Court of Appeal Supreme Court New South Wales

• Medium Neutral Citation: Ramsay v BigTinCan Pty Ltd [2014] NSWCA 324
• Hearing dates: 4 June 2014
• Decision date: 16 September 2014
• Before: McColl JA at [1]; Macfarlan JA at [10]; Gleeson JA at [103]

Decision

Appeal dismissed with costs.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

• Catchwords: EQUITY - company director formulated and implemented plan to divert funding and business opportunities to new company - second appellant knowingly assisted him in dishonest and fraudulent design - whether causal connection between breaches of fiduciary duty and company's failure to obtain funding - whether loss of opportunity to obtain funding is itself a substantial financial loss - failure to obtain funding only causally related to financial loss where funding would have been put to profitable use - assessment of equitable compensation where plaintiff cannot adduce precise evidence of loss
• Legislation Cited: Civil Procedure Act 2005 (NSW), s 100; Corporations Act 2001 (Cth), ss 181, 232, 1417H; Supreme Court Act 1970 (NSW), s 75A(8); Uniform Civil Procedure Rules 2005 (NSW), r 51.53
• Cases Cited: Adelaide Petroleum NL v Poseidon Ltd (1990) 98 ALR 431; Akins v National Australia Bank (1994) 34 NSWLR 155; AMP Services Ltd v Manning [2006] FCA 256; BigTinCan Pty Ltd v Ramsay [2013] NSWSC 1248; Brickenden v London Loan & Savings Co [1934] 3 DLR 465; Chappel v Hart [1998] HCA 55; 195 CLR 232; Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54; 174 CLR 64; Consul Development Pty Ltd v DPC Estates Pty Ltd [1975] HCA 8; 132 CLR 373; Daniels v Anderson (1995) 37 NSWLR 438; Farah Constructions Pty Limited v Say-Dee Pty Limited [2007] HCA 22; 230 CLR 89; Fitzgerald v Penn [1954] HCA 74; 91 CLR 268; Houghton v Immer (No 155) Pty Ltd (1997) 44 NSWLR 46; Howard v Commissioner of Taxation [2014] HCA 21; 88 ALJR 667; I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd [2002] HCA 41; 210 CLR 109; Kenny & Good Pty Ltd v MGICA (1992) Ltd [1999] HCA 25; 199 CLR 413; March v E & M H Stramare Pty Ltd [1991] HCA 12; 171 CLR 506; Maguire v Makaronis [1997] HCA 23; 188 CLR 449; McCrohon v Harith [2010] NSWCA 67; Aust Torts Reports 82-056; Nicholls v Michael Wilson & Partners Ltd [2012] NSWCA 383; O'Halloran v R T Thomas & Family Pty Ltd (1998) 45 NSWLR 262; 29 ACSR 148; OzEcom v Hudson Investment Group [2007] NSWSC 719; Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd [2003] HCA 10; 77 ALJR 768; Poseidon Ltd v Adelaide Petroleum NL [1991] FCA 663; 105 ALR 25; Re Dalkeith Investments Pty Ltd (1984) 9 ACLR 247; Selangor United Rubber Estates Ltd v Cradock (No 3) [1968] 1 WLR 1555; Sellars v Adelaide Petroleum NL [1994] HCA 4; 179 CLR 332; Spotless Group Ltd v Blanco Catering Pty Ltd [2011] FCA 979; 212 IR 396; State of New South Wales v Moss [2000] NSWCA 133; 54 NSWLR 536; Target Holdings Ltd v Redferns (A Firm) [1996] 1 AC 421; Tjiong v Tjiong [2012] NSWCA 201; Warman International Ltd v Dwyer [1995] HCA 18; 182 CLR 544; Westpac Banking Corporation v Bell Group Ltd (in liq) (No 3) [2012] WASCA 157; 44 WAR 1
• Category: Principal judgment
• Parties: David Ramsay (First Appellant); Roel Pollers (Second Appellant); BigTinCan Pty Ltd (Respondent)
• Representation: Counsel: C Botsman (Appellants); A P Cheshire/ S Spadijer (Respondent); Solicitors: Barraket Stanton Lawyers (Appellants); McLachlan Thorpe Partners (Respondent)
• File Number(s): CA 2013/296002

Decision under appeal

• Jurisdiction: 9111
• Citation: BigTinCan Pty Ltd v Ramsay [2013] NSWSC 1248
• Date of Decision: 2013-09-04 00:00:00
• Before: Ball J
• File Number(s): SC 2010/108812

HEADNOTE

[This headnote is not to be read as part of the judgment]

The respondent, BigTinCan Pty Ltd ("BTC"), was a "start-up" company established in 2008 by Mr David Keane, a director and majority shareholder, to develop smart phone applications. In September 2008 the first appellant, Mr David Ramsay, suggested that BTC approach ETT Ltd, a publicly listed company, in order to secure capital funding for BTC. ETT subsequently lent BTC a total of $225,000, secured by way of a charge over BTC's assets.

In January 2009 Mr Ramsay was appointed a director of BTC and shares representing approximately 20% of BTC's capital were ultimately issued to Mr Ramsay and his wife. Mr Ramsay had extensive experience in raising capital for start-up information technology companies and his primary task as a director of BTC was to assist it to obtain funding, in particular by developing and marketing the "app" known as BigTinCan Connect. In March 2009 BTC engaged the second appellant, Mr Roel Pollers, to assist in developing a new version of that app. Throughout 2009, Mr Ramsay worked on raising capital for BTC and regularly reported to board meetings that he was confident of securing up to $1.2 million in funding for the company.

In or around April 2010, Mr Keane obtained access to emails that had passed in late 2009 and early 2010 between Mr Ramsay, Mr Pollers and others to which he had not been privy. On 3 May 2010, BTC commenced the present proceedings claiming that during their engagements with BTC, Mr Ramsay and Mr Pollers (with others) formulated and implemented a plan to acquire BTC's assets at a discounted value, to develop and undertake BTC's business through a new entity ("Newco") and to divert funding and business opportunities from BTC to Newco.

By judgment of 4 September 2013, Ball J sitting in the Equity Division of the Court delivered judgment in BTC's favour, finding that Mr Ramsay had breached his duties as a director of BTC. His Honour also found that Mr Pollers knowingly assisted Mr Ramsay in the latter's dishonest and fraudulent breaches of duty, and that Mr Ramsay's conduct caused BTC to lose an opportunity to raise capital. Mr Ramsay and Mr Pollers were ordered to pay BTC equitable compensation of $300,000 plus interest.

Held, dismissing the appeal (per Macfarlan JA; McColl and Gleeson JJA agreeing except where otherwise stated):

(1) Mr Pollers failed to establish that the claim against him was not adequately pleaded. BTC's Statement of Claim alleged that Mr Ramsay's breaches of duty constituted a "dishonest and fraudulent design" and it was unnecessary to plead or prove a separate allegation of dishonesty on the part of Mr Pollers ([54]-[55]). Nor was it necessary for BTC to put to Mr Ramsay or Mr Pollers in cross-examination that they were engaged in a dishonest and fraudulent design ([56]).

(2) The application by Mr Ramsay and Mr Pollers for an order admitting further evidence (being of two telephone conversations) on appeal is rejected ([51]).

(3) The primary judge did not err on the question of causation. His Honour was not required to consider whether Mr Ramsay's breaches were the cause of loss to BTC but whether they were a cause ([62]). Mr Ramsay's capacity as a wrongdoer justified inferences being readily drawn in favour of BTC when considering whether Mr Ramsay's conduct had caused BTC loss ([63]).

(4) The primary judge erred in treating BTC's loss of an opportunity to obtain funding as, of itself, a substantial financial loss. If the evidence established that funding would, or might, have enabled BTC to earn profits, the absence of that funding might fairly be regarded as causally related to a financial loss. Otherwise, it could not be so regarded ([69]-[72]).

Poseidon Ltd v Adelaide Petroleum NL [1991] FCA 663; 105 ALR 25 considered.

(5) In the readily explicable absence of evidence precisely proving BTC's loss, the Court must do its best to assess the probabilities or possibilities involved ([82]). While the prospect of deriving the anticipated profits were subject to significant business contingencies, Mr Ramsay and others with considerable expertise pursued the relevant business opportunity with considerable vigour over a lengthy period of time. The figure of $300,000 is a fair assessment of BTC's loss ([4], [8], [83]-[84]) (Gleeson JA dissenting).

(6) The primary judge did not err in dismissing the appellants' cross-claim for oppressive conduct. There was no evidence that BTC's rights issue was made for an improper purpose ([89]-[91]). Knowledge that some shareholders cannot, or will not, subscribe to a rights issue cannot in itself render the rights issue oppressive ([89]).

(7) The primary judge erred in not dealing with part of the cross-claims ([96]). However, those claims should not be remitted for determination at first instance as they would be bound to fail ([96]-[101]).

Judgment

1 McCOLL JA: I have had the benefit of reading Macfarlan JA and Gleeson JA's reasons in draft. I agree with Macfarlan JA's reasons for concluding that the application to adduce fresh evidence on appeal should be rejected (and the consequential effect on Mr Ramsay's appeal against the finding that he breached his fiduciary duty) and with his Honour's reasons for dismissing Mr Pollers' appeal that he knowingly assisted Mr Ramsay's breach. I also agree with his Honour's conclusion on causation.

2 I also agree with Macfarlan JA (at [72]) that this Court should reassess the respondent, BigTinCan Pty Ltd's ("BTC"), claim for equitable compensation as the primary judge should have considered, not only BTC's prospects of obtaining funding, but also whether, if obtained, that funding would have been put to profitable use.

