that the copying of evidence in successive affidavits of one witness is not analogous to the copying of affidavit evidence between two different witnesses, since the latter necessarily distorts the evidence of the relevant witnesses in a way which the former typically does not. 17In Seamez v McLaughlin [1999] NSWSC 9, Sperling J concluded from the high degree of similarity in content, detail, terminology and sequence between the affidavits of three witnesses that they could not have come into existence without direct or indirect collaboration and observed at [40]) that: "[a]cceptance of one of the three accounts of the events ... means not only that the other two are not genuinely recollected, independent accounts. It also means that the authors of those other accounts have misstated the way in which their respective accounts came into existence, and seriously so. The credit of the others would then be worthless." The difficulty which arises from these matters is not merely the possibility of collusion between witnesses that prejudices the value of their evidence but also, as Palmer J noted in Macquarie Developments above, the possibility (and in this case the virtual certainty) that the affidavits did not use the actual words of the respective deponents. His Honour there observed (at [90]) that: "Save in the case of proving formal or non-contentious matters, affidavit evidence of a witness which is in the same words as affidavit evidence of another witness is highly suggestive either of collusion between the witnesses or that the person drafting the affidavit has not used the actual words of one or both the deponents. Both possibilities seriously prejudice the value of the evidence and Counsel usually attacks the credit of such witnesses, with good reason." Obviously enough, as Ward J (as her Honour then was) noted in Celermajer Holdings Pty Ltd v Kopas [2011] NSWSC 40, it is unlikely that two deponents would have a precisely identical recollection, uninfluenced by the recollections of others, of shared experiences. Her Honour also noted, and I agree, that (at [186]): "even if there has not been collusion as such between the witnesses, in the sense of changing their evidence to make it fit with that of another, the fact that the affidavits may not contain the actual words of one or other of the deponents devalues their evidence." 18I accept that, in some cases, the courts have taken the view that difficulties of this kind do not render the credit of a witness worthless, although they require care before accepting the evidence of one or other of the witnesses: Macquarie Developments above at [89]-[91]; Rosebanner Pty Ltd v Energy Australia [2009] NSWSC 43; (2009) 223 FLR 460 at [324], [326] per Ward J; Celermajer Holdings above at [183]-[189]. In this case, where the difficulties relate to the most important disputed conversations and where the manner in which they arose remains unexplained by the Plaintiffs, I consider that they substantially devalue the weight to be given to the affidavit evidence of each of Helen and Kenneth as to those matters, to the point that neither's affidavit evidence can be treated as reflecting a genuine individual recollection of events as distinct from a collective reconstruction of them. 19These difficulties are exacerbated by the fact that Kenneth was provided by the Plaintiffs' solicitors, prior to his cross-examination, with access to the transcript of Helen's cross-examination, although he claimed in cross-examination that he had read only some parts of that transcript (T328). This further undermined the likelihood that Kenneth could give independent evidence under cross-examination. 20There were also other difficulties with Kenneth's evidence. I recognise that Kenneth was, on occasions, prepared to make concessions in cross-examination, including as to possible wrongdoing by him, that were against his interests. However, he often contradicted his affidavit evidence in doing so, and then retreated to his affidavit evidence when he was made aware of the contradiction. For example, Kenneth retreated from his evidence in cross-examination (T335) that he first spoke to Mr Huang rather than Helen as to an investment in Colorado, in a manner that is strongly indicative of his appreciating that his evidence in cross-examination had been inconsistent with his affidavit evidence and with the Plaintiffs' case that Helen was the primary decision-maker and that he then sought to revise that evidence to avoid contradicting that case. He similarly gave evidence that Mr Huang first suggested the Phoenix acquire an interest in Colorado after the 1 June meeting (T337) but then altered that evidence to conform to his affidavit evidence (T350). Kenneth's evidence in cross-examination was initially that he was "sure" that Mr Huang, Helen and he did not ask to see written agreements with Tradelink and Harvey Norman on 1 June (T393) but he also changed that evidence to seek to reflect his affidavit evidence and acknowledged that he had done so (T393). His evidence in cross-examination that he did not recall discussion of the proposed lease of the Rydalmere premises in the meetings in Hong Kong in July (T423-424) was inconsistent with his affidavit evidence and was also reversed when that inconsistency was pointed out (T425). Kenneth also denied in his affidavit evidence significant parts of Clare's evidence with which he later agreed in cross-examination, including that there had been discussion at a critical meeting on 1 June 2009 about Harvey Norman's Commercial Division and of the difficulty of Colorado dealing both with Harvey Norman and Tradelink as customers (T383, T386). 21There was also a wider difficulty with Kenneth's credit, namely that, in January 2011, he directed several of Colorado's customers to make payments to his company rather than to Colorado and that he had also misappropriated stock of Colorado to be used in his own business. Kenneth was cross-examined as to these matters under the protection of a certificate under s 128 of the Evidence Act and accepted that his conduct from January 2011 was contrary to the interests of HY International, and indeed involved an attempt to "cheat" Mr Huang (T367). He also accepted in cross-examination that he did not tell Mr Huang or Helen of what he was doing, because he knew he was doing the wrong thing and that his conduct was dishonest (T369). Kenneth was also cross-examined as to whether he was prepared to deceive Mr Huang (T401) as follows: "Q. In June 2009 you had no difficulty in deceiving Huang Yi if you thought it would benefit you financially? A. Yes. Q. You are agreeing with me? A. Yes." In my view, Kenneth must have understood the concept of "deceive" when that cross-examination took place. However, he then sought to suggest in re-examination that his understanding of the word "deceiving" was as "the opposite meaning of receiving" (T476), which was not consistent with the reference to financial benefit in the cross-examination to which I have referred above. I do not accept that evidence and the fact that it was given further undermines his credit. 22The Plaintiffs also relied on the affidavit of Mr Derrick Keating dated 5 November 2013. The Plaintiffs submit, and I accept, that Mr Keating's evidence - which was significant although in narrow scope - was honestly given. The Plaintiffs also rely on an affidavit of Kenneth's wife, Ms Hong Ying Ruan, dated 17 November 2013. Ms Ruan gave evidence of Kenneth's authority to act on behalf of Phoenix, but not of knowing of representations alleged to have been made by Clare to induce the Plaintiffs to acquire shares in Colorado, and was not cross-examined. Her evidence did not support Kenneth's evidence that he had told her about those representations (Kenneth 27.11.2013 [5]). The Plaintiffs also rely on affidavits of several other witnesses who addressed narrower issues and were not cross-examined, namely, Mr Daoming Huang dated 22 November 2012; Ms Lina He Zhaohong dated 16 July 2013; Ms Luciana Martins De Andrade dated 22 August 2013; Ms Joan Chow dated 20 November 2013 and Mr John Stevens dated 21 November 2013. The Plaintiffs also rely on three expert reports of Ms Julie Planinic dated 2 March 2012, 2 August 2013 and 30 August 2013. The Defendants properly accept Ms Planinic's qualifications and that she was a witness of credit. 23The Defendants rely on the affidavits of Clare dated 20 October 2013 and 29 January 2014 and her son, Mr David Xie, dated 18 October 2013. The Plaintiffs submit (T942), and I accept, that Clare's affidavit reflects significant drafting input from her legal advisers, in the sense that the language of that affidavit was significantly more precise and "legalistic" than the manner in which Ms Huang expressed herself in other correspondence. That is, however, not necessarily a matter which impugns her credit, since affidavits drafted with the assistance of solicitors or Counsel will commonly have that characteristic to some extent. There were, in my view, other significant difficulties with Clare's evidence. She gave evidence in cross-examination of significant conversations and events that she had previously not mentioned in her affidavit and on several occasions gave accounts of significant matters that were inconsistent with documentary evidence, or that she then varied when confronted with inconsistent evidence, and often gave lengthy and self-serving answers which failed to answer the question asked. For example, I set out below Clare's explanation, late in her cross-examination, of Sorrento Kitchen's involvement in dealings with Tradelink, which she had previously not accepted. The Plaintiffs contend that the Court should reject all of Clare's evidence unless that evidence is corroborated by contemporaneous documentary records or by other witnesses of truth. In my view, Clare's evidence needs to be treated with caution. Witnesses not called by the Plaintiffs 24The Plaintiffs did not call evidence of two persons who played significant roles in the relevant events. Helen's husband, Mr Huang, is a successful businessman with very substantial business interests in Hong Kong and China and is astute in business matters (T123). He was a director of HY International from 24 August 2006 until at least 25 February 2010 (Ex D9 518). Although Helen's evidence in cross-examination was initially that she could not remember whether he had been a director of HY International at the time it acquired an interest in Colorado (T88), financial reports for HY International for the period 1 January 2009 - 31 December 2009, provided to the Department of Immigration in February 2010, recorded Mr Huang as a director of HY International (Ex D9, p 75) and Helen ultimately accepted in cross-examination that he had not resigned as a director before those accounts were signed (T96). It appears that the reference to "HY" in "HY International" may be a reference to Mr Huang's name, a proposition that was accepted by Kenneth in cross-examination but denied by Helen whose evidence was that those initials referred to "happy" (T89). That evidence seems to me to be somewhat implausible, although it is not necessary to reach a firm finding in that regard. Mr Huang was involved in several critical aspects of HY International's acquisition of an interest in Colorado. He was present at the significant meetings relating to the acquisition, including a meeting on 1 June 2009 and meetings that took place in Hong Kong in July 2009; Kenneth's report dated 6 June 2009 concerning the potential purchase of Colorado's business (Ex P1 1/425) was sent to him; he loaned money to Kenneth to enable Phoenix to purchase shares in Colorado; and he is, incidentally, funding the proceedings (T87). 25Helen's evidence sought to minimise Mr Huang's role in the matter. Her evidence in cross-examination was that she was looking for a long term business investment for future income so Mr Huang left it with her to decide whether she wanted to go ahead or not and that she made the relevant decision to acquire an interest in Colorado, to Mr Huang's exclusion (T89). That position seems to me to be inconsistent with Helen's approach when the possibility of the acquisition of an interest in Colorado was first raised with her by Kenneth, which was simply to refer it (and at least some of the subsequent correspondence) to Mr Huang (Ex P1 2/636; T90). Helen's evidence was that she did not read the Share Sale Deed or have it read to her (T175) and that approach seems to me to be inconsistent with any suggestion that Helen was the primary decision-maker in respect of the transaction (T179-180). Helen's evidence was also that she made strategic decisions in respect of Colorado to the exclusion of Mr Huang (T118) and that he left all matters to her to decide (T119), but that evidence was in turn contradicted by information provided by Helen's immigration agent to the Immigration Department in March 2010, which represented that all strategic decisions in respect of Colorado were made in conjunction with Mr Huang (Ex D9, 514). The nature of Mr Huang's role was obviously an important matter given the emphasis that the Defendants had placed on the fact that he was not giving evidence. I do not accept Helen's evidence as to that matter, which does not seem to me to have been the product of any error of recollection, and this matter seriously undermines Helen's credit generally. 26Helen's evidence as to Mr Huang's role was also inconsistent with Kenneth's evidence as to that role. Kenneth's evidence, in answer to a question whether Mr Huang was the person in charge of HY International, was that he assumed that HY International, for which he worked for a period, was named after Mr Huang (T332). His evidence in cross-examination was also that he first contacted Mr Huang in respect of the possible investment of HY International in Colorado, because he understood that Mr Huang would make any decision in respect of that investment (T334). That evidence contradicted the account in his affidavit (Kenneth 22.08.2011 [17]) that he initially telephoned Helen to discuss Colorado, although he retreated from his evidence in cross-examination when that contradiction was raised with him, while still acknowledging that "my focus is to discuss the issue with Huang Yi, not with Helen" (T349). Kenneth's evidence was that Mr Huang then instructed him to investigate the opportunity and did not suggest that he should speak to Helen in respect of the matter (T335). Kenneth's evidence was also that Mr Huang attended the meeting of 1 June because Mr Huang wanted to know more about the Colorado business and that the purposes of his visit from Hong Kong at that time were both to visit his family and see the Colorado business (T336-337). Kenneth also acknowledged that it was possible that Mr Huang had asked questions during that meeting (T337). 27The financial controller of Mr Huang's company, Mr Harry Lai, also did not give evidence although he was present when key representations were alleged to have been made at meetings in Hong Kong in July 2009 and Helen, Kenneth and Mr Huang had relied upon his review of financial material prior to entry into the Share Sale Deed in respect of the interest in Colorado. Helen referred to Mr Lai's role in her affidavit evidence as follows: "Mr Lai ("Mr Lai") is a qualified accountant with CPA Australia as well as with the Hong Kong Institute of CPA. He has been an accountant since 1997. Mr Lai's role included reading, interpreting, analysing data provided by [Clare] on the Colorado shares deal and reporting to me. He would raise questions to clarify accounting and financial issues but he did not recommend any investment decisions to Huang Yi or [Helen]." (Helen 1.3.2012 [22]). Helen's evidence in cross-examination (T148-149) was that she left it to Mr Lai to look at Colorado's financial accounts on her behalf "[b]ecause after all he's [sic] more professional person and I need his professional opinion". Mr Lai was also emailed documents relating to the proposed purchase by Kenneth and took part in telephone discussions concerning the proposed transaction with Kenneth (Ex P1 2/685). 28Ms Grace Wan, an employee of Helen's migration agent (T80), also advised Helen in respect of matters relating to Colorado from July 2010, although Helen was initially reluctant to disclose that matter in cross-examination (T81). Ms Wan also had a significant role in respect of a critical amendment to HY International's accounts to which I will refer below. She also did not give evidence. 29Where a party would be expected to, but does not, call a witness who could give evidence on a relevant matter, and the failure to call that evidence is unexplained, an inference may in appropriate circumstances be drawn that the uncalled evidence would not have assisted the party's case: Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298; Kuhl v Zurich Financial Services Australia Ltd [2011] HCA 11; (2011) 243 CLR 361 at [63]-[64] per Heydon, Crennan and Bell JJ; MSPR Pty Ltd v Advanced Braking Technology Ltd [2013] NSWCA 416 (at [53]) per Macfarlan JA (with whom Ward and Gleeson JJA agreed). The inference may be significant if the absent witness is a person who was a senior executive of a corporate party who was personally engaged in the transactions in question: Dilosa v Latec Finance Pty Ltd (1966) 84 WN (Pt 1) (NSW) 557 at 582 per Street J; Australian Securities & Investments Commission v Adler [2002] NSWSC 171; (2002) 168 FLR 253 at [448] per Santow J (as his Honour then was). The Defendants rely on the further proposition that, where a witness is not called, the Court may more confidently draw any inference unfavourable to the party that failed to call that witness, if that witness appears to be in a position to cast light on whether the inference should be drawn: Jones v Dunkel above at 308 per Kitto J, at 312 per Menzies J and at 320-321 per Windeyer J; Sagacious Legal Pty Ltd v Wesfarmers General Insurance Ltd [2011] FCAFC 53 at [78] per Besanko, Perram and Katzmann JJ. I consider that I can and should infer that the evidence of Mr Huang and Mr Lai would not have assisted the Plaintiffs' case and that I may more confidently draw inferences contrary to that case where such evidence was not led. 30The Defendants also refer to the principle in Blatch v Archer (1774) 1 Cowp 63 at 65; 98 ER 969 at 970, where Lord Mansfield referred to "a maxim that all evidence is to be weighed according to the proof that it was in the power of one side to have produced and in the power of the other to have contradicted". In Cook's Constructions Pty Ltd v Brown [2004] NSWCA 105; (2004) 49 ACSR 62 at [42], Hodgson JA observed that: "[w]here a party has to prove something and prima facie has available evidence that would directly deal with the question, a court will be very hesitant in drawing an inference in that party's favour from indirect and second-hand evidence, when the party doesn't call the direct evidence that prima facie it could have called, at least unless some explanation is given, or the circumstances themselves provide an explanation." However, in Australian Securities and Investments Commission v Hellicar [2012] HCA 17; (2012) 247 CLR 345 at [250], Heydon J referred to cases which had applied that principle, and noted that many of the applications of the principle were no more than an application of the rule in Jones v Dunkel above and (at [253]) that a failure to call certain evidence would not lead to a discounting of other evidence actually called. Misleading or deceptive conduct claims 31The first category of claims identified by the parties is the Plaintiffs' claims in respect of misleading or deceptive conduct. The first issue arising from those claims is whether the representations pleaded at paragraphs 20 and 60 of the FASC were made by Clare. The parties note that the next issue arising in respect of this claim is whether causation in the nature of reliance by the Plaintiffs is established. The parties agree that this issue involves questions as to reliance by Helen and Kenneth; the corporate governance of Phoenix; the involvement of Mr Huang and Mr Lai in the transaction; and the identification of the parties who advanced capital sums of $800,000 to Colorado in August 2009. 32Before turning to those issues, it will be convenient to set out the events leading to the Plaintiffs' acquisition of shares in Colorado. Clare gives evidence of meeting Kenneth, apparently for the first time, at her business premises in March 2009 and telling him that, if she could find the right buyer for the Colorado business, she might consider selling the business (Clare 20.10.2013 [52]). Her evidence is that she said the price for the business was "$1,500,000 for goodwill. Not negotiable" and that she had not put any thought into how she arrived at that figure, which was an amount "that just occurred to [her] at the time as an amount [she] would be willing to accept" (Clare 20.10.2013 [52]). Mr Keating's evidence (Keating 5.11.2013 [6]), contrary to Clare's evidence that she first considered the sale of the business when approached by Kenneth, is that Clare had discussed the possible sale of Colorado with him from about 2007 and had referred to a sale price of $1.5 million for the business from that time. In her affidavit dated 29 January 2014, Clare denied saying to Mr Keating that she wanted $1.5 million for Colorado or having any conversation along those lines before mid-2009, when the sale of shares to the Plaintiffs was taking place; denied discussing with Mr Keating the possible sale of Colorado's business or shares in Colorado; and said that she had not given serious thought to the sale of Colorado's business or shares in it until after she met Kenneth in late March 2009 (Clare 29.1.2014 [5]). The proposition that Clare would decide, without any particular thought, the price at which she would sell the business that she had operated for many years is strikingly implausible, as a matter of general experience, and also inconsistent with the care with which Clare has approached all other aspects of the conduct of these proceedings. Its implausibility undermines her evidence as to this matter and her credit generally and I prefer Mr Keating's evidence that she had been considering selling her business and had decided the price at which she would do so some time before. 33Clare's evidence is that, in a telephone call with Kenneth in mid-May 2009, he referred to a potential purchaser of the business who wanted to invest in the business "for immigration purposes" and he said that the family already had its own business in Australia "but it is not big enough to support their immigration and they need a substantial business for immigration purposes" (Clare 20.10.2013 [58]). That evidence, if accepted, would point to a motivation for the purchase of the business by HY International which was not wholly financial in character. Clare's evidence is, at least to some extent, consistent with the objective probabilities given the other evidence to which I will refer below. 34Kenneth's evidence was that he was approached by Clare in respect of the sale of the Colorado business in about May 2009 (Kenneth 20.08.2011 [15]-[16]). His evidence is that Clare indicated that she would like $1.5 million for the "trading business" and that she said that the "price is not negotiable" (Kenneth 22.8.2011 [16]). Kenneth's evidence is that he initially telephoned Helen, who invited him to speak to Mr Huang, and that he subsequently put the proposal to Mr Huang in May 2009 (Kenneth 22.8.2011 [17]-[18]). Helen's evidence (Helen 1.3.2012 [12]) was that she was approached by Kenneth in May 2009 about the possibility of acquiring an interest in Colorado from Clare and her evidence was that she responded to that approach by saying: "Can you please speak to my husband Mr Huang in Hong Kong about the business opportunity?" I have referred above to the significance of Mr Huang's role in respect of these matters. 35A meeting took place on 1 June 2009 attended by Kenneth, Clare and Mr Huang and Helen's affidavit evidence (to which no objection was taken) (Helen 1.3.2012 [14]) was that she and Mr Huang attended the meeting on behalf of HY International. On the other hand, Helen's evidence in cross-examination was that Mr Huang attended the meeting of 1 June because he happened to be in Sydney on a regular visit with the family. It was not entirely clear whether she also acknowledged that he had also attended the meeting to participate in the decision whether HY International would proceed with the acquisition of an interest in Colorado. She responded to that proposition when it was put to her in cross-examination with the statement "[y]es, he went with me" (T123). As I noted above, Mr Huang did not give evidence of what occurred at the meeting. 36Helen's evidence (Helen 1.3.2012 [16]) is that Clare made a critical statement at that meeting, on which the Plaintiffs' rely for several of the pleaded representations, as follows: [Clare]: "Druin Pty Ltd trading as 'Harvey Norman Commercial' ("Harvey Norman") has promised to purchase a minimum of $1 million to $1.2 million in stock per annum from Colorado for the financial year 2009/2010. Because of these sales, the turnover of Colorado for the financial year 2009/2010 will be about $3.5 million. The turnover for this current financial year [2008/2009] is about $2 million. I am prepared to sell my shares for $1.5 million but the deal must be done no later than 30 June 2009 for tax purposes." Helen acknowledged in cross-examination that Clare did not refer to Druin Pty Ltd but only to "Harvey Norman" in that conversation, and that Clare may have referred to "Harvey Norman" or to "Harvey Norman Commercial" (T124). Helen was cross-examined at some length as to whether any representation as to the amount of business with Harvey Norman related to new or additional business and she acknowledged that she then did not know the amount of existing business done with Harvey Norman (T126); however, I accept that the necessary implication of the reference to Harvey Norman, if there had also been reference to a suggested increase of turnover from about $2 million to $3.5 million, would have been that the business was substantially new business. 37Helen's evidence (Helen 1.3.2012 [17]) is also that Clare said the following to Mr Huang, Kenneth and her at the meeting: [Clare]: "I am a successful businesswoman. I have been operating and managing Colorado for a long time on my own. Colorado is a successful business and has a good name in the industry. I design Colorado's products and make them in my own factory in China. I then sell them to my customers in Australia. Crane Distribution Limited trading as 'Tradelink' ("Tradelink") has been the major customer of Colorado for some years. I have known the managers at Tradelink for quite some time and I have good relationship with them. Harvey Norman has been buying from Colorado for years and the managers there promised to buy $1 million to $1.2 million of stock from Colorado in the coming year. These two customers are big and reputable companies in Australia. Colorado's business with them has been growing." Again, Helen conceded in cross-examination (T128) that Clare had not used the phrase "Crane Distribution Limited trading as 'Tradelink'" in that conversation. Helen also referred to Clare's comments as to these matters in cross-examination, not always in a responsive manner. For example, her evidence was that: "Later on after we go back we calculate what Clare told us Harvey Norman sell and bringing in new business, $1 million to $1.2 million. For the next year the sales turnover to $3.5 million. So according to that figure we calculate the figure, so we clearly remember what she say and what she told us." (T86) Helen's evidence in cross-examination was also that she could not remember whether Mr Huang asked questions at the meeting on 1 June (T132). That lack of recollection is wholly inconsistent with her detailed account, in direct speech, of what was said at the meeting and is a matter that also undermines her credit. 38In cross-examination, Helen denied that Clare had said, at the meeting on 1 June, that she had asked Harvey Norman for some more support in the past but Harvey Norman had asked her to cut off her business with Tradelink (T176). She could not remember Clare having said that Harvey Norman had given Colorado about $250,000 - $300,000 worth of sales in the past (T176). She denied that a conversation concerning a proposal to put Colorado products into Harvey Norman Commercial display rooms in certain stores had taken place (T176). Helen's evidence was also that she or Kenneth requested a copy of the financials and the supply agreements with Harvey Norman and other major suppliers and that Clare responded that she was not prepared to provide that information because, if she did, "you will know everything you need to know about my business", and reiterated the purchase price for all of the shares was $1.5 million (Helen 1.3.2012 [16]). 39Kenneth also gave evidence as to the meeting on 1 June 2009 (Kenneth 22.8.2011 [19]ff). The Plaintiffs contend that Helen's evidence is "corroborated" by Kenneth's evidence dated 22 August 2011. I do not accept that submission since the consistency between their affidavit evidence is at least equally likely to reflect the pervasive copying of passages in their respective affidavits to which I referred above rather than any genuine consistency of recollection. Kenneth acknowledged in cross-examination, contrary to his affidavit evidence, that Clare had mentioned the difficulties of dealing with both Harvey Norman and Tradelink, but denied that she had then mentioned that Harvey Norman had asked her to cut off Colorado's trade with Tradelink (T383). He accepted that there was reference to the Harvey Norman Commercial showrooms at that meeting (T383) and acknowledged in cross-examination that, when he made his affidavit in August 2011 and again in November 2012, he did not pay careful attention to their content in respect of the relevant conversation at the meeting on 1 June (T386). 40Kenneth did not give any affidavit evidence as to any statement by Clare as to the turnover of the business made at the meeting on 1 June 2009, although he claimed in cross-examination that he had a recollection of Clare saying something about the current turnover and, indeed, accepted that Clare said something to the effect that Colorado's turnover for the financial year 2009/2010 would be doubled (T390). Any such representation would not be consistent with the amount of the suggested additional business from Harvey Norman, which would have been well short of the amount necessary to cause Colorado's turnover to double (T389-391). I do not accept Kenneth's evidence in this regard. 41Kenneth accepted that he had changed his evidence concerning whether he had asked to see a copy of Colorado's financial statements at the meeting on 1 June, having initially denied in cross-examination that he asked for those financial statements and then reversed that position when he was reminded that his affidavit had said he had made that request (T393). Kenneth also accepted that he had not had experience of any previous contract where a large supplier had promised to buy goods in the future before they needed them and that a contract between Colorado and Harvey Norman containing such a promise would have been quite extraordinary in his experience (T395). 42Clare's affidavit evidence as to this meeting is that she gave an oral presentation as to the Colorado business and she sets out what she said, in direct speech, at substantial length, in evidence that is strongly suggestive of reconstruction. Clare's evidence (20.10.2013 [63]) is that she said words to the following effect in the meeting in June: "... Harvey Norman has given us about $250,000 to $300,000 worth of sales but I would like it if it was more. The managers of Harvey Norman's commercial division have promised Colorado more support allowing Colorado to put products into their commercial display rooms in Taren Point, Canberra and Somersby. They have agreed for us to put our products in Canberra first and Taren Point and Somersby later on. We will be renewing the contract with Harvey Norman at the end of the month as we renew those contracts annually." Clare denies that she said that Harvey Norman had promised to purchase a minimum of $1 million to $1.2 million in stock per annum from Colorado for the financial year 2009/2010 or any financial year (Clare 20.10.2013 [63]-[64]) and she also denies that she said that Colorado's turnover for the financial year 2009/2010 would be about $3,500,000 (Clare 20.10.2013 [65]). She also denies that she said that she was prepared to sell her shares for $1.5 million but that the deal must be done no later than 30 June for tax purposes (Clare 20.10.2013 [66]); the price at which the transaction took place was in fact equivalent to $1.5 million and Clare ultimately required that payment to occur by that date. 43Clare's evidence is that there was no discussion at that meeting in relation to various matters, including the price that the purchaser was willing to pay for Colorado or the price that she would accept for the business or the time at which the sale must be completed (Clare 20.10.2013 [67]), although her evidence is that she had indicated a non-negotiable price for goodwill to Kenneth in her first conversation with him (Clare 20.10.2013 [52]). Mr Harper submitted, in oral submissions for the Plaintiffs, that it was incredible that there was no discussion of the purchase price, on Clare's account of the meeting on 1 June 2009 and that, on her account, Clare did not give a reason why that price was justifiable. It would perhaps be less surprising if the price was not discussed if it had previously been disclosed to Kenneth, and Clare had made clear that it was non-negotiable as both she and Kenneth say. 44Clare acknowledges that she said at that meeting that the turnover of Colorado for the financial year 2008/2009 would be approximately $2 million, and says that she also said that she expected that next year "won't be less than what we have now" (Clare 20.10.2013 [69]). She seeks to establish a reasonable basis for the latter statement, having regard to Harvey Norman's indication that it would provide more support to Colorado; the proposal to permit Colorado display products in Harvey Norman Commercial's showrooms; and her view as to the market environment and the Australian dollar (Clare 20.10.2013 [69]). She denies making any statement as to the expected turnover of Colorado beyond 2009/2010 (Clare 20.10.2013 [71]). She contends that only Mr Huang and not Helen or Kenneth asked questions and made comments about the business during that meeting (Clare 20.10.2013 [72]). Clare also contends that there was a discussion at that meeting of "gross margin" using the Mandarin term which corresponds to "gross margin" in English, and that she answered "about 40%" to a question about that matter, and advised that she did not know the "net margin" or profit margin of the business, which was determined by the accountants at the end of each year (Clare 20.10.2013 [73]-[74]). 45Clare was also asked to give evidence of that meeting orally, in cross-examination, without reference to her affidavit, and her oral evidence was substantially consistent with her affidavit evidence. However, that matter did not seem to me to provide any real support for any finding as to Clare's recollection of the meeting, since it is equally consistent with Clare having taken careful steps to familiarise herself with the content of her affidavit. 46Kenneth's evidence was, after the 1 June meeting, that Mr Huang expressed his view that the business seemed to be mature and well-established and "not a bad business to invest" and suggested that Phoenix could participate with HY International in the acquisition and offered to lend Kenneth money for that purpose (T337-338). Kenneth also forwarded any documents that were important for the transaction to Mr Huang to look at (T340). 47Kenneth also gives detailed evidence of a further meeting with Clare, in Helen's absence, on 5 June 2009 (Kenneth 22.8.2011 [23]-[24], [27]), at which he says that Clare provided him with detailed information about the Colorado business, including the amount of wages paid to individual employees; the rent payable on the warehouse and the warehouse area; and the turnover of the business in 2006-2007, 2007-2008 and 2008-2009. His evidence is that Clare also said: "In addition, we will sign the actual supply agreement with Harvey Norman in early July 2009. They have promised a minimum order of $1.2 million to $1.5 million each year. On this basis, the turnover for 2009/2010 should be $3.5 million. The company is worth at least $1.5 million. The purchase price is not negotiable." (Kenneth 22.08.2011 [24]) Kenneth's evidence is also that Clare provided him information about the three main products sold by Colorado - vanities, laundry tubs and kitchen sinks - and about the profit margin on each of the products; the level of stock in the warehouse; the period of credit extended to customers; and the amount then owed by customers. Clare denies that such a meeting took place (Clare 20.10.2013 [79]). 48Kenneth's evidence is that he made handwritten notes of the issues discussed at the meeting although he says he did not retain them, and used those notes to draft a note to Mr Huang and Helen (Ex P1 1/427A). By his further affidavit dated 27 November 2013, Kenneth gives evidence (at [7]) that he sent that note to Mr Huang by facsimile from his home facsimile machine and he annexes a telephone bill which records a communication with the facsimile number for Mr Huang. There is other evidence of the transmission of that note to Mr Huang, including the copy of that facsimile printed out by Mr Huang's secretary in Hong Kong; evidence of that secretary; and a further copy of that facsimile sent by that secretary to Mr Huang who was then in China. The fact that that note was also sent to Mr Huang is supported by a reference to it in an email from Mr Lai dated 4 August 2009 (Ex P1 3/965) well before the dispute arose. I accept that Kenneth provided that information to Mr Huang, although there is a question as to whether a critical part of it accurately reflected any comment made by Clare. 49That note records several matters that are critical to the Plaintiffs' representational case. The relevant portions of the translation of that note from the original text, written partly in Chinese, are as follows: "2. Product and profit: Company turnover: 2006/2007 $1.6 - $1.7m 2007/2008 $2m 2008/2009 $2.1m The contract with Harvey Norman is signed. Harvey Norman promised minimum $1.2 - $1.5m order per year. So Clare expect the turnover for 2009/2010 is around $3.5m." 50The note then refers to the return on each of vanities, laundry tubs and kitchen sinks, and notes that the average return on turnover is around 40%. The note continues: "3. Sale price, stock and cashflow: Sale price: Clare insist $1.5m, no discussion. Stock: Currently she has $800,000 stock in Warehouse. She promised to reduce to around $500,000. But I believe if the turnover is around $3m next year, we need to keep 2 months stock at lease [sic]. Cashflow: Because most of the buyers have credit account with Colorado. Some is 14 days. Some 30 days and 60 days. Currently, the company has $300,000 to be paid by their customers. Those money will return to company account day by day, and week by week. At same time, new orders will send out. In the meantime, Tradelink's order is more than 50% of company total order. Other small orders take another 50%. In the future, after Harvey Norman join in, these two major buyer will take nearly 70% of the company's order." 51Much of the detailed information contained in that note accurately reflected the position of Colorado as at June 2009, at a level of detail that Kenneth could not have achieved unless Clare had communicated the information to him. That fact posed an obvious difficulty for Clare's unequivocal denial that a meeting had occurred with Kenneth on 5 June, which would have left unexplained how Kenneth obtained the information that he provided to Mr Huang. Mr Harper sought, in cross-examination, to have Clare confirm the accuracy of the relevant information. In my view, Clare deliberately sought to avoid providing that confirmation, by responding to questions of that kind by denying that she had made the relevant statements, rather than addressing the correctness of the information contained in them. I am comfortably satisfied that, although English is not Clare's first language, she understood the relevant questions and was deliberately seeking to avoid answering them. I draw this conclusion because, throughout the large part of her cross-examination, Clare was plainly capable of understanding questions asked in English and answering them, often with considerable subtlety, in English. It does not seem to me, based on my observation of her in the witness box and the logic of her answers to questions generally, that she would have had the slightest difficulty in understanding that Mr Harper's questions were directed to the accuracy of the factual information, not to whether she had made the relevant statements, particularly after Mr Harper had repeatedly explained that matter to her. 52In cross-examination, Clare plainly anticipated the difficulty that I noted above in respect of the source of the information provided by Kenneth to Mr Huang, and responded to it by suggesting, in a manner not addressed in any of her affidavits in the proceedings, that she might have provided the information contained in Kenneth's note to him in earlier conversations in May to assist him in introducing a purchaser to the business. Mr Harper squarely put to Clare that this evidence was an invention and was false and she denied that proposition. It seems to me to be possible that this evidence was in fact a late invention, in the witness box, in order to address the difficulty which Clare recognised from her denial of the 5 June meeting and the specificity of the information provided by Kenneth to Mr Huang. It ultimately does not seem to be necessary to decide whether a meeting on 5 June occurred, because it is plain that, even if a meeting on that date did not occur, the large part of the information contained in Kenneth's note must previously have been conveyed by Clare to Kenneth and was then conveyed by Kenneth to Mr Huang. However, it does not follow that all of the information contained in that note reflected information provided by Clare to Kenneth, since it is of course possible that a person who conveys generally accurate information by a note may introduce inaccurate information in it. 53The Defendants accepted in oral submissions that a representation had been made to Mr Huang, in the note sent by Kenneth to Mr Huang on 6 June, that Harvey Norman had promised $1.2 to $1.5 million worth of sales but do not accept that Clare was the source of that representation (T994). The Defendants contend that the reference to a meeting with Clare on 5 June 2009 is a fabrication reflecting Kenneth's willingness to deceive Mr Huang when his own financial interests were at stake (T401). They point out that the note claims that Clare had said the agreement with Harvey Norman was signed and that Kenneth acknowledged in his evidence he had not been told that (T406). Kenneth's evidence in cross-examination was at one point that he was told at the meeting on 5 June that Colorado's turnover was $1.6 to $1.8 million per annum (T396) but in his note to Mr Huang he claimed to have been told that turnover was $2.1 million. His recollection was that he was told of an expectation of "three plus million turnover" (T398) but the note to Mr Huang referred to a representation of turnover of $3.5 million. Kenneth's further evidence in cross-examination was that the figure of $2.1 million in his note to Mr Huang reflected a figure of under $2 million referred to by Clare, which he had adjusted because there were 4 weeks left to run between the date of that meeting and the end of the financial year (T403). Kenneth also accepted that he stated in the note to Mr Huang that the contract with Harvey Norman was signed, whereas Clare had told him that the contract was going to be signed, and he suggested that he had made a "mistake" in that regard (T404). In cross-examination, Kenneth was less precise than his note in respect of the information that Clare had provided as to the content of the Harvey Norman promise, suggesting that that figure may have been from $1 million up to $1.5 million (T404), but then reaffirming that Clare had promised a minimum of $1.2 million (T405). There was also an inconsistency between Kenneth's affidavit evidence, which referred to Clare having said that Tradelink provided more than 70%-80% of Colorado's total turnover (Kenneth 22.08.2011 [24]), and the note provided to Mr Huang which stated that Tradelink contributed more than 50% of Colorado's turnover (T407-T408); although those figures are not, strictly, contradictory, the difference between them is substantial. 54It was put to Kenneth, in cross-examination, that he had exaggerated aspects of the information provided to Mr Huang in order to deceive him, because he was seeking to encourage Mr Huang to invest in Colorado as that would be to Kenneth's financial benefit (T411). I accept that Kenneth stood to benefit from the transaction, to the extent that he would derive a salary from his proposed role as Colorado's new General Manager and had also been offered the opportunity to participate in the investment through Phoenix, although he would need to borrow significant sums from Mr Huang in order to take up that opportunity. There is a significant difficulty with the accuracy of the note in respect of an important matter recorded in it, namely, that Kenneth conceded in cross-examination that his statement in the document that the Harvey Norman contract was "signed" was a "mistake", and that he should have said "going to be signed", without providing any real explanation of how he could make such a significant mistake (T383, 385, 392-394, 397, 404). It seems to me more likely than not that, as the Defendants contend, Kenneth overstated the progress of that matter in order to encourage Mr Huang to proceed with the transaction, and that raises concern as to the accuracy of the other references to the position in respect of Harvey Norman in that note. 55Clare's affidavit evidence was that she discussed the possible sale of the business with her accountant following a further conversation with Kenneth, about a week after the 1 June 2009 meeting, and was then advised by her accountant to have the purchase price paid before the end of the financial year (Clare 20.10.2013 [82]). Her evidence was that she then met with Kenneth at her former residence on the afternoon of 14 June 2009 and had a lengthy discussion regarding the purchase of Colorado on that occasion (Clare 20.10.2013 [83]-[84]). Clare's evidence in cross-examination was that she told Kenneth at that meeting of the need to complete the transaction by 30 June, at her accountant's suggestion, although there was no reference to that matter in her account of the conversation on 14 June in her affidavit (Clare 20.10.2013 [83]; T647-648). 56Clare then sent an email to her solicitor, attaching a document that she had prepared titled "Buy and Sell Agreement between Colorado Products Pty Ltd and the two other puchases [sic] (name: Kenny and Huang Yi)" which she says reflected the matters discussed with Kenneth (Clare 20.10.2013 [84]; Ex D5 pp 20-25). The Plaintiffs refer to that draft agreement as the genesis of the Supply and Buy Agreement later executed between Colorado and Sorrento China. Clause 4 of that draft agreement contemplated that Colorado would purchase its products, namely "sinks, laundry tubs, tapwares, accessories, vanities, basins, man-made stone [c]aesar stone topes [sic], mirrors, toilets, bathroom accessories and bathtubs" from Sorrento China and that Colorado agreed not to purchase its products from other suppliers both in Australia or in China and that Sorrento China agreed not to supply its products (detailed by the same list) to any buyer in Australia and New Zealand and that any sales from Sorrento China to Australia and New Zealand must be through to Colorado or in another manner agreed by the parties. The final version of the Supply and Buy Agreement did not provide for Colorado to buy its products exclusively from Sorrento China, and Helen and Kenneth did not act as though it were bound to do so, to the extent that they later explored the possibility of alternative suppliers. The draft agreement also contemplated the possibility of sales by Sorrento China in Australia and New Zealand in another manner agreed by the parties. 57On 19 June 2009, Helen received an email from Kenneth attaching a draft contract and a draft lease from CH Design of the Rydalmere premises from which Colorado's business was conducted (Ex P1 2/564; Ex P3, 10-57). Kenneth also sent a draft lease of the Rydalmere premises to Mr Huang (Ex P1 2/636, 651; T179). Helen's and Kenneth's affidavit evidence that they had not seen the lease before they executed it some time later was incorrect and their common error in that regard further undermines the reliability of their evidence. Helen's evidence in cross-examination was that she was not "very clear" about whether a lease was under discussion between Clare and Kenneth in late June 2009 (T180), although that lease was attached to documents being exchanged at that time (Ex P1 2/632). Helen accepted that, if a lease was attached to the emails that she forwarded to Mr Huang in June 2009, she might have forwarded that lease on without being aware of it (T181). She ultimately accepted that, as paragraph 19 of her first affidavit indicated, a draft lease for the premises had been attached to the email of 19 June but her evidence was that there was no detailed discussion of the lease at that time, and she contended that it was at the second meeting in June, or possibly the meeting in Hong Kong in July, that Clare said there would be a lease and at the meeting on 23 July that Clare asked for the lease to be signed as a "formality for the Bank" (T182). Helen's evidence was that the details of the lease were never reviewed "because Clare said there was no need" (T182). 58Clare gives evidence of a further meeting with Kenneth at a Japanese restaurant at North Ryde on 21 June 2009 discussing the payment of the purchase price prior to 30 June and her giving a guarantee that the money would be refunded if the deal did not go ahead (Clare 20.10.2013 [87]). On the other hand, Clare's evidence in cross-examination was that she could not recall whether Kenneth raised the possibility of her giving a guarantee to repay an amount paid to her prior to 30 June, if the transaction did not proceed, at that meeting (T650). 59Clare's evidence is that, contrary to Kenneth's evidence that she declined to permit access to information concerning the business, Kenneth "frequently came to the Colorado premises to inspect Colorado's internal records and documents" (Clare 20.10.2013 [88]). Clare's evidence is also that Helen "would occasionally come to the Colorado Premises during this period as well to inspect Colorado's internal records and documents" (Clare 20.10.2013 [88]). The evidence does not permit this dispute to be resolved, where there are difficulties with the credit of each of Clare and Kenneth and no corroborating evidence. In that situation, there is no basis for a finding that any representations made to the Plaintiffs were qualified by any access to other information made available to them by Clare. 60Helen's evidence (Helen 1.3.2012 [20]) is that she and Kenneth attended a further meeting with Clare on 23 June 2009, in which words to the following effect were said: [Kenneth/Helen]: "We are buying shares in Colorado because you said that Harvey Norman is going to purchase $1 million to $1.2 million of stock from Colorado in the coming financial year, and therefore total sales for 2009/2010 will be about $3.5 million. You also promise that Colorado will continue to achieve a gross profit margin of 40% on sales. [Clare]: Yes". There was also discussion, on Helen's account, at the meeting on 23 June 2009 of the fact that Helen and Kenneth would not be ready to finalise the deal by 30 June 2009 but that they would pay $1.2 million before that date, on the basis of a written guarantee provided by Clare for the return of that amount if the deal did not proceed. Helen acknowledged that at that time, the understanding was that, if Helen and Kenneth decided not to proceed with a purchase, Clare would be required to give back any money that had been paid by 30 June (T136). 61When cross-examined as to this meeting, Helen had considerable difficulty recalling it and there were lengthy pauses in her evidence while she read her affidavit, plainly in order to remind herself of what she said had occurred in it (T128, 130). Helen then reiterated, in the form which occurred elsewhere in her cross-examination, the alleged representations, namely: "I remember, she repeated what she promised. That the promise that Harvey Norman and the business from Harvey Norman being $1 million to $1.2 million. That the turnover for the following year will reach $3.5 million. And the gross profit margin will be maintained at 40%." (T135) There is an inconsistency between Helen's affidavit evidence and her cross-examination as to whether, at that meeting, Clare had repeated the promise by Harvey Norman to purchase $1 - $1.2 million of stock from Colorado in the next financial year or she and Kenneth had repeated the representations and Clare had acknowledged them. Kenneth does not give evidence of attending such a meeting and Clare denies that meeting. Helen's specific evidence of what was said at that meeting is inconsistent with her generally poor recollection of events in cross-examination and with the uncertainty reflected in her inability to recall whether she or Kenneth had made the statement in her affidavit and her then attributing the statement to Clare in cross-examination. I do not accept Helen's evidence of that meeting or that the alleged statement was made in it, although it is plain that arrangements as to the payment of the purchase price and the giving of the guarantee by Clare were being made about this time. 62On 26 June 2009, Mr Lai sent an email to Kenneth suggesting changes to the draft Share Sale Deed and Deed of Guarantee that he had received from Kenneth on 24 June 2009. At least by 30 June 2009, HY International and Phoenix were taking advice from Australian solicitors as to the proposed purchase of Colorado and, on that date their solicitor, Ms Chen, sent Clare's solicitor an email attaching a marked up version of the transaction documents (Ex P1 2/691). Ms Chen included a proposed restraint of trade in that draft (Ex P1 2/705) consistent with Mr Lai's suggestion that such a provision should be included (Ex P1 2/685). I will address issues as to the scope of that restraint below. 63The purchase price for the shares to be acquired by HY international and Phoenix was paid before completion in exchange for a secured guarantee given by Clare to repay the money if the transaction did not proceed, an arrangement that had been discussed between Kenneth and Mr Huang (Ex P1 2/577b). The Deed of Guarantee (Ex P1 2/578) provided for a deposit of $120,000 that was only refundable if Clare terminated the transaction. However, Kenneth's and Helen's understanding was that the whole of the purchase price of $1.2 million would be repaid if the transaction did not proceed (T135-136, T147). On 29 June 2009, Kenneth, Helen and Clare met and Helen provided Clare with a cheque of $600,000 and Kenneth provided Clare with a cheque also of $600,000 on that basis. Kenneth and Helen both give evidence that meeting took place at the Kirribilli Club on 29 June 2009 (Kenneth 22.8.2011 [34]; Helen 1.3.2012 [29]). Clare denies that the meeting took place at the Kirribilli Club and contends that it took place at a food court in Chatswood (Clare 20.10.2013 [96]). It is not necessary to resolve that dispute. 64Both parties agree that a further meeting took place at the Kirribilli Club on 1 July 2009 and the Share Sale Deed and Deed of Guarantee was signed either on 30 June 2009 (on Clare's account at Clare 20.10.2013 [100] - [102]) or on that date. The Share Sale Deed relevantly provides, in Recital D, that Clare and the purchasers agree that the value of Colorado is $1.5 million; Recital E records that Clare has agreed to sell and the purchasers have agreed to purchase 80% of Colorado's share capital at the price of $150,000 per 10% share capital, totalling $1.2 million. Recitals F-G to the Share Sale Deed provide that: "F. [Clare] discloses and warrants to the Purchasers that all Stock currently held by [Colorado] at [Colorado's] premises belong to [Clare] and the Purchasers agree to purchase 80% (at 40% each) of the Stock owned by [Clare] from [Clare] and [Clare] is responsible for 20% of the value of the Stock held by [Colorado]. G. [Clare] agrees that the total value of the Stock on Completion of this Deed shall not exceed $500,000." 65Clause 3 of the Share Sale Deed provides for the sale of 80% of the share capital in Colorado for a total price of $1.2 million and for the purchasers to purchase 80% of the stock held by Colorado valued in accordance with cl 10, which appears to be intended to be a reference to cl 11. Clause 4 sets out several conditions precedent to the sale; cl 5 sets out the steps to be taken at completion of the sale; cl 6 provides for payment of the purchase price to be made on or before 30 June (in its heading) or on or before 29 June (in its text); cl 7 contains an entire agreement clause and seeks to exclude collateral agreements; and cl 8 provides for Clare to give several warranties. 66Clause 11.1 of the Share Sale Deed in turn provides that: "11.1 Stocktake (a) [Clare] discloses and warrants to the Purchasers that all Stock currently held by [Colorado] at [Colorado's] premises belong to [Clare]. (b) On Completion of this Deed or date as agreed by the parties, [Clare] and the Purchasers shall conduct a stocktake and valuation of the Stock by examining invoices for the stock held by the Company and evidence of the ownership of the same by [Clare]. (c) The Purchasers agree to purchase 80% (at 40% each) of the Stock owned by [Clare] from [Clare] and [Clare] is responsible for 20% of the value of the Stock held by Colorado. (d) The value of the stock shall form part of the purchase price payable on Completion. (e) [Clare] agrees that the total value of the Stock on Completion of this Deed shall not exceed $500,000.00." 67Clause 11.2 in turn provides for the management and conduct of Colorado's business, presumably up to the completion of the Share Sale Deed; cl 12 provides for completion and cl 13 sets out Colorado's obligations on and after completion. In particular, cl 13.2 provided that: "On Completion of this Deed, [Colorado] agrees to enter into a lease for the current premises known as 9 Euston Street, Rydalmere from CH Design Solutions Pty Limited on the terms and conditions acceptable to the Purchasers and [Clare]. [Colorado] shall be responsible for the payment of the Lessor's costs of granting and preparing the lease, as well as associated costs including any mortgagee's consent costs, registration and stamp duty." Clause 16 of the Share Sale Deed contains a restriction on competition by Clare, to which I will refer below. 68A further meeting took place at Mr Huang's office in Hong Kong on 10 July 2009 attended by Helen, Mr Huang, Mr Lai, Kenneth and Clare. Helen's evidence (Helen 1.3.2012 [33]) is that: "The purpose of this meeting was to further discuss in detail the financial accounts of Colorado for the year ended 30 June 2009 and the draft Shareholders Agreement. Kenneth and I both wanted to read some official financial records of Colorado to confirm what [Clare] said about the business." Helen's evidence in cross-examination was that the main purpose of the meeting on 10 July was not to make a final decision whether or not to proceed with the purchase of the Colorado shares, because payment had already been made, but to discuss the Shareholders Agreement (T137). In her affidavit evidence, Helen describes Mr Lai's role at the meeting as "to help Mr Huang and [Helen] review the financial accounts and to raise questions to [Clare]" (Helen 1.3.2012 [34]). 69Helen's evidence is that, at that meeting, Clare provided Kenneth, Helen, Mr Huang and Helen with Colorado's draft financial statements for the year ending 30 June 2009; a trading agreement between Colorado and Crane Distribution Ltd trading as Tradelink Plumbing (Ex P1 2/840); a trading agreement between Colorado and Harvey Norman (Ex P1 2/820); and a draft Shareholders Agreement; and that Clare's son, Mr Xie, had sent the trading agreements with Tradelink and Harvey Norman by facsimile from Australia (Helen 1.3.2012 [35]-[36]). 70Helen's evidence in cross-examination was that she, Kenneth, Mr Huang and Mr Lai reviewed the trading agreements with Tradelink and Harvey Norman at the meeting on 10 July (T138), although she also said that she could not remember that "very clearly", could not remember when she had looked at those documents although somebody had done so and she could not remember whether it was Mr Huang or Mr Lai or Kenneth (T142). Helen acknowledged that the trading agreement with Harvey Norman that was provided to the meeting on 10 July did not include a promise to purchase any goods from Colorado and her evidence was that no-one had commented on that matter at that meeting (T143). She then repeated, in a similar form the statement to which I have referred above, that: "Clare told us verbally that Harvey Norman will give the business $1 - $1.2 million and that the target of $3.5 million will be reached in the following year. We believe she has the ability to do so before she could say those things." (T144) She then referred to Kenneth's meeting with Clare on 5 June 2009, although that matter had not been addressed in her affidavit (T144) and explained that meeting may have been omitted from her affidavit because she had "made a mistake" (T145). 71In her affidavit of 1 March 2012, Helen draws attention to a version of Colorado's financial statements for the year ended 30 June 2009 provided to the attendees at the 10 July 2009 meeting (Ex P1 2/729) and to a different version lodged by Colorado with the Australian Taxation Office on or about October 2009 (Ex P1 2/755) together with Colorado's company tax return for the year ended 30 June 2009. The sales recorded in those two versions of the financial statements are the same; the gross profit stated in the version lodged with the Australian Taxation Office is $647,543 rather than $730,543, the gross profit margin is 35% rather than 39.56% and the profit before tax is $65,241 rather than $157,269, and the stated stock level at closing is lower in the version of the accounts lodged with the Australian Taxation Office. Helen's affidavit evidence was that she became aware, in May 2011, that Colorado later lodged a different version of its accounts with the Australian Tax Office than that which had been made available in draft at the 10 July meeting (Helen 1.3.2012 [59]). That evidence is starkly inconsistent with the fact that Helen had in fact signed those different accounts in October 2009, unless she had done so without reading them (T203). 