Gilmore Finance Pty Ltd v Aesthete Pty Ltd atf the Real Money Unit Trust (No 2)

1. [1]

   Between February 2011 and August 2012, the plaintiff, Gilmore Finance Pty Ltd, invested some $7.69 million in development projects relating to two pieces of land purchased by the first and second defendants (“A1” and “A3”) in Western Sydney.

2. [2]

   The first piece of land was a petrol station site at 198 Great Western Highway, Kingswood which was purchased by A1 in April 2010 for $2 million (the “Kingswood Land”). The second was land adjacent to the Nepean Hospital which was purchased by A3 in August 2012 for $7.7 million (the “Hospital Land”).

3. [3]

   A1 and A3 were at all material times trustees of unit trusts that I will refer to as the “Kingswood Trust” and the “Hospital Trust” respectively. The two trusts were established for the purpose of the development of the two properties by construction of multi-storey commercial and residential buildings. Ultimately, neither development proceeded. The properties have now been sold.

4. [4]

   The sole director of A1 and A3 is the third defendant, Mr Farshad Amirbeaggi. Mr Amirbeaggi is a solicitor and the principal of the firm Yates Beaggi.

5. [5]

   The decisions of Gilmore Finance to invest were made by its director, Mr Lyle Gilmore. Through other companies, Mr Gilmore had engaged in various activities associated with the mining industry. Those activities were profitable. Mr Gilmore established Gilmore Finance as “an investment arm”.

6. [6]

   The amounts invested by Gilmore Finance were:

7. [7]

   The fourth and fifth defendants, Ms Vashti Conway and Ms Kate Yates held units in the Kingswood and Hospital Trusts. They are the wives of Mr Amirbeaggi and Mr Amirbeaggi’s then business partner, Mr Brenton Yates.

8. [8]

   Gilmore Finance alleges it made its investments as a result of representations, said to be misleading or deceptive for the purposes of s 18 of the Australian Consumer Law, [1] made to Mr Gilmore by Mr Amirbeaggi, as director of A1 and A3. Gilmore Finance alleges some of those representations were made by Mr Amirbeaggi himself, and others on his behalf by Mr Christopher Wayman, Mr Graham Armstrong and Mr Adam Hollioake. Gilmore Finance contends that, but for those representations, it would not have made the investment: a “no transaction” case.

9. [9]

   Gilmore Finance makes other claims concerning the manner in which A1 and A3 conducted the Kingswood and Hospital Trusts, which claims only arise for consideration if it fails to make out its primary “no transaction” claim.

10. [10]

    As I have said, the proposed development of the Kingswood Land and the Hospital Land did not proceed. A3 sold the Hospital Land in January 2018 for $18 million and paid Gilmore Finance $4 million from the proceeds. A1 sold the Kingswood Land in June 2020 for $3.54 million. No monies were paid from the proceeds to unitholders, although A1 had earlier repaid Gilmore Finance some $215,000.

11. [11]

    Gilmore Finance claims it has lost the balance of its investment, some $3.5 million, and seeks to recover that loss in these proceedings.

Decision

1. [12]

   Gilmore Finance has failed to make out any of its claims.

2. [13]

   The proceedings will be dismissed with costs.

The hearing

1. [14]

   The hearing took place over seven days between 14 and 24 March 2022.

2. [15]

   The hearing was conducted with efficiency by all parties. I was greatly assisted by comprehensive written submissions received before and after the hearing. Much of what follows as to the factual background is taken, with gratitude, from those submissions; particularly those made on behalf of A1, A3 and Mr Amirbeaggi, which outlined those matters in helpful detail.

The Kingswood Land

1. [16]

   On 7 May 2008, A1 entered into an option to acquire the Kingswood Land for a purchase price of $2 million. On 19 June 2009, A1 obtained Development Consent for the redevelopment of the Kingswood Land as a multi storey mixed use residential, commercial and retail development.

2. [17]

   In April 2010, A1 exercised the option to purchase the Kingswood Land. The purchase price of $2 million was paid by Mr Amirbeaggi and Mr Yates.

3. [18]

   On 1 September 2010, A1 executed a mortgage over the Kingswood Land in favour of the National Australia Bank Ltd (“NAB”). As I set out below, the loan from the NAB was repaid in full on 25 February 2011, partly from the advance of $1.75 million made by Gilmore Finance on 25 February 2011 that I have set out in the table at [6] above.

4. [19]

   Thereafter, having obtained a feasibility study in respect of the re-development of the Kingswood Land in accordance with the Development Consent, Mr Amirbeaggi sought to locate parties who would be interested in investing in the re-development of the Kingswood Land in conjunction with A1.

5. [20]

   Between November 2010 and February 2011 Mr Amirbeaggi received a number of offers from third parties to invest in the development of the Kingswood Land.

The Hospital Land

1. [21]

   On 4 August 2009, A3 entered into a call option deed in respect of the Hospital Land for a purchase price of, relevantly, $7.7 million.

2. [22]

   On 3 August 2011, A3 exercised the option to purchase the Hospital Land. Ms Conway and Ms Yates paid the 10% deposit of $770,000.

3. [23]

   On 17 August 2011, the Department of Planning granted a development consent, subject to conditions, on the Hospital Land for a multi-storey mixed use development.

4. [24]

   A3 completed the purchase of the Hospital Land in August 2012, in the circumstance I discuss below.

Mr Wayman

1. [25]

   Mr Christopher Wayman played a major, and highly discreditable and dishonest role, in the events that have led to these proceedings.

2. [26]

   Although his role in persuading Mr Gilmore to cause Gilmore Finance to invest in the Kingswood Trust and the Hospital Trust was pivotal, neither Gilmore Finance nor A1 and A3 called him to give evidence in the proceedings.

3. [27]

   On behalf of Gilmore Finance, it was submitted that it was for the defendants to call Mr Wayman and that I should infer from their failure to do so that Mr Wayman could not assist their case. That submission was not pursued orally, although it was revived on written submissions received after judgment was reserved. I do not accept it. It is true that, in response to a question from me, Mr Amirbeaggi said he had spoken to Mr Wayman during the course of these proceedings and following Mr Armstrong’s evidence. However, such implications as might arise from that fact were not explored in cross-examination by Mr Marshall SC, who appeared with Mr Aspinall and Mr Arnold for Gilmore Finance. [2] For the reasons I set out below, my conclusion is that Mr Wayman did make misleading statements to Mr Gilmore but that Mr Amirbeaggi did not authorise them and did not know of Mr Wayman’s dishonesty until June 2011. However, I find Mr Wayman’s absence as a witness to be neutral. Neither side could reasonably be expected to have called him.

4. [28]

   Mr Wayman enlisted the assistance of Mr Armstrong to persuade Gilmore Finance to invest. Gilmore Finance called Mr Armstrong to give evidence in its case. Mr Armstrong’s evidence was critical for Gilmore Finance’s “no transaction” case, as it was to the effect that Mr Amirbeaggi, along with Mr Wayman, importuned Mr Armstrong to misrepresent to Mr Gilmore the level of investment in the Kingswood site project (the “Kingswood Project”). For reasons set out below, I do not accept Mr Armstrong’s evidence on that, or indeed, any matter; save for his own admitted dishonest conduct vis-à-vis Mr Gilmore.

5. [29]

   Another person who played a less clear role in causing Gilmore Finance to invest was Mr Adam Hollioake. Neither party called Mr Hollioake. No submission was made on behalf of Gilmore Finance that any inference adverse to A1, A3 and Mr Amirbeaggi thereby arose.

The course of events

1. [30]

   Mr Amirbeaggi first met Mr Wayman in early 2009 when Mr Wayman retained Yates Beaggi to provide legal services not related to these proceedings.

2. [31]

   In mid-2010, Mr Wayman approached Mr Amirbeaggi and Mr Yates “seeking to meet to discuss … business affairs, and need for provision of legal services”.

3. [32]

   Mr Amirbeaggi met Mr Wayman over lunch on 16 July 2010.

4. [33]

   Mr Amirbeaggi said [3] they had this conversation:

5. [34]

   Following that meeting, Mr Amirbeaggi sent to Mr Wayman, by email, documents concerning the Kingswood Project, including architectural drawings. Mr Amirbeaggi’s email stated that gross realisations were anticipated to be $20 million and that anticipated costs, including the cost of the original site acquisition, would be in the order of $15 million.

6. [35]

   Mr Wayman replied on 19 July 2010, saying:

7. [36]

   Mr Amirbeaggi then provided Mr Wayman with documents which included an estimated anticipated profit margin in the order of $4.7 million.

8. [37]

   On 21 July 2010, Mr Amirbeaggi sent Mr Wayman an email with high level detail concerning the Hospital Land.

9. [38]

   In the meantime, Mr Gilmore was also introduced to Mr Wayman.

10. [39]

    Mr Gilmore explained how that occurred in his affidavit:

11. [40]

    At around this time, on 15 October 2010, Mr Wayman wrote to Mr Amirbeaggi:

12. [41]

    The person that Mr Wayman described as having “substantial cash to invest” was, evidently, the person “Desmond” to whom Mr Gilmore referred in his evidence as having recommended to Mr Gilmore that he speak to Mr Wayman. [4]

13. [42]

    At around this time Mr Gilmore met Mr Armstrong.

14. [43]

    Mr Gilmore did not describe in his affidavit evidence the circumstances in which he met Mr Armstrong.

15. [44]

    However, Mr Armstrong, who as I have said Gilmore Finance called in its case, deposed that he met Mr Wayman in early 2010 and that he met Mr Gilmore later in 2010.

16. [45]

    Mr Armstrong said:

17. [46]

    On 20 January 2011, Mr Armstrong sent Mr Wayman a document called “Wealthy Life Group Partnership Agreement”, expressed to be between entities associated with Mr Armstrong, Mr Wayman and Mr Hollioake.

18. [47]

    Mr Armstrong wrote to Mr Wayman:

19. [48]

    On 25 January 2011 Mr Wayman wrote to Mr Gilmore about the “Nepean Hospital Precinct Development”.

20. [49]

    His email read:

21. [50]

    In this email, Mr Wayman spoke as if he were actively involved in the proposed development of the Hospital Land. Thus, he spoke of “we” having a “pre-commitment of just over 60%”, that “we currently have $5 million in the deal personally” and that “we are looking for $1m as an equity participation”.

22. [51]

    Mr Gilmore, understandably, took this to mean that Mr Wayman was then directly involved in the proposed development of the Hospital Land and that he had himself made a financial investment in the land.

23. [52]

    None of this was true.

24. [53]

    Mr Amirbeaggi said that he did not see this communication until after the commencement of these proceedings and that he did not ask Mr Wayman to send it to Mr Gilmore.

25. [54]

    I see no reason to doubt Mr Amirbeaggi’s evidence.

26. [55]

    Mr Wayman was misrepresenting to Mr Gilmore his role in the development. As I describe below, it appears that Mr Wayman’s motivation in doing this was, at least in part, to procure for himself the right to project manage one or both of the Kingswood Land and/or Hospital Land developments.

27. [56]

    Two days later, on 27 January 2011, Mr Wayman became bankrupt on his own petition.

28. [57]

    Several days later, on 30 January 2011, Mr Wayman wrote to Mr Gilmore, under the heading “[Hospital] Development Site”:

29. [58]

    Mr Wayman then set out the details of the Yates Beaggi trust account.

30. [59]

    Again, Mr Wayman was representing to Mr Gilmore that he was involved in the “[Hospital] Development Site” project, saying that “we” need to get things moving to finalise the funding and referring to “remaining equity partners”. He encouraged Mr Gilmore to transfer $1 million into the Yates Beaggi trust account.

31. [60]

    Mr Amirbeaggi said he did not ask Mr Wayman to send this email and was not aware of it until after he saw it in these proceedings. The evidence did not reveal how Mr Wayman came to know of the details of Yates Beaggi’s trust account, save that Mr Wayman had been a client of the firm. Nothing was made of this in closing submissions.

32. [61]

    In the email, Mr Wayman referred to his conversation with Mr Gilmore “on Friday”. That was a reference to Friday 28 January 2011, the day after Mr Wayman had become bankrupt on his own petition.

33. [62]

    On 31 January 2011, Mr Wayman wrote to Mr Amirbeaggi:

34. [63]

    It was by this email that Mr Wayman introduced Mr Amirbeaggi to Mr Armstrong. As the email set out, Mr Wayman described Mr Armstrong as being a former “Flexi Rent director” and a “minor shareholder” in that company that “he helped float” some years earlier.

35. [64]

    In his affidavit, Mr Amirbeaggi said:

36. [65]

    Mr Amirbeaggi said that around that time Mr Wayman told him that:

37. [66]

    This evidence was not challenged.

