Irwin v Pamplin & Ors (No 4)

The plaintiff, Ann Irwin, was the de facto spouse of the late Adrian Dennis Pamplin (deceased), who died in August 2013 without a will. Ann’s status as his de facto was established in this Court: Estate of Pamplin; Irwin v Pamplin [2017] NSWSC 1477 (Lindsay J judgment). Ann is sole administrator of the deceased’s estate.

The first defendant, Marie Dawn Pamplin, is the deceased’s mother. She is also the mother of the second defendant, Lionel Pamplin, who is the deceased’s younger brother.

With no disrespect intended, I refer to the parties and other members of their family by the first names.

From around 1989, the deceased and Lionel were involved in various business endeavours together, including property development. They owned shares in companies they had established, and real property.

The deceased and Lionel were also members of the Nomads Motorcycle Club. In the mid to late 1990’s, they were charged with drug related offences and involved in a NSW Crime Commission investigation.

From May 2002, the deceased and Lionel transferred legal ownership and control of the companies and assets they owned to Marie. New companies were set up and new assets acquired, all of which were (directly or indirectly) legally owned and controlled by Marie.

Ann says that the transactions from May 2002 happened pursuant to an agreement, understanding or an assumption held in common by the deceased, Lionel and Marie that Marie would hold the transferred business and property assets and any future assets generated by ongoing or new business ventures for the benefit of or on trust for the deceased and Lionel in equal shares, which Marie would hand over if asked to do so. She says that the agreement, understanding or common assumption also provided that the deceased and Lionel would act as shadow directors of the companies and keep de facto control of them and the assets, and that they did so.

Ann contends that the prime motivation for the arrangement was asset protection, namely, to shield them from vulnerability to confiscation under the Proceeds of Crime Act 2002 (Cth), and that the circumstances under which the assets were divested to Marie and future assets acquired either impressed them with a trust, or otherwise mean that Marie and the companies she controls are subject to an estoppel or contractual obligation which prevents them from dealing with the assets contrary to that arrangement.

Marie and Lionel deny the existence of the alleged agreement or common assumption.

While accepting there was a change in the way things were done from mid-2002, Marie and Lionel say that the new structure arose from a desire to pool resources in circumstances where the brothers’ property pipeline was empty, they had not produced significant wealth and were indebted to Marie for legal costs and business loans. They also say that the suggestion that the alleged arrangement was premised on a threat of asset confiscation under the Proceeds of Crime Act is misplaced.

Ann commenced these proceedings in June 2018 pursuant to directions given by Lindsay J after he delivered his judgment.

In her Second Further Amended Statement of Claim filed on 21 July 2021, (SFASC), Ann seeks a range of declarations and other orders to the effect that 50% of identified assets held by Marie and in companies Marie controls are held on trust for the benefit of the deceased’s estate. As Ann is the sole beneficiary of the deceased’s estate, in economic terms, Ann's claim is that the 50% share of the assets are held on trust for her.

Ann pleads an agreement or understanding and a common assumption on the same terms, which she says was acted on and gives rise to an express trust or, alternatively, constructive or resulting trusts in respect of the transferred assets and new assets that are legally owned by Marie and the corporate defendants. She claims that it is unconscionable for Marie to seek to depart from the terms of the arrangement or assumption and she is estopped in equity from doing so, and also pleads that the parties entered into a binding contract on the terms of the agreement. I refer to these as the Arrangement Claims.

Ann also makes a claim on her own behalf in respect of $451,000 of trust distributions that the Dennis G Pamplin Family Trust (DGP Trust) declared were payable to Ann in the financial years 30 June 2016 to 30 June 2012 which Ann says were never paid to her. I refer to this as the DGP Trust Distributions Claim.

The other defendants are companies that are directly or indirectly owned or controlled by Marie. Ann contends that the shares and assets of these companies are held on trust for her on the same terms, as are three properties located on Pitt Town Road, Kenthurst (Pitt Town properties), of which Marie is the registered proprietor.

The third defendant is Mircon Pty Ltd (Mircon), a company established by the deceased and Lionel in 1992 under the name A.L.T. Property Development Pty Ltd (ALT Property). It was renamed as Mircon in 1997. Marie has, since 2002, been Mircon’s sole director and company secretary and owned all of its shares.

The fourth defendant is Dennis G Pamplin Pty Ltd (DGP), a company established in 2002. Marie is the sole director and owns all the shares. DGP is the trustee of the DGP Trust which was also established in 2002.

The fifth defendant is Halcrows Investments Pty Ltd (Halcrows), which was established in 2013. Halcrows is the Trustee of the Halcrows Road Trust. Marie is the sole director and shareholder of Halcrows.

The seventh defendant, The Peak on Andrew Pty Ltd (Peak on Andrew), was established in 2008. The Peak on Andrew is the Trustee of the Peak Unit Trust. Marie is the sole director of the Peak on Andrew and DGP owns its shares.

The eighth defendant is Mircorp International Pty Ltd (Mircorp), a subsidiary of DGP, and was established in 2013.

The sixth and ninth defendants are, respectively, NMOS Pty Ltd (NMOS) and OSCO (Australia) Pty Ltd (OSCO). Marie is the sole director and company secretary of NMOS and OSCO and the sole shareholder of NMOS.

On 29 March 2021, Parker J made orders on Ann’s application for interlocutory relief, restraining Marie from dealing with her shares or interests in the corporate defendants and the Pitt Town properties and from exercising any power of appointment as to income or capital or otherwise dealing with the assets of the DGP Trust and Lionel from exercising any rights as appointor of that trust pending determination of Ann’s claims. Orders were also made for Ann to withdraw caveats she had lodged on the Pitt Town properties.

On 20 August 2021, Parker J made orders that certain issues be determined separately, being:

The effect of these orders is, in broad terms, directed to first determining issues of liability in relation to the Trust and Trust Distributions Claims, before Ann’s claims for the transfer of trust properties, equitable compensation and damages for breach of contract.