72The copy of the draft Colorado financial statements for the year ended 30 June 2009 which were discussed at that meeting has Mr Lai's handwritten notations (Ex P1 2/805). Those notations are in Chinese characters and no party had them translated. In cross-examination, Helen acknowledged that Mr Lai went through the draft accounts, asking questions that Clare answered and that he had made notes as part of his function as financial adviser to Helen and Mr Huang (T146). Her evidence was that she did not further discuss those matters with Mr Lai on that day, because she and Mr Huang then travelled to China on that day (T147). Her evidence was also that she did not read the accounts of Colorado as at July 2009 since she was not "very clear about these things" and had given them to Mr Lai to review (T148) and relied on Mr Lai's opinion because of his professional qualifications (T149). In these circumstances, the absence of Mr Lai's evidence becomes more significant. At least by the point that those accounts were made available on 10 July 2009, it was apparent that Colorado's sales figure for 2009 was $1.846 million rather than $2 million, although Helen's evidence in cross-examination was in any event that those figures were "very close" (T149). 73Helen also gives evidence of questions asked by Mr Lai in relation to the factory operated by Sorrento China and of a review of the clauses of the proposed Shareholders Agreement, and she refers to a further conversation between Clare and Mr Lai concerning Colorado's "average gross profits"; a promise by Clare to clear Colorado's debts before completion of the sale; and a statement by Mr Lai that further work would be needed on the proposed Shareholders Agreement and that a Supply and Buy Agreement with Sorrento China was also needed (Helen 1.3.2012 [38]). 74Kenneth also gives evidence of the 10 July meeting (Kenneth 22.8.2011 [37]ff). I have referred above to the difficulties arising from the fact that part of Kenneth's evidence of the relevant conversations is in substantially identical form to Helen's evidence of those conversations. Kenneth accepted in cross-examination that Mr Huang needed to see the agreements with Tradelink and Harvey Norman and Colorado's financial reports before the deal could be finalised and that the Plaintiffs would not just rely on what they had been told as to those matters but would check them (T413). Kenneth also accepted that, when he saw the trading agreement between Colorado and Harvey Norman at that meeting, he saw that it did not contain any promise by Harvey Norman to buy any particular level of stock in the future (T416). 75Clare's evidence is that her understanding was that the purpose of this meeting was to review and finalise a draft Shareholders' Agreement (Clare 20.10.2013 [107]). Clare's evidence was initially that she did not recall any discussion at the meeting regarding trading agreements with Harvey Norman or Tradelink (Clare 20.10.2013 [109]). However, it is likely that such discussion took place, where the parties took steps to have those agreements faxed to them while they were in that meeting. Clare's evidence was that the loan by Mr Huang to Kenneth toward Phoenix's purchase of a 40% interest in Colorado was disclosed at that meeting (Clare 20.10.2013 [112]). She also gives evidence of discussion that HY International and Phoenix would pass business to Colorado once they became shareholders, and of Kenneth referring to HY International having a bathtub and bathroom accessories business (Clare 20.10.2013 [113]). Clare denies repeating the statement that Harvey Norman had promised to purchase a minimum of $1 million in stock for 2009/2010 at that meeting (T654) and also denies that Mr Lai had asked any questions about the gross profit from trading at that meeting (T654) and denies that she said that the average gross profits had been 40% and that Colorado would continue to achieve those gross profits (T655). 76Mr Huang and Mr Lai did not give evidence of what had occurred at the 10 July meeting. I find myself unable to give substantial weight to Helen's or Kenneth's account of those conversations, given the matters to which I have referred above; but I also cannot give substantial weight to Clare's account of the conversation, given the issues as to her credit to which I have also referred above. I do find, on the objective probabilities, that Colorado's financial statements for the year ending 30 June 2009 were discussed at that meeting; that the trading agreements with Tradelink and Harvey Norman were available at that meeting, and were reviewed by at least some of the participants at the meeting; that there was discussion of the draft Shareholders Agreement and supply arrangements with Sorrento China at the meeting; and that there was also discussion as to the terms of the salary for the General Manager, who was initially to be Clare and subsequently Kenneth. 77Helen also initially gave affidavit evidence of a further meeting in Hong Kong on 23 July 2009. When it was put to Helen in cross-examination that that meeting did not occur on 23 July, she gave evidence that the meeting had been brought forward to mid-July because of a change in Mr Huang's itinerary (T183), a matter that further emphasises his significance in the relevant discussions. Helen's affidavit evidence was that a conversation took place at that meeting between Kenneth and Clare as to trading arrangements between Colorado and Sorrento China and that Clare indicated that Colorado needed to enter into a new lease for the warehouse premises owned by CH Design and occupied by Colorado (Helen 1.3.2012 [41]). Kenneth's affidavit evidence was also that a further meeting took place on 23 July 2009 between Helen, Kenneth, Mr Huang, Mr Lai and Clare (Kenneth 22.08.2011 [39]). Kenneth did not give detailed evidence as to what occurred at that meeting, other than to note that the proposed Shareholders Agreement and proposed Supply and Buy Agreement between Colorado and Sorrento China were discussed. Kenneth subsequently acknowledged that the meeting that he had originally said took place on 23 July 2009 occurred on 15 July 2009, and that he was mistaken in the date of that meeting because it had originally been intended to take place on the later date (Kenneth 27.11.2013 [23]). 78That meeting did not take place on 23 July 2009; however, it is clear that a meeting took place, probably on 15 July 2009, at least involving Kenneth, Helen and Mr Huang. Kenneth gave convincing evidence as to Clare's presence at Mr Huang's offices on 15 July, referring to the fact that Mr Huang's driver had driven Clare to pick up a special tool required for Colorado's business in Hong Kong following that meeting (T421). Kenneth's evidence in cross-examination as to whether Clare was present at the meeting on 15 July (as distinct from at Mr Huang's offices) was confusing; he initially said that he was "pretty sure" she was there (T420) but subsequently accepted in cross-examination that he had no recollection of her being in the meeting (T421). It seemed to me that this contradiction may well have resulted from a lack of attention to the matters being put to him in cross-examination, but that still causes difficulty in giving substantial weight to Kenneth's evidence as to these matters. 79In cross-examination, Clare initially denied that she had attended a second meeting on 15 July 2009 (T658, 715-716). Clare subsequently gave evidence that, although she was in Hong Kong on 15 July, she did not attend that meeting but "popped" in at Mr Huang's office when the meeting was going on to "pay a visit" (T658-659). It seemed to me that Clare adjusted her evidence in this regard to Kenneth's evidence, after she was present in court, as she was entitled to be as a party to the proceedings, when Kenneth was cross-examined about this matter. Clare's evidence that she did not attend the meeting seems to me to be inconsistent with the probabilities where significant matters were still under discussion at that time, and is also inconsistent with an email dated 20 July 2009 from Clare to Mr Lai (Ex P8, p 111a) which refers to sending the: "amended minutes of the shareholders agreement which we discussed on the meetings in Hong Kong last week." That reference supports the inference that, contrary to Clare's evidence, she attended the second meeting in Hong Kong on 15 July. 80A Shareholders Agreement (Ex P1 2/890) and the Supply and Buy Agreement between Colorado and Sorrento China were signed on 28 July 2009 (FASC [28]-[29], Amended Defence [28]-[29], Kenneth 22.8.2011 [41]). Clause 2.1 of the Shareholders Agreement provided that it was a condition precedent to that Agreement that Colorado enter into a lease with the owner of the relevant business premises, CH Design. Clause 3.1 of the Shareholders Agreement provided that Colorado's business would be confined to the "Operations" (as defined) and such other activities as all shareholders, from time to time, in writing agreed. The term "Operations" was defined as "the conduct of the Business" by Colorado and the term "Business" was defined as "vanities, basins, mirrors, sinks, laundry tabs, tapwares, bathroom accessories, toilet products, import and distribution business presently conducted by [Colorado] at the Premises". 81Clause 3.2 of the Shareholders Agreement provided that: "The Shareholders will, in their respective capacities as a shareholder or a director of (or their powers of appointment of directors of) [Colorado], or in any other capacity whatever, use their best endeavours to ensure that the affairs and operations of [Colorado] are conducted in a vigorous, efficient and profitable manner and in accordance with good business practice in all respects." Clause 3.4 of the Shareholders Agreement provided that: "Each Shareholder will promptly and fully disclose to the others (or to their nominees on the Board) all information or material learned, obtained or produced by it in relation to the Business or in relation to the creation, development, promotion, marketing, distribution, sale or use of the products of [Colorado]/the affairs of [Colorado], material to the venture which is the subject of this Agreement, including any infringement (or any threatened or likely infringement) of any intellectual or other property or other protected rights relating to the product/services/assets of [Colorado]." Clause 3.5 of the Shareholders Agreement provided for Colorado to appoint Clare as its General Manager to take care of the day-to-day management of the business and affairs of the Company from the commencement of the agreement to 31 December 2009 and to appoint Kenneth as General Manager from 1 January 2010. 82Clause 6.1 of the Shareholders Agreement imposed restrictions on shareholders' activities, to which I will refer below. Clause 7.1 in turn prohibited disclosure or use, other than for the purpose of Colorado's business, of Colorado's confidential information or confidential information supplied by any shareholder in Colorado, subject to specified exceptions. The Shareholders Agreement also provided in cl 12.2 that each party would: "(a) act promptly, reasonably and in good faith while taking action or undertaking conduct in order to observe the provisions of this Agreement; and (b) be just and faithful to each other party and provide full information, particulars and explanations of all matters relating to the affairs and activities of [Colorado]." 83The Supply and Buy Agreement in turn recorded Sorrento China's agreement to give a 5% rebate to Colorado if sales are "direct from Sorrento [China] to other Australian customers" (Ex P1 3/927). That clause plainly contemplates the possibility of sales by Sorrento China to Australian customers other than Colorado. Clause 2 provides: "Sorrento [China] agrees not to sell any Colorado brand products to Australian market without going through or agreed by Colorado." Kenneth accepted in cross-examination that he was representing Colorado's interests in negotiating the Supply and Buy Agreement between Colorado and Sorrento China and was trying to get the best deal for Colorado and that Clare was representing Sorrento China and trying to get the best deal for Sorrento China (T426). 84On completion of the Share Sale Deed, 17 shares in Colorado were issued, which did not strictly correspond to the process contemplated by cl 4.1(a) of the Share Sale Deed. The result was that the share capital of Colorado was increased from 3 shares to 20 shares rather than from 3 shares to 10 shares as provided by the Share Sale Deed; HY International was allotted 8 shares in Colorado rather than purchasing 4 shares from Clare as contemplated by the Share Sale Deed; and Phoenix was allotted 8 shares in Colorado instead of purchasing 4 shares from Clare as provided in the Share Sale Deed (Helen 1.3.2012 ([53]-[54)]. Clare's evidence is that she assumed that the issue of shares in Colorado, instead of a sale of shares, was accepted by the Plaintiffs as satisfying the requirements of the Share Sale Deed; such an assumption was plainly reasonable, where the Plaintiffs proceeded to completion of the Share Sale Deed on that basis (Clare 20.10.2013 [125]). The Plaintiffs no longer any press any claim arising from this matter. The pleaded June 2009 Representations 85The Plaintiffs plead (FASC [20]) that, in or about early June 2009, Clare made several representations to HY International and Phoenix ("June 2009 Representations"). The June 2009 Representations are particularised as having been oral and express and made by Clare at various meetings between her, Kenneth and Helen. Paragraphs 67-84 of the FASC in turn plead claims of misleading or deceptive conduct against Clare in respect of the Plaintiffs' purchase of the Colorado shares, relying on the June 2009 Representations as pleaded in FASC [20]. 86The Plaintiffs plead that, in making the June 2009 representations, Clare engaged in conduct that contravened ss 1041E, 1041F and 1041H of the Corporations Act (FASC [68]) and that, in making those representations, Clare had no reasonable grounds for them (FASC [69]). The Plaintiffs also plead that the relevant conduct contravened s 42 of the Fair Trading Act 1987 (NSW) and that the representations pleaded in FASC paragraph 20(a)-(d) were with respect to a future matter within the meaning of s 41 of that Act and that Clare did not have reasonable grounds for making them (FASC [77]-[78]). The same claim was initially put on the basis of a contravention of s 18 of the Australian Consumer Law (FASC [81]-[84]) but that claim is no longer pressed. The Plaintiffs point out that these statutory provisions are relevantly the same, referring to Australian Securities and Investments Commission v Cycclone Magnetic Engines Inc [2009] QSC 58; (2009) 224 FLR 50 at [72] per Martin J. The approach to be adopted in assessing whether conduct is misleading or deceptive was summarised in Australian Competition and Consumer Commission v Telstra Corporation Ltd [2007] FCA 1904; (2007) 244 ALR 470 at [14]-[15] per Gordon J, in a passage approved by Griffiths J in Forty Two International Pty Ltd v Barnes [2014] FCA 85; (2014) 97 ACSR 450 at [446], as follows: "The relevant legal principles have been well traversed by Australian courts. A two-step analysis is required. First, it is necessary to ask whether each or any of the pleaded representations is conveyed by the particular events complained of ... Second, it is necessary to ask whether the representations conveyed are false, misleading or deceptive or likely to mislead or deceive. This is a 'quintessential question of fact'" [citations omitted] 87The Plaintiffs point out, uncontroversially, that whether particular conduct is misleading or deceptive or likely to mislead or deceive is a question of fact and that it is not necessary for them to establish that Clare intended to mislead or deceive and that the relevant question is whether, viewed objectively, the relevant conduct was misleading or deceptive or likely to mislead or deceive: Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; (1982) 149 CLR 191 at 197 per Gibbs CJ, 216 per Brennan J; Australian Competition and Consumer Commission v Jewellery Group Pty Ltd [2012] FCA 848; (2012) 293 ALR 335 at [66] per Lander J; Osgaig Pty Ltd v Ajisen (Melbourne) Pty Ltd [2004] FCA 1394; (2004) 213 ALR 153 at [91] per Weinberg J. They point out that conduct is likely to mislead or deceive if there is a real and not remote chance or possibility that a person is likely to be misled or deceived, and this is so even though the possibility of that occurring is less than 50 per cent: Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; (2004) 218 CLR 592 at [112] per McHugh J. 88The Plaintiffs point out that, so far as it is established that the representations alleged to have been made by Clare were representations as to future matters, the Plaintiffs bear the onus of proving that Clare did not have reasonable grounds for making the representations for the purposes of s 769C of the Corporations Act (Cycclone Magnetic Engines above at [78]) and Clare has the onus of proving that she had reasonable grounds for making the representations under the Fair Trading Act (Dib Group Pty Ltd v Ventouris Enterprises Pty Ltd [2011] NSWCA 300; (2011) 284 ALR 601 at [31] per Allsop P, with whom Macfarlan JA and Handley AJA agreed) and, in the case of the Trade Practices Act 1974 (Cth) claim, Clare bears an evidential onus to demonstrate some reasonable ground for making the representations and, if some evidence is put forward, the Plaintiffs bear the onus of proving that the Clare did not have reasonable grounds for making the representations. The Harvey Norman, expected turnover and future sales representations 89The first three of the pleaded June 2009 Representations (FASC (20(a)-(c)) are that: "(a) Harvey Norman had promised to purchase a minimum of $1 - $1.2 million in stock per annum from Colorado for the financial year 2009/2010; (b) By virtue of the expected Harvey Norman sales, [Clare] expected turnover of Colorado for the financial year 2009/2010 and thereafter would be $3.5 million; (c) Future sales of Colorado from 2010/2011 onward would continue to be at least $3.5 million." The Defendants deny that Clare made these representations and accepted, in opening, that they could not be supported and that, if made, they were relevantly misleading or deceptive. It is convenient to deal with these representations together since they turn on the same evidence. 90The question whether the Harvey Norman representation was made was one of the most difficult questions in an already difficult case. I have ultimately concluded that, while it was possible that it was made, I cannot be satisfied that it or the expected turnover and future sales representations were made on the balance of probabilities. I have set out the evidence as to the conversations said to give rise to the Harvey Norman representation above and also noted the reference to it in the note of the 5 June meeting sent by Kenneth to Mr Huang. So far as the expected turnover and future sales representations are concerned, Kenneth accepted in cross-examination that he never heard Clare refer to a figure of $3.5 million (T 398-399). Even on the Plaintiffs' case, an increase in Harvey Norman sales to $1-1.2 million would increase Colorado's turnover only to around $3 million. 91The Plaintiffs contend that, on the balance of probabilities, Clare sought to support the purchase price on 1 June by making the alleged representations and I have had regard to the fact that Clare plainly had an incentive to make such a representation so as to justify the price sought for the shares to be sold. Although there is dispute as to whether Clare referred to the sale price of $1.5 million for Colorado (or its goodwill) at the meeting on 1 June 2009 or only at an earlier meeting with Kenneth, she accepted in cross examination that she knew, or assumed, that Kenneth, Helen and Mr Huang knew that sale price at the time of that meeting. I can give little weight to her denial of the representations given the reservations as to her evidence to which I have referred above. 92However, I cannot be satisfied that the alleged representations were made at the meeting on 1 June, where I am not satisfied that Helen's and Kenneth's affidavits genuinely reflect their own recollections of events for the reasons noted above, where Kenneth's evidence in cross-examination is compromised by his access to the transcript of Helen's cross-examination and where Mr Huang has not given evidence of the meeting on 1 June that he attended. So far as Kenneth records those representations in his note of the 5 July meeting, I am also not satisfied as to the accuracy of at least that aspect of the record, given his significant and unexplained "mistake" (or misstatement) that the agreement with Harvey Norman had been signed when it had not, his incentives to encourage Mr Huang to proceed with the transaction and his acknowledged willingness to deceive Mr Huang if it were in his interests to do so, to which I have referred above. 93There is also objective evidence that the representations, if made at the meeting of 1 June, and to the extent made in Kenneth's report of 5 June, were not significant to the Plaintiffs, and that matter is of particular importance in a case where there are difficulties with the relevant witnesses' evidence. No reference was made to those representations on subsequent occasions when they would have been highly relevant had they been made, or (to the extent referred to in Kenneth's report) been of significance to the Plaintiffs. Clare's evidence was that there was no complaint to her, prior to the commencement of the proceedings, about the fact that, relevantly, Harvey Norman did not provide $1 - $1.2 million worth of business to Colorado in the 2009/2010 financial year or that Colorado's turnover for that financial year was less than $3.5 million (Clare 20.10.2013 [316]-[318]). That evidence is consistent with the contemporaneous documents. 94In early January 2010, Clare provided Kenneth and Helen with a sales report (Ex P1 3/1324) indicating sales of about $800,000 for Colorado, up 10% from the previous year, in the past 5 months and forecasting a further increase of 10% - 15% in the next 6 months. The suggested growth in sales in that report was qualified by the fact that at least part of it reflected the introduction of $60,000 of revenue from the sale of bathroom accessories, which was business previously undertaken by HY International (T152), a matter to which Clare referred in the sales report. The sales reported in that document were about half what the Plaintiffs claim was the level of sales represented to them including the additional sales to Harvey Norman. However, Helen and Kenneth did not then suggest that sales of that level were well short of the represented additional sales to Harvey Norman or the forecast of $3.5 million sales for the following year (T150). Helen's evidence in cross-examination was that she considered that the figures seemed "very promising" and she sought to explain the absence of question or protest by the suggestion that, although the sales "were not as [Clare] promised", Helen thought eventually the sales would pick up (T151). It is difficult to accept that such a report would have been accepted by Helen and Kenneth without question or comment had the alleged representations as to sales to Harvey Norman or the related representation as to total turnover been made, or (to the extent referred to in Kenneth's report of 5 June) been of significance to them, and not met to this extent. 95Colorado's business subsequently declined in the first quarter of 2010, after Kenneth had assumed management of Colorado from Clare and in circumstances that Colorado's financial constraints, to which I will refer below, impeded its ability to order stock from Sorrento China. A further report of sales was prepared by Clare (Ex P1 4/1622) and a meeting of directors took place on 29 March 2010 (Ex P1 4/1581), at which the issue of poor sales was discussed but the alleged promise of $1-$1.2 million of sales to Harvey Norman, and the obvious failure to achieve those sales, was not mentioned (T157). Helen responded in cross-examination that there were then no specific sale figures from Harvey Norman available to raise that issue; however, it was plain from Colorado's total sales in that period that sales from Harvey Norman could not have been achieved at anything close to the allegedly represented figure. When that matter was put to Helen in cross-examination, she responded by repeating the form of the suggested representation, namely, that: "I firmly believed that Harvey Norman would bring in sales of $1 to $1.2 million and that at the end of the year there will be a turnover rate reached for $3.5 million and a gross profit margin of 40% will be achieved. There are many reasons for the business not going well, but if eventually the sales can reach that target then I will still be satisfied." (T158) That response did not, however, explain the absence of any reference to a critical representation, had it been made or (to the extent referred to in Kenneth's report of 5 June) been of significance to the Plaintiffs, in discussions to which it would obviously have been relevant at a time that the alleged representation had plainly not been made good. 96In a discussion paper prepared with Ms Wan's assistance in August 2010, Helen recognised that total sales by Colorado to Harvey Norman in the 2009/2010 financial year were approximately $100,000 (Ex P1 6/2378) and referred to the existence of other "problems" and to a "shareholders' dispute" (Ex P1 6/2382), but again did not refer to any previous representation made by Clare as to the level of sales promised by Harvey Norman. Helen responded, in cross-examination, that she had found out that she had been deceived by Clare in buying Colorado's shares and at that time it was "pointless talking to her about the sales from Harvey Norman" (T159). I do not accept that explanation. If there was point in raising the other areas of dispute with Clare, then there would also be point in raising the falsity of a critical representation that had brought about the purchase of the business. That document also noted that Colorado's sales had declined substantially, but also did not refer to any previous representation as to sales of $3.5 million. Helen's evidence in cross-examination was that she knew by that time that it would be "impossible to achieve that kind of thing" (T159). Again, that does not explain the absence of any reference to that representation in an important document to which it would have been relevant had it been made or (to the extent referred to in Kenneth's report of 5 June) been of significance to the Plaintiffs. 97Helen, Kenneth and Clare then attended a meeting on 11 August 2010 and Helen recorded that meeting on her mobile phone, although there was a dispute whether she had disclosed that she was doing so, and a translation of the transcript of that recording is in evidence (CB10/4347). Again, there was no reference at that meeting to any earlier representation as to sales to Harvey Norman or any failure to achieve the represented level of sales. Helen's evidence was that, by the time of the meeting in August 2010, she knew that Clare had deceived the Plaintiffs in buying Colorado's shares and that sales to Harvey Norman would never reach $1m - $1.2m but again "felt that there was no need to" mention that at the meeting (T172). Helen also acknowledged that there was no complaint to Clare concerning any such representation in any conversation involving Helen or any email sent throughout 2010, but her evidence was that in the circumstances, she "felt there was no need for me to challenge her" (T172-173). I also find myself unable to accept this evidence in circumstances that, as Helen acknowledged in cross-examination, she was frequently in disagreement with Clare during 2010 and occasionally there were "quite angry disagreements" with her (T173), and where other issues in dispute were raised by Helen in that period. Helen also sought to explain the absence of any reference to the representation concerning Harvey Norman in this period by the speed with which events developed (T172), including that issues arose as to monies paid by customers into Colorado's old accounts controlled by Clare and a change in payment terms to Sorrento China (T173), issues to which I will refer below; no doubt, those events created significant challenges for Helen and Kenneth as directors of Colorado, but they do not provide an explanation, in the context of a dispute with Clare, for the continuing absence of reference to earlier representations which would have been critical to Colorado's position, when other aspects of the dispute were raised between the parties. 98The Defendants also point out that, during the second half of 2009, Kenneth had regular meetings and other dealings with Harvey Norman (for example, Ex P1 3/1166, 1345), at a time that sales to Harvey Norman were well short of the level allegedly represented by Clare. Kenneth's evidence in cross-examination was that matters discussed in the second half of 2009 concerned an attempt to persuade Harvey Norman to put vanities in the Harvey Norman Commercial showroom at Taren Point, a matter that had been discussed in conversations with Clare in June and July 2009 (T435-436) and these efforts continued into 2010 (T438-439). There is also no evidence that any query was then raised by Kenneth with either Clare or Harvey Norman representatives as to why the level of sales that had allegedly been represented had not been achieved. 99For these reasons, I am not satisfied that the alleged Harvey Norman, expected turnover and future sales representations were made or, to the extent reflected in Kenneth's report of 5 June, were significant to the Plaintiffs. The current turnover representation 100The fourth of the pleaded June 2009 Representations (FASC (20(d)]) is that: "The turnover for Colorado for the financial year 2008/2009 would be close to $2 million." The Defendants accept that Clare made a representation to this effect and contend that it was true, since Colorado's financial statements for the financial year shows sales of $1,847,000 and that figure has been accepted as correct by the Plaintiffs' accounting expert witness, Ms Planinic (Planinic Report 2.3.2012 [61]). The Defendants point also out that, at a meeting on 10 July 2009, at a point at which the Plaintiffs understood they were not finally bound to the transaction, Helen, Kenneth, Mr Huang and Mr Lai were given and reviewed financial accounts which reflected that sales figure for 2008/2009. Kenneth accepted that he was told that turnover was $1.6 to $1.8 million in any event (T388). Helen also accepted in cross-examination there was no material difference between what Clare had described as "almost $2 million" and the actual figure (T149). It has not been established that this representation was misleading or deceptive or likely to mislead or deceive. The average profit margin representation 101The fifth of the pleaded June 2009 Representations (FASC (20(e)]) is that: "The average gross profit margin on sales in the Business was currently 40% in the 2008/2009 financial year and would continue to be 40% in the 2009/2010 financial year and future years." The Defendants accept that Clare represented that the average gross margin on sales in Colorado's business was currently 40% in the 2008/2009 financial year, but deny that representation was made in respect of the gross profit margin or that she stated that she expected that gross margin on sales to continue at 40% for the 2009/2010 financial year and into the future (Amended Defence [20]). 102Helen's evidence (Helen 1.3.2012 [17]) is that Clare said words to the following effect: "Currently the gross profit margin is about 40% on average and I don't see any problem in maintaining that level of gross profit margin for the coming years." Helen's evidence is that, if Colorado's gross profit margin was 35% rather than 40% as represented by Clare, Helen would not have caused HY International to purchase Colorado's business or shares in Colorado (Helen 1.3.2012 [62]). Kenneth's evidence (Kenneth 22.8.2011 [24]) is that Clare said that "the average return on turnover is about 40%" and Kenneth's note of the suggested meeting with Clare on 5 June (to which I referred above) recorded a statement that "[o]verall, the average return on turnover is around 40%" (Ex P1 1/427B). Clare's evidence is that Mr Huang asked her a question about "gross margin" at the meeting on 1 June (Clare 20.10.2013 [73]) and that she understood Mr Huang's question, having regard to the term he used, in Mandarin, to ask about Colorado's margin (or mark-up) on products sold to its customers and that she answered Mr Huang's question by saying words to the following effect of "about 40%". 103The Plaintiffs contend that Clare's version of events is inherently implausible for several reasons. They contend that a prospective buyer of a business such as the Plaintiffs would not be interested in the mark-up that the business placed upon goods sold and that any purchaser of a business such as the Plaintiffs would be interested in a business' gross profit margin. That submission seems to me to invite to speculation as to that matter in place of the evidence that Mr Huang could have, but did not, give about the matters that were of interest to him when he asked the relevant question. If one were to speculate as to that matter, it is by no means apparent that the margin on sales would be irrelevant to a sophisticated businessman such as Mr Huang. Neither that submission nor Helen's nor Kenneth's evidence respond to Clare's evidence as to the meanings of the word used by Mr Huang in Mandarin. Mr Huang did not give evidence and I infer that his evidence as to his question and Clare's answer to it would not have assisted the Plaintiffs. Clare herself appears to have regarded the margin on sales as a significant indicator of business performance since, in a sales report dated 31 December 2009 (Ex D3 383-384), she expressed the view that: "We must be sure gloss [sic] margin of sales are not less than 40% across the full range of products, otherwise, we might as well not bother to trade!!!" 104I am not satisfied that the alleged representation was made in respect of Colorado's gross profit margin, as distinct from in respect of the margin on sales, and any representation as to the latter was not falsified. The value of the shares representation 105The sixth of the pleaded June 2009 Representations (FASC (20(f)]) is that: "By virtue of the expected increased sales to Harvey Norman and 40% average gross profit margin on sales, the value of shares in Colorado was $1.5 million." The Plaintiffs rely on Helen's affidavit dated 1 March 2012 at [16]-[17] and Kenneth's affidavit dated 22 August 2011 at [20], [24] and [28] for this representation. The Defendants deny that Clare made this representation. I have referred above to a dispute, which it is not necessary to resolve, as to whether there was mention of the sale price at the meeting on 1 June, and to Clare's evidence that there was no discussion of the price that anyone was willing to pay for Colorado or the price that she would accept for the business of Colorado (or its goodwill) at the meeting in early June (Clare 20.10.2013 [69]). It does not seem to me that the dispute matters, since Clare accepts that she had indicated a non-negotiable price of $1.5 million prior to that meeting and that was conveyed to Mr Huang by Kenneth in his report of 5 June which stated that: "Sale Price: Clare insist [sic] ($1.5M), no discussion." 106So far as this representation is derivative of the alleged representations as to sales to Harvey Norman and that Colorado's gross profit margin (as distinct from the margin on sales) would be 40%, it has not been established. The Defendants also submit that the concept of the value of shares in a small, tightly-held private company and the sale price which an owner might accept for those shares are two different things. The affidavits of Kenneth and Helen record Clare having said at the 1 June meeting that: "...I am prepared to sell my shares for $1.5 million" and "[t]he purchase price for all of the shares is $1.5 million" (Kenneth 22.8.2011 [20]; Helen 1.3.2012 [16]). The Defendants contend, and I accept, that this was not a representation as to the value of the shares, as distinct from a statement as to the sale price that would be acceptable to the vendor. 107It does not seem to me that the Plaintiffs' case in this regard goes any further than that Clare made clear, at some point, that she would not sell the business (or its goodwill) for less than $1.5 million. There seems to be no basis for holding that a vendor of business which names a sale price thereby represents that the business sold has a value corresponding to that price. The concepts of price and value are not the same. This representation is also not established. Reliance and causation 108The Plaintiffs plead (FASC [21]) that, induced by and relying upon the June 2009 Representations, or any one of them, HY International agreed to purchase 40% of Colorado's share capital at the price of $150,000 per 10% share capital for a total price of $600,000; Phoenix agreed to purchase 40% of Colorado's share capital at the price of $150,000 per 10% share capital for a total price of $600,000; and HY International and Phoenix agreed to and entered into the Share Sale Deed. The Defendants do not admit that the Plaintiffs relied upon the relevant representations. 109I have held that only one of the June 2009 representations, that pleaded in [FASC 20(d)], is established, and that representation has not been falsified. Questions of reliance and causation therefore do not strictly arise. However, I should address them against the contingency that an appellate court may take a different view as to the findings that I have reached above. 110I should first say something about the applicable legal principles. Section 1041I(1) of the Corporations Act provides that: "A person who suffers loss or damage by conduct of another person that was engaged in in contravention of section 1041E, 1041F, 1041G or 1041H may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention" Section 68(1) of the Fair Trading Act and s 82(1) of the Trade Practices Act are to similar effect. These provisions direct attention to whether the Plaintiffs have suffered loss or damage "by" conduct of another person done in the contravention of the relevant prohibitions. In Wardley Australia Ltd v Western Australia [1992] HCA 55; (1992) 175 CLR 514 at 525, Mason CJ and Dawson, Gaudron and McHugh JJ observed that the word "by" expresses the notion of causation and that these provisions: "should be understood as taking up the common law practical or common-sense concept of causation recently discussed by [the High Court] in March v Stramare (E & MH) Pty Ltd (1991) 171 CLR 506, except in so far as that concept is modified or supplemented expressly or impliedly by the provisions of the Act." 111The Plaintiffs therefore need to establish a causal connection between the alleged representations and the loss for which they seek compensation: Wardley above at 525-526; Henville v Walker [2001] HCA 52; (2001) 206 CLR 459 at 469-470 [17] (Gleeson CJ), 480 [61] (Gaudron J), 488-489 [94] (McHugh J with whom Gummow J agreed)) and 508-509 [159]-[160] (Hayne J with whom Gummow J agreed); Carey v Freehills [2013] FCA 954; (2013) 303 ALR 445 at [411] per Kenny J. In a claim for misleading or deceptive conduct constituted by representations, acts done by the person to whom the representation was made in reliance upon the misrepresentation will "constitute a sufficient connexion to satisfy the concept of causation": Wardley above at 525; Carey above at [412]. A material representation, in the sense of a representation that is "objectively likely" to act as an inducement to act in a particular way, will be a cause of the relevant loss or damage if it contributed to the loss or damage in some way, even if "other factors or conditions ... played an even more significant role in producing the loss or damage": Henville above at 493 [106] (McHugh J, with whom Gummow J agreed), 509 [163] (Hayne J, with whom Gummow J also agreed); Carey above at [412]. 112The Plaintiffs also rely on the well-established principle that, in a proper case, reliance may be inferred: Shears v Chisholm [1994] 2 VR 535 at 648; (1994) 9 ACSR 691 per JD Phillips J; Hanave Pty Ltd v LFOT Pty Ltd [1999] FCA 357; (1999) 43 IPR 545 at [11] per Wilcox J, and at [45] per Kiefel J, where her Honour noted that: "The question of causation can sometimes be resolved not by direct evidence as to what part a misrepresentation played in the process of entry into contract, but by a court determining what effect must be taken to have resulted. Indeed this course may sometimes be preferable to one which rested solely on evidence later given on the point. In Gould v Vaggelas [(1985) 157 CLR 215 at 236 ; 62 ALR 527; [1985] HCA 75] Wilson J held that if a material representation is calculated (which is to say, objectively likely ...) to induce the representee to enter into a contract and the person in fact enters into a contract, a fair inference arises that the representation operated as an inducement, adding that it need not be the only cause ... That part of Wilson J's judgment was not stated to be an exhaustive rule, but is to be seen as a guide to a question of fact which may arise. A conclusion of inducement may then be reached where a combination of factors, including the quality of the representation itself, goes unanswered. In relation to the representation itself it would need to be of a kind likely to provide that inducement and such that "... commonsense would demand the conclusion that the false representations played at least some part in inducing the plaintiff to enter into the contract." 113Turning now to the evidence as to reliance and causation, Helen's evidence (Helen 1.3.2012 [26]) was that the matters on which HY International relied upon in deciding to purchase and purchasing 40% of the shares in Colorado were as follows: "In deciding to purchase, and in ultimately purchasing, 40% of the shares in Colorado, HY International relied upon what [Clare] said during the conversations referred to above specifically, that: (a) Harvey Norman had promised to purchase a minimum of $1 - $1.2 million in stock per annum from Colorado for the financial year 2009/2010; (b) By virtue of the expected Harvey Norman sales, [Clare] expected annual turnover of Colorado for the financial year 2009/2010 would be around $3.5 million; (c) Future sales from 2010/2011 onward would continue to be at least $3.5m; (d) The turnover for Colorado for the financial year 2008/2009 would be close to $2 million; (e) The average gross profit margin on sales in the Business was currently 40% in the 2008/2009 financial year and would continue to be 40% in the 2009/2010 financial year and future years; (f) By virtue of the expected increased sales to Harvey Norman and 40% average gross profit margin on sales, the value of the shares in Colorado was $1.5 million." (Helen 1.3.2012 [26]) The term "business" used in this paragraph is defined in paragraph 9 of Helen's affidavit as "the business of importing from China, vanities, basins, mirrors, sinks, laundry tubs and other bathroom accessories for distribution and resale in Australia". 114Kenneth's evidence was that Phoenix decided to buy a 40% shareholding in Colorado for an amount of $600,000 after his discussions with Clare on 5 June 2009 (Kenneth 22.8.2011 [28]). The Defendants responded that Kenneth was not a director of Phoenix and Phoenix then led evidence of Kenneth's wife, Ms Hong Ying Ruan, that, in effect, she authorised Kenneth to make relevant decisions on behalf of Phoenix. Ms Ruan gave evidence that, between May 2009 and July 2009, she caused Phoenix to authorise Kenneth to conduct negotiations with Clare regarding Colorado for the purpose of purchasing shares in Colorado (Ruan 17.11.2013 [4]). She also gave evidence that she executed a power of attorney in favour of Kenneth dated 30 June 2009 on behalf of Phoenix and that power of attorney is in evidence (Ruan 17.11.2013 [6]). There is also evidence of a shareholders' meeting of Phoenix held on 17 November 2013 (after the point had been taken in the Defendants' submissions) attended by Ms Ruan, which passed several resolutions confirming Kenneth's authority to conduct negotiations and deal with matters relating to the purchase of shares in Colorado on behalf of Phoenix. 115Kenneth's further affidavit dated 27 November 2013 purports to set out conversations with Ms Ruan in May and June 2009 in respect of the purchase of the Colorado business. It is plain that the conversation that Kenneth says took place in May 2009 as to a possible investment of Phoenix in Colorado did not occur, since Kenneth's evidence in cross-examination was that the possibility of Phoenix investing in Colorado did not arise until after the meeting on 1 June 2009, when Mr Huang raised that possibility with Kenneth (T344). I also do not accept Kenneth's evidence that he discussed with his wife "all the possibilities" in May 2009 (T344), at least if that evidence is intended to include the possibility of Phoenix acquiring an interest in Colorado that it was not then funded to buy and that had not been offered to it. It also seems to me to be doubtful that Kenneth has an actual recollection, as he claimed (T346), of any conversations with his wife as to this matter over four years after they occurred. 116By his affidavit of 27 November 2013, Kenneth also gave evidence that he borrowed the bulk of the money that Phoenix applied to purchase the shares in Colorado from Mr Huang. Two loan agreements between Mr Huang and Kenneth are in evidence, and refer to the purpose of the loans as relating to the purchase of the Colorado shares. The first loan agreement between Kenneth and Mr Huang was signed on 15 July 2009 in Mr Huang's Hong Kong office and the second in August, after Mr Huang had transferred money into Colorado's account to purchase stock and working capital (T341). Kenneth's evidence is that he would not have purchased the Colorado shares if Clare had not said the words in June 2009 set out in his earlier affidavits (Kenneth 27.11.2013 [13]). 117The Plaintiffs' contend that their reliance upon the representations allegedly made by Clare may be inferred by reason that the purchase of the Colorado shares was a sizeable investment and Phoenix had to borrow funds to complete the purchase; Helen's evidence that the investment was for the purposes of providing a future income stream for her children; and the fact that the financial performance of Colorado was paramount in the Plaintiffs' minds, which is said to be confirmed by the fact that they insisted that Clare retain a 20% shareholding in Colorado which they perceived would provide an incentive to her to ensure the continuing financial success of Colorado. 118I am conscious that it is difficult to see that, in the ordinary course, a purchaser could have agreed to pay a substantial price to acquire the shares in Colorado, other than with an expectation of substantial turnover of the kind allegedly represented by Clare, where that price related solely or substantially to Colorado's goodwill, since it did not include stock and the Company's other assets were very limited. Nonetheless, I do not consider that reliance was established on the evidence, or can be inferred, in this case. I am unable to accept Helen's evidence that she was the sole decision-maker and have substantial reservations as to Helen's and Kenneth's evidence generally to which I have referred above; and Mr Huang and Mr Lai did not give evidence of their reasoning. Helen denied in cross-examination that the acquisition of an interest in Colorado would assist her application for Australian residency (T147), notwithstanding her reliance on the acquisition of that interest, combined with her interest in HY International, in information provided to the Department of Immigration in support of such an application. Nonetheless, there exists a plausible alternative motivation for the purchase, not dependent on its financial performance, namely, to secure Helen's and her childrens' right of residency in Australia when HY International was too small to achieve that result. The motivations of Phoenix were also too complex to allow such an inference to be drawn, where it was purchasing the business in substantial part with money lent by Mr Huang and since Kenneth would gain employment and a salary from that purchase, so long as HY International or Mr Huang was prepared to fund the business to secure its continued viability. 119It also seems to me that it would also have been difficult to infer reliance upon the alleged Harvey Norman, expected turnover and future sales representations, where they had, on their face, a significant degree of extravagance about them. As the Defendants point out, the effect of the alleged representations was that Colorado's turnover would increase by almost 65% in a single year, solely due to new purchases from a single customer, and in circumstances that Harvey Norman had historically been the source of approximately $250,000 - $300,000 of sales for Colorado. The alleged Harvey Norman representation was pleaded as an unequivocal promise by Harvey Norman to purchase a minimum value of stock, apparently unqualified by trading conditions, pricing or quality of that stock, and the alleged future sales representation apparently extended indefinitely into the future. I also find it difficult to accept that experienced businesspersons such as Mr Huang and Mr Lai would have relied on those alleged representations had they been made, and I proceed on the basis that their evidence would not have assisted the Plaintiffs in establishing reliance. 120The Defendants also contend that the Plaintiffs cannot establish reliance upon the representation that Harvey Norman had promised to purchase $1.5 million of stock per annum in the future, because such a representation was inconsistent with the terms of the written trading agreement between Colorado and Harvey Norman, which did not require Harvey Norman to buy any particular level of stock from Colorado, and which were read by each of Mr Huang, Mr Lai, Helen and Kenneth on 10 July 2009 at a time at which they could have relied on the guarantee given by Clare to rescind the purchase of the Colorado shares and recover their money. As I noted above, Kenneth's evidence in cross examination was that, before the transaction could be finalised, he and Mr Huang needed to see Colorado's agreement with Harvey Norman in order to check that it said the things that he had been told Harvey Norman had agreed to do (T413), and Kenneth also accepted in cross-examination that he read the Harvey Norman agreement and saw that it did not contain any promise by Harvey Norman to buy any particular level of stock in the future (T416). The Defendants also point to Helen's evidence in cross-examination, to which I have referred above, that copies of the relevant agreements were requested "to confirm" what they had been told in the meeting, and because the Plaintiffs would not accept what Clare had said about future sales without checking it (T131). 121I accept that that evidence was, at least potentially, inconsistent with reliance on any representation as to the level of purchases that would be made by Harvey Norman without further verification. However, it does not seem to me to follow from the fact that the trading agreements between Colorado and Harvey Norman contained no express promise of a level of turnover that the Plaintiffs could not have relied upon a representation made by Clare as to that matter, reflecting an extracontractual representation made by Harvey Norman to Colorado. That question needs to be assessed by reference to the evidence that Helen gave as to that matter, and on the basis that Mr Huang's and Mr Lai's evidence as to what they observed or inferred from that agreement would not have assisted the Plaintiffs' case. That issue is not avoided by the Plaintiffs' submission that Helen alone made the relevant decisions, which I do not accept given the extent of Mr Huang's and Mr Lai's involvement to which I have referred above. 122It does not seem to me that the Plaintiffs have established that the alleged representations had causative effect in any event, quite apart from the fact that I am not satisfied, for the reasons noted above, that the alleged representations (other than that pleaded in FASC 20(d)) were made, and the representation pleaded in FASC [20(d)] was not falsified. Clause 21 of the Share Sale Deed 123In answer to the allegation of reliance, the Defendants also rely on cl 21 of the Share Sale Deed which provided that the parties entered into the Share Sale Deed without relying on any representation by any other party and relied entirely on their own inquiries in relation to the subject matter of the Share Sale Deed. The Defendants characterise that matter as giving rise to a common assumption and contend that it would be unconscionable for the Plaintiffs to depart from that assumption and that they are estopped from doing so (Amended Defence [21A]). Alternatively, the Defendants contend that Clare entered into the Share Sale Deed on the basis that no party was relying on any representation by any other party and was induced to do so by the Plaintiffs agreeing to a form of Share Sale Deed that included cl 21 and that the Plaintiffs are estopped from denying the claimed assumption (Amended Defence [21B]). 124Clause 21 of the Share Sale Deed does not assist Clare. In Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304 at [130], Gummow, Hayne, Heydon and Kiefel JJ observed that: "[N]either the inclusion of an entire agreement clause in an agreement nor the inclusion of a provision expressly denying reliance upon pre-contractual representations will necessarily prevent the provision of misleading information before a contract was made constituting a contravention of the prohibition against misleading or deceptive conduct by which loss or damage was sustained. As pointed out earlier, by reference to the reasons of McHugh J in [Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592], whether conduct is misleading or deceptive is a question of fact to be decided by reference to all of the relevant circumstances, of which the terms of the contract are but one." That clause would not exclude a claim that the relevant statements were nonetheless misleading and the Defendants in fact relied upon them: see also Nifsan Developments Pty Ltd v Buskey [2011] QSC 314 at [57] per Applegarth J; Forty Two International Pty Ltd above at [486]. It has not been established that there is any unconscionability in the Plaintiffs disregarding that clause in the relevant circumstances so as to give rise to an estoppel. Whether loss and damage is established in respect of the June 2009 representations 125The Plaintiffs particularise the loss or damage claimed by reason of the alleged contraventions as the entire purchase price of the relevant shares, or alternatively, the difference in value between the purchase price of those shares and their actual value. The principles relating to the measure of damages under s 1041I of the Corporations Act are relevantly the same as those applicable to s 82 of the Trade Practices Act and s 68 of the Fair Trading Act: Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Markets Ltd [2008] NSWCA 206; (2008) 73 NSWLR 653 at [171] per Ipp JA. The starting point for the measure of damages is the rule in Potts v Miller [1940] HCA 43; (1940) 64 CLR 282 at 289 per Starke J; 297 per Dixon J, where the High Court held that the measure of damages was the difference between the amount paid for the shares and the real value of the shares at the time they were purchased. 126It was ultimately common ground between the parties that any damages for misleading or deceptive conduct should be assessed as the difference between the amount paid for the shares and the real value of the shares at the time they were purchased. The Defendants accept that the market value of the shares in Colorado was significantly less than the price paid for them and did not contest the valuation of $95,000 as at the date of the sale advanced by the expert accounting witness called by the Plaintiffs, Ms Planinic, although submitting that that valuation makes no allowance for some important aspects of the sale, namely, the special value to the Huang family of continuing the import business which would justify their immigration to Australia. Mr Braham, who appeared with Mr Neggo for the Defendants, confirmed in oral submissions that the Defendants accepted that damages on the representational case, if that was made out, would be the difference between what was paid for their shares and 80% of the value of the shares at the date of transaction (quantified as $95,000 for the business as a whole) reflecting the interest acquired by the Plaintiffs in that business (T959). On that basis, the complexities of a proportionate liability defence that had been raised by the Defendants in respect of later events did not arise. 127Had the Plaintiffs established that the representations pleaded in FASC [20(a)-(c) and (e)-(f)] had been made and that those representations and that pleaded in FASC [20(d)] were misleading or deceptive or likely to mislead or deceive, and had they established reliance and causation, I would have held that they were entitled to recover the amount invested for purchase of 80% of the shares in Colorado, $1,200,000, less the true value of the shares at the date of purchase, which Ms Planinic valued at $76,000 after allowing for the book value of fixed asset equipment (Planinic Report 2.3.2012 [22], [87]-[89]; T894), for a total of $1,124,000. The Continuing Performance Representations and the Settlement Agreement 128Paragraph 60 of the FASC pleads the Colorado Continuing Performance Representations which are alleged to have been made between July 2009 and August 2009, and FASC [85]-[92] plead claims of misleading or deceptive conduct in respect of those representations. The Colorado Continuing Performance Representations are alleged to have contravened s 42 of the Fair Trading Act and the representations pleaded in FASC [60(a)-(d)] are alleged to have been representations as to future matters within the meaning of s 41 of the Fair Trading Act, as to which Clare is alleged not to have had reasonable grounds; and the representation pleaded in FASC [60(e)] is alleged to have been false (FASC [85]-[88]). The same claim was initially also made by reference to s 18 of the Australian Consumer Law but that claim is no longer pressed. 129The first of the pleaded Colorado Continuing Performance Representations (FASC [60(a)]) is that Clare would cause Sorrento China to provide Colorado with a 5% discount on stock purchased by Colorado. The Defendants admit the allegation that Clare made this representation. It has not been falsified, since the Supply and Buy Agreement required Sorrento China to provide such a discount and there is no evidence that it did not do so. 130The second of the pleaded Colorado Continuing Performance Representations (FASC [60(b)]) is that Clare would cause Sorrento China to improve product quality control, costs and ensure reliable supply of products to Colorado. The Plaintiffs' submissions indicate that they rely on Helen's evidence of the conversation at the meetings on 1 June 2009, 10 July 2009 and 23 July 2009 (which, as I noted above, took place in mid-July) (Helen 1.3.2012 [17], [38], [41]), a draft agreement that Clare provided to her solicitor and Kenneth (Ex P1 1/432) and cl 5 of the Supply and Buy Agreement (Ex P1 3/927), which provided that Sorrento China would take full responsibility for the products supplied to Colorado, especially quality control. It does not seem to me to have been established that a representation was made in the unqualified terms pleaded, although there was plainly discussion of these matters, reflected in the statement in cl 5 of the Supply and Buy Agreement. In any event, such a representation has not been falsified, since there was no evidence of material issues as to product quality or that costs were not "controlled", although there were price increases over the period. It also does not seem to me that such a representation could be read more widely as requiring Sorrento China to supply stock for which Colorado did not pay in accordance with its terms of supply and I will deal with the dispute as to that matter below. 131The third of the pleaded Colorado Continuing Performance Representations (FASC [60)(c)]) is that Colorado would continue making a gross profit of 40%. The Plaintiffs rely on Helen's evidence of the discussion of the 40% figure at the 1 June meeting, Helen's repetition of that figure at the suggested 23 June meeting (which I am not satisfied took place, for the reasons noted above), Helen's evidence as to HY International's reliance on those matters, the suggested discussion of this matter at the 10 July meeting and the 23 July meeting (which, as I noted above, took place in mid-July) and a discussion on 3 August 2009 (Helen 1.3.2012 [17], [20], [26]-[27], [38], [41], [71]; Kenneth 22.8.2011 [24], [28]-[29]) for this representation. I have dealt with these matters, other than the 3 August discussion, above. I will now address the 3 August discussion. 132Helen's evidence is that, in a further conversation after a stocktake on about 3 August 2009 (Helen 1.3.2012 [71]), Clare repeated a reference to the gross margin of 40% and repeated the representation of turnover of $3.5 million. Clare gives evidence of a conversation in different terms, between herself and Kenneth, prior to the stocktake (Clare 20.10.2013 [192]). I am unable to accept Helen's affidavit evidence of the 3 August meeting, which is again a lengthy verbatim account of a conversation several years before in terms that promote the Plaintiffs' case, inconsistent with her limited recollection of matters in cross-examination. I am not satisfied that this representation was made, for the same reasons that I am not satisfied that the corresponding representation alleged to have been made in June 2009 was made. 133The fourth of the pleaded Colorado Continuing Performance Representations (FASC [60(d)]) is that Colorado's sales in the 2009-2010 financial year would be $3,500,000 and could be more. The Plaintiffs rely on Helen's evidence of the discussion at the 1 June meeting; Helen's repetition of that figure at the suggested 23 June meeting (which I am not satisfied took place) and Helen's evidence as to HY International's reliance on those matters (Helen 1.3.2012 [16], [20], [24], [26]-[27]) and Kenneth's evidence as to the 5 June meeting and as to reliance on that matter (Kenneth 22.8.2011 [24], [28]-[29]) for this representation. I am not satisfied that this representation is established on the balance of probabilities for the reasons noted above in respect of the corresponding June 2009 representation. 