38. [67]

    Mr Amirbeaggi also said that in early 2011 Mr Wayman said to him:

39. [68]

    Mr Wayman was thus representing to Mr Amirbeaggi that he had a “group” of potential investors, including Mr Gilmore, that “my group” was interested in a “joint venture” of the Kingswood Land, that he was “currently carrying out” other developments with those investors and that he, Mr Armstrong and Mr Hollioake, could project manage the construction work on the Kingswood Land and “manage the sales of the apartments off plan”. Mr Wayman was making these representations concurrently with his false representations to Mr Gilmore about his financial commitment in the Hospital Land.

40. [69]

    Mr Amirbeaggi said that he did not “physically meet Armstrong, Hollioake, or any of the investors Wayman referred to” until 16 February 2011.

41. [70]

    Mr Amirbeaggi said that:

42. [71]

    I see no reason to doubt this evidence.

43. [72]

    During the first week of February 2011, Mr Amirbeaggi said that Mr Wayman said to him:

44. [73]

    Mr Amirbeaggi said:

Commitment to Kingswood

1. [74]

   On 7 February 2011, under the heading “Funds Transfer”, Mr Amirbeaggi wrote to Mr Wayman:

2. [75]

   Thereafter, also on 7 February 2011, Mr Armstrong telephoned Mr Amirbeaggi and said:

3. [76]

   Later on 7 February 2011, at Mr Armstrong’s request, Mr Amirbeaggi drafted and sent to Mr Wayman and Mr Armstrong a draft agreement between A1 and the company to which Mr Armstrong referred, whose full name was 182-190 Great Western Highway Pty Limited (“GWH”). I will call this document the “GWH Unit Subscription Agreement”.

4. [77]

   From 7 February 2011 Mr Armstrong was the only director and shareholder of GWH. [7] It appears that his and Mr Wayman’s plan was that GWH would be engaged as project manager of the Kingswood Project and would employ Mr Wayman to do the actual project management work.

5. [78]

   The draft GWH Unit Subscription Agreement provided that:

6. [79]

   Mr Amirbeaggi’s email to Mr Wayman and Mr Armstrong read:

7. [80]

   Thus, as things then stood, Gilmore Finance was to hold 25 of the 100 units in the GWH Trust which, through GWH, was to hold 50 of the 100 units in the Kingswood Trust; giving Gilmore Finance an indirect 12.5% interest in Kingwood Trust. [13]

8. [81]

   Later on 7 February 2011, Mr Armstrong, as director of GWH:

9. [82]

   Mr Armstrong said he was the source of the $175,000. There is no evidence showing what funds Mr Armstrong had such as would have enabled him to pay the $175,000. But there is no evidence contradicting Mr Armstrong’s evidence that he was the source of the funds.

10. [83]

    Mr Amirbeaggi said:

11. [84]

    At around this time Mr Amirbeaggi said that he had a conversation with either Mr Wayman or Mr Armstrong to the following effect:

12. [85]

    Mr Amirbeaggi said that around this time he had a telephone conversation with Mr Wayman to the effect:

13. [86]

    On the following day, 8 February 2011, Mr Amirbeaggi wrote to Mr Armstrong and Mr Wayman:

14. [87]

    Mr Wayman replied within the hour:

15. [88]

    A short time later, also on 8 February 2011, Mr Wayman sent a further email to Mr Amirbeaggi:

16. [89]

    Thus, at this stage A1 had secured what appeared to be a binding commitment from GWH, as trustee for the GWH Trust, to pay the balance of the $1.75 million referred to in the Kingswood Trust Unit Subscription Agreement, namely the $1.575 million referred to in that document, and also in Mr Amirbeaggi’s email to Mr Armstrong of 8 February 2011.

17. [90]

    Later in the morning of 8 February 2011, Mr Amirbeaggi sent an email to Mr Wayman:

18. [91]

    Mr Amirbeaggi’s email makes clear that he saw Mr Wayman as representing a group of investors in the Kingswood Project. He refers to the transaction completing when “you” have paid “the total $1.75 million” and referred to “your group” becoming a “joint owner” of the Kingswood Project.

19. [92]

    Later on 8 February 2011, Mr Wayman sent Mr Amirbeaggi, Mr Armstrong and Mr Hollioake what he described as being a “market research report that I have done for the marketing of our project”.

20. [93]

    There is no suggestion Mr Amirbeaggi had any involvement in the preparation of that document.

The site visit

1. [94]

   At some time prior to 15 February 2011 Mr Wayman telephoned Mr Yates and said:

2. [95]

   On 15 February 2011 Mr Yates sent an email to Mr Wayman and Mr Amirbeaggi headed “Run Sheet for today/tomorrow”. He said, under the heading “Tomorrow”:

3. [96]

   Mr Yates had asked Mr Amirbeaggi’s personal assistant, Ms Brooke Maniscalco, to “arrange a 5-seater hire car” as he understood that those engaging in the “site inspections at Kingswood” would be Mr Wayman, Mr Armstrong, Mr Hollioake and Mr Gilmore. Mr Yates said it was his understanding that neither Mr Amirbeaggi nor he would be attending the site inspection.

4. [97]

   Thus, Mr Amirbeaggi and Mr Yates had this conversation:

5. [98]

   Mr Amirbeaggi and Mr Yates decided to attend the site visit after Mr Wayman called Mr Amirbeaggi and said:

6. [99]

   Mr Amirbeaggi then said to Mr Yates that “if I have to go, I’d like you to come too”, whereupon Mr Yates arranged for a minibus, rather than a 5-seater hire car, to be arranged to facilitate the visit.

7. [100]

   On 16 February 2011 Mr Amirbeaggi and Mr Yates met Mr Wayman, Mr Armstrong, Mr Hollioake, Mr Gilmore, and Mr Gilmore’s wife, Mrs Doris Gilmore outside the offices of Yates Beaggi. All those people then boarded the minibus that travelled out to the Kingswood Land.

8. [101]

   On Mr Amirbeaggi’s account of the journey to the site, apart from exchanging pleasantries, he did not speak to either Mr Wayman, Mr Armstrong, Mr Hollioake or Mr and Mrs Gilmore. Mr Yates gave evidence to the same effect and said that he and Mr Amirbeaggi had limited conversations between themselves about work, but otherwise spent their time on their telephones, and did not participate in other conversations in the minibus.

9. [102]

   Mr Gilmore and Mr Armstrong had different recollections as to the extent to which Mr Amirbeaggi engaged in conversation with other members of the group about the Kingswood site.

10. [103]

    It is common ground that while the parties were inspecting the Kingswood Land, it was agreed that they should also travel, in the minibus, to the Hospital Land.

11. [104]

    Mr Gilmore gave this evidence in chief:

12. [105]

    Mr Gilmore continued, initially in response to questions from me:

13. [106]

    Mr Gilmore said, in relation to the visit to the Hospital Land:

14. [107]

    Mr Gilmore qualified this evidence somewhat in cross-examination. I return to this below. [14]

15. [108]

    Mr Amirbeaggi and Mr Yates both denied that Mr Amirbeaggi had said anything about any “investors from the United States”.

16. [109]

    Mr Amirbeaggi gave evidence that, while the group was at the Hospital Land, Mr Gilmore said words to the effect:

17. [110]

    In its List Statement, Gilmore Finance alleged that Mr Amirbeaggi had made a total of 18 representations, all said to be misleading or deceptive, during the course of the visits to the Kingswood Land and the Hospital Land.

18. [111]

    In closing submissions, only five of these representations were pressed, one consequence of which is that the differing recollections as to what Mr Amirbeaggi said during the site visit are less significant than might first appear.

19. [112]

    I will return to this when considering the detail of Gilmore Finance’s misleading or deceptive conduct claim.

20. [113]

    In any event, Mr Gilmore said, in answer to a question from me, that his interest in putting money into either of the Kingswood Project or the Hospital site project (the “Hospital Project”) arose after the site visit and because of things said to him individually by Mr Wayman, Mr Armstrong and Mr Hollioake. I return to this below. [15]

Mr Armstrong’s admission of participating in a fraud practised on Mr Gilmore and his evidence as to conversations with Mr Amirbeaggi following the site visits

1. [114]

   Mr Armstrong, called in Gilmore Finance’s case, admitted that he had falsely represented to Mr Gilmore that he and Mr Wayman had invested $1.75 million in the Kingswood Project.

2. [115]

   That is, he admitted he was party to a fraud practised on Mr Gilmore.

3. [116]

   He asserted that he had done this at the bidding of both Mr Wayman and Mr Amirbeaggi. [16] This is pivotal evidence in Gilmore Finance’s case. It has called an admitted fraudster to prove its case against Mr Amirbeaggi; that Mr Amirbeaggi himself engaged in fraud.

4. [117]

   Mr Armstrong said that, at around this time, he had “several” telephone conversations with Mr Amirbeaggi in which Mr Amirbeaggi said words to the effect:

5. [118]

   Mr Armstrong also gave evidence that after the site visit on 16 February 2011, Mr Amirbeaggi said to him words to the effect:

6. [119]

   Mr Amirbeaggi denied saying any such thing. I am not persuaded that I should accept Mr Armstrong’s evidence that Mr Amirbeaggi said anything to this effect.

7. [120]

   I explain this conclusion further below. But one reason is that I do not accept that Mr Armstrong has any clear recollection of what Mr Amirbeaggi said at around this time.

8. [121]

   Mr Armstrong’s affidavit was made on 8 October 2021. Mr Gilmore’s solicitors had approached Mr Armstrong as early as 2018 to give a statement for the purpose of the proceedings.

9. [122]

   In October 2020, Gilmore Finance’s solicitors served an “Outline of Prospective Evidence of Graham Armstrong” that evidently set out the evidence that Gilmore Finance’s solicitors then anticipated Mr Armstrong would give.

10. [123]

    That “Outline of Prospective Evidence” is not in evidence before me.

11. [124]

    In August 2021, Mr Gilmore contacted Mr Armstrong directly to enquire whether he would be willing to provide a statement for the purposes of the proceedings. This led to the preparation of Mr Armstrong’s 8 October 2021 affidavit.

12. [125]

    In cross-examination, Mr Pritchard SC, who appeared with Mr Fernon SC and Mr Macauley for A1, A2 and Mr Amirbeaggi, [17] asked Mr Armstrong about the process by which that affidavit was prepared.

13. [126]

    So far as concerns the evidence that I have set out at [118] above, Mr Armstrong gave this evidence:

14. [127]

    That evidence suggests to me that Mr Armstrong did not, in fact, have a recollection of what Mr Amirbeaggi said to him at or around the time of the 16 February 2011 site visit. As he said, he recorded in his affidavit what he “thought might have been said”.

15. [128]

    In any event, Mr Armstrong’s evidence concerning what Mr Amirbeaggi allegedly said to him at around this time is impossible to reconcile with what Mr Armstrong said, and did not say, in emails he sent in June and July 2011. I return to this below.

16. [129]

    Mr Amirbeaggi denied that he said anything to this effect to Mr Armstrong. His later conduct, in emails he sent in June and July 2011, is consistent with this denial. Indeed, as I discuss below, unless those later emails are fabrications by Mr Amirbeaggi, designed to create a trail of communications to conceal his true role in the matter, they are impossible to reconcile with him having said anything to Mr Armstrong to the effect alleged. As will emerge, my conclusion is that I am not satisfied that Mr Amirbeaggi behaved in this way. His conduct, as evidenced by his many written communications to all the stakeholders in this venture, cannot be reconciled with any such conclusion.

17. [130]

    Mr Armstrong said that he was “told similar things by Wayman at that time too”. Subsequent events suggest that this part of Mr Armstrong’s evidence may well be true.

Completion of investment in the Kingswood Land

1. [131]

   On 18 February 2011, Mr Amirbeaggi sent an email to Mr Wayman:

2. [132]

   On 22 February 2011, Mr Wayman wrote to Mr Gilmore under the heading “Kingswood Petrol Station Site”:

3. [133]

   This email contains a number of false statements.

4. [134]

   First, it was not true for Mr Wayman to say that “we have put in $1,750,000 for the site”. Nor was it true for Mr Wayman to say “we” are “also going as the guarantors for the construction facility”. Nor did Mr Wayman have any basis to say that the “ROI”, that is, presumably, return on investment, would be “100%”; apart from, perhaps, the very high level figures Mr Amirbeaggi had given him during 2010. There is no suggestion in the evidence that Mr Amirbeaggi authorised Mr Wayman to tell Mr Gilmore that he would, in effect, double his money in 18 months.

5. [135]

   In the email, Mr Wayman said to Mr Gilmore that “Your Equity Required” was also $1.75 million. At the conclusion of his email, Mr Wayman asked Mr Gilmore to send the $1.75 million to Yates Beaggi’s trust account and provided details of that account.