The SFASC is lengthy (71 pages) and somewhat repetitive. The Defendants described it in final written submissions as “prolix” and “bloviated”.

Ultimately, and despite the various pleaded claims, the key issues to be determined are:

The hearing took 10 days. The Court received over 200 pages of written submissions and the Court Book runs for around 7500 pages.

I have had regard to all the evidence and facts contended for by the parties, as referred to in their written and oral submissions. Given the volume, it is not practicable or necessary, in my view, to refer to all the material. These reasons set out those facts and matters which I consider are salient to the issues and necessary to understand the parties’ respective positions and why I have made my factual findings and reached my conclusions on the issues for determination.

Ann read affidavits that she swore and from Mr Peter Loccisano.

The Defendants read affidavits from Marie, Lionel and Mr Peter Burrows.

Each of the witnesses were cross-examined and submissions were made about the reliability and credibility of the parties' evidence and that of Mr Loccisano’s evidence of the key witnesses. In assessing the evidence and making my findings, I have had regard to the following principles and those referred to at [49] and [51].

In view of the frailty of human memory and the parties’ apparent self-interest, more weight should be placed on the contemporaneous documents (to the extent they are available), the objective surrounding facts and the inherent probabilities and improbabilities of events: Watson v Foxman (1995) 49 NSWLR 315 at 319; Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 at [30]–[31].

Ann bears the onus of proof. The standard of proof is the balance of probabilities but involves an actual persuasion of the occurrence of conversations: John Holland Pty Limited v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451 at [94].

As to the witnesses, I generally accept the evidence Ann gave. While acknowledging her self-interest, she impressed me as an honest witness relaying her best recollection of events, including what the deceased and others said in her presence about events in question. The deceased's statements to her about laws changing and needing to put things into Marie’s name were inherently plausible and consistent with the objective evidence.

Ann answered questions in a direct and clear manner and made concessions when she did not recall matters. Her recollection was shown to be incorrect or limited on occasion, such as about the Commonwealth bank loan (which, to her credit, she accepted was in error) and the relief sought in the Buckingham property proceedings (see [55] below), but she otherwise displayed good recall of details, such as when asked about the deposits into her bank account. The matters raised in the Defendants’ submissions, such as the discrepancies about the value of shares and life insurance in the estate inventory affidavits and her evidence regarding the 2014 Centrelink report that recorded her as having a poor memory and concentration, are not matters that, to my mind, undermined the credibility or reliability of her evidence more generally. Nor did the fact that Ann had made no attempt to revoke or ask for a re-assessment in respect of tax returns that she disclaims any involvement in preparing.

Mr Loccisano is a person who had an interest in a footwear distribution business called X-Distribution Pty Ltd (X-Dist) and a company called Footwear Trading Company Pty Ltd (Footwear Trading). X-Dist went into administration in about late 2003, after which Mr Loccisano established Corell Holdings Pty Ltd (Corell). He was also involved in NMOS and OSCO. From about 2000, Mr Loccisano borrowed money from the deceased and Lionel which, after 2002, was repaid to DGP.

I treated Mr Loccisano’s evidence with some caution, noting that he has engaged in dishonest and fraudulent conduct in the past, for which he was convicted and signed a statutory declaration admitting to those things. That said, Mr Loccisano has no direct interest in the outcome of these proceedings and he was candid about his past. His evidence was, in large part, consistent with the documentary material and the evidence from others, such as about the cash loans made to him by the deceased and Lionel (starting at $30,000 and growing to $3 million) and what he was told by the deceased about being a target of authorities and needing to put everything in Marie’s name. I do not consider that his lack of response to the subpoena is significant to assessing the credibility or reliability of his evidence given the issues raised in the correspondence about that matter.

As for Marie and Lionel, I formed an unfavourable view of much of their evidence. I found each to be an unsatisfactory and unreliable witness in some key respects and found their evidence about the rationale for the new regime to be unsupported by any objective evidence and inherently unlikely. I concluded that, overall, I could not accept their evidence unless it was supported by other objective evidence or against the Defendants’ interest.

Marie’s credit was undermined, in my view, by her evidence that Ann and the deceased were not in a relationship after 1996, which was inconsistent with the DGP Trust Distributions she authorised to Ann (as the deceased’s spouse) after 2006 and the findings made in Lindsay J’s judgment. Her explanation in cross-examination that she became aware that the Trust Distributions to Ann were a mistake was fanciful in the context where she did raise that matter in her affidavit or, more relevantly, with Mr Aboud, her accountant at the time when she says she realised the mistake. Her explanation that she did not understand who the beneficiaries were undermined her evidence that she was in control of and managing DGP’s finances and business, as did her evidence that: she did not understand how the accountants moved money around the companies; she did not keep records of weekly cash payments on account of “wage splits”, with the result that she did not know money was paid to Ann on account of the distributions; and she left the deceased and Lionel to have discussions with creditors.

Marie’s affidavit evidence that, to her knowledge, the deceased was not being investigated by the NSW Crime Commission (Crime Commission) was implausible and likely false given that she accepted that the deceased (and Lionel) had told her that the deceased was being investigated, that she knew he was being examined at the instance of the Crime Commission and her evidence before Lindsay J, which referred to an investigation over a lengthy period of years. Her explanation for not accepting what the deceased told her because she had reviewed documents in these proceedings that did not refer to any investigation was dissembling.

Marie’s evidence that she invested in 4 to 5 property developments, was an experienced property developer, substantially funded Mircon’s development and was its largest creditor by May 2002 was unsupported by the objective evidence and also inconsistent with her evidence before Lindsay J that she was not a property developer, not involved with Mircon until 2022 and could not say what happened and had no knowledge of its developments prior to that time. There were also other aspects of her evidence in this case which were shown to be inconsistent with the evidence she had given previously, such as her denial in this case that the XX2 Pitt Town property was bought for the deceased’s occupation (which was also unsupported by the documents in evidence) and her description as the person in charge of decisions in relation to the new companies and assets given she referred to herself as “just a secretary”.