134The fifth of the pleaded Colorado Continuing Performance Representations (FASC [60(e)]) is that Colorado required at least $500,000 worth of stock and there was no harm in Colorado in having $700,000 worth of stock. The Plaintiffs relied in submissions on Helen's evidence of a conversation with Mr Huang concerning this matter, but that evidence had been of a hearsay character and had not been admitted in evidence where Mr Huang had not been called; Helen's evidence of reliance; a conversation with Clare concerning Clare's claim that she owned the relevant stock at some time between June and August 2009, to which I will refer below; Helen's and Kenneth's calculation of Colorado's stock requirements based on the draft financial statements provided to the 10 July meeting (Helen 1.3.2012 [24], [26]-[27], [67], [69]); and Kenneth's evidence of the 5 June meeting (Kenneth 22.8.2011 [24]). 135Kenneth's evidence is also that "on numerous occasions", Clare said to him: "Colorado needed [sic] at least $500,000 worth of stock" (Kenneth 29.8.2013 [54]). As the Defendants point out, the use of the past tense in this statement reflects the pleaded representation but is not consistent with what might have expected to have been said in a conversation as to a future stock acquisition. There is also no reference to these words having been said in Kenneth's first affidavit of two years earlier. I do not accept this evidence given these matters and the wider issues to which I have referred above in respect of Kenneth's credit and the preparation of his affidavit evidence generally. 136Helen's evidence is that she had a conversation with Clare about stock located in Colorado's premises at some time between June 2009 (that is, prior to completion of the sale) and August 2009 (well after completion) in which Clare claimed to own all stock on the floor at the premises and offered to sell stock to the value of $500,000 to Colorado in words to the following effect: [Clare] "I own all the stock and Colorado has to buy the stock from me. Since the sales of Colorado in 2009/2010 will be $3.5 million, I will sell to Colorado $500,000 stock which will cover 2 months sales. You will contribute 80% of the stock purchase money and I'll contribute 20%." (Helen 1.3.2012 [67]) The claim that Clare owned the relevant stock was not new, since Recital F of the Share Sale Deed provided that the Purchaser agreed that all stock held as at 29 June by Colorado at its premises belonged to Clare. This evidence also refers to the alleged representation as to the level of sales by Colorado in 2009/2010. Helen also points to the fact that the accounts provided to Kenneth, Mr Huang and Helen on 10 July had indicated that the stock owned by Colorado was valued at $418,232 but says that she "did not raise any question on the ownership of the stock at that time" (Helen 1.3.2012 [68]). Helen seeks to explain that position by reference to her lack of accounting and tax knowledge but it is difficult to accept that explanation when she had access to Mr Lai and there is no suggestion that he lacked accounting knowledge. 137Helen also gives evidence (Helen 1.3.2012 [71]) of a further conversation, on or about 3 August 2009, where she and Kenneth noted that there was stock to the value of $730,000 on the warehouse floor based on Clare's valuation; that they would only take stock of $500,000 and that the remaining stock would be Clare's responsibility; and Clare sought to have Colorado buy all of the stock, on the basis that she could not sell the stock on her own as a shareholder and director of Colorado. That conversation also emphasises Mr Huang's and Mr Lai's continuing role, since Helen records Kenneth or herself stating: "Before we finalise the stock purchase, we also have to ask Huang Yi his opinion because this was not part of our agreement back in June. Can you email the stocktake lists to Mr Lai in Hong Kong." 138Helen's evidence is that Clare then sent a copy of those stocktake lists to Mr Lai on 4 August 2009 (Ex P3 334-349), and Kenneth also emailed Mr Lai referring to the stocktake and extra stock that Colorado would consider buying on the same date (Ex P3 350). Helen's evidence was that "[i]n light of the promising sales potential represented by [Clare]", Kenneth and Helen decided that Colorado would buy total stock of $600,000 (Helen 1.3.2012 [74]). Kenneth also sent an email to Mr Lai concerning the stock contribution on 18 August 2009 (Ex P3 355). The amount necessary to purchase that stock was remitted by Mr Huang to Colorado's cheque account on 17 August 2009. Helen's evidence is that Clare deposited the amount of $120,000, which would have been a proportionate share of the cost of that purchase, into that cheque account on 4 September 2009 and withdrew the same amount on that day (Helen 1.3.2012 [75]). 139The Deed of Settlement (Ex P1 3/1005) provided that the value of stock to be paid for by shareholders was $600,000 and allowed Clare to deal with the balance of stock valued at $130,000. The agreement is undated but refers to stock arriving between 3 and 28 August 2009 and appears to have been executed after the latter date. The parties are Clare as vendor, HY International and Phoenix as purchasers and Colorado. The recitals refer to the agreement to purchase stock at a maximum value of $500,000 under the Share Sale Deed and to a stocktake undertaken on 31 July, and to a total value of stock owned by the vendor, Clare, of $730,000. Clause 1 provides for the purchasers to cause Colorado to purchase stock from Clare to the value of $600,000 and the purchasers acknowledge, by cl 2, that Clare could sell $130,000 worth of stock in her own name. Clause 3 acknowledges Clare's receipt of $480,000 from the purchasers, being 80% of the agreed value of the stock. There is also an agreement that Colorado will require running capital of $400,000 as at 1 August and for the parties to make contributions prior to 27 August 2009 in proportion to their shareholdings. 140Mr Keating's evidence was that Colorado's stock then included excess, slow moving and surplus stock and stock arising from cancellation of orders which could not be immediately resold (Keating 5.11.2013 [10]). In her affidavit dated 29 January 2014, Clare denied that there was excess, slow moving or surplus stock in Colorado's warehouse at June 2009 (Clare 29.1.2014 [6]). I do not accept Clare's evidence that Colorado's stock did not include any excess, slow moving or surplus stock, which would be a remarkable position in respect of a trading business. Ms Planinic's report sought to establish that "excess stock" had been purchased, by reference to actual sales subsequent to the purchase of the stock, but she accepted in cross-examination that her approach was "entirely dependent on hindsight" and did not purport to give an opinion about what a reasonable person in August 2009 might have believed was a reasonable level of stock to hold (T908-909) and that there were also gaps and significant inconsistencies in the data available to her (T912). Ms Planinic also acknowledged in cross-examination that her approach was susceptible to a decline in Colorado's fortunes, which had plainly occurred in 2010 (T909). Neither Mr Keating's nor Ms Planinic's evidence established the extent of any such excess, slow moving or surplus stock, or that the stock acquired by the Plaintiffs under the Deed of Settlement was substantially of that character. 141The allegation that a representation that Colorado required at least $500,000 stock was made depends wholly on Helen's and Kenneth's oral evidence. Kenneth's evidence reflects the pleaded representation, but I do not accept it for the reasons noted above, and Helen's evidence is framed in terms which refer to the amount of stock that Clare sought to sell, rather than to Colorado's stock requirements. Given the issues as to Helen's and Kenneth's evidence to which I have referred above, I am not satisfied that the pleaded representation was made. It has also not been established that that representation was not correct as a matter of fact, still less that Clare did not have a reasonable basis for it, to the extent that it represented that Clare held a belief or opinion as to the level of stock that was required for the business. Reliance and causation 142The Plaintiffs plead (FASC [61]) that, relying upon the Colorado Continuing Performance Representations (as defined), they entered into the Deed of Settlement by which they caused Colorado to purchase $600,000 of stock from Clare; caused an amount of $480,000 being 80% of the total amount of stock to be purchased under the Deed of Settlement to be loaned to Colorado; and caused an amount of $320,000 to be remitted to Colorado as an injection of working capital. An essential element of this claim is that HY International and Phoenix, the parties to the proceedings that seek the relevant relief, made the relevant payments. 143The Plaintiffs contend that the Court should infer that they relied upon the Continuing Performance Representations in taking these steps because these representations and the Plaintiffs' subsequent decisions in response were made at a time when the Plaintiffs had "virtually no experience in Colorado's business (about July to September 2009)"; Clare was the only then source of knowledge available to them regarding Colorado's financial performance as at about August 2009; and it was reasonable for the Plaintiffs to rely upon the Continuing Performance Representations in all the circumstances. I do not consider that reliance was established, so far as these representations (particularly those pleaded in FASC [60(c)] and [60(d)]) duplicate the June 2009 Representations that I have addressed above. It is otherwise not necessary to determine that matter, since I am not satisfied that the relevant representations were made and, as will emerge below, I am also not satisfied that the Plaintiffs (as distinct from Mr Huang, Helen or Kenneth) funded the relevant payments so as to have a claim arising from them. 144Alternatively, the Plaintiffs claim that the purchase of the stock of $480,000 and the injection of capital of $320,000 was directly referable to the misleading or deceptive conduct in the form of the June 2009 representations. That contention cannot be accepted for the same reasons that reliance and causation is not established in respect of the June 2009 representations. Whether the Plaintiffs advanced the relevant monies and suffered loss 145The Plaintiffs contend that they are entitled to damages in respect of the Continuing Performance Representations in the amount of $800,000 for stock purchase and contributions to working capital, and interest from August 2009. The Defendants contend that the amount of $800,000 advanced to Colorado in August 2009 was an advance by Mr Huang, not by HY International (Ex P6, vol 1, tab 5; Planinic Report 2.8.2013 [100]ff), and that that amount was treated in Colorado's books as a loan from Helen and Kenneth (Ex P6, vol 2, tab 18; Planinic Report 2.8.2013 [100]ff) rather than from the Plaintiffs. Mr Huang, Helen or Kenneth are not party to the proceedings so as to bring any claim personally in respect of an amount advanced by them personally, and that matter is not merely formal, where it has a real impact on who would be liable for costs if the Plaintiffs are not successful in the proceedings. Mr Huang, Helen or Kenneth did not seek to be joined as additional plaintiffs, notwithstanding that the Defendants had placed substantial emphasis on this matter. 146Helen gave evidence in her fourth affidavit (Helen 20.11.2013 [3]), in direct speech, of a conversation with Mr Huang over 4 years earlier, which was not referred to in any of her earlier affidavits. Her evidence was that, in early August 2009, she advised Mr Huang that HY International needed a loan of $400,000 to purchase stock and working capital for Colorado, and he responded: "I will remit money from my personal account to Colorado on behalf of HY International. Let's treat this as an interest free loan. HY International can repay me on demand. I will do it when I can. I will let you know once it has been done." That conversation has an artificiality about it that is suggestive of, at best, reconstruction. The Defendants also point to inconsistencies in Helen's affidavit as to whether the suggested loan was to be made to HY International (Helen 20.11.2013 [3]) or to HY International and Phoenix (Helen 20.11.2013 [4]). 147Helen's evidence is also that, on 17 August 2009, Mr Huang and she had a conversation in which he advised that he had arranged for $480,000 to be transferred to Colorado's bank account for stock and she responded that HY International and Phoenix would each pay back $240,000. Her evidence is that, at the time of preparing HY International's accounts, she caused HY International to record an amount of $400,000 as two loans, one for $240,000 and the other for $160,000, and she refers to a financial report for HY International for the year ended 30 June 2011 in that regard (Helen 20.11.2013 [5]-[6]). Helen conceded in cross-examination that she did not, in February 2010 when she signed HY International's accounts, recall the conversation with Mr Huang in August 2009, of which she gave evidence in November 2013 (T116). Her evidence was also that she overlooked the suggested loan from Mr Huang to HY International when she signed HY International's accounts in February 2010 and in discussions with her migration agent (T115). 148The report of the accounting expert called by the Plaintiffs, Ms Planinic, records that the funds contributed to the inventory purchase and working contribution were recorded in directors' loan accounts in Colorado's MYOB records, recording, relevantly, deposits by Clare totalling $200,000 on 4 September 2009 and by Mr Huang on 17 August 2009 of $480,000 and on 3 September 2009 of $320,000, with a reallocation to record a contribution by Kenneth of $400,000 as at 1 August 2009 (Planinic Report 2.3.2012 [48]). That observation is supported by the ledger entries that are exhibited to Ms Planinic's report. Those records are inconsistent with the payments having been made by the Plaintiffs, as distinct from Mr Huang and Kenneth. 149Helen's evidence in this regard was also inconsistent with other financial records of HY International to which she did not refer in her affidavit evidence. Financial reports for HY International for the period 1 January 2009 - 31 December 2009, which had been provided to the Department of Immigration in February 2010, recorded the amount owing by HY International to directors at the end of December 2009 as $988,702 (Ex D9, 82) which would include the amount of $600,000 that Mr Huang lent the Company to fund the initial acquisition of shares in Colorado in June 2009 (T96), and were not sufficient to include a further amount of $400,000 advanced by Mr Huang to HY International in August 2009 (T98). Helen's evidence, when these accounts came to light in her cross-examination, was that this was also a "mistake" which was later corrected. 150In April 2010, Helen's migration agent also provided the Immigration Department with information as to advances made to HY International as at December 2009, which listed three advances made in 2007, two advances in 2008 and two advances in 2009, including the amount of $600,000 which Mr Huang advanced to allow HY International to purchase the shares in Colorado Products. That information also contained no reference to an amount of $400,000 being advanced by Mr Huang to HY International in August 2009. Helen's evidence in cross-examination was that was because the money was remitted into Colorado's bank account (T112), and that, at that time, they did not see a difference with paying the monies to the HY International or the Colorado accounts and considered that it was convenient to put the monies into the account for Colorado (T113). That evidence is consistent with a direct advance having been made by Mr Huang to Colorado for convenience, rather than taking a two step process by which an advance was made by Mr Huang to HY International and a further advance by HY International to Colorado, in circumstances that little difference was then seen to exist between the two approaches. Helen also suggested that the approach adopted was driven by urgency and by pressure exerted by Clare (T113); that would explain a direct payment to Colorado, but not a failure to record loans by Mr Huang to HY International and by HY International to Colorado in HY International's financial reports had they been made. It seems to me that the absence of reference to a loan by Mr Huang to HY International in HY International's financial reports in February 2010 and in the information provided on Helen's behalf to the Immigration Department in April 2010 tells strongly against the existence of that loan, and is a matter that should be given more weight than Helen's recollection of a conversation with her husband contemplating an inconsistent treatment of the loan, first raised in evidence several years later and in her fourth affidavit filed in the proceedings. 151The accounts of HY International referred to in Helen's fourth affidavit showed a total debt to the directors of $1.2 million; however, that was approximately $200,000 more than the balance recorded for December 2009 in the accounts provided to the Department of Immigration, significantly less than the amount of $400,000 claimed to have been advanced by Mr Huang to HY International. Helen accepted in cross-examination that she knew how much money her husband had lent to HY International when she signed the accounts provided to the Department of Immigration and was satisfied that amount was accurately recorded in the accounts at that time, but claimed she later discovered there was a mistake. I am unable to accept that, in a document as significant as accounts provided to the Department of Immigration to support a business migration application, and where it would have been in Helen's and Mr Huang's interests not to understate the amount that they had invested in Australia, an amount of $400,000 lent by Mr Huang to HY International would have been inadvertently omitted. It seems to me that the more likely explanation was, as the Defendants contend, that the amount had been advanced by Mr Huang directly to Colorado, rather than by Mr Huang to HY International and then by HY International to Colorado. 152A chartered accountant with the firm of accountants that acts for HY International, Mr John Stephens, also gave evidence of the circumstances surrounding the preparation of HY International's accounts for the year ended 30 June 2010. He states that he did not include the amount of $400,000 said to have been lent by Mr Huang to HY International in HY International's balance sheet for the year ended 30 June 2010 because he was not aware of that amount, or of its components of $260,000 and $140,000, which did not appear in the bank statements provided to his firm for that year (Stephens 21.11.2013 [12]). This evidence does not assist HY International, because it leaves unexplained why no representative of HY International drew Mr Stephens' attention to that not insubstantial amount, if it had in fact been lent by Mr Huang to HY International and by HY International to Colorado rather than by Mr Huang personally to Colorado. 153Mr Stephens also explained that he amended the balance sheet and general ledger for HY International, on 8 February 2011, after receiving an email dated 31 January 2011 from Ms Wan. That email also does not assist HY International, stating in particular that: "These two payments were made via bank deposits directly to Colorado's bank account. They were advanced by HY's shareholder on 17.8.2009 and 3.9.2009 and no receipts were obtained from Colorado. These amounts have not been recorded on HY's books. Given the situation as is, pls advise how should [sic] HY get these two amounts back onto its books. Also given that 2010 June's accounts have been finalised, should we go back and change them?" (Stephens 21.11.2013 [9]) This email is itself not an unambiguous statement that monies were originally advanced by Mr Huang to HY International rather than direct to Colorado, as distinct from a request to Mr Stephens to record the former position in HY International's accounts. Ms Wan is Helen's financial adviser and provides bookkeeping for her company and prepared the accounts of HY International in Hong Kong, which she sent to Mr Stephens (T277). Ms Wan was also assisting in respect of other issues concerning Colorado, which were by then in dispute between the shareholders. Ms Wan also did not give evidence in the proceedings. 154The affidavit of Kenneth's wife and Phoenix's director, Ms Ruan, dated 17 November 2013 also does not address any loan to Phoenix from Mr Huang or any liability of Phoenix to repay any such loan. The minutes of meeting dated 17 November 2013 (Annexure "C" to that affidavit) do not record any retrospective approval of such a loan, and Kenneth also did not give any evidence about agreeing, on Phoenix's behalf, to accept any such loan, so as to put Phoenix in funds to make such a payment to Colorado. 155It has not been established that the Plaintiffs suffered any loss in respect of the Continuing Representations, since it has not been established that the Plaintiffs, as distinct from Mr Huang, or Helen or Kenneth, made the relevant payments to Colorado. Breaches of Share Sale Deed and Shareholders Agreement (FASC [148]) 156The Plaintiffs plead breaches of the Share Sale Deed and Shareholders Agreement at FASC [148]. It will be convenient to follow the approach adopted by the Statement of Issues prepared by the parties and address this issue prior to the alleged breaches of equitable and statutory duties. The Plaintiffs have standing to pursue this cause of action in their own right, whereas their claims for breach of equitable and statutory duties turn upon the validity of the assignment of those causes of action by the provisional liquidator of Colorado to them. The pleading of breaches of the Share Sale Deed and Shareholders Agreement in this paragraph is complex, with multiple breaches alleged, supported by numerous particulars that are not expressly linked to the alleged breaches. The allegations depend on several of the factual disputes between the parties, which are also relied on in other pleaded causes of action, which I will address at this point. It will also be convenient to address these allegations in several groups since there is a considerable degree of overlap between them. 157The first pleaded breach of the Share Sale Deed and the Shareholders Agreement relates to an alleged breach of cl 3.2 of the Shareholders Agreement (pleaded in FASC 29(a)), the terms of which I have set out in paragraph 81 above. The alleged breach is a failure by Clare to use her best endeavours to ensure that Colorado's affairs and operations were conducted in a vigorous, efficient and profitable manner and in accordance with good business practice in all respects. The second pleaded breach of the Shareholders Agreement relates to an alleged breach of cl 3.4 of the Shareholders Agreement, the terms of which I have set out in paragraph 81 above. The alleged breach is a failure to disclose information and other matters to other shareholders. The third and fourth alleged breaches of the Shareholders Agreement relate to alleged breaches of cl 12 of the Shareholders Agreement, the terms of which I have set out in paragraph 82 above. The breach is pleaded as the converse of that obligation, namely, as a failure to act promptly, reasonably and in good faith while taking action or undertaking conduct in order to observe the provisions of the Shareholders Agreement and a failure to be just and faithful to Helen, Kenneth and Colorado and provide full information and explanations of matters relating to Colorado's affairs. Several matters are then particularised to FASC [148] which relate to one or more of the pleaded breaches to which I have referred. Alleged misappropriation of Colorado's monies and failure to repay the "Acknowledged Amount" 158It will be necessary to deal with several matters together in respect of this allegation, although they are particularised separately, because they turn on common facts. The first particular to the claim in FASC [148] relates to an allegation that Clare misappropriated Colorado's monies "as pleaded herein", and the fourth particular overlaps with the first, referring to Clare's "secretly utilising" Colorado's own monies for her own purposes and refusing to repay them "as pleaded herein". In each case, the Plaintiffs' list of cross-references provided in the course of submissions (MFI 10) identified the intended reference as to FASC [109]-[114]. The basis of the claim is there stated as being for recovery of trust funds (FASC [114]), although the Plaintiffs did not put substantive submissions in respect of a separate cause of action on that basis, and I assume a claim on that basis (as distinct from for breach of the relevant agreements, breach of fiduciary duty and breach of statutory duty) is no longer pressed. 159Paragraphs [63]-[66] of the FASC in turn plead matters relating to Colorado's bank accounts. The Plaintiffs plead [FASC [65]) that, following the Completion Date under the Share Sale Deed: "[Clare], without the permission or knowledge or her co-directors, Helen and Kenneth, continued to secretly accept monies from Colorado customers deposited into the ANZ Cheque Account and the ANZ US Dollar Account." The Defendants deny that allegation and plead that Clare continued to accept monies deposited into those accounts with the permission and knowledge of Kenneth, Helen and Colorado (Amended Defence [65]). The Plaintiffs also plead (FASC [66]) that, at no time from the Completion Date in August 2009 to January 2010, did Clare inform Kenneth or Helen of the deposit of monies into those accounts; invite or cause Kenneth or Helen to become signatories to those accounts; or have approval from Colorado's board to utilise the monies for her own benefit. The Defendants admit that Clare did not invite or cause Kenneth or Helen to become signatories to those accounts and otherwise deny the allegations (Amended Defence [66]). 160The Plaintiffs plead (FASC [107]-[114]) that, between August 2009 and July 2010, Clare continued to accept monies from Colorado customers deposited into a cheque account and US dollar account with Australia & New Zealand Banking Group Ltd ("ANZ"), secretly accessed the funds deposited into those accounts and utilised them for her own use; that Clare or CH Design held monies alleged to have been received from Colorado customers by way of Colorado invoices on trust for Colorado; that Colorado is entitled to trace the relevant monies; and that Clare or CH Design is required to account to Colorado in respect of those monies. As I noted above, no substantive submissions were ultimately made to support the claim for a remedy in trust or by way of tracing in respect of those monies. 161The Defendants admit that Colorado customers made payments for products purchased from Colorado by depositing amounts into those accounts; contend that Clare utilised funds that rightfully belonged to her; and also that she made payments out of those accounts to and on behalf of Colorado (Amended Defence [107]). The Defendants plead that those payments: "(i) In 2009, [were made] at the request of Kenneth ... and Helen ..., pending Colorado's new bank accounts becoming fully operational; (ii) In 2010, were because Kenneth ... and Helen ... on behalf of Colorado had not informed all of the customers of Colorado's new bank account details or some customers had not updated their payment records; and (iii) In the case of IAG, were in respect of orders placed by customers directly with Capri International Trading Limited through [Clare] to which Colorado was only entitled to a commission of 5% pursuant to an agreement reached between Kenneth ... on behalf of Colorado and [Clare] on behalf of Capri International Trading Limited, whereby those customers that had ordered containers directly from Capri International Trading Limited before July 2009 (rather than through Colorado) could continue to do so on the basis that a commission of 5% of the order value would be remitted to Colorado." 162The sixth particular to FASC [148] relates to the failure to repay an amount of $67,719.67 ("Acknowledged Amount") pleaded in FASC [111] that Clare had previously acknowledged was owed by her in respect of amounts paid by Colorado customers into the relevant accounts. The eighth particular to FASC [148] relates to Clare refusing to cause Sorrento China and CH Design to offset the "Acknowledged Amount" (as defined) from any amounts owed by Colorado to those entities "as pleaded herein" and the Plaintiffs identify the intended reference (MFI 10) as to the matters pleaded in FASC [113], [119] and [121]. Paragraph [111] of the FASC in turn pleads that, on or about 11 May 2010, Clare acknowledged that she was indebted to Colorado in the Acknowledged Amount. The Defendants deny that allegation and plead that: "(a) On 11 May 2010, [Clare] acknowledged that she owed Colorado $67,719.67, such sum being derived in part from amounts paid by Colorado customers into the ANZ Cheque Account and the ANZ US Dollar Account, part from GST owing to Colorado for container orders of goods pursuant to the [Commission Agreement] and part commissions owing pursuant to that agreement; (b) On 11 May 2010, Helen ... on behalf of Colorado and [Clare] agreed that [Clare's] debt to Colorado in the amount of $67,719.67 would be set off against an amount of $130,000 that Colorado owed to [Clare], resulting in a net balance owing by Colorado to [Clare] of $62,280.33; and (c) In the premises, the agreement reached between Colorado and [Clare] constituted an accord and satisfaction." 163Turning now to the relevant facts, prior to the Completion Date under the Share Sale Deed, Colorado operated a cheque account and a US dollar account with ANZ into which payments from Colorado's customers were deposited and those accounts were under Clare's control. Following the Completion Date, new accounts were opened on behalf of Colorado at the Commonwealth Bank. However, the accounts previously held by Colorado with ANZ were not then closed and it is common ground that some payments made by customers of Colorado were deposited to those accounts in the period after new accounts were opened by Colorado, and some payments were made by Clare on Colorado's behalf from those accounts. 164Clare's affidavit evidence (Clare 20.10.2013 [264]) is that, in mid-August 2009, she had a conversation with Kenneth as follows: "[Clare]: I'm going to close the ANZ account. Kenneth: No, Clare you can't close your ANZ accounts. We know they are owned by you but you can't close them. We have to make payments every day and we haven't finalised the internet banking yet and we can't yet buy US dollars. You can keep making payments on behalf of Colorado from the ANZ accounts and we can sort that out and pay you back. [Clare]: How long would this go for? Kenneth: When we are in a position to handle all of the transaction payments, including Australian dollars and US dollars, we can inform you to close the account. [Clare] Okay but you need to inform me as soon as possible." Like many conversations led in the evidence of both parties, this conversation has a degree of formality about it that is suggestive of reconstruction, and the reference to "your accounts" and the acknowledgement that the accounts were "owned" by Clare attributed to Kenneth are plainly calculated to advance the Defendants' position. It also does not seem that the ANZ accounts were, strictly, "owned by" Clare, although at least some monies in those accounts would have related to transactions undertaken at the time that Clare was the sole shareholder of Colorado. 165Clare had previously given somewhat different evidence in an earlier affidavit filed in the proceedings in relation to her discussions with Kenneth in respect of the closure of the relevant accounts and the Plaintiffs placed substantial emphasis on the difference between those two affidavits. In Clare's earlier affidavit sworn 11 October 2011 (Ex P10), she gave evidence of a conversation with Kenneth, in respect of payments made by customers into Colorado's ANZ accounts, in which he said: Kenneth "... Just in case they still pay into the ANZ account then you can pay it back to the company." (Clare 11.10.2011 [8]) The account of that conversation set out in Clare's earlier affidavit differed from the later account so far as it included reference to Kenneth having said that, in case customers paid into the ANZ account, then Clare could pay that amount back to Colorado, whereas the later account had Kenneth instead referring to Clare making payments on behalf of Colorado from the ANZ accounts and stating that Colorado could pay Clare back. The later account of this conversation was also significantly more elaborate that the first. Clare was vigorously cross-examined in respect of the difference between these accounts in these two affidavits (T610-618, 623-628). The conversation set out in the earlier affidavit was said to have occurred in mid-September 2009, rather than August 2009; however, Clare's evidence in cross-examination was that the affidavits referred to the same conversation that took place in mid-August 2009 rather than mid-September 2009 (T615-616). Her evidence was initially that she remembered the words of the conversation and that her later affidavit recorded "exactly the wording" of that conversation which she had always remembered (T611). 166Both accounts are suggestive of reconstruction and I have expressed reservations as to Clare's evidence generally above. The difference between the two accounts does not seem to me to take the matter further than that. The first account is directed to the treatment of monies received from customers into the ANZ accounts and the second to money paid out by Clare on Colorado's behalf from those accounts; both issues could and did arise and would have warranted discussion and it is common ground that Clare in fact made payments on Colorado's behalf from the ANZ accounts. I think it likely that Clare reshaped the second conversation to place its focus on the payments made by her on Colorado's behalf rather than discussion of repayment to Colorado, where Clare would later rely on an alleged set-off agreement to seek to avoid repayment, and that is consistent with my reservations as to her evidence generally. 167The Plaintiffs accept that at least $152,997 of funds from the ANZ accounts was paid out by Clare on Colorado's behalf (Helen 7.11.2013 [60]), although the Defendants contend that an amount of $216,717 was paid from that account on Colorado's behalf and for its benefit (Clare 20.10.2013 [265]). It is not necessary to resolve that dispute for the purposes of the proceedings. Clare closed the ANZ US dollar account in December 2009 and transferred the balance of that account, which included the proceeds of sales to IAG to which I will refer below, to CH Design's ANZ foreign currency account (Clare 20.10.2013 [272]). 168The accounting expert called by the Plaintiffs, Ms Planinic, concludes in her report dated 2 August 2013 (at [15]) that an amount of $160,099 was deposited into bank accounts controlled by Clare, out of the larger amount of $176,976 that was not deposited into Colorado's CBA account. Ms Planinic also undertakes an analysis seeking to assess the impact of the loss of funds by Colorado on Colorado's financial performance for the relevant period. That analysis is undertaken on the basis that, inter alia, the entirety of the proceeds for sale to IAG was due to Colorado; for reasons set out in paragraphs 327-331 below, I find that they were properly characterised as "container sales" within the scope of a discussion with Mr Lai and the subsequent agreement formed between Clare and Kenneth, to which only a 5% commission was due to Colorado. Ms Planinic's analysis also does not take account of the set-off agreement that I have found was made on 11 May 2010, for the reasons set out in paragraphs 169-183 below. Ms Planinic does not undertake any analysis of Colorado's financial position on alternative assumptions that reflect those findings and I am therefore not assisted by her analysis which assumes a substantial diversion of funds that was not established. 169The amount owing to Colorado in respect of these transactions is, on Clare's calculation (but subject to a suggested double-counting in the calculation), the same as the "Acknowledged Amount" referred to in FASC [111], which reflects the fact that Clare acknowledged owing that amount to Colorado from at least May 2010. Clare relies upon a set-off agreement alleged to have been reached at a meeting with Helen and Kenneth on 11 May 2010 to resist the payment of that amount. There is a dispute as to whether or not it was agreed at that meeting that Clare would be entitled to offset that amount against the $130,000 worth of stock still held in Colorado's warehouse which Clare, under the Deed of Settlement, was entitled to sell in her own name. The Defendants contend that it was agreed at that meeting that Clare could offset her acknowledged debt of $67,719.67 against the stock in Colorado's warehouse that had not already been purchased by Colorado from Clare. The Plaintiffs deny that such an agreement was reached. 170Clare's evidence is that it was agreed between Helen, Kenneth and her at that meeting that that amount would be applied to purchase further stock held by her beyond the amount provided in the Deed of Settlement. Helen's evidence is that there was a meeting on 11 May 2010 between Kenneth, Helen and Clare during which that matter was discussed and Clare claimed that Colorado was entitled to 5% of the sales on two containers supplied to IAG (an issue that I will address below) and calculated the total amount owed to Colorado of about $67,719.67 (Helen 1.3.2012 [115]). Helen's evidence is that Clare suggested at that meeting that that amount should be offset against stock that Colorado had not purchased from her, so that Clare would only take about $63,000 of stock (Helen 1.3.2012 [117]). Helen's evidence is that she and Kenneth rejected that suggestion and that the meeting ended without agreement. Kenneth also denied in cross-examination that there was any agreement at the meeting on 11 May to offset the amount owed by Clare against the stock remaining with her under the Deed of Settlement (T462). Kenneth's evidence is that HY International and Phoenix were not going to pay cash for old and discontinued stock that would not be valuable (T463). 171Clare made handwritten notes of the meeting on 11 May 2010 and two different versions of these notes are in evidence (Ex P1 4/1763, 4/1777). Each party contends, in substance, that the other has falsified the version of the note on which the other relies. Each version records an amount due by Clare to Colorado of $67,719.67, made up of amounts of $55,863.37 and $11,856.30. The first version contains a note referring to stock "$130,000 - $67,719.67" with a balance of $62,280.33, which would be consistent with offsetting the amount owing by Clare to Colorado against the value of stock which she was to take under the Deed of Settlement. There is an issue as to whether, when Helen signed the document at Ex P1 4/1763, it contained the set-off agreement that appears at the bottom of that page, but does not appear on the version of that document that appears at Ex P1 4/1777. 172Clare's evidence is that she copied the original handwritten notes and gave copies to Helen and Kenneth (Clare 20.10.2013 [202], [204]). Clare accepts that she later wrote the words "double up" on the original and the Plaintiffs contend that, because the document at Ex P1 4/1763 contains that later note, it was not the copy of the document given to Helen and Kenneth. That is plainly the case so far as the copy of that document containing the words "double up" is concerned, but it takes the matter no further as to the state of the document before Clare wrote those additional words on it. Helen's and Kenneth's evidence is that the document at Ex P1 4/1777 is the original form of the document that Clare gave to them (Helen 1.3.2012 [116], [118]; Kenneth 4.11.2013 [28]) and it does not record any agreement to offset the amount of $67,719.67 against stock. Helen reiterated in cross-examination that when she signed her name to the document, she was just confirming the amount owed by Clare to Colorado in respect of the IAG sales and two other matters was $67,719.67 and it did not contain the last two lines of the note relating to the offset arrangement (T208). The Plaintiffs contend that it was not put to Kenneth or Helen in cross-examination that they had altered the document at Ex P1 4/1777 by, for example, masking or obscuring the disputed phrases; however, it was squarely put to Helen that the document at Ex P1 4/1763 on which Clare relies was in fact the document that Helen had signed and she denied that in cross-examination (T251). 173Clare was cross-examined as to the 11 May document in the form that excluded the last two lines referring to the set-off (Ex P1 4/1777) at some length (T779-780). However, the weight that can be given to that cross-examination is reduced by reason of confusion as to whether Clare's claim to have said "I need to double check my record, that is what I said to them" (T779), which prompted an allegation of recent invention by the Plaintiffs, referred to a meeting on 11 August 2010 or to a meeting some weeks later. As the Defendants point out, a comment by Clare to that effect is recorded in the minutes of the meeting on 6 September 2010 (Ex P1 6/2505) and Helen had accepted that that comment was made by Clare at that meeting in her cross-examination (T235-236). I do not find that Clare's evidence at this point involved any element of recent invention, since she could well have understood that the cross-examination was directed to the occasion in September when the comment to which she referred was made. 174I have had regard to the fact that an agreement between Kenneth and Clare to apply the Acknowledged Amount against the stock held by Clare would have been a further variation of the stock purchase arrangements under the Deed of Settlement which had been reached after discussion of the level of stock to be acquired and, on Helen and Kenneth's account, after they had declined to acquire additional stock from Clare. On the other hand, that arrangement would have had the advantage of immediately converting the debt owed by Clare to Colorado to an asset of apparent value, the stock. I do not consider that I could safely reach a finding as to what occurred at the meeting on 11 May, or the form of the document signed at the conclusion of the meeting by reference to the witnesses' accounts of it, because of the difficulties with credit affecting each of the relevant witnesses to which I have referred above; the absence of independent evidence based on any forensic examination of the document; and the seriousness of the finding that Helen and Kenneth and Clare respectively seek that the other had wrongfully altered the document by adding or deleting material after it had been signed by the parties. 175It seems to me that the objective probabilities, having regard to subsequent events, should be given greater weight in determining this issue. Both parties relied on subsequent dealings between the parties which they respectively contended supported conclusions that the offset agreement was or was not reached at the 11 May meeting. It seems to me that they were correct to treat these matters as admissible and probative as to that matter. Subsequent actions of contracting parties are not admissible as an aid to construction of a contract: Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61; (2001) 53 NSWLR 153 at [26] per Heydon JA; Johnston v Brightstars Holding Company Pty Ltd [2014] NSWCA 150 at [56] per Beazley P. However, post-contractual conduct of the parties is admissible so far as the exchanges between the parties said to have given rise to the offset are a question of fact and that conduct constitutes an admission as to that question: County Securities Pty Ltd v Challenger Group Holdings Pty Ltd [2008] NSWCA 193 at [162], where McColl JA observed that, although post-contractual conduct cannot be used as an aid to interpretation of a contract, regard may be had to that conduct as "constituting an admission of the state of the parties' rights": see also Johnston above at [84] per Beazley P, at [122] per Basten JA. In particular, the parties' subsequent conduct may constitute either an admission that Clare no longer owed the claimed amount to Colorado, consistent with the alleged offset agreement, or that that money was recognised as still owing, inconsistent with such an agreement: compare the reference to broadly similar evidence in Johnston above at [58] per Beazley P. Those events seem to me to support a finding that the offset arrangement for which Clare contended had been reached at that meeting, for reasons that I will now explain. 176As the Defendants point out, there is no evidence that the Plaintiffs made any further claim that Clare should repay the Acknowledged Amount between May and September 2010. That would be an extraordinary omission where Colorado was then short of funds, and where it is common ground that Clare had agreed to repay that amount but not done so, if no agreement to offset that amount against stock had been reached at that meeting. On 22 July 2010, Clare sent an email to Colorado's accountants, copied to Kenneth and Helen (Ex P1 5/2174), in which she gave instructions for the stock to be reduced by $70,000 "of Clare Huang's own stock", which appears to be the amount of $130,000 of stock less the suggested offset agreed in May, a matter that is recognised by in the report of the Plaintiffs' accounting expert, Ms Planinic (30.8.2013 [28]-[29], fn 13). Neither Helen or Kenneth then took issue with that approach, as ordinary experience would suggest they would have done had an arrangement to that effect not been reached at the meeting on 11 May 2010. 177A meeting of directors and shareholders then took place on 11 August 2010 (Ex P1 6/2363). Prior to the meeting, Helen prepared, with assistance from her advisers in Hong Kong, a "discussion paper" dated 9 August 2010 (Ex P1 6/2378) which identified matters that should be discussed at the meeting. That discussion paper does not refer to the amount of $67,719.67 then being due but unpaid by Clare but refers to several other items then in dispute between the parties. The minutes of that meeting in turn record that a deficiency in Colorado's working capital funds was discussed. Three "options" were proposed to address that deficiency of working capital, but none involved the payment by Clare to Colorado of $67,719.67. Kenneth accepted in cross-examination that no-one raised the alleged $67,719.67 debt at this meeting although it was suggested that Clare should lend money to Colorado (T467), a proposition that would make little commercial sense if Clare already owed Colorado a substantial amount that had not been repaid. That is consistent with Clare's position that the parties had agreed to offset that amount against the stock then held in Colorado's warehouse. The Defendants contend, and I accept, that the omission of any reference to the debt in the discussion paper and at this meeting is consistent with all three directors believing that Clare did not then owe the claimed amount to Colorado. 178Kenneth's explanation for the failure to raise repayment of the $67,719.67 amount with Clare during May - August 2010 (T463) was that: "Well on few occasions when speaking to each other over the phone I did ask her. But we didn't - the problem, we don't want to bring the problem [sic] becomes bigger, because we're still partners in the same business, we're in the same boat, and should keep the face to each other you know, to keep [sic] good relationship between, so keep the business going. $67,000, it's not a small amount, but it's not a huge amount, and we are still buying lots of - we're still placing lots of orders to Sorrento China, we're still paying the rent every month, so we said it's not in a hurry to do that." Kenneth rejected the suggestion that they did not previously ask Clare to pay the $67,719.67 because she was going to offset the amount that she owed against the stock (T465). I have difficulty accepting this evidence, because of the wider issues as to Kenneth's credit; the fact that other issues in dispute were raised between the parties notwithstanding they were in the "same boat"; and where that amount was substantial in Colorado's then financial position. 179The Plaintiffs rely on subsequent demands for payment of the $67,719.67 which are said to be inconsistent with the existence of such an offset agreement, the first of which was made at a directors' meeting on 6 September 2010 (Helen 1.3.2012 [120]; Ex P1 6/2505) and subsequently on 5 October 2010 (Ex P1 6/2701) and 13 December 2010 (Ex P1 7/3088). The minutes of the meeting made on 6 September 2010 (Ex P1 6/2505) refer to an arrangement by which "commission base sales" were made directly from Sorrento China to Colorado's clients, with Sorrento China then to pay 5% commission on those sales and a discussion as to the "stock offsetting" which is recorded as: "As per Clare's advices, there is agreement between other shareholders about her stock offsetting with C/N [container] sales. After discussions, Helen and Kenny asked Clare to pick up her stocks and return total 5% C/N to Colorado (Aust) ...Kenny and Helen have asked Clare returns $67,719.67 to Colorado (Aust), which included stock sales and C/N stock. Clare has to check this figure with her records." 180The minutes of that meeting record that Clare asserted the existence of the offset arrangement in terms consistent with the position the Defendants now take in the proceedings. Kenneth's evidence is that he told Clare at that meeting that: "You have taken $67,719.67 of the company's money. You must return that money. You can take you old stock, but you cannot offset the money." (Kenneth 22.08.2011 [68]) Kenneth's evidence is that Clare responded: "OK I will, but I have to go home and check that the figure is right." I am conscious that the reference to "check this figure", recorded in the minutes of the meeting, could be understood as a concession that an amount, to be checked by Clare, was payable. However, Clare's cross-examination as to this matter, to which I referred above, suggested that what was to be checked by Clare was the disputed note as to the offset arrangement, on which she relied. It also does not seem to me that demands made at this late stage can overcome the absence of such a demand in the previous several months, immediately after the alleged offset agreement was reached. 181Further requests for payment are made in an email dated 5 October 2010 from Helen to Clare (Ex P1 6/2701) and a further email sent on 13 December 2010 (Ex P1 6/2702), by which Helen advised Clare that: "Your handwritten document notes around 67,000 was owing, the company has no way of verifying this amount without access to bank records. It could be more, it could be less, I am not in a position to say. On your assumption that $67,719.67 is correct, I can only see the following two options to resolve this problem and I would welcome your comments: 1 month rent:$16,500 (GST inclusive) 1 container (Invoice CIT0011) waiting for clearance: $44,542.15 Total company expenses due: $61,042.15 Your debt: $67,719.67" 182I am not satisfied that the breaches pleaded in FASC [148] were established in respect of this matter. The arrangements reached between the parties in respect of the relevant bank accounts were informal and had the capacity to give rise to difficulty, as they did. However, they were reached by agreement at least between Kenneth and Clare; they allowed Colorado access to a US dollar facility that it would not otherwise have had at the relevant time; Clare made payments in a substantial amount from the ANZ accounts for Colorado's benefit at a time that the monies in them would largely have reflected sales made by Colorado under her ownership, the benefit of which was to remain with her; and the parties, albeit belatedly, later sought to resolve the amount that was owing by Clare to Colorado as a result of these dealings. On balance, the evidence supports Clare's claim that that matter was resolved by an offset of the amount of $67,719.67 acknowledged by Clare, and accepted by Helen at the 11 May meeting, to be due to Colorado against the value of stock not purchased from her under the Deed of Settlement. 183It does not seem to me that consensual arrangements of this kind, reached between directors of Colorado who in turn represented, at least in a broad sense, its shareholders, can properly be held to have amounted to a failure by Clare to use her best endeavours to ensure that Colorado's affairs were conducted in a vigorous, efficient and profitable manner or in accordance with good business practice as pleaded in FASC [148(a)], where all parties chose to adopt that approach, albeit that the business might well have been better conducted by all parties in a very different way. A failure to disclose information to other shareholders as pleaded in FASC [148(b)] has not been established where the relevant arrangements were consensual and information was provided as to the relevant sales. A failure by Clare to act promptly, reasonably and in good faith while taking action or undertaking conduct in observing the provisions of the Shareholders Agreement (FASC [148(c)]) has not been established where the relevant arrangements were implemented by the parties collectively. A failure by Clare to be just and faithful or to provide information (FASC [148(d)]) has also not been established where the relevant arrangements were consensual and information was provided as to the relevant sales. 184The question of quantification therefore does not arise in respect of this claim. However, I note that the amount alleged to have been misappropriated by Clare was quantified by the accounting expert called by the Plaintiffs, Ms Planinic, and pleaded in FASC [109], as $168,645 (Planinic Report 2.08.2013 [68]) rather than the amount of $67,719.67 previously acknowledged by Clare. The difference between the two quantifications substantially relates to a claim in respect of sales made by Sorrento China (or Capri International Trading Ltd ("Capri International") as its agent) to IAG, with Ms Planinic assuming that Colorado was entitled to all of the proceeds of sales to IAG rather than a 5% commission to those sales under the Supply and Buy Agreement. I address the issue in respect of IAG below. In my view, the claim to the higher amount has not been established since Colorado was only entitled under the "container sales" agreement formed between Clare and Kenneth, after discussion with Mr Lai, to the 5% commission in respect of container sales to IAG, for the reasons set out below. Colorado Continuing Performance Representations 185The second particular to FASC [148] relates to the allegations of misleading or deceptive conduct in respect of the Continuing Performance Representations "as pleaded herein" and the Plaintiffs' summary of cross-references (MFI 10) identifies the intended reference as to FASC [60]. I have addressed that matter in paragraphs 128-141 above. The relevant breaches of the Shareholders Agreement are not established, and the Plaintiffs did not suffer loss arising from the alleged representations, for the reasons that I there indicated. Alleged failure to assist new management 186The third particular to FASC [148] relates to Clare's alleged failure to assist "New Management", namely Helen and Kenneth, and Colorado as pleaded in FASC [105]. Paragraphs 102-106 of the FASC in turn plead the matters that are alleged to give rise to a breach of the Shareholders Agreement in this regard. The Plaintiffs plead that, from about January 2010, Kenneth acted as General Manager of Colorado and Helen periodically assisted in Colorado's management ("New Management") (FASC [103]). They plead that Clare (FASC [104]): "(a) was aware that New Management relied upon [Clare] to assist in the management and affairs of Colorado given [Clare's] knowledge of Colorado's affairs; (b) in any event, had represented to HY International and Phoenix that [Clare] would as shareholder, director or in any other capacity in respect of Colorado, use her best endeavours to ensure that the operations of Colorado were conducted in a vigorous, efficient and profitable manner and in accordance with good business practices." The Defendants deny the first of those allegations and admit the second (Amended Defence [104]), which reflects the terms of cl 3.2 of the Shareholders Agreement. The Plaintiffs in turn plead [FASC [105]) that Clare failed to take various steps, namely, to: "(a) set up and hand over to New Management proper and adequate bookkeeping and accounting systems; (b) train accounting staff; (c) provide New Management with proper and adequate financial information; (d) assist Colorado to increase sales revenue; (e) assist Colorado to negotiate favourable terms with its major supplier Sorrento China as pleaded herein; (f) assist Colorado to negotiate with its customers to negotiate price increases; (g) cooperate with New Management in managing the affairs of Colorado; and (h) put forward constructive and resourceful suggestions to improve Colorado's business; (i) provide financing to Colorado from time to time as pleaded herein." 187The Defendants deny each of those allegations, other than that they admit that Clare did not provide certain money referred to in FASC [116] but otherwise do not admit the allegation as to a failure to provide financing to Colorado. The Defendants submit that Clare continued to manage the business for a period of 6 months to December 2009, while Kenneth and Helen had the opportunity to familiarise themselves with it and, from January 2010, was a non-executive director. They deny that Clare did not work diligently and properly in her role for Colorado; they concede that she declined to provide financing for Colorado when requested to do so by Kenneth, but contend that that is not an obligation of a director and is something beyond "best endeavours". 188I referred above to cl 3.5 of the Shareholders Agreement (Ex P1 2/894) which provided that Clare was appointed as the "General Manager" of Colorado until the end of 2009 and that Kenneth would take over that role from 1 January 2010. The role of the General Manager was to "take care of the day to day management of the business and affairs of the Company" and to consult with the board "in respect of all matters of commercial significance concerning the affairs of the Company". From 1 January 2010, Kenneth was the General Manager of Colorado; Clare became a non-executive director; Kenneth was the only member of the Board being paid for his services (T205); and Helen attended the premises of Colorado approximately two days a week on average, and Clare less than that (T206). 189This claim is another illustration of the complexity of the Plaintiffs' claims. Four breaches of the Shareholders Agreement are pleaded, by cross-reference to other pleadings that in turn incorporate nine particulars of breach to FASC [105], and the particularised matters were not linked to the alleged breaches in submissions. The claims depend upon the pleading that Clare was aware that Kenneth and Helen relied upon Clare to assist in Colorado's management, but the basis of an entitlement to do so was unclear where the Shareholders Agreement provided for Kenneth to assume the role of General Manager from 2010, and Clare was not paid for time spent in Colorado's offices from that time, although she remained a minority shareholder and non-executive director of Colorado. It is also by no means clear that a non-executive director's or minority shareholder's obligation to use "best endeavours" to ensure the matters referred to in cl 3.2 of the Shareholders Agreement could properly be read as requiring her to perform or assist in performing, on a day-to-day basis and without remuneration, tasks in Colorado's ordinary activities which would typically be performed by executive management or Colorado's staff. The claims and the Plaintiffs' submissions also seemed to have an underlying assumption that, if something should have been done to address a deficiency in Colorado's business, it was largely a matter for Clare to do it, notwithstanding that the obligations under the Shareholders Agreement applied to all shareholders, where Helen and Kenneth were also directors of the business and represented its majority shareholders, and Kenneth was appointed as General Manager of the business from 2010 as noted above. 190Paragraphs 105(a)-(c) of the FASC plead a failure to set up and hand over to Helen and Kenneth "proper and adequate bookkeeping systems", a failure to train accounting staff or provide Helen and Kenneth with "proper and adequate financial information". Helen gives evidence (Helen 29.8.2013 [286]) of matters that are said to amount to a lack of adequate bookkeeping and accounting systems, including no internal control over the physical movement of stock, no records of stock cost data maintained in MYOB, no reconciliation of inventory count in MYOB to physical count on the floor and no stocktake list in support of the stock value reported on the balance sheet as at financial year end. Helen indicates that she expressed her concerns as to Colorado's inventory system in about April 2010 and August 2010, although there appears to be no suggestion that she or Kenneth (who was then General Manager) then took any steps to remedy the suggested deficiencies. Kenneth also supports the allegation of failure to hand over proper and adequate bookkeeping and accounting systems by reference, in his affidavit dated 29 August 2013 (at [56]-[57]), to the fact that there was no stock system in MYOB and unit costs were not input into that system, although purchase quantities were sometimes input into that system and were not matched with actual deliveries. His evidence is also that MYOB stock units did not reflect the actual stock on hand because purchases were not recorded properly and Colorado had to rely on a physical count in order to ascertain its stock level. By his further affidavit dated 27 November 2013, Kenneth's evidence was that the MYOB system that Clare handed over did not assist Kenneth and Helen to manage Colorado's stock adequately. He gives evidence (at [51]) that the stock levels recorded in the MYOB system did not match the actual stock levels in Colorado's warehouse, which he knew because he would from time to time personally count the stock levels; refers to his experience in using the MYOB system from about January 2010 to manage Colorado's stock, but does not further elaborate on that reference; and refers to the fact that unit costs for stock systems did not appear in the MYOB system. He also refers (at [52]) to his inability to distinguish between new and old stock because Clare did not remove the stock which had not been acquired under the Deed of Settlement from the warehouse and because of the suggested problems with the MYOB system. 