3 The difference between Macfarlan JA and Gleeson JA turns on the quantification of the equitable compensation to which BTC is entitled by reason of Mr Ramsay's breach of his fiduciary duties as a director, with the knowing assistance of the second appellant, Mr Pollers: see BigTinCan Pty Ltd v Ramsay [2013] NSWSC 1248 (at [80] and [87]).

4 I agree with Macfarlan JA that $300,000 represents a fair assessment of BTC's loss. While I may not have reached the same figure as his Honour, bearing in mind the necessarily impressionistic exercise involved in the assessment of damages, in my view by reason of the appellants' breaches, BTC lost the chance of earning a profit at the higher end of the scale rather than at the lower end as favoured by Gleeson JA.

5 I take this approach, bearing in mind that the Court should assess damages or compensation in the robust manner contemplated in Nicholls v Michael Wilson & Partners Ltd [2012] NSWCA 383 (at [287]) having regard to the fact that the appellants' actions in frustrating BTC's attempt to raise the funds to develop the BigTinCan Connect and Buzz Me applications have made an accurate determination of BTC's loss problematic. I also take into consideration that seeking to evaluate the loss BTC suffered by reason of the appellants' conduct requires the use of hindsight and common sense: O'Halloran v R T Thomas & Family Pty Ltd (1998) 45 NSWLR 262 (at 273)

6 Although BTC was still described as a start-up company in 2010, it had been established since 2008. It had some clientele as well as products which had been approved by Apple, Blackberry and Google. Thus, it could point to an ability to develop products for which there was a market. It had sufficient reputation, experience and worthwhile products that, as Mr Ramsay told Mr Keane early in the piece, he was confident of raising the $1.2 million necessary to develop the BigTinCan Connect and Buzz Me applications.

7 I would not, with respect, accept Gleeson JA's preference for the financial projections which Mr Ramsay and Carling Capital Partners prepared for Newco (SpringTel) in April 2010. Newco would have entered the market in 2010 with no track record such as BTC's. Although this may be a somewhat intangible factor, (and is not the only matter on which I rely) it supports preferring BTC's figures, rather than SpringTel's which I would infer reflect the fact that in 2010 it was entering the market as a total unknown.

8 Hindsight as to the widespread adoption of "apps" in smartphones lends support to the proposition that the forecasted EBITs in BTC's financial documents (EBIT for FY 2011 of $1.8 million and $5.4 million for FY 2012: see Macfarlan JA (at [81])) while perhaps optimistic, nevertheless reflected the probability that BTC's business had prospects of substantial profits. Why else, as BTC submitted, would the appellants go to such lengths to seek to divert its business into Newco (SpringTel)? The figure of $300,000 Macfarlan JA proposes represents a substantial discount of those figures with which I agree having regard to the contingencies to which his Honour refers (at [84]).

9 Accordingly, I agree with the orders Macfarlan JA proposes.

10 MACFARLAN JA: In 2008 the respondent, BigTinCan Pty Ltd ("BTC"), was a "start-up" company engaged in the business of developing smart phone applications. Its founder was Mr David Keane, a director and the majority shareholder. In September 2008 the first appellant, Mr David Ramsay, who was a former colleague of Mr Keane, suggested that BTC approach ETT Ltd with a view to that company providing funding to BTC. ETT subsequently lent BTC a total of $225,000, secured by a charge over BTC's assets.

11 In January 2009 Mr Ramsay became a director of BTC and, at some stage, shares representing about 20% of BTC's capital were issued to Mr Ramsay and his wife. Mr Ramsay had had extensive experience in raising capital for start-up information technology companies and his principal task as a director of BTC was to assist it to obtain funding to progress its business, in particular by developing and marketing the "app" known as BigTinCan Connect. In March 2009 BTC engaged the second appellant, Mr Roel Pollers, an expert in web and database technologies, to develop a new version of that app. During that year Mr Ramsay worked on raising capital for BTC and regularly reported to it that he was confident that he could secure funding of up to $1.2 million.

12 After Mr Keane obtained copies of various emails that had passed in late 2009 and early 2010 between Mr Ramsay and others including Mr Pollers (and to which Mr Keane had not been privy), BTC commenced the present proceedings on 3 May 2010, alleging that during their engagements with BTC, Mr Ramsay and Mr Pollers (with others) formulated and implemented a plan to acquire BTC's assets at a discounted value, to develop and undertake BTC's business through a new entity ("Newco") and to divert funding and business opportunities from BTC to Newco.

13 In a judgment of 4 September 2013, Ball J sitting in the Equity Division of the Court found that this had occurred and that Mr Ramsay had thereby breached s 181 of the Corporations Act 2001 (Cth) and his fiduciary duties as a director of BTC ([2013] NSWSC 1248). His Honour also found that Mr Pollers knowingly assisted Mr Ramsay in what his Honour found to be Mr Ramsay's dishonest and fraudulent breaches of duty, found that Mr Ramsay's conduct caused BTC to lose an opportunity to raise finance and that equitable compensation of $300,000 plus interest should be awarded against Mr Ramsay and Mr Pollers to compensate BTC for the loss of that opportunity.

14 For the reasons given below, I consider that Mr Ramsay and Mr Pollers' appeal against the judgment against them should be dismissed, as should their appeal against the dismissal of their cross-claims.

THE FACTUAL CIRCUMSTANCES

15 The factual circumstances giving rise to these proceedings are described in detail in the primary judgment at [9] to [65]. The following summary, taken from that judgment, is, with paragraphs [10] to [12] above, sufficient for the disposition of the appeal.

16 An email dated 25 December 2009 from Mr Ramsay to Mr Tom Sharp, a broker who was assisting Mr Ramsay in raising capital for BTC, included the following:

"I am mtg Glenn Wheatley and niki from blackberry & Michael Milne on Jan 2, I may be forced into a deal with them because of time pressure, & to repay the ett loan.

The other option is the shell in Brisbane, would be a 90:10 deal in our favour, 3% share issue to the broker, 0.5% trailing fee fir capital raised [by] others, 6% if they raise it.

Them [sic] we would finish a prospectus, issue it in fe/march, & be relisted as btc by June.

I can take that deal if we (you) choose that path, what do you think?

My 2 options seem to be that deal or the Michael Milne deal, which will involve ripping the assets into a newco under arturis capital & we would end up with options & a mgt contract".

17 An email dated 11 January 2010 from Mr Ramsay to a Mr Walsh included the following. Mr Walsh was a friend of Mr Tetley of ETT and of Mr Ramsay and had acted on occasions as the solicitor for ETT and BTC. By this date, ETT's loans to BTC were repayable on 14 days' notice.

"Btc to do

New company set up

Bank account

Ip assignment agreements

Business cards

Web site

Paypal account

Rim discussion

Bb appworld sign-up

Ett call in loan offer 250k for all assets, we pay ett 250k for all assets from newco including name

Get new Dara centre

Dr resign as director of btc

Get investment completed".

18 The minutes of a BTC directors' meeting of 28 January 2010, at which Mr Keane and Mr Ramsay were present, included the following:

"Fund raising

The meeting discussed the progress of fund raising efforts. Mr Ramsay reported that the first deposit of $200,000 was now in a trust account and a further $200,000 from a second investor was expected within a day. Subject to certain information being provided to them a third group was also expected to invest within the coming week or two. By 12 February it was hoped that between $800,000 and $1,200,000 would be in trust.

It was agreed that no funds should be drawn from the trust account until the fund raising process was complete. The first order of business at that point would be to settle the ETT debt. The meeting discussed the terms of the fund raising and Mr Ramsay tabled the form of agreement with the investors. The meeting authorised Mr Ramsay to sign agreements with the prospective investors in the form tabled."

19 By a written contract of 8 February 2010, BTC engaged Mr Pollers as a consultant with roles that included that of Chief Technical Officer of BTC.

20 On 10 and 11 March 2010 Mr Ramsay reported to Mr Keane on his efforts in raising funds for BTC, identifying various prospective investors. Mr Ramsay however gave evidence that in late March or early April 2010 he came to believe that it was unlikely that BTC would obtain funding and that he raised this with Mr Keane on a number of occasions, including on 7 April 2010 when Mr Keane told him that he had reached the same conclusion and had started looking for other jobs.