6. [136]

   Mr Amirbeaggi said that he did not see this email until after these proceedings were commenced; and that he did not ask Mr Wayman to send the email.

7. [137]

   Ten minutes later, Mr Wayman sent a further email to Mr Gilmore, this time headed “Kingswood Hospital Site”.

8. [138]

   In that email Mr Wayman said:

9. [139]

   This email also contained falsehoods.

10. [140]

    First, Mr Wayman said that “the people that are in this deal” include a “USA JV Partner”. Second, Mr Wayman said that “we” have put in “$5,000,000 for the site” and that “we” are “also bringing in a further $12,500,000” into the project over the next few months”. Third, Mr Wayman said that the contribution would have the effect of reaching a “50/50 JV with our USA JV Partner”. Finally, Mr Wayman falsely said that “we would be going as guarantors for the construction” of the project. None of this was true.

11. [141]

    As with his earlier email, Mr Wayman asked Mr Gilmore to transfer his “Equity Contribution” of $1.25 million into the Yates Beaggi trust account and provided details for that trust account.

12. [142]

    Mr Amirbeaggi denied having asked Mr Wayman to send this email or telling him what to say in the email.

13. [143]

    The following day, 23 February 2011, Mr Gilmore replied to Mr Wayman:

14. [144]

    This email shows that Mr Gilmore understood that Mr Wayman was able to speak on behalf of “the project”: understandable enough bearing in mind the terms of Mr Wayman’s communications to him. But this was not because of anything Mr Amirbeaggi had said to him or authorised anyone else to say to him.

15. [145]

    The following day, 24 February 2011, Mr Gilmore caused Gilmore Finance to transfer $1.75 million into the Yates Beaggi trust account.

16. [146]

    The GWH Unit Subscription Agreement called for a further payment on “Completion” of $1.575 million, not $1.75 million.

17. [147]

    There is no evidence that, at the time, Mr Amirbeaggi realised or acknowledged this apparent discrepancy. Mr Amirbeaggi said his recollection was that, at some point, the $175,000 received into the Yates Beaggi trust account on 7 February 2011 was repaid to Mr Armstrong or GWH, although he was unable to point to any document recording this, whether in the records of the Kingswood Trust or of the Yates Beaggi trust account.

18. [148]

    Mr Armstrong denied that he had received back the $175,000. However, as I set out below, he did not refer to the $175,000 as being outstanding following his 21 July 2011 agreement to transfer GWH’s 25% interest in the Kingswood Trust to Gilmore Finance. I return to this below. [18]

19. [149]

    Completion of GWH’s acquisition of units in the Kingswood Trust occurred the following day, 25 February 2011. On settlement, A1 used part of the $1.75 million provided by Gilmore Finance to discharge a mortgage of $600,000 to the NAB then secured over the Kingswood Land.

20. [150]

    On 25 February 2011, Mr Amirbeaggi wrote to Mr Armstrong:

21. [151]

    A short time later on 25 February 2011, Mr Wayman wrote to Mr Gilmore, replying to Mr Gilmore’s 23 February 2011 email, and stating:

22. [152]

    On 28 February 2011, Mr Yates wrote to Mr Wayman and Mr Armstrong enclosing, among other things, a Unit Certificate certifying that GWH, as trustee of the GWH Trust, held 100 units in the Kingswood Trust in which the sum of “$17,500.00 per unit has been paid subject to the terms of the [Kingswood Trust]”.

23. [153]

    On 1 March 2011, Mr Amirbeaggi sent Mr Gilmore an email that, in its List Statement, Gilmore Finance contended conveyed a representation that the effect of the documentation executed to date was that Gilmore Finance held 25% of the unencumbered Kingswood Land. As that aspect of Gilmore Finance’s claim was not pressed in final submissions, I will not consider it further.

24. [154]

    On 7 March 2011, Mr Gilmore’s accountant, Mr Darrell Camilleri, telephoned Mr Amirbeaggi and said that he thought it better that Gilmore Finance have a direct interest in the Kingswood Trust, rather than an indirect interest via the GWH Trust. Mr Amirbeaggi agreed to this and caused Gilmore Finance to be issued with 25 units in the Kingswood Trust.

25. [155]

    During his telephone call with Mr Amirbeaggi, Mr Camilleri handwrote a diagram which, evidently, recorded his understanding of what Mr Amirbeaggi was explaining to him about the current state of the investment by GWH in the Kingswood Trust.

26. [156]

    A copy of that diagram is attached. Attachment A - diagram (486621, pdf)

27. [157]

    The document shows that Mr Amirbeaggi explained to Mr Camilleri that the total amount of GWH’s investment in the Kingswood Trust was $1.75 million, comprising 100 units in the Kingswood Trust at $17,500 per unit.

28. [158]

    Mr Camilleri must have understood that the $1.75 million referred to was that contributed by Gilmore Finance on 24 February 2011.

29. [159]

    Later on 8 March 2011, Mr Camilleri’s secretary forwarded a copy of the diagram to Mr Gilmore.

30. [160]

    The diagram should have made clear to Mr Gilmore that it had not been correct for Mr Wayman to assert, in his 22 February 2011 email, that as at that date “we have put in $1,750,000 for the site” and that “Your Equity Required” was a further $1,750,000.

31. [161]

    The explanation given by Mr Amirbeaggi to Mr Camilleri, as recorded in his diagram, cannot be reconciled with the proposition that Mr Amirbeaggi was a party to a plan to mislead Mr Gilmore into thinking that GWH had invested more into the project than the $1.75 million provided by Gilmore Finance.

32. [162]

    On 8 March 2011, Mr Camilleri wrote to Mr Amirbeaggi:

33. [163]

    The second paragraph of that email appears to bespeak Mr Gilmore’s apprehension, no doubt based on what Mr Wayman had stated in his 22 February and 3 March 2011 emails, that “other contributors” had “advanced” funds for the Kingswood Project.

34. [164]

    Mr Amirbeaggi appears not to have picked this up, as he replied on 9 March 2011:

35. [165]

    Later that day, 9 March 2011, Mr Gilmore wrote to Mr Camilleri:

36. [166]

    The evidence does not reveal what response Mr Camilleri gave to Mr Gilmore’s enquiry. Mr Pritchard suggested to Mr Camilleri in cross-examination that Mr Gilmore’s enquiry showed some confusion on Mr Gilmore’s part and should have rung “alarm bells” for Mr Camilleri. This cross-examination was evidently directed to the proposition that Mr Camilleri was a “concurrent wrongdoer” for the purposes of s 87CB(3) of the Competition and Consumer Act, a claim withdrawn in closing submissions.

37. [167]

    In any event, as I describe below, Mr Camilleri followed the matter up with Mr Amirbeaggi on 29 April 2011.

38. [168]

    The following day, 10 March 2011, Mr Amirbeaggi wrote to Mr Camilleri, with a copy to Mr Gilmore:

Investment in the Hospital Land

1. [169]

   In the meantime, on 28 February 2011, Mr Wayman telephoned Mr Amirbeaggi. They had this conversation:

2. [170]

   Several days later, on 3 March 2011, Mr Wayman sent a further email to Mr Gilmore concerning the “Kingswood Hospital Site” in which he repeated the falsehoods in his 22 February 2011 email. Again, Mr Amirbeaggi said he did not authorise Mr Wayman to send this email and did not know of its contents until after the commencement of these proceedings. This email read:

3. [171]

   Mr Wayman concluded by asking Mr Gilmore to cause $1.25 million to be paid into the Yates Beaggi trust account “this week”.

4. [172]

   On or around the 14 or 15 March 2011, Mr Wayman telephoned Mr Amirbeaggi again and had this conversation:

5. [173]

   On 16 March 2011, Mr Gilmore caused Gilmore Finance to pay $1.25 million into the Yates Beaggi trust account and sent an email to Mr Amirbeaggi and Mr Wayman:

6. [174]

   Mr Amirbeaggi said that Mr Gilmore caused this payment to be made without any prior request for payment from him. In his affidavit he said:

7. [175]

   On 21 March 2011 Mr Amirbeaggi sent to Mr Gilmore and Mr Wayman a draft Unit Sale Agreement, providing for the sale by Ms Yates and Ms Conway of five units in the Hospital Trust [19] to Gilmore Finance in consideration of the $1.25 million that Gilmore Finance had already paid into the Yates Beaggi trust account on 16 March 2011.

8. [176]

   Several weeks later, on 5 May 2011, Mr Camilleri sent Mr Amirbeaggi the executed pages of that Unit Sale Agreement, signed by Mr Gilmore on behalf of Gilmore Finance.

Appointment of DevCom as project manager

1. [177]

   It was a term of the Unit Subscription Agreement made between A1 and GWH on 7 February 2011 that the parties agreed to negotiate in good faith and to complete a unitholders’ agreement, one of the terms of which was to appoint Mr Wayman as project manager to manage the Kingswood Land project at a renumeration of $125,000 per annum.

2. [178]

   In this context, on 29 March 2011, Mr Yates sent to Mr Wayman by email a draft consultancy agreement between A1 and DevelopmentCom Pty Ltd (“DevCom”), a company associated with Mr Armstrong, in respect of the development of the Kingswood Land. That document was executed on behalf of DevCom by Mr Armstrong and returned to Mr Amirbeaggi on the same day.

3. [179]

   Pursuant to that agreement DevCom agreed to provide A1 with Mr Wayman’s project management services.

4. [180]

   Evidently, Mr Wayman did perform some work in the nature of project management for the Kingswood Land.

5. [181]

   Thus, on 5 April 2011, Mr Amirbeaggi wrote to Mr Gilmore and Mr Camilleri:

6. [182]

   Similarly, on 21 April 2011, Mr Wayman wrote to Mr Gilmore, Mr Amirbeaggi, Mr Armstrong and Mr Hollioake, among others, under the heading “Kingswood Project Update” and setting out detailed notes to “update you all regarding our progress” including that:

The Kingswood Trust Unitholders’ Agreement

1. [183]

   By 12 May 2011, both GWH and Gilmore Finance had executed the Kingswood Trust Unitholders’ Agreement.

2. [184]

   That document showed the unitholders in the Kingswood Trust to be:

   1. (1)

      GWH as to 25 units;

   2. (2)

      Gilmore Finance as to 25 units;

   3. (3)

      Ms Yates as to 17.5 units;

   4. (4)

      Ms Conway as to 17.5 units; and

   5. (5)

      Mr Vaughan Williams [20] as to 15 units.

3. [185]

   This document reflected an implementation of Mr Camilleri’s advice that Gilmore Finance have a direct 25 unit interest, reflecting its $1.75 million investment in the Kingswood Trust, rather than an indirect interest through the GWH Trust.

4. [186]

   There are terms of the Kingswood Unit Trust Unitholders Agreement that are relevant to a number of the matters Gilmore Finance seeks to raise, assuming it fails in its “no transaction” case. I will return to the relevant terms when considering those matters.

Discovery of Mr Wayman’s misrepresentations

1. [187]

   On 29 April 2011, Mr Camilleri sent an email to Mr Amirbeaggi making a number of enquiries about the Kingswood Land and the Kingswood Trust. These enquiries may have arisen from the confusion Mr Gilmore expressed in his email of 9 March 2011.

2. [188]

   Mr Amirbeaggi replied on 1 May 2011.

3. [189]

   One of the enquires made by Mr Camilleri was:

4. [190]

   Mr Amirbeaggi replied:

5. [191]

   Another enquiry made by Mr Camilleri was:

6. [192]

   Mr Amirbeaggi replied:

7. [193]

   The second of these responses, but not the first, is relied on by Gilmore Finance as constituting a representation by Mr Amirbeaggi that $7 million had in fact been subscribed for units in the Kingswood Trust. I return to this below.

8. [194]

   Mr Marshall asked Mr Amirbeaggi about his state of mind on 1 May 2011 as to the investment in the Kingswood Trust. Mr Amirbeaggi said:

9. [195]

   Mr Amirbeaggi then gave this evidence in response to questions from me:

10. [196]

    On 5 May 2011 Mr Camilleri wrote to Mr Amirbeaggi and asked two questions. Mr Amirbeaggi replied to those questions on 30 May 2011. In its List Statement, Gilmore Finance relied upon Mr Amirbeaggi’s 30 May 2011 replies as constituting “No Discount Representations”. As that contention was not pressed in closing submissions, I will give it no further consideration.