191Ms Lina He Zhaohong gives evidence in the Plaintiffs' case that she commenced employment with Colorado as an administrative assistant in about October 2009 and was responsible for administering Colorado's office and accounting work including the administration of sales and receipts and used MYOB software to manage Colorado's sales and receipts. She sets out her usual practice for managing Colorado's sales and receipts during her employment. She records (Zhaohong 16.7.2013 [6]) that her practice was to record all sales into the MYOB system and that she was not aware of and did not observe any other record or system where Colorado's sales or receipts was recorded. It is not immediately apparent that this evidence indicates any deficiencies in Colorado's accounting or record keeping system. 192Clare's evidence is that she suggested to Helen, in August 2009, that Helen needed to spend some time learning about Colorado's accounting system which included customer lists and supplier information and about invoicing, receivables and payables and lodgement of the business activity statement, because Clare would not be in the office in 2010, and that Clare spent a week taking Helen through the MYOB system in August 2009 (Clare 20.10.2013 [158]-[160]). Clare's evidence is that she continued to train Helen in the MYOB system after she returned from several weeks overseas in mid-September 2009 (Clare 20.10.2013 [161]). Clare's evidence is also that, from July to December 2009, she provided training to Kenneth in respect of the MYOB accounting system (Clare 20.10.2013 [174]) and that Kenneth indicated that he was familiar with the MYOB system in a conversation with her in August 2009 (Clare 20.10.2013 [176]). Clare in turn contends that she became concerned about the way that data was recorded in the MYOB system, including the treatment of rebates to Colorado's largest customers, after Kenneth took over the role as General Manager in early 2010 (Clare 20.10.2013 [177]). 193It does not seem to me that, without further explanation by Helen or Kenneth or expert evidence, the Plaintiffs have established the significance or otherwise of the matters of which they complain. The Plaintiffs had acquired a business with existing accounting and financial reporting systems and it does not seem to me that any of the alleged breaches are established by Clare not having changed those systems, during the 6 month period in which she was General Manager pending Kenneth's appointment to that position, so as to be different from those which existed in the business that the Plaintiffs had acquired. It also does not seem to me that Helen's and Kenneth's reliance on Clare, or cl 3.2 of the Shareholders Agreement, were sufficient to impose responsibility for these matters on Clare after she ceased to be Colorado's General Manager on 31 December 2009. No loss has been established as a result of these matters in any event. 194Helen also indicates (Helen 29.8.2013 [292]) that Clare kept a separate database for Colorado's sales and expenses made in July 2009, since the new shareholders had commenced the operation of Colorado's business from 1 August 2009, and that Colorado's MYOB database had only 11 months of financial data for the financial year ending in 2010, requiring journal entries to be manually raised to account for the financial year opening balance and for July 2009 transactions. Again, it does not seem to me that the Court is in a position to determine whether this course was inappropriate, where there is no evidence as to what ought to have been done so as to transition the business from its former owner to its new majority owners. 195In support of the allegation of failure to train accounting staff, Helen refers to the fact that Clare stopped coming into the office for work on a daily basis after she ceased as Colorado's General Manager on 31 December 2009, although she continued to participate in aspects of the management and control of Colorado's operation by email (Helen 29.8.2013 [305]). It does not seem to me that this course is self-evidently inappropriate, or a breach of cl 3.2 of the Shareholders Agreement, where Kenneth and not Clare was then being remunerated as Colorado's General Manager, and Clare was then no more than a non-executive director and minority shareholder in Colorado. 196Kenneth's evidence is also that Clare did not provide "proper and adequate information" to him in 2009 and January 2010, including statements and other information regarding Colorado's bank accounts held with ANZ; information regarding Colorado's sink design registration; information regarding the cost of stock, so as to value the stock for obsolescence and write-down or write-off purposes; information regarding historical accounting and tax information, or a trading agreement with Raymor and a commission agreement with NK Sales, and that Clare did not attempt or suggest to renew those agreements (Kenneth 29.8.2013 [64]). It seems to me that information regarding Colorado's accounts with ANZ should properly have been provided to Colorado, given the continued use which was being made of those accounts to which I have referred above. I have addressed the issue as to stock records above. I am unable to form a view concerning the position in respect of sink design registrations or historical accounting and tax information, where the evidence does not establish the significance of the former or that historical account and tax information was in fact available to Clare (as distinct from, for example, Colorado's external accountants) to be provided to Kenneth and Helen. A failure to provide trading agreements with Raymor and a commission agreement with NK Sales has not been shown to amount to the alleged breach, where Raymor (as distinct from Tradelink) does not seem to have been a substantial customer of Colorado and the significance of any commission agreement with NK Sales has not been established. No loss has been established as a result of these matters in any event. 197The Plaintiffs plead (FASC [105(d)]) a failure to assist Colorado to increase sale revenue. That breach is established, so far as it has been established (as I will note in paragraphs 286-313 below) that Clare wrongfully diverted, to Sorrento Kitchens, sales that could (subject to Colorado's financial constraints) have been made by Colorado to Tradelink. That conduct also seems to me to at least have involved a failure to disclose relevant information to other shareholders and a failure to be just and faithful to other shareholders. I will address that issue below. The alleged loss is, however, "reflexive" of Colorado's loss in that regard, in the sense to which I refer in paragraph 338 below, and the Plaintiffs accept that they cannot recover loss personally in respect of this claim where it duplicates loss recovered by Colorado in respect of this claim. 198The Plaintiffs plead (FASC [105(e)]) a failure to assist Colorado to negotiate favourable terms with its major supplier Sorrento China. It does not seem to me that breach is established. Colorado was entitled to a discount on goods acquired from Sorrento China under the Supply and Buy Agreement and that was, on its face, a "favourable" arrangement. The concept of "favourable terms" otherwise becomes elusive when applied to, for example, to the period for payment that Sorrento China should permit to Colorado. I will address that issue further in paragraphs 202-215 below. 199The Plaintiffs plead (FASC [105(f)]) a failure to assist Colorado to negotiate price increases with customers. It does not seem to me that breach is established. Clare's evidence is that, from July to December 2009, she introduced Kenneth to major customers and their management and sales teams, by taking him to meetings with them or including him in meetings with them when they came to Colorado's premises, including meeting with the managers and sales team of Harvey Norman monthly between September and December 2009 and meeting with Tradelink's management and sales team in November 2009 (Clare 20.10.2013 [174]). The evidence does not permit any findings as to the extent to which Colorado did, or could have, increased its prices to customers over the relevant period. No loss has been established arising from this matter in any event. 200The Plaintiffs plead FASC [105(g)]) a failure to cooperate with New Management (namely, Helen and Kenneth), and I have addressed associated issues in respect of FASC [105 (a)-(c)] above. Helen also gives evidence of the existence of disputes between Clare on the one hand and Kenneth and herself on the other, and it is plain that cooperative arrangements between the parties broke down over the relevant period (Helen 29.8.2013 [274]). It does not seem to me that the existence of those disputes in itself establishes any failure of cooperation on Clare's part, since Clare as a non-executive director and minority shareholder in Colorado was not obliged to accede to the views of the majority shareholders or the majority directors as to the matters that were in dispute. It does not seem to me that the alleged failure to make constructive and resourceful suggestions to improve Colorado's business (FASC [105(h)]) has been established, where the nature of the suggestions that should have been made but were not made is not identified. It is also by no means clear that that the particularised failures gives rise to the breaches pleaded in FASC [148] and, in any event, the amount of any loss arising from this matter has not been established. 201The Defendants accept that Clare did not provide funding to Colorado at various times the Plaintiffs requested her to do so. I address that issue in paragraphs 238-240 below. It does not seem to me that any of the pleaded provisions of the Shareholders Agreement imposed an obligation on a non-executive director or minority shareholder to provide such funding in the relevant circumstances or that the alleged breaches are established by any failure to do so. Dealings with Sorrento China 202The fifth particular to FASC [148] relates to Clare's alleged conduct in causing Sorrento China wrongfully to make demands for payment and wrongfully to refuse to deliver products "as pleaded herein". The Plaintiffs identify the intended reference in their schedule of cross-references (MFI 10) as to the matters pleaded in FASC [120]. The Plaintiffs plead (FASC [115], [120]-[121]) that Clare caused Sorrento China wrongfully to make demands for payment and withhold products from Colorado. The Plaintiffs' written submissions indicate that the complaints against Clare are that she caused Sorrento China to pursue Colorado for payment of invoices (PWS [278]); demand payment for goods before delivering a bill of lading (PWS [280]); and unilaterally and without notice to Colorado increase the prices of its products (PWS [337]). The Plaintiffs also advance overlapping, but wider, allegations of conflict of interest in respect of Clare's involvement with Sorrento China in the ninth and eleventh particulars to FASC [148] which I will address below. 203The Plaintiffs plead (FASC [51]) that, between August 2009 and February 2010, Sorrento China supplied products to Colorado pursuant to the Supply and Buy Agreement; Colorado paid Sorrento China for the relevant goods within one week of delivery to its warehouse premises, with Sorrento China accepting payment without complaint; Colorado relied upon Sorrento China to supply it with approximately 90% of its products; and "Colorado assumed that it was acceptable for payment of any product sold by Sorrento China to be paid within one week of being delivered to the Premises ('the Payment Assumption')." The Plaintiffs in turn plead that Colorado adjusted its cashflow and expenditure in reliance upon the Payment Assumption and contend that it would be unconscionable for Sorrento China to depart from the Payment Assumption (FASC [53]-[54]). The Plaintiffs also plead (FASC [58]) that, between December 2009 and December 2010, Sorrento China failed to deliver products to Colorado within a reasonable time of orders being placed ("Delivery Breaches"). 204Clare was the sole director and shareholder of Sorrento China at least from September 2005 until mid-November 2012. Clare's evidence is that she incorporated Sorrento China in China in 2005 and that entity established a factory in China which produced vanities and basins which were exported to Colorado, and supplied by Colorado to Tradelink and later Harvey Norman and Reece (Clare 20.10.2013 [35]-[39]). Clare accepted in her affidavit evidence that she controlled Sorrento China (Clare 20.10.2013 [144]) and owned its business, at least in 2009 (Clare 20.10.2013 [150]) and also accepted that she had overall control of Sorrento China in cross-examination (T827). Kenneth acknowledged in cross-examination that, at the time the Supply and Buy Agreement between Colorado and Sorrento China (Ex P1 3/927) was signed, he was representing the interests of Colorado and he knew that Clare, although a director of Colorado, was representing the interests of Sorrento China and trying to get the best deal for Sorrento China (T426). 205Clare gives evidence of the process by which Colorado obtained and paid for stock from Sorrento China prior to mid-2009 and that those arrangements were, in her experience, not usual trading terms (Clare 20.10.2013 [142]-[143]). Her evidence, led without objection, was that a more formal system for payments was required after the sale of shares in Colorado, when she was no longer in control of Colorado (Clare 20.10.2013 [144]). 206The Defendants submit, and I accept, that the principles applicable to multiple directorships (to which I will refer further below) apply in respect of this issue. They accept that Clare could not exercise her powers as a director of Colorado for the benefit of another company without clearly disclosing any competing interest and obtaining informed consent, but contend that she did not do so. They submit that, for Sorrento China to seek payment of its invoices generated in the course of its business relationship with Colorado, in accordance with the Supply and Buy Agreement, the terms of which, and Clare's involvement in which, were known to all parties, did not cause Clare to be in breach of any duty, and that Clare's duties to Colorado did not extend to her procuring Sorrento China to give forbearance in respect of invoices. 207The Defendants also rely, in response to this allegation, on the involvement of a Hong Kong company "Fortune City", which is alleged to be under Mr Huang's control, in the supply of the relevant products; deny that Colorado paid Sorrento China within one week of delivery of the goods and deny the pleaded assumption (Amended Defence [51]). Helen's evidence was that, between August and December 2009, Fortune City, which was controlled by Mr Huang, Kenneth and Helen, was set up as a billing agent which paid Sorrento China for goods despatched from Sorrento China to Colorado's premises and then charged Colorado a higher price for those products (T185-186). That arrangement caused Colorado to pay a higher price for the products than it could have purchased them from Sorrento China, and also diverted profit that would otherwise have been made by Colorado to Fortune City, so that, for example, goods which were invoiced by Capri International (as selling agent for Sorrento China) to Colorado had a price of US$22,395 (Ex P1 3/1255) by invoice dated 26 November 2009 and were then the subject of an invoice from Fortune City to Colorado dated 10 December 2009, for the same products, at the price of US$28,843 (Ex P1 3/1242; T186-187). In cross-examination, Helen accepted that, during the later part of 2009, Colorado made payments to Fortune City for goods shipped from Sorrento China to Colorado which were marked up by Fortune City so as to obtain a profit for itself (T187). There is evidence that there were delays in payment by Fortune City from Sorrento China, such that products sold by Sorrento China were not in fact always paid for within one week of delivery to Colorado's premises (T188; Ex P1 3/1129). 208Subsequently, in January 2010, an agreement was reached between Helen, Clare and Mr Lai that Fortune City would become an "agent" of Colorado and would charge an agency fee, although Capri International (as selling agent for Sorrento China) would directly invoice Colorado for products supplied by Sorrento China (T196). On one occasion, in February 2010, Fortune City made a loan of $16,000 to Colorado to allow it to pay for purchased goods, but it otherwise provided no services to Colorado from January 2010 (T197). A "handling fee" charged by Fortune City is reflected in subsequent correspondence from Helen to Kenneth and a member of Fortune City's accounting staff in June 2010 (Ex D2; T197). Helen's evidence in cross-examination is that she was not "very clear" as to the fee arrangement between Colorado and Fortune City because she was not involved in it. That evidence had the obvious difficulty that, by an email dated 30 June 2010 (Ex D2), Helen had explained the fee arrangement to Clare, Kenneth and Fortune City. Helen responded to that difficulty with the proposition that "Fortune City told me that the handling fee was 8%" (T198) although that did not explain why Colorado accepted that arrangement. 209Turning now to the issue as to the demand for payment for goods before delivering a bill of lading, the Plaintiffs plead that, in March 2010, Sorrento China "unilaterally, without notice to Colorado, and contrary to the Payment Assumption", changed its payment terms to require Colorado to make payment in full before the original bill of lading was released. Clare's evidence is she had conversations with Kenneth and Helen regarding a failure to make payments to Sorrento China between September and December 2009 (Clare 20.10.2013 [153]) and several emails from Clare to Kenneth concerning that matter are in evidence (Clare 20.10.2013 [153]-[154]). Her evidence is that, due to amounts owing since 2009 by Colorado to Capri International (as selling agent for Sorrento China), she was no longer willing, from about March 2010, for Capri International to hand over original bills of lading to Colorado before payment had been made of its invoices (Clare [157]). Helen complained about changed payment terms from Sorrento China in an email sent in March 2010 (Ex P1 4/1538), which stated that: "I am very disappointed to learn that the payment term has been changed without mutual agreement by Capri and Colorado. It is normal practice by [sic] Clare you that [sic] payment will be made after the container delivering to the Colorado warehouse in Sydney. Althougwih [sic] at pr[e]sent Colorado is under new management, you are still Colorado shareholder. Any change shall be under mutual agreement." The Supply and Buy Agreement did not provide that Sorrento China could only increase its prices or vary its terms of payment with Colorado's consent. 210Helen's evidence (Helen 20.11.2013 [45]-[46]) is that she assumed, as at about November 2010, that it was acceptable for any payment of any products sold by Sorrento China to be paid after the products were delivered to Colorado's premises and that she relied upon that assumption by causing Colorado to adjust its cashflow and expenditure accordingly "and caused Colorado to defer making the rental payment for November 2010". The first proposition does not seem to be tenable since Sorrento China had made its position clear prior to November 2010 and the second proposition is not referable to the alleged assumption, and presumably reflects the copying of part of Helen's evidence relating to dealings with CH Design into this paragraph. 211As the Defendants point out, there was no evidence that a requirement by Sorrento China for payment for goods before delivering a bill of lading was uncommercial, unduly onerous or outside the normal course of dealing between arm's length parties and the evidence indicates that requirement arose after delays in payment by Colorado, or by Fortune City under the arrangements to which I referred above. The Defendants submit, and I accept, that it is not to the point that Clare, when she was the sole shareholder of Colorado, or Sorrento China, permitted more generous terms to Colorado where no obligation to continue to do so was imposed by the sale arrangements or the Supply and Buy Agreement. 212Next, I turn to the issue as to the alleged price increase by Sorrento China in May 2010. The Plaintiffs plead that, in May 2010, Sorrento China "unilaterally and without notice to Colorado" increased prices for the products to be purchased by Colorado between 8-12%. Helen gives evidence of an increase in the supply charge for various products by Sorrento China in May 2010 (Helen 1.3.2012 [157]; Ex P1 4/1713, 1713A). Kenneth's evidence (Kenneth 22.8.2011 [55]) is that, in May 2010, Sorrento China increased its supply charge and that: "The decision of Sorrento China to change payment terms and increases prices as outlined above caused significant financial difficulties for Colorado. It created cashflow shortages for Colorado and Colorado was unable to trade without financial contributions from its shareholders." 213The Defendants contend that the 2010 price increase notifications were addressed to all of Sorrento China's customers, although the evidence is unclear as to the extent of those other customers. Clare's evidence in cross-examination was that the price increases were necessary to maintain the viability of the Sorrento China factory (T793). Contrary to the Plaintiffs' case, it appears that notice was given of that price increase, since the notification of the price increase was dated 28 April 2010 and provided for the increase to take effect from 1 July 2010 (Ex P1 4/1713a). Clare's evidence in cross-examination was that the price increase was not implemented until September 2010 (T798). 214The Plaintiffs also plead that, in or about December 2010, Sorrento China "unilaterally, without notice to Colorado, and contrary to the Payment Assumption" made a further change to the payment terms for products delivered so that Colorado was required to make full payment before products were dispatched from Sorrento China. Helen's evidence is that, in December 2010, Sorrento China required full payment before two containers ordered would be despatched from its factory and required a 30% deposit for future orders (Helen 1.3.2012 [165]). 215It does not seem to me that these matters establish the pleaded breach of FASC [148]. It does not seem to me that the requirement in cl 3.2 of the Shareholders Agreement that Clare use her "best endeavours" to ensure that Colorado's affairs were conducted in, relevantly, a profitable manner went so far as to require that she surrender Sorrento China's interest in being paid for the products it supplied within a reasonable time to Colorado's (or Fortune City's) interest in maximising its profits by delaying payment to Sorrento China, particularly where no such requirement was imposed by the Supply and Buy Agreement. The breach alleged in FASC [148(a)] has therefore not been established. No relevant failure to disclose information has been established so as to give rise to the breach pleaded in FASC [148(b)]. The Plaintiffs have not shown that the dealings between Colorado and Sorrento China, generally or in any particular respect, involved any failure to act promptly, reasonably or in good faith in taking action or undertaking conduct in order to perform the provisions of the Shareholders Agreement as pleaded in FASC [148(c)]. It does not seem to me that a failure to subordinate Sorrento China's interests in the manner noted above, where the relationship was governed by the Supply and Buy Agreement, amounted to a failure to be just and faithful as pleaded in FASC [148(d)] and no relevant failure to provide information was established. I address the other pleaded breaches of FASC [148], so far as they involve Sorrento China, below. Dealings with CH Design 216The sixth particular to FASC [148] relates to Clare allegedly causing CH Design to wrongfully make demands for alleged outstanding rent in respect of the premises occupied by Colorado, wrongfully terminate the lease and re-enter the premises "as pleaded herein". The Plaintiffs' schedule of cross-references (MFI 10) identifies the intended reference as to the matters pleaded in FASC [40]-[41]. The thirteenth particular relates to Clare allegedly causing CH Design to issue a creditor's statutory demand in respect of unpaid rent and the Plaintiffs identify the intended reference as to FASC [49]. The fourteenth particular relates to the commencement of winding up proceedings brought by CH Design against Colorado "as pleaded herein" and the Plaintiffs identify the intended reference as to FASC [127]. The Plaintiffs also advance overlapping, but wider, allegations of conflict of interest in respect of Clare's involvement with CH Design in the ninth and tenth particulars to this paragraph, which I will address separately below. 217Paragraphs 31-49 of the FASC in turn plead matters relating to the entry into the lease between Colorado and CH Design. The Plaintiffs plead (FASC [31]) that, on or about 23 July 2009, Clare on behalf of CH Design represented to Helen and Kenneth ("Lease Representations") that: "(a) A formal lease of the Premises was only required to satisfy the ANZ Bank so as to allow a charge against Colorado to be removed; (b) In executing the lease of the Premises Helen and Kenneth would not need a lawyer; (c) There was no need for Helen and Kenneth to worry about any lease." The alleged representations are said to have been express and oral, in conversation between Clare and Helen and Kenneth on or about 23 July 2009. The Plaintiffs contend that, relying upon the Lease Representations, Helen and Kenneth assumed that they did not need legal representation when signing the Lease and CH Design "would not seek to enforce any lease of the Premises or any promise contained therein". The pleaded assumption is of a somewhat extravagant nature, since it would have the effect that CH Design would make substantial warehouse premises, on which it had substantial borrowings from the ANZ Bank, available to Colorado without, for example, enforcing any promise that Colorado would, for example, pay any rent in respect of the premises under the lease of the premises. 218The Plaintiffs plead (FASC [37]) that: "(a) [not pressed] (b) Kenneth and Helen are not liable under the alleged Rental Guarantee; (c) Further or alternatively, it would be unconscionable in all the circumstances for the Rental Guarantee to be enforced against Helen and Kenneth." Helen's evidence is that Clare did not explain her liabilities as a guarantor under the lease to her at the time the lease was signed (Helen 1.3.2012 [46]); however, a draft of that lease had been provided to the solicitors acting for the Plaintiffs some time before. The Plaintiffs also criticise the process by which the lease between Colorado and CH Design was prepared and point out that that lease was executed on behalf of Colorado by Helen and Kenneth at a time when, strictly, Kenneth and Helen had not yet been appointed as directors of Colorado. They ultimately did not press a challenge to the lease on that basis. 219It is necessary to say something further as to the circumstances of entry into the lease of the premises from which Colorado's business was conducted from CH Design. On 19 June 2009, Helen received an email from Kenneth attaching, inter alia, a draft lease (Helen 1.3.2012 [19]; Ex P1 2/564]). Kenneth also sent a draft of the lease to Mr Huang on 24 June 2009 (Ex P1 2/619, 632; T423). Clause 13.2 of the Share Sale Deed executed on 1 July 2009 in turn required Colorado to enter a lease for the warehouse premises from CH Design. 220Helen's affidavit evidence was that a discussion about the lease took place at the meeting which she previously dated 23 July (and now dates as 15 July) between Kenneth and Clare as to, inter alia, Clare's request that Colorado needed to enter into a new lease for the Rydalmere premises, since Clare (or CH Design) had a loan against the property and the bank would not renew the loan or remove the charge from Colorado without a signed lease (Helen 1.3.2012 [41]). Helen's evidence (Helen 1.3.2012 [41]) is also that Kenneth requested a draft of the lease agreement and that Kenneth said he would need his lawyer to review it; and that Clare responded: Clare: "I only need a lease to show the bank so I can ask ANZ to remove the charge against Colorado and extend the loan. I am still a shareholder and director of Colorado. There is no need for you to get a lawyer involved. There is no need to worry about the lease. It is going to take a long time for the solicitor to review it and I don't have much time. My family owns the Rydalmere premises. There is really no need to worry about the lease." As I noted above, Clare denies attending this meeting and also denies the conversation. This account of the conversation is difficult to reconcile with the fact that Clare's solicitors had previously provided a draft of the lease to the solicitors acting for HY International and Phoenix in respect of the transaction. I do not accept that Helen or Kenneth would have understood any such conversation, had it occurred, as indicating that a lease would not, for example, impose obligations on Colorado as to the payment of rent. 221Kenneth also gave evidence in his affidavit of a conversation with Helen at the meeting in Hong Kong on 15 July concerning the lease (Kenneth 22.8.2011 [40]). He gave plainly contradictory evidence in cross-examination that he did not recall any discussion about the lease until after the parties came back from Hong Kong, when the matter was discussed in Sydney in late July or early August, and then reversed that evidence, when reminded of his affidavit, to say that that matter was in fact discussed at the meeting in Hong Kong (T424-425). I do not accept that Kenneth has, or at least has disclosed, any reliable recollection as to this matter. Kenneth also acknowledged in cross-examination that the draft lease for the premises had already been provided to the lawyers acting for HY International and Phoenix in respect of the acquisition of the shares in Colorado, and that this could have occurred in June (T425). 222On or about 28 July 2009, a lease of the warehouse premises owned by CH Design and occupied by Colorado was executed by Kenneth and Helen, on Colorado's behalf, and by CH Design as trustee of the CH Family Trust (Helen 1.3.2012 [43]-[46]). The lease (Ex P1 3/928A) provided that the annual rent payable was $180,000 (cll 5(1), 5(3) and item 3 of the reference schedule); the annual rent was payable in advance by monthly instalments of 1/12 of the annual rent (cl 5(4)), being $15,000; the rent was to be paid whether demanded or not and without deduction (cl 5(7)); and that payment of the rent was an essential term of the lease, and that failure to pay rent in accordance with the provisions of the lease would constitute a fundamental breach which would, inter alia, entitle the lessor to terminate the lease and to sue for and recover damages from the lessee (cl 5(7); and see also cll 19(1)(a)) and 32(1)(a)). Clause 5(5) of the lease provided that the lessee was to pay the first monthly instalment on the date referred to in item 4 of the reference schedule, and each following monthly instalment on the same day of each month or, if a month does not contain a day corresponding to that date, on the last day of that month. Item 4 of the reference schedule did not provide a date for payment of the first instalment. The parties seem to have accepted (in the sense that Clare asserted, and neither Kenneth nor Helen disputed) that rent was to be paid on the 5th of each month. As the Defendants point out, the precise due date in each month is not significant, because it is not in dispute that Colorado did not pay rent at all between November 2010 and January 2011 (Clare 20.10.2013 [323]; this matter was conceded by Counsel for the Plaintiffs at T541). 223The lease provided that CH Design could cancel the lease if rent remained unpaid for 7 days after it was due, whether formally demanded or not (cl 19(3)); that CH Design may cancel the lease by (a) notifying the lessee of the cancellation; or (b) re-entering the leased premises, with force if necessary, ejecting the lessee and all other persons and effects from the leased premises and repossessing them without being guilty of any manner of trespass; or (c) doing both (cl 19(4)); and that, upon cancellation of the lease by the lessor, the lease would cease, and the lessee would remain liable for any previous breach (cl 19(5)). The lease also provided that the acceptance by the lessor of arrears, or of any late payment of rent, would not constitute a waiver of the essentiality of the lessee's obligation to pay rent (cl 32(2)). The lease also contained a guarantee by Helen and Kenneth of payment of rent under the lease. 224There were repeated delays by Colorado in payment of rent and Clare, on behalf of CH Design repeatedly pressed for the rent to be paid when due. On 18 February 2010, Clare emailed Ken requesting payment of the February rent (Ex P1, 4/1413). On 26 February 2010, Clare emailed Ken stating "please arrange the outstanding rental payments to CH Design nominated account ASAP!" (Ex P1 4/1422). Between 6 and 8 April 2010, Clare and Ken exchanged further emails relating to payment of the rental due for March 2010 (Ex P1 4/1612-1615, 1633). On 4 May 2010 (Ex P1 4/1729), Clare demanded outstanding rental payments from Colorado for April 2010 and required that payment be made no later than 4 May 2010; suggested that Colorado should consider moving to smaller premises if it could not afford to pay rent on time; and expressed the view that she did not wish to waste her time chasing outstanding payments and that Colorado should either move out of the premises or pay the rental on time in the future. On 2 June 2010, Clare again emailed Ken and Helen relating to the May rental (Ex P1 5/1895). Rent was again not paid when due in July 2010. On 9 August 2010, Clare emailed Ken and Helen stating: "Please arrange the outstanding July, August rental payments to CH Design Solutions Pty Ltd within the next 24 hours, otherwise, CH Design Solutions Pty Ltd has not [sic] other course of action, but to ask Colorado Products to vacate the premises to leave." (Ex P1 6/2360) On 10 August 2010, Clare again emailed Ken and Helen stating: "CH Design Solutions Pty Ltd will not accept the part payments of the outstanding rental. Once again, if the outstanding rental payments will not pay in full to CH Design Solutions Pty Ltd's account before 5pm today, CH Design Solutions Pty Ltd will have no other choice of action, but to ask Colorado Products to vacate the premises to leave." (Ex P1 6/2360) On 6 October 2010, Clare again emailed Ken and Helen stating: "You got to arrange the rental to CH Design today. ...To pay the rental or move out, simple as it is. I am sick of it." (P1 6/2726) 225The Plaintiffs plead in FASC [43] that, on or about 2 December 2010, Clare on behalf of CH Design represented to Colorado that the payment of rent due from Colorado for the period November 2010 in the amount of $15,000 plus GST "could be deferred indefinitely" and that, as a result of that representation, Colorado assumed that the rental payment for November 2010 "would be deferred and until such time as was convenient to Colorado" ("Rent Deferral Assumption"). The Plaintiffs particularise that representation as having been express and oral and made during a telephone conversation between Helen and Clare on or about 2 December 2010. The Plaintiffs plead (FASC [45]) that, in reliance upon the Rent Deferral Assumption, Colorado adjusted its cashflow and expenditure accordingly and deferred making the rental payment for November 2010. The Plaintiffs plead that it would be unconscionable for CH Design to depart from the Rent Deferral Assumption and it is estopped from doing so (FASC [46]). These matters are denied by the Defendants. 226There is a further conflict in the evidence as to the terms of the discussion on about 2 December 2010 between Clare and Helen as to payment of rent. The divergence between their accounts of that conversation is such that it is unlikely that one of them is simply mistaken as to their recollection. Helen's evidence is that she said "...[i]s it ok to pay the factory and other customers first and pay your November rent and Kenneth's sub-contractor fees later?" and that Clare replied: "Fine, just pay the factory and other customers first" (Helen 1.3.2012 [170]). The reference to "other customers" in this statement appears to be in error since it is not apparent why Colorado would need to pay its customers (as distinct from its suppliers) or why Clare would agree to its doing so. Kenneth's evidence is that, in a telephone conversation with Helen in relation to the November 2010 rent in early December 2010, Helen said words to the effect that: "I have spoken to Clare. There were nine payments to be made but there wasn't enough funds to make the payments. She agreed we pay the factory and other customers first and pay her November rent and your sub-contractor fees later." (Kenneth 22.8.2011 [78]) Kenneth's evidence here repeats Helen's apparent error in referring to payments to "other customers". I am not persuaded by Helen's and Kenneth's evidence of these conversations, given the wider credit issues to which I have referred above and since, as the Defendants point out, Clare had consistently pressed the issue of rental payments throughout 2010, taking the position that CH Design needed the rental payments to be made on time in order to meet its own obligations and it is inherently unlikely that Clare would abruptly reverse that position and now agree to a rent deferral of indefinite length. 227On the other hand, Clare's evidence is that Helen said "[w]e are not able to pay the rent, the factory and salaries at the same time. I propose to pay the factory and the salaries first. We can pay the rent within a day or two" and that she replied "Helen, CH Design really needs that payment. You have to pay the rent in a day or two" and that Helen said "OK. We will definitely pay" (Clare 20.10.2013 [329]). On 9 December 2010, Clare emailed Helen and Kenneth stating: "As promised, Colorado is going to pay the November rental this week. CH Design could not offer to pay the interest to bank for last month and December. We required the rental payments to pay to CH Design ASAP. If CH Design could not offer to pay for the interests, the property will be taken over by the bank" (Ex P1 7/3078). That email is consistent with Helen having agreed that the rent would be paid within "a day or two" (although the reference to a threat of the bank taking over the property in this email does not seem to have had a proper basis) and the proposition that a longer period of rent deferral had been discussed was not then raised by Helen or Kenneth in answer to that email. 228Helen's evidence (Helen 20.11.2013 [43]) is that as a result of the alleged conversation on 9 December: "I assumed that rental payment for November 2010 would be deferred and until such time as convenient to Colorado." Her evidence (Helen 20.11.2013 [44]) is also that, as a director of Colorado and as controlling mind of HY International, she relied upon the Rent Deferral Assumption by causing Colorado to adjust its cashflow and expenditure accordingly and caused Colorado to defer making the rental payment for November 2010. Again, I have difficulty accepting that Helen or HY International in fact made, or could reasonably have made, that assumption. Helen accepted in cross-examination that, throughout 2010, Clare had insisted on the rent being paid on time even though she was aware that Colorado had cash flow problems (T256). Helen also said in cross-examination that Clare had telephoned her subsequently in December 2010, requesting that the rent be paid (T257) and also accepted in cross-examination was that she "was pretty sure that Clare would insist chasing the company for rental" (T258). These matters are all inconsistent with the suggested assumption. 229On 13 December 2010, Helen emailed Clare and proposed a set-off of one month's rent against the amount of $67,719 referred to in the 11 May 2010 meeting (Ex P1 7/3088) to which I have referred in paragraph 170 above. That proposal was not accepted by Clare, and it was plainly inconsistent with the offset agreement that Clare contended (and I have, on balance, accepted) was reached at that meeting. There was no reference to the suggested agreement as to deferral of rent reached on 2 December 2010 in that email. On 13 December 2010, CH Design's solicitors sent a letter of demand to Colorado stating that Colorado was in breach of the lease, demanding payment of outstanding rent within seven days, and stating that, if the rent was not paid, further steps would be taken. The letter also referred to CH Design's entitlement, if the breach was not remedied, to take possession and terminate the lease (Ex P1 7/3092). 230On 15 December 2010, Kenneth sent an email to Clare and Helen stating that: "My understanding is that your reimbursement [presumably, the amount in the 11 May 2010 document] include [sic] the payment for this container and office rent" (Ex P1 7/3099). 231On 16 December 2010, Helen emailed Clare, in a form that reads as having been prepared for her by solicitors or other advisers, stating that: "We deny that there is any rent which is unpaid or overdue. On Monday 13 December 2010...Helen emailed you and demanded a debt of A$67,719.67 to be recovered from Clare .... Furthermore, we note that the agreement between Colorado and CH is for the rent to be paid one month in arrears. This has been the custom and practice. Also, regardless of the issues raised in the email from Helen to Clare of 13 December 2010, as a result of many factors affecting the cash flow of Colorado, it was agreed by you on 2 December that November rent payment could be deferred. ... You are required to withdraw the letter and give an undertaking that you shall not deem Colorado to be in breach of the lease pursuant to that demand. We also seek an undertaking that you will not seek to take possession of the premises of Colorado without giving a further and separate seven (7) days notice. If you fail to give these undertakings, Colorado shall need to protect its position and may, without further notice to you, make application to the Supreme Court for orders restraining CH in the manner set out above. We require you reply no later than 5 pm on 20 December 2010" (Ex P1 7/3108-3111). 232On 20 December 2010, CH Design's solicitors replied to Helen's email to Clare dated 16 December 2010 stating that: "We are instructed that there was an adjustment of $67,719.67 made to Clare ... in May 2010. This is a separate matter and ought not to be confused with Colorado's liability to our client for rent. Our client does not accept the arrangement put forth in [Helen]'s email of 13 December. There was never any agreement to defer rent payment for any month. Our client has made a valid claim for outstanding rent and will not withdraw its claim. In the event that the outstanding rent is not paid by 4 pm 22 December 2010, we anticipate instructions to take further steps as previously stated" (Ex P1 7/3113). 233On 22 December 2010, Kenneth sent a further email to Clare and Helen stating that: "As everyone know, the company has a difficult situation now, the business is down and short of cash flow. ...The company is also disputing with Vendor about December's rent. What are we going to do with this? Are we going to raise a loan around shareholders? Or any other solutions? Helen and myself have already raised $18,000 each to the company. Clare didn't. Should all shareholders and directors have a meeting to discuss it? We need to have solution for the current situation as soon as possible" (Ex P1 7/3133). 234On or about 23 December 2010, CH Design served a creditors' statutory demand in the amount of $33,000 for unpaid rent for November-December 2010. The Plaintiffs criticise the issue of a creditor's statutory demand on the basis that it was issued shortly after unpaid rental allegedly fell due and because, they contend, the debt was genuinely disputed. CH Design then took possession of the Rydalmere premises on or around 7 January 2011 (Kenneth 22.8.2011 [83]). 235The Plaintiffs contend that it can be inferred from the terms of the lease that Clare only had regard to the interests of CH Design as lessor and that the lease contains onerous obligations imposed upon Colorado with respect to the payment of rent and the consequences of non-payment of rent (PWS [245]). It was not established that the provisions of the lease were anything other than the terms of a commercial lease entered into by a lessor that, all things being equal, would prefer to see its tenant comply with its obligation to pay rent rather than not do so. The Plaintiffs also submit that rent was not required to be paid to enable CH Design to meet its own liability to the bank but, as the Defendants point out, a lessor's contractual entitlement to rent does not depend on how it proposes to apply it. 236With this background, it does not seem to me that a breach of the pleaded provisions of the Shareholders Agreement has been established by the particularised demand for outstanding rent, termination of the lease or re-entry into the premises. I do not accept that the lease was signed on the basis that CH Design would not enforce it, which is inconsistent with the fact that a draft was previously provided by Clare's solicitors to the Plaintiffs' solicitors for review, and with the fact that CH Design had borrowings on the property and there is no suggestion that, in the longer term, it could have met repayments on those borrowings without income from the property. I am not persuaded that the suggested representation that rent need not be paid was made in December 2010, where that would be inconsistent with CH Design's and Clare's approach throughout, and given the issues as to Helen's and Kenneth's evidence to which I have referred above. It has not been established that the issue of a creditor's statutory demand for rent was wrongful, where that rent was unpaid after repeated demands by CH Design that rent be paid when due or that the termination of the lease or re-entry when rent remained unpaid was wrongful. 237It does not seem to me that the requirement in cl 3.2 of the Shareholders Agreement that Clare use her "best endeavours" to ensure that Colorado's affairs were conducted in, relevantly, a profitable manner went so far as to require that she surrender CH Design's interest as lessor in being paid rent for the premises it leased within a reasonable time, or at all, to Colorado's interest in maximising its profits by delaying paying that rent. The breach alleged in FASC [148(a)] has therefore not been established. No relevant failure to disclose information has been established so as to give rise to the breach pleaded in FASC [148(b)]). The Plaintiffs have not shown that the dealings between Colorado and CH Design, generally or in any particular respect, involved any failure to act promptly, reasonably or in good faith in taking action or undertaking conduct in order to perform the provisions of the Shareholders Agreement as pleaded in FASC [148(c)]. It does not seem to me that a failure to subordinate CH Design's interests in the manner noted above, where the relationship was governed by the lease of the premises, amounted to a failure to be just and faithful as pleaded in FASC [148(d)] and no relevant failure to provide information was established. I address the other pleaded breaches of FASC [148], so far as they involve CH Design, below. Failure to provide financial assistance 238The seventh particular to FASC [148] relates to Clare refusing to provide financial assistance to Colorado "in the circumstances pleaded herein" and the Plaintiffs' schedule of cross-references (MFI 10) identifies the intended reference as to the matters pleaded in FASC [117]. The fifteenth particular overlaps with that particular and relates to Clare failing to provide financial assistance to Colorado "as pleaded herein" and the Plaintiffs' schedule of cross-references (MFI 10) identifies the intended reference as being to FASC [118]. 239Paragraphs 116-121 of the FASC plead a refusal by Clare to provide further funds to Colorado as requested by Kenneth or to offset the Acknowledged Amount (as defined) against a debt claimed by Sorrento China and to a dispute as to payment for a container of goods supplied by Sorrento China and held at Sydney Wharf in December 2010. Helen's evidence is that, on 19 July 2010, Colorado requested Clare to provide financial assistance to it and Clare refused to assist. The Defendants respond, and I accept, that it is no part of a director's duty to lend money to a company, or otherwise render financial assistance to it. The Plaintiffs did not refer to any authority for such a positive duty on the part of a director, which would be inconsistent with the fact that many non-executive directors do not have substantial economic interests in the companies to which they are appointed. So far as such a duty is said to arise in the particular circumstance, the request to offset the Acknowledged Amount against the debt owed to Sorrento China was inconsistent with the offset agreement that I have held, on balance, was reached in May 2010 and Clare was therefore not obliged to accede to it. 240It also does not seem to me that Clare's unwillingness to provide additional funding to Colorado, as a minority shareholder or as a director, amounted to a breach of her obligation to use her "best endeavours" to ensure that Colorado's affairs were conducted profitably, given her then concerns as to Kenneth's management, the difficulties in the parties' relationship and the uncertainty whether the provision of such funds would in fact have secured Colorado's profitability in the then circumstances, or a failure to be just and faithful or otherwise gave rise to the pleaded breaches of FASC [148]. Conflict of interest 241The ninth particular to FASC [148] relates to Clare placing herself in a position of conflict "as pleaded herein" and the Plaintiffs' schedule of cross-references (MFI 10) identifies the intended reference as to FASC [146]. This particular raises, by the cross-reference to FASC [146(a)], an allegation that, as a director and officer of Colorado, Clare placed herself in a position where her personal interests, and the interests of entities controlled by her, were in conflict or were likely to conflict, by her being a director of CH Design. The tenth particular to FASC [148] raises a related allegation that Clare preferred the interests of herself and CH Design to the interests of Colorado "as pleaded herein" and the Plaintiffs' schedule of cross-references (MFI 10) identifies the intended reference as to the matters pleaded in FASC [58]-[59], [115] and [120]-[121] which relate to dealings with, relevantly, CH Design. This particular also raises, by the cross-reference to FASC [146(b)], an allegation that Clare placed herself in a position where her personal interests, and the interests of entities controlled by her, were in conflict or were likely to conflict, by her being a director of Sorrento China. The eleventh particular raises a related allegation that Clare preferred the interests of herself and Sorrento China to the interests of Colorado "as pleaded herein". This particular raises, by the cross-reference to FASC [146(c)], an allegation that Clare placed herself in a position where her personal interests, and the interests of entities controlled by her, were in conflict or were likely to conflict, by being the principal and controlling mind of Sorrento Kitchens, Sorrento China and BL/GLCo. 242These claims parallel the claim in FASC [146]-[147] that Clare was in breach of a duty to avoid an undisclosed conflict of interest owed to Colorado, which I address in paragraphs 358-389 below. I have not found that a breach of the relevant duty is established - other than in respect of the diversion, to Sorrento Kitchens, of potential sales from Colorado to Tradelink - for the reasons set out in those paragraphs. In these circumstances, a breach of the obligations pleaded under the Shareholders Agreement, including the obligation to act in good faith while taking action or undertaking conduct in order to observe the provisions of the Shareholders Agreement and the obligation to be just and faithful as between the shareholders, is not established other than in respect of the diversion of that business. I address the question of diversion of business in paragraphs 285-335 below. Use of confidential information 243The Plaintiffs plead (FASC [148(h)]) a breach of the Shareholders Agreement by disclosure or use of "the Confidential Information of Colorado as pleaded herein" other than for Colorado's business and their schedule of cross-references (MFI 10) identifies the intended reference as being to FASC [127]. The twelfth particular to this paragraph also relates to Clare using Colorado's confidential information to her own profit and advantage "as pleaded herein" and the Plaintiffs' schedule of cross-references (MFI 10) identifies the intended reference as being to FASC [49]. 244The reference to Colorado's "Confidential Information" appears to be to FASC [14] - [16], which plead that Clare had access to specified information of Colorado that was confidential and gave rise to an equitable obligation of confidentiality, including customer lists and names, product pricing and profit margins and other matters. The Defendants do not admit that the pleaded information is properly characterised as confidential to Colorado (Amended Defence [14]). Paragraph 29(i) of the FASC pleads an obligation under cl 7 of the Shareholders Agreement in respect of confidential information. That clause prohibited Colorado's shareholders from using or disclosing confidential information other for the purpose of Colorado's business. Paragraph 49 of the FASC relates to the service of the creditor's statutory demand by CH Design on Colorado. Paragraph 127 of the FASC in turn pleads that: "In commencing the Winding Up Proceedings, [Clare] has utilised and continues to utilise information confidential to Colorado, namely, the financial position of Colorado and details of the asset and liability position of Colorado." 245Notwithstanding the breadth of the pleaded definition of "Confidential Information", the pleaded breach of confidentiality in FASC [49] and [127] (to which the Plaintiffs indicate this particular refers) is that Clare or CH Design made use of knowledge of Colorado's financial position in the service of the creditor's statutory demand and in the winding up proceedings, rather than alleging any misuse of customer information or product pricing information. The factual basis of that allegation does not seem to me to have been established. First, so far as an issue is raised as to the creditor's statutory demand, that relied only on the fact that rent then alleged to be due by Colorado to CH Design had not been paid. It does not seem to me that any breach of a duty of confidentiality can be established, since the fact that Colorado had not paid rental to CH Design was plainly known to CH Design, which had not received it, and was not confidential to Colorado. It does not seem to me that that information was confidential as between the parties to the lease, at least in any sense that would prevent the lessor taking steps to recover that amount by a claim for debt or, if the debt was not the subject of a genuine dispute, taking steps to issue a creditor's statutory demand that, if not satisfied, would give rise to a presumption of insolvency. Second, the confidential information alleged to have been used in the winding up proceedings, or how it was used, has not been established. Third, a duty of confidentiality owed between parties does not prevent recourse to the courts to determine their respective rights. 246In closing submissions, the Plaintiffs also contended that Clare breached cl 7 of the Shareholders Agreement by her conduct in dealing directly with Colorado customers secretly and encouraging them to deal directly with her or Sorrento Kitchens, to the exclusion of Colorado. I will address the issue of diversion of business below. However, the claim for breach of confidentiality in that regard goes beyond the pleaded and particularised breach as identified by the Plaintiffs' schedule of cross-references (MFI 10). Unsuitable stock 247The sixteenth particular relates to Clare causing or inducing Colorado to purchase the stock pleaded in FASC [61(a)] which is alleged to have not been suitable to its trading requirements and not capable of being promptly sold to Colorado's customers. Paragraphs 144-145 of the FASC in turn plead that Clare caused Colorado to purchase stock not suitable to its requirements. This allegation refers to the purchase of $600,000 of stock from Clare under the Deed of Settlement. The Plaintiffs contend that Clare failed to ensure that the stock purchased was suitable to Colorado's trading requirements or was capable of being promptly sold to Colorado's customers and that the contrary was the case. I have referred to the evidence as to the suitability of that stock in paragraph 140 above, in addressing the representational claim as to the same issue. 248I have held above that the representations alleged to have been made by Clare in respect of this matter have not been shown to be misleading or deceptive or likely to mislead or deceive, and that the extent to which the stock purchased was unsuitable has not been established. It also does not seem to me that a negotiated agreement for the acquisition of stock, reached between the relevant shareholders, is capable of giving rise to the breach pleaded in FASC [148(a)]. Non-disclosure of particular information of the kind pleaded in FASC [148(b)] has not been established; the relevant negotiations and entry into the Deed of Settlement do not seem to me to be an action or conduct to observe the provisions of the Shareholders Agreement for the purposes of FASC [148(c)]; and it has not been established that the course of those dealings, apparently on an arm's length basis, involved any failure to be "just and faithful" to Helen, Kenneth or Colorado or any relevant failure to provide information as to Colorado's affairs and activities for the purposes of FASC [148(d)]. Involvement in Sorrento China without making offer of participation to Colorado 249The fifth pleaded breach of the Shareholders Agreement (FASC [148(e)]) relates to Clare's involvement in the business of Sorrento China, without an offer of participation having been made to Colorado. This allegation is wider than the matters relating to Sorrento China set out in the fifth particular to the paragraph, which I have addressed in paragraphs 202-215 above. 250Both parties treated this allegation and a similar allegation in respect of other entities (which I will address below) as giving rise to questions as to the construction and validity of two provisions contained respectively in the Share Sale Deed and Shareholders Agreement that were arguably in the nature of restraints of trade. Clause 16 of the Share Sale Deed provides: "16. RESTRICTION ON VENDOR'S COMPETITION 16.1 In this clause: (a) "Be involved" includes being involved as a sole trader, partner, joint venturer, manager, agent, appointor, assistant, clerk, director, majority shareholder or person with the capacity to exercise substantial control of a corporation; 16.2 The parties must not, without the prior written consent of each other: (a) Be involved in a business which is the same type of business, or a similar type of business operated by the Company during the time when all parties are shareholders of the Company. 16.3The Vendor must not during the restraint time engage in any conduct derogating from the Purchasers' right to obtain the full benefit of the goodwill of the Company and the business owned by the Company. 16.4 The Vendor acknowledges that the restraint time and the restraint distance are no greater than are reasonably required to protect the of [sic] of the Company and the business owned by the Company. 16.5 This clause does not merge on completion." I would infer that cl 16.4 of this clause is intended to refer to the protection of Colorado's goodwill. 251A preliminary issue arises as to whether cl 16 of the Share Sale Deed is void for uncertainty. The Defendants point out that the "restraint time" and "restraint distance" are not defined in that clause and that it cannot be given effect to in a meaningful way and should be found void for uncertainty. No issue of uncertainty arises in respect of cl 16.2, which does not use the terms "restraint time" or "restraint distance" but applies during the time that all parties are shareholders in the company. The Defendants submit that, although cl 16.2 of the Share Sale Deed is expressed as an obligation on the parties not to engage in particular conduct "during the time when all parties are shareholders of the Company", it is of no assistance in identifying the "restraint time" for the purposes of clause 16.3, which is an independent obligation on the part of the vendor. Mr Harper contended, in oral submissions, that the reference to a "restraint time" in cl 16.3 of the Share Sale Deed should be construed to mean while the parties are shareholders (T1050). I do not consider that that term can be given that meaning since, if that was the intention, that phrase which was used in cl 16.2 could have been used in cl 16.3, or the prohibitions combined. The use of a different concept suggests a different time was intended, to the extent that the parties had given any thought to the question. 252In Fawcett Properties Pty Ltd v Buckingham County Council [1961] AC 636 at 678; [1960] 3 All ER 503, Lord Denning observed it must be "utterly impossible to put a meaning on the words" before a clause is held to be void for uncertainly, and that observation was approved by Pembroke J in Seven Network (Operations) Ltd v Warburton (No 2) [2011] NSWSC 386 at [37]. It does seem to me that it is impossible to put such a meaning on cl 16.3 of the Share Sale Deed where the parties have not themselves reached any identified consensus as to the restraint time and restraint distance. To give effect to that clause, the Court would not be interpreting an agreement the parties had formed, albeit obscurely expressed, but establishing an agreement to apply over a period and one that the parties had not in fact agreed. That conclusion is more readily reached where no application for rectification of that clause is brought on the basis that any anterior consensus existed which that clause failed to reflect. That difficulty is not avoided by s 4 of the Restraint of Trades Act 1976 (NSW) which, by s 4(2), does not affect the invalidity of a restraint of trade by reason of any matter other than public policy in respect of restraint of trade, such as lack of contractual certainty. The Defendants also contend that, in these circumstances, the acknowledgment in cl 16.4 should be given little weight. In my view, that acknowledgement can be given little or no weight where the parties had not in fact agreed the restraint time or restraint distance that they are purporting to acknowledge is reasonably required. 