21 Meanwhile, Mr Ramsay was progressing his efforts to establish Newco. He had a number of email communications to this end with Mr Sharp and with Mr David Williams who worked for Carling Capital Partners Pty Ltd, ETT's corporate advisors. On 15 April 2010, Mr Williams sent to Mr Ramsay a "term sheet" entitled "Big Tin Can Mark 2", which included the following:

A.	Background
1.	David Ramsay ("DR") and Roel Pollers ("RP") have been working on the Big Tin Can ("BTC") business model.
2.	Carling Capital Partners ("CCP") has been involved in advising parties in relation to BTC.
3.	ETT Limited ("ETT", now named Farmworks Australia Limited) is due a debt from ETT amounting to $225,000. ETT is understood to be in the process of calling its debt.
B.	NewCo (BTC Mark 2 or "BTC2")
1.	DR, RP and CCP [Mr Ramsay, Mr Pollers and Carling Capital Partners] propose to incorporate BTC2 to undertake the business opportunity previously undertaken by BTC.
2.	Ideally this will involve acquiring the BTC assets from ETT or its agent.
3.	BTC2 will be an unlisted public company.
C.	Fund Raising
1.	BTC2 will raise $300,000 of funds from new investors.
2.	These funds will be used to settle the ETT debt for no more than $50,000 and to provide the initial working capital of $250,000 for BTC2.
3.	It is intended to sell 300,000 new shares of nominal $1.00 each in BTC2 equating to 15% for $300,000 of the expanded capital (ie total shares on issue post 15% placement is 2,000,000).
4.	The funds will be raised by CCP and DR agreeing to a fund raising program.
D.	Corporate Strategy
1.	It is intended to raise further funds and list BTC2 as soon as practicable and to then use the BTC2 scrip in an aggregation strategy regarding "apps" developers.
E.	BTC2 Business Model
1.	Attached to this term sheet is the initial capital raising PPT for BTC2 together with summary, forecast income statements and cashflows.
2.	Together these documents reflect the initial business model as agreed by the Board.
F.	BTC2 Initial Shareholding
				%
	DR			27.5
	RP			27.5
	CCP*			20
	Consultants			10
	New Investors			15
	*CCP to be granted sufficient options if when exercised would give CCP a shareholding equal to that of each of DR and RP individually. The options will be exercisable at the same price as the new investors entry price, be for a term of five years and be adjusted for the anti dilution effect of all subsequent equity issues.
	*The CCP shares and options can be held by any nominee of CCP.
G.	Board of Directors
	●	The initial Board of BTC2 will be -
		● David xxx Ramsay
		● Roel xxx Pollers
		● David Lewis Williams (CCP)
	●	The Board agrees to act in accordance with this term sheet and all attachments thereto.
	●	The Board to be adjusted as deemed necessary to satisfy the appropriate levels of corporate governance at the time of listing.
H.	Roles
	●	DR	Managing Director, sales, strategic planning
	●	RP	Developer Apps, strategic planning
	●	CCP	Stock market strategy, CFO, accounting
	●	DR and RP to be compensated for time at less than market rates until BTC2 is cash-flow positive for a period of 3 months
	●	CCP to provide services for no cash consideration until such time as BTC2 is cash-flow positive for a period of 3 months.
I.	Company Secretarial
	●	JW Meehan ("JM") to provide basic company secretarial services for $1,000 per month accrued until BTC2 is cash-flow positive.
	●	Additional work and monthly charge after listing to be negotiated on an arms length basis between DR and JM.

Provision was made for the term sheet to be signed by Mr Ramsay and Mr Williams.

22 On 22 April 2010 the proposed Newco, SpringTel IT Limited, was registered. Mr Ramsay gave evidence that it was intended to be operated by himself and Mr Pollers. On the same day, ETT sent a demand to BTC for repayment of its loans.

23 On 29 April 2010, Mr Ramsay sent an email to Mr Sharp which included the following:

"Anyway, btc update:

1. ETT called in their loan last Thursday night - 14 days runs out next Thursday

2. Looks like BTC will hand over assets without the need for a receiver - leaving the way open to do a deal immediately with them & acquire the assets & inject into newco straight after this initial investment.

This will underpin the valuation uplift in readiness for the next round of fundraising to get the required shareholder spread.

3. I have attached an IM for a newco which Carling Capital Partners incorporated a few days ago, Carling were the initial advisers to ETT when they invested in BTC December '08

They have committed to raising $100k out of the $300k but have still put nothing in yet... .

We are prepared to give away 15% to investors & 20% to advisers for the $300k - note this can be split up however it best makes sense.

Do you still have interest to participate in this opportunity?"

24 At about this time Mr Keane obtained access to the above emails, sent by or to Mr Ramsay concerning Newco, to which Mr Keane had not been privy. As noted earlier, this led to the commencement of the present proceedings.

25 Also about this time, Mr Keane obtained the assistance of Mr Geoffrey Cohen, who has had extensive experience in the information technology industry and start-up businesses. After BTC raised some limited funds, Mr Cohen concluded that there was no realistic prospect of finding further investors for BTC's business.

26 In June 2010 BTC made a rights issue to its shareholders to obtain funds for the prosecution of the present proceedings. The only shareholders to take up their rights were Mr Keane and an entity associated with him. As a result of the rights issue, the shareholdings in BTC of Mr Ramsay and Mr Pollers' interests were considerably diluted. BTC subsequently ceased to trade.

27 After the commencement of these proceedings, no further steps were taken to raise capital for SpringTel which was deregistered in 2011.

THE JUDGMENT AT FIRST INSTANCE

Mr Ramsay's breach of duty

28 The primary judge reached the following conclusions on this topic:

"80 It follows from what I have said that Mr Ramsay breached his duties as a director of BTC. He had an obligation to do what he could to assist BTC to raise capital. Instead of discharging that obligation to the exclusion of his own interests, he formulated a plan to set up a new company to acquire BTC's assets using capital raised by that company and took steps to implement that plan. There is no direct evidence that Mr Ramsay sought to raise capital for that company to the exclusion of BTC. However, having formulated the plan he did, he had an interest in seeing BTC's attempts at raising capital fail and he had an interest in diverting whatever capital he could raise from BTC to the new company to the extent that that was possible. He took no steps to draw that conflict of interest to the attention of the board of BTC. Moreover, he gave an explanation for the failure to raise capital for BTC (Mr Keane's refusal to agree to establish a new company) that is not plausible. That false explanation suggests that the real reason for the failure was that he was pursuing his own interests rather than those of BTC. In my opinion, in acting in that way Mr Ramsay at least breached s 181 of the Corporations Act and his fiduciary duties as a director."

29 In relation to Mr Keane's alleged refusal to agree to establish a new company, his Honour had earlier said:

"73 ... According to Mr Ramsay, the sticking point with investors was their desire to invest in a new company and Mr Keane's refusal to agree to that proposal. However, that evidence makes no sense. It is implausible that Mr Keane would have insisted that the investment be in BTC itself if that was the only issue. It would have been a straight forward task to get one or more of the investors to explain to Mr Keane that they required their investment to be in a new company if that is really what they wanted; and it seems inconceivable that Mr Keane would not have agreed to that course if he had received an explanation along those lines, particularly since, according to Mr Ramsay, Mr Keane did say in the conversation on 20 April 2010 that if investors wanted a newco, he would agree to it."

Mr Pollers' liability

30 The primary judge referred to Farah Constructions Pty Limited v Say-Dee Pty Limited [2007] HCA 22; 230 CLR 89 at [160]-[163] in identifying the following three elements as necessary to establish the knowing assistance claim BTC made against Mr Pollers:

"(a) A dishonest and fraudulent breach of duty by Mr Ramsay;

(b) Knowledge of the dishonest and fraudulent breach on the part of Mr Pollers;

(c) Assistance in that breach by Mr Pollers" (Judgment [83]).

Relying on Selangor United Rubber Estates Ltd v Cradock (No 3) [1968] 1 WLR 1555 at 1590-1 and Gibbs J's reference to it with approval in Consul Development Pty Ltd v DPC Estates Pty Ltd [1975] HCA 8; 132 CLR 373 at 398, his Honour concluded that it was sufficient if the conduct alleged to be "dishonest and fraudulent" could as a matter of ordinary language be described as "morally reprehensible" (Judgment [84]). His Honour continued:

" ...In my opinion, Mr Ramsay's conduct was dishonest and fraudulent in the required sense. The plan he formulated was a deliberate plan to obtain the assets of BTC for the benefit of a company in which he was to have a substantial interest. In pursuing that plan, he put his own interests ahead of those of BTC" (Judgment [84]).

31 His Honour concluded also that Mr Pollers had actual knowledge of Mr Ramsay's plan and knowingly assisted him in his breaches of duty (Judgment [85] and [86]).

Causation

32 The primary judge considered that BTC's claim should be assessed upon the basis that it had lost a valuable opportunity to raise capital, rather than on the alternative basis relied upon of wasted expense (as to the latter, see Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54; 174 CLR 64).

33 His Honour referred to authorities concerning the test of causation to be applied in the context of breaches of fiduciary duty and noted that in O'Halloran v R T Thomas & Family Pty Ltd (1998) 45 NSWLR 262; 29 ACSR 148 at 277, Spigelman CJ had reserved for future consideration the question of whether the strict test of causation referred to in Brickenden v London Loan & Savings Co [1934] 3 DLR 465 was applicable to breaches by a director of fiduciary duties that did not involve the disposition of the company's property for an improper purpose.

34 His Honour then made the following factual findings relevant to the question of causation:

"98 ... First, although it is unclear whether Mr Ramsay's conduct contributed to BTC's failure to raise capital before mid-April 2010, Mr Cohen's evidence, which was not challenged and which I accept, was that Mr Ramsay's conduct meant that, by the beginning of May 2010, it was no longer possible to seek to raise capital from investors who had previously expressed an interest and there were few other investors who could be approached. Moreover, it may be inferred that, once BTC had commenced court proceedings, what prospect there was of finding investors was lost. Any investment in BTC was speculative; and the risks associated with it would be substantially increased once the company became embroiled in significant litigation. Looked at in this way, the opportunity that was lost was an opportunity to approach investors who had previously indicated an interest in investing in BTC to see whether they could be persuaded to invest unaffected by the attempt of two of its shareholders to obtain control of the company or its assets and the uncertainty that that attempt would be likely to cause in the minds of investors. Viewed in that way, there is a clear causal connection between Mr Ramsay's conduct and the opportunity that BTC is said to have lost.

