That meeting concluded with a decision to refer the matter to the SFO and to use liquidation proceedings to try to claw back nearly $400,000 in funding provided to Trends.
Kalev Crossland, acting for Trends, told the court that conclusions were drawn by Deloitte staff he characterised as lacking experience, and Callaghan's decision was premature and based on incorrect information
"Each of those seven allegations raised there are denied," he said.
The Deloitte investigation is central to both the ongoing Serious Fraud Office investigation into Trends and a counter-claim by the publishing company that the report is flawed and Callaghan's use of it amounts to defamation and breach of contract.
Trends strongly rejected any allegation of fraudulent conduct and argued that the alleged obstruction either did not happen or had innocent explanations.
Crossland said the "whistleblower" was unreliable and dishonest. "This whistleblower took a case to the ERA, which found his evidence wasn't accepted. He was a disgruntled employee who was facing a disciplinary meeting the very day Deloittes were on site," he said.
Trends said Deloitte claims that emails from investigators to staff were being blocked were simply the result of addresses being mistyped and the messages being returned to sender.
They've taken out material that's counterintuitive. Because if the agreement's unclear, one possible explanation, if one's investigating inappropriate use of grant funds, is maybe you've misunderstood the grant document.
The conclusions drawn by Deloitte in its final report, finalised some months after that meeting, said there were potential breaches of the funding agreement due to over-claiming the amount of labour actually involved in research and development, lack of documentation and the claiming of ineligible expenditure.
Callaghan had approved Trends for a growth grant which entitled it to claim 20 per cent of funds spent on research and development.
Deloitte raised concerns that ineligible expenditure had been submitted for the subsidies that did not qualify as either research or development, including a premium for the directors' life insurance policy, bank fees and travel insurance.
Crossland alleged one portion of the report, detailing broader concerns from Deloitte that contracts governing the scheme were "ambiguous", and simultaneously allowed and prohibited capitalised spending on development, had been withheld by Callaghan.
"They've taken out material that's counterintuitive. Because if the agreement's unclear, one possible explanation, if one's investigating inappropriate use of grant funds, is maybe you've misunderstood the grant document."
Both Callaghan and Steven Joyce, the Minister for Science and Innovation, have declined to answer questions about Deloitte's broad criticism of the scheme that sees $135 million in taxpayer funds paid out annually to private sector businesses.
Trends denied any improper claims for subsidies and argued the funding agreement between it and Callaghan was ambiguous.
Sebastian Bisley, acting for Callaghan, said the report's contested section "might be relevant" but did not appear to be a blanket cover for all mis-spending -- such as on life insurance -- identified by Deloitte.
Bisley said the dispute was complex, serious and involved considerable antipathy. "This is a story to which there are two sides, and this will continue to be played out for some time," he said.