253Clause 16 of the Share Sale Deed, and specifically cl 16.2 which I have not found to be uncertain, is plainly a restraint of trade and its operation must be approached by reference to public policy and s 4 of the Restraints of Trade Act on which the Plaintiffs rely. At general law, a restraint of trade is invalid unless it is reasonable as between the parties, in the sense of being necessary for the adequate protection of the covenantee's legitimate interests: Reed Business Information Pty Ltd v Seymour [2010] NSWSC 790 at [36] per Ball J; Zomojo Pty Ltd v Hurd (No 2) [2012] FCA 1458; (2012) 299 ALR 621 at [179] per Gordon J; Kosciuszko Thredbo Pty Ltd v ThredboNet Marketing Pty Limited [2013] FCA 563 at [241]-[245] per Cowdroy J. The onus is on the plaintiffs to establish this: Buckley v Tutty [1971] HCA 71; (1971) 125 CLR 353 at 377. The principles applicable to the determination whether a restraint of trade will be upheld have recently been summarised by the Full Court of the Federal Court of Australia in McHugh v Australian Jockey Club Ltd [2014] FCAFC 45 at [4] by Perram J (with whom Griffiths and White JJ relevantly agreed) as follows: "(a) at common law all interferences with individual liberty of action in trading and all restraints of trade themselves, if there is nothing more, are contrary to public policy and therefore void: Nordenfelt v Maxim Nordenfelt Guns and Ammunition Company Ltd [1894] AC 535 at 565 per Lord Macnaghten; (b) such a restraint will nevertheless be valid if: (i) it affords no more protection than is reasonably necessary to protect the interests of the party in whose favour it is imposed: Nordenfelt at 565; Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd [1973] HCA 40; (1973) 133 CLR 288 at 315-316 per Gibbs J; and (ii) it is reasonable having regard to the interests of the public: Nordenfelt at 565; Amoco at 315; (c) reasonableness in those contexts is to be judged at the date the restraint was first imposed: Adamson v New South Wales Rugby League Ltd [1991] FCA 425; (1991) 31 FCR 242 at 285-286 per Gummow J; Sheppard J agreeing at 245; (d) the onus of showing that the restraint is no more than reasonably necessary to protect the interests of the party having the benefit of the restraint is on that party: Esso Petroleum Co Ltd v Harper's Garage (Stourport) Ltd [1968] AC 269 at 319 per Lord Hodson; Herbert Morris Ltd v Saxelby [1916] 1 AC 688, 700, 707-708 per Lord Atkinson and Lord Parker. There are judgments of individual Justices of the High Court to similar effect: see Lindner v Murdock's Garage [1950] HCA 48; (1950) 83 CLR 628 at 646 per McTiernan J and 653 per Kitto J; Amoco at 317 per Gibbs J; (e) the onus of showing that a contract in restraint of trade is injurious to the public lies on the party making that allegation: Herbert Morris at 700, 707-708; Esso Petroleum at 319; (f) what is to be proved in both cases are facts, but the question of whether those facts make good the proposition that the restraint is reasonable is a question of law: Esso Petroleum at 319; Amoco at 317; (g) in assessing what is reasonable the Court may take into account future probabilities that could have been foreseen: Adamson at 285-286; and (h) in assessing what is reasonable, facts occurring after the restraint's inception may, but need not, throw light on circumstances existing at the relevant date: Amoco at 318." 254Section 4(1) of the Restraints of Trade Act in turn provides that a restraint of trade is valid to the extent to which it is not against public policy. The effect of that section was summarised by Brereton J in Cactus Imaging Pty Ltd v Peters [2006] NSWSC 717; (2006) 71 NSWLR 9 at [10], in a passage approved by Windeyer J in Austress-Freyssinet Pty Ltd v Kowalski [2007] NSWSC 399 at [12] as follows: "Although at common law a restraint of trade is contrary to public policy and void unless it is justified by the special circumstances of the particular case (for which purpose it is sufficient justification that the restriction is reasonable having regard to the interests of the parties concerned and in reference to the interests of the public, so that while affording adequate protection to the party in whose favour it is imposed, it is not injurious to the public) [Nordenfelt v Maxim Nordenfelt Guns & Ammunition [1894] AC 535 at 565; Herbert Morris Ltd v Saxelby [1916] 1 AC 688 at 706 and 707; Lindner v Murdock's Garage (1950) 83 CLR 628 at 653], in New South Wales a restraint is valid to the extent to which it is not against public policy, even if not in severable terms [Restraints of Trade Act, 1976 (NSW) s 4(1); Koops Martin Financial Services Pty Ltd v Reeves [2006] NSWSC 449, [26]-[27]]. The effect of the Restraints of Trade Act is that, in New South Wales, one approaches this type of case by determining, first, whether the alleged breach (independently of public policy considerations) does or will infringe the terms of the restraint properly construed; secondly, whether the restraint in its application to that breach is against public policy; and thirdly, if it is not, then in its application to the alleged infringing conduct, the restraint is valid unless the court makes an order under Restraints of Trade Act, s 4(3) [Orton v Melman [1981] 1 NSWLR 583; Woolworths Limited v Olson [2004] NSWCA 372, [42]]. That is because the effect of the Restraints of Trade Act, s 4(1), is to require that, for the purpose of determining the validity of a restraint, attention be focussed on the actual or apprehended breach, rather than on imaginary or potential breaches." In Austress-Freyssinet above at [12] and [18], Windeyer J in turn treated a restraint of trade which was unlimited as unreasonable, but read the clause down under the Restraints of Trade Act. Mr Harper submits that the relevant restraint, when read down in that manner, would prohibit Clare from engaging in the relevant conduct during 2010-2011. Mr Harper made clear that no submission was put that it would be reasonable to treat the prohibition on conduct as applying after Colorado had ceased to conduct business in early 2011 (T1052). 255In the present case, s 4 of the Restraints of Trade Act draws attention, first, to whether the alleged breach by Clare's involvement with Sorrento China, in the period in which Colorado was conducting business, prior to early 2011, infringed the restraint in cl 16.2 of the Share Sale Deed as properly construed. Clare was plainly involved in Sorrento China in the relevant sense, so the real question is whether that business is the same type, or is similar, to a business operated by Colorado. The Plaintiffs contend that, from about March 2010, Sorrento China sold products that were similar to if not identical with products sold by Colorado and refer to Helen's evidence in her affidavit of 29 August 2013 at [97]ff. The Defendants respond that Helen does not identify those products as being Colorado branded products and point out that the Supply and Buy Agreement (Ex P1 3/927) provided that Sorrento China would not sell Colorado branded products other than through Colorado and made no such provision in respect of other products and also provided that Sorrento China would pay Colorado 5% of any sales made directly from China to "other Australian customers". The Defendants contend that the parties anticipated that Clare would continue to operate the Sorrento China business and export products into Australia and specified the balance to be struck between Clare's participation in Colorado and that business. The Defendants also rely on the "container sales" agreement to which I have referred above, as extending this arrangement to containers sales of non-Colorado branded products direct from Sorrento China to Colorado customers, subject to an accounting to Colorado for 5% by way of commission. 256The business of Sorrento China was as a manufacturer and also supplier of products of other Chinese manufacturers in containers to an Australian distributor and outside Australia, and also involved direct shipping of containers to Australian customers for which payment was required to be made in US dollars. The business of Colorado was to receive supply of products manufactured by Sorrento China and other manufacturers in containers and distribute smaller quantities of those products in the wholesale market from its warehouse, to purchasers that would make payment to Colorado in Australian dollars. It does not seem to me that the business of the two entities were the same and the extent of the differences between them is such that they do not seem to me to be similar. I accept that there was an overlap between the two businesses so far as sales of similar products could be made either by direct sales from Colorado's warehouse or by container sales direct from Sorrento China to a customer, which was in turn addressed by the "container sales" agreement. However, the fact that two parties may deal in the same or similar products (which would be the case in respect of any manufacturer, wholesaler and retailer of the same product) does not seem to be sufficient to establish that they are the same or similar business for the purpose of this clause. Such a conclusion would not be consistent with the fundamental differences between the manner in which Sorrento China and Colorado conducted business to which I have referred. 257It would also be an odd result, to say the least, if, immediately after the Plaintiffs had chosen to acquire an interest in Colorado and not in its supplier, Sorrento China, and entered into the Supply and Buy Agreement to regulate the relationship between the two entities on the understanding that Clare would have a continued involvement with Sorrento China, Clare was then prohibited from having such an involvement by the terms of cl 16.2 of the Share Sale Deed. It may be that another reason that result would not arise is that the Supply and Buy Agreement and other correspondence recording dealings between Colorado and Sorrento China, or Helen, Kenneth and Clare, amounted to written consent to Clare's involvement in Sorrento China in any event, although it is not necessary to reach a finding in that regard, given the other findings I have reached and where the matter was not fully addressed in submissions. 258Second, s 4 of the Restraints of Trade Act requires the Court to determine whether the restraint in cl 16.2 of the Share Sale Deed, in its application to the alleged breach, would be against public policy. It does not seem to me that is the case, where Clare was plainly experienced in the relevant business and had close connections with relevant customers and a prohibition on her being involved in a business which is the same type of business, or a similar type of business operated by Colorado during that year was not unreasonable to preserve Colorado's goodwill, particularly where that was the primary asset that the Plaintiffs had acquired. 259Accordingly, it seems to me that cl 16.2 of the Share Sale Deed was effective as a restraint, but was not breached by Clare's involvement in Sorrento China because it was not (as a manufacturer dealing in products exported in containers and paid for in US dollars) conducting the same type of business or a similar type of business to Colorado, and cl 16.3 was void for uncertainty. For completeness, I note that the Defendants also contend that the Shareholders Agreement, made at the end of July (Ex P1 2/890), contains an entire agreement clause, and they contend that the Shareholders Agreement replaced the Share Sale Deed and displaced the operation of cl 16 of the Share Sale Deed. I do not accept that submission, so far as those agreements deal with different subject matters, although there is a degree of overlap between them, including in respect of the broad area of regulation of competition with Colorado. 260Clause 6 of the Shareholders Agreement in turn relevantly provides that: "6. RESTRICTIONS ON OPERATIONS OF SHAREHOLDERS 6.1 No Shareholder may during the term of this Agreement, except to the extent permitted by this Agreement, undertake or participate in any venture or activity which is the same as or competitive with the Operations/business then conducted by the Company, without first offering in writing participation in that venture or activity to the Company on a basis no less favourable to the Company than is available to the offering Shareholder. That Shareholder may undertake or participate in such venture or activity only if, pursuant to a resolution of the Board, the Company declines the offer of participation. 6.2 For the purposes of clause 6.1 a Shareholder will be deemed to undertake or participate in a venture or activity of it or a related body corporate/an associate (within the meaning of that term in the Corporations Act) directly or indirectly, alone or in conjunction with another or others, carries on or conducts, or is engaged, concerned or interested in, any such venture or activity, whether as principal, agent, director, shareholder or employee of any other such person or as debenture holder or holder of any other security. 6.3 If the Company undertakes to carry out or conduct a venture or activity of a kind referred to in clause 6.1, each Shareholder will (as far as is possible) ensure that the Company does all things reasonably necessary to comply with its obligations in connection with that venture or activity." 261The Defendants contended that cl 6.1 of the Shareholders Agreement is a right of first refusal and damages would be assessed on the basis of what Colorado would have done had it been offered the opportunity to invest in Sorrento China, and that the clause has regard to Colorado's business, which did not include the business of direct delivery of containers to Colorado's customers (T1031). Alternatively, the Defendants contended that cl 6 of the Shareholders Agreement is an unreasonable restraint of trade in that it purports to limit Clare's ability to trade with third parties to the Shareholders Agreement as she sees fit. The Defendants submitted that, on that construction, cl 6 of the Shareholders Agreement does not protect a legitimate business of Colorado having regard to the terms of the restraint, so far as it purports to restrain conduct that is "the same as or competitive with the Operations/business then conducted by the company". The Defendants contend that the use of the term "business" in cl 6.1 of the Shareholders Agreement seems intended to restrain any activity competitive with the conduct of the business carried on by Colorado at any particular time so that, if the company commenced a business other than the Operations, the shareholders would be restrained from competing with that business. They contend that Colorado can have no legitimate interest in restraining the activities of Clare in respect of any business that it did not conduct at the time that the Shareholders Agreement. The Defendants also point out that cl 6 of the Shareholders Agreement is not limited to any geographical area and contend there is no suggestion that Colorado operated throughout the world and the application of cl 6 of the Shareholders Agreement to any activity the "same as or competitive with" the business of Colorado anywhere in the world does not protect a legitimate business interest of the company. 262The Defendants also submitted that the conduct restrained under that clause would include Clare being employed in a competitive venture regardless of the nature of the employment or role undertaken and would be breached if she acquired one share in a publicly-listed company without offering Colorado an "opportunity" to participate in that venture. They point out that the clause also extends to activities of third parties that are a "related body corporate" or an "associate" within the meaning of the Corporations Act, and contend that this extension is unreasonable as the clause does not require the shareholder to have any involvement in the competitive activity in order to, prima facie, place the shareholder in breach of the clause if an "associate" undertakes a competitive venture by its own volition. The Defendants also contended that the clause also places an unfair restraint on shareholders generally, who are not subject to the same duties as directors. 263The Defendants also contended that the combination of cll 4 and 11 of the Shareholders Agreement would result in a significant prejudice to Clare because the restraint is expressed to apply to Clare for the duration of the term of the Shareholders Agreement, and the term of the agreement was for so long as the shareholders remain shareholders in Colorado, and Clare could not cease being a shareholder of Colorado without the Plaintiffs' consent. The Defendants contended that the only buyers for Clare's minority shareholdings are likely to be the existing shareholders and even if Clare could find a third party buyer, cl 4.4 of the Shareholders Agreement arguably allowed HY International and Phoenix the ability to frustrate any sale by refusing to enter into a further shareholders agreement with the third party. 264In oral submissions, Mr Braham contended that, if that clause operated as a restraint, it would be void because it required the parties not to compete with Colorado's business, irrespective of the scope of that business from time to time, and was not limited to the goodwill attached to the company at the time of sale (T1031), referring to JD Heydon, The Restraint of Trade Doctrine, (3rd ed 2008, LexisNexis Butterworths) at 203. Mr Braham points out that the width of any such restraint does not extend only to Ms Huang, who was the vendor of the shares, but also HY International and Phoenix, which would be banned from competing with Colorado. 265The parties did not draw attention to any authority dealing specifically with the question whether a requirement that Clare first offer an opportunity to Colorado is properly characterised as a restraint of trade. Broadly, a contract in restraint of trade is one in which a party (the covenantor) agrees with any other party (the covenantee) to restrict his or her liberty in the future to carry on trade with other persons not parties to the contract in such manner as he or she chooses: Petrofina (Great Britain) Ltd v Martin [1966] Ch 146 at 180 per Diplock J. Whether a contractual provision is a restraint "is to be answered by having regard to the practical working of the alleged restraint rather than merely to its legal form": Peters (WA) Ltd v Petersville Ltd [2001] HCA 45; (2001) 205 CLR 126 at [14] per Gleeson CJ, Gummow, Kirby and Hayne JJ. In JD Heydon, The Restraint of Trade Doctrine, the learned author notes that a restraint may arise from a "condition having the practical effect of stopping competition as much as in a promise not to compete" (at p 55). However, that text does not address the question whether a clause offering a right of first refusal can properly be characterised as a restraint. 266It does not seem to me that cl 6 of the Shareholders Agreement is, on its proper construction, in the nature of a restraint of trade. The clause does not prevent Clare or an associated entity participating in a competitive business, but merely requires that she offer Colorado the opportunity to participate in that business on specified terms. The substantive effect of the clause is that either Colorado (by its board) takes up participation in the relevant venture or activity, allowing Clare an indirect economic interest in it (through her shareholding in Colorado) or, if it declines to do so, she is permitted to take up that opportunity for herself. While the clause provides that participation may take place "only if" that offer is made, it remains that it permits such participation as long as the prescribed process is followed; to that extent, it does not seem to me to be analogous to a prohibition on the conduct of that competing business. As Mr Harper accepted in submissions, the clause does not purport to prevent the competitive business being conducted, after such an offer was made, irrespective of whether Colorado took up that offer and participated in that business or declined that offer and did not do so. If the clause were, contrary to my view, a restraint of trade, it is plainly very wide, and the criticisms to which the Defendants advanced above would have had substantial force. The clause may have been saved by s 4 of the Restraint of Trades Act, so far as its application in 2010 was concerned, but it is not necessary to decide that matter where I have held that the clause is not, on its proper construction, a restraint of trade. 267So far as the application of this clause in respect of Sorrento China is concerned, it may be that the reference to "an offer being made on a basis no less favourable to Colorado" than was available to Clare in that clause limited its scope so that it applied only to an offer of an interest in a business made to Clare after the clause came into effect, which could provide the basis of a comparison, rather than to an interest in an existing business acquired some years before. If not, the identification of the terms of such an acquisition would have been difficult, to say the least, where the question whether those terms were "no less favourable to Colorado" than were available to Clare would have had to reflect the fact that Clare had invested, several years before, in starting up Sorrento China's business and taken the commercial risk in doing so. It would also be an odd result if immediately after the Plaintiffs had chosen to acquire an interest in Colorado and not in its supplier, Sorrento China, and entered into the Supply and Buy Agreement to regulate the relationship between the two entities, Clare was then bound to offer Colorado the interest in Sorrento China that the Plaintiffs had not acquired in the primary transaction. 268In any event, no loss has been established arising from any breach of this clause in respect of Sorrento China. There is no evidence that Colorado would have taken up an interest in Sorrento China had it been offered, or that it had the financial resources to do so, and it is unlikely that the Plaintiffs would have caused it to do so where they had not sought to acquire an interest in Sorrento China at the time they acquired an interest in Colorado. There is also no evidence of any economic benefit that Colorado or the Plaintiffs would have obtained had Colorado taken up such an interest and has lost by not doing so. Involvement in other entities without making offer of participation to Colorado -Capri International 269The sixth pleaded breach, in FASC [148(f)], relates to Clare's alleged involvement in the businesses of Sorrento China (as to which the allegation duplicates that made in FASC [148(e)] which I have addressed above), Capri International, Sorrento Kitchens and BL/GLCo without an offer of participation having been made to Colorado. 270The first entity in issue is Capri International, to which reference has been made above in respect of other alleged breaches. Clare was the majority shareholder in Capri International, a Hong Kong company, from about the end of 2008 until June 2010 and a director of Capri International from at least the end of 2008 until 30 August 2010. Clare incorporated Capri International in about 2008 to act as an agent between manufacturers in China and Colorado. Clare's evidence was that, from about mid-2009, Capri International acted as an agent for Sorrento China, taking orders, issuing invoices and collecting payment on behalf of Sorrento China, and retaining a commission from those funds (Clare 20.10.2013 [45]). Clare's evidence was that this was done to make it more difficult for competitors to find out where Colorado was obtaining its stock, as imported stock would show the agent's name (Clare 20.10.2013 [40]) and she contended in cross-examination that that entity only derived sufficient income to pay its staff (T557). It is not necessary to reach a finding as to the purpose for which Capri International was incorporated or its profitability for the purposes of these proceedings. 271It does not seem to me that a Hong Kong trading agent for a Chinese manufacturer, taking a commission on sales in US dollars, and an Australian distributor selling its products from a warehouse in Australian dollars, are the same type of business or a similar type of business for the purposes of cl 16.2 of the Share Sale Deed. It may be that another reason that clause would not be breached is that correspondence in respect of dealings between Colorado, Capri International, Fortune City, Helen, Kenneth and Clare amounted to written consent to Clare's involvement in Capri International in any event, although it is not necessary to reach a finding in that regard, particularly where the matter was not fully addressed in submissions. 272So far as cl 6 of the Shareholders Agreement is concerned, there was no evidence that Colorado would have taken up an offer of an interest in Capri International, had one been offered to it; and, to the extent that the Plaintiffs sought access to an arrangement to this kind, Mr Huang appears to have obtained it through Fortune City, to which I have referred above. Even if the relevant breach were established, no resulting loss has been established. Had Clare made such an offer, the likely result is that Colorado would not have taken up such an interest in Capri International, and there would have been no breach by the conduct of its business. There is also no evidence of any economic benefit that Colorado or the Plaintiffs would have obtained had Colorado taken up such an interest and has lost by not doing so. Accordingly, even if a breach of this clause were established in respect of Capri International, no loss has been established. Involvement in other entities without making offer of participation to Colorado -Sorrento Kitchens 273A corresponding allegation is put in respect of Clare's undertaking or participating in the business of Sorrento Kitchens without offering an interest in that business to Colorado. Paragraphs 128-133 of the FASC plead the incorporation of Sorrento Kitchens. The Plaintiffs plead (FASC [140]) that Clare was the controlling mind of Sorrento Kitchens; Sorrento Kitchens was in the business of importing and distributing within Australia vanities, basins, mirrors, sinks, laundry tubs, tapware, bathroom accessories, toilet products and other bathroom and laundry accessories; and that the business of Sorrento Kitchens was a venture or activity the same as or competitive with the operation/business conducted by Colorado, both generally and within the terms of the Shareholders Agreement. The Plaintiffs also plead (FASC [142]) that Clare, in her individual capacity or through other entities, began selling laundry tubs, sinks, vanities, ceramic basins and other bathroom and laundry products to Tradelink from February 2010, or alternatively an earlier date, and that Sorrento Kitchens transacted at least $423,313 in relevant business with Tradelink in the calendar year 2010. Paragraph 143 of the FASC pleads that those business dealings were the same as or competitive with the operations and business conducted by Colorado. 274The Defendants deny (Amended Defence [140]) that Clare was the controlling mind of Sorrento Kitchens. They contend that Mr Xie, with Clare's help, set up Sorrento Kitchens and contend that this business was different to Colorado's business. They accept that Sorrento China supplied product to Sorrento Kitchens but contend they were not Colorado branded products and that, so far as Colorado branded products were concerned, the Defendants point out that Sorrento Kitchens sought and obtained, with Kenneth's and Helen's approval, a line of credit from Colorado so that Sorrento Kitchens was a customer of Colorado. The Defendants contend that the nature of Sorrento Kitchens' business was materially different to that of Colorado and they were not in a true sense competitors. 275Steps to incorporate Sorrento Kitchens began in February 2010 (Xie 18.10.2013 [43]) and Clare took the steps to incorporate the company (Ex P1 4/1394). Mr Xie accepted in cross-examination that he was not aware that Clare was then taking those steps (T871). Mr Daoming Huang's evidence is that he had a conversation with Clare in mid-2010 in which she described Sorrento Kitchens as her new company and to a further conversation in which she stated that Sorrento Kitchens "imports vanities, sinks and a variety of other kitchen and bathroom products from China" (Doaming Huang 22.11.2012 [3]-[4]). Mr Daoming Huang was not required for cross-examination in respect of this evidence, although it appears that he is the principal of a company which is involved in a separate dispute with Clare. 276Whether a breach of cl 16.2 of the Share Sale Deed is established in respect of Clare's involvement with Sorrento Kitchens turns, first, on whether it conducted the same or a similar type of business as Colorado. Sorrento Kitchens conducted a kitchen supply business, with a retail showroom in Willoughby, selling partly to individual home owners, although it also conducted other business with at least one of Colorado's customers, Tradelink, to which it will be necessary to refer below. The Plaintiffs rely upon Helen's affidavit evidence for the proposition that, relevantly, "from about March 2010", Sorrento Kitchens sold products "similar to if not identical with" products sold by Colorado (PWS [296]). It was put to Mr Xie that, in 2010, Sorrento Kitchens sold products to Tradelink that were "similar" to products that Colorado had sold and he accepted that proposition (T872), although he denied that the products sold by Sorrento Kitchens "were the same products that had been sold by Colorado" (T873). He was then asked whether the products in a purchase order from Tradelink in July 2010 was for products "extremely close to products that had been sold by Colorado", which he also denied (T873-874). 277Whether a breach of cl 16.2 of the Share Sale deed is established in respect of Clare's involvement with Sorrento Kitchens turns, second, on whether Clare was involved in its business, within the meaning of cl 16.1 of the Share Sale Deed, including in the capacities specified in that clause. Evidence given by Clare and her son, Mr Xie, as to her role in Sorrento Kitchens was to the effect that she was simply a kitchen designer and Mr Xie denied, in cross-examination, that Clare was running Sorrento Kitchens (T876-877). There is evidence that Clare in fact played a much more substantial role in the day-to-day business activities and management of Sorrento Kitchens that she acknowledged (Luciana Martins De Andrade 22.8.2013) and Clare's extensive dealings with Tradelink (to which I will refer below) also indicate that she played a much more substantial role in dealing with at least that entity as a potential and actual customer of Sorrento Kitchens. Mr Xie's evidence was also that Clare acted under his instruction in at least some transactions (T881) but he also accepted that she acted on her own initiative and without his knowledge in contacting Tradelink personnel (T877). 278The Plaintiffs contend that the evidence of Clare's activities, coupled with the absence of any significant evidence of Mr Xie acting in a similar way, leads to the conclusions that Clare controlled the activities of Sorrento Kitchens, or that she acted in concert with Mr Xie in controlling and directing the activities of Sorrento Kitchens. The Plaintiffs also contend that the Court should conclude that Clare was a de facto director of Sorrento Kitchens. It seems to me that Clare was at least "involved" in Sorrento's business for the purposes of cl 16.1 of the Share Sale Deed as a "manager" of that business, so far as she had significant responsibility for its day-to-day business, as "agent" so far as she acted on behalf of Sorrento Kitchens in dealings with Tradelink, other suppliers and customers of Sorrento Kitchens and, in any event, as an "assistant" to Mr Xie in respect of substantial aspects of the conduct of that business. It is therefore not necessary to decide whether, as the Plaintiffs contended, she was a de facto director or exercised substantial control of Sorrento Kitchens. 279It seems to me that the Plaintiffs have established that there was sufficient overlap in the business of Colorado and Sorrento Kitchens in 2010 that they undertook a similar type of business for the purposes of cl 16.2 of the Share Sale Deed, and that Clare was involved in Sorrento Kitchens' business in the relevant sense, and a breach of that clause is established. However, the loss arising from that breach is the same as the loss arising from the diversion of business from Colorado to Sorrento Kitchens; that loss is reflexive of Colorado's loss in that regard, in the sense to which I refer in paragraph 338 below; and the Plaintiffs cannot recover loss personally in respect of this claim where Colorado recovers its loss in respect of the corresponding claim for diversion of business to Sorrento Kitchens. 280It seems to me that the Plaintiffs have also established that Clare at least participated in Sorrento Kitchen's business and that that business was, at least in significant respects, competitive with Colorado's operations and business. It seems to me that a breach of cl 6 of the Shareholders Agreement is therefore established by a failure to offer an interest in that business to Colorado. However, no loss arising from that breach has been established, because there is no evidence that Colorado could or would have taken up such an interest had it been offered to it, or of any economic benefit that it or the Plaintiffs would have obtained had it done so and has lost by not doing so. Any loss suffered by the conduct of that business is therefore not recoverable in respect of any breach of cl 6 of the Shareholders Agreement. Involvement in other entities without making offer of participation to Colorado - BL/GLCo 281A corresponding allegation is also put in respect of Clare's undertaking or participating in the business of BL/GLCo without offering an interest in that business to Colorado. Paragraphs 134-138 of the FASC plead the incorporation of BL/GLCo. The Plaintiffs also plead (FASC [140]) that Clare was the controlling mind of BL/GLCo; that it was in the business of importing and distributing within Australia vanities, basins, mirrors, sinks, laundry tubs, tapware, bathroom accessories, toilet products and other bathroom and laundry accessories; and that business of BL/GLCo was a venture or activity the same as or competitive with the operation/business conducted by Colorado, both generally and within the terms of the Shareholders Agreement. The Plaintiffs also plead (FASC [142]-[143]) that Clare, in her individual capacity or through other entities, began selling laundry tubs, sinks, vanities, ceramic basins and other bathroom and laundry products to Tradelink from February 2010, or alternatively an earlier date; that BL/GLCo transacted at least $406,915 in relevant business with Tradelink in the calendar year 2011; and that those business dealings were the same as or competitive with the operations and business conducted by Colorado. The Plaintiffs also submit that Clare was the controlling mind of BL/GLCo at all material times; and, alternatively, even if the Court accepts that Mr Xie was the controlling mind of BL/GLCo, the associate reference in cll 6.1 and 6.2 of the Shareholders Agreement are wide enough to capture that activity. 282The Defendants deny (Amended Defence [140]) that Clare was the controlling mind of BL/GLCo before 6 June 2012, but admit that she has been the controlling mind of that entity since that date; admit that, from 6 June 2012, BL/GLCo was in the business of importing kitchen sinks and laundry tubs into Australia which were then sold on a wholesale basis in Australia; and deny that its activities were competitive with the operations or business conducted by Colorado from 6 June 2012, on the basis that Colorado had ceased trading and sold its business by June 2011. The Defendants acknowledge that Mr Xie incorporated BL/GLCo after Colorado had ceased to trade in January 2011, and that it was an importing and wholesale/trade company, although they contend it was focused on kitchens. Mr Xie accepted in cross-examination that BL/GLCo conducted the same business that had been conducted by Sorrento Kitchens under the previous business name "Black Label Wholesale Kitchens" (T875); that BL/GLCo sold the same products as Colorado (T876); and that the business of BL/GLCo was the same as that of Sorrento Kitchens (T879). 283This claim can be resolved simply. BL/GLCo was not incorporated until 2011, after Colorado had ceased actively to carry on business. The Plaintiffs, in submissions, abandoned any claim that cl 6.2 of the Share Sale Deed could apply after Colorado ceased to conduct business in early 2011, and that claim is therefore not established in respect of BL/GLCo. It seems to me that the Plaintiffs have established that Clare at least participated in BL/GLCo's business; however, they have not established that that business was competitive with Colorado's operations and business for the purpose of cl 16 of the Shareholders Agreement, where BL/GLCo was not established until after Colorado had ceased that business. 284Even if such a breach had been established, no loss arising from that breach has been established. As I noted above, once an offer under cl 16 6 of the Shareholders Agreement was made, that clause did not prohibit the conduct of that business, irrespective of whether Colorado did or did not take up an interest in it. There is no evidence that Colorado could or would have taken up such an interest had it been offered to it, a fortiori after it had ceased business and then been placed under the control of a provisional liquidator. Any economic benefit that Colorado or the Plaintiffs would have obtained had Colorado taken up such an interest and has lost by not doing so has also not been established. Diversion of business and dealing with Colorado's customers 285The seventh pleaded breach of the Shareholders Agreement (FASC [148(g)]) relates to the alleged diversion of business and business opportunities from Colorado to Sorrento China, Capri, Sorrento Kitchens and BL/GLCo. The Plaintiffs contend that Clare took active steps to divert valuable business opportunities away from Colorado, by directly dealing with Colorado's existing customers for this purpose. Clare's conduct in respect of dealings with Tradelink 286I will first address the issue of diversion of sales to Tradelink from Colorado to Sorrento Kitchens. The Plaintiffs rely on numerous communications between Clare and representatives of Tradelink, which was a business conducted by Crane Distributions, between March and December 2010. They contend that Clare had close contact with Tradelink personnel in previous years on behalf of Colorado and contacted them in this period on behalf of Sorrento Kitchens. 287It is plain that there were difficulties in Colorado's relationship with Tradelink during 2010. On 10 March 2010, Kenneth reported to Clare (Ex P1 4/1522) that the relevant executive at Tradelink, Benny: "called me today. he seems very upset with Colorado (sic) ... Benny's attitude was not that nice. He said to me he will pull the plug if this happen again." In July 2010, that Tradelink executive sent a further email to the effect that "the level of service and communication with my team from Colorado is disgraceful" and "absolutely not acceptable" (Ex P1 5/2102; T445). In cross-examination, Kenneth attributed the problem to poor cash flow on Colorado's part, leading to an inability to purchase sufficient stock to meet Tradelink's needs (T447-448) and accepted that Colorado could lose Tradelink's business if service did not improve (T450). 288Clare sent an email dated 8 April 2010 to Ms Marshall of Tradelink about laundry tubs (Ex P8/190). At that time, Tradelink was Colorado's major customer accounting for approximately half of its turnover. The Plaintiffs also refer to communications with Mr Zavalas of Tradelink on 10 April 2010 about prices for vanities and laundry tub sets (Ex P8/192); Ms Marshall, Mr Hadley and Mr Zavalas of Tradelink on 3 May 2010 following up the quotation for laundry sinks (Ex P8/201); Ms Marshall on 10 May 2010 asking for an order soon (Ex P8/202); and Ms Marshall between 2 and 28 June about sinks and laundry tub cabinets (Ex P8/215, 217, 219, 235-236). Documentation to set up Sorrento Kitchens as a supplier to Tradelink was completed in mid-2010, as referred to in an email dated 1 July 2010 from an employee of Tradelink to Clare (Ex P8/243A). 289Clare again communicated with Ms Marshall of Tradelink on 2 July 2010 providing Sorrento Kitchens bank account details for payments (Ex P8/243-243A) and with Ms Marshall on 7 July 2010 in respect of a purchase order (Ex P8/247-250). By email dated 27 July 2010 (Ex P8/275-275A), Clare wrote to Ms Marshall that: "...I am sure you have already received the new price lists from Colorado, just for your record. It has [sic] brought to my attention that you told me the other day, the laundry tubs we have supplied to you by container are expensive, Tradelink only pays $118 per D-460/D-600, it was true, as well as the Tiffany sink, the prices of these 2 type of products were set up by my own hands for the last 5 years due to I tried my very best to support Tradelink NSW Projects sales team to win the jobs on the market. Colorado has very skinny margins on it. Since June 2010, the management of Colorado Products according to the market requirements, anything is getting expensive day by day. Therefore, the management of Colorado Products have decided to increase their prices of all their products to their customers from 1 September 2010. (See attached). The prices for Tradelink NSE Projects, D-350/460/600 laundry tubs from $118 increase to $130 per laundry set, C-350/460/600 laundry tubs from $160 to $178 per laundry tub ... I know there are some problems in Colorado Products, I keep telling the GM of Colorado Products that as a principle [sic] supplier, Colorado Products must be sure [sic] has enough stock to support their customers. But the fact is opposite, Colorado Products plays [sic] the order to the factory by the time Colorado has received order from their customers. This is the big problem. Till today's date, Colorado has bought 4 container products from the factories, compare to the same periods year 2009, we bought 18 container products from the factories. Now you can tell the different [sic], why they always short of stocks. Colorado has an agreement with the manufacture [sic] that they have to buy minimum 3 x 40 foot containers per month (they bought 4 containers within 7 months), otherwise, the factories have the right to supply their products to anybody in Australia market. Colorado Products has infringed the agreement with the manufacture. Business is business, we all need to keep on going, we can't stay there and wait. The customers can't wait, the manufactures [sic] can't wait, we have to do something. There comes a decision, we move forward Nikki." A number of the matters stated in this email, including Clare's criticisms of Colorado's then management, may have accurately reflected her view; others, including the reference to a breach of an agreement with the "manufacture[r]", which must refer to Sorrento China, and a consequential right of the manufacturer to sell in the Australian market, were false. It is plain that this email was calculated to, and did, further undermine Colorado's already difficult relationship with Tradelink. 290On 23 August 2010, Ms Marshall emailed Clare (Ex P8/282) that: "Hi Clare Warren in VIC has just come back to me with his requirements of the C1020 Sink (Java). He needs 31 x LH Bowl & 37 x RH Bowl. Can we order them thru Sorrento Kitchens - or do I have to go thru Colorado? Please advise." Clare responded (Ex P8/283) that: "Morning Nikki, Colorado hasn't got enough stock to comply [sic] the quantities as per Warren's requirement. I want to know does Warren want the complete order or part of the order? How urgent? Looking forward to hearing from you." Ms Marshall then emailed Clare (Ex P8/283) that: "Hi Clare He would like them all straight away. Let me know what's still available and how long the wait will be." Clare in turn responded (Ex P8/283) as follows: "Hi Nikki, Colorado has 50 in stock, 50% each hand bowls, Colorado hasn't got any order in system at this stage. Ask Warren how much these sinks can help him." Ms Marshall then emailed Clare (Ex P8/284) that: "Hi Clare He (Warren) is going to need those but also the balance. Can we just get the whole lot from Sorrento... If you were to fly them in what would be the timeframe & the cost?" Clare in turn replied (Ex P8/286) that: "Hi Nikki, You know we can get the whole lot at the same time from Sorrento, but definitely need times if Warren can wait for the timing. By the way, I would like to bring to your attention that to avoid the Christmas rush, it would be good to send the orders to the factory if you are preparing some more orders before Christmas. The factory is very busy now to Christmas. Looking forward to hearing from you." After further email correspondence, Clare again wrote to Ms Marshall (Ex P8/290) on 25 August 2010 advising that: "The factory has informed me again this morning that if the factory can receive the orders before this week, the products can be dispatched [sic] the factory at the end of September of 1st week October, otherwise, will be in November or December, no chance at all in October." An order was then placed by Tradelink with Sorrento Kitchens for 68 T1020 sinks (Ex P8/300). This correspondence indicates the diversion of business from Colorado, or at least a willingness on Clare's part to accede to Tradelink's preference to deal with Sorrento Kitchens rather than Colorado. 291There were further communications between Clare and Ms Marshall on 31 August 2010 seeking payment of invoices for Sorrento Kitchens (Ex P8/307); with Ms Marshall on 15 September 2010 about sink containers (Ex P8/313); and with Ms Marshall on 4 November 2010 asking if references to Capri International and Sorrento Kitchens could be avoided in the Tradelink system, purportedly to avoid direct contact by Tradelink's Lidcombe store (Ex P8/324). The Plaintiffs also point to Clare's lack of frankness in responding to an email from Kenneth dated 19 November 2010 (Ex P1 7/2936) expressing puzzlement as to the lack of orders from Tradelink. 292Mr Xie conceded in cross-examination that Clare was contacting representatives of Tradelink on behalf of Sorrento Kitchens and also accepted that Sorrento Kitchens sold products to Tradelink, between March and December 2010, that were similar to products that Colorado had sold (T872). Mr Xie also accepted that Sorrento Kitchens in 2010 imported products to be sold to Tradelink and that business was separate to the business activities of Sorrento Kitchens conducted at its retail kitchen showroom (T873). 293Mr Keating's evidence (Keating 5.11.2013 [12]) was that, in late 2009, he observed Clare seeking to sell products that were ordinarily sold by Colorado direct from Sorrento China to Tradelink. He gave evidence of a meeting with Tradelink, in late 2009, in which Clare suggested to a representative of Tradelink that: "In the future I think it will be beneficial if you bought container stock directly from my factory in China for any of your up and coming projects. This would be beneficial for both you and my factory." (Keating 5.11.2013 [14]) Mr Keating's evidence (Keating 5.11.2013 [15]-[16]) was also that Clare provided the Tradelink representatives with contact details for Sorrento China and that he had a further conversation with Clare, that evening in words to the effect that: "[Keating]: Clare what you are doing isn't right. Clare: You shut your big mouth." 294In her affidavit dated 29 January 2014, Clare accepted that she asked Mr Keating to come with her on a trip to Melbourne to meet representatives from Tradelink in late 2009, but denies that she was trying to sell Colorado products directly from Sorrento China to Tradelink (Clare 29.1.2014 [8]). Her evidence is that the purpose of the trip was to have dinner with the Tradelink representatives as a customer relationship exercise as that was her practice at around Christmas time (Clare 29.1.2014 [9]) and she denies the conversation attributed to her by Mr Keating and her evidence is that business was not discussed at the dinner (Clare 29.1.2014 [11]). She also denies (Clare 29.1.2014 [13]) the conversation set out in paragraph 16 of Mr Keating's affidavit to which I have referred above. I prefer Mr Keating's evidence to Clare's evidence in this regard. 295Mr Keating was vigorously cross-examined, and it was put to him that, in effect, he had pressured Clare to resolve a separate dispute with a third party which he had introduced to Clare and had made up his evidence for that purpose. Mr Keating was also cross-examined as to the detail of the conversation with Tradelink's representative referred to in his affidavit. I think it likely that Mr Keating chose to give evidence in the proceedings by reason of his disappointment as to Clare's dealings with that third party, having sought to persuade Clare to resolve that issue, partly by the threat of giving evidence rather than standing outside the proceedings. However, I do not accept the contention that he made up that evidence. He presented as an honest, although somewhat argumentative, witness. In my view, Mr Keating's evidence provides strong support for the Plaintiffs' claims in respect of the diversion of Tradelink's business from Colorado to Sorrento China, and ultimately to Sorrento Kitchens when Tradelink was not prepared to deal in US dollars as direct dealings with Sorrento China would have required. 296Helen and Kenneth's evidence, which is consistent with the objective probabilities, is that they were not informed by Clare or associated entities that she was approaching Colorado customers directly, or communicating directly with them; did not receive any offer that Colorado participate in such a venture or activity; and that no resolution was passed authorising that conduct. 297Clare's evidence in cross-examination was initially that she was dealing with Tradelink on behalf of Sorrento China, but she later acknowledged that dealings were undertaken through Sorrento Kitchen because Tradelink would not accept the exchange rate risk involved in payment direct to Sorrento China in US dollars. The Plaintiffs also contend, with substantial force, that Clare's assertion that these dealings were on behalf of Sorrento China cannot be accepted in light of Clare's provision of banking details for Sorrento Kitchens to an employee of Tradelink and the evidence of her son, Mr Xie, that she was dealing with Tradelink for Sorrento Kitchens under his instructions (T881), by contrast with her position that she was dealing on behalf of Sorrento China but without any significant involvement on the part of Mr Xie. The Plaintiffs also put significant weight on the fact that Clare communicated with Tradelink and other potential customers from an email address at Sorrento Kitchens. I give little weight to this matter, since Clare was then working with Sorrento Kitchens and it would be expected that she would have sent and received emails from that email address, as a matter of convenience, even if, as she initially claimed, the relevant correspondence involved proposed transactions with Sorrento China. 298The Defendants point out that there were no sales by Sorrento Kitchens in the period March to August 2010 (T873), which is the period on which the Plaintiffs focused on in their cross examination of Clare. However, it is plain enough that Sorrento Kitchens' later dealings with Tradelink were the product of Clare's efforts to divert business from Colorado over that period. The Defendants submit that the only relevant sales (before Colorado ceased to trade) are a series of sales in the last several months of 2010 to Tradelink, and that all of those sales can be seen to be container sales since Sorrento Kitchens did not have a warehouse (T871), so that a container would have to be delivered directly to the customer. However, those sales were not within scope of the exception in the Supply and Buy Agreement since, even if they otherwise related to non-Colorado branded products so as potentially to fall within the provision for such sales under the Supply and Buy Agreement, they were not container sales by Sorrento China, because Tradelink was not prepared to make payment in US dollars so as to purchase directly from Sorrento China. They were also not within the scope of the "container sales" agreement formed between Kenneth and Clare, to which I will refer in paragraphs 316-325 below, because that agreement did not extend to permit sales by third parties arranged by Clare as distinct from sales by Sorrento China or possibly Clare herself. Sorrento Kitchens also did not seek to conduct itself as though that agreement were applicable by paying the 5% commission contemplated by it to Colorado. The nature of the diverted sales to Tradelink 299The parties addressed lengthy submissions to comparison of products sold by Colorado and products sold by Sorrento Kitchens, although they were difficulties with the evidentiary basis of those submissions, as I will note below. It seems to me that the Plaintiffs' case for breach of the Shareholders Agreement (and its corresponding claim for breach of fiduciary duty, which I will address below) arising from diversion of the opportunity to make sales to Tradelink to Sorrento Kitchens should properly be determined on a somewhat broader basis. It seems to me that all of the products contained in the detailed schedules to which I will refer below, at least in respect of the 2010 year, were within the line of Colorado's business, in the sense that concept is understood in the context of the principles applicable to diversion of corporate opportunities, to which I refer in paragraph 381 below. Even if Colorado did not then import the same or a "similar" product (recognising the difficulties with that standard, to which I also refer below) to that which Clare arranged to have Sorrento Kitchens sell to Tradelink within that line of business, there is no suggestion that Colorado could not have sourced such a product from Sorrento China or elsewhere, but for Clare's conduct in diverting the relevant business opportunities from Tradelink to Sorrento Kitchens in the 2010 year, and subject to the issues as to its lack of funds to purchase stock to which I will refer below. It seems to me that that is sufficient to give rise to liability for breach of at least cll 3.2 and 12(b) of the Shareholders Agreement (and breach of fiduciary duty) in respect of the diversion of the relevant business in respect of Tradelink to Sorrento Kitchens in 2010, which does not depend on a comparison of the detail of the features of the relevant products. I will nonetheless address that comparison against the contingency that an appellate court may take a different view. 300The Plaintiffs identified the products involved in the sales to Tradelink (and other entities) alleged to have been diverted to Sorrento Kitchens (and BL/GLCo) in extensive schedules (MFI 20 and MFI 21). Those schedules sought to establish, broadly, that the products sold by Sorrento Kitchens and BL/GLCo were the same or similar to those sold by Colorado. The Plaintiffs' first schedule (MFI 20) was some 88 A3 pages in length, printed in a small font, and referred to 65 separate transactions, many of which involved several products, although only 13 of those transactions related to the 2010 year for which a claim for compensation is now pressed. The Plaintiffs' second schedule (MFI 21) was a further 89 pages in length and compared products sold by Colorado and those sold by Sorrento Kitchens and BL/GLCo. The Defendants, by leave, lodged a detailed submission in response to those schedules on 17 March 2014, which was 191 pages in length, although the bulk of that schedule largely reflected the fact that the Defendants had added their responses to the Plaintiffs' schedule . 301After the Defendants had lodged those submissions in response, the Plaintiffs lodged further submissions, purportedly in reply, without leave. The courts have repeatedly emphasised that that course is inappropriate: Carr v Finance Corp of Australia Ltd (No 1) [1981] HCA 20; (1981) 147 CLR 246 at 257-258, where Mason J observed that the hearing is the time and place to present argument, whether it be wholly oral or oral argument supplemented by written submissions; see also Al Raeid v Minister for Immigration & Multicultural Affairs [2000] FCA 1357 at [41] per Branson J; Jackson v Conway [2000] FCA 1530 at [28] per Branson J; Notaras v Waverley Council [2007] NSWCA 333 at [147] per Tobias JA, with whom Mason P and Hodgson JA agreed; Bull v Lee (No 2) [2009] NSWCA 362 at [8]. The proper course is for me to disregard those further written submissions, particularly where they did little more than re-agitate issues that had already been agitated at length by both parties, and I have done so. 302I have reviewed the parties' schedules in detail, but it is plainly not practicable to set out the detail of some 370 pages of submissions concerning 65 transactions in this judgment. I will, however, refer in some detail to the 13 transactions relied upon in respect of the Plaintiffs' claim for compensation referable to the 2010 year and will briefly refer to other transactions in later years. The Plaintiffs seek to reserve the right to rely on those other transactions should they later elect for an account of profits. 303The first item in the Plaintiffs' schedule (MFI 20) refers to a remittance advice from Tradelink to Capri International for an order dated 21 October 2010 in the amount of $20,990.42 referred to in Ms Planinic's report dated 30 August 2013. That items relates to 900mm and 1200mm vanities and the Plaintiffs rely on Helen's evidence (Helen 29.8.2013 [98]-[99]) that: "As at April 2010, Colorado sold and supplied vanities of 900 millimetres length, being model number Fendi Range CPF-910, examples of which are contained in the books and records of Colorado ... As at April 2010, Colorado sold and supplied vanities of 1200 millimetres length, then model number Sorrento Mini-Range CP-1200." This evidence is given as at April 2010, whereas the relevant invoice was issued in October 2010. Putting aside that difficulty, Helen's evidence of similarity appears to go no further than the proposition that both products were vanities and both products had the same length, which is no doubt true of all vanity products of that length, but does not have regard to any relevant differences between them. However, the Plaintiffs' schedule also refers to correspondence between a representative of Tradelink and Clare relating to the possible supply of poly white vanity cabinets, which includes a reference to the vanities being the same as those bought by Tradelink for Central Coast Tradelink stores. The reference in Clare's email to the fact that the poly vanity products are the same as those bought for Central Coast Tradelink stores suggests that at least those vanities correspond to vanities that were at some point supplied by Colorado. 304The Defendants point out that there appear to be differences between the relevant products, and refer particularly to difference between "MDF" vanities and "poly" vanities, although an assessment of the significance or otherwise of that difference would need to be based on appropriate evidence. The Defendants also submit that the inference that the relevant products are "similar" is uncertain, because that concept is not defined by the Plaintiffs and implies the existence of differences, and that the evidence does not permit an assessment of the importance of the relevant similarities and differences to the market. It does not seem to me that the Court is in a position to assess the significance of the similarities and differences between the relevant products without the assistance of reasoned evidence. I do not consider that Helen's evidence is sufficient for that purpose, since the weight to be given to her expressions of opinion that Colorado sold "similar" products is limited both by her limited experience in the relevant industry and because the statements contained in her affidavit are largely conclusory in character; she does not identify the similarities or differences between the particular products which lead her to form them; and, as the Defendants point out, the standard of "similarity" which she adopts is undefined, so that it is unclear whether Helen is proceeding on the basis, for example, that all vanities of a similar size are "similar", notwithstanding any other design or other differences between them. This difficulty is of lesser significance in respect of this item than others, so far as one of the products was previously supplied by Colorado to Tradelink. 305This item also raises different issues from other items referred to in the schedules since Capri International's role was as sales agent for Sorrento China. It seems to me that this sale must be treated as, in substance, a direct sale by Sorrento China. The transaction appears to be a supply by Sorrento China to Tradelink by container, so that, to the extent that diversion of business was established, the amount recoverable by Colorado would be limited to the 5% commission to which it was entitled under the Supply and Buy Agreement, or the extension of that arrangement under the "container sales" agreement to which I have referred above. 306Items 2, 3 and 4 in the Plaintiffs' schedule in the amounts of $47,481.28, $24,413.39 and $29,513.00 together comprise an amount of $101,407.67 referable to a payment from Crane Distribution on 17 September 2010 referred to in Ms Planinic's report. The second item refers to an invoice dated 4 September 2010 for $47,481.28 referable to, inter alia, the supply of Waratah 2 Bowl 1 Drainer Sinks and T1090 Project 1 3/4 Bowl Sinks by Sorrento Kitchens to Tradelink. Mr Braham pointed out that this invoice relates to delivery by container and corresponding notations appear in other invoices. The Waratah sink is alleged to be the same or similar to a Colorado product, described as SKB-1180. The T1090 Project 1 3/4 Bowl Sinks are said to be the same or similar to a Tiffany range sink C-1100B sold by Colorado (Helen 29.8.2013 [95], [193]). The Plaintiffs contend that Colorado could have made the relevant sale and the sale has been diverted, and that Clare was actively involved in the diversion of that sale. The Defendants respond to the allegation of similarity of the items that that proposition was put to Mr Xie and denied; that the standard of "similarity" applied by the Plaintiffs is unclear as noted above; and that the evidence is insufficient to support an inference that the products are the same or similar. Mr Xie's evidence (T873) was that the Waratah 2 Bowl 1 Drainer Sink sold by Sorrento Kitchens was totally different to the relevant product sold by Colorado. 