99 Second, in my opinion, it is not open in the circumstances of this case for Mr Ramsay to say that his conduct did not cause BTC to lose the opportunity to raise capital. He was the director responsible for the capital raising. He put himself in a position where in breach of his duties he had an interest in seeing that capital raising fail. BTC failed to raise any capital. The likelihood is that BTC's prospects of raising capital would have been better if Mr Ramsay had not put himself in the position he did. BTC is entitled to be compensated for that fact."

35 His Honour concluded that these findings indicated that the strict Brickenden causation test was satisfied but that even if the Brickenden test was inapplicable, BTC had nevertheless, applying general law concepts of causation, established causation of its loss. His Honour said:

"100 But even if the approach in Brickenden is no longer good law, in my opinion, this is a case where it is appropriate to infer that BTC lost the opportunity to raise capital as a consequence of Mr Ramsay's conduct. In various branches of the law, courts are prepared to draw inferences against wrongdoers in the absence of evidence to the contrary. [His Honour then referred to Gould v Vaggelas [1985] HCA 75; 157 CLR 215 at 236 and 250, Commonwealth v Amann Aviation and New South Wales v Burton [2008] NSWCA 319 at [107]-[108]]. In my opinion, for the reasons I have given in the absence of any other evidence it is appropriate to infer that Mr Ramsay's conduct caused BTC to lose an opportunity to raise finance."

Compensation

36 Referring to Spotless Group Ltd v Blanco Catering Pty Ltd [2011] FCA 979; 212 IR 396 at [125], the primary judge took the view that the contract and tort principles applicable to the recovery of damages for loss of a chance or opportunity are applicable to a claim for equitable compensation for breach of fiduciary duty, and that it was not necessary for BTC to prove on the balance of probabilities that, but for Mr Ramsay's breach, BTC would have raised additional capital. It was sufficient that it proved that it lost an opportunity to do so (Judgment [94]).

37 Having concluded that Mr Ramsay's conduct caused BTC to lose an opportunity to raise capital (see [32] and [34] above), his Honour continued:

"101 It is difficult to place a value on that lost opportunity. Mr Ramsay told Mr Keane that he was confident he could raise up to $1,200,000 and at the board meeting on 28 January 2010 he reported that it was hoped that between $800,000 and $1,200,000 would be in trust by 12 February 2010. However, that did not happen. It is difficult to draw any conclusions from what actually happened because of the effect that Mr Ramsay's desire to raise capital for a new entity would have had on his efforts to raise capital generally. On the other hand, notwithstanding Mr Ramsay's confidence in January 2010, the likelihood is that it would have been difficult to raise capital in any event because of the risks associated with the venture. Taking these matters into account, I have concluded that an appropriate way to value BTC's lost opportunity is to assume that it had a 25 per cent chance of raising $1,200,000. On that basis, the value of the lost opportunity is $300,000."

38 His Honour concluded that Mr Pollers was liable to pay BTC equitable compensation in the same amount and considered that it was unnecessary to deal with the compensation claim against Mr Ramsay under s 1417H of the Corporations Act, because BTC had not suggested that it could recover more under s 1417H than it could recover for breach of the fiduciary duties owed by Mr Ramsay.

The cross-claims

39 By cross-claim, Mr Ramsay and Mr Pollers had sought damages for oppressive conduct by BTC, in contravention of s 232 of the Corporations Act, in making the rights issue referred to in [26] above, this having had the effect of diluting the shareholdings of Mr Ramsay and Mr Pollers' interests.

40 The primary judge rejected these claims, saying:

"104 There is no merit in Mr Ramsay's and Mr Pollers' cross-claim. There is no evidence to suggest that the rights issue was made for an improper purpose. The raising of funds to enable BTC to pursue this proceeding was a proper purpose. The rights issue was offered to all shareholders. Mr Ramsay and Mr Pollers cannot complain that their interests in BTC were diluted because they chose not to subscribe to the rights issue."

41 His Honour did not deal with other aspects of the cross-claims which included, so far as Mr Ramsay was concerned, claims for unpaid salary or director's fees and for unpaid expenses, and claims in relation to two computers that Mr Ramsay alleged he had delivered to BTC. Additional claims in Mr Pollers' cross-claim related to his entry into the consultancy contract with BTC and alleged misleading and deceptive representations made to him by BTC.

THE APPLICATION TO ADDUCE FURTHER EVIDENCE ON APPEAL

42 By Notice of Motion filed on 15 April 2014, Mr Ramsay and Mr Pollers sought an order from this Court that transcripts of two telephone conversations, not in evidence at first instance, now be admitted into evidence.

The first conversation

43 This conversation occurred between Mr Ramsay and Mr Keane on or about 14 April 2010. The parts of the transcript to which the Court was taken by the appellants' counsel were to the following effect:

(a) Mr Ramsay said that two prospective investors wanted BTC's business to be in a new company. Mr Keane said that that would be "all right" (p 11 of Mr Pollers' affidavit of 12 April 2014).

(b) Because of the difficulty in obtaining funding for BTC, both Mr Ramsay and Mr Keane were considering obtaining alternative employment (p 13).

(c) Mr Ramsay referred to the possibility of a joint venture arrangement under which a new investor and BTC would each own a large percentage of the shares in a new company that would conduct BTC's business. Mr Keane said that he would be happy with such an arrangement.

Mr Ramsay said that the stumbling block in his negotiations with potential investors was that they were concerned that BTC may have "baggage" and that they therefore did not want to undertake due diligence inquiries. Mr Ramsay referred to the potential investors as having kept saying this and Mr Keane having kept saying that there was no "baggage" (p 14).

(d) Mr Keane said that if Mr Williams (from Carling Capital Partners) and others had a plan in relation to funding, he was happy to talk to them (p 16).

(e) Mr Keane reiterated that BTC did not have any potential due diligence issues (p 18).

44 I do not consider that admission into evidence at first instance of the transcript of these exchanges would have changed the outcome of the proceedings. On the contrary, the extracts are in my view consistent with, and to some extent supportive of, his Honour's findings. First, they do not indicate that Mr Keane had any knowledge before late April 2010 that Mr Ramsay and Mr Pollers were involved in a plan for a new company, not involving BTC as a major shareholder, to obtain BTC's business. The plan that Mr Ramsay discussed with Mr Keane was conformable with BTC's interests in that it involved BTC (and not just some, or even all, of its shareholders) holding those shares in the new company that were not required to be issued to the investor who was to provide funding.

45 Secondly, the extracts confirm that Mr Keane would have been willing to support the establishment of a new company on this basis. This accords with the primary judge's finding that Mr Ramsay's explanation for the failure to raise capital for BTC (Mr Keane's refusal to agree to establish a new company) was not plausible (Judgment [73] and [80] quoted in [28] to [29] above).

46 Thirdly, the fact that Mr Keane was considering other job opportunities did not indicate that he was not interested in pursuing BTC's business. On the contrary, the implication from the extracts is that Mr Keane was still interested in BTC obtaining funding but was, understandably, becoming increasingly pessimistic about that occurring.

The second conversation

47 The second transcript sought to be tendered was of a conversation between Mr Keane and a Mr Jon Peters. The conversation occurred in early 2010. Precisely when is not clear.

48 In the part of the transcript to which the Court's attention was directed, Mr Keane is recorded as saying to Mr Peters that Mr Ramsay believes that he has an investor prepared to fund BTC to the extent of $1 million. The appellants say that the conversation is important because, in response, Mr Keane expressed doubts as to whether the investment was "real".

49 However, admission into evidence of this transcript would not advance the appellants' case. The transcript is consistent with the primary judge's finding that Mr Keane was anxious for BTC to obtain funding. That he might have expressed some scepticism about whether a particular funding proposal advanced by Mr Ramsay might come to fruition does not in any way derogate from that.

Conclusion on application to adduce further evidence

50 The appellants accepted that recordings of the two conversations were available to them at the time of the hearing at first instance. As a result, s 75A(8) of the Supreme Court Act 1970 (NSW) applies to prohibit this Court receiving the further evidence tendered on appeal "except on special grounds". Akins v National Australia Bank (1994) 34 NSWLR 155 and cases which have followed it, such as Tjiong v Tjiong [2012] NSWCA 201 at [166], establish that, in general, the following three conditions need be met to satisfy this requirement:

"(1) It must be shown that the evidence could not have been obtained with reasonable diligence for use at the trial; (2) The evidence must be such that there must be a high degree of probability that there would be a different verdict; (3) The evidence must be credible" (Akins at 160).

51 There is an issue in the present case of whether the appellants ought be excused from compliance with the first requirement because they were unrepresented at the hearing at first instance. The various factors bearing on this question need not be addressed as in my view the second condition has plainly not been met. Far from the further evidence being such that, if admitted at first instance, it would, or even might, have led to a different result, for the reasons I have given above the further evidence would not in my view have assisted the appellants' case at all. The application to admit it on appeal should accordingly be rejected.

RESOLUTION OF THE APPEAL

MR RAMSAY'S BREACHES OF FIDUCIARY DUTY

52 The appellants indicated on appeal that they would only be able to mount a challenge to the primary judge's finding that Mr Ramsay breached his fiduciary duties to BTC if their application to adduce further evidence was allowed and they could therefore rely on that evidence in their submissions. As that application has in fact been unsuccessful, there is no challenge to the primary judge's finding of breach of duty.

MR POLLERS' LIABILITY

53 Mr Pollers challenged the finding against him upon the basis that "there was no pleading of a dishonest and fraudulent design ... , there were no particulars of such an allegation, there was no pleading at all of dishonesty in relation to Pollers and it appears not to have been put to Ramsay or Pollers that they were engaged in a dishonest and fraudulent design" (Appellants' Amended Written Submissions, [48]). I deal with these complaints in turn.