11. [197]

    On 23 May 2011, Mr Amirbeaggi sent an email to Ms Jenny McLure, who I was told is Mr Wayman’s mother-in-law, about the purchase of a BMW for Mr Wayman. In the email, Mr Amirbeaggi said that he “located” the car and that “I paid $50k top up” and the car “was driven away and encumbered by Chris”. In cross-examination, Mr Amirbeaggi agreed that he had “negotiated the purchase of the trade” but said that although he said that “I” paid the $50,000, the money was in fact provided by Mr Wayman or his wife. During the hearing Mr Marshall sought to amend Gilmore Finance’s claim to include an allegation that this communication was relevant to whether Mr Wayman was acting as the agent of A1 or Mr Amirbeaggi. I refused that application. [21]

12. [198]

    On behalf of Gilmore Finance it was submitted that this evidence goes to Mr Amirbeaggi’s credit and to the question of whether a Jones v Dunkel [22] inference should be drawn against A1, A3 and Mr Amirbeaggi by reason of “the failure to call Mr Wayman”. I am not persuaded I should reject Mr Amirbeaggi’s evidence that he did not personally pay the $50,000 referred to in his email. And, for the reasons I have set out above, [23] I think neither party could reasonably have been expected to call Mr Wayman.

13. [199]

    On 15 June 2011, Mr Amirbeaggi wrote to Mr Wayman and Mr Armstrong about his 29 April/1 May 2011 exchange with Mr Camilleri.

14. [200]

    Evidently, Mr Amirbeaggi realised from his exchange with Mr Camilleri that Mr Gilmore may have understood that Mr Wayman, Mr Armstrong and Mr Hollioake had, like Gilmore Finance, contributed $1.75 million for their 25% share in the Kingswood Trust. By now Mr Amirbeaggi had been told by Mr Wayman that he had evidently told Mr Gilmore he would “double his money”. I say “evidently” as these matters were not explored in cross-examination.

15. [201]

    Thus, on 15 June 2011, Mr Amirbeaggi wrote to Mr Wayman and Mr Armstrong:

16. [202]

    Mr Amirbeaggi is expressing himself in this email as if he had not, prior to his exchange with Mr Camilleri, understood that Mr Gilmore might be labouring under the misapprehension that Mr Wayman and Mr Armstrong had paid $1.75 million for their “25% share”; and that, prior to an evidently recent conversation with Mr Wayman, he had not known of Mr Wayman’s “double your money” representation.

17. [203]

    Mr Amirbeaggi did not explain in his affidavit why it took him until 15 June 2011 to raise these matters with Mr Wayman and Mr Armstrong. He was not asked anything about this in cross-examination.

18. [204]

    Mr Marshall submitted in closing submissions that Mr Amirbeaggi, in effect, concocted this and later emails, to create a written record, or paper trail, consistent with his ignorance of misrepresentations made to Mr Gilmore about the level of investment in the Kingwood Project.

19. [205]

    Thus, Mr Marshall submitted:

20. [206]

    This is a grave allegation, tantamount to fraud, to make about Mr Amirbeaggi. I do not accept it. To the extent to which Mr Marshall put this proposition to Mr Amirbeaggi in cross-examination, Mr Amirbeaggi firmly rejected it. And, on the hypothesis that Mr Amirbeaggi was behaving this way, a person who would know about that was Mr Armstrong. As emerges below, Mr Armstrong’s responses to Mr Amirbeaggi’s emails at this time cannot be reconciled with the conclusion that Mr Amirbeaggi was a party to the fraud that Mr Armstrong admitted, indeed asserted, he and Mr Wayman had practised on Mr Gilmore.

21. [207]

    After sending this email, Mr Amirbeaggi telephoned Mr Wayman. Mr Amirbeaggi gave this account of their conversation:

22. [208]

    Later on 15 June 2011, Mr Armstrong replied to Mr Amirbeaggi’s email:

23. [209]

    Mr Armstrong was here professing an intention to “look after Lyle” when he knew that he had joined with Mr Wayman in mispresenting to Mr Gilmore the nature of GWH’s investment in the project. He made no suggestion in this email that Mr Amirbeaggi was involved in any such deception.

24. [210]

    A few minutes later, Mr Armstrong sent Mr Amirbeaggi and Mr Yates a further email:

25. [211]

    A short time later, Mr Amirbeaggi replied to Mr Armstrong:

26. [212]

    Later that day Mr Armstrong replied:

27. [213]

    The following day, 16 June 2011, Mr Armstrong wrote to Mr Amirbeaggi and Mr Yates:

28. [214]

    Once again, although he knew he had joined in the deception of Mr Gilmore, Mr Armstrong is here asserting a “strong and trusting relationship” with Mr Gilmore and foreshadowing discussing with Mr Gilmore “openly and honestly … how to treat the investment on his side”. There is no suggestion in Mr Armstrong’s email of any involvement by Mr Amirbeaggi in such deception.

29. [215]

    Around half an hour later, also on 16 June 2011, Mr Wayman forwarded to Mr Armstrong a copy of his 22 February 2011 “Kingswood Petrol Station Site” email to Mr Gilmore [26] and said:

30. [216]

    Mr Wayman was seemingly oblivious of, and unrepentant about, the misleading nature of that email. He did not suggest he had sent it at Mr Amirbeaggi’s request. He also expressed himself as if he understood Mr Armstrong knew of it. Mr Armstrong did not forward this email on to Mr Amirbeaggi; consistently with Mr Armstrong understanding that Mr Amirbeaggi did not know of the falsehoods in the email.

31. [217]

    On 21 June 2011, Mr Armstrong wrote to Mr Yates under the heading “My approach will be as follows” and said:

32. [218]

    As I set out below ultimately, at a meeting on 21 July 2011, Mr Armstrong confessed to Mr Gilmore his and Mr Wayman’s deception and agreed to cause GWH to transfer to Gilmore Finance its 25% of units in the Kingswood Trust. In his email, Mr Armstrong appears to be foreshadowing such a transfer of units.

33. [219]

    On 22 June 2011, Mr Armstrong and Mr Hollioake visited Mr Gilmore in Mackay.

34. [220]

    In his affidavit, Mr Armstrong said that, prior to this visit, he said to Mr Amirbeaggi:

35. [221]

    Evidently, Mr Armstrong deposed to that conversation without considering the email that he sent Mr Amirbeaggi on his return from Mackay on 27 June 2011. That email read:

36. [222]

    There is no suggestion in Mr Armstrong’s email that he said anything to Mr Amirbeaggi to the effect set out at [220] above.

37. [223]

    In fact, Mr Armstrong agreed in cross-examination that during his visit to Mackay he did not tell Mr Gilmore of the true position. He said that he knew Mr Gilmore believed that he and Mr Wayman had invested the same amount as had Gilmore Finance in the Kingswood Project and knew that this was not correct. Nonetheless he did not tell Mr Gilmore that this was the position.

38. [224]

    Rather, in his email, Mr Armstrong asserted that Mr Gilmore had shown “very little interest” in “the conversation surrounding Chris and his future involvement with our group”, and that Mr Gilmore seemed “completely satisfied with the % breakdown of the shares” and was “content with the deal the way it is”.

39. [225]

    In cross-examination, Mr Armstrong professed to feeling “ashamed” about this.

40. [226]

    In his email Mr Armstrong also said, in a statement laden with irony as things have turned out, that Mr and Mrs Gilmore had “placed their trust with me since day one and this is only grown stronger of late”.

41. [227]

    Mr Gilmore did not refer in his affidavits to his meeting in Mackay with Mr Armstrong and Mr Hollioake.

42. [228]

    After receiving Mr Armstrong’s 27 June 2011 email Mr Amirbeaggi telephoned him. They had this conversation:

43. [229]

    On 28 June 2011, Mr Armstrong wrote to Mr Amirbeaggi and Mr Gilmore again suggesting that Mr Hollioake’s father, Mr John Hollioake, might be a suitable person to “oversee the project management of this site if required”.

44. [230]

    Mr Armstrong continued:

45. [231]

    In this email, Mr Armstrong spoke of “all the mistruths Chris has passed between us in recent times”. Mr Armstrong did not suggest that Mr Amirbeaggi was a party to any such “mistruths”.

46. [232]

    On the subject of the future project management of the Kingswood Project, Mr Amirbeaggi replied to Mr Armstrong and Mr Gilmore:

47. [233]

    The following day, 29 June 2011, Mr Gilmore wrote to Mr Amirbeaggi:

48. [234]

    This email suggests that Mr Gilmore’s focus was then on the project management of the Kingswood Project, rather than on the nature of the investment of other parties in the project.

49. [235]

    On 7 July 2011, Mr Gilmore wrote to Mr Amirbeaggi stating that, for a number of reasons, his “financial situation has changed just recently” and continuing:

50. [236]

    Mr Amirbeaggi replied:

51. [237]

    A short time later, Mr Amirbeaggi sent a further email to Mr Gilmore:

52. [238]

    In closing submissions, Mr Marshall relied on this email as repeating the representation said to have been made by Mr Amirbeaggi in his response to Mr Camilleri’s 29 April 2011 enquiries, namely that Gilmore Finance was not the only party to have “paid $1.75 million for a quarter share in the Kingswood Project”.

53. [239]

    This submission is not part of Gilmore Finance’s pleaded case.

54. [240]

    In any event, the submission appears to proceed upon a misunderstanding of how the Kingswood Project was to be financed and developed. As Mr Amirbeaggi made clear in an email he sent on 14 July 2011 to Mr Wayman and Mr Armstrong, with a copy to Mr Gilmore (to which I refer below) his understanding was that the arrangement between GWH and Gilmore Finance was that Gilmore Finance was to be a “passive” investor with no obligation to contribute to future expenses, whereas GWH and DevCom, between them, were to meet 50% of future expenses; that is to cover what would otherwise have been Gilmore Finance’s obligation to pay 25% of those future expenses. So understood, the 7 July 2011 offer was consistent with the structure.

55. [241]

    Thus, later on 7 July 2011, Mr Amirbeaggi sent an email to Mr Armstrong, Mr Hollioake and Mr Wayman saying that “we need to raise some funding for the general account” and continuing:

56. [242]

    Mr Armstrong replied on 12 July 2011:

57. [243]

    Mr Armstrong was here asserting that, contrary to Mr Amirbeaggi’s previous understanding that the interests associated with Mr Armstrong would “still … cover” Gilmore Finance’s obligation to meet future expenses, Gilmore Finance was now to contribute 25%, and that Mr Gilmore was “more than happy to pay his share going forward”. It appears Mr Gilmore did not share this understanding, as his later communications revealed.

58. [244]

    On 14 July 2011, Mr Amirbeaggi wrote to Mr Gilmore and Mr Armstrong:

59. [245]

    Mr Gilmore replied on 14 July 2011:

60. [246]

    Mr Amirbeaggi replied within the hour:

61. [247]

    In his affidavit, Mr Amirbeaggi gave this account of a conversation he had with Mr Gilmore on 14 July 2011 following receipt of Mr Gilmore’s email earlier that day. It is not clear whether the conversation took place before or after the email I have set out in the previous paragraph.

62. [248]

    Mr Amirbeaggi’s account of the conversation was as follows:

63. [249]

    The only part of this conversation that Mr Gilmore disputed was Mr Amirbeaggi’s statement that “$1.75 million represents 50% of the value of the land … because we have adopted a $3.5 million valuation”. Mr Gilmore said, “I do not think this conversation took place”. Although the matter was not explored in cross-examination, I understood Mr Gilmore’s reference to “this conversation” to be limited to that part of the conversation to which Mr Gilmore made specific reference.

64. [250]

    Thus, Mr Gilmore did not dispute that during this conversation Mr Amirbeaggi explained to him that GWH’s, and thus, in effect, Mr Wayman’s, Mr Armstrong’s and Mr Hollioake’s, 25% share of the units in the Kingswood Trust was “for meeting the ongoing share of contributions, and for the work they are undertaking on the project”. Nor did Mr Gilmore dispute that it was in this conversation that he first understood that “the boys” had not matched Gilmore Finance’s contribution of $1.75 million. This makes clear that whatever Mr Armstrong had hitherto said to Mr Gilmore, whether during the visit to Mackay or otherwise, it had not included a truthful statement of the nature of “the boys’” financial contribution to the project.

65. [251]

    Later on 14 July 2011, following his conversation with and email to Mr Gilmore, Mr Amirbeaggi sent an email to Mr Wayman, Mr Armstrong and Mr Hollioake, with a copy to Mr Gilmore:

66. [252]

    Mr Amirbeaggi’s email reads as if, consistently with his case before me, he had that morning revealed to Mr Gilmore, for the first time so far as he and Mr Gilmore were concerned, that Mr Armstrong and Mr Wayman had not matched Mr Gilmore’s $1.75 million investment in the Kingswood Project, nor his $1.25 million investment in the Hospital Project. Mr Amirbeaggi’s email also reads as if, again consistently with his case before me, he had not been a party to any deception of Mr Gilmore, and that he was inviting those who were a party to such deception to deal with the problem.