307The third item in the Plaintiffs' schedule relates to a sale of a colourbond two side hole laundry tub to Tradelink, described in the Sorrento Kitchen's invoice as product T590, which is said to be similar to a Colorado laundry 45 litre stainless steel C-630 tub (Helen 29.8.2013 [200]-[201]). Helen refers in her affidavit to a "stainless steel" laundry tub, apparently assuming that colourbond steel is the same as stainless steel, and to various other items, and says that: "Between about August 2009 and January 2011, Colorado sold and supplied cabinets and basins that fit the above descriptions and was ready, willing and able to supply such products to Colorado's customers." She refers to examples of such products, including Colorado laundry tub C-630, to which the Plaintiffs refer in their schedule. Her affidavit contains no further reasoning as to the extent of similarity between the relevant products, the extent of stock which Colorado had of the relevant product, or its capacity to fund additional stock orders given the constraints on capital to which I have referred above. The proposition of the similarity of the products was put to and denied by Mr Xie and the Defendants again attack the lack of any identified criteria for an assessment of similarity; submit that the evidence is insufficient to support an inference that the products are the same or similar, and contend that there are manifest differences in the product, including that the product supplied by Sorrento Kitchens to Tradelink was made from colourbond steel and the allegedly similar product supplied by Colorado was made from stainless steel, a matter not adequately addressed by the evidence. 308The fourth item in the Plaintiffs' schedule relates to the sale of, inter alia, dark brown two door wall hug vanity sets basins and cabinets which are said to be similar to the Signature range of wall hung vanities supplied by Colorado. Helen's affidavit evidence refers (Helen 29.8.2013 [144]) to the relevant invoice and indicates that "Signature" is a vanity range of Colorado; however, that invoice does not indicate that the sales made by Sorrento Kitchens were in fact of the "Signature" range. Helen then says: "As at November 2010, Colorado sold and supplied a variety of wall hung vanities with pull-out drawers and overflow kit for basins 200mm deep similar to those mentioned above and was ready, willing and able to supply such products to Tradelink. An example of such a product is the Signature range wall hung vanity with 1 pull out drawer (CPS-910WH). Set out at page X [sic] of LNH2 is a reference to model number CPS-910WH in the books and records of Colorado." Again, the basis for Helen's conclusion that the wall hung vanities sold by Sorrento Kitchens were "similar" to those sold by Colorado is not set out in that affidavit, since Helen does not seek to indicate the aspects in which the products were similar or different, nor is the assertion that Colorado was "ready, willing and able" to supply such products elaborated by reference to how it would fund the costs of purchasing them, given the financial constraints to which I have referred above. The Defendants point out that the products were at least different in respect of the fact that the products supplied by Sorrento Kitchens had dark brown doors and the products supplied by Colorado did not. The proposition that the products were similar was put to and denied by Mr Xie. This invoice also involves the sale of T590 colourbond two side hole laundry tubs of the same kind as the third item above and similar issues arise as in respect of that item. 309Items 5, 6 and 7 in the Plaintiffs' schedule relate to two claims in the amount of $47,432 each, less a credit of $8,134.50 by way of rebate, which correspond to a payment of $86,729.50 by Crane Distribution on 29 October 2010 referred to in Ms Planinic's report. The fifth item relates to the sale of T1080 Waratah 2 bowl 1 drainer sinks LHB/RHB and T1090 Project 1 3/4 bowl sinks LHB/RHB sold by Sorrento Kitchens, which are said to be the same or similar to Colorado products, the SKB-1180 new collection and the Tiffany range C-1100B sink respectively. Helen's evidence (Helen 29.8.2013 [95]) is that: "As at March 2010, Colorado sold and supplied a stainless steel 1 ¾ bowl sink, being model number C-1100B. Set out at page X [sic] of LNH2 is a photograph of model number C-1100B, which forms part of the books and records of Colorado. Set out at page 55 of LNH2 is a reference to model C-1100B in the 31 July 2009 stocktake list, which forms part of Colorado's books and records." This evidence establishes that Colorado sold products that are of the same nature as the product sold by Sorrento Kitchens, although it does not provide any basis for any detailed assessment of the similarities or differences between the relevant products. Paragraph 193 of Helen's affidavit also confirms that between August 2009 and January 2011, Colorado sold and supplied sinks including 1 ¾ bowl and 1 drainer sinks, but does not go further than that proposition. The sixth item relates to products applied to Tradelink by invoice dated 13 October 2010, also T1080 Waratah 2 bowl 1 drainer sinks and T1090 Project 1 3/4 bowl sinks. Similar submissions are made by each party in as in respect of the fifth item. 310Item 8 in the Plaintiffs' schedule relates to claims for $74,914.40 and item 9 relates to a claim for $10,322.40 and those claims correspond to an amount of $85,236.80 invoiced by Sorrento Kitchens in November 2010 and paid by Crane Distribution on 26 November 2010 and referred to in Ms Planinic's report. Item 9 relates to a product sold by Sorrento Kitchens described as the T-1020 LHB/RHB Java San Brast [sic] finished sink, and the similar Colorado product is described as the SKB-1020 new collection. Helen's affidavit (Helen 29.8.2013 [133]-[134]) refers to the T-1020 Java San Brast finished sink, which she says she recognises as a stainless steel sink and that: "As at November 2010, Colorado sold and supplied a wide variety of sinks ... similar to the ones described above and was ready, willing and able to supply such products to Tradelink." Helen's evidence that the SKB-1020 Sorrento sink was "similar" to the product supplied by Sorrento Kitchens goes no further to identify the similarities (beyond the fact that both were sinks) and the differences between the relevant products. That invoice also refers to the supply by Sorrento Kitchens of a T-0016 Java 1020 sink ½ S/S colander 1080, which is in turn said to be similar to Colorado's C/016 stainless steel colander. Helen's evidence in this regard (Helen 29.8.2013 [109]-[114]) is that a colander and chopping board were sold as accessories to 1- ½ RH bowl sinks, and she refers to Colorado product code C-016 referring to a stainless steel colander. Her evidence establishes that both products were colanders and both were made of stainless steel; beyond that, questions whether all colanders are the same, or whether there were any design similarities or differences between the colander sold by Sorrento Kitchens and that sold by Colorado, were not addressed by the evidence. 311Items 10, 11 and 12 in the Plaintiffs' schedule relate to claims for $25,856.55, $23,716 and $77,190.330 in respect of products invoiced to Tradelink on 19 November 2010 and together correspond to an amount of $126,762.85 paid by Crane Distribution on 10 December 2010 and referred to Ms Planinic's report. Item 10 relates to a T-590 C/B Project Banksia 2 side hole L/tub (with by-passes, seals and wastes) which is said to be similar to a Colorado laundry 45 LT S/S C-630 tub. Helen's evidence is that the T-590 laundry tub is a stainless steel laundry tub (Helen 29.8.2013 [200]). Helen's evidence in that regard is otherwise directed to Colorado's willingness to supply cabinets and basins, and she also gives an example of such a product as being Colorado C-630, which appears to be a laundry tub. Item 11 relates to the same item as item 10. Item 12 relates to the sale of TS-910 Vanity Signature WH 1 Pull Out Drawer and TS-910 200mm Overflow Kits for 200mm Depth Basins, with the former said to be the same or similar to the Colorado product, Signature Wall Hung Vanity CPS-910 WH. Helen's affidavit evidence (Helen 29.8.2013 [144]) refers to the relevant invoice and indicates that "Signature" is a vanity range of Colorado, using the CPS-910H product as an example of the Signature range which was "similar" to the product supplied by Sorrento Kitchens. Helen's evidence's in that regard is otherwise directed to Colorado's willingness to supply wall hung vanity and overflow kit products as at November 2010. 312Item 13 in the Plaintiffs' schedule relates to an amount of $23,177 invoiced to Tradelink by Sorrento Kitchens on 19 November 2010 and paid by Crane Distribution on 16 December 2010 and referred to in Ms Planinic's report. That item relates to the sale of the T590 C/B Project Banksia Standard L/Tub (with wastes and by passes), which is said to be the same or similar to the Colorado product, Colorado Laundry 45 LT S/S C-630 Tub. Helen refers in her affidavit (Helen 29.8.2013 [201]) to the range of T590 Laundry Tubs as 'stainless steel laundry tubs', and states the willingness of Colorado to supply cabinets fitting this description. Her affidavit again contains no further reasoning as to the extent of similarity between the relevant products or Colorado's capacity to supply additional stock orders. Conclusion in respect of diverted sales to Tradelink 313In my view, Clare's dealings with Tradelink amounted to a systematic and successful attempt to divert business away from Colorado to Sorrento Kitchens. It seems to me that Clare's conduct in respect of the diversion of Tradelink's business from Colorado plainly breached her obligation under cl 3.2 of the Shareholders Agreement as pleaded in FASC [148(a)]. Clare's undisclosed dealings with Tradelink, and her seeking to persuade it to acquire products from Sorrento Kitchens, were plainly material to Colorado's affairs, judged by reference to the number of those dealings, the value of products involved and the significant risk of an adverse impact on Colorado's business arising from those dealings, and the failure to disclose these dealings breached cl 3.4 of the Shareholders Agreement as pleaded in FASC [148(b)]. It seems to me that the conduct also amounted, as I will find below, to a breach of fiduciary duty and a corresponding failure to be just and faithful to Helen, Kenneth and Colorado and provide full information, particulars and explanations of all matters relating to the affairs and activities of Colorado in breach of cl 12(b) of the Shareholders Agreement as pleaded in FASC [148(c)]. I will address the question of quantification of Colorado's loss in respect of this breach below. The Plaintiffs' loss in respect of this breach of the Shareholders Agreement is reflexive of Colorado's loss in respect of Clare's breach of fiduciary duty owed to it in respect of the same conduct, in the sense to which I refer in paragraphs 336-338 below, and the Plaintiffs cannot recover loss that simply reflects the loss that Colorado is entitled to recover in respect of that conduct. Raymor 314I turn now to the allegation of diversion of business in respect of Raymor. Clare's affidavit evidence was that Sorrento China operated its own business of exporting containers of non-Colorado branded products to Raymor in Australia and that Sorrento China or Capri International would invoice Raymor directly and deliver containers to Raymor directly (Clare 20.10.2013 [186]) and that Raymor would also occasionally order container orders of non-Colorado branded Bega vanities direct from Sorrento China or Capri International, which were manufactured by Sorrento China and not sold by Colorado (Clare 20.10.2013 [296]). In cross-examination, Clare acknowledged that Raymor had also been a customer of Colorado since about 1995; had purchased containers of sinks through Colorado until 2003, when it found its own supplier of sinks in China; and, from 2004 to 2009, would occasionally buy sinks and laundry tubs out of Colorado's stock (T585-587). Her evidence was that Colorado and Crane Distribution (of which Raymor was a business unit) had entered into a Supply and Buy Agreement dated 16 August 2006 for a term of 3 years, but that business did not follow in accordance with that agreement, although Raymor purchased small orders from Colorado (T585-586, 627). Kenneth accepted in cross-examination that he did not recall Colorado doing business with Raymor and that any orders received from Raymor would have been a very small amount (T455). He also accepted in cross-examination that, contrary to paragraph 33 of his August 2013 affidavit, it was not correct that Raymor was a significant customer of Colorado in 2010 (T456), and the statement in his affidavit that Tradelink and Raymor accounted for over 50% of Colorado's total sales between August 2009 and December 2010 reflected sales to Tradelink rather than to Raymor (T457). 315Clare attempted to secure business from Raymor for Sorrento China (or possibly Sorrento Kitchens) during 2010. She sent an email dated 27 March 2010 to Mr Ostler of Raymor about laundry tubs, containing the same products descriptions and codes as contained in email communications with Tradelink at about the same time (Ex P1 4/1573). The Plaintiffs also rely on Helen's affidavit evidence, to which I will refer below, to contend that the products referred to by Clare in the email of 27 March 2010 were the same or very similar to the products sold by Colorado at all relevant times. Clare sought to justify that email in cross-examination (T755) by reference to Kenneth's and Helen's attempts at that time to find an alternate supplier to Sorrento China, but that would provide no justification for any diversion of such business from Colorado to Clare or entities associated with her. Clare sent further emails to Mr Ostler again between 23 April and 10 June 2010 about the quote for vanities (Ex P1 4/1692, 1706, 5/1929; Ex P8/194). On 29 June 2010, Clare sent an email to Mr Ostler relating to orders for sinks and vanities which noted: "Please note that orders must be emailed to me via clare@sorrentokitchens.com.au or fax to me on [number omitted] ... Orders please do not send to Colorado Products." (Ex P5, vol 2, 451) Clare sought to explain this email in her affidavit evidence (Clare 20.10.2013 [301]) on the basis that: "I wrote this because I was in contact with Nelson Ostler regarding Raymor Container Orders and, as Raymor was not a customer of Colorado for container orders, I thought that it would cause confusion or a misunderstanding in the Colorado office if orders were sent there by Raymor." 316Whether dealings between Sorrento China and Raymor (and IAG, to which I will refer below) gave rise to a breach of the Shareholders Agreement or any other breach of duty owed by Clare largely turn on whether they were permitted by the Supply and Buy Agreement between Colorado and Sorrento China and a further agreement, referred to as the "container agreement", that was initially discussed with Mr Lai and later reached between Clare and Kenneth. (I have held above that the container agreement would not have authorised sales by Sorrento Kitchens as distinct from sales by Sorrento China). The Defendants contend that in July/August 2009, Clare and Kenneth agreed that Sorrento China would be entitled to make sales of entire containers to Colorado customers in Australia, accounting to Colorado for 5% of those sales (Clare 20.10.2013 [189]). The Defendants characterise this agreement as an extension of the agreement contained in the Supply and Buy Agreement, which permitted sales of non-Colorado branded products by Sorrento China to Australian customers. 317Kenneth's affidavit evidence is that there was discussion of arrangements relating to container sales in the 10 July meeting in Hong Kong, and he attributes words to the following effect to Clare: "Some customers of Colorado who buy large quantities of Colorado's products. Only opportunity to get their sales is to give them the lowest price. To get the lowest price, we need to lower our prices. Sorrento China will organise to deliver containers direct to those customers. Sorrento China will pay Colorado 5% commission of the total sale." (Kenneth 27.11.2013 [25]) 318In cross-examination, Kenneth also said that there was a discussion in Hong Kong, with Mr Lai, that Colorado customers which dealt directly with Sorrento China rather than with Colorado could continue to do so, but that the transaction had to be put through Colorado's accounts on the basis that Colorado would issue the invoice and pay the factory but not make any profit other than the 5% rebate or commission on the transaction (T427-428). Kenneth's evidence in cross-examination (T428) was that that discussion was as follows: "A ...during that meeting Clare raised the [container sales] issue and say Colorado has other kinds of customer which is not dealing with Colorado directly but dealing with the factory directly, so what are we going to do with those customers, because they are container buyers, the price we give them is very, very low, there's no much margin in between, so what are we going to do. Harry [Lai] made a suggestion saying, so whether it is the first meeting or the second meeting I don't remember, but Clare was definitely there. Q. So it was an open discussion that you remember about the fact that the factory would sell containers to Australian customers? A. Yes. Q. Harry Lai wanted those transactions to go through Colorado? A. Correct. Q. Then there was an agreement reached and reduced to writing, and that's this agreement? A. Yes." Kenneth understood that agreement to have been reduced to writing, in the form of the Supply and Buy Agreement (T428). 319I have referred to the terms of the Supply and Buy Agreement above. Kenneth's evidence under cross-examination was that he understood that "everything should go through ... Colorado" (T433). That understanding does not seem to me to be supported by either cl 1 of the Supply and Buy Agreement, or by the fact that cl 2 applies only to "Colorado brand products", implicitly excluding products manufactured by Sorrento China but not branded with the Colorado brand. The Defendants contend that these two provisions indicate that it was contemplated by the parties that Sorrento China could sell its products (other than Colorado branded products) into Australia otherwise than through Colorado and would pay a rebate or commission to Colorado on those sales. Mr Harper accepted in oral submissions (T950) that the Plaintiffs also construed the Supply and Buy Agreement as having the result that all Colorado branded products were to be sold by Colorado and that there would be a 5% rebate to Colorado on sales of non-Colorado branded products. However, Helen's and Kenneth's evidence sought to advance an additional qualification that sales within cl 2 of the Supply and Buy Agreement could only be made with Colorado's consent, and Mr Harper submitted that sales under the Supply and Buy Agreement not only had to be direct from Sorrento China to other Australian customers, but had to be made with the consent or knowledge of Colorado (T967). The terms of the Supply and Buy Agreement do not impose that further requirement. 320Clare's evidence is that she reached an agreement with Kenneth that "container sales", being the sales of an entire shipping container of stock direct from Sorrento China to a customer, could be effected on the basis of a payment of a 5% commission to Colorado (Clare 20.10.2013 [189]). Clare's evidence is that the arrangement was that the invoice for such a sale would be issued by Colorado, but the goods would be supplied directly by Sorrento China to the customer and Clare would collect the proceeds and accept an obligation to pay Sorrento China for the goods and remit 5% to Colorado as a commission. Clare had recorded two versions of this conversation in her affidavit evidence. The Plaintiffs submitted, in oral submissions, that the later version of that conversation (Clare 20.10.2013 [189]) involved an attempt by Clare to reconstruct and improve the evidence she had previously given in the earlier version of that conversation (Ex P10; Clare 11.10.2011 [11]). Clare's evidence in cross-examination was that the earlier version of that conversation correctly recorded a conversation with Kenneth in July or August 2009 (T623) and set out the "container agreement" as she had recalled it in October 2011 (T624); and that that account and her later account (Clare 20.10.2013 [189]) referred to the same conversation (T626). However, there was no reference to Raymor in her earlier version of that conversation. 321Clare sets out a further conversation with Kenneth a day or two after the first discussion as follows (Clare 20.10.2013 [191]): "Clare: I have spoken to the factory. I will pay 5% commission on container orders for Colorado branded sinks which IAG purchase. Colorado will still invoice IAG for container orders of Colorado brand sinks, [b]ut the money will be paid to me, and I will pay the supplier and pay the 5% commission to Colorado based on Colorado's invoice amount. If there is anything left, I can keep that. Kenneth: OK, I agree with that." The phrasing of that conversation tends to suggest that there was an uncertainty as to whether the transactions would be profitable in the use of the phrase "[i]f there is anything left". It seems implausible that Clare would have taken the trouble to undertake these transactions on her own account if they were not profitable. 322Kenneth denied the conversation set out in Clare's affidavit (Kenneth 4.11.2013 [26]), but then accepted in cross-examination that he had said the words attributed to him by Clare in this paragraph, in August rather than in July as Clare's affidavit had indicated. His evidence in cross-examination (T429) was as follows: "Q. You remember Clare saying something like, "Colorado has two main streams of business"? A. Yes. Q. And "Mainly Colorado's customers purchased products from Colorado's stock", correct? A. Yes. Q. But she also said, "That includes blanket orders", correct? A. Yes. Q. But she also mentioned container orders as a different form of business, didn't she? A. Yes. Q. And she could have said, "IAG orders containers of Colorado sinks through Colorado"? A. No, she never mentioned any names of these container customers. Q. Leaving aside the name, she told you that there were customers who ordered containers of Colorado Products through Colorado? A. Yes. Q. That they were manufactured by the Chinese company, correct? A. She mention that there's a container customer, yeah, but not dealing with Colorado directly, dealing with the factory directly. Q. And she said that those container customers pay in US dollars? A. No, she never said that. Q. But that the containers came straight from the Chinese factory to the customer? A. Yes. Q. An agreement was reached between you and Clare, or maybe Harry Lai and Clare, for containers like that to continue to be sent from the Chinese factory to Australian customers? A. Yes. Q. And for Colorado to get 5 per cent of that trade? A. Yes." 323Kenneth also accepted in cross-examination there was or may have been a discussion between him and Clare (T430-431) to the effect that: "Q. Is it possible you also had a discussion on that topic where there was just you and Clare? A. Yes. Q. That could have happened in Sydney, couldn't it? A. Yes. Q. And it's the case, isn't it, that at either of those two meetings you might well have said words such as those that are attributed to you on page 829 of the affidavit? A. Mostly, yes, but-- Q. What part do you disagree with? A. The Colorado brand sell. After the Hong Kong meeting, my understanding is Colorado and Sorrento China, Sorrento, the China factory, have bonded to each other exclusively to each other is whatever Colorado factory make we sell, we have to buy from the Colorado factory - Sorrento factory first, and anything from Sorrento factory in China has to go to the Colorado, unless the - they are not limited on the Colorado brand. So every products, if Sorrento China is producing, whether it's the regular customer or the container customer, has to go through the Colorado. Q. So you would agree with these words that have been attributed to you? A. Yeah, rest of the words I agree. Q. But you wouldn't have limited it to Colorado brand sales? A. Brand, yeah. Q. It would have been for any brand sales? A. Yes, as long as is made from Sorrento factory in China. Q. As long as it's made for Sorrento in the Sorrento factory? A. Yes. Q. The Sorrento factory could sell to customers in Australia, you would have said something like that, to be invoiced by Colorado. The customer will pay you, but you will have to pay the factory, and you pay Colorado 5 percent commission? A. Correct." 324Kenneth's unsatisfactory explanation of the bare denial of this conversation in his affidavit (T431) was that the conversation had occurred in August, not July, as Clare had said in her affidavit and also that: "Well I told my solicitor that never had this kind of conversation in July before, the detailed discussion was in August, not in the July." (T432) That evidence leaves unexplained why Kenneth's affidavit did not disclose that the substance of the conversation set out by Clare had in fact occurred, even if she had wrongly dated it. The failure to disclose that matter further undermines the integrity of his evidence. 325The container sales agreement had the advantage to Colorado that Clare or Sorrento China rather than Colorado would fund the purchase of the relevant products and Colorado would receive commission without incurring that cost, and that advantage may have been significant where Colorado had financial difficulty for much of the relevant period. On the other hand, the arrangement was potentially disadvantageous to Colorado so far as it involved the appropriation of the revenue from the sales and much of any associated profit on a sale to a Colorado customer by interests associated with Clare; the potential that Colorado might include costs, including for example, GST, on such a sale; and the risk to Colorado, which came home, that Clare would not comply with her obligations to remit the commission on the sale to Colorado. That disadvantage was greater where, on Clare's own account, IAG (to which I have referred above) was a "big customer for Colorado as they have purchased about 6 container loads per annum of Colorado sinks" (Clare 20.10.2013 [189]). However, the Plaintiffs' claim that Kenneth had not reached that agreement collapsed when he reversed his affidavit evidence to that effect in cross-examination. I do not understand the Plaintiffs to have advanced any substantive attack on the adequacy of disclosure made in respect of that agreement, although I make that comment with some hesitation given the multiplicity of attacks that were raised and developed to a greater or lesser extent. 326It seems to me that the sales to Raymor are properly characterised as having been made by Sorrento China and that they fall within the scope of the "container sales" agreement reached between Clare and Kenneth. A breach of the Shareholders Agreement has not been established in respect of these sales. There is, in any event, so far as I am aware, no evidence of invoices issued by Sorrento Kitchens to Raymor, as distinct from Tradelink, during the year 2010 in which the Plaintiffs press their claim for compensation. IAG 327Clare's evidence was that Colorado also had a container order business with IAG and IAG would place orders directly with Colorado for container loads of Colorado branded sinks, which were manufactured by a third party manufacturer in China rather than by Sorrento China (Clare 20.10.2013 [188]). Kenneth refers to having become aware of a Colorado invoice to IAG issued in US dollars in September 2009, and to discussions of that invoice with Clare's son, Mr Xie, who was then employed by Colorado, and with Clare (Kenneth 27.11.2013 [27]). He also gives evidence that he observed the stock being unloaded and placed in Colorado's warehouse and having observed entries in Colorado's delivery book indicating that deliveries were made to IAG (Kenneth 27.11.2013 [30]). That evidence, if accepted, would be inconsistent with direct delivery by Sorrento China to IAG. I am unable to accept that evidence, where it is not corroborated by other evidence, given the range of credit issues in respect of Kenneth to which I have referred above. 328I have referred to the Supply and Buy Agreement and the "container sales" agreement above. Kenneth accepted in cross-examination that the arrangements between Colorado and Sorrento China permitted the latter to make a direct container sale to IAG, although it was a Colorado customer, and to account to Colorado for only 5% of that sale amount (T461), as follows: "Q. You knew that IAG was a Colorado customer, didn't you? A. Yes. Q. And at least during this meeting you accepted the proposition that the factory in China could make a sale to a Colorado customer, the goods would be supplied and invoiced by Colorado, the factory would keep 95 percent and account for only 5 percent of that transaction; correct? A. Yes. Q. That would be so if the transaction could be described as a container or commission sale? A. Yes. Q. Your understanding in May 2010 was that that way of dealing reflected the agreement between the factory in China and Colorado? A. Ask me again. Q. That method of dealing reflected the agreement that was in place between China - the factory in China and Colorado Products? A. Yes." 329There was a further reference to the "container sales" arrangement at the 11 May 2010 meeting, to which I have referred above, where the amount payable by Clare was calculated on the basis of that arrangement, and at least some information was provided to Helen in respect of sales to IAG at that meeting. The Defendants point out that, although aspects of the 11 May 2010 meeting are contested, the document signed by the parties (on either version) assumes that Clare is only required to pay 5% to Colorado in respect of some sales, including the sales to IAG, consistent with the suggested container sales agreement. Helen's affidavit evidence (Helen 1.3.2012 [115]) was also that, during the 11 May 2010 meeting, she or Kenneth, referring to the calculations set out in that document, said: "I see how you did your calculations." The Defendants submit, and I accept, that that comment is consistent with an arrangement for payment of 5% to Colorado, in respect of at least some potential sales, as set out in that document. 330Helen's account in cross-examination of the treatment of this issue at the May 2010 meeting was uncertain and starkly inconsistent with the apparently precise recollection of conversations and events reflected in her affidavit evidence. In particular, she emphasised her lack of recollection of the arrangement and the meeting of 11 May in her cross-examination (T209-210) and was unable to explain the apparent inconsistency between the Plaintiffs' position in the proceedings and her accepting at that meeting that Clare could account to Colorado for 5% of some sales to IAG (T212). After an adjournment, she advanced the position that her position at that meeting reflected the fact that she did not then know that IAG had been a previous customer of Colorado; however, that explanation had the difficulty that the 11 May meeting itself concerned, inter alia, payment of Colorado invoices to IAG (T215). Helen later accepted that she was aware of an agreement as to container sales which she described as follows (T225): "Q. And could you tell the Court please, either in English or a Chinese language, what you understand "container sales" to mean? A. WITNESS: According to the buy and supply agreement, container sale is the factory - direct sell to those customers other than Colorado customer. That means, is not Colorado current customer, clear the factory have entitlement to sell directly from the factory. That's container sale. Not through Colorado. Q. So you understood that the Chinese factory could sell directly to Australian customers not through Colorado? A. WITNESS: Not Colorado customer. Q. I want to leave the question of who the customers were aside for one minute and return to it. Leaving aside which customers we're talking about, you accepted, didn't you, that the Chinese factory could in some circumstances sell directly to Australian customers? A. WITNESS: Yes, but not Colorado current or past customer. Q. The circumstances in which they, the Chinese factory, could do that, obliged - on your understanding, obliged the factory to give Colorado 5 percent of those sales; correct? A. WITNESS: With Colorado's consent, yeah. Q. What has Colorado's consent got to do with it? A. WITNESS: So if you want to sell, you discuss with us, and then we if we think is a reasonable, you can sell direct." The suggested restriction to exclude past or present Colorado customers, and the further requirement for Colorado's consent to each sale, is not supported by any other evidence and I do not accept Helen's evidence in this regard. 331It seems to me that sales to IAG are properly characterised as having been made by Sorrento China and that they fall within the scope of the "container sales" agreement reached between Clare and Kenneth. A breach of the Shareholders Agreement has not been established in respect of these sales. Diversion of sales after Colorado ceased its business 332Items 14 and following in the Plaintiffs' schedule (MFI 20) of diverted sales refer to transactions in the 2011 year which are now not pressed in respect of the Plaintiffs' claim for compensation. By the time of those sales, Colorado had ceased to trade and an inference that Colorado could have made the relevant sale cannot be drawn. The sales in items 33, 35-44 and 48-65 occurred after Colorado was in provisional liquidation. I refer to those items for completeness, although it is not necessary for me to address the parties' detailed submissions in respect of the similarity of the relevant products where I have approached the issue of diversion of sales on a broader basis and a claim for compensation in respect of these sales is, in any event, not pressed. 333Items 14-16, 19 and 45 in the Plaintiffs' schedule relate to invoices dated 17 May 2011, 6 and 7 June 2011 and 11 and 29 August 2011 respectively rendered by BL/GLCo, or, possibly, Sorrento Kitchens trading as "Black Label Wholesale Kitchens", since the invoices do not refer to the corporate name or its Australian Business Number. Items 17-18 and 20-25 relate to invoices rendered by BL/GLCo between June and December 2011. Items 26-29 relate to invoices rendered by BL/GLCo in January and February 2012. Item 30 relates to an invoice rendered by BL/GLCo dated 11 July 2011 and items 31-32 relate to invoices rendered by BL/GLCo dated 27 September 2011, each of which relate to sales of Colorado branded products to Osman Home Improvements Pty Ltd ("Osman") or Austfly Investments Enterprises Pty Ltd ("Austfly"), a company apparently associated with Osman, after Osman was licensed to use the Colorado trade mark. It does not seem to me that sales to a person licensed, or apparently licensed, to use the Colorado trade mark can be characterised as sales competitive with Colorado's business, quite apart from the fact that these sales were made in closing down that business after it had ceased to trade. Item 34 relates to an invoice rendered by BL/GLCo dated 5 September 2011. Each of these invoices was rendered after Colorado had ceased to trade and the Plaintiffs do not press a claim for compensation while reserving their claim to an account of profits. 334Items 33 and 35-36 and 37-38 relate to invoices rendered by BL/GLCo (after that entity had changed its name to Gold Label Products Pty Ltd) dated 15 March 2012 and 15 May 2012. Item 39 (in the amount of $399.30) relates to an invoice rendered by BL/GLCo dated 25 June 2012; items 40 (in the amount of $253) and 41 relate to invoices dated 5 and 21 September 2012; item 42 (in the amount of $165) relates to an amount invoiced on 29 November 2012 and items 43 (in the amount of $291.50) and 44 (in the amount of $55) relate to amounts invoiced on 17 December 2012. Items 46 and 47 relate to amounts invoiced by Sorrento Kitchens on 30 September 2011; item 48 relates to an amount invoiced by Sorrento Kitchens on 29 October 2011; items 49 - 53 relate to amounts invoiced by Sorrento Kitchens on 29 October 2011; and item 54 relates to an amount invoiced by Sorrento Kitchens on 22 May 2012. Each of these invoices was also rendered after Colorado had ceased to trade and the Plaintiffs do not press a claim for compensation while reserving their claim to an account of profits. Item 55 relates to an amount invoiced by BL/GLCo on 6 September 2012; items 56-59 relate to amounts invoiced by BL/GLCo on 11, 17, 25 and 31 January 2013; items 60 - 61 relate to amounts invoiced by BL/GLCo on 1 and 18 February 2013; items 62-63 relates to amounts invoiced by BL/GLCo on 11 March 2013 and 2 April 2013; and items 64-65 relate to amounts invoiced by BL/GLCo on 15 May 2013. Again, each of these invoices was rendered after Colorado ceased to trade and the Plaintiffs do not press a claim for compensation while reserving their claim to an account of profits. The totality of the particularised matters 335I should add that I have been conscious that, although the Plaintiffs' claim in respect of FASC [148] was put as involving several discrete actions that gave rise to the pleaded breaches of the Share Sale Deed and Shareholders Agreement, which were separately particularised, that case must be considered as a whole and not only by reference to the particular acts on which they rely. It is, of course, possible that acts that did not individually give rise to a breach of the Share Sale Deed and the Shareholders Agreement could cumulatively do so, because the totality of the relevant conduct amounted to a failure to comply with the relevant obligations. That could occur, for example, if several individual acts were established that were not individually sufficiently substantial to, for example, amount to a breach of the pleaded provisions of the Share Sale Deed or Shareholders Agreement but did so in totality. In the present case, for the reasons that I set out above, the majority of the particularised acts are not shown to involve a breach of the relevant provisions of the agreements. It does not seem to me that the totality of several acts that did not breach those agreements established a breach of those agreements, other than in respect of the diversion of Tradelink's business to Sorrento Kitchens, which in itself established such a breach. Loss or damage 336The parties agree that there is a further issue as to what damage has been suffered by HY International and Phoenix as a result of the alleged breaches of the Share Sale Deed and Shareholders Agreement. The Plaintiffs claimed damages including loss of their investment of $1.2 million; loss of $800,000 paid for stock and working capital; and loss of the business of Colorado. The Plaintiffs pleaded (FASC [149]) that, as a result of the breaches of the Share Sale Deed and Shareholders Agreement, the Plaintiffs have suffered loss and damage particularised as: "Loss of total investment in Colorado of $2 million. Loss of use of funds. Loss of the entire Business of Colorado. Unnecessarily causing Colorado to incur legal fees in defending the Statutory Demand and Winding Up proceedings. Diversion of valuable business and business opportunities from Colorado to each of Sorrento China, Capri International Trading Limited, Sorrento Kitchens, Black Label Wholesale Kitchens Pty [sic] and Gold Label Products Pty Ltd." 337The Defendants identify the issues raised by this claim as whether the Plaintiffs suffered any loss after Colorado ceased to trade in January 2011, after Colorado sold all of its stock in June 2011 and/or after Colorado entered into provisional liquidation on 14 October 2011 and also as to other possible causes of loss of customers of Colorado. The Plaintiffs respond that loss of the business of Colorado does not involve considering issues beyond January 2011, presumably on the basis that (as Mr Harper later made clear in oral submissions) the claim for damages or compensation (as distinct from any account of profits) is not pressed beyond that date. The parties note that issues also arise as to whether the loss claimed by the Plaintiffs can properly be said to have arisen from the breaches of contract and to be available as damages at the suit of the Plaintiffs, as opposed to Colorado. The Plaintiffs contend that claims for loss by them and Colorado are pleaded in the alternative and the Plaintiffs accept that there can be no double recovery. 338The only breaches of the Shareholders Agreement established by the Plaintiffs are Clare's involvement in Sorrento Kitchens' business during 2010 and the associated diversion of sales to Tradelink from Colorado to Sorrento Kitchens in that year. The Plaintiffs accept that they cannot recover this loss to the extent that it would duplicate loss recovered by Colorado in respect of the same conduct. It is well established that a shareholder of a company cannot recover damages that are merely a reflection of a loss suffered by the company, as distinct from damages for loss suffered personally that is separate and distinct from the company's loss: Chen v Karandonis [2002] NSWCA 412 at [34]-[53] per Beazley JA, with whom Heydon and Hodgson JJA agreed; Ballard v Multiplex Ltd [2008] NSWSC 1019; (2008) 68 ACSR 208 at [32]-[41] per McDougall J; VPlus Holdings Pty Ltd v Bank of Western Australia Ltd [2012] NSWSC 1327; (2012) 91 ACSR 545 at [28] per Stevenson J. I will therefore deal with the quantification of that loss in respect of Colorado's claims, which I address below. Validity of assignment of equitable causes of action to HY International 339I turn now to the equitable causes of action upon which HY International relies, pursuant to an assignment of those causes of action by the provisional liquidator of Colorado to it. The parties identify several issues in respect of the assignment of Colorado's causes of action to HY International, namely, the efficacy of the assignment (FASC [11A]-[11B], Amended Defence [11A], [11B] and [11C]); the right to seek relief under the Corporations Act for breaches of the statutory director's duties; and the right to sue in equity for breaches of fiduciary duty (including the entitlement to an account). It will be convenient to set out the facts relating to the assignment and then address the issues in respect of the assignment of the causes of action for breach of fiduciary duties here, and the question whether the statutory causes of action were assignable below. 340HY International relies (FASC [11A]) on an assignment to it of "all causes of action available to Colorado in these proceedings" by the provisional liquidator of Colorado, in exercise of his power conferred by s 477(2)(c) of the Corporations Act. Although a point was initially taken by the Defendants as to whether that assignment had been approved by the Court under s 477(2B) of the Corporations Act, that point ultimately became moot when the liquidator sought and obtained retrospective approval of the assignment. 341The Defendants accept that a liquidator's power to assign property under s 477(2)(c) of the Corporations Act is broad, but contend that power does not render assignable that which is inherently unassignable: Owners of Strata Plan 5290 v CGS & Co Pty Ltd [2011] NSWCA 168; (2011) 81 NSWLR 285 at [64] and [70] per Sackville AJA with whom Giles and Campbell JJA agreed. The Defendants submit that the benefit of a fiduciary duty owed by a fiduciary to its principal is not capable of assignment by the principal. They contend that relief in respect of a claim for breach of fiduciary duty is personal, works on the fiduciary's conscience as a consequence of its relationship with their principal, and has no proprietary component and is "insusceptible of assignment", referring to Meagher, Gummow & Lehane, Equity: Doctrines and Remedies (4th ed 2002, Butterworths) at [4-140]. 342The Defendants also rely upon the decisions in Krishell Pty Ltd v Nilant [2006] WASCA 223; (2006) 32 WAR 540 and MG Corrosion Consultants Pty Ltd v Gilmour [2012] FCA 383; (2012) 202 FCR 354 as reflecting the correct position that such claims are not assignable. In Krishell Pty Ltd above at [73], McLure JA observed that a liquidator's power to sell or assign was confined to "property" as defined in the Corporations Act; noted that that definition included "things in action", which her Honour took to mean choses in action; noted that a chose in action is a personal right of property which can only be claimed or enforced by action, including rights enforceable by action; but observed that "a purely personal right is not a chose in action because it is not property". The approach adopted in Krishell was referred to in MG Corrosion Consultants Pty Ltd above at [11]-[13] and [19]-[23], where Barker J held that a derivative action by a company against one of its directors, including a claim for breach of fiduciary duty, was not a claim in relation to the company's property for the purposes of s 440D of the Corporations Act, and expressed doubt (at [17]) as to whether the cause of action was property capable of assignment. 343The Defendants also submit that a third party not personally owed a fiduciary duty cannot seek an account of profits or equitable compensation for breach of any fiduciary duty. They refer to decisions which characterise an accounting as owed to the person to whom the obligation is owed: for example, Chan v Zacharia [1984] HCA 36; (1984) 154 CLR 178 at 199 per Deane J; Warman International Ltd v Dwyer [1995] HCA 18; (1995) 182 CLR 544 at 563. They submit that the requirement to account arises as an incident of the existence of the fiduciary relationship, and the right to take action to enforce that requirement is a right personal to the principal, and that equity does not conceive of a requirement on a fiduciary to account to any third party other than the principal. The Defendants contend that Colorado's ability to seek an account of profits, or the taking of accounts, from Clare is not capable of assignment to HY International and that those rights are personal to Colorado and are "insusceptible of assignment": Meagher, Gummow & Lehane above at [4-140]; MG Corrosion Consultants Pty Ltd above at [18]. The Defendants take the same position in respect of HY International's assertion that Colorado's other equitable rights as against Clare or the other Defendants, which found the claims for equitable compensation and any other remedy in equity, have been assigned to it. 344The question whether a claim for breach of fiduciary duty was assignable was comprehensively reviewed by Beech J in EC Dawson Investments Pty Ltd v Crystal Finance Pty Ltd (No 3) [2013] WASC 183, on which the Plaintiffs rely, and I gratefully draw upon his Honour's analysis. In EC Dawson Investments, the defendants submitted, as do the Defendants in this case, that a claim for breach of fiduciary duty is a personal right that cannot be assigned at law or in equity. Beech J there noted that many of the cases that appear to support such a proposition relate to principles of maintenance and champerty, which now have little or no application in this context. His Honour also noted (at [889]) that the principle that a personal right to litigate cannot be assigned is subject to exceptions, including where the assignee has a genuine and substantial commercial interest in the claim, which exists independent of the assignment (Trendtex Trading Corp v Credit Suisse [1982] AC 679 at 703; [1981] 5 All ER 520 and see the other cases cited in EC Dawson Investments above at [889]) and that a liquidator's statutory power to sell the property of a company is a further exception to that principle. His Honour noted (at [892]-[895]) that several decisions have established the proposition that a liquidator may assign a bare right of action to a third party, so long as that right of action constitutes "property" of the company for the purposes of s 477 of the Corporations Act, which is defined in s 9 of the Corporations Act to include a chose in action, and referred to Re Movitor Pty Ltd (in liq) (1996) 64 FCR 380 at 390-391; 19 ACSR 440; UTSA Pty Ltd (in liq) v Ultra Tune Australia Pty Ltd [1997] 1 VR 667; (1996) 132 FLR 363 and on appeal in UTSA Pty Ltd (in liq) v Ultra Tune Australia Pty Ltd (1996) 21 ACSR 457 at 463-464; Bank of Melbourne Ltd v HPM Pty Ltd (in liq) (1997) 26 ACSR 110 at 111-112. His Honour also noted that other cases have referred to the assignment of claims for fiduciary duty by a liquidator or administrator without suggesting that there was any doubt as to the validity of such an assignment (for example, Re New Tel (in liq); Evans v Wainter Pty Ltd [2005] FCAFC 114; (2005) 145 FCR 176) and pointed to the fact that there are also observations in several cases that a right of action is a property right, in the different context of determining whether it is property for the purposes of s 51(xxxi) of the Constitution (for example, Georgiadis v Australian & Overseas Telecommunications Corporation [1994] HCA 6; (1994) 179 CLR 297 at 311; JT International SA v Commonwealth [2012] HCA 43; [2012] 86 ALJR 1297 at [174]). 345In EC Dawson Investments above at [906], Beech J noted that that the decision in Krishell (to which I referred in paragraph 342 above) related to an application for leave to appeal and the observations in that case were made in somewhat tentative terms and disagreed with it on the basis that the fact that some bare rights to litigate were incapable of assignment at common law did not indicate that they were not property and not choses in action. His Honour observed (at [915]) that the non-assignability of a bare right of action reflected the public policy relating to maintenance and champerty, which was not applicable to an assignment by a liquidator under s 477(2)(c) of the Corporations Act, and that the breadth of the statutory definition of "property" in s 9 of the Corporations Act and the object of s 477(2)(c) of the Corporations Act supported the view that a company's claim for breach of fiduciary duty is property capable of being assigned by a liquidator. 346Beech J's review of the authorities in EC Dawson Investments above, and the conclusions drawn from it, is thorough and I consider that the conclusions that his Honour draws are correct. So far as that decision concerns the construction of s 477(2)(c) of the Corporations Act, the desirability of consistency of decision-making in respect of uniform national legislation indicates that I should take the same approach, especially where I do not doubt the correctness of His Honour's reasoning. Accordingly, I consider that the provisional liquidator's assignment of Colorado's claim for breach of fiduciary duty to HY International is effective to confer upon it the ability to bring that claim. The pleaded claim for conflict of interest 347The Plaintiffs plead (FASC [13]) that Clare owed equitable duties to Colorado, including a duty "not to allow to put herself [sic] in a position where her interests and duty to Colorado conflicted". Paragraphs 146-147 of the FASC in turn plead matters relating to an allegation that Clare was in a position of conflict. These matters are also relied upon to support an allegation of breach of contract (FASC [148] particulars (ix)-(xii)) and breach of directors' duties (FASC [150] particular (c), [151], [152] particulars (vii)-(ix)). It is convenient to address the issues as to conflict of interest together at this point. 348The Plaintiffs plead (FASC [146]) that, since about August 2009, as a director and officer of Colorado, Clare: "[h]as placed herself in a position where her own personal interests, and the interests of entities controlled by her as pleaded herein, are in conflict, or are likely to conflict by: (a) being a director of [CH Design], the lessor of the Premises occupied by Colorado as pleaded herein; (b) being a director of Sorrento China, the supplier of goods to Colorado as pleaded herein; (c) being the principal and controlling mind of Sorrento Kitchens, Sorrento China, Black Label Wholesale Kitchens Pty Ltd and Gold Label Products Pty Ltd as pleaded herein." 349The Plaintiffs in turn plead (FASC [147]) that Clare preferred her own interests to those of Colorado in respect of seventeen matters, to which I will refer below. Paragraph 154 of the FASC pleads that Clare has breached the equitable duty to avoid conflicts of interest and the duty of confidentiality and: "(a) Failed to allow herself not to be placed [sic] in a position where her interests and duty to Colorado conflicted; (b) Failed not to disclose or divulge or otherwise use the Confidential Information for her own personal profit." That matter is in turn particularised by reference to the same matters as FASC [148], which pleads the breaches of the Share Sale Deed and Shareholders Agreement that I have addressed above. Paragraph 155 of the FASC in turn pleads that as a result of Clare's breaches of her equitable duties, Colorado has suffered loss and damage. The particulars of the loss and damage are: "Loss of the entire Business of Colorado. Purchase price of unnecessary stock purchased." Paragraph 158 of the FASC pleads that Clare is liable to compensate Colorado in equity through the payment of equitable damages or, alternatively, equitable compensation. 350The Defendants in turn contend that that the scope of Clare's equitable duties to Colorado was modified by the terms of Colorado's constitution and by the assent of Colorado's directors and/or shareholders. Paragraph 12 of the Amended Defence pleads that: "(b) ... the scope of the duties owed by [Clare] was informed by the terms of Colorado's Constitution, and in particularly [sic] clause 9.1 of Colorado's Constitution; (c) ... the duties owed by [Clare] were also owed subject to the assent of Colorado's directors and/or shareholders..." The relevant legal principles 351The relevant principles are well-established. Broadly, the no conflict rule prohibits conduct where a fiduciary has a personal interest or duty owed to a third party which gives rise to a real and sensible possibility of a conflict. That rule and the no profit rule, which provides that a fiduciary cannot obtain a profit from its fiduciary position without the principal's consent, may overlap. 352In Boardman v Phipps [1967] 2 AC 46 at 123; [1966] 3 All ER 721; [1966] 3 WLR 1009, Lord Upjohn (dissenting) observed (in a statement that may require clarification as noted in paragraph 353 below) that the: "relevant rule for the decision of this case is the fundamental rule of equity that a person in a fiduciary capacity must not make a profit out of his trust which is part of the wider rule that a trustee must not place himself in a position where his duty and his interest may conflict". His Lordship also there formulated (at 124) the test for whether a conflict exists as whether a: "reasonable man looking at the relevant facts and circumstances of the particular case would think that there was a real sensible possibility of conflict; not that you could imagine some situation arising which might, in some conceivable possibility in events not contemplated as real sensible possibilities by any reasonable person, result in a conflict." 353In Chan v Zacharia above at 198, Deane J (with whom Brennan and Dawson JJ agreed) referred to an observation of Sir Frederick Jordan in Chapters in Equity in New South Wales (6th ed 1947) at 115 that: "It has often been said that a person who occupies a fiduciary position ought to avoid placing himself in a position in which his duty and his interest, or two different fiduciary duties, conflict. This is rather a counsel of prudence than a rule of equity; the rule being that a fiduciary must not take advantage of such a conflict if it arises." His Honour noted (at 198) that that formulation, even as an unqualified counsel of prudence, may be inappropriate in some circumstances and that: "The equitable principle governing the liability to account is concerned not so much with the mere existence of a conflict between personal interest and fiduciary duty as with the pursuit of personal interest by, for example, actually entering into a transaction or engagement 'in which he has, or can have, a personal interest conflicting ... with the interests of those whom he is bound to protect' (per Lord Cranworth L.C., Aberdeen Railway Co v Blaikie Brothers [1854] 1 Macq 461 at p 471 or the actual receipt of personal benefit or gain in circumstances where such conflict exists or has existed." 354In Hospital Products Ltd v United States Surgical Corp [1984] HCA 64; (1984) 156 CLR 41 at 103, Mason J also referred to Sir Frederick Jordan's observation and noted that: "[t]he fiduciary's duty may be more accurately expressed by saying that he is under an obligation not to promote his personal interest by making or pursuing a gain in circumstances in which there is a conflict or real or substantial possibility of conflict between his personal interests and those of the persons whom he is bound to protect." That formulation places emphasis upon the fiduciary's conduct in making or pursuing a gain, and not merely upon his or her occupying a position where a conflict or potential conflict exists. 355Deane J in Chan v Zacharia above also observed (at 198-199) that the equitable rule involved two themes and that: "The first is that which appropriates for the benefit of the person to whom the fiduciary duty is owed any benefit or gain obtained or received by the fiduciary in circumstances where there existed a conflict of personal interest and fiduciary duty or a significant possibility of such conflict: the objective is to preclude the fiduciary from being swayed by considerations of personal interest. The second is that which requires the fiduciary to account for any benefit or gain obtained or received by reason of or by use of his fiduciary position or of opportunity or knowledge resulting from it: the objective is to preclude the fiduciary from actually misusing his position for his personal advantage. Notwithstanding authoritative statements to the effect that the 'use of fiduciary position' doctrine is but an illustration or part of a wider 'conflict of interest and duty' doctrine (see, eg, Boardman v Phipps at p 123; N.Z. Netherlands Society "Oranje" Inc v Kuys at p 1229), the two themes, while overlapping, are distinct. Neither theme fully comprehends the other and a formulation of the principle by reference to one only of them will be incomplete. Stated comprehensively in terms of the liability to account, the principle of equity is that a person who is under a fiduciary obligation must account to the person to whom the obligation is owed for any benefit or gain (i) which has been obtained or received in circumstances where a conflict or significant possibility of conflict existed between his fiduciary duty and his personal interest in the pursuit or possible receipt of such a benefit or gain; or (ii) which was obtained or received by use or by reason of his fiduciary position or of opportunity or knowledge resulting from it." 356In Warman International Ltd v Dwyer above at 557-558, the High Court similarly observed that: "A fiduciary must account for a profit or benefit if it was obtained either (1) when there was a conflict or possible conflict between his fiduciary duty and his personal interest, or (2) by reason of his fiduciary position or by reason of his taking advantage of opportunity or knowledge derived from his fiduciary position. The stringent rule that the fiduciary cannot profit from his trust is said to have two purposes: (1) that the fiduciary must account for what has been acquired at the expense of the trust, and (2) to ensure that fiduciaries generally conduct themselves "at a level higher than that trodden by the crowd". The objectives which the rule seeks to achieve are to preclude the fiduciary from being swayed by considerations of personal interest and from accordingly misusing the fiduciary position for personal advantage." 357In Pilmer v Duke Group Ltd (in liq) [2001] HCA 31; (2001) 207 CLR 165 at 199, McHugh, Gummow, Hayne and Callinan JJ formulated the no conflict rule as follows: "... [t]he fiduciary is under an obligation, without informed consent, not to promote the personal interests of the fiduciary by making or pursuing a gain in circumstances in which there is 'a conflict or a real or substantial possibility of a conflict' between personal interests of the fiduciary and those to whom the duty is owed." The matters pleaded in FASC [146] 358As I noted above, the Plaintiffs plead (FASC [146]) a conflict of interest arising because Clare had "placed herself in a position where her own personal interests, and the interests of entities controlled by her ... are in conflict, or are likely to conflict", and that conflict as pleaded on the basis that she was a director of CH Design, a director of Sorrento China, and "the principal and controlling mind" of Sorrento Kitchens, Sorrento China and BL/GLCo. The Plaintiffs contended, in their opening submissions, that: "Conflict of interest is marked. [Clare] was the owner, director and controlling mind both of Colorado's landlord [CH Design], and Colorado's major supplier of goods [Sorrento China]. This made conflict inevitable. After her interest in Colorado had been reduced to 20%, the evidence demonstrates [Clare] consistently and deliberately preferred the interests of [CH Design] and Sorrento China, whenever these conflicted with Colorado's interests. This was tantamount to preferring her own interests." 359The Defendants responded, in their opening written submissions, that: "In every instance, the preferential conduct comprises causing those companies to require timely payments of debt by Colorado, and the insistence on standard commercial terms. ... By the end of 2010 (when most of the complained of conduct occurred), Kenneth had been in control of Colorado for a year, and its trading performance had been poor. Its financial [v]iability was threatened, and there was no reason for Clare to risk her interests in CH Design or Sorrento China by extending credit to Colorado. Her position as Colorado's director did not require her to act any differently when acting as a director of those other entities. The conflict between the interests of Colorado, Sorrento China and CH Design was obvious to all 3 directors and in those discussions and negotiations. Helen and Kenneth represented Colorado, and Clare represented her other interests." 