54 First, I do not agree that the claim against Mr Pollers was not adequately pleaded. Paragraph 57 of the Statement of Claim alleged, under the heading "Accessorial liability of Pollers", that the breaches of duty earlier pleaded (in [24]-[44]) against Mr Ramsay constituted "a dishonest and fraudulent design". Thus, contrary to the appellants' submission, a design of the relevant character was pleaded. Detailed allegations about the design were contained in the earlier paragraphs to which reference was made, and particulars were included in the paragraphs. If the appellants needed further particulars, they should have sought them. It was not suggested to this Court that they were sought.

55 The appellants next complained that "there was no pleading at all of dishonesty in relation to Pollers" but it was not necessary for BTC to make that allegation. What it had to, and did, plead was that Mr Ramsay's breaches constituted "a dishonest and fraudulent design" and that Mr Pollers had knowledge of those breaches and assisted in them. Knowing assistance by Mr Pollers in Mr Ramsay's dishonest breaches gave rise to liability without the necessity to plead or prove a separate allegation of dishonesty on the part of Mr Pollers. As indicated by the High Court in Farah Constructions v Say-Dee at [173], "a person may have acted dishonestly, judged by the standards of ordinary, decent people, without appreciating that the act in question was dishonest by those standards". In their Honours' view, it would have been sufficient to establish liability of the third parties in that case to show that they had "consciousness of those elements of the transaction which [made] participation transgress ordinary standards of honest behaviour" (at [165]).

56 It was not suggested that the factual matters constituting Mr Ramsay's breaches and Mr Pollers' knowledge and assistance were not adequately put to them in cross-examination. It was not necessary for BTC to go further and put to Mr Ramsay or Mr Pollers in cross-examination that they were engaged in a dishonest and fraudulent design. BTC's assertion that the factual matters relied upon constituted "a dishonest and fraudulent design" appeared plainly in the Statement of Claim and it was unnecessary, and probably not appropriate in any event, for Mr Ramsay and Mr Pollers to be asked to agree that that was the appropriate legal characterisation of the matters alleged against them.

57 There cannot justifiably be, and does not appear to have been, any complaint by the appellants about the manner in which the primary judge interpreted the words "dishonest and fraudulent". His Honour found that they would be satisfied if the conduct could as a matter of ordinary language be described as morally reprehensible, as was so in the case before him. His Honour found it unnecessary to consider whether a lower threshold was appropriate (see for example Westpac Banking Corporation v Bell Group Ltd (in liq) (No 3) [2012] WASCA 157; 44 WAR 1 at [2112] and following) and it is unnecessary to do so on appeal.

CAUSATION

58 The appellants' written submissions dealt at length with the question of whether the Brickenden test (see [33] above) applied to the present case. It is however unnecessary to consider whether it did because, as already noted (see [35] above), the primary judge dealt with the question of causation on two bases - that the Brickenden test applied and that it did not apply. His Honour found causation was established on both bases (see [35] above).

59 As to his Honour's finding on the latter basis, the appellants submitted that "the funding failed not because of Mr Ramsay but because of misgivings about the technology" and that the primary judge failed to consider the impact of the following other relevant factors (Appellants' Amended Written Submissions, [19], [41] and [42]):

"a. Certain investors preferred to see an investment into a Newco;

b. Ramsay had discussed investment into a Newco with Keane in December 2009 or January 2010 and Keane said that it was not necessary;

c. A Newco had the advantage that there would be minimal due diligence, thereby reducing the time to complete and accelerating the release of funds;

d. Timing was important because for investors like Cadence Capital investing with public money, completion for Cadence was predicated on BTC being listed quickly;

e. Karl Siegling of Cadence Capital had misgivings about the technology because the app was not working to his satisfaction on the Blackberry platform and decided not to invest;

f. The investment of $1.2m was conditioned on each of Cadence Capital, Clodene and Station Capital investing equally, the withdrawal of Cadence compromised the entire investment and resulted in Ramsay proposing a reduced investment in BTC of $500,000;

g. Concerns about BTC's (lack of) ownership of the Intellectual Property concerning its products;

h. Lack of appetite in the markets;

i. Concern by some investors about the extent of Mr Keane's majority shareholding".

60 The primary judge was not however considering whether, on the balance of probabilities, the cause of BTC's failure to obtain funding was Mr Ramsay's conflict of interest.

61 Rather, the primary judge considered not the probabilities of the funding being obtained but whether BTC lost an opportunity of some value to obtain that funding.

62 Further, his Honour was not required to consider whether Mr Ramsay's breaches were the cause of loss to BTC but whether they were a cause. This is the general law test (see for example Fitzgerald v Penn [1954] HCA 74; 91 CLR 268 at 275-6; March v E & M H Stramare Pty Ltd [1991] HCA 12; 171 CLR 506 at 522; Chappel v Hart [1998] HCA 55; 195 CLR 232 at [24]; Kenny & Good Pty Ltd v MGICA (1992) Ltd [1999] HCA 25; 199 CLR 413 at [118]; I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd [2002] HCA 41; 210 CLR 109 at [56] - [57]; see also Howard v Commissioner of Taxation [2014] HCA 21; 88 ALJR 667 at [63]-[64]).

63 His Honour concluded that the evidence before him established the required causal link (see Judgment [98] to [100] referred to in [34] and [35] above). Bearing in mind that he was required to approach the issue on the bases I have just mentioned, this conclusion appears to me to reflect commonsense. There may have been many other factors which would ultimately have thwarted BTC's funding hopes but there were clearly a number of potential investors who were interested in BTC's business and seriously considering investing in it. Little store can be put on Mr Ramsay's assertions that some or all of the investors had a preference for investing in a new company when Mr Ramsay was obliged to act loyally on behalf of BTC to obtain funding for it but was in fact motivated by his personal interests. The primary judge was right to regard Mr Ramsay's capacity as a wrongdoer as justifying inferences being readily drawn in favour of BTC when considering whether Mr Ramsay's conduct had caused BTC loss (see Judgment [100] quoted in [35] above) as Mr Ramsay's breaches were such that BTC would never have been able to prove precisely what impact his disloyal motivation had on his negotiations with the proposed investors.

64 Furthermore, Mr Ramsay's evidence that BTC did not obtain funding because potential investors wanted a new company did not support his argument that there was no causal connection between his breaches of fiduciary duty and the failure of BTC to obtain funding. If, as appears may have been the case, the potential investors were concerned to avoid due diligence issues that might have arisen from investment in BTC, there was no reason why BTC itself could not have established a new company as a subsidiary in which investors obtain shares in return for funding. Moreover, as his Honour held (see [29] above), Mr Keane would have supported BTC establishing such a new company if it had been necessary to do so in order to obtain funding.

65 Clearly the time and energy expended by Mr Ramsay and others in the first four months of 2010 is indicative of their view as experienced businesspeople that BTC had a worthwhile business which had significant chances of obtaining funding, at least through a new company. That is not to say that other considerations, including some of those listed in [59] above, may not have thwarted BTC's attempt to obtain funding. His Honour's appreciation of this is reflected in his reference to the difficulty of raising capital because of the risks associated with the venture (Judgment [101] quoted in [37] above) and his adoption of a percentage of 25 as the chance of raising $1.2 million.

66 I reject the appellants' submission that BTC's commencement of the present proceedings in May 2010 (see [12] above) constituted a novus actus interveniens breaking the chain of causation between Mr Ramsay's breaches (and Mr Pollers' knowing assistance in them) and BTC's loss. Even if the concept of novus actus interveniens were relevant in this context (compare Maguire v Makaronis [1997] HCA 23; 188 CLR 449 at 470), the court proceedings were commenced as a consequence of those breaches of duty and did not therefore constitute an extraneous event that might have broken the chain of causation. The fact, as the primary judge indicated in Judgment [61], that BTC subsequently sought interlocutory relief requiring Mr Pollers to restore a code that he had removed from BTC did not deprive the proceedings of their connection to the breaches for which damages and equitable compensation were sought. This is so even if the removal of the code was unrelated to those breaches.

67 For these reasons, I do not consider that his Honour erred on the question of causation.

COMPENSATION

68 As already noted, the primary judge concluded that "an appropriate way to value BTC's lost opportunity is to assume that it had a 25 per cent chance of raising $1,200,000. On that basis, the value of the lost opportunity is $300,000" (see [37] above).

69 After this Court raised the issue, the appellants submitted that the primary judge erred in treating BTC's loss of an opportunity to obtain funding as, of itself, a substantial financial loss. I accept this submission as I consider that the raising of funds would only have been of benefit to BTC if it could have done something useful with them. Otherwise, whilst the company would have received money, it would have incurred a liability to the investor to repay an equivalent amount, either as a debt due to a creditor or as share capital ultimately to be returned to a shareholder. If the evidence established that funding would, or might, have enabled BTC to earn profits, the absence of that funding might fairly be regarded as causally related to a financial loss. Otherwise, it could not be so regarded.