While accepting that memories fade, Marie’s inability to recall lending DGP $2.5 million in the 2013/2014 financial year, explain how she was in a position to do so based on her declared income and how Mircon came to be indebted to her for $600,000 as at 30 June 2012 (and how it increased by $85,000 the following year), raised doubts about the reliability of her evidence, noting that the Defendants final written submissions were critical of Ann for not recalling a loan for $150,000 in 2008, stating “A loan is a significant undertaking and about which the Court would expect a person to recall”. Marie also could not satisfactorily explain why her own lawyers’ letter sent on her instructions in 2014 to Ann’s lawyer asserted that the deceased was not an employee of any of her companies and no income was paid to him from those entities (contrary to the Defendants’ position in this case). Her disagreement with the description of Mr Lower’s 14 May letter as being about asset protection was also implausible, having regard to its title and terms (as set out at [136] below).

As for Lionel, he came across as evasive and argumentative at times, and trying to answer in terms that were favourable to his case, rather than as a generally frank and candid witness. His attempt to distance himself from the discussions with Mr Marianne in 2013 about life insurance and why he did not protest what he said were the deceased’s purported lies was unconvincing given he signed documents containing statements that referred to structuring his and the deceased’s affairs for ‘asset protection’, authorised Mr Marianne to implement recommendations in the 25 July 2013 letter and attempted to obtain insurance for DGP for $2.5 million. His rejection of a discussion about asset protection with Mr Lower in May 2002 and his description of Mr Lower’s 14 May letter as a standard advice containing suggestions was farfetched having regard to the letters’ terms, Mr Burrows’ evidence and Mr Burrows’ 1 July facsimile that was written on the basis of the asset protection strategy set out by Mr Lower.

I also found Lionel’s evidence that he did not tell his accountants about the loans from Marie for property development to be implausible in the context where they were preparing tax returns and financial statements for his and the deceased’s business (run by Mircon) and the repayment of debts to Marie was the underlying purpose (according to Lionel and Marie) of the transactions under the new regime. Likewise, Lionel’s oral evidence that Marie was going to forgive the debts allegedly owing to her sons sometime just around 14 May was new and inconsistent with his affidavit evidence, which was to the effect that the debts had to be repaid and that that was a primary reason for transferring Mircon and assets to Marie as part of the restructure, including Russell Island. His evidence that he received more in the way of remuneration than the deceased was also inconsistent with his evidence before Lindsay J that they received the same wages.

Mr Burrows is a chartered accountant who was at the firm Lower, Russell & Farr (LRF) in 1994–2012. He and Mr Steven Lower (a principal of LRF) were the accountants for the deceased and Lionel and their businesses from about 1994, and gave advice to them about structuring their affairs in 2002. Mr Burrows was supervised by Mr Lower until about 2006 and continued to provide tax and accounting services to the deceased, Lionel, Marie and the various Pamplin companies until 2012.

Mr Burrows impressed me as a witness who endeavoured to give evidence to the best of his recollection. Other than noting his lack of recall about matters, there were no issues raised about him. I generally accept his evidence unless contradicted by other objective evidence.

There are two other matters to note about the evidence.

The first is that the Defendants raise doubts about the credibility of the deceased’s statements to others, particularly to Ann, by reference to his character as reported in medical and expert reports in relation to a workplace injury claim and prosecution for drug offences, statements he made in an affidavit in other proceedings and in documents relating to the events in this case and the evidence given by Marie and Lionel.

There are statements made by the deceased in the documents that are either false or an exaggeration (such as asserting in 2008 that he had been involved in developing 250 homes and that his will and life insurance had been done in 2013). The picture painted by the evidence also suggests he may have been argumentative and boastful on occasion. That said, I do not accept that the court should not accept the truth of any of his statements unless corroborated and against interest based on the matters raised the Defendants. I have, however, had regard to them and closely scrutinised the evidence of what he said and where possible, looked for some corroboration, before making my findings: Plunkett v Bull (1915) 19 CLR 544; [1915] HCA 14; Chant v Curcuruto [2021] NSWSC 751 at [263]–[264].

The second matter relates to the documents, or lack of them.

Ann submits that the dispute with Marie about her de facto status has meant that she was deprived of access to material, including on the deceased’s computer, that other sources of records were not forthcoming, such as from the corporate defendants and advisors to the Pamplin family and discovery was significantly delayed and not fully complied with. The Defendants’ suggestion that Ann was not prevented from accessing material because, for example, she had access to his computer in the days after his death lacked merit in my view. This is particularly in light of the findings of Richmond J that a computer containing emails that fell within the scope of the Defendants’ discovery order had not been accessed and had subsequently been destroyed (apparently by lightning), with Ann being entitled to an explanation of the circumstances. In that context, I have had regard to the ability and inability of the parties, particularly Ann, to access documents and weighed the evidence according to the proof which it was in the power of one side to have produced, and in the power of the other to have contradicted: Blatch v Archer (1774) 1 Cowp 63 at 65; 98 ER 969 at 970.

The following facts are based on the affidavit, oral and documentary evidence. Unless otherwise indicated, I am satisfied of the following matters.

Ann (born in 1969) and the deceased commenced their relationship in 1987 and started living together, in around 1999, in a property located at Buckingham Street, Pitt Town (Buckingham St property). They continued in their de facto relationship until the deceased’s death in August 2013, at the age of 47.

From 1999, Ann was not in paid employment. She was financially dependent on the deceased until his death.