360It is not clear whether the pleading in FASC [146] is intended to be a freestanding allegation of breach or simply to plead the background to the specific breaches of the rule against conflict of interest pleaded in FASC [147]. If it is intended to operate as the former, I do not accept that such a breach is established since, as I noted above, the rule against conflict of interest prohibits a fiduciary acting in a manner inconsistent with that rule, rather than simply occupying a position of conflict or potential conflict. It also does not seem to me that the bare fact that Clare was a director both of Colorado on the one hand and CH Design and Sorrento China on the other, as pleaded in FASC [146](a)-(b)], establishes a breach of the rule against conflict of interest. The case law recognises that a person being a non-executive director even of competing companies will not necessarily breach the conflict rule: On The Street Pty Ltd v Cott (1990) 101 FLR 234; 3 ACSR 54 at 61 per Powell J; Streeter v Western Areas Exploration Pty Ltd (No 2) [2011] WASCA 17; (2011) 278 ALR 291 at [69] per McLure P. In such a case, each company is entitled to the director's unbiased and independent judgment and the director must not exercise their powers for the benefit of the other company without disclosure of the competing interest and informed consent: R v Byrnes [1995] HCA 1; (1995) 183 CLR 501 at 516-517 per Brennan, Deane, Toohey and Gaudron JJ. To the extent that Clare was the principal and controlling mind of Sorrento China, Sorrento Kitchens and BL/GLCo as pleaded in FASC [146(c)], it also does not seem to me that would in itself establish a breach of the rule against conflict of interest which would not have been established by her being a director of both Colorado and those companies, unless it were also established that Clare had exercised her powers as a director or officer of Colorado for the benefit of those companies without disclosure of the competing interest and informed consent. 361As the Defendants point out, a necessary step in determining whether a breach of the rule against conflict of interest is established is to ascertain the subject matter of the relevant fiduciary obligations, which may be determined from the course of dealing between the parties: Birtchnell v Equity Trustees, Executors and Agency Co Ltd [1929] HCA 24; (1929) 42 CLR 384 at 409 per Dixon J; Chan v Zacharia above at 196 and 204 per Deane J; Streeter v Western Areas Exploration Pty Ltd (No 2) above at [70]; Omnilab Media Pty Ltd v Digital Cinema Network Pty Ltd [2011] FCAFC 166; (2011) 285 ALR 63 at [206], where Jacobson J (with whom Rares and Besanko JJ agreed) characterised the proposition "that the scope of the fiduciary duty must be moulded according to the nature of the relationship and the facts of the case" as "fundamental". The Defendants point out, and I accept, that the content of fiduciary duties are moulded to the character of the particular relationship so that, even within an established fiduciary relationship (such as between director and corporation), the content of the duties will not be uniform for all cases, and that fiduciary obligations exist in relation to a defined area of conduct and, except in that defined area, the fiduciary retains its economic liberty: United Dominions Corporation Ltd v Brian Pty Ltd [1985] HCA 49; (1985) 157 CLR 1 at 11 per Mason, Brennan and Deane JJ; Noranda Australia Ltd v Lachlan Resources NL (1988) 14 NSWLR 1 at [15] per Bryson J; Streeter v Western Areas Exploration Pty Ltd (No 2) above at [70]. In Grimaldi v Chameleon Mining NL (No 2) [2012] FCAFC 6; (2012) 200 FCR 296, the Full Court of the Federal Court (Finn, Stone and Perram JJ) observed that: "The concept of 'duty' in the 'conflict of duty and interest' formula of the first of these [themes] is convenient shorthand. It refers simply to the function, the responsibility, the fiduciary has assumed or undertaken to perform for, or on behalf of, his or her beneficiary. What that function or responsibility is, is a question of fact. It may be narrow and circumscribed, as is often the case with specific agencies; it may be broad and general, as is characteristically the case with the functions of company directors; its scope may have been antecedently defined or determined; it may have been ordained by past practice; it may be left to the fiduciary's discretion to determine; and it may evolve over time as is commonly the case with partnerships. Put shortly the actual function or responsibility assumed determines '[t]he subject matter over which the fiduciary obligations extend' for conflict of duty and interest and conflict of duty and duty purposes". In Howard v Commissioner of Taxation [2014] HCA 21, a judgment delivered after I had heard submissions and reserved judgment in the matter, French CJ and Keane JJ in turn referred (at [34]) to the principle that: "The scope of the fiduciary duty generally in relation to conflicts of interest must accommodate itself to the particulars of the underlying relationship which give rise to the duty so that it is consistent with and conforms to the scope and limits of that relationship." Their Honours also noted, with reference to authority, that such a duty is to be "moulded according to the nature of the relationship and the facts of the case". Gageler J (at [110]) there referred with approval to the observation in Grimaldi v Chameleon Mining NL (No 2) to which I have referred above. This principle can in turn overlap with principles of waiver and ratification, summarised by Tracey J in Holyoake Industries (Vic) Pty Ltd v V-Flow Pty Ltd [2011] FCA 1154; (2011) 86 ACSR 393 at [92] (varied on appeal on another point in V-Flow Pty Ltd v Holyoake Industries (Vic) Pty Ltd [2013] FCAFC 16; (2013) 93 ACSR 76), as having effect that: "A breach may be avoided if the fiduciary makes a full and frank disclosure of the facts to the person to whom the duty is owed and that person consents to the fiduciary acting in a way that would otherwise place him or her in a position of conflict. Disclosure and consent may also retrospectively excuse a breach which has already occurred." 362The Defendants submit that the scope of the duties owed by Clare were informed, first, by the terms of Colorado's constitution (Ex P1 1/16), including cl 9.1, which provides that: "Notwithstanding any rule of law or equity to the contrary a director of the Company shall not be disqualified by his office from contracting with the Company either as vendor, purchaser or otherwise, nor shall any such contract or any contract transaction or arrangement entered into by or on behalf of the Company in which any director shall be in any way interested be avoided or be rendered voidable nor shall any director so contracting or being interested be liable to account to the Company for any profit realised by any such contract transaction or arrangement by reason of such director holding that office or by reason of the fiduciary relationship thereby established and any such director, notwithstanding his conflicting interests and/or such fiduciary relationship may as a director vote in respect of any such contract, transaction or arrangement and may take part in the execution of any deed, document or instrument giving effect to evidencing or in any way relating to any such contract, transaction or arrangement but disclosure of any such interestedness shall be made and recorded as contemplated by Part 2D.1 Div 2 of the Corporations Act. Failure to make and/or to record such disclosures as aforesaid shall not operate to avoid or render voidable any such contract, transaction or arrangement." This clause expressly preserves a director's ability to contract with Colorado, including as vendor of goods and services, as companies associated with Clare (Sorrento China and CH Design) did; and also permits the directors to vote in respect of such transactions, and arguably to participate in less formal decision-making in that regard, subject to a requirement for disclosure of the relevant interest, which in this case of Clare's involvement with Sorrento China and CH Design was already well known to Helen and Kenneth. Formal disclosure of an interest in a transaction is not required under such a clause where it is already known to other directors: Woolworths Ltd v Kelly (1991) 22 NSWLR 189 at 212; 4 ASCR 431. 363The Plaintiffs reply by denying that cl 9.1 of Colorado's constitution was validly adopted, but no basis for that contention has been established. Helen's evidence (Helen 20.11.2013 [47]) is that she was not aware of cl 9 of Colorado's constitution and was not provided with that constitution and was not aware that Clare may have been relying upon that clause in selling kitchen, bathroom or laundry products to Tradelink and Raymor. She also gives evidence, that had she known that Clare was relying on that clause, she would have taken steps to alter the constitution and to restrain her from engaging in the relevant conduct. No submission was put indicating how Helen's awareness, or otherwise, of Colorado's constitution was relevant to whether the terms of the duties owed by Clare would be restricted in accordance with its terms. 364The Plaintiffs also contend upon its proper construction, cl 9.1 of Colorado's constitution does not absolve or relieve the Clare from her fiduciary or statutory duties owed to Colorado. That proposition is strictly correct, but does not address the question whether that clause is relevant to narrowing the scope of those duties to the extent that it provides a permission for particular conduct. The Plaintiffs contend that any such effect of cl 9.1 is contrary to public policy and seeks to oust the jurisdiction of the Court. The Plaintiffs also contend, without citing authority, that a company cannot, in effect, "contract out" of the duties and obligations owed at law and provided for by the Corporations Act. I do not accept that proposition, since the content of the relevant duties will be determined in the relevant circumstances and having regard to the Company's constitution, and, one should also note, provisions of this kind are, and for many years have been, commonplace in corporate constitutions. The Plaintiffs also point out that Colorado's shareholders agreed in the Shareholders Agreement at cl 10.1 (Ex P1 2/919) that the provisions of the Shareholders Agreement will prevail over any inconsistent provision in the constitution, although they did not identify any specific inconsistency. It does not seem to me that there is any inconsistency between cl 9.1 of Colorado's constitution and the Shareholders Agreement so far as it permits a director to deal with the company in the specified manner, where the Shareholders Agreement does not contain a contrary prohibition. The permission in cl 9.1 of the Constitution will be relevant to determining the scope of the duties owed under the Shareholders Agreement generally. 365The Defendants also submit that the scope of the duties owed by Clare were subject to the assent of Colorado's directors and/or shareholders. They contend that it was known to all, prior to June 2009, that Clare was a director (and shareholder) of Colorado, CH Design and Sorrento China; that Colorado had a relationship with CH Design (as lessor) and Sorrento China (as supplier); and that those relationships were based upon, in the case of CH Design, a written lease, and in the case of Sorrento China, the written Supply and Buy Agreement. It seems to me that these matters must have been well known to and accepted by Colorado's shareholders, since they were the necessary consequence of the structure which the parties adopted, by which Colorado occupied the relevant premises owned by CH Design and acquired the relevant products from Sorrento China. The alleged conflicts in respect of CH Design and Sorrento China existed prior to the Plaintiffs' acquisition of an interest in the business, and would, on their case, have continued after their acquisition of that interest, knowing of the relevant business structures. Helen acknowledged that she dealt with Clare in her role as representing the landlord of Colorado and as representing the factory, Sorrento China, during 2010, although she emphasised that she still considered Clare to be a director and shareholder of Colorado (T206). Helen acknowledged that she understood that Clare was a director of Colorado, a shareholder of Colorado, the owner of the landlord and the owner of the factory (T206). Kenneth also acknowledged in cross-examination that he understood that Clare was dealing with Colorado as a representative of the landlord and supplier during 2010 (T426). It seems to me that those matters necessarily amounted to a narrowing of the scope of Clare's fiduciary duties to at least permit her roles with CH Design and Sorrento China. The matters pleaded in FASC [147] - dealings with Sorrento China 366I turn now to the specific matters pleaded in FASC [147] to support the claim for conflict of interest. I have referred above to the need to have regard, in dealing with these matters, to the scope of the relevant fiduciary obligations and to whether the fiduciary's conduct promoted its personal interest (or a third party's interests) in circumstances where a conflict existed. 367The first, second, third and twelfth matters relied upon in respect of this allegation relate to Sorrento China. I have addressed the position in respect of dealings between Colorado and Sorrento China generally in paragraphs 202-215 above and will not repeat that analysis here. The first of the pleaded matters (FASC [147(a)]) relates to Clare "causing" Sorrento China to depart from the "Payment Assumption "as pleaded herein". The Plaintiffs' schedule of cross-references (MFI 10) indicates this matter is a reference to FASC [51], which defines that term as an assumption made by Colorado between August 2009 and February 2010 that it was acceptable for payment of any product sold by Sorrento China to be paid within one week of being delivered to the Premises. I have dealt with changes in payment arrangements required by Sorrento China, which are said to give rise to breach of that assumption, in paragraphs 203-215 above. It does not seem to me that the pleaded conduct is capable of giving rise to a breach of the rule against conflict of interest, because the arrangements which the parties had entered as between Colorado and Sorrento China necessarily accepted Clare's interest in, and control of, Sorrento China and the fact that she would act on behalf of Sorrento China in dealings with Colorado (the interests of which would be represented by Helen and Kenneth) and the scope of her duties to Colorado were narrowed to reflect that matter. 368The second of the matters (FASC [147(b)]) relates to Clare "causing" the alleged "Delivery Breaches " as pleaded herein". The Plaintiffs' schedule of cross-references (MFI 10) identifies that matter as a reference to FASC [58], which refers to the "delivery breaches" as an alleged failure by Sorrento China, between December 2009 and about December 2010 in breach of the Supply and Buy Agreement, to deliver products to Colorado within a reasonable time of orders being placed. I have addressed the issues arising between Sorrento China and Colorado as to payment and delivery arrangements above. It does not seem to me that the pleaded conflict is established, by reason of the parties' acceptance of Clare's role in Sorrento China, to which I referred above, and also because it does not seem to me that it was established that there was a failure to deliver products within a reasonable time in the relevant circumstances. 369The third of the matters (FASC [147(c)]) relates to Clare "causing" Sorrento China to demand monies from Colorado "as pleaded herein". The Plaintiffs' schedule of cross-references (MFI 10) identifies this matter as a reference to FASC [115] which refers to conduct by Clare, as a director of Sorrento China, in July 2010, in stating that Sorrento China would not further extend time for payment of invoices to Colorado and required full payment of a particular invoice. It does not seem to me that the pleaded breach is established. Once the parties accepted that Clare was entitled to have a continued interest in and control of Sorrento China, as their business relationship necessarily did, the scope of her duties were necessarily narrowed so as to permit her to take steps to deal with issues in respect of payments due to Sorrento China, which must include the decision whether to extend time for such payments and to require them to be made, whether in full or in part. Again, it does not seem to me to be conceivable that, so far as the parties contemplated a continued relationship between Colorado and Sorrento China, and that Clare would have a continuing role in both entities, Clare would have been required to subordinate Sorrento China's interests to Colorado's interests to the extent, for example, of granting any extension of time for payment requested by Colorado and not requiring payment of invoices which Colorado preferred not to pay, either when due or at all. 370The twelfth of the matters (FASC [147(l)]) relates to Sorrento China's claim for the "Alleged Outstanding Invoice", in circumstances where Clare owed Colorado the "Acknowledged Amount" and had the capacity to cause Sorrento China to offset that amount against any monies allegedly owed by Colorado "as pleaded herein". The Plaintiffs' schedule of cross-references (MFI 10) identifies this matter as referring to FASC [120] which relate to a requirement by Clare, as director of Sorrento China, for payment of an outstanding invoice to Sorrento China on 15 December 2010, which offered the alternatives of full payment of that invoice by that date, return of the relevant container by Colorado to Sorrento China at Colorado's costs, or Sorrento China selling those goods to another buyer in Australia. The premise of the alleged conflict is that Clare ought to have set-off the "Acknowledged Amount", being the amount said to be owed by her from the ANZ accounts to Colorado to which I have referred in paragraph 162 above, against the amount due by Colorado to Sorrento China in respect of the purchase of the container. That premise is not established since I have held above that, on balance, the claim to the Acknowledged Amount had been compromised by the offset arrangement made some months before, on 11 May 2010, and Colorado then had no further claim against that amount. The rule against conflict of interest does not require Clare to accept a demand to offset an amount not due by her to Colorado against an amount owed by Colorado to Sorrento China. Alleged diversion and misappropriation of Colorado's monies 371The fourth and fifth matters (FASC [147(d)-(e)]) relate to the alleged diversion and misappropriation of Colorado's monies "as pleaded herein". The fourth matter involves an allegation of Clare "secretly diverting and misappropriating" Colorado's monies "as pleaded herein" and the fifth involves Clare "secretly utilising" Colorado's monies "as pleaded herein". The Plaintiffs' schedule of cross-references (MFI 10) identifies the intended reference as to FASC [109]-[114] which deal with payments into the ANZ cheque account and ANZ US dollar account which I have addressed in paragraphs 158-184 above. The premise of this allegation is not established, because the evidence to which I have referred above indicates that the arrangements in respect of that account were consensual, although possibly ill-advised, and that the possibility that customers would continue to make payments into that account had been recognised by both parties, albeit that Clare does not seem to have been forthcoming in accounting for monies held in that account until the meeting in May 2010. The arrangements formed between Clare and Kenneth in respect of the operation of the relevant accounts necessarily narrowed Clare's fiduciary duties to permit her to act in accordance with those arrangements, particularly where Colorado took the benefit of those arrangements so far as Clare paid monies out of those accounts on its behalf. 372The sixth matter pleaded in FASC paragraph [147(f)] relates to an alleged failure to repay the Acknowledged Amount (as defined) to Colorado. The Plaintiffs' schedule of cross-references (MFI 10) identifies the reference as to FASC [111], which relates to Clare's acknowledgement that she was indebted to Colorado in the amount of $67,719.67 to which I have referred in paragraph 162 above. The relevant breach is not established since I have held, in paragraphs 169-183 above, that, on balance, an offset arrangement in respect of that amount had been formed at the meeting on 11 May 2010, and Clare was therefore not obliged to repay that amount as distinct from acting in accordance with that arrangement. Dealings with CH Design 373The seventh - tenth matters pleaded on in FASC [147(g)-(j)] relate to CH Design. In their written closing submissions, the Plaintiffs contended that: "In her position as both a director of Colorado and a director of CH Design, [Clare] was in a position where conflict was always likely: * As a director of CH Design, and the only director, [Clare] looked to the interests of a landlord, which were in truth coextensive with her own commercial interests because she was the only shareholder. * As a director of Colorado, [Clare's] duties compelled her to consider the position of Colorado as a tenant, and its interests as a tenant, which included keeping any rental payable for the premises to a minimum. * In such circumstances [Clare] had to ensure the position of Colorado was properly addressed ahead of the position of CH Design, because in substance the duties by [Clare] to CH Design were duties owed to herself. * In addition, in the event that Colorado fell behind in any rental payments, [Clare's] position as director of Colorado required her to support any proposal for an extension of time for Colorado to make any rental payments. * These factors established a standard of what was required for satisfaction of her duty to Colorado regarding the Lease and payment of rent." (PWS [241]) 374The Plaintiffs also contended that Clare, in her capacity as director of CH Design, from a relatively early stage of the relationship between CH Design and Colorado, "aggressively pursued the interests of CH Design as landlord to Colorado's detriment" (PWS [246]). Clare was cross-examined with vigour and at considerable length as to this allegation and rejected it, also with vigour and at length in her answers in cross-examination. The Defendants refer to the principles applicable to multiple directorships, which I noted above, and to the parties' knowledge of Clare's involvement with CH Design and submit that, in those circumstances, Clare did not breach her fiduciary duties to Colorado merely because she acted in the interests of CH Design when dealing with Colorado as a representative of the lessor and that it was not part of Clare's duty to Colorado to cause CH Design to forebear from demanding rent in accordance with the terms of the lease, or to forgive rent arrears or to assist Colorado to avoid its obligations under the lease. 375The seventh matter (FASC [147(g)]) relates to CH Design's claim for rent for November 2010 as pleaded in FASC [43]. The eighth and ninth matters (FASC [147(h)-(i)])) relate to the allegedly termination of the lease and re-entry into the premises as pleaded in FASC [122]-[125]. The tenth matter (FASC [147(j)]) relates to the alleged wrongful departure from the Rent Deferral Assumption as pleaded in FASC [46]. I have addressed these matters in paragraphs 216-237 above. 376It seems to me that the parties' entry into an arrangement by which Colorado would lease the premises from CH Design, while Clare was a director of Colorado and held the principal economic interest in CH Design, to all parties' knowledge, necessarily narrowed the scope of Clare's fiduciary duties to permit her to implement that arrangement on behalf of CH Design. It can scarcely be suggested that, having entered that arrangement, any attempt by Clare, on CH Design's part, to require the payment of rent by Colorado to CH Design would have amounted to a prohibited conflict of interest on her part. Each of these claims fails since the steps taken by Clare, although directed to promoting CH Design's interest in payment of rent in respect of the premises, were within the scope of the parties' consent to her continued involvement with CH Design as lessor of the premises. Failure to provide financial assistance to Colorado 377The eleventh matter (FASC [147(k)]) relates to Clare's failure to provide financial assistance to Colorado when requested to do so as pleaded in FASC [117]. I have addressed the relevant factual matters in paragraph 238-240 above. The prohibition upon conflicts of interest does not seem to me to impose a positive obligation upon a director to contribute funds to a company on demand, and Clare's unwillingness to do so in the relevant circumstances does not amount to a breach of the rule against conflict of interest. Use of confidential information and issue of creditor's statutory demand 378The thirteenth matter (FASC [147(m)]) relates to the alleged use of confidential information in respect of the winding up proceedings brought by CH Design as pleaded in FASC [126]-[127]. I have addressed this matter in paragraphs 243-246 above. This allegation is not established, because it was not established that the information relating to the amount of rent due but unpaid by CH Design to Colorado was confidential information, or that there was any misuse of that other confidential information in issuing a creditor's statutory demand or in bringing subsequent winding up proceedings. It also does not seem to me that there is any basis for a claim that a party can be deprived of recourse to the courts by a suggestion that the subject matter of the proposed proceedings are confidential to the parties, so that their disclosure to the Court would amount to a breach of confidentiality. 379The fourteenth matter (FASC [147(n)]) relates to the issue of a creditor's statutory demand by CH Design when it is alleged that Clare and CH Design knew that the amount claimed was genuinely disputed. It does not seem to me that it has been established the fact that the amount claimed by Colorado was genuinely disputed, which requires more than that Colorado, Helen or Kenneth consider that it ought not be required to pay the claimed debt, or that Clare and CH Design knew that matter. In any event, the parties' consent to Clare's involvement with CH Design necessarily extended to steps which might be taken in respect of debts owed by Colorado to CH Design, including the issue of a creditor's statutory demand which might found a presumption of insolvency in a proper case. Diversion of business 380Paragraph [147(o)] of the FASC deals with diversion of business and business opportunities. In submissions, the Plaintiffs contend that Clare had a conflict of interest as principal and controlling mind of each of Sorrento China, Sorrento Kitchens and BL/GLCo which involved the diversion of business opportunities away from Colorado. The Plaintiffs submit that Clare had at least since about March 2010 engaged in a systematic and deliberate diversion of valuable business opportunities away from Colorado, particularly with respect to Crane Group Ltd and that "[t]his had the effect of weakening Colorado's already precarious financial position and led ultimately to Colorado's demise as a going concern" (PWS [286]). 381Issues as to a director's diversion of corporate or business opportunities are addressed by reference to the no conflict and the no profit rules (to which I have referred in paragraphs 351-357 above) under Australian law, rather than by reference to any separate legal principles dealing with such opportunities: see R P Austin, "Fiduciary Accountability for Business Opportunities" in P D Finn, Equity and Commercial Relationships (1987 Lawbook Co) at pp 141-185; Streeter v Western Areas Exploration Pty Ltd (No 2) above. In Colour Control Centre Pty Ltd v Ty [1995] NSWSC 96 at [46], Santow J helpfully summarised the content of the relevant rules, so far as they apply to a director's appropriation of a corporate opportunity, as follows: "... a director or senior employee who takes up a business opportunity within the scope of the company's actual or potential line of business, without the consent of the company upon full disclosure of the facts, may be required to account to the company for any profit made or to compensate it for any loss suffered: Cook v. Deeks (1916) 1 AC 554 at 563-4; (1916-17) All ER 285; Pacifica Shipping Co Ltd v. Anderson (1985) 2 NZCLC 96-040; (1986) 2 NZLR 328, Green and Cara Pty Ltd v. Bestobell Industries Pty Ltd (1982) WAR 1." In Streeter v Western Areas Exploration Pty Ltd (No 2) above, McLure P (with whom Buss JA agreed) in turn observed (at [66]) that a fiduciary is under an obligation, without informed consent, not to promote his or her personal interest by making or pursuing a gain or benefit in circumstances in which there is a conflict or a real or substantial possibility of a conflict between the fiduciary's personal interest and those whom he or she is bound to protect. Her Honour also observed (at [76]) that: "When examining the case law, a distinction needs to be drawn between those cases in which the fiduciary was under a positive duty to acquire or seek to acquire a particular benefit or property for the company (Cook v Deeks [1916] 1 AC 554; Chan v Zacharia; Industrial Development Consultants Ltd v Cooley [1972] 1 WLR 443; [1972] 2 All ER 162; Keech v Sandford (1726) 25 ER 223) and cases where there is no such positive duty. This case falls into the latter category. Whether there is a sufficient connection in those circumstances can give rise to difficult questions of fact. Indeed, where a complex course of dealing is in issue, as in this case, minds reasonably may differ as to the outcome of the application of the principles: Maguire v Makaronis at 468. The principles in this area of the law are easier to state than to apply." 382I have addressed the relevant facts in paragraphs 286-313 above. It seems to me that the conduct to which I there referred amounts to a plain breach of the rule against conflict of interest, so far as Clare preferred Sorrento Kitchen's interest in making the relevant sales to Tradelink to Colorado's interests in respect of its ability to continue to deal with Tradelink. No issue of narrowing the scope of the duty or waiver arises, since Clare had not provided Colorado, Helen or Kenneth with sufficient information to obtain informed consent to her diverting sales to Colorado's customers to Sorrento Kitchens, nor had such consent been given. Participation in businesses of Sorrento China, Capri International, Sorrento Kitchens and BL/GLCo 383Paragraph 147(p) of the FASC pleads Clare's undertaking or participating, from February 2010, in the business of Sorrento China, Capri International, Sorrento Kitchens and BL/GLCo "as pleaded herein, being businesses which are the same as or competitive with the operations/business conducted by Colorado". The Plaintiffs' schedule of cross references (MFI 10) identifies the intended reference as to FASC [128]-[143] which plead Clare's involvement with each of these entities. I have addressed the relevant factual matters relating to that involvement in paragraphs 249-284 above. It does not seem to me that a breach of the rule against conflict of interest is established by Clare's involvement in Sorrento China or Capri International since, as I noted in dealing with the corresponding allegations of breach of the Share Sale Deed and Shareholders Agreement, Clare's involvement in those businesses was a necessary consequence of the structure of the arrangements agreed between the parties. 384It does seem to me that Clare's involvement in Sorrento Kitchens involved a breach of the rule against conflict of interest, notwithstanding that the scope of her duties would be narrowed by the terms of the Share Sale Deed and Shareholders Agreement to which I have referred above, so far as they specified the limits of permissible competition between the parties. As I noted in paragraph 278 above, it seems to me that there was a sufficient overlap in the business of Colorado and Sorrento Kitchens in 2010 that a breach of cl 16.2 of the Share Sale Deed was established, and a breach of the conflict of interest rule would also be established so far as the scope of Clare's duties were as defined in that clause. It seems to me that the loss arising from that breach is the same as the loss arising from the diversion of business from Colorado to Sorrento Kitchens in 2010. 385It does not seem to me that a breach of the rule against conflict of interest is established in respect of Clare's involvement with BL/GLCo, so far as that arose after Colorado had ceased to carry on business. I have dealt with a similar issue in respect of the limitations on competition under the Share Sale Deed in paragraphs 281-283 above. The Defendants also submit, and I accept, that: "Once Colorado ceased to carry on business, the prophylactic purpose of the fiduciary duties - at least, as regards conflicts between the business interests of the directors and the business interests of Colorado - was no longer served. There was no relevant business interest of the company for those duties to protect. There was no area of the company's business which would operate to mould the directors' relevant fiduciary duty to avoid conflicts (by limiting their ability to participate in areas conflicting with the company's). The "economic liberty" of the directors (to use the words of Bryson J in Noranda Australia Ltd v Lachlan Resources NL (1988) 14 NSWLR 1) was no longer influenced by any concern regarding conflicts with the company's business. At that stage, the prospect of a conflict in business interests, as with the proposition that business can be diverted from a company which is not carrying on any business, becomes meaningless. Any ongoing duties would be formulated in such a way as to recognize that the prospect of ongoing conflict in business interests would not arise (and would not include proscribing participation in the area of the company's former commercial activity)." (DWS [168]) Purchase of stock 386The seventeenth matter (FASC [147(q)]) relates to the purchase of the stock pleaded in FASC [61], implemented by the Deed of Settlement. It does not seem to me that the relevant breach has been established. The arrangements reached between the parties, under the Share Sale Deed, and later implemented by the Deed of Settlement, contemplated the purchase of stock by Colorado from Clare and it must have been recognised by the parties that Clare's interests as vendor of the stock would differ from the interests of Colorado as purchaser of the stock, and any fiduciary obligations of Clare in respect of the transaction were necessarily narrowed accordingly. Although Colorado was party to the relevant transaction, under the terms of the Deed of Settlement, its substance appears to have been, and to have been treated by the parties as being, a dealing between the Plaintiffs as purchasers of Colorado's business, or Helen and Kenneth (and Mr Huang as funder) as their principals, rather than between Colorado and Clare in her capacity as a director of the Colorado. The totality of the particularised matters and the Plaintiffs' wider case 387As I noted above in respect of the alleged breaches of the Share Sale Deed and Shareholders Agreement, I have had regard to the possibility that, even if the particular acts and circumstances that are separately pleaded as giving rise to a conflict of interest in FASC [146]-[147] did not do so, they might in totality do so. However, I have held above that the particular matters pleaded, with the exception of the diversion of Tradelink's business to Sorrento Kitchens, were either matters that were contemplated by the arrangements between the parties - particularly in respect of dealings with Sorrento China and CH Design - or were not established, and it does not seem to me that the totality of those several matters does, in those circumstances, give rise to the pleaded conflicts in circumstances that the individual matters relied upon do not do so. 388The Plaintiffs also advanced a wider case in submissions that, in effect, Clare sought to destroy Colorado's business. They contend that, by February 2010, Clare had lost interest in supporting Colorado's business and was involved either herself or in concert with Mr Xie in setting up the new business to be conducted by Sorrento Kitchens for the purpose of competing with Colorado or, alternatively, herself competing directly with Colorado using Sorrento China; and that from March 2010, Clare undertook measures designed to cause financial pressure for Colorado and undermine its business by, in substance, seeking to require that Colorado pay rent due to CH Design in accordance with the terms of the relevant lease; causing Sorrento China to change its prices and payment terms in mid-2010; and from March 2010 approaching Colorado's contacts and customers to divert business to Sorrento Kitchens or Sorrento China. 389While I accept that that wider allegation provides a possible explanation of events, it does not seem to me that it has been established on the balance of probabilities, having regard to the gravity of the claim that is advanced. The diversion of business to Sorrento Kitchens has been established, as noted above. So far as this wider allegation turns upon Clare's conduct in respect of CH Designs and Sorrento China, that conduct in respect of CH Design would be equally explicable by a reasonable wish to have rent paid when due and to limit her exposure to the credit risk of Colorado when it was no longer under her control; its sales were declining, in part by reason of issues relating to Kenneth's management of the business and its lack of capital to fund purchases of stock, and its liquidity was under pressure, and her conduct in respect of Sorrento China would be explicable by similar factors and a wish to recover rising costs which were apparently also reflected in price rises to other customers of the business. The availability of these alternative explanations, consistent with the evidence, seems to me to exclude the wider finding sought by the Plaintiffs. Whether HY International has standing to bring a claim for breach of statutory duties under ss 180-183 of the Corporations Act 390The next category of claims involves claims for breach of statutory duty, which are brought by HY International pursuant to the assignment by the provisional liquidator of those causes of action to it to which I referred above. A preliminary question arises as to whether HY International has standing to bring those causes of action. 391The claim for compensation in favour of Colorado is brought under s 1317H of the Corporations Act and also under s 1324(10) of the Corporations Act (FASC [164]), to which I will refer below. Section 1317H(1) of the Corporations Act provides that: "A Court may order a person to compensate a corporation or registered scheme for damage suffered by the corporation or scheme if: (a) the person has contravened a corporation/scheme civil penalty provision in relation to the corporation or scheme; and (b) the damage resulted from the contravention. The order must specify the amount of the compensation." 392The Plaintiffs point out that the issue of whether a corporation's action for breaches of directors duties was assignable was considered in Re Cant (in his capacity as liquidator of Novaline Pty Ltd (ACN 006 622 933) (in liq)) [2011] FCA 898; (2011) 282 ALR 49 and North J there held that, while the bare right to litigate under s 1317H of the Corporations Act is not assignable under the general law, a liquidator was able to assign that cause of action pursuant to the specific power in s 477(2)(c) of the Corporations Act. That approach is consistent with the decision in UTSA Pty Ltd (in liq) v Ultra Tune Australia Pty Ltd (1996) 21 ACSR 457, which approved the assignment of various statutory claims against directors under s 232(2), (4), (5) and (6) of the Corporations Law. However, that decision was considered by the New South Wales Court of Appeal in Owners of Strata Plan 5290 above at [70]-[72], which held that it was not authority that an otherwise non-assignable chose in action could be assigned under s 477 of the Corporations Act. 393The Defendants submit that there is no power in s 1317H of the Corporations Act for the Court to order a person to compensate any third party such as any shareholder of the corporation, and that the right of compensation under s 1317H of the Corporations Act is only available to the corporation or registered scheme which suffers the relevant loss or damage. On that contention, Colorado could (by its provisional liquidator) maintain a claim for loss or damage suffered by it and assign the fruits of that claim to HY International, but an assignment of the right of action to HY International does not confer upon it a right to recover substantive damages, where it was not in fact the corporation which has suffered the relevant loss or damage. The Defendants rely on decision of Barker J in MG Corrosion Consultations Pty Ltd above as authority for that proposition. His Honour there observed that a claim for compensation under s 1317H of the Corporations Act in respect of losses referred by an alleged breach of the Corporations Act is not assignable under the Corporations Act, because only a corporation or registered scheme that suffers damage can be compensated under this provision. The Plaintiffs point out that his Honour was not taken to, and does not refer to, the decisions in Re Cant above and in Ultra Tune above, and contend that decision should not be followed. 394In Mijac Investments Pty Ltd v Graham (No 2) [2009] FCA 773; (2009) 72 ACSR 684 at [32], Gordon J noted that statutory causes of action had been held not to be assignable, by reason of the distinction between personal causes of action and an impersonal right in the nature of a proprietary right. Her Honour also concluded (at [33]) that a claim arising from a breach of s 232 of the Corporations Act by a controller, as an officer of the company (which is analogous to a claim against a director under s 180 of the Corporations Act), is not property and cannot be assigned as a chose in action. Her Honour also observed (at [34]) that the question whether the exception under Trendtex above, where an assignee has a genuine commercial interest in enforcement of another's claim, is of uncertain application in Australia. That reasoning depends, however, on the approach that I have not followed above in respect of the assignment of Colorado's claim for breach of fiduciary duty to HY International. 395It seems to me that the decision in MG Corrosion Consultations Pty Ltd above is correct, so far as the statutory claims for breach of directors' duties relying upon s 1317H of the Corporations Act are concerned. Irrespective of any assignment of the relevant causes of action, HY International does not have standing to obtain an order of compensation under s 1317H of the Corporations Act, and an assignment cannot confer upon it a right which that section does not. That position is reinforced by s 1317J(2) of the Corporations Act which provides that, relevantly, the corporation may apply for a compensation order. In the present case, Colorado does not seek such an order, and the assignment of its causes of action to HY International does not alter that fact. 396That position is further reinforced by s 1317J(4) of the Corporations Act which provides that no person may apply for, relevantly, a compensation order unless permitted by that section. The fact that, as the Plaintiffs point out, the expression "corporation" is defined in s 57A of the Corporations Act in an inclusive manner does not alter that position, since the reference to the "corporation" in ss 1317H and 1317J is plainly to the corporation that has suffered the relevant loss. I therefore do not accept the Plaintiffs' submission that the reference to "corporation" in those sections includes any person who has the benefit of an assignment of the corporation's causes of action under s 477(2)(c) of the Corporations Act. Even if the relevant rights have, in one sense, been effectively assigned by the provisional liquidator to HY International, the terms of ss 1317H and 1317J of the Corporations Act do not permit their enforcement by HY International. It is, of course, still open to a person who seeks to bring such a claim to bring it as a derivative action in a proper case. 397The Plaintiffs contend that, if the Court finds (as I have found) that HY International does not have standing to obtain relief under s 1317H of the Corporations Act, it may nonetheless obtain relief under s 1324(10) of the Corporations Act. Subsection 1324(10) of the Corporations Act provides that: "Where the Court has power under this section to grant an injunction restraining a person from engaging in particular conduct, or requiring a person to do a particular act or thing, the Court may, either in addition to or in substitution for the grant of the injunction, order that person to pay damages to any other person." The Plaintiffs point out that they have sought damages under s 1324(10) in prayer 11 and have sought an injunction in prayer 19 of the relief claimed in the FASC. They submit that the claim for the injunction supports relief under s 1324(10) and contend that the restriction identified by the Queensland Court of Appeal in McCracken v Phoenix Constructions (Qld) Pty Ltd [2012] QCA 129; [2013] 2 Qd R 27 does not apply. 398The Defendants respond that s 1324(10) of the Corporations Act does not permit an award of damages, where the Court has power to grant an injunction, in favour of any person whose interests are adversely affected by a contravention of a civil penalty provision. They also submit that an injunction is now not available to HY International where Colorado ceased to trade in January 2011 and subsequently entered into provisional liquidation, and contend that the claim for an injunction is a colourable attempt to enliven a claim to damages under s 1324(10) of the Corporations Act. They submit that, where an injunction is not available, there is nothing for an award of damages to "substitute for" or "supplement" within the principles identified in McCracken above. 399I had previously addressed this issue in determining an application to strike out this defence ([2013] NSWSC 1613), where I observed (at [40]-[41]) that: "The Plaintiffs also contend that the claim under s 1324(10) of the Corporations Act is not properly arguable, relying on the decision of the Court of Appeal of the Supreme Court of Queensland in McCracken v Phoenix Constructions (Qld) Pty Ltd [2012] QCA 129; (2012) 2 Qd R 27; (2012) 289 ALR 710. Mr Harper contended, consistent with the reasoning of the Court of Appeal of the Supreme Court of Queensland in Phoenix, s 1324(10) had no application in the absence of claim for an injunction against Mr Tan and Ms Helen Huang. I accept that the decision in Phoenix Constructions (Qld) Pty Ltd above would be binding upon me, as a Judge sitting at first instance, and is also likely to be followed by a Court of Appeal in this State by reason of the importance given to uniformity of decision-making in respect of the Corporations Act. However, I do not consider that the question of the availability of a claim under s 1324(10) of the Corporations Act can be said to be closed beyond argument. The scope of that section and its predecessors has been a matter of considerable controversy in the case law; a wider construction was given to predecessors of s 1324(10) in early case law, before the narrower construction came to prevail; and there is substantial body of academic commentary contending that the wider construction should be given to that section. It seems to me that, at least in the High Court of Australia, the wider construction of that section for which Ms Huang contends would be open to be adopted. If the Court now strikes out a claim which advances that wider construction, that would deny the First and Second Defendants the ability to contend for that wider construction at least at the appellate level, or at least run the risk that, if an appellate Court were to take a wider view of the scope of the section, the matter would then have to be remitted for a further hearing at first instance in the absence of factual findings as to the claim that had been struck out." 400In Executor Trustee Australia Ltd v Deloitte Haskins & Sells (1996) 135 FLR 314; (1996) 22 ACSR 270, Perry J noted, in respect of the corresponding provision in s 574(8) of the Companies (SA) Code, that the focus of the section was upon the power to grant injunctions rather than the creation of a right to damages and pointed to other provisions in the Companies Code which conferred specific remedies for particular contraventions. In GE Capital Australia v Davis [2002] NSWSC 1146; (2002) 180 FLR 250, Bryson J referred to earlier authorities including Waterhouse v Waterhouse (1999) 148 FLR 312; 46 NSWLR 449 at 490-491 and Artistic Builders Pty Ltd v Elliott and Tuthill (Mortgages) Pty Ltd [2002] NSWSC 16 at [132] and observed (at [61]) that: "As there was not when the litigation was commenced any prospect that an injunction would be granted, the power to grant damages in addition to grant of an injunction cannot apply, nor can the power to grant damages in substitution for the grant of an injunction. Where there is simply no prospect of the grant of an injunction there is no room under subs (10) for ordering payment of damages." 401In McCracken above, the respondents contended that it was sufficient to establish an entitlement to damages under s 1324(10) that the Court had jurisdiction to grant an injunction, and that the circumstance that an injunction might only have been granted at an earlier time was not determinative and the fact that the injunction might have been refused on discretionary grounds was irrelevant. Fraser JA (with whom White and Applegarth JJA agreed) undertook a detailed review of earlier case law and concluded that s 1324(10) did not authorise the award of damages to a person other than the company in the relevant circumstances. His Honour pointed to the scope of Pt 9.4B of the Corporations Act, and pointed out that s 1317J provided for ASIC to apply for the three specified remedies and for the corporation (or a responsible entity for a registered scheme) to apply for a compensation order but not for any other person to apply for those remedies. His Honour noted (at [27]) that that Part was: "difficult to reconcile with a construction of s 1324(10) under which any person whose interests are adversely affected by the contravention of a civil penalty provision might be awarded damages for that adverse effect where the Court has power to grant an injunction." His Honour also noted that that construction would be inconsistent with the effect of s 1317J in providing that only ASIC and the corporation may claim compensation and would make a "dead letter" of the provisions in Pt 9.4B which create and regulate the power to award compensation. That decision is a recent decision of an appellate court dealing with the corresponding issue and I consider I should follow it. I note that, in Sutherland v Pascoe (No 2) [2012] FCA 1361; (2012) 297 ALR 328, Jacobson J also referred to the consideration of the authorities in McCracken above and observed (at [39]) that the effect of the authorities is that the power to award damages under s 1324(10) does not exist independently of an application for injunctive relief. 402In the present case, it also does not seem to me that the application for injunctive relief is of substance, as distinct from an artifice to seek to create a basis to recover damages under s 1324(10) of the Corporations Act. I can seen no reason why an injunction to restrain any continuing conduct of Clare would now be granted where Colorado ceased to trade in January 2011 and subsequently entered into provisional liquidation and where there was no identification in the evidence of any such continuing conduct. It does not seem to me that the basis for an order for damages in lieu of an injunction under that subsection is established in that situation. In these circumstances, I do not accept that HY International can obtain damages under s 1324(10) of the Corporations Act, in respect of alleged contraventions of ss 180-183 of the Corporations Act, that it does not have standing to claim under Pt 9.4B of the Corporations Act. 403This result does not deprive HY International of an opportunity to vindicate Colorado's rights in respect of the statutory causes of action. It had that opportunity, when an earlier application for leave for it to bring a derivative action was heard in the course of these proceedings. It lost that opportunity by its choice not to cause an adequate indemnity for the costs of such an action to be given to Colorado, as set out in my judgment delivered on 12 February 2014 ([2014] NSWSC 64). Claim for breach of statutory duties 404It follows from the conclusion that I have reached above that HY International does not have standing to pursue a claim for damages under ss 1317H or 1324(10) of the Corporations Act, in respect of Colorado's claim for breach of statutory duties owed by Clare to it, and it is not strictly necessary to determine the claims for breach of those duties. I should nonetheless do so against the contingency that an appellate court might take a different view as to whether the assignment of Colorado's rights allowed HY International standing to bring a claim for damages otherwise available only to Colorado, in the absence of leave for Colorado to bring a derivative claim. 405The parties partly agreed to the scope of the issues raised by the claim for breach of the statutory duties. The Defendants identified an issue as to identification of the content of the relevant statutory duties in relation to conflicts of interest, business opportunity and competition, which they contended would involve questions as to any understandings and agreements between directors; an assessment of the scope of the statutory duties owed by Colorado's directors in light of the particular understandings and agreements between the directors; and whether those duties were breached by Clare in the circumstances of this case. The Plaintiffs contend that the only real issue is whether Clare breached the statutory duties and that the content of those duties is well established as a matter of law and informed by the Share Sale Deed and the Shareholders Agreement. 406The Plaintiffs plead (FASC [12]) that Clare owed statutory duties to Colorado under ss 180-183 of the Corporations Act and a duty to give other directors notice of any matter in which Helen had a material personal interest arising under s 191 of the Corporations Act. The Defendants respond (Amended Defence [12]) that the scope of the duties owed by Clare was informed by the terms of Colorado's constitution, and in particular cl 9.1 of Colorado's constitution (to which I have referred above), and was subject to the assent of Colorado's directors and shareholders. The Plaintiffs in turn plead, in FASC [150]-[155], that Clare breached ss 180(1), 181(1), 182(1) and 183(1) of the Corporations Act and also breached a duty to avoid conflicts of interest and a duty of confidentiality. Allegation of breach of s 180 of the Corporations Act 407The Plaintiffs plead (FASC [150]) breaches of s 180(1) of the Corporations Act, particularised by reference to six matters. Section 180(1) of the Corporations Act requires a director or officer to exercise his or her powers and discharge his or her duties with the degree of care and diligence which a reasonable person would exercise if he or she was a director or officer of a corporation in the corporation's circumstances and occupied the office within that corporation held by the director or officer and had the same responsibilities within the corporation as the director or officer. The Plaintiffs refer to well-known case law in respect of this section, including Vrisakis v Australian Securities Commission (1993) 9 WAR 395; 11 ACSR 162; Australian Securities Commission v Gallagher (1993) 11 WAR 105; 10 ACSR 43 and Australian Securities & Investments Commission v Vines [2005] NSWSC 738; (2005) 55 ACSR 617, affirmed by the Court of Appeal in Vines v Australian Securities & Investments Commission [2007] NSWCA 75; (2007) 73 NSWLR 451. 408This case does not raise any novel issues as to the content of such duties and a broad summary of the applicable principles will be sufficient. In Australian Securities Commission v Gallagher above at 52-53, Pidgeon J observed that the test whether the statutory duty of care and diligence had been contravened was an objective one, that a director need not exhibit a greater degree of skill in the performance of his or her duties than may reasonably be expected for a person of his or her knowledge and experience, in the relevant circumstances, and that it was relevant to consider the way in which the work of the company was distributed between its directors and other officers, provided that distribution was reasonable. In Australian Securities and Investments Commission v Adler above at [372] (upheld by the Court of Appeal in Adler v Australian Securities and Investments Commission [2003] NSWCA 131; (2003) 179 FLR 1), Santow J noted that the duties imposed by the section are essentially the same as directors' duties at general law; that, in determining whether a director had exercised reasonable care and diligence, the test was what an ordinary person, with the director's knowledge and experience, might be expected to have done in the circumstances if he or she was acting on his or her own behalf; and that the duty of care and diligence would require special vigilance in a situation of potential conflict, requiring scrupulous concern on the part of those officers who become aware of that transaction to ensure that any necessary corporate approvals are obtained and safeguards put in place. That decision has been cited with approval in recent case law, including Parker v Tucker [2010] FCA 263; (2010) 77 ACSR 525 at [70] per Gordon J and Diamond Hill Mining Pty Ltd v Huang Jim Mining Pty Ltd [2011] VSC 288; (2011) 84 ACSR 616 at [90] per Croft J. 409At first instance in Australian Securities & Investments Commission v Vines above, Austin J in turn noted (at [1058]-[1060]) that the section adopted an objective standard of care measured by reference to what a reasonable person of ordinary prudence would do, which could be more demanding in circumstances where the individual has been appointed by reference to a particular skill possessed by that individual. The Court of Appeal in Vines v Australian Securities & Investments Commission above in turn observed (at [141]-[145]) that the standard of care applicable to the statutory duty is similar to the general law duty and it is not necessary to establish a higher order of negligence in order to establish breach of that duty. In Australian Securities & Investments Commission v Rich [2009] NSWSC 1229; (2009) 236 FLR 1, Austin J noted (at [7203]) that the statutory duty incorporates a minimum standard of diligence and (at [7242]) that the question in respect of a contravention of s 180(1) was whether a company officer failed to meet the standard of care and diligence, and this was to be assessed with regard to the circumstances existing at the relevant time, without the benefits of hindsight and with the distinction between negligence and mistakes or errors of judgment firmly in mind. 410The first and second of the matters on which the Plaintiffs rely in FASC [150] are the alleged misappropriation of Colorado's monies and the use of those monies for Clare's own purposes and the refusal to repay them to Colorado "as pleaded herein". The Plaintiffs' schedule of cross-references (MFI 10) indicates that the intended reference is to the matters pleaded in FASC [109]-[114] and I have addressed those issues in paragraphs 158-184 above. The third of those matters is the allegation that Clare placed herself in a position of conflict "as pleaded herein". The Plaintiffs' schedule of cross-references indicates that the intended reference is to the matters pleaded in FASC [146] relating to her involvement with CH Design and I have addressed that issue in paragraphs 373-376 above. The fourth of those matters relates to the alleged diversion of business and business opportunities from Colorado to Sorrento China, Capri International, Sorrento Kitchens and BL/GLCo "as pleaded herein" and I have addressed that issue in paragraphs 286-334 above. The fifth of those matters relates to Clare's undertaking or participating in the business of Sorrento China, Capri International, Sorrento Kitchens and BL/GLCo "as pleaded herein". The Plaintiffs' schedule of cross-references indicates that the intended reference in respect of both the fourth and fifth matters is to the matters pleaded in FASC [128]-[143] and I have addressed that issue in paragraphs 249-284 above. The sixth of those matters relates to Clare causing or inducing Colorado to purchase the stock pleaded in FASC [61(a)] and I have addressed that issue in paragraphs 247-248 above. 411The matters relied on in the Plaintiffs' written closing submissions do not wholly correspond to those pleaded in FASC [150]. The Plaintiffs contended (at PWS [334]) that: "Contrary to adhering to the required standard of care and diligence, the First Defendant failed to use her best endeavours to ensure the operations of Colorado were conducted in a vigorous, efficient and profitable manner and in accordance with good business practices by failing to ensure that: * management had proper and adequate bookkeeping and accounting systems; * appropriate accounting staff were trained; * management were provided with proper and adequate financial information; and * terms of trade were negotiated favourably on behalf of Colorado." These matters overlap with those pleaded in FASC [105] which I have addressed in paragraphs 186-201 above and a breach of s 180 of the Corporations Act is not established by those matters for the reasons I there noted. 412The Plaintiffs also contended that Clare's alleged failure to take an active and constructive part in the supervision of the Colorado's management, where she knew that she was being relied upon by "New Management" (namely Kenneth and Helen) to provide such supervision, contravened s 180(1) of the Corporations Act. I have addressed that issue in paragraphs 190-200 above. I also do not accept that submission, so far as it involves an alleged breach of s 180 of the Corporations Act where, so far as the evidence goes, Helen and Kenneth had previously had an extended transition period and were not entitled to require Clare, once she was no longer appointed as or remunerated as General Manager, to perform the responsibilities which attached to the role to which Kenneth had been appointed and for which he was remunerated. Clare's duties under s 180 of the Corporations Act were therefore to be determined, after she ceased to be General Manager, by reference to her role as a non-executive director of Colorado, in the context of the parties' duties under the Shareholders Agreement, but not on the basis that she had executive responsibilities within Colorado. 