70 Authority confirms the correctness of this view. In Adelaide Petroleum NL v Poseidon Ltd (1990) 98 ALR 431 at 530-2, French J (as his Honour then was) took the view that a company's failure to obtain funding by way of a share placement could not of itself be loss suffered by the company and that any recoverable loss in this context would have to be represented by the profit not able to be earned by use of the expected funding. This approach was upheld on appeal to the Full Federal Court (Poseidon Ltd v Adelaide Petroleum NL [1991] FCA 663; 105 ALR 25 at 42 and 51) and was applied by McDougall J in OzEcom v Hudson Investment Group [2007] NSWSC 719 at [279]-[298]. It was not addressed on the further appeal to the High Court in Adelaide Petroleum (Sellars v Adelaide Petroleum NL [1994] HCA 4; 179 CLR 332).

71 I reject the respondent's submission that these authorities should be distinguished because they were concerned with the assessment of common law or statutory damages, and not equitable compensation. The decisions concerned the same question as arises when assessing equitable compensation: namely, whether loss has flowed from identified breaches of duty (Nicholls v Michael Wilson & Partners Ltd [2012] NSWCA 383). In this respect it does not matter whether the breaches were of common law, statutory or equitable duties.

72 In my view the primary judge should therefore have considered, not only BTC's prospects of obtaining funding, but also whether, if obtained, that funding would have been put to profitable use. His Honour's approach was thus erroneous, the result being that this Court should reassess BTC's claim for equitable compensation.

73 BTC objected to the appellants relying upon this point on appeal but I consider that they should be allowed to do so as the Court's grant of leave to the parties to lodge further written submissions has given BTC an adequate opportunity to address it.

74 Further, I reject the appellants' submission that assessment of compensation in the correct manner would fall outside BTC's pleadings at first instance. Paragraph 62 of BTC's Statement of Claim alleged that BTC suffered damage as a consequence of the appellants' breaches, including breaches of fiduciary duty, that it had earlier pleaded. Subsequent paragraphs making more particular allegations concerning damages did not purport to, or in fact, limit the generality of paragraph 62.

75 Paragraph 62 and the subsequent paragraphs of the Statement of Claim appeared under the heading "Damages" and the appellants pointed out in submissions that in its Summons BTC had clearly distinguished between "Damages" and "Equitable compensation". However the context in which the heading "Damages" appeared made it clear that that word was there used in a loose manner to cover equitable compensation as well as common law and statutory damages because many of the breaches referred to under it were breaches of fiduciary, and thus equitable, duties.

76 The appellants complained also that BTC had not filed a Notice of Contention seeking re-assessment of BTC's loss on a loss of profits basis. However the opportunity offered to the parties to lodge written submissions on the issue has overcome any prejudice that may otherwise have been suffered.

77 I turn then to reassessment of BTC's claim for equitable compensation.

78 The appellants contended that the Court should reject BTC's claim for equitable compensation because any attempt to value the alleged loss of opportunity would be too speculative. They rightly pointed to the considerable uncertainty of outcome which attends investment in a business such as that of BTC. It was a start-up company in the information technology field, its principal intended product was new to the market and it needed to raise capital to pursue its business.

79 The appellants also submitted that this was a case in which BTC was able to, but did not, adduce evidence of its loss. They relied upon the observation of Hayne J in Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd [2003] HCA 10; 77 ALJR 768 at [38] to the effect that in such a case a court should be less inclined to engage in estimation, if not guesswork, in assessing damages than in cases where it is impossible for a plaintiff to adduce precise evidence of its loss (see also at [6] per Gleeson CJ, McHugh and Kirby JJ).

80 However, the present was a case of the latter kind. The anticipated profits were to be earned in the future by exploitation of new technology. It is difficult to see what more BTC could have done to prove its loss than, as it did, to lead evidence that suggested that a significant number of people in the industry, or considering entering the industry, (who can be assumed to include people with considerable relevant business and technological experience) took the view that BTC's business had a worthwhile prospect of success (see [11] and [65] above). Their time and energy would not have been devoted to it if they had not thought this.

81 Unsurprisingly, the documents they produced therefore contemplated the earning of substantial profits. For example, a 2009 BTC document described by Mr Keane in evidence as a "presentation" projected earnings before interest, tax and depreciation ("EBITDA") as $1,847,816 in 2011 and $5,394,385 in 2012, after a loss of $46,808 in 2010. The proposed Newco's projected EBIT for 2011 of $574,707 was considerably lower but that projection appears to have been made in 2010 after delays had been experienced and is probably more aptly compared to BTC's projection for 2010 than that for 2011. The profit-making aspirations of those involved were clearly not limited to the 2011 and 2012 financial years, as their documents referred to future valuations for the business of $7.5 million and $10 million and elsewhere of a minimum of $20 million.

82 In the therefore readily explicable absence of evidence precisely proving BTC's loss, the Court must do its best to assess the probabilities, or indeed possibilities, involved (see McCrohon v Harith [2010] NSWCA 67; Aust Torts Reports 82-056 at [118]-[127] per McColl JA and the authorities to which her Honour referred). As is apparent from State of New South Wales v Moss [2000] NSWCA 133; 54 NSWLR 536 at [71] per Heydon JA, performance of this task may involve a degree of speculation by the Court.

83 Although in my view the primary judge erred in the approach that he took, I consider the figure of $300,000 at which he arrived to be a fair assessment of BTC's loss. The task of assessment in the present case is undoubtedly a highly subjective one. To my mind it is of particular significance that Mr Ramsay and others, who appeared to have considerable relevant expertise, pursued the relevant business opportunity with considerable vigour over a lengthy period of time and that Mr Ramsay, with the assistance of Mr Pollers and others, was prepared to go to the lengths of acting in the underhand manner that he did in order to preserve and pursue it.

84 I have arrived at the figure of $300,000 after attaching significance to this factor and taking into account the very significant business contingencies to which the prospect of deriving the anticipated profits was subject. I cannot, with respect, accept Gleeson JA's view that 10% of $650,000 represents a fair assessment of the value of the business opportunity (see [139] below). The parties involved were contemplating far greater returns than $650,000 in profits and I do not consider that they would have committed the time and effort that they did if they had not assessed the business's prospects of success at more than 10%. There is no better evidence available than can be gleaned from their approach.

85 In these circumstances it is unnecessary to deal with the alternative basis of wasted expenditure upon which BTC put its claim for equitable compensation as BTC relied on that basis of calculation to support, but not to have increased, the award made by the primary judge.

86 Finally, BTC would not be assisted by having its claim assessed as one for compensation under s 1417H of the Corporations Act, as the same issues of proof of its loss would arise as in the case of its claim for equitable compensation.

THE CROSS-CLAIMS

87 There are two aspects of the cross-claims that need to be addressed on appeal. The first is the claims made in them by the appellants concerning the June 2010 rights issue (see [39] above). The second concerns the claims in the cross-claims not dealt with by the primary judge (see [41] above).

The rights issue

88 As reflected in the primary judge's conclusion on this topic (see [40] above), the essence of the appellants' complaint was that the rights issue was oppressive to them because it was made in the face of their unwillingness to subscribe to it (the rights issue being at least in part for the purpose of BTC prosecuting the present litigation against them), with the result that their interests in BTC were diluted.

89 Knowledge that some shareholders cannot, or will not, subscribe to a rights issue cannot be enough in itself to render the rights issue oppressive, although it may be a relevant factor in that respect (see Re Dalkeith Investments Pty Ltd (1984) 9 ACLR 247 at 252). The appellants provided no adequate reason why this rights issue should have been regarded by the Court as oppressive. They simply submitted that evidence "about the transfer of BTC assets to America" should have been taken into account "in considering whether the rights issue[] was made for a proper purpose" (Appellants' Submissions in Reply, [54]). Assuming there was evidence of such a transfer, this would not of itself have rendered the rights issue oppressive.

90 The appellants' cross-claims alleged repeatedly that BTC's purpose, or at least one of its purposes, in making the rights issue was to dilute the appellants' percentage shareholdings. However, on appeal the Court was not referred to any evidence that would suggest that this was a purpose, rather than simply an effect, of the rights issue.

91 The appellants' challenge to the primary judge's decision concerning the rights issue accordingly fails.

The other contentions in the cross-claims

92 As noted above, the primary judge did not deal with other aspects of the appellants' cross-claims. Presumably, he took this course because only the rights issue claim was expressly referred to in address. However, this did not in my view warrant the inference that the other aspects of the cross-claims were not pressed, particularly bearing in mind that the appellants were not represented at the hearing at first instance and that, as indicated below, they made general references to their cross-claims in their oral addresses.

93 At the conclusion of his address, Mr Ramsay said:

"Your Honour with respect to the cross-claim I don't think that has been addressed but the second defendant [Mr Ramsay] relies on the facts provided in the affidavit associated with that claim" (Transcript p 293).

94 In the appellants' written submissions at trial, reference was made to various of Mr Ramsay's claims contained in his cross-claim, in addition to reference to the rights issue claim. The submissions then said that "[t]his claim remains in force" ([29]), without making it clear which claim was referred to. Arguably, it was a reference to the cross-claim generally.

95 Furthermore, Mr Pollers said towards the end of his oral address that "[m]ost of the other stuff I think is pretty much covered but [sic] in our cross-claims shortly after the start of the proceedings, myself and Mr Ramsay ..." (Transcript p 295). Mr Pollers went on to deal with the rights issue claim. Arguably he was referring to the remainder of the allegations in his cross-claim as "the other stuff".

96 Although I consider that in these circumstances the primary judge erred in not dealing with the balance of the cross-claims, I do not consider that the remaining claims should be remitted for determination at first instance: in my view, those claims would inevitably fail. Consistently with r 51.53 of the Uniform Civil Procedure Rules 2005 (NSW), no remitter should occur because no "substantial wrong or miscarriage" has been occasioned by the error.