The Buckingham St property was owned by Ann, her father and her brother, Andrew. In 1996, the deceased bought Andrew's share of the property, but did not have that interest put into his name, telling Ann, at the time, “the mortgage will affect my borrowing power with the businesses”. In 2008, the deceased brought proceedings against Ann and her father seeking orders appointing a trustee for sale of the Buckingham property. The proceedings were settled on terms which acknowledged that Ann and her father held the property upon trust for themselves and the deceased as tenants in common. Ann later became the sole registered proprietor.

The deceased was in born in 1966. He left school in 1980 and did a fitting and machining apprenticeship.

The deceased was, from about 1989 and until his death, a member of the Nomads Motorcycle Club.

The deceased had a history of medical and mental health issues stemming from a motorcycle accident in 1987 on his way to work and trichlorethylene poisoning in 1991, which he sustained while he was working as a water proofer. The deceased ceased working as a water proofer following the poisoning. He received payouts in relation to the accidents and treatment for physical and psychological complaints from the accidents, which included severe headaches and migraines, back pain and tiredness.

Prior to 2002, the deceased and Lionel were involved in various business ventures together and with third parties (which are outlined below). The deceased also undertook some property developments on his own account, which are also described below.

Marie was born in 1946. She was married to Dennis Pamplin, the father of the deceased and Lionel, who died in 1996.

Marie, Dennis and their sons lived in the family home at Pellitt Lane, Dural (Pellitt Lane property), where Marie continues to live. Marie became the sole registered proprietor of the Pellitt Lane property following Dennis’ death.

Marie entered the work force in the 1980’s after Dennis suffered a work injury and started experiencing severe mental health issues. She worked at Fasco Electric Motors Australia from 1981 until April 2000, when she was made redundant and accepted a payout of around $50,000.

According to Lionel, in 1997, the deceased and Lionel gave Marie their share of Dennis’ estate, which comprised approximately $150,000 from the sale proceeds of a unit in Woy Woy that Dennis had owned. Ann says that the deceased told her that he and Lionel were going to put the money from Dennis’ estate “in the company” and did not mention giving the money to Marie.

Lionel was born in 1966. After school, he worked as a machine operator.

Lionel was, from the 1980’s, a member of the Nomads Motorcycle Club and continues to be a life member.

As already noted, Mr Burrows and Mr Lower commenced as accountants for the deceased and Lionel in about 1994.

Prior to 2002, Mr Burrows prepared financial statements and tax returns for the companies established by the deceased and Lionel, met with them to do their tax returns and was aware of the property developments they carried out. Mr Burrows was involved in the development and implementation of the 2002 strategy and his involvement with the Pamplin’s various businesses increased after 2002.

Mr Ron Winter (now deceased) was a partner of Reimer Winter & Williamson, a firm of solicitors. He acted as the solicitor for the deceased and Lionel from at least 1996 to at least 2013 and also for Marie after the deceased’s death.

Mr Vincent Aboud is a chartered accountant and principal of Vincent Aboud & Associates. He provided accounting and tax services to the Pamplins and the various companies from 2012. Mr Aboud prepared and lodged tax returns for the deceased and Ann. Ann gives evidence, which I accept, that she never gave Mr Aboud instructions to prepare her tax return, never signed any documents in his presence and never met him.

Mr Stephen Marianne is a financial planner at DIB Financial who dealt with the deceased and Lionel in 2013 to broker life insurance for them. He is the author of various business records that refer to an asset protection strategy employed by the deceased and Lionel.

It is common ground that prior to May 2002, the deceased and Lionel were involved in business ventures together, including property development and money lending. They established companies through which those activities were carried out and also undertook some of them with third parties and some on their own account. The following sets a summary of the ventures and describes the role played by Marie, as claimed by the Defendants.

On about 13 November 1989, A and L Pamplin Earthmoving and Contracting Pty Ltd (ALPEC) was incorporated (with the “A” and “L” standing for Adrian and Lionel), with the deceased and Lionel as the only directors and equal shareholders.

ALPEC was established to carry out earthmoving and excavation activities.

According to Lionel, the deceased agreed to establish the business on terms that provided for Lionel to purchase an earthmoving machine called a “Drott” for $110,000, the deceased providing his Hebersham property as security for a loan to buy the Drott from the Commonwealth Bank (CBA), Lionel hiring and operating the machine and the deceased and Lionel sharing the venture's net income equally.

Lionel says that in late January or early February 1990, their agreement to share ALPEC’s running costs, expenses and earnings terminated and between 1990 and 1996, he alone operated ALPEC’s earthmoving business and the deceased was not involved. Lionel also says that his solo operation of ALPEC generated sufficient funds to repay the CBA loan so that the deceased’s Hebersham property was no longer encumbered.

Lionel's evidence that he operated ALPEC alone for a period in the early 1990s has some support from statements made by the deceased to medical practitioners in 1994: see the report prepared by a Clinical Psychologist, Sam Borenstein, that records the deceased was a partner in an earthmoving business with his brother but gained no financial benefit and did not work within the company and a report prepared by Dr Florida that records that the deceased said he lost his ability to carry out the fledgling bulldozer business after developing an illness following exposure to toxic chemicals. However, according to an affidavit sworn by the deceased on 19 June 2008 in relation to the Buckingham property proceedings (2008 Affidavit) (Exhibit A), the deceased had established the earthmoving business with Lionel and had worked in it ever since. According to Lionel, it was also the deceased who signed the tax returns for ALPEC as a director between 1994 to 2000.

It is unclear on the evidence what work was carried out through ALPEC after late 1996 or 1997 (when Lionel says he sold the Drott) or what assets it owned as at 27 May 2002, when Marie was appointed sole director and company secretary of ALPEC.

In about 1989, the deceased and Lionel purchased land on Russell Island, Queensland (Russell Island Property) from Tony Taylor, the deceased’s employer at the time. According to Lionel, he and the deceased each paid $3,000 to Mr Taylor for the property. The deceased and Lionel remained the owners of the Russell Island Property until it was transferred to DGP on about 19 November 2007.