67. [253]

    If ever there was a point in the proceedings for Mr Marshall to put to Mr Amirbeaggi the proposition that he was deliberately concocting email communications in order to feign a lack of involvement in the deception, it was in relation to this email. In fact, Mr Marshall did not challenge Mr Amirbeaggi at all in relation to this email. In this circumstance, I can see considerable substance in Mr Pritchard’s submission that this omission was “fatal to the fraud case”.

68. [254]

    To that I would add that, as I have set out above, Mr Armstrong’s responses to Mr Amirbeaggi’s emails since 15 June 2011 cannot be reconciled with Mr Amirbeaggi’s involvement in the deception.

69. [255]

    Mr Gilmore replied the following day stating that:

70. [256]

    Mr Amirbeaggi replied:

71. [257]

    As I have set out above, this proposal was evidently one that had occurred to Mr Armstrong as early as 21 June 2011.

72. [258]

    A short time later, on 15 July 2011, Mr Armstrong sent this astonishing email to Mr Gilmore and Mr Hollioake. He wrote:

73. [259]

    Mr Armstrong was responding to Mr Amirbeaggi’s 14 July 2011 email in which Mr Amirbeaggi had reported revealing to Mr Gilmore that, contrary to Mr Gilmore’s understanding to that point, neither Mr Wayman nor Mr Armstrong had “placed $1.75m into the JV”.

74. [260]

    In that context, Mr Armstrong’s expression of dismay about the “behaviour of these guys” and his assertion that this was “not how we do business” is impossible to fathom. Nor is his reference to “these [ridiculous] antics” and his stated assumption that Mr Amirbeaggi “has agreed to provide you the additional shares in Kingswood”.

75. [261]

    Still more difficult to understand is the agreement, bearing the date 25 February 2011, purportedly made between A3 and a company “Barber Avenue Pty Ltd” that Mr Armstrong attached to this email. Mr Armstrong said “please keep this document to yourself” and that he did not want Mr Amirbeaggi to have it “if Chris has not given it to him”. The company Barber Avenue Pty Ltd was not incorporated until August 2012. Although Mr Armstrong purported to execute the document on behalf of that company, he was never an office holder in it.

76. [262]

    Mr Armstrong then set out a draft of an email he said he intended to send to Mr Amirbeaggi.

77. [263]

    The draft email added:

78. [264]

    The draft email contains no suggestion that Mr Amirbeaggi had asked Mr Armstrong to deceive Mr Gilmore about the level of investments in either the Kingswood or Hospital Projects. In any event, Mr Armstrong did not send it.

79. [265]

    About an hour later Mr Gilmore sent an email to Mr Amirbeaggi:

80. [266]

    On 18 July 2011, Mr Amirbeaggi wrote to Mr Gilmore, Mr Wayman, Mr Armstrong, Mr Hollioake and another unitholder in the Kingswood Trust, Mr Williams:

81. [267]

    On 19 July 2011, Mr Armstrong wrote to Mr Amirbeaggi:

82. [268]

    Mr Armstrong’s reference to the “following email” was a reference to the above email Mr Amirbeaggi had sent to Mr Gilmore, Mr Wayman, Mr Armstrong, Mr Hollioake and Mr Williams on 18 July 2011 seeking “a further contribution of $50,000.00 from GWH/Gilmore”.

83. [269]

    There is no suggestion in any of these communications from Mr Armstrong that Mr Amirbeaggi had importuned him to deceive Mr Gilmore.

84. [270]

    Mr Amirbeaggi replied the same day:

85. [271]

    Although the matter was not explored in cross-examination, these communications suggest that Mr Amirbeaggi’s reference to what Mr Gilmore “was never to know” was to an obligation to cover ongoing expenses.

86. [272]

    A short time later, Mr Amirbeaggi and Mr Gilmore had a telephone conversation as follows:

87. [273]

    Thus, Mr Gilmore’s reaction to having been told of the deception practised on him by Mr Armstrong and Mr Wayman was to request that Mr Wayman and Mr Armstrong transfer to him their interest in the Kingswood Project. As I have set out above, this was a “solution” to the problem that had earlier occurred to both Mr Armstrong and Mr Amirbeaggi.

88. [274]

    Mr Amirbeaggi then sent an email to Mr Armstrong and Mr Hollioake:

The 21 July 2011 meeting

1. [275]

   On 21 July 2011, Mr Amirbeaggi met with Mr Gilmore, Mr Armstrong and Mr Hollioake at the Novotel Airport Hotel in Brisbane.

2. [276]

   When Mr Amirbeaggi arrived, only Mr Gilmore was present. Mr Armstrong and Mr Hollioake arrived after. Mr Armstrong said that Mr Wayman “is a liar and has taken off”.

3. [277]

   Mr Amirbeaggi gave this account of the conversation that took place at the meeting:

4. [278]

   In his affidavit in reply, Mr Gilmore did not dispute the substance of Mr Amirbeaggi’s account of this conversation.

5. [279]

   The effect of the conversation was thus that, for the first time, Mr Armstrong confessed to Mr Gilmore that he and Mr Wayman had deceived him in relation to the level of investment in the Kingswood and Hospital Projects on behalf of Mr Wayman, Mr Hollioake and himself.

6. [280]

   There was discussion as to how to resolve the situation. It was agreed that:

7. [281]

   The following day, 22 July 2011, Mr Amirbeaggi wrote to Mr Armstrong, Mr Hollioake, Mr Wayman and Mr Gilmore:

8. [282]

   Mr Gilmore replied immediately:

9. [283]

   In his affidavit, Mr Armstrong gave a short account of the meeting. Mr Armstrong said that he said to Mr Gilmore:

10. [284]

    Mr Armstrong thus deposed that he made reference to his 7 February 2011 contribution of $175,000, and, in effect, agreed to walk away from it.

11. [285]

    However, also on 22 July 2011, Mr Armstrong wrote to Mr Gilmore:

12. [286]

    A short time later, Mr Armstrong sent an email to Mr Amirbeaggi, with a copy to Mr Gilmore:

13. [287]

    Mr Armstrong made no reference in these emails to the $175,000, although he did refer to “absorbing” and making no “claim” for “other costs” and “these additional amounts”. If, as he asserted before me, he was proposing to abandon any claim to the $175,000, it seems likely he would have mentioned this in terms in these emails, sent the day after the 21 July 2011 meeting. His failure to do so is consistent with Mr Amirbeaggi’s recollection that the $175,000 had been earlier repaid. [29] I think it more likely that this was the true position. In any event, no part of Gilmore Finance’s pleaded case turns on this point.

14. [288]

    Later on 22 July 2011, Mr Amirbeaggi sent Mr Gilmore an executed unit certificate in the Kingswood Trust, backdated to 7 February 2011, which stated that:

15. [289]

    In closing submissions, Mr Marshall sought to characterise events this way:

16. [290]

    I do not see this as a fair characterisation of what occurred by the end of July 2011.

17. [291]

    Rather, what happened was that Mr Gilmore elected to cause Gilmore Finance to maintain its investment in the Kingswood Trust, notwithstanding having been informed of the deception earlier practised on him by Mr Wayman and Mr Armstrong; not by Mr Amirbeaggi. Evidently, Mr Gilmore saw the transfer by GWH to Gilmore Finance of its interest in the Kingswood Trust as adequate compensation. Mr Gilmore did this with his eyes open. Evidently, he was sufficiently confident about the ultimate success of the venture to maintain his investment of $1.75 million, albeit now with a 50% interest.

Development consent for Hospital Land

1. [292]

   On 17 August 2011, the Department of Planning gave development consent for the Hospital Land.

2. [293]

   On 22 August 2011, Mr Amirbeaggi wrote to Mr Gilmore:

3. [294]

   Mr Amirbeaggi attached a feasibility study which predicted a potential profit in the order of $37.65 million and stated that he anticipated that A3 would exchange contracts to purchase the Hospital Land for $7.7 million in the next few days.

Execution of the Hospital Land Unitholders’ Agreement

1. [295]

   Some six months later, on 22 February 2012, Mr Amirbeaggi telephoned Mr Gilmore. Mr Amirbeaggi’s account of the conversation was:

2. [296]

   Following the conversation, and also on 22 February 2012, Mr Amirbeaggi sent Mr Gilmore an email which included:

3. [297]

   Mr Amirbeaggi’s email also set out rough calculations as to gross realisations for the Hospital Project (predicted to be $114.5 million) and expected outlays (expected to be $75 million), producing a projected margin of $40 million, that could be split equally:

4. [298]

   Sometime later, Mr Amirbeaggi asked Mr Gilmore:

5. [299]

   Mr Gilmore answered:

6. [300]

   Following this, on 23 April 2012, Mr Amirbeaggi wrote to Mr Gilmore:

7. [301]

   Mr Amirbeaggi thus proposed that the Hospital Land be developed three ways between Gilmore Finance, and interests associated with Mr Amirbeaggi and Mr Yates. There was no suggestion in this email that any other investors would be involved.

8. [302]

   On 30 April 2012, Mr Amirbeaggi sent Mr Gilmore a proposed Hospital Trust Unit Allotment Agreement. In his covering email, Mr Amirbeaggi said the agreement:

9. [303]

   Mr Amirbeaggi continued:

10. [304]

    On 5 June 2012, Mr Amirbeaggi sent Mr Gilmore an updated feasibility study in relation to the Hospital Land. That feasibility study estimated a total revenue of $117 million, net revenue of $107 million, and total cost of $78 million, with a projected profit margin of $28.65 million.

11. [305]

    Later on the same day, Mr Gilmore sent Mr Amirbeaggi an executed copy of the Hospital Trust Unit Allotment Agreement.

12. [306]

    By the Unit Allotment Agreement, Gilmore Finance applied to A3 for the issue of 28 ordinary units in the Hospital Trust for an “Issue Amount” of $4.25 million.

13. [307]

    The agreement provided in cl 2.1(b):

14. [308]

    The result was that, on 5 June 2012, there were three equal unitholders in the Hospital Trust: Gilmore Finance, Ms Conway and Ms Yates.

Advance by Gilmore Finance of final $4.25 million – Gilmore Finance loan $2.25 million

1. [309]

   In July 2012, Mr Amirbeaggi and Mr Yates were involved in a subdivision at Blaxland, unrelated to the Kingswood or Hospital Projects.

2. [310]

   On 11 July 2012, Mr Amirbeaggi sent Mr Gilmore an email:

3. [311]

   Mr Amirbeaggi and Mr Gilmore then had this conversation:

4. [312]

   Mr Gilmore did not dispute this conversation, but said that he could not recall it. It seems likely the conversation did take place as Mr Gilmore followed the matter up in an email of 31 July 2012:

5. [313]

   Later on the same day, 31 July 2012, Mr Amirbeaggi wrote to Mr Gilmore enclosing material concerning the Hospital Land, and stating under the heading “Funding Requirements”:

6. [314]

   Mr Gilmore replied later that day:

7. [315]

   Later on 31 July 2012, Mr Amirbeaggi replied to Mr Gilmore attaching a proposed “Deed of Loan” and stating:

8. [316]

   On 2 August 2012, Mr Gilmore wrote to Mr Amirbeaggi:

9. [317]

   Mr Gilmore then retained Mr Andrew Coates, of McKays Solicitors. A number of emails were exchanged between Mr Gilmore, Mr Coates and Mr Amirbeaggi.

10. [318]

    On 7 August 2012, Mr Amirbeaggi wrote to Mr Yates and Mr Gilmore, with a copy to Mr Coates:

11. [319]

    Settlement of the purchase of the Hospital Land was scheduled to take place at 4pm on the following day, 8 August 2012.

12. [320]

    Very early on 8 August 2012, Mr Amirbeaggi wrote to Mr Gilmore and to Mr Coates, with a copy to Mr Yates:

13. [321]

    Mr Amirbeaggi then expressed some doubt as to whether he would be successful in obtaining investors from the “market”. He continued:

14. [322]

    Later on 8 August 2012, Mr Gilmore agreed with this proposal.

15. [323]

    Thus, later on 8 August 2012, Mr Coates wrote to Mr Amirbeaggi, Mr Yates, Mr Gilmore and Mr Camilleri, under the heading “Loan and Option”:

16. [324]

    In closing submissions, Mr Marshall sought to characterise the events of this point as follows:

17. [325]

    Again, I do not see this as a fair characterisation of what had occurred.

18. [326]

    Mr Gilmore, with the assistance of an external and independent legal advisor, Mr Coates, decided to make the investments that Mr Amirbeaggi had proposed on 31 July 2012, which Mr Gilmore had, that day, acknowledged to be self-explanatory; and agreed to make a further advance to A3, on commercial terms, at interest and on a secured basis.