97 My reasons for concluding that these claims would be bound to fail on remission are as follows.

98 Mr Ramsay's first additional claim was founded on an allegation that he lent two computer servers to BTC. BTC admitted that the servers had been delivered to its premises but there was no admission or evidence that, as alleged by Mr Ramsay, the servers were lent by him to BTC. The basis on which the delivery to BTC occurred was not addressed in his evidence, or elsewhere. (I add that I have, in Mr Ramsay's favour, proceeded upon the basis that the documents attached to his cross-claim were part of the evidentiary material before the Court. Although that was not strictly so, it is clear that Mr Ramsay, with some justification, proceeded upon the assumption that those documents were in evidence (see Transcript pp 54 and 293)).

99 His second claim was for outstanding salary or director's fees, but there was no evidence before the Court of the oral agreement alleged by Mr Ramsay in his cross-claim to found his entitlement to the amount claimed.

100 His third claim was for reimbursement of expenses totalling $3,000. BTC admitted that that amount had not been paid by it to Mr Ramsay but there was no evidence before the Court, or admission, that the expenses were incurred or that there was an arrangement entitling Mr Ramsay to recoup them.

101 The only additional claim in Mr Pollers' cross-claim that was pressed on appeal was founded on an alleged oral representation made to him by Mr Keane "[o]n about 6 February 2010" that BTC was solvent and would be able to pay Mr Pollers' salary "on an ongoing basis". As there was no evidence of that representation, the claim must fail. I add that the claim appeared in Mr Pollers' cross-claim in part under the heading "Copyright of the 'BigTinCan Connect Version 2' Software" but what appeared under that heading did not assert that there had been a breach of copyright.

CONCLUSION AND ORDERS

102 For the reasons that I have given, the appeal should be dismissed with costs.

103 GLEESON JA: I have had the advantage of reading in draft the judgment to be delivered by Macfarlan JA.

104 In relation to the appeal by Mr Ramsay and Mr Pollers against the judgment against them, I agree with the reasons of Macfarlan JA, except [83]-[84] on the reassessment of the respondent's (BTC) claim for equitable compensation for the lost opportunity to obtain funding for its businesses.

105 I also agree with his Honour's reasons at [87]-[101] that Mr Ramsay's and Mr Pollers' appeal against the dismissal of their cross-claims should be dismissed.

Introduction and summary of conclusions

106 BTC was engaged in a start-up business in the telecommunications field. It focused on developing and selling mobile phone applications (apps) to provide international call and messaging services, as well as web and app conference calling, at a cheaper price than conventional telecommunication suppliers. BTC was also involved in developing location based services for advertisers which would enable them to deliver content and promotions directly to consumers' mobile phones (Blue 1/219-224).

107 The purpose of the funding which BTC was seeking to raise in early 2010 was to pursue product development and marketing of its smart phone applications and related services (Buzz Me) and its telecommunications business (BigTinCan Connect). BTC anticipated that this funding would enable these businesses to reach a break-even trading position by the end of 2010 and thus prepare the company for a further capital raising by way of an initial public offering (IPO) in 2011. If this last step was successful, BTC was projecting significant earnings before interest and taxes (EBIT) from its businesses in the financial years ending 30 June 2011 ($1.8 million) and 2012 ($5.4 million) (FY 2011 and FY 2012). BTC claimed on appeal that it had lost the opportunity to obtain a financial benefit in the form of projected future profits from its businesses.

108 The difference in view between Macfarlan JA and my own is that, although finding error in the primary judge's approach to valuing the lost opportunity, on the reassessment of compensation Macfarlan JA would not disturb the primary judge's award of equitable compensation of $300,000. For the reasons which follow, I would reassess equitable compensation in a lesser amount of $65,000. This amount reflects my estimation on the available indications of the "value" of BTC's lost opportunity claim. An allowance for interest should be added to this amount. The statutory prejudgment interest totals $11,048.93: see [141] below.

109 On the view I favour the appellants have enjoyed some success on the appeal in reducing the amount of equitable compensation that they are liable to pay by a little over three quarters. An order reflecting that limited success, viewed in light of the appellants' failure on all other grounds of appeal, is that the respondent pay 30% of the appellants' costs of the appeal.

110 It follows that the orders which I would propose for the disposition of the appeal are as follows:

(2) Appeal allowed in part.

(3) Set aside order 1 made by Ball J on 4 September 2013.

(4) In lieu thereof, judgment for the plaintiff against the second and third defendants for the sum of $76,048.93.

(5) The judgment in order 3 is to take effect from 4 September 2013.

(6) Respondent to pay 30% of the appellants' costs of the proceedings in this Court.

Compensation

111 BTC is entitled to compensation for Mr Ramsay's and Mr Pollers' breach of duty. BTC put its case in two ways. One involved treating BTC's loss of an opportunity to obtain funding as, in and of itself, a compensable loss. As explained by Macfarlan JA at [69]-[71] the primary judge erred in accepting this submission. The other and alternative basis was a claim of wasted expenditure of $418,781.04 in respect of two parts of BTC's business. Nonetheless BTC did not contend on appeal for a higher award of compensation than that ordered by the primary judge. In view of the conclusion reached by Macfarlan JA on the lost opportunity claim, his Honour did not find it necessary to deal with this alternative claim: at [85].

112 Having regard to the view I have reached in relation to BTC's lost opportunity claim, it is necessary that I deal with the wasted expenditure claim. It is convenient to turn to this claim first.

(a) Wasted expenditure claim

113 BTC's wasted expenditure claim of $418,781.04 represented the combined loss for the period 1 July 2008 to 30 June 2010 in relation to two segments of BTC's business - Buzz Me (and related applications) and BigTinCan Connect (Blue 918L-Q and 920H-T).

114 The wasted expenditure claim may be put aside for the reason given by the primary judge at [89] - there is simply no direct connection between Mr Ramsay's breach of duty and that loss. Although his Honour did not elaborate on this conclusion it is amply supported by the following matters.

115 First, on the findings of the primary judge there was no evidence of Mr Ramsay's breach of duty prior to the period from late March to the end of April 2010: at [71]. Accordingly, the net losses incurred by BTC in respect of its Buzz Me and BigTinCan Connect businesses prior to the date of Mr Ramsay's breach of duty had no causal connection with that breach.

116 Secondly, BTC's evidence at trial did not attempt to attribute what amount, if any, of the losses which were incurred in FY 2011 related to the period April to June 2010 (and therefore would have coincided with the earliest date of Mr Ramsay's breach of duty).

117 Thirdly, BTC did not put its case of wasted expenditure on the basis that, had it known of Mr Ramsay's breach of duty in late March 2009, it would not have continued to pursue the development and marketing of the Buzz Me and BigTinCan Connect segments of its business so as to avoid further losses being incurred. Moreover there was no evidence that this step, even if taken, would have avoided or reduced any losses which BTC had in fact incurred in these segments of its business in the period April to June 2010.

118 Accordingly, BTC's claim for wasted expenditure was not made out on the evidence.

(b) Lost opportunity claim

119 As regards BTC's lost opportunity claim, the starting point is to recall the fundamental error in BTC's argument. This is the notion that a company's failure to obtain funding is, of itself, "loss suffered by the company". The reasons and authorities referred to by Macfarlan JA at [69]-[70] demonstrate why this is not so. BTC would only have lost something of "value" if the funding it was seeking to obtain from investors would, or might, have enabled BTC to obtain a financial benefit (relevantly, in this case, the projected future profits in FY 2011 and FY 2012). The purpose of compensation is only to make good a loss that was in fact suffered by BTC and which, using hindsight and common sense, can be seen to have been caused by the breach: O'Halloran v R T Thomas & Family Pty Ltd (1998) 45 NSWLR 262 at 273 (Spigelman CJ; Priestley and Meagher JJA agreeing) citing Target Holdings Ltd v Redferns (A Firm) [1996] 1 AC 421 at 439 (Lord Browne-Wilkinson). See also AMP Services Ltd v Manning [2006] FCA 256 at [64]-[69] (Finkelstein J).

120 The principles to be applied in the assessment of equitable compensation were reviewed by this Court in Nicholls v Michael Wilson & Partners Ltd (Michael Wilson & Partners) [2012] NSWCA 383 at [171], [174] (Sackville AJA; Meagher JA and Barrett JA agreeing). It is unnecessary to repeat what was there stated. It is sufficient to note two matters which are of significance in the present case.

121 First, it is to be recognised that the task of the Court in the present case involves "judicial estimation on the available indications": Warman International Ltd v Dwyer [1995] HCA 18; 182 CLR 544 at 567, a case involving the assessment of an amount to which a plaintiff was entitled against an errant fiduciary on an account of profits.

122 Secondly, BTC is entitled to invoke the principle that where a party's actions have made an accurate determination of damage or loss problematic, doubtful questions should be resolved against that party and the Court should assess damages or compensation in a robust manner: Michael Wilson & Partners at [287]; Houghton v Immer (No 155) Pty Ltd (1997) 44 NSWLR 46 at 59 (Handley JA; Mason P and Beazley JA agreeing). Nonetheless, as Sackville AJA observed in Michael Wilson & Partners at [287], this principle is not a licence for the Court to choose an arbitrary figure and certainly not a licence to award an amount of compensation which is designed to punish the appellants for their misconduct.