On 4 November 1992, ALT Property was established as a property development vehicle by the deceased, Lionel and John Browne, the founder of the Nomads Sydney Chapter (referred to by the Defendants as “Metho Tom”), each of whom was a director and shareholder. On 1 February 1994, Mr Browne resigned as director and gave up his shareholding. Thereafter, until May 2002, the deceased and Lionel were the only directors and each held 50% of the issued shares.

On 8 November 1996, ALT Property was appointed trustee of the Pamplin Discretionary Trust which was established by deed made that day. Mr Winter was the settlor and the deceased and Lionel were the specified beneficiaries.

ALT Property changed its name to Mircon on about 11 August 1997. The deceased told Ann that the derivation of Mircon’s name was “Nocrim”.

Between 1996 and 2002, the deceased and Lionel carried out the following property developments.

In July 1997, ALT Property purchased land at Linde Road, Glendenning for $205,000 (Glendenning property) for a subdivision development. The purchase price was funded by a loan of $200,000 from Lanreilly Pty Ltd, secured by mortgage over the Glendenning property. A further loan of $105,000 from Lanreilly for capital works was secured against Marie’s Pellitt Lane property. The deceased and Lionel, as directors of Mircon, gave personal guarantees to Lanreilly.

On 15 December 1997, the subdivision of the Glendenning property into four lots was registered (SP873219). The lots were sold by Mircon in 1998 and 1999 for a total of $346,000.

On 23 December 1997, Mircon acquired land at Paton Street, Woy Woy for a subdivision and development into three villas for $172,000 (Woy Woy property).

The purchase price was funded by a loan from St George Bank of $137,500 secured by a mortgage on the Woy Woy property. Lionel says that Marie paid the balance of the purchase price.

On 1 March 2000, the subdivision of the Woy Woy property that created three lots was registered (SP62103). Mircon sold the three lots between 20 April and 28 November 2000 for a total sale price of $710,950.

On 31 October 1997, Mircon acquired two properties on South Street, Umina Beach (South St properties) for a subdivision and development into six villas. The purchase price of $400,000 was funded by a loan from St George Bank of $159,900.

The South St properties were used as security for a construction facility that Mircon obtained on 21 April 1999 for $1,390,000 from St George Bank (St George loan), that was guaranteed by the deceased and Lionel as Mircon’s directors. Mircon’s St George loan was refinanced on 29 January 2001 by a loan from NAB in the amount of $1 million (NAB loan) that was secured by a mortgage over the South St properties, as well as a mortgage over the Woy Woy property.

On 19 October 2001, the subdivision of the South St properties that created six lots was registered (SP66658). The six lots were sold by Mircon between 24 December 2001 and 24 June 2002 for a total sale price of $1,722,500.

According to Marie, she provided the balance of the purchase price for the South St properties. Lionel says that the funds from the sale of South St properties project were insufficient to repay Marie the monies that she had advanced to him and the deceased.

On 6 June 1994, the deceased, Lionel and Mr Geoffrey Krahe purchased land at First Street, Kingsford (First St property) to subdivide and to build three town houses.

Development of the First St property stalled in 1995 due to the Crime Commission lodging a caveat against Lionel's interest in the property. According to Lionel, the freezing orders made also meant he could not access funds to contribute his share of the capital for First Street’s development. He says that this annoyed the deceased who refused to contribute his share, with the impasse only broken when Marie provided $70,000 to enable work to continue.

On 29 March 1996, the subdivision of the First St property that created two lots was registered (SP858160). One lot was sold in May 1996 for $101,500.

The other lot was developed for townhouses with a loan for $153,000 from St George Bank that was secured by a mortgage over the property and in respect of which the deceased and Lionel gave personal guarantees. The subdivision of that land (creating three lots) was registered on 18 December 1997 (SP56138). These three lots were sold between April and July 1998 for a total of $456,500.

On about 21 May 1997, Superior Property Developments Pty Ltd (SPD) was established by the deceased and Lionel as a vehicle to carry out property developments with Frank Marino and his wife, Maria Marino.

The deceased, Lionel and Mr and Mrs Marino were appointed directors and shareholders, with the brothers’ interests being equal. On or around 31 July 2001, the brothers’ shares in SPD were transferred to Mircon. The deceased, Lionel and Mr Marino remained the directors of SPD until it was deregistered on 15 December 2002.

On 24 November 1999, the deceased, Lionel and Mrs Marino acquired land for development at Ettalong Beach, Broken Bay for $315,000 (Broken Bay property). The Broken Bay property was used as security for a loan of $752,000 from Cardinal Financial Securities Ltd that was later assigned to LKM Capital Limited.

On 27 August 2001, the Broken Bay property was subdivided into three lots, (SP66273). In October and December 2001, one lot was transferred to each of the deceased, Lionel and Mrs Marino for $1.00 as the stated consideration. The transferred lots were subject to mortgages from NAB (LKM Capital's mortgage having been discharged) that secured loans of $265,000 in respect of each of the deceased and Lionel's lots and a loan of $500,000 in respect of Mrs Marino’s lot.

The deceased’s lot was sold for $420,000 on 6 August 2002, Lionel's lot was sold for $400,000 on 2 December 2002 and Mrs Marino's lot was sold for $590,000 on 22 August 2002.

Prior to 2002, the deceased undertook the following property developments on his own account:

On 18 July 1996, the deceased, Lionel and Marie purchased land in North Turramurra for $195,000 with a loan of $155,000 secured by a mortgage over the property and guarantees given by the deceased, Lionel and Mircon. It appears that this development did not progress and the property was sold on 28 September 1997 for $280,000.