19. [327]

    On 9 August 2012, a number of documents were executed.

20. [328]

    They included:

    1. (1)

       an application by Gilmore Finance for the 28 units in the Hospital Trust the subject of the 5 June 2012 Unit Allotment Agreement “to be issued at $1.00 per unit and $151,784.71 per unit in premium” (that is, within a dollar or two of the $4.25 million specified in that agreement);

    2. (2)

       a Unit Payment Subscription Deed by which Ms Conway and Ms Yates subscribed for 17 units in the Hospital Trust for a “Subscription Price” of $2.25 million; that is at the rate of $132,353 per unit;

    3. (3)

       a Deed of Loan between A3 and Gilmore Finance for a loan of $2.25 million from Gilmore Finance to A3, and a mortgage by A3 in favour of Gilmore Finance over the Hospital Land to secure that loan; and

    4. (4)

       a Call Option granted by Ms Conway and Ms Yates in favour of Gilmore Finance in respect of the 17 units in the Hospital Trust for $2.25 million. [30]

21. [329]

    On the same day Gilmore Finance paid A3:

22. [330]

    On 9 August 2012, A3 issued a Unit Certificate stating:

23. [331]

    The Unit Certificate stated that Gilmore Finance held 33 units in the Hospital Trust, having paid $166,665.67 per unit. It reflected the fact that Gilmore Finance had paid $5.5 million (33 x $166,665.67) for units in the Hospital Trust; the five units purchased on 16 March 2011 for $1.25 million and the further 28 subscribed for on 9 August 2012 for $4.25 million, pursuant to the 5 June 2012 Unit Allotment Agreement.

24. [332]

    As must have been obvious to Mr Gilmore and Mr Coates, the five units purchased in March 2011 were at the rate of $250,000 per unit ($1.25 million divided by five), whereas the additional 28 units purchased in August 2012 were purchased at $151,785 per unit ($4.25 million divided by 28).

25. [333]

    On 9 August 2012, the sale of the Hospital Land to A3 was completed. The transfer was registered on 22 October 2012. The mortgage from A3 to Gilmore Finance over the Hospital Land was registered on 18 December 2012.

Repayment of the Gilmore Finance loan

1. [334]

   A3 repaid the Gilmore loan in full by September 2015, with interest.

2. [335]

   The loan was not repaid within the initial six-month period. However, extensions were granted.

3. [336]

   The loan was repaid by Ms Conway and Ms Yates meeting their obligations under the 2012 Unit Subscription Payment Agreement as follows:

4. [337]

   Mr Amirbeaggi’s evidence about these repayments was contained in an affidavit made on 8 March 2022, shortly before the commencement of the hearing.

5. [338]

   In closing submissions, Mr Marshall pointed out that although Mr Amirbeaggi’s evidence was given by reference to nominated entries in bank statements, his evidence as to the source of the funds was evidently from his memory and not from objective documentary material. Nonetheless, Mr Marshall did not object to, nor challenge the evidence. I see no reason not to accept it.

A1’s borrowing from Ares Capital Management Pty Ltd

1. [339]

   On 8 September 2015, A1 borrowed some $1.725 million from Ares Capital Management Pty Ltd.

2. [340]

   Gilmore Finance alleges that this was a borrowing that was not authorised under the 12 May 2011 Kingswood Trust Unitholders’ Agreement.

3. [341]

   I will deal with the facts surrounding this transaction below when dealing with Gilmore Finance’s contentions as to Unauthorised Transactions.

A3’s borrowing from Perpetual Trustee Company Ltd

1. [342]

   On 23 December 2016, A3 borrowed $3 million from Perpetual Trustee Company Ltd as trustee for the Arch Finance Warehouse Trust.

2. [343]

   Gilmore Finance contends that this borrowing was not authorised by the relevant provision in the 5 June 2012 Hospital Trust Unitholders’ Agreement.

3. [344]

   Again, I will deal with the facts leading to this borrowing when considering Gilmore Finance’s contentions concerning allegedly Unauthorised Transactions.

The sale of the Kingswood and Hospital Land

1. [345]

   As I have set out earlier, on 15 January 2018, A3 completed the sale of the Hospital Land for $18 million. From the proceeds, $4 million was distributed to Gilmore Finance. The same amount was distributed to each of the other one-third unitholders in the Hospital Trust.

2. [346]

   Finally, again as I have stated, on 11 June 2020, A1 sold the Kingswood Land for $3.54 million. No monies were distributed from the proceeds of the sale to any of the unitholders.

The misrepresentation claims

1. [347]

   As I have set out above, Gilmore Finance alleges that it made its investments in the Kingswood Project and the Hospital Project as a result of representations made to it by Mr Amirbeaggi as director of A1 and A3, either by himself, or by his agents.

2. [348]

   In closing submissions, Mr Marshall said:

3. [349]

   The representations are said to arise from things said by Mr Amirbeaggi during the site visit on 16 February 2011 and, as pressed in final submissions, Mr Wayman’s email to Mr Gilmore of 3 March 2011 [31] and Mr Amirbeaggi’s 1 May 2011 reply to Mr Camilleri’s enquiry of 29 April 2011. [32]

4. [350]

   In its List Statement, Gilmore Finance alleged that:

5. [351]

   In closing, Mr Marshall submitted that representations were not only made by Mr Wayman as the agent of Mr Amirbeaggi, but also by Mr Wayman’s “two accomplices, Messrs Armstrong and Hollioake”.

6. [352]

   That allegation is not pleaded and I do not propose to take it into account.

7. [353]

   As Mr Pritchard pointed out in final submissions, the allegation of Mr Wayman’s alleged agency is pleaded narrowly.

8. [354]

   The allegation is that Mr Amirbeaggi appointed Mr Wayman, relevantly, to obtain Mr Gilmore as a funder of the Kingswood Project and the Hospital Project. It is not alleged that Mr Wayman was appointed as an agent to procure or canvass investors generally; [33] let alone to make representations to investors about the level of investment in the projects.

9. [355]

   In any event, my conclusion is that Mr Amirbeaggi did not appoint Mr Wayman as the agent of A1 or A3 for any purpose.

10. [356]

    It is true that Mr Amirbeaggi, from time to time, provided Mr Wayman with information concerning the proposed developments.

11. [357]

    But the communications that I have set out above show that Mr Wayman was, purportedly, acting on behalf of alleged proposed investors in the development, not as a result of any request made of him by Mr Amirbeaggi, but because of an arrangement between Mr Wayman and the alleged investors, particularly Mr Gilmore.

12. [358]

    At the 16 July 2010 meeting that I have referred to, [34] Mr Wayman said that “I” have a “group of investors”, that “my group” will engage in “all sorts of property development”. Mr Wayman asked Mr Amirbeaggi and Mr Yates to let him know if they “came across any opportunities”. After Mr Amirbeaggi described, in general terms, the Kingswood Project and the Hospital Project, Mr Wayman asked whether “my group” could “have a look at those”.

13. [359]

    Further, Mr Gilmore explained that he had been introduced to Mr Wayman, not by Mr Amirbeaggi, but by his friend “Desmond”, and that later, he was to meet with Mr Wayman about the possible purchase of a property in Brisbane. [35]

14. [360]

    On 15 October 2010, Mr Wayman wrote to Mr Amirbeaggi about having “just formed a JV with a party that has substantial cash to invest” and enquiring about “opportunities” for investment. [36]

15. [361]

    By 20 January 2011, Mr Wayman and Mr Armstrong had established the “Wealthy Life Group Partnership”. [37]

16. [362]

    On 31 January 2011, Mr Wayman wrote to Mr Amirbeaggi about a “base partnership agreement” established by “one of my business partners”. He said that he wished to involve Mr Amirbeaggi with a “fund that we are setting up”. [38]

17. [363]

    At around that time Mr Wayman spoke to Mr Amirbeaggi about “my group” and “his clients” and “his investors” and spoke of having “completed investments with that group and am currently carrying out similar developments with them”. Mr Wayman mentioned one of “our investors”, Mr Gilmore, and said “I’ve placed investments and completed projects with him before” and that “I just made him a lot of money buying and selling properties”. [39]

18. [364]

    These communications do not establish that Mr Amirbeaggi was asking Mr Wayman to act on behalf of A1 or A3. On the contrary, they show that Mr Wayman was presenting himself to Mr Amirbeaggi as acting on behalf of prospective investors, including Mr Gilmore.

19. [365]

    In my opinion, Mr Armstrong’s evidence takes the matter no further.

20. [366]

    As I have set out above, I do not accept the truthfulness of his evidence because I am not satisfied that he has an actual recollection of what he said to Mr Amirbeaggi at the relevant times and because I find his assertions as to what he said to Mr Amirbeaggi irreconcilable with his written communications in the period of June and July 2011.

21. [367]

    There are other factors.

22. [368]

    The first, and obvious one, is that, as he has admitted, Mr Armstrong behaved in a dishonest fashion to Mr Gilmore until immediately before the 21 July 2011 meeting.

23. [369]

    According to Mr Armstrong, he by then had had an epiphany which, it was submitted, reflects well on him. Nonetheless, his admitted conduct causes me to be very cautious about accepting his evidence as to any contentious matter.

24. [370]

    Further, Mr Armstrong suggested that not only was Mr Amirbeaggi involved in the deception of Mr Gilmore, but that Mr Yates was also involved.

25. [371]

    Thus, in his affidavit he asserted that Mr Yates was involved in saying words to the effect:

26. [372]

    Mr Armstrong adhered to that evidence in cross-examination. Thus, he gave this evidence:

27. [373]

    In his affidavit, Mr Armstrong did not assert that Mr Yates had said to him anything to the effect that Mr Gilmore “should not know” that Mr Wayman and Mr Armstrong had “only put in $175,000” or that “Lyle should not think he is the only one putting in cash” or that “Lyle needs to think that all investors are contributing on the same basis”. [40]

28. [374]

    Nonetheless, Mr Marshall put to Mr Yates in cross-examination:

29. [375]

    Immediately following that evidence, Mr Yates gave this evidence, in response to questions from me:

30. [376]

    I observed Mr Yates carefully while he gave evidence and found his rejection of the proposition put to him convincing.

31. [377]

    Indeed, in closing submissions, Mr Marshall submitted that Mr Yates should be found to be “generally truthful” but “with an unreliable recall for important events in February 2011”. As to the evidence that I have set out in the preceding paragraph, Mr Marshall submitted:

32. [378]

    I do not accept that submission.

33. [379]

    I find that Mr Yates did not know of any suggestion that Mr Amirbeaggi had appointed Mr Wayman as an agent of A1 or A3 or that Mr Amirbeaggi had made any suggestion to Mr Armstrong about concealing from Mr Gilmore the true level and nature of Mr Wayman’s and Mr Armstrong’s investment in the projects.

34. [380]

    I find that a further reason not to accept the submission that Mr Amirbeaggi appointed Mr Wayman to act as the agent of A1 and A3; whether for the purpose of making representations to Mr Gilmore, or at all.

35. [381]

    In its List Statement, Gilmore Finance alleged that during the site visit on 16 February 2011, Mr Amirbeaggi made 18 separate representations.

36. [382]

    As I have said, only five were pressed in final submissions.

37. [383]

    I will deal with these in turn.

38. [384]

    As I have set out above, [41] Mr Gilmore gave evidence in chief that he recalled Mr Amirbeaggi saying during the site visit something about investors from the United States, that Mr Amirbeaggi said they were a “big party” and a “joint venture from the USA”. Mr Gilmore said that he thought that “Healthscope” may have been mentioned.

39. [385]

    There is no evidence before me as to whether “Healthscope” is a United States enterprise.

40. [386]

    Mr Gilmore’s evidence was not corroborated by Mrs Gilmore or by Mr Armstrong. It was denied by Mr Amirbeaggi, whose denial was corroborated by Mr Yates.

41. [387]

    Neither Mr Amirbeaggi nor Mr Yates were challenged about those denials.

42. [388]

    In relation to Mr Amirbeaggi, Mr Marshall’s cross-examination was confined to:

43. [389]

    As for Mr Yates, the cross-examination was confined to:

44. [390]

    Further, in cross-examination, Mr Gilmore qualified the evidence he had given in evidence-in-chief. Thus, he gave this evidence when asked about the reference in Mr Wayman’s 22 February 2011 email to the “JV with our USA JV Partner on this project”:

45. [391]

    On the basis of this evidence, I am not satisfied that Mr Amirbeaggi made any reference to “American investors” being interested in investing in the Hospital Land.

46. [392]

    In any event, Gilmore Finance does not, in its List Statement, allege that any such representation was misleading or deceptive and does not allege that there were no American investors “interested in investing in the Hospital Land”. What is alleged in the List Statement is that “no United States JV partner invested in the Hospital Project”.