413In their written closing submissions, the Plaintiffs also contended that Clare breached her duty owed to Colorado under s 180 of the Corporations Act by utilising confidential information concerning the financial position of Colorado to cause CH Design to serve it with a creditor's statutory demand and that: "the decision to cause [CH Design] to serve a statutory demand on Colorado was not made with care and diligence with respect to [Clare's] duties to Colorado" (PWS [336]). I do not accept the first submission, since, as I noted in paragraph 245 above, the fact that Colorado had not paid rental to CH Design was plainly known to CH Design and not confidential to Colorado. I do not accept the second submission, since the decision to issue the creditor's statutory demand was made in the affairs of CH Design and Clare owed no duty of care and diligence to Colorado as to how it was made. I have addressed the issue of conflict of interest in that regard in paragraphs 379 above. 414In their written closing submissions, the Plaintiffs also contended that: "[Clare] also being the sole shareholder, director and controlling mind of Sorrento China breached her obligations to Colorado under s 180 by allowing Colorado to enter into supply terms with Sorrento China in circumstances where she was the sole cause of Sorrento China subsequently, unilaterally and without notice to Colorado increasing prices for the products to be purchased by Colorado by between 8 and 12 per cent less than half a year later and in circumstances where she knew, or ought reasonably to have known, that Sorrento China supplied Colorado with 90% of its products. [Clare] breached her duties either at the time the supply agreements were entered by Colorado and Sorrento China, or alternatively, at the time the terms of trade were unilaterally altered to the detriment of Colorado. It can offer no excuse at law that by making this decision, [Clare] was exercising care and diligence in her role as a director of Sorrento China. By maintaining her active involvement in the business of Colorado as a shareholder and director, [Clare] continued to owe a degree of care and diligence in her decision making with respect to Colorado in accordance with s 180. What [Clare] should have done before or at least no later than the time the interests of Colorado, Sorrento China and [CH Designs] became unaligned is resign from one or more companies (in this proceeding, from Colorado). [Clare] cannot now rely on her involvement in companies outside of Colorado to somehow downplay her duties owed to it" (PWS [337]-[338]). 415Whatever the position in respect of conflict of interest, it does not seem to me that this matter is capable of establishing a breach of the duty of care and diligence under s 180 of the Corporations Act on Clare's part. The Supply and Buy Agreement with Sorrento China was a negotiated agreement reached in connection with the sale of Colorado's shares and Helen and Kenneth (and possibly also Mr Lai) were acting on Colorado's behalf in respect of the negotiation of that agreement. To the extent that Clare was involved in later changes of Sorrento China's terms of trade, she was acting on its behalf and not Colorado's behalf. Where a person is a director of two competing companies, as the case law permits in the circumstances to which I referred above, it does not seem to me that he or she owes a duty of care to the second in making a decision on behalf of the first, and no authority was cited for such a proposition. 416In their written closing submissions, the Plaintiffs also submitted that: "... Colorado, and its new management, maintained the involvement of [Clare] post sale of the business to obtain the benefit of favourable terms of trade, long established customer relationship, experienced management of affairs and financial accommodation and assistance (if and when required). The failure of [Clare] to adhere to these requirements, in the context, constitutes a breach of s 180(1)" (PWS [339]). These may well have been matters that the Plaintiffs had hoped to achieve by requiring that Clare remain a director and shareholder of Colorado. I have addressed the question of dealings with Sorrento China and Clare's obligations in respect of management, after Kenneth had been appointed General Manager, above. No authority was cited for any general proposition that a director's duty of care and diligence under s 180 of the Corporations Act requires that he or she fund a company on demand and I do not understand that proposition to be the law. 417I have again had regard to the possibility that the totality of the matters pleaded might give rise to a contravention of s 180 of the Corporations Act even if the individual matters pleaded did not. However, the facts underlying the alleged breaches of that section have not been established in respect of the majority of those matters - including the alleged misappropriation of Colorado's monies and failure to account, the alleged failure to assist New Management and the pleaded conduct in respect of the purchase of unsuitable stock - for the reasons noted above, and other matters such as Clare's involvement with Sorrento China and CH Design reflected the underlying arrangements between the parties. It does not seem to me that the pleaded breach arises from these matters as a whole, where it does not arise from them individually. I have addressed the diversion of Tradelink's business to Sorrento Kitchens, as to which a breach of the Shareholders Agreement and ss 182-183 of the Corporations Act has been established, elsewhere in this judgment. Allegation of breach of s 181 of the Corporations Act 418The Plaintiffs plead (FASC [151]) breaches of s 181(1) of the Corporations Act, particularised by reference to the particulars to FASC [148], which in turn particularises sixteen matters in support of the alleged breaches of the Share Sale Deed and Shareholders Agreement. I have addressed those sixteen matters in paragraphs 156-338 above. 419Section 181(1) of the Corporations Act requires a director or other officer of a corporation to exercise his or her powers and discharge his or her duties in good faith in the best interests of the corporation, and for a proper purpose. In Chew v R (1991) 4 WAR 21; 5 ACSR 473 at 499, Malcolm CJ summarised the requirements of that duty as being that directors (1) must exercise their powers in the interests of the company, and must not misuse or abuse their power; (2) must avoid conflict between their personal interests and those of the company; (3) must not take advantage of their position to make secret profits; and (4) must not misappropriate the company's assets for themselves. 420The case law is divided as to whether a contravention of s 181(1)(a) of the Corporations Act requires that it be established that a director engaged deliberately in conduct which he or she knew was not in the company's best interests: for example, Forge v Australian Securities and Investments Commission [2004] NSWCA 448; (2004) 213 ALR 574 at [245] per McColl JA (with whom Handley and Santow JJA agreed); Holyoake Industries (Vic) Pty Ltd v V-Flow Pty Ltd above at [150], varied on appeal on another point in V-Flow Pty Ltd v Holyoake Industries (Vic) Pty Ltd above. In Westpac Banking Corporation v Bell Group Ltd (in liq) (No 3) [2012] WASCA 157; (2012) 44 WAR 1, the Court of Appeal of the Supreme Court of Western Australia unanimously held that the corresponding general law duty to act in good faith in the company's best interests was subjective and would be complied with if directors honestly believed they acted in the company's best interests (at [923] per Lee AJA, at [1988] per Drummond AJA, [2027], at [2772], [2795] per Carr AJA). The alternative view is that a contravention of that limb of s 181 can be established if the law objectively considers that what the director did was improper, even if the director subjectively believed that he or she was acting in the company's best interests: see, for example, Australian Growth Resources Corporation Pty Ltd v Van Reesema (1988) 13 ACLR 261 at 270-271; 6 ACLC 529 per King CJ; Mernda Developments Pty Ltd (in liq) v Alamanda Property Investments No 2 Pty Ltd [2011] VSCA 392; (2011) 86 ACSR 277 at [32]-[33]. The difference in those approaches does not seem to me to be material for the purposes of this case. The section may be contravened if a director promotes his or her personal interest in a situation where there is a conflict or real or substantial possibility of a conflict between those interests and the company's interests: Australian Securities and Investments Commission v Adler above at [735]; Parker above at [72]. 421A contravention of s 181(1)(b) may also be established if a director does not exercise his or her powers for the purpose for which they were conferred or exercised them for an improper purpose, and the bulk of authority indicates that question is to be determined objectively: Permanent Building Society (in liq) v Wheeler (1994) 11 WAR 187; 14 ACSR 109 at 137 per Ipp J (with whom Malcolm CJ and Seaman J agreed); Australian Securities and Investments Commission v Adler above at [738]-[739]; Parker above at [73]. In Westpac Banking Corporation v Bell Group Ltd (in liq) (No 3) above, the majority held that whether a director acts for an improper purpose, for the purposes of the corresponding general law duty, is determined objectively involving an assessment by the Court of what was reasonable in the circumstances (at [933] per Lee AJA, at [1988], [2027], [2073] per Drummond AJA). By contrast, Carr AJA held that the test whether directors had acted for an improper purpose was primarily subjective, although a decision would be voidable if directors acted in good faith for a purpose that was beyond their powers or for a collateral purpose (at [2923]). 422The first matter particularised as a contravention of this section is the alleged misappropriation of Colorado's monies; the fourth matter relates to utilisation of Colorado's monies for Clare's own purposes; and the eighth matter relates to Clare refusing to cause Sorrento China and CH Design to offset the "Acknowledged Amount" (as defined) from any amounts owed by Colorado to those entities. I addressed these matters in paragraphs 158-184 above. In their written closing submissions, the Plaintiffs relied on Clare's use of monies paid into Colorado's ANZ accounts and her failure to remit the proceeds to Colorado as a breach of s 181 of the Corporations Act, and contended that, by maintaining bank accounts owned and operated in the name of Colorado to which Clare remained the sole signatory (even after the sale of the business) and to which she did not seek the consent of the new directors when drawing down and using monies in those accounts, Clare breached her obligation to Colorado to act in good faith in its best interests. I have not found that matter to be established and a contravention of this section therefore does not arise on that basis. 423I do not accept that the maintenance of these accounts in this manner, which appears to have been agreed between at least Clare and Kenneth and was plainly not well thought-out, involved a breach of s 181 of the Corporations Act on Clare's part, and Clare accounted for monies due to Colorado, as agreed at the meeting on 11 May 2010, by the offset agreement which I have found on balance, was reached at that meeting. I do not accept the Plaintiffs' submission that the position is analogous to that considered in Re Wan Ze Property Development (Aust) Pty Ltd [2012] NSWSC 722; (2012) 90 ACSR 593, where the parties' agreement here was that Clare would take the benefit of the monies in the relevant accounts, subject to accounting to Colorado for any payments mistakenly made by customers into those accounts, and where payments were also made out of those accounts as contemplated by that arrangement for Colorado's benefit. A contravention of the section is not established on that basis. 424The second matter particularised as a contravention of this section is the alleged Colorado Continuing Performance Representations, which I addressed in paragraphs 128-141 and 185 above. I there noted that the first and second of the pleaded representations were not falsified; I was not satisfied that the third, fourth and fifth pleaded representations were made. The third matter particularised as a contravention of this section was the alleged failure to assist new management, which I addressed in paragraphs 186-201 above. The relevant contravention was not established, and in any event does not seem to me to involve matters that would constitute a contravention of s 181 as distinct from a possible breach of the duty of care and diligence under s 180 of the Corporations Act. A contravention of the section is therefore not established by reason of these matters. 425The fifth matter particularised as a contravention of this section is causing Sorrento China wrongfully to make demands for payment and to refuse to deliver goods to Colorado, which I addressed in paragraphs 202-215 above. The sixth, thirteenth and fourteenth particulars relate to dealings with CH Design, which I addressed in paragraphs 216-237 above. The seventh matter relates to a failure to provide financial assistance to Colorado, which I addressed in paragraphs 238-240 above. A contravention of the section is not established for the reasons I indicated in those paragraphs. 426The ninth matter particularised to this paragraph is the allegation that Clare placed herself in a position of conflict "as pleaded herein". I have addressed this issue generally in paragraphs 241-242 and 358-386 above. In their written closing submissions, the Plaintiffs also relied on the alleged conduct of a business in competition with Colorado as a breach of s 181 of the Corporations Act. I have addressed this matter in paragraphs 286-338 above and the diversion of sales to Tradelink from Colorado to Sorrento Kitchens during 2010 was plainly not undertaken in good faith in Colorado's best interests or for a proper purpose and amounts to a breach of that section. 427The tenth matter particularised to this paragraph raises a related allegation that Clare preferred the interests of herself and CH Design to the interests of Colorado "as pleaded herein". In their written closing submissions, the Plaintiffs contended that Clare's conduct in causing CH Design to serve the creditor's statutory demand on Colorado breached her duties to act in good faith in the best interests of Colorado. I have addressed these matters in paragraphs 236 and 373-376 above and it does not seem to me that Clare's conduct in this regard breached s 181 of the Corporations Act for the reasons I there indicated. 428The eleventh matter particularised to this paragraph is the allegation that Clare preferred the interests of herself and Sorrento China to the interests of Colorado "as pleaded herein". I have addressed these matters in paragraphs 366-370 above. In their written closing submissions, the Plaintiffs also contended that, by arranging for Colorado to contract with Sorrento China in circumstances where she knew, or ought reasonably to have known, that she would cause Sorrento China to alter its trading terms and prices to the detriment of Colorado, Clare breached her duties to act in good faith in Colorado's best interests. This submission overlaps with the issue that I have addressed in paragraphs 202-215 above. This submission fails to recognise that, first, the Supply and Buy Agreement with Sorrento China was an essential aspect of the sale of Colorado's business since Colorado would need to have a supplier of the goods it distributed and that second, as I noted above, Helen, Kenneth (and to some extent Mr Lai) represented Colorado's interests in the entry into this agreement. This submission also assumes, without evidence, that the later decision to alter Sorrento China's terms of trade was known at the time the terms of that agreement were settled. I do not accept this submission. It does not seem to me that Clare's conduct in this regard breached s 181 of the Corporations Act for the reasons I there indicated. 429The twelfth matter particularised to this paragraph relates to Clare using Colorado's confidential information to her own profit and advantage. I have addressed these matters in paragraphs 243-246 above and it does not seem to me that Clare's conduct in this regard breached s 181 of the Corporations Act for the reasons I there indicated. The fifteenth particular relates to Clare failing to provide financial assistance to Colorado, which I addressed in paragraphs 238-240 above. The sixteenth matter relates to Clare causing or inducing Colorado to purchase the stock pleaded in FASC [61(a)] which is alleged not to have been suitable to its trading requirements and not capable of being promptly sold to Colorado's customers. I have addressed this matter in paragraphs 247-248 above. I do not consider that the alleged breach of s 181 of the Corporations Act has been established by these matters for the reasons I indicated in those paragraphs. 430Again, I have had regard to whether the matters pleaded might together establish a breach of s 181 of the Corporations Act although those matters individually did not do so. I do not consider that a breach is established by these matters taken together for the reasons that I have set out above in respect of the Plaintiffs' reliance on those matters to establish a breach of the Share Sale Deed and Shareholders Agreement. Allegation of breach of s 182 of the Corporations Act 431Paragraph 152 of the FASC in turn pleads a contravention of s 182(1) of the Corporations Act in that Clare has improperly used her position as director of Colorado to gain an advantage for herself and cause detriment to Colorado, particularised by fifteen matters. 432Section 182(1) of the Corporations Act prohibits a director, secretary, officer or employee of a corporation from improperly using his or her position to gain an advantage for himself or herself or someone else or cause detriment to the corporation. An objective standard is to be applied in determining what amounts to an "improper" use of position, and impropriety is established by "a breach of the standards of conduct that would be expected of a person in the position of the alleged offender by reasonable persons with knowledge of the duties, powers and authority of the position and the circumstances of the case": R v Byrnes above at 514-515 per Brennan, Deane, Toohey and Gaudron JJ; R v Towey (1996) 132 FLR 434; 21 ACSR 46 at 57 per Gleeson CJ (with whom Allen and James JJ agreed). In Doyle v Australian Securities and Investments Commission [2005] HCA 78; (2005) 227 CLR 18, the High Court observed (at [35]) that the relevant conduct would be improper if it amounted to: "a breach of the standards of conduct that would be expected of a person in [the director's] position by reasonable persons with knowledge of the duties, powers and authority of his position as director, and the circumstances of the case, including the commercial context." 433It is not necessary that the relevant director gain an advantage for himself or herself or cause a detriment to the company in order to establish a contravention of the section: Chew v R [1992] HCA 18; (1992) 173 CLR 626 at 633 per Mason CJ, Brennan, Gaudron and McHugh JJ. An objective test was also applied to determine whether this section was contravened in Holyoake Industries (Vic) Pty Ltd v V-Flow Pty Ltd above and, in Hydrocool Pty Ltd v Hepburn (No 4) [2011] FCA 495; (2011) 279 ALR 646, Siopsis J followed R v Byrnes, above, in holding that impropriety for the purposes of this section was objective and did not require subjective knowledge of impropriety and followed Chew v R, above, in holding that a contravention could be established although the desired object was not achieved. In Angas Law Services Pty Ltd (in liq) v Carabelas [2005] HCA 23; (2005) 226 CLR 507 at [32], Gleeson CJ and Heydon JJ noted that, although shareholders cannot release directors from the statutory duties imposed by, relevantly, s 229 (4) of the Companies (SA) Code (which was a predecessor to s 182 of the Corporations Act), their acquiescence in a course of conduct might affect the practical content of those duties and be relevant to a question of impropriety. 434The first and second of the matters on which the Plaintiffs rely are the alleged misappropriation of Colorado's monies and the use of those monies for Clare's own purposes and the refusal to repay them to Colorado "as pleaded herein". The Plaintiffs' schedule of cross-references indicates that the intended reference is to the matters pleaded in FASC [109]-[114] and I have addressed the facts of these claims in paragraphs 158-184 above. It does not seem to me that Clare's conduct in this regard has been shown to be improper, in the relevant sense, where the arrangements in respect of the ANZ accounts were agreed with Kenneth and the monies due to Colorado were addressed by the offset agreement that I have held, on balance, was reached in May 2010. 435The third matter relates to causing Sorrento China to wrongfully make demands for payment and wrongfully refuse to deliver products "as pleaded herein." The Plaintiffs' schedule of cross-references indicates that the intended reference is to the matters pleaded in FASC [120] and I have addressed this matter in paragraphs 202-215 above. It does not seem to me that impropriety has been established, for the reasons there indicated, where the arrangements between the parties contemplated that Clare would continue to control Sorrento China and the position taken by that entity has not been shown to be unreasonable in the relevant circumstances. The fourth matter relates to causing CH Design to wrongfully make demands for alleged outstanding rent, wrongfully terminate the lease and re-enter the premises "as pleaded herein". The Plaintiffs' schedule of cross-references indicates that the intended reference is to the matters pleaded in FASC [40]-[41] and I have addressed this matter in paragraphs 216-237 above. It does not seem to me that impropriety has been established, for the reasons there indicated, where the parties contemplated and accepted Clare's continued involvement with CH Design and the positions it took has also not been shown to be unreasonable in the circumstances. 436The fifth matter relates to Clare refusing to provide financial assistance to Colorado "in the circumstances pleaded herein." The Plaintiffs' schedule of cross-references indicates that the intended reference is to the matters pleaded in FASC [117] and I have addressed this matter in paragraphs 238-240 above. As I noted above, no authority was cited for any proposition that a minority shareholder or director is obliged to fund a company and Clare's decision not to provide further financial assistance to Colorado in the relevant circumstances was not shown to be unreasonable. It does not seem to me that any impropriety is established in that regard. The sixth matter relates to Clare refusing to cause Sorrento China and CH Design to offset the "Acknowledged Amount" (as defined) from any amounts owed by Colorado to those entities. The Plaintiffs' schedule of cross-references indicates that the intended reference is to the matters pleaded in FASC [113], [119] and [121] and I have addressed this matter in paragraphs 162-184 above. No impropriety is established where I have held, on balance, that an offset arrangement was reached in respect of the Acknowledged Amount in May 2010; that arrangement was subsequently implemented by a reduction in the value of stock treated as Clare's rather than Colorado's property; and the Acknowledged Amount was thereafter not due by Clare to Colorado so as to be set off against any amount due by Colorado to Sorrento China or CH Design. 437The seventh matter related to Clare placing herself in a position of conflict "as pleaded herein." The Plaintiffs' schedule of cross-references indicates that the intended reference is to the matters pleaded in FASC [146] and I have addressed the facts of those claims in paragraph 241-242 and 358-386 above. The eighth matter relates to Clare preferring the interests of herself and CH Design to the interests of Colorado "as pleaded herein", the intended reference is to the matters pleaded in FASC [58]-[59], [115] and [120]-[121] and I have addressed this matter in paragraphs 216-237 and 373-376 above. The ninth matter relates to Clare preferring the interests of herself and Sorrento China to the interests of Colorado "as pleaded herein" and I have addressed this matter in paragraphs 202-215 and 366-370 above. It does not seem to me that impropriety is established in respect of these matters other than in respect of the diversion of Tradelink's business from Colorado to Sorrento Kitchens in 2010, where a breach of the rule against conflict of interest is not established other than in respect of the diversion of that business. 438The tenth matter relates to Clare improperly using "confidential Information of Colorado for her own advantage and profit as pleaded herein." The Plaintiffs' schedule of cross-references indicates that this matter relates to FAS [49] which I have addressed in paragraph 243-246 and 378 above, and it does not seem to me that impropriety is established for the reasons I there noted. In their written closing submissions, the Plaintiffs contend that Sorrento Kitchens and BL/GLCo also used information made known to Clare from her involvement in Colorado. That allegation was not pleaded and no evidence was cited for that proposition. It does not seem to me that that allegation is open to the Plaintiffs. 439The eleventh and twelfth matters relate to Clare causing CH Design to issue a creditor's statutory demand to Colorado and commencing winding up proceedings "in the circumstances pleaded herein." The Plaintiffs' schedule of cross-references indicates that the intended reference is to the matters pleaded in FASC [49] and [127] which I have addressed in paragraphs 243-246 above. It does not seem to me that improper use of Clare's position as a director of Colorado is established for the reasons I there indicated. 440The thirteenth and fourteenth of these matters relate to the alleged diversion of business and business opportunities from Colorado to Sorrento China, Capri International, Sorrento Kitchens and BL/GLCo and to Clare's undertaking or participating in the business of Sorrento China, Capri International, Sorrento Kitchens and BL/GLCo. The Plaintiffs' schedule of cross-references indicates that the intended reference is to the matters pleaded in FASC [128]-[143] and I have addressed those matters in paragraphs 285-335 above. The findings that I have there reached are sufficient to establish a contravention of s 182 of the Corporations Act so far as the diversion of Tradelink's business to Sorrento Kitchens is concerned, but not in respect of dealings of BL/GLCo which occurred after Colorado had ceased to trade. 441The fifteenth matter relates to Clare causing or inducing Colorado to purchase the stock pleaded in FASC [61(a)] which is alleged to have not been suitable to its trading requirements and not capable of being promptly sold to Colorado's customers. I have addressed this matter in paragraphs 247-248 and 386 above. This allegation is not established for the reasons I there indicated. 442I have again had regard to whether the matters set out above could together constitute a breach of s 182 of the Corporations Act although individual acts did not do so. For the reasons I have indicated above in respect of the corresponding issue in respect of the alleged breaches of the Share Sale Deed and Share Sale Agreement and ss 180 and 181 of the Corporations Act, which largely rely on the same matters, it does not seem that the totality of the pleaded matters gives rise to any contravention of the section that the individual matters do not. Such a contravention is established in respect of the diversion of Tradelink's business to Sorrento Kitchens as I noted above. Allegation of breach of s 183 of the Corporations Act 443Paragraph 153 of the FASC pleads a contravention of s 183 of the Corporations Act by Clare's improper use of information to gain an advantage for herself or someone else or to cause detriment to Colorado. The Plaintiffs refer to the summary of the elements of a contravention of this section in Commissioner for Corporate Affairs v Green [1978] VR 505 at 510, approved by Santow J in Forkserve Pty Ltd v Jack [2000] NSWSC 1064; (2000) 19 ACLC 299 at [114]-[118], namely that a person was at the relevant time an officer of the corporation; he or she acquired the relevant information and did so by virtue of his or her position as officer of the corporation; and he or she made improper use of that information in order to gain directly or indirectly an advantage for himself or herself or for some other person or, alternatively, he or she made that improper use to cause detriment to the corporation. The prohibition in s 183 of the Corporations Act substantially corresponds with the equitable duty of confidentiality and would be contravened where a director used information that was confidential to a company to make a personal profit: for example, Rosetex Co Pty Ltd v Licata (1994) 12 ACSR 779 at 783; 12 ACLC 269 per Young J. A broader view of the section would allow its application to an improper use of information obtained by a director, irrespective of whether that information is confidential in equity: for example, in Grove v Flavel (1986) 43 SASR 410; 11 ACLR 161; McNamara v Flavel (1988) 13 ACLR 619; 6 ACLC 802. 444This allegation is particularised by reference to the sixteen particulars to paragraph 148 and the fifteen particulars to paragraph 152. The Plaintiffs did not seek to put, in submissions, that that wide range of particularised matters involved the use of information so as to give rise to a contravention of those sections. I have addressed the relevant factual matters above and do not need to repeat those matters. My findings above indicate that the element of impropriety required for a contravention of that section would not in any event be established other than in respect of the diversion of Tradelink's business to Sorrento Kitchens. 445In their written closing submissions, the Plaintiffs made the more limited submission that Colorado's customer lists and pricing models were confidential and that Clare has had the benefit of such information to establish, or aid in the establishment of, rival companies. That allegation was not pleaded or particularised as giving rise to a contravention of s 183 of the Corporations Act and is not open to the Plaintiffs. The confidentiality of that information was also not established, where price lists would at least be known to the customer to whom they were provided; it was not established that Colorado had "pricing models", as distinct from a general policy of seeking to maintain a 40% mark-up on goods; and the use of that information by Mr Xie or Clare, to the extent that she was involved, in establishing Sorrento Kitchens and the other businesses, was also not established. Knowing involvement in contraventions of ss 180 - 183 of the Corporations Act 446The Plaintiffs also bring claims against CH Design, Sorrento Kitchens and BL/GLCo on the basis that they were knowingly concerned in or party to Clare's alleged contraventions of ss 180-183 of the Corporations Act (FASC [160]) and were involved in those contraventions within the meaning of s 79 of the Corporations Act (FASC [161]). The Plaintiffs rely upon paragraphs (a) and (c) of s 79 of the Corporations Act to establish that each of CH Design, Sorrento Kitchens and BL/GLCo were involved in the pleaded contraventions of the Corporations Act. These paragraphs respectively refer to a person who has aided, abetted, counselled or procured a contravention or has been in any way, by act or omission, directly or indirectly, knowingly concerned in, or party to, the contravention. The Plaintiffs also relied in submissions on the principle that, where a delinquent trustee establishes a company for the purpose of perpetrating the breach of trust, and where the trustee is a principal shareholder, director and the de facto mind and will of the company so formed, the company is attached with the knowledge of the breach of trust: Re Rossfield Group Operations Pty Ltd and Morton Holdings (ACT) Pty Ltd [1981] Qd R 372 at 377; (1980) 5 ACLR 237. 447The only relevant breach that has been established is a breach of ss 181 and 182 of the Corporations Act in respect of the diversion of Tradelink's business to Sorrento Kitchens within the period in which Colorado was conducting business to early 2011. Mr Xie's evidence that Clare's conduct was undertaken on behalf of Sorrento Kitchens in significant respects, and the extent of her role within that entity would arguably be sufficient to establish a claim for knowing involvement against that entity, in respect of that breach. No breach has been established in respect of BL/GLCo, which was established and conducted business after Colorado was no longer doing so. However, it is not necessary to express a final view as to that matter where the Plaintiffs do not have standing to bring such a claim under s 1317H of the Corporations Act and s 1324(10) of the Corporations Act is not available for the reasons noted above. 448I should add, for completeness, that the Plaintiffs did not plead a claim under the second limb of Barnes v Addy (1874) LR 9 Ch App 244, often referred to as "knowing assistance", which makes a third party liable if it assists a fiduciary in a breach of fiduciary duty, with knowledge of a dishonest and fraudulent design on the part of the fiduciary: see, for example, Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89 at 160; EC Dawson Investments above at [655]. An allegation of that kind is a serious allegation which requires to be pleaded and particularised (Farah Constructions above at [170]; EC Dawson Investments above at [657]) and I need not address it where it was not pleaded and the Defendants did not conduct themselves in a manner that treated it as in issue despite the pleadings. In submissions in reply, the Plaintiffs also sought to rely on the principle that a third party may also be held liable in respect of a breach of duty by a fiduciary where it is the corporate creature, vehicle or alter ego of the wrongdoing fiduciary who uses it to secure the profits of the breach of duty: Grimaldi v Chameleon Mining NL (No 2) above at [243]; EC Dawson Investments Pty Ltd above at [641]. Mr Harper accepted in oral submissions that a case of knowing receipt against third parties was not pleaded, although he contended that a claim of knowing involvement (presumably, within the meaning of s 79 of the Corporations Act) and knowing receipt would rely upon the same factual matters (T1056). Again, it seems to me that procedural fairness required that a case relying on knowing receipt in equity, as distinct from knowing involvement in a breach of ss 180-183 of the Corporations Act, needed to be identified in the pleadings if it was to be put. Remedies - compensation 449The Plaintiffs accepted that the Court should now determine the amount of any compensation to which they were entitled given that questions of liability and quantum had not been split and given the manner in which the case had been run. In particular, the Plaintiffs have had disclosure going to the question of quantification, expert accounting evidence has been led as to that question and that expert has been cross-examined. 450The parties note that this question raises questions as to whether, if breach is established, the Plaintiffs or Colorado suffered loss and damage as a result of the breach and as to the appropriate measure of loss, including loss of the business of Colorado. There was initially a question whether the Plaintiffs suffered any loss after Colorado ceased to trade in January 2011; however, the Plaintiffs now do not press any claim for loss after that date so far as equitable compensation is concerned, while reserving their position in respect of any account of profits. The loss claimed in respect of Colorado is particularised as the loss of its entire business, loss of valuable business and unnecessary stock purchased (FASC [155], [162]). The Plaintiffs (as distinct from Colorado) claim the loss of use of funds and the loss of the entire business of Colorado (FASC [163]). 451The only breaches that the Plaintiffs have standing to rely upon, and which have been established, are breaches of the Shareholders Agreement and a breach of fiduciary duty by Clare in respect of the diversion of Tradelink's business from Colorado to Sorrento Kitchens during 2010. An order for equitable compensation for breach of fiduciary duty is intended to put the beneficiary in the same position as if no breach had occurred and equitable compensation is assessed by reference to the plaintiff's loss and irrespective of whether the defendant made a profit: Nocton v Lord Ashburton [1914] AC 932 at 952 per Viscount Haldane LC; Re Dawson (deceased); Union Fidelity Trustee Co Ltd v Perpetual Trustee Co Ltd [1966] 2 NSWR 211 at 215; (1966) 84 WN (Pt 1) (NSW) 399 per Street J; O'Halloran v RT Thomas & Family Pty Ltd (1998) 45 NSWLR 262; 29 ACSR 148 at 157 per Spigelman CJ (with whom Priestley and Meagher JJA agreed); GM & AM Pearce & Co Pty Ltd v Australian Tallow Producers [2005] VSCA 113 at [65] per Warren CJ (with whom Chernov JA and Dodds-Streeton AJA agreed). 452The Defendants contend, and I accept, that the Plaintiffs have not proved a diminution in the value of Colorado's business over the period of the diversion of sales to Tradelink from Colorado to Sorrento Kitchens during 2010. The evidence of the Plaintiffs' accounting expert, Ms Planinic, was that, as at June 2010, her view was that the shares in Colorado were worth no more than $36,500 and could have been worth nothing (T922), and this position existed prior to any diversion of sales. 453The lost sales originally claimed by the Plaintiffs in respect of diversion of business are quantified in Ms Planinic's report dated 30 August 2013. Ms Planinic quantifies diverted sales made by Sorrento Kitchens and BL/GLCo to Colorado's customers in the period 2010-2012, being sales to Tradelink and Raymor in the amount of $785,559.95, made up of sales by Sorrento Kitchens in the period to December 2010 and by BL/GLCo in the period from July 2011 to February 2012; sales by BL/GLCo to Austfly and Osman (which are associated entities) in July and November 2011 in the amounts of $20,124 and $34,981 respectively; sales by BL/GLCo to Tradeworld in March 2013 in the amount of $31,190.16; sales by BL/GLCo to Crown Group between September 2011 and October 2012 in the amount of $127,833.86; and three miscellaneous deposits into BL/GLCo's bank accounts between November and December 2012 in the amount of $465. The total amount of diverted sales initially quantified by Ms Planinic was $1,001,406.90. Based on the original quantification of diverted sales in that amount, Ms Planinic quantified Colorado's loss of profits based on the profit margin of 40% alleged to have been represented by Clare as $400,563 and based on her quantification of Colorado's actual gross profit margin of 27.2% as $272,383. 454In closing submissions, the Plaintiffs limited their claim for compensation, in respect of the diversion of sales, to diverted sales for the calendar year 2010, and Mr Harper acknowledged in oral submissions that the compensation now claimed by the Plaintiffs was wholly attributable to dealings between Sorrento Kitchens and Tradelink in that year (T1058). I set out Clare's role in those dealings in paragraphs 286-313 above. Claims for compensation for lost business of approximately $900,866 referable to the 2011, 2012 and 2013 years were not pressed, where Colorado was not conducting business in those years and would not have had the capacity to make sales in those years in any event. The Plaintiffs quantified their claim in respect of diverted business for the year calendar 2010 as $444,302 inclusive of GST, corresponding to Ms Planinic's calculation of that amount for that year as $413,297 exclusive of GST. The Plaintiff's primary position in oral submissions was that they were entitled to compensation in that year in that amount. That claim cannot be sustained since, as Mr Harper accepted in oral submissions, the calculation of compensation would in fact have had to have regard to the cost of sales (T1060). 455Mr Harper indicates that the Plaintiffs fall-back position is that Colorado's compensation is 40% of that amount, being the gross profit margin that it was allegedly represented that Colorado would make. As I noted above, the Plaintiffs have not established that Clare made a representation that the gross profit margin, as distinct from the markup on products, was 40% and that basis of calculation cannot be sustained. Even if Clare had made such a representation, the better view is that Colorado's loss would be quantified by reference to the actual profit that had been lost, rather than by reference to a representation as to a profit margin that it could not have achieved. 456Mr Braham pointed out, in reply to Colorado's submissions as to the quantification of loss, that Ms Planinic had not applied the gross margin of 40% in calculating the Plaintiffs' loss, but instead pointed out that the gross margin that Colorado's books and records recorded that it achieved in the financial year ending June 2010 was 27.2%. The corresponding claim calculated by reference to Colorado's actual gross profit margin of 27.2% would be $112,416.78 exclusive of GST. Ms Planinic in turn expressed the view that a one-off adjustment relating to the treatment of the acquisition of stock needed to be made which would reduce Colorado's gross profit margin to 5.45% (Planinic Report 30.08.2013 [34]; T914]). I do not consider that the percentage of 27.2% would be discounted by the further one-off accounting adjustment to which Ms Planinic referred, which does not reflect Colorado's actual profit made on an ongoing basis. 457The Defendants submit that no damage has been shown to have been caused by the alleged diversion of business away from Colorado and that the Plaintiffs have not demonstrated that Colorado could or would have made the sales that were in fact made by Sorrento Kitchens to Tradelink. They contend that Ms Planinic accepted in cross-examination that risk factors for Colorado's business included its reliance on one major customer, Tradelink, where there was no certainty that the relationship will continue, especially after a change in management (T891, 893). They also point to the difficulties between Kenneth and Tradelink to which I have referred above, which Ms Planinic accepted in cross-examination would be relevant to any consideration of the cause of lost sales (T917). They also point out that Ms Planinic accepted in cross-examination that Colorado had experienced a decline in sales to other major customers such as Harvey Norman, Capitol and IAG (T915) and had also experienced a significant decline in sales to Tradelink before any competitive sales by Sorrento Kitchens were made (T916). The Defendants point out that, in 2009/2010, Colorado had experienced a decline in sales equivalent to 32% of 2009 reported sales or 23% if all of the IAG sales (rather than 95% of them, as I have held) were due to Colorado (T914). They point out that Ms Planinic accepted in cross-examination that "there are likely to be other reasons" for the decline in sales to Tradelink, in addition to Clare's or Sorrento Kitchens' conduct (T920). 458The Defendants also contend that Colorado's ability to make the relevant sales was limited because Colorado was short of capital and could not buy in more stock from Sorrento China so as to supply further Tradelink orders. Colorado's liquidity difficulties are set out in Ms Planinic's report dated 2 August 2013, which refers to a range of communications referring to those difficulties (Planinic Report 2.8.2013 [91]). Ms Planinic expresses the view that Colorado's working capital deficiency caused disruption to its operations and earnings capacity, while also recognising that other factors such as changes in economic and industry conditions and customer demand would also impact its financial performance (Planinic Report 2.8.2013 [92]-[95]). Kenneth's evidence in cross-examination also was that at the time during which Sorrento Kitchens was making sales to Tradelink, Colorado would have been unable to make any additional sales even if orders had come in, since there was insufficient stock and, perhaps more fundamentally, a lack of funds to purchase stock (T446-448). Ms Planinic accepted in cross-examination that this evidence would be relevant to an assessment of causation, because it suggests that even if Colorado had received more orders in that period, it would have made no more sales (T918). 459Mr Harper acknowledged Kenneth's evidence that there was a tightness of cashflow, although the Plaintiffs contended that that was brought about by Clare's conduct (T1064), and pressed a lost opportunity claim in the alternative to the Plaintiffs' primary claim (T1064). The Defendants also submit that the evidence does not support any attribution of that difficulty to Clare's conduct in particular, a fortiori where, on the Plaintiffs' evidence, Clare had paid approximately $152,000 out of the ANZ accounts for business expenses of Colorado between August 2009 and January 2010 (Helen 7.11.2013 [60]). Ms Planinic accepted in cross-examination that that information, which had not been provided to her, would be relevant to assessing the impact of Clare's behaviour on the cash flow of Colorado (T905). However, that proposition needs to be qualified by noting that the amount paid out by Clare from those accounts was less than the amounts paid into them by Colorado's customers; the excess gives rise to the Acknowledged Amount, to which I have referred above. 460The Defendants also contend that any business opportunity that was diverted from Colorado to Sorrento Kitchens was the opportunity to participate in a commission of 5% of any container sale that is made and Colorado never lost that entitlement (T1012). Mr Harper responded that the sales made by Sorrento Kitchens were not "container sales" direct to a customer but were of the same kind as the sales undertaken by Colorado, by which goods were delivered, held in a warehouse and sold in individual orders (T1061). While the relevant invoices refer to "container sales", Mr Harper pointed out that the relevant goods would necessarily be delivered from China to Australia in a container, and that was not determinative of the character of the sales. However, the delivery address recorded in the invoices for the relevant sales was that of the customer, indicating the likelihood that delivery was made of the container directly from the port to the customer. Mr Harper accepted in oral submissions that the Court would draw the inference from the invoices that containers were delivered directly from Sorrento China to the customer, and there was no evidence that the containers were unpacked at any intermediate point (T1063). However, he contended that the sales were not sales permitted by the Supply and Buy Agreement and the "container sales" agreement, because of Sorrento Kitchen's involvement and because they were undertaken without Colorado's knowledge. Alternatively, he contended that Colorado would be entitled to the 5% commission on those sales, if they were container sales directly from Sorrento China. 461Mr Braham summarised the Defendants' position as to sales by Sorrento China, in oral submissions, as that Clare was entitled to cause Sorrento China to make sales to Australian customers, specifically container sales, excluding Colorado brands, on the basis that Sorrento China would account to Colorado for 5% of the sale (T1005). The Defendants contended that Colorado was in the same position, whether a container sale was made through Sorrento China or Sorrento Kitchens, in that it had an entitlement to 5% and no more than 5% on such a sale. Mr Braham contended that no loss was suffered by Colorado because it retained its entitlement to a 5% commission on such sales in any event. I do not accept that submission, because the 5% entitlement was directed to sales by Sorrento China, and Clare's conduct and Tradelink's unwillingness to pay in US dollars had the result that the relevant sales were made by Sorrento Kitchens, not Sorrento China. 462Mr Braham also submitted that there is no evidence to support an inference that, if container sales had not been made by Sorrento Kitchens, corresponding sales would have been made by Colorado out of its warehouse, rather than container sales being made by Sorrento China on which the 5% commission would have been payable. I also do not accept that submission, so far as the relevant sales to Tradelink are concerned, given the evidence that Tradelink was not prepared to make payment in US dollars as dealings with Sorrento China would have required and, absent Sorrento Kitchen's sales to it, its most obvious alternative would have been to make the relevant purchases through Colorado. 463It seems to me to be likely that, but for Clare's dealings with Tradelink, Tradelink would have dealt with Colorado to purchase the relevant products, had Colorado been able to fund the acquisition of those products from Sorrento China. The loss suffered from the loss of sale of those products was the gross margin in the order of 27% of the gross amount of those sales. However, that loss needs to be substantially discounted by the evidence as to the lack of funds of Colorado to acquire the relevant stock so as to hold it in the warehouse. In that sense, Colorado is driven to its alternative claim based on the loss of opportunity to make the relevant sales. 464Although the parties did not address the principles applicable to such a claim in submissions, the authorities establish that a claimant in a loss of opportunity case must establish that loss and damage was caused by the alleged breach: Sellars v Adelaide Petroleum NL [1994] HCA 4; (1994) 179 CLR 332 at 364 per Brennan J. Once causation is established, the fact that a claimed loss involves a degree of speculation does not necessarily exclude recovery for that loss: Malec v JC Hutton Pty Ltd [1990] HCA 20; (1990) 169 CLR 638 at 643 per Deane, Gaudron and McHugh JJ; Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54; (1991) 174 CLR 64; Sellars v Adelaide Petroleum NL above at 353 per Mason CJ, Dawson, Toohey and Gaudron JJ. The Court may also place a monetary value on a loss of opportunity in assessing equitable compensation, although that loss is incapable of precise measurement, and may use subjective "tools" in arriving at that value, such as common sense and general notions of justice and fairness, and may determine the amount of equitable compensation by a process of "judicial estimation" on the available indications: O'Halloran v RT Thomas & Family Pty Ltd above at 273; AMP Services Ltd v Manning [2006] FCA 256 at [69] per Finkelstein J. 465It seems to me, doing the best I can with limited evidence, that treating Colorado as having a prospect in the order of 50% of funding the acquisition of the relevant products and making such sales to Tradelink, but for Clare's conduct, so as to derive the profit of in the order of 27% on those sales, would be consistent with common sense and fairness, where the absence of funds within the business would reflect at least to some extent, the fact that sales were diverted from it. In the result, the outcome from Colorado undertaking such sales in its own right would be somewhat higher than the 5% commission to which it would have been entitled had the relevant transactions taken place as direct container sales from Sorrento China to Tradelink. The damages recoverable by Colorado in respect of the diversion of sales in 2010 are therefore in the order of 13.5% of the value of the sales made by Sorrento Kitchens to Tradelink in that year in respect of the second - thirteenth items in the Plaintiffs' schedule (MFI 20), and a lost 5% commission on the first sale in that schedule which is a sale (made by Sorrento China by its sales agent, Capri International) for which a 5% commission would be payable under the Supply and Buy Agreement. I will leave the parties to calculate that amount, should the Plaintiffs elect for equitable compensation rather than an account of profits. Account of profits 466The Plaintiffs contend that the successful party in a claim for breach of fiduciary duty is entitled to wait until after judgment to make an election as to whether it wishes to obtain relief by way of equitable compensation or an account of profits and that they (or more precisely, HY International which brings that claim as Colorado's assignee) intend to exercise that entitlement and wait until after judgment before making such an election: Warman International Ltd above at 569-570; Personal Representatives of Tang Man Sit v Capacious Investments Ltd [1996] AC 514 at 521; 1 All ER 193; Visnic v Sywak [2009] NSWCA 173; (2009) 257 ALR 517 at [4]-[5] per Spigelman CJ (with whom Campbell and Macfarlan JJA agreed); Barescape Pty Ltd as Trustee for the V's Family Trust v Bacchus Holdings Pty Ltd as Trustee for the Bacchus Holdings Trust (No 9) [2012] NSWSC 984 at [281] per Black J. The Defendants accept that the Plaintiffs are entitled to await the judgment before making an election as regards to account of profits and any other potential relief which may be available. 467The Defendants submit, and I accept, that the manner in which the case has been conducted requires that any account of profits should be determined by reference to the evidence already led in the proceedings. The Plaintiffs should have the opportunity to make that election prior to the entry of judgment and I will hear any necessary further submissions as to any account of profits at that point. Although the Defendants submitted that the basis for an account of profits is not established, it seems to me preferable that I address those submissions only if the Plaintiffs elect for an account of profits rather than compensation. Cross-claim 468By a Cross-Claim filed on 21 September 2012, CH Design claims unpaid rent in the sum of $49,500, unpaid rates and other expenses and damages in an amount to be determined against Colorado. CH Design claims that Colorado failed to pay rent due under the lease of the Rydalmere premises on 31 October and 30 November 2010 totalling $33,000 and failed to pay rent due under the lease on 31 December 2010 in the amount of $16,500; that CH Design terminated that lease by re-entry and repossessing the premises on 7 January 2011; and that CH Design has suffered loss and damage as a result of Colorado's breach of the lease. The Cross-Claim acknowledges the receipt of certain monies reducing the amount of the claim against Colorado. CH Design also pleads that each of Colorado, Kenneth and Helen are jointly and severally liable to pay CH Design the specified amount. By cl 24 of the lease, Helen and Kenneth had guaranteed that Colorado would punctually pay the rent and other money payable under it and would perform its obligations and undertook to CH Design that they would be liable separately and together with Colorado to CH Design for the payment of rent and other money and the performance of Colorado's obligations and given an associated indemnity. 469By their Defence to the Cross-Claim, Helen and Kenneth variously denied Colorado's entry into the lease, although accepting that the lease was purportedly executed by Colorado on or about 28 July 2009 and contended that the lease was induced by misleading or deceptive conduct (paragraphs 17-26); claimed that Clare breached fiduciary and statutory duties in inducing Colorado to enter into the lease (paragraphs 27-32); that the lease was wrongfully terminated and claim relief from forfeiture (paragraphs 33-39); claimed that CH Design was estopped from claiming rent for November 2010, rates, taxes and outgoings (paragraphs 40-52); and that leave under s 471B of the Corporations Act should be refused. I do not understand the challenges in respect of the entry into the lease to have been pressed. 470I have addressed the terms of the lease between CH Design and Colorado and the parties' dealings in respect of that lease in paragraphs 216-237 above. Clare's evidence is that Colorado did not pay rent after October 2010, other than a payment of $16,500 received in May 2011 (Clare 20.10.2013 [323]). On that basis, $33,000 would be owing. The Defence to Cross-Claim did not admit non-payment of those arrears. As I noted above, Mr Harper, properly, conceded that matter in submissions. Subject to the several defences raised by Helen and Kenneth, CH Design would be entitled to judgment against Colorado for the amount of rent outstanding. 471In opening submissions, the Plaintiffs denied that Colorado was liable for outstanding rent, contending that their claim greatly exceeds CH Design's rental claim and that Clare cannot take advantage of her own wrong. In their closing submissions, the Plaintiffs again submitted (PWS [433]-[434]) that it would be "unconscionable" for Clare (or, more precisely, CH Design) to recover any outstanding rent and that Clare should not be able to "take advantage of [her] own wrong". As the Defendants point out, CH Design was contractually entitled to be paid rent and Colorado was contractually obliged to pay it. This was obviously known to the parties, and it does not seem to me that to give effect to the terms of the lease would not lead to a breach of duty on the part of Clare. No relevant wrong has been established on the part of CH Design or Clare in requiring payment of rent or taking possession in circumstances where the rent had not been paid. 472Helen and Kenneth plead that the lease was induced by misleading or deceptive conduct (Defence to Cross-Claim [17]-[26]). The claim has not been established for the reasons noted in paragraphs 216-237 above. Helen and Kenneth also plead that Clare breached fiduciary and statutory duties in inducing Colorado to enter into the lease (Defence to Cross-Claim [27]-[32]). That claim has also not been established for the reasons noted in paragraphs 373-376, 410 and 427 above. 473Helen and Kenneth plead that CH Design is estopped from claiming rent for November 2010, rates, taxes and outgoings (Defence to Cross-Claim [40]-[52]). The suggested estoppel is based on the alleged practice by Colorado of the rent to CH Design being paid from three weeks to one month in arrears since August 2009 (T741) and Helen's evidence of a conversation with Clare on or about 2 December 2010 in which she claims that Clare agreed that the factory and other customers could be paid before the rent. Helen and Kenneth contend that, based on Clare's conduct, Colorado assumed the rent for November could be deferred and, in all the circumstances, it would be unconscionable for CH Design to be able to recover any outstanding rent. I have referred to the conflicting evidence in respect of that conversation in paragraphs 225-237 above. I do not accept that an estoppel was established on the former basis. The repeated demands by CH Design for payment of rent made clear that CH Design did not accept the continuing delays by Colorado in payment of rent and Colorado could have no reasonable basis for any contrary understanding. As I noted above, I also do not accept Helen's evidence of the conversation on 2 December 2010, which was inconsistent with the position previously and subsequently taken by CH Design and an estoppel is also not established on that basis. 474Helen and Kenneth also submit that for CH Design to recover the alleged outstanding rent would be contrary to a principle that a person should not take advantage of their own wrong. This submission appears to be based on the contention that, but for Clare's breaches of duty, Colorado would have been able to pay its rent. That proposition has the difficulty that, as the Defendants point out, Colorado had sufficient funds to pay the rent at the relevant time although it did not do so. As the Defendants point out, CH Design's solicitors had, on 13 December 2010, demanded payment of $33,574. As at 4 January 2011, following a payment from Crane Distribution on that day, Colorado's bank account held $42,053 (Ex P1 7/3159). This could have been used to meet the demand for rent before Colorado was locked out. Over the next month, prior to CH Design taking possession, Colorado paid amounts totalling $22,375 to a company associated with Kenneth, Kenway Investments (Aust) Pty Ltd (Ex P1 10/4573-4574, 4579-4580). Beyond that, there is no wrong involved in a lessor being paid rent for occupancy of its property. This defence to the Cross-Claim has therefore not been established. 475Helen and Kenneth also contend that CH Design is prevented from pursuing its action by virtue of s 471B of the Corporations Act and leave should not be granted. It seems to me that leave should be granted under that section where the issues raised by the Cross-Claim overlap with the claims raised in the claims brought by Colorado and assigned to HY International. I grant such leave, to the extent that it may be required, nunc pro tunc. 476Helen and Kenneth plead that the lease was wrongfully terminated and claim relief against forfeiture (Defence to Cross-Claim [33]-[39]). No substantive submissions were made in respect of this claim and Colorado has not, so far as the evidence goes, made any offer to pay the rental due. The findings that I have reached above do not establish any element of unconscionability in CH Design requiring the payment of rent or exercising its rights consequential upon rent not being paid so as to support such relief. 477For these reasons, there should be judgment for CH Design in respect of the amount of rent due. Helen and Kenneth guaranteed Colorado's payment of rent under the lease, by cl 24(4) of the lease (Ex P1 3/928Y). No basis to prevent CH Design relying on that guarantee has been established. My finding that CH Design is entitled to judgment in respect of the rent means that it should also have judgment on the Cross-Claim against Helen and Kenneth. Orders and costs 478The Plaintiffs should now be required to make their election between equitable compensation and an account of profits in respect of the diversion of business. I will then hear the parties as to any such accounting and as to the form of orders, including in respect of the Cross-Claim and costs. ********** Amendments 29 October 2014 - Line 1 of paragraph 97 amended to replace the words "Clare recorded that meeting" with the words "Helen recorded that meeting".Line 1 of paragraph 187 amended to replace the words "other than that they admit that Helen did not provide" with the words "other than that they admit that Clare did not provide". Amended paragraphs: Line 1 of paragraph 97; Line 1 of paragraph 187 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 29 October 2014