On 10 April 1997, the deceased and Lionel each bought a block of land to develop in Glenmore Park. The land was bought in their own names.

The deceased’s land (at Magpie Close) was acquired for $77,000, subdivided into two lots (using a $150,000 loan from St George Bank secured by a mortgage) that were later sold in February 2000 and in May 2001 for $415,000.

Lionel's land (at Woodlands Drive) was acquired for $80,000 using (Lionel says) the Drott's proceeds of sale. The Crime Commission lodged a caveat on that property on 28 April 1997, which was withdrawn in March 1998. The land was subdivided into two lots (using a $152,600 loan from St George Bank secured by a mortgage), which were later sold in August and October 1999 for $370,000.

In the late 1990’s or 2000, the deceased and Lionel loaned money to Mr Loccisano to assist him with his clothing and footwear businesses, including X-Dist. The money was lent on the basis that each of the deceased and Lionel would put in half of the amount loaned and split the monies repaid and interest 50/50. The monies loaned to Mr Loccisano were paid in cash by Lionel and, prior to 2002, repaid in cash by Mr Loccisano.

There is a dispute as to how much was borrowed by Mr Loccisano and when. Lionel says the loans before the early 2000’s were never more than $40,000 and funds of $120,000 were sought later. Mr Loccisano says it was closer to $150,000 in 2000.

I am unable to say how much money the deceased and Lionel lent to Mr Loccisano before 2002. There were further dealings between the deceased, Lionel and Mr Loccisano and his companies, post 2002, which I describe below.

Lionel deposes that, as best as he can recall, Marie contributed $70,000 to the First St property, $90,000 to his legal fees in relation to the Crime Commission proceedings and $45,000 towards the deceased’s legal expenses. He gave evidence that Marie funded other developments but could not recall how much Marie advanced in relation to the First St property and also said that the Woodlands Road, Glenmore Park development was the only development in respect of which Marie advanced money (T576, T552).

Marie also gave evidence that following 1995 she contributed significant funds to Mircon for the First St property and Glendenning property and to the brothers for their legal expenses. Marie said that, to her knowledge, in the years prior to 2002, she was the biggest funder of Mircon’s developments and the deceased and Lionel did not make any contributions after 1995. Marie could not say how much money she gave the brothers for legal fees or the property developments, other than the amount of $50,000 (her retrenchment payment), which she says she paid to Mircon on 2 August 2000.

Ann deposes that the deceased never told her that Marie had contributed to his (or Lionel’s) legal fees or funded the property developments.

I cannot exclude the possibility that Marie assisted the brothers with their legal expenses. However, in the absence of any document or other objective evidence referring to that occurring, I am not satisfied that Marie lent Lionel $90,000 and the deceased $45,000 to pay for their legal fees between 1995 and 1997 or that they owed her money in relation to legal fees as at early 2002.

I also do not accept Marie's and Lionel's evidence that Marie was substantially funding Mircon’s property developments up to 2002, that she provided $70,000 for the First St property development and paid the balance of the purchase price for the Woy Woy property or that she was owed significant sums of money by the deceased and/or Lionel at the beginning of 2002.

Marie did put her Pellitt Lane property up as security for the $105,000 loan in respect of the Glendenning property development but there is no evidence to suggest that Marie discharged the mortgage from her own funds, rather than being paid from the sale proceeds of the property itself. As to Marie’s evidence that she paid her $50,000 retrenchment payout to Mircon, the bank statements in evidence indicate that $50,000 was paid out of her account the day after $50,000 had been paid into Mircon, making it difficult to conclude that the $50,000 payment into Mircon's account was from Marie.

In cross-examination, Marie was unable to identify the source of the funds which she allegedly made available for the property developments, the amount of her savings at the time or recall the amounts allegedly advanced by her (other than the $50,000). More significantly, there are no documents or other objective evidence referring to the payments by Marie or loans occurring to the brothers for property development (or legal fees). Nor is there any ongoing accounting for loans from her. The contemporaneous records indicate that the deceased and Lionel and their companies were able to obtain large loans to fund their activities, such as in relation to the Woy Woy and Broken Bay developments and none of them refer to Marie as a creditor of Mircon as at 2002 or that monies had been lent by her to the brothers for the property development purposes.

I am satisfied and find that from at least 2000, Marie assisted with bookkeeping for the deceased and Lionel and their companies. This finding is supported by Mr Burrows’ evidence, who says that he dealt with Marie from that time in connection with those matters. However, I find that prior to 2022, Marie did not have relevant experience or knowledge in relation to property development, other than as co-purchaser of the Turramurra property in 1996 which development did not proceed. I reject her evidence that she had been involved in 4 to 5 property developments by May 2002. It is not supported by the objective evidence and was inconsistent with the evidence she gave in the estate proceedings before Lindsay J.

I also find that other than doing some bookkeeping, Marie did not have any involvement or experience in any of the other businesses conducted by the deceased and Lionel, such as ALPEC's earthmoving business or lending money.

The deceased and Lionel were not unacquainted with the law enforcement authorities.

In the 1990s, the deceased was charged with and convicted of drug offences and spent some time in prison.

In August 1993, the deceased was arrested in connection with supplying a commercial quantity of a prohibited substance. In about 1994, he submitted to the “Seizure Department” of the police. In 1996, he was convicted of conspiracy to supply prohibited substances and sentenced to 12 months periodic detention, which he served.

In 1995, Lionel was investigated by the police and the NSW Crime Commission (Crime Commission) in connection with alleged drug trafficking and was arrested and charged in connection with supplying prohibited drugs. Those charges were subsequently withdrawn or dismissed.

In 1995, the Crime Commission commenced proceeds of crime proceedings against Lionel in the Supreme Court of NSW pursuant to the Drug Trafficking (Civil Proceedings) Act 1900 (now known as the Criminal Assets Recovery Act 1990 (NSW)). The Crime Commission obtained freezing orders against Lionel’s assets and lodged caveats on property that he owned, which included property that was jointly owned with the deceased in First Street, Kingswood.