47. [393]

    I find that Gilmore Finance has failed to establish that this representation was made.

48. [394]

    If Mr Amirbeaggi said anything to this effect, it was true.

49. [395]

    Mr Marshall did not develop Gilmore Finance’s submissions in relation to this alleged representation beyond the passage I have set out at [348] above.

50. [396]

    To the extent that Mr Gilmore gave evidence in his affidavit about this matter, it was in inadmissible form, was objected to and rejected.

51. [397]

    Although I granted Mr Marshall leave to adduce evidence-in-chief, in proper form, as to what Mr Amirbeaggi was alleged to have said at the site visit, Mr Gilmore did not give evidence about any representation to this effect.

52. [398]

    Nor did Mr Armstrong give any evidence to this effect.

53. [399]

    After I reserved judgment, my Associate made an enquiry of those advising Gilmore Finance for evidentiary references to Mr Amirbeaggi having made any representations to this effect. Submissions in reply made numerous references to the transcript, not one of which constituted such evidence.

54. [400]

    Mr Amirbeaggi denied making any statement to this effect. His denial was corroborated by Mr Yates. Neither of these denials was challenged in cross-examination.

55. [401]

    Gilmore Finance has not established that this representation was made.

56. [402]

    For the same reasons, Gilmore Finance has not established this representation.

57. [403]

    For the same reasons, this representation is not established.

58. [404]

    In any event, I am not persuaded that Mr Gilmore relied on anything said during the site visit in making his decision to invest in either the Kingswood or the Hospital Projects.

59. [405]

    As I set out at [113] above, Mr Gilmore said, in answer to a question from me, that his interest in putting money into either of the projects arose after the site visit and because of things said to him individually by Mr Wayman, Mr Armstrong and Mr Hollioake.

60. [406]

    However, I accept that this evidence needs to be seen in its context.

61. [407]

    Mr Pritchard put to Mr Gilmore the account of the site visit given by Mr Amirbeaggi. The following evidence then ensued, leading to my question:

62. [408]

    My reference to what Mr Gilmore had “told me earlier” was a reference to evidence that Mr Gilmore had, earlier, given. That evidence started with questions from Mr Pritchard concerning Mr Wayman’s 25 January 2011 [42] email to Mr Gilmore.

63. [409]

    That evidence was, commencing with questions from me:

64. [410]

    Mr Gilmore’s evidence, at this point, was focused on the Hospital Land. Mr Gilmore was making clear that during the site meeting he was not attracted to investing in the Hospital Land. Thus, I inadvertently, misstated to Mr Gilmore what he had “told me earlier”.

65. [411]

    Nonetheless, Mr Gilmore gave the answers recorded in the transcript and the matter was not taken up in re-examination.

66. [412]

    In that state of the evidence, I am not persuaded that Mr Gilmore made his decision to invest in either of the Kingswood or Hospital Projects based on anything said by Mr Amirbeaggi, or anyone else, during the site visit.

67. [413]

    The “Further Representations” are said to arise from the statements made by Mr Wayman in his 3 March 2011 email to Mr Gilmore that I have set out at [170] above and are said to be that:

68. [414]

    For the reasons I have set out above, many of the statements made by Mr Wayman in this email were false.

69. [415]

    But as I have also set out above, I accept Mr Amirbeaggi’s evidence that he did not authorise Mr Wayman to send this email and did not know of it until after the commencement of these proceedings.

70. [416]

    Further, as I have set out, I am not satisfied that Mr Wayman had any authority of any kind to make any communications on behalf of A1, A3 or Mr Amirbeaggi.

71. [417]

    Gilmore Finance has thus not established that the representations made by Mr Wayman in this email were made on behalf of any of A1, A3 or Mr Amirbeaggi.

72. [418]

    In any event, Mr Gilmore did not give evidence that he relied on anything contained in Mr Wayman’s 3 March 2011 email in making his decision to cause Gilmore Finance to pay $1.25 million on 16 March 2011 for five units in the Hospital Trust.

73. [419]

    This alleged representation arises from Mr Amirbeaggi’s response to Mr Camilleri’s 29 April 2011 question:

74. [420]

    As I have set out above, [43] Mr Amirbeaggi’s response to that question was:

75. [421]

    Mr Marshall submitted that this response “misleadingly represented” that the other investors had already subscribed for the balance of the total”. The effect of Mr Marshall’s submission was that Mr Amirbeaggi’s response conveyed that $7 million had in fact been subscribed for units in the Kingswood Trust.

76. [422]

    I do see substance in this submission. Mr Amirbeaggi’s response to Mr Camilleri’s question was somewhat oblique.

77. [423]

    However, there is no evidence that Mr Gilmore knew of Mr Amirbeaggi’s response to Mr Camilleri’s question. There is no evidence that Mr Camilleri forwarded the email to Mr Gilmore or discussed it with him.

78. [424]

    In any event, as I have set out above, before Gilmore Finance made any further payment in respect to the Kingswood Project, [44] “any ambiguity arising from the above statement … was corrected”. [45]

79. [425]

    Thus, even if Mr Gilmore did know of Mr Amirbeaggi’s less than fulsome response to Mr Camilleri’s 29 April 2011 enquiry, the question arises as to whether Gilmore Finance can show that it has suffered damage “because of” that response. [46]

80. [426]

    Where there may be multiple causes of a plaintiff’s loss or damage, the plaintiff may succeed if it establishes that the defendant’s impugned conduct “materially contributed” to the loss or damage suffered. [47]

81. [427]

    Thus, in Henville v Walker, McHugh J [48] said, when considering causation under s 82 of the Trade Practices Act 1974 (Cth): [49]

82. [428]

    In my opinion, whatever impression Mr Gilmore could have gained from Mr Amirbeaggi’s 1 May 2011 response to Mr Camilleri’s 29 April 2011 question concerning the level of subscription in the Kingswood Trust did not “materially contribute” to Mr Gilmore’s decision to remain invested in the Kingswood Project following revelation of the deceit that had been practised on him by Mr Wayman and Mr Armstrong.

83. [429]

    As I have set out, Mr Gilmore, with his eyes open, and with the full facts before him, decided to accept Mr Armstrong’s offer to, in effect, surrender GWH’s 25% unitholding in the Kingswood Trust as adequate compensation for the deception that had been practised on him.

84. [430]

    Accordingly, I do not accept that Gilmore Finance has suffered any loss “because of” the lack of clarity in Mr Amirbeaggi’s response to Mr Camilleri’s question.

85. [431]

    For these reasons, my conclusion is that Gilmore Finance has failed to establish that Mr Amirbeaggi, as director of A1 and A3, made any of the representations alleged in the List Statement save, perhaps, the “Subscription Representation”, and has, in any event, failed to establish that it was misled by any of the representations alleged.

86. [432]

    Gilmore Finance has thus failed to establish that it has suffered any loss “because of” any representation allegedly made by Mr Amirbeaggi on behalf of A1 or A3.

87. [433]

    It has thus failed to make out its “no transaction” case.

88. [434]

    In those circumstances it is not necessary for me to consider the submissions made on behalf of A1, A3 and Mr Amirbeaggi concerning contributory negligence or concurrent wrongdoers.

The under-contribution claim

1. [435]

   This claim is based on an alleged breach of cl 5.1(c) of the 5 June 2012 Hospital Trust Unitholders’ Agreement that, as I have set out above, provided that the unitholders in the Hospital Trust would contribute “the funds required for completion … in accordance with the percentage of their Unit Holding”.

2. [436]

   In its List Statement, Gilmore Finance alleges that A3, Ms Conway and Ms Yates breached that clause by failing to contribute to A3 an equal amount for the purpose of completing the purchase of the Hospital Land.

3. [437]

   The claim is particularised as follows:

4. [438]

   This claim takes no account of what Mr Gilmore agreed, in August 2012, should be done in relation to the provision of funds necessary to enable A3 to complete the purchase of the Hospital Land.

5. [439]

   As I have set out above, [52] Gilmore Finance, by then being independently advised by Mr Coates, agreed that, notwithstanding cl 5.1 of the Unitholders’ Agreement, it would loan A3 $2.25 million to enable A3 to complete the purchase of the Hospital Land. That loan was repaid from the amounts paid by Ms Conway and Ms Yates pursuant to the 2012 Unit Subscription Payment Agreement. [53]

6. [440]

   Further, by the 5 June 2012 Unit Allotment Agreement, Gilmore Finance agreed to pay $4.25 million for 28 units in the Hospital Trust, giving Gilmore Finance a one-third holding of the units in that Trust. That $4.25 million was a payment to subscribe for units in the Hospital Trust. It did not represent payments pursuant to cl 5.1(c) of the Hospital Trust Unitholders’ Agreement.

7. [441]

   The implication of Gilmore Finance’s claim appears to be that although it agreed to pay $4.25 million to purchase 28 units in the Hospital Trust, it should only have been required to pay one-third of the funds required to complete the purchase of the Hospital Land or, at least receive back the difference between the amount of its subscription and an amount equal to one-third of the funds necessary to complete that purchase.

8. [442]

   In effect, by making this claim, Gilmore Finance seeks to rewrite history. With independent legal advice, it agreed to all of the circumstances that led to the funding of A3’s purchase of the Hospital Land. I cannot see how it can now assert that it has suffered damage as a result of the transactions to which it, in terms, agreed in August 2012.

The Discount Units Claim

1. [443]

   This claim arises from the issue by A3, on 9 August 2012, of 17 units in the Hospital Trust to Ms Conway and Ms Yates.

2. [444]

   Gilmore Finance’s pleaded case in relation to this claim is that the unit price ascribed by A3 to the units acquired by Ms Conway and Ms Yates on 9 August 2012 “was at a significant discount to the unit price ascribed by” A3 to the units acquired at that time by Gilmore Finance, and that by reason of A3 granting Ms Conway and Ms Yates such “Unit Price Discount”, A3 breached its fiduciary duties to Gilmore Finance because it:

3. [445]

   The only submission made on behalf of Gilmore Finance about this matter was in the final paragraph of its opening submissions:

4. [446]

   The matter was not referred to at all by Mr Marshall in final written or oral submissions.

5. [447]

   The figures in Gilmore Finance’s submissions on this point are not correct.

6. [448]

   As I have set out above, on 9 August 2012, A3 issued:

7. [449]

   These unit allotments were part of a series of transactions to which Gilmore Finance, with the benefit of advice from Mr Coates, agreed to as a means by which to fund completion of the purchase by A3 of the Hospital Land and to increase Gilmore Finance’s investment in the Hospital Trust to an equal one-third investment with interests associated with Mr Amirbeaggi and Mr Yates; namely the unitholdings of Ms Conway and Ms Yates.

8. [450]

   This was not something that A3 “contrived” to do. These were elements in commercial transactions to which Gilmore Finance, independently advised, agreed.

The Proper Financial Records Claim

1. [451]

   Clause 10.2 of the 12 May 2011 Kingswood Trust Unitholders’ Agreement obliged A1 to prepare “accounts of the Business and the Trust” “as soon as practicable after the end of each financial year”.

2. [452]

   In closing submissions, Mr Marshall referred to the “dilatory presentation of the accounts” and drew attention to the dates when the financial accounts for the Kingswood Trust were produced. He submitted that:

3. [453]

   However, as Mr Pritchard submitted:

4. [454]

   Further, in closing oral submissions, Mr Fernon, who presented this part of the argument on behalf of A1, A3 and Mr Amirbeaggi pointed out that Gilmore Finance:

5. [455]

   It is hard to know precisely what complaint Gilmore Finance maintained in relation to the books of account of A1 and A3.

6. [456]

   I heard concurrent evidence from accounting experts retained by the parties, being Mr David Hambleton for Gilmore Finance and Mr Clayton Hickey for A1 and A3.

7. [457]

   Mr Fernon objected to the admissibility of Mr Hambleton’s report on the basis that, although he is a chartered accountant, his background and experience is in acting as a liquidator rather than dealing with accounting standards.

8. [458]

   I do not find it necessary to come to a conclusion about that submission. That is because the fundamental dispute between Mr Hambleton and Mr Hickey was whether the accounts for A1 and A3 should have been prepared in accordance with accounting standard AASB 101.

9. [459]

   On behalf of A1 and A3, Mr Fernon developed detailed submissions as to why Mr Hickey’s opinion, that standard AASB 101 was not applicable and why Mr Hambleton’s contentions to the contrary, should not be accepted.

10. [460]

    However, and strikingly, the closing written submissions on behalf of Gilmore Finance made only fleeting reference to Mr Hambleton and contained the bold submission that:

11. [461]

    That submission was not developed. No submission was proffered as to why the relevant accounts did not present a true and fair view of the financial position of the two trusts.