123 In assessing equitable compensation the Court may make a determination on the basis of loss of opportunity: AMP Services Ltd v Manning [2006] FCA 256 at [69] (Finkelstein J); Spotless Group Ltd v Blanco Catering Pty Ltd [2011] FCA 979; 212 IR 396 at [125] (Mansfield J). For the reasons given by Macfarlan JA, it should be accepted that BTC lost the opportunity to obtain a financial benefit in the form of projected future profits and that this opportunity had "some" commercial value: Daniels v Anderson (1995) 37 NSWLR 438 at 530-531 and 539. The critical issue is the quantification of the "value" of that lost opportunity.

124 Here Mr Ramsay's breach of duty was a cause of BTC failing to obtain the pre-IPO funding in mid 2010. However this funding was but a necessary step to preparing BTC for a further capital raising by way of an IPO in late 2010. On the evidence, there was no possibility of BTC raising any capital in respect of its businesses as they existed at the time, once it became embroiled in the litigation against Mr Ramsay and others in May 2010. Thus the possibility of an IPO and the projected future profits were also lost.

125 BTC's loss is not to be equated necessarily with the value of the financial benefit it hoped to obtain, but may be discounted, taking into account the degree of possibilities or probabilities of achieving the projected future profits if it had been successful in raising funds in or about the middle of 2010: Sellars v Adelaide Petroleum NL [1994] HCA 4; 179 CLR 332 at 355.

126 The prospects of BTC achieving those projected future profits would have depended upon a number of contingencies, the most important of which are:

(1) the attitude of the secured creditor of BTC and whether it would have been prepared not to call up its loan, as it did on 22 April 2010, assuming no breach of duty by Mr Ramsay;

(2) whether BTC could have solicited sufficient interest from other investors in late March and April 2010, having regard to the change of attitude of two of the investors (Cadence Capital and Station Capital) who had previously committed to the capital raising proposal earlier in 2010 but had since withdrawn for reasons apparently unrelated to Mr Ramsay's breach of duty. In particular whether it is likely that there would be sufficient investors at the pre-IPO stage with a risk appetite for the potential returns which might be achievable for initial investors in the event of a subsequent successful IPO;

(3) the risks inherent in (a) successfully developing and marketing new technology in the highly competitive telecommunications market and (b) achieving sufficient growth in the number of subscribers to make BTC's businesses financially viable to prepare them for a further capital raising by way of an IPO;

(4) whether the contemplated IPO was likely to be successful in raising further capital of $2 million required for BTC's businesses; and

(5) whether BTC would likely achieve the growth in the number of subscribers to its products in FY 2011 and FY 2012 consistent with the assumptions underlying BTC's profit projections in early 2010.

127 Although both capital raising proposals were related, the contingencies affecting each phase were, at least to some extent, independent of each other. Accordingly the prospects of BTC achieving its financial projections in FY 2011 and FY 2012 depended to some degree upon the separate prospects of BTC successfully executing each phase of these proposals.

128 The contingencies to be taken into account in the assessment of the value of BTC's lost opportunity are various and do not readily lend themselves to the assignment of probabilities, particularly as BTC was essentially a company with start-up businesses. Furthermore the evidence concerning the likelihood of successfully raising capital was necessarily limited and largely a matter of inference. Nor was the reasonableness of the assumptions underlying BTC's future profit projections a matter explored in the evidence or debated at trial. For these reasons the discounting exercise associated with assessment of the lost opportunity is fundamentally of a qualitative nature: Adelaide Petroleum NL v Poseidon (1990) 98 ALR 431 at 532 (French J).

129 There is a further consideration which must be taken into account in relation to the pre-IPO capital raising. The primary judge proceeded upon the basis that, at the time of Mr Ramsay's breach, BTC's proposal was to raise up to $1.2 million (at [101]) and that any capital raising would have been complete by 30 June 2010: at [106]. His Honour did not find it necessary to consider the prospects of the IPO capital raising. However, by April 2010 BTC's capital raising proposal had evolved. What was then in contemplation was that the pre-IPO capital raising would proceed in two tranches (at Blue 53, 218-232, especially at 230):

• the first tranche of up to $500,000 was intended to provide working capital and to partly repay the secured creditor of BTC;
• the second tranche of $1 million, which it was assumed would be raised in June 2010, was intended to repay the balance of the secured creditor's debt and to prepare BTC for an IPO, which in turn was targeted towards raising a further $2 million by November 2010.

130 The capital raising proposal which Mr Ramsay prepared for Newco in April 2010 assumed a similar staged fund raising, albeit with a slightly lesser initial tranche of $300,000 for a 15% interest in Newco - to be used for working capital purposes and to repay $50,000 of the loan owing to the secured creditor, and a second tranche of pre-IPO capital raising in the second half of 2010 - to be used to repay the balance of the secured creditor's debt and to prepare Newco for an IPO in early 2011 (Blue 204 and 214). Break-even was expected within 9 to 12 months (Blue 207).

131 The capital raising proposal prepared for SpringTel in April 2010 contained similar assumptions, but provided some additional detail (Blue 272):

• the initial funding of $300,000 (net $250,000) was planned to be raised in the period May to November 2010;
• the second tranche of pre-IPO funding of $1 million (net $700,000 after costs for acquisitions and capital raising fees) was planned to be raised in the period December 2010 to February 2011;
• the IPO funding of $2 million (net $1.7 million after allowing for costs for acquisitions and capital raising fees) was planned to be raised in February 2011 (Blue 273); and
• SpringTel's projected EBIT for FY 2011 was estimated at $574,707. (There were no financial projections beyond this date.)

132 The Court must also take note of the fact that other documents prepared in respect of SpringTel in April 2010 (apparently by Carling Capital Partners), forecast an EBIT of more than $650,000 for the financial year ending 30 June 2011 (Blue 292-293).

133 Thus it may be observed that although the projected earnings differed, as at April 2010, both BTC and Newco/SpringTel were forecasting significant positive earnings by June 2011. In each case the profit projections assumed a successful pre-IPO capital raising in two tranches and a further successful capital raising at the IPO stage.

134 The evidence at trial, limited as it was, was directed to considerations affecting the likelihood of obtaining the pre-IPO funding of up to $1.2 million. No real attention was given to the likelihood of obtaining further capital by way of an IPO. This is unsurprising as BTC had put its lost opportunity claim in somewhat simplistic and incorrect terms - that the "value" of the lost opportunity was represented by the chance of raising $1.2 million, rather than the "value" of the possibilities or probabilities of obtaining financial benefits if the initial pre-IPO funds were raised.

135 One further matter should be mentioned. The quantification issue requires attention to be given to the reasonableness of the assumptions on which the projected future earnings of BTC on the one hand, and Newco/SpringTel on the other, were based and whether one projection was more likely than the other. The primary judge did not make any findings in this regard, as it was unnecessary for him to do so on the approach which he took. As already noted, BTC was projecting EBIT for FY 2011 of $1.8 million and $5.4 million for FY 2012, whereas SpringTel was projecting EBIT for FY 2011 of either $574,000 or $650,000. The capital raising proposals of Newco/SpringTel did not include any forecast earnings for FY 2012.

136 The Court was not taken to any material from which an inference could be drawn as to which of these profit projections, if either, was the more likely. A critical integer in the projections was the assumed growth in the number of subscribers for BTC's businesses in FY 2011 and FY 2012 and for Newco/SpringTel in FY 2011 alone. The business plan for BTC recorded the assumed number of subscribers, whereas the plans for Newco/SpringTel did not. The evidence did not provide any objective indications from which one might conclude whether one set of assumptions was more reasonable than the other.

137 I would incline to the view that the financial projections which Mr Ramsay and Carling Capital Partners prepared for Newco and SpringTel in April 2010 should be taken to be more likely than BTC's projections made at an earlier time in 2010 (albeit Mr Ramsay was involved in preparing BTC's projections). The later figures represented the most up-to-date projections for the businesses of BTC which Newco/SpringTel hoped to acquire at the time of Mr Ramsay's breach of duty. It was not suggested that these projections were unreasonable.

138 Thus the starting point for BTC's loss is a nominal loss of profits of $650,000 in FY 2011, adopting the higher of the projections for Newco/SpringTel. I would not make any assumption as to likely profits after that period. First, to do so would be simple speculation. Secondly, experienced business people such as Mr Ramsay and the persons from Carling Capital Partners were not prepared to forecast future profits for Newco/SpringTel beyond FY 2011.

139 A very significant discount should be made to this nominal loss to take into account the multiple, and to some degree independent, contingencies affecting the possible outcome. In my view the prospects of BTC successfully executing the two tranches of the pre-IPO capital raising, as well as the IPO funding itself, and also of achieving significant earnings in FY 2011 of $650,000 must be considered to have been very low indeed. I assess the prospects to be no more than 10%. Adopting a discount of 90% produces a figure of $65,000 ($650,000 by 10%).

140 Although a relatively small amount, in my view, this properly reflects the significant obstacles in BTC's path as at April 2010, if there had been no breach of duty by Mr Ramsay, in successfully executing both capital raising proposals and also achieving the forecasted growth in subscriber numbers for its products which it needed to achieve the projected future profits in FY 2011.

141 Accordingly, in my view, the amount which should be awarded as equitable compensation for BTC's lost opportunity to obtain funding is $65,000. An allowance for prejudgment interest should be added to this amount pursuant to s 100 of the Civil Procedure Act 2005 (NSW) for the period from 1 July 2011 (being the time when the assumed profits in FY 2011 would have been received) to 4 September 2013 (being the date of judgment below). Interest amounts to $11,048.93.

**********

Decision last updated: 16 September 2014