On 22 March 1995, the deceased was ordered to attend the Supreme Court for an examination in relation to the joint affairs of him and Lionel and any joint property they held as part of the Crime Commission’s proceedings against Lionel.

On 5 March 1998, the Crime Commission discontinued the Supreme Court proceedings against Lionel.

In October 2002, the Proceeds of Crime Act 2002 (Cth) was enacted. The Bill to the Act was propounded in 2001.

At the hearing, the Defendants took issue with the proposition that the deceased was, in fact, investigated by the Crime Commission and submitted that it was implausible that the introduction of the Proceeds of Crime Act 2002 (Cth) was the motivating factor that led to concern about an investigation and confiscation of assets and the new way of doing things from May 2002. The Defendants’ final written submissions devoted 13 pages to these matters, including a “primer” on the proceeds of crime legislation. I do not accept the Defendants' submissions on this issue.

Irrespective of whether the deceased was, or was not, the target of the 1995 Crime Commission investigation and notwithstanding that legislation existed prior to the Proceeds of Crime Act 2002 (Cth) that enabled authorities to take action in respect of property held beneficially, I am satisfied that in the period before and up to 2002, the deceased considered he was a potential target for investigation by the Crime Commission, his assets were at risk as a result and he told other people of his concerns. I also consider it likely and find that Lionel thought and said the same, despite his evidence that in 2002 he had no reason to be concerned of any future action by the Crime Commission.

Ann gave evidence, which I accept, that the deceased told her he had been the subject of inquiries from the Crime Commission and she overheard him say to Lionel, on a number of occasions in the 1990’s, that “Once this is over we should look at putting everything in mum’s name so if we get arrested again they will have nothing to take from us.” Although Ann's recollection of when she was told this may have been inaccurate (she said in the late 1990’s), her evidence that the deceased told her after he was arrested that, “I’ve transferred everything of mine to mum. Fuck the Crime Commission they’re not getting this shit”, was entirely plausible given the facts set above and later in these reasons, together with evidence from the other witnesses.

Mr Burrows gave evidence that in the 1990s and throughout the two to three year period to the end of 2001, the deceased and/or Lionel told him that they had been investigated by the Commission, their assets had been frozen and they were very concerned about the resurgence of investigation by the Crime Commission, which concerns were ongoing at the time of the 13 May 2022 meeting described below.

As for Mr Loccisano, he may have been off with timing when he deposed that the deceased said to him in 2004 that new laws were being introduced to disrupt and dismantle motorcycle clubs and about a meeting at Belmonte’s when he first met Mr Burrows (Mr Loccisano and Lionel said it occurred in the early 2000’s; Mr Burrows said in 2006 or 2007), but his evidence that the deceased was scared that his and Lionel’s involvement with the Nomads made them subjects of investigation by the police, the Commission and other law enforcement authorities, they feared that their assets would be seized and they had instructed Mr Winter and Mr Burrows to put everything into Marie’s name was not, in my view, both “implausible and contradicted” (as the Defendants submit), having regard to the totality of the evidence.

Marie also accepted that the deceased told her that he had been the subject of inquiries by the Commission, had concerns about members of motorcycle clubs being targeted for investigation, including by the police, and he expressed those concerns for a number of years, both before and after 2002 (T388).

For these reasons and based on other evidence (to which I will come), I am satisfied that the risks referred to above and the desire to protect their existing and future assets was the motivating factor for the deceased and Lionel changing the way they did business together and why, together with Marie, they restructured their affairs from May 2002.

From mid-May 2002, the way in which the deceased and Lionel conducted their business affairs changed. They, together with Marie, obtained advice from Mr Lower, Mr Burrows and Mr Winter about those matters.

On 13 May 2002, the deceased and Lionel attended a meeting with Mr Lower and Mr Burrows at LWT’s offices.

Marie deposed that she was also present at the meeting. I do not accept Marie’s evidence and find she was not at the meeting. This is based on Mr Burrows’ evidence, who said that he could not recall Marie being at the meeting, but that Mr Lower was there (which was contrary to Marie’s and Lionel’s evidence that they could not recall Mr Lower being at the meeting), and the letter that Mr Lower sent the next day, which was not addressed to Marie.

On 14 May 2002, Mr Lower wrote a letter, addressed to the deceased and Lionel, copied to Mr Winter that said:

Mr Burrows gave evidence that he could not recall what was discussed at the meeting but he had no reason to doubt that Mr Lower’s letter accurately reflected what was discussed. He described the document as “Mr Lower's letter”, said that he was not surprised by the reference to asset protection (T661ff) and that he and Mr Lower had discussed asset protection with the deceased and Lionel from the late 1990's and early 2000’s.

Lionel could not recall discussing the matters referred to in the 14 May letter. He described the letter as a “standard advice”, that included suggestions that were not adhered to. Lionel was asked why “Asset Protection” strategies (as identified in the letter) had been discussed, he responded “you would have to ask Mr Burrows”, and then gave a discursive answer about the letter dealing with a couple of things that should have been in separate letters. Lionel’s evidence that there was no need for asset protection, he and the deceased were not concerned about that matter and the structures suggested by Mr Lower were not designed for that purpose was implausible in the context of that letter and the matters referred to above in relation to their history with law enforcement (particularly the Crime Commission proceedings) the timing of the introduction of the Proceeds of Crime Act and concerns they expressed about the risk of future investigation and seizure of assets and I reject it.

Mr Lower was not called by the Defendants. I accept Ann’s submission that the Court should draw an inference pursuant to Jones v Dunkel (1959) 101 CLR 298 that his evidence would not have assisted them. He was someone who could be expected to have given evidence about the genesis of the asset protection strategy and recall what was discussed at the 13 May meeting given he was the author of the letter.