12. [462]

    Mr Hickey did agree that the loan of $2.25 million made by Gilmore Finance to A3 was wrongly omitted from A3’s financial statements.

13. [463]

    The explanation for the omission was that A3’s external accountant, Mr Bland, took the view that Gilmore Finance’s loan should be booked as a loan to Ms Conway and Ms Yates, and not to A3; evidently, because he understood that the Gilmore Finance loan would be repaid by Ms Conway and Ms Yates in due course.

14. [464]

    It appears that Mr Bland was incorrect to book the loan in this way. But this was a decision of an external professional advisor of A3 and not, insofar as the evidence to which my attention has been drawn reveals, as a result of the decision made by Mr Amirbeaggi.

15. [465]

    In any event, as Mr Fernon pointed out in closing, this loan was repaid from the proceeds of the sale of the Hospital Land and Gilmore Finance points to no prejudice arising from the accounting deficiency.

16. [466]

    Furthermore, absence of Gilmore Finance’s loan of $2.25 million was equalised by the absence of any receivable for the monies due under the Hospital Trust Unit Subscription Payment Agreement.

17. [467]

    This complaint was not pursued by Gilmore Finance in final submissions.

The Unauthorised Transaction Claim – Kingswood Trust

1. [468]

   Clause 13 of the 12 May 2011 Kingswood Trust Unitholders’ Agreement was headed “Unitholder’s Restrictions” and provided, under the heading “Reserved Items”:

2. [469]

   One of those “Reserved Items” was contained in cl 13.1(b):

3. [470]

   Mr Amirbeaggi caused his own firm, Yates Beaggi, to be retained to provide legal and other advice to A1.

4. [471]

   In that regard, cl 6.1(e) of the Unitholders’ Agreement provided that the unitholders agreed that:

5. [472]

   Issues of construction arise in relation to both of these clauses.

6. [473]

   In relation to cl 13.1, cl 4.1 of the Unitholders’ Agreement provided that “it is agreed”, that is by the Unit Holders, that the initial “director/s” of A1 would be Mr Amirbeaggi, alone.

7. [474]

   Mr Pritchard submitted that it followed from this that Mr Amirbeaggi should be seen to be the director “appointed by the Unitholders” for the purpose of cl 13.1 and that, “by conscious choice, the unitholders named a single director, Mr Amirbeaggi, to represent them, not a plurality”.

8. [475]

   Mr Marshall submitted that “directors of the Trustee are not appointed by the unit holders but by members of the Trust corporation”. That may be true, but the Kingswood Trust Unit Holders Agreement is not a shareholders’ agreement and is, rather, an agreement by the unitholders in their capacity as unitholders as to who will be a director of the trustee, A1.

9. [476]

   It is true, as Mr Marshall pointed out, that there is no specific reference in cl 4 to the unitholders agreeing to Mr Amirbeaggi being a director of A1 for the purpose of cl 13. It is also true that cl 13 speaks of the directors “appointed” by the unitholders, whereas cl 4 speaks only of the unit holders “agree[ing]” that Mr Amirbeaggi be a director. But, when the clauses are read together they appear to bespeak the unitholders’ agreement that Mr Amirbeaggi be the director of A1 for all purposes, including for the purpose of cl 13.

10. [477]

    It is also true that cl 13.2 provided that:

11. [478]

    But the unitholders had agreed that the “director/s” be Mr Amirbeaggi, alone. The evident purpose of cl 13.2 was to ensure that were there, contrary to the fact, more than one director, those directors would have to agree about decisions concerning “reserved items”.

12. [479]

    The point is, in any event, moot, for the reasons that follow.

13. [480]

    In relation to cl 6(c) of the Unitholders’ Agreement, the issue is whether the cap of $69,000 applied to work other than that specified in sub cll 6(e)(i) to (iv). In my opinion, the fact that the sum of the amounts separately set out in sub cll 6(e)(i) to (iv) total $69,000 makes clear that the cap applies only to work as described in those subclauses.

14. [481]

    However, notwithstanding these matters, Gilmore Finance was well aware that Mr Amirbeaggi was arranging for his firm to perform work on behalf of the Kingswood Trust.

15. [482]

    Mr Marshall pointed to the fact that there was no evidence of any costs agreement between A3 and Yates Beaggi and submitted that “accordingly Yates Beaggi Lawyers could only charge for reasonable fees”.

16. [483]

    There were extensive communications between Mr Amirbeaggi and Mr Coates, on behalf of Gilmore Finance, about the rate at which Yates Beaggi was charging for work done, it being asserted on behalf of Gilmore Finance that some of the work for which Yates Beaggi was charging was not legal work but was more in the nature of property development work.

17. [484]

    However, that controversy was resolved by an agreement that Yates Beaggi could charge a “blended rate” of $450 per hour (rather than Mr Amirbeaggi’s usual charge-out rate of $600 per hour) for all work done, whether that work was of a legal nature of otherwise.

18. [485]

    There was extensive communication between Mr Amirbeaggi and those representing Gilmore Finance about that matter including an email from Mr Camilleri to Mr Amirbeaggi dated 12 February 2014, copied to Mr Coates and Mr Gilmore, in which Mr Camilleri referred to the receipt of invoices from Yates Beaggi and stated that the fees “for December and June are at a rate of $450 as agreed with Andrew [Coates].”

19. [486]

    Indeed, in cross-examination, Mr Gilmore agreed that “it was an agreed rate. Yes. We agreed the rate.”

20. [487]

    In relation to that evidence, Mr Marshall submitted in closing:

21. [488]

    That submission was not developed and no response was given to the detailed submissions made by Mr Pritchard concerning the communications leading to the agreement that Mr Gilmore accepted existed (including Mr Camilleri’s email to which I have referred).

22. [489]

    Further, Gilmore Finance adduced no evidence to substantiate the proposition implicit in its submissions that Yates Beaggi overcharged A3 for the work it did. Gilmore Finance has not sought to have the fees assessed or to adduce countervailing evidence as to what would have been a reasonable amount to charge.

23. [490]

    On 15 April 2013 and 11 June 2014 Mr Amirbeaggi wrote to Mr Coates stating that, if final invoicing was not agreed, he was happy to undergo a formal costs assessment. Gilmore Finance did not seek to take up that proposal.

24. [491]

    In these circumstances, I see no substance in Gilmore Finance’s complaint about Yates Beaggi’s fees.

25. [492]

    Another of the “Reserved Items” requiring approval under cl 13.1 of the Kingswood Trust Unitholders’ Agreement was, as I have set out, any borrowing exceeding $10,000.

26. [493]

    As I have mentioned above, on 8 September 2015, A3 borrowed $1.725 million from Ares Capital Management Pty Ltd. That loan was secured by a mortgage over the Kingswood Land.

27. [494]

    In closing submissions, Mr Marshall stated that this money was used to repay the loan of $2.25 million made by Gilmore Finance to A1 in August 2012. That is not correct. The Gilmore loan was repaid in the manner I have set out at [336].

28. [495]

    In fact, as Mr Pritchard set out in detail in closing submissions, the money was borrowed in order that A1 could implement the recommendations made by Mr Malacco from Hall Chadwick in his report of 1 July 2015 to “correct the number of units on issue and their value as at January 2011”. I have referred above to Mr Amirbeaggi’s retaining of Mr Malacco to review the financial records of both A1 and A3 to determine their accuracy. [57]

29. [496]

    A1 borrowed the $1.725 million from Ares Capital Management Pty Ltd to implement Mr Malacco’s recommendations.

30. [497]

    On 15 September 2015, after A1 entered into the loan agreement with Ares Capital Management Pty Ltd, Mr Amirbeaggi wrote to Mr Coates:

31. [498]

    Neither Mr Coates nor Mr Gilmore made any objection to the course proposed by Mr Amirbeaggi and, in due course, as foreshadowed in Mr Amirbeaggi’s email, Gilmore Finance received an amount of $214,118.50.

32. [499]

    Later in 2015, A1 refinanced its loan from Ares Capital with borrowing of $1,725,000 from St George Bank Ltd.

33. [500]

    On 20 December 2015 Mr Amirbeaggi sent a circular to unitholders, including Mr Coates, notifying him of his intention to take this step.

34. [501]

    Mr Coates made no objection to this course.

35. [502]

    In closing submissions, Mr Marshall made no attempt to engage with the detailed submissions Mr Pritchard made about this matter.

36. [503]

    My conclusion is that, even if unitholders’ consent was not formally obtained under cl 13.1 of the Unitholders’ Agreement in relation to these matters, Gilmore Finance, through Mr Coates, was well aware of them, raised no objection to them, and obtained a benefit from them.

The Unauthorised Transaction Claim – Hospital Trust

1. [504]

   In relation to the accounts and records of the Hospital Trust and the engagement of Yates Beaggi to do work in relation to the Hospital Trust, Mr Marshall did little more than refer to the submissions he made in relation to these topics so far as concerns the Kingswood Trust.

2. [505]

   Mr Marshall made no mention of Mr Malacco’s report about that Trust.

3. [506]

   Mr Marshall referred to the fact that on 23 December 2016, A3 borrowed $3 million from Perpetual Trustee Company Ltd as trustee for the Arch Finance Warehouse Trust and granted Perpetual Trustee Company Ltd a mortgage over the Hospital Land to secure that borrowing. Having referred to the borrowing, Mr Marshall did not develop any submission about it save that each required unitholders’ approval under the provision in the Hospital Trust Unitholders’ Agreement equivalent to that to which I have referred in relation to the Kingswood Trust.

4. [507]

   In opening submissions, Mr Marshall had sought to raise an issue as to how the proceeds of this borrowing were used by A3. Mr Pritchard handed up, as an aide memoire, a document pointing out that these matters had not been pleaded. Evidently in response to that document, Mr Marshall made no submission in closing about the use to which the borrowed funds were put; and did not submit that they had been used for otherwise than the proper purposes of the Hospital Trust.

5. [508]

   On the other hand, Mr Pritchard pointed to emails from Mr Amirbeaggi to Mr Coates which suggested that the funds were used to meet future expenses in relation to the Hospital Project.

6. [509]

   For example, on 30 July 2013, Mr Amirbeaggi wrote to Mr Coates with a copy to Mr Yates:

7. [510]

   On 4 March 2014, Mr Amirbeaggi sent Mr Coates and Mr Camilleri a “Short Form Annual Program & Update” in respect of A3, in which he set out expected outlays concerning legal costs, general consultants, Department of Planning fees, project management fees, and then stated under the heading “Finance”:

8. [511]

   Ultimately, the borrowing from Perpetual Trustee Company Ltd were repaid from the proceeds of sale of the Hospital Land.

9. [512]

   Mr Marshall did not seek to engage with these submissions.

10. [513]

    In those circumstances, I see no basis upon which I can conclude that the borrowed funds were used otherwise than for proper trust purposes.

Removal of A1 And A3 as trustees

1. [514]

   Finally, Gilmore Finance seeks orders removing A1 and A3 as trustees of the Kingswood Trust and the Hospital Trust.

2. [515]

   Both parties developed detailed submissions as to the circumstances in which the Court may remove a trustee under s 70 of the Trustee Act 1925 (NSW) and appoint a trustee “whenever it is expedient” to do so. The Court has, in addition, an inherent jurisdiction to remove a trustee where the Court considers that the continuance of the trustee in the trust will prevent its proper execution. [58]

3. [516]

   Gilmore Finance’s submissions concerning the removal of A1 focused on the complaints it made about the delay in the preparation of the trust’s accounts for F13 to F17, concluding with the unhelpful submission that:

4. [517]

   Gilmore Finance did not develop any separate submissions in relation to the position of A3 as trustee of the Hospital Trust.

5. [518]

   In my opinion, Gilmore Finance has not demonstrated any conduct on the part of either A1 or A3 such as would warrant their removal as trustee.

6. [519]

   In any event, the Kingswood Trust and the Hospital Trust were established for the specific purpose of pursuing identified property developments, neither of which is now proceeding. Both the Kingswood Land and the Hospital Land have now been sold.

7. [520]

   On behalf of A1 and A3, it was submitted that none of the trusts was in possession of any assets, “save for adverse costs orders against Gilmore Finance”.

8. [521]

   On the other hand, it was submitted on behalf of Gilmore Finance that “it is not [at] all clear that there are no assets in the trust”.

9. [522]

   However, Gilmore Finance engaged Mr Hambleton to conduct a close analysis of the accounts of the trusts and, were there evidence that either of the trusts had assets, that is a matter which it could have established.

Conclusion

1. [523]

   None of the claims advanced by Gilmore Finance has been established.

2. [524]

   The proceedings should be dismissed with costs.