The matters proposed in Mr Lower’s 14 July letter were not all adopted; for example, the deceased and Lionel did not remain directors and shareholders of Mircon. However, that letter and Mr Burrows’ evidence satisfies me that the deceased and Lionel discussed and agreed to change the way they did business at or shortly after the meeting on 13 July, they also discussed the proposals for changes with Marie and they agreed on a way forward as to how they were going to conduct their business affairs in the future which was for asset protection reasons, which they started implementing within 10 days.

Under the hearing “Current Position”, the letter refers to Unit 1 and Unit 2 at Broken Bay Road. These are the Broken Bay property lots owned by the deceased and Lionel which, as noted above, they sold later in 2002.

Shortly after the 14 May letter, steps were taken by the deceased and Lionel and Marie to implement the new asset protection regime.

On 16 May 2002, DGP was incorporated, with Marie appointed the sole director and shareholder on 21 May 2002.

On 24 May 2002, the DGP Trust (a discretionary trust) was established by a deed made that day (DGP Trust Deed). DGP was the trustee and Mr Lower was the settlor and appointor. (Lionel became appointor of the DGP Trust on 10 July 2017 when Mr Lower resigned form that role.) The DGP Trust Deed relevantly provides that:

On 27 May 2002, the deceased and Lionel resigned as directors of Mircon and ALPEC and Marie was appointed the sole director and secretary. On 17 July 2002, the shares in those companies were transferred to Marie to become the sole shareholder.

On 29 May 2022, Mircon sold the remaining South St property lot for $280,000. Marie signed the transfer as sole director, with the deceased witnessing her signature as “manager”.

On 1 July 2002, Mr Burrows sent a fax to the deceased and Lionel headed, “who does what”, which states:

The reference in Mr Lower’s 14 May letter to the Castle Hill project “Mum has already commenced” is to a property located in Ridgecrop Drive, Castle Hill (Castle Hill property), which was acquired in Marie’s name on 5 July 2002 for $562,000 for a subdivision development. Mircon was originally to be the owner and developer of the Castle Hill property, and only after May 2002 was Marie to become its registered proprietor (T368.50–T369.41). I infer this was the result of the new asset protection regime.

The Castle Hill property was secured by a mortgage in favour of NAB in respect of a loan facility to Mircon for $1 million which Mircon obtained in March 2002 that was guaranteed by the deceased and Lionel up to $975,000 and by Marie up to the amount of $575,000. The Castle Hill subdivision development was completed in 2003, and the two lots created were sold by Marie on 14 July 2003 and 7 January 2004 for $468,000 and $650,000 respectively.

Ann deposes that the deceased said to her on different occasions:

She also says that some weeks later, Lionel asked her, “Did Adrian tell you we put all our shit in mum's name?”. Lionel denies saying this.

The Defendants submit that what Ann was told by the deceased (and Lionel) was wrong as the deceased and Lionel did not transfer anything into Marie’s name and the trust did not make them owners per se. In my view, that submission is not to the point. The statements, while technically incorrect, were made by laymen and can be readily understood as applying to shares and directorships of Mircon and ALPEC and relating to the creation of a new entity, DGP, which was in Marie’s name and would carry out most of the future business activities. In any event, in my view, they are indicative of the deceased and Lionel both proceeding on the basis that they remained entitled to the assets despite Marie indirectly owning or controlling them via Mircon, ALPEC and, in respect of future assets, through DGP and the DGP Trust. Ann was not cross-examined on this evidence. I find her evidence credible given the other objective evidence and accept it.

It is common ground that post July 2002, a range of business activities, including property developments and investments, were undertaken through DGP or new companies and new trusts were also established. Marie also acquired the Pitt Town properties. The following sets a summary of those activities and describes the role of Marie.

DGP was involved in six property transactions between 2002 and 2011.

The first of these was a development in Port Stephens (Lemon Tree Passage development) that was undertaken with Coolrush Pty Ltd, a company part owned by Mr Loccisano.

DGP and Coolrush bought adjoining lots of land as tenants in common on 7 August 2002 for $373,000 that was funded by a loan of $299,000 from NAB secured by a mortgage over the property. The plan of subdivision was registered on 22 August 2003 creating eight lots (SP105566), which were sold in 2003 and 2004. Marie’s evidence does not disclose the sale price of the lots other than in respect of lot 8, which sold for $115,000 on 25 September 2003. The evidence does not refer to any involvement Marie had with the development and she gave evidence that she was unaware that Coolrush was part owned by Mr Loccisano, even though schedules she said she prepared (and sent to Mr Loccisano) in respect of loans made around that time referred to that company.

In mid-2003, DGP acquired land in Airlie Beach and built a two-unit residential apartment complex. Internal NAB documents refer to a land purchase price of $400,000, construction costs of $700,000, a loan of $690,000 granted in July 2004, construction completed in April 2005 and one unit sold (for an unspecified sum) in August 2005. Marie and Lionel gave limited evidence about this development and it is unclear what happened to the other unit. Ann’s evidence is that this development was undertaken by the deceased with a Mr Paul Rostirolla.

On 13 April 2006, DGP acquired two parcels of land in Windsor (Windsor property) for $595,000 with a loan of $1,054,000 secured by a mortgage over the property. Two townhouses were built at the rear of each parcel of land. The land was subdivided on 18 March 2008 into four lots (SP270579). DGP continues to own the Windsor property and the four lots are leased.

In October 2007, DGP acquired 6 hectares of land in Tamworth as a tenant in common with a third party company, Stiks Land Pty Ltd, for $110,000. Approval to subdivide was granted in around 2014. In 2019, Ann consented to the dedication of a road to the local council. DGP continues to own this land. Marie says that DGP does not derive income from its interest in the Tamworth land, it has funded its share of the capital works to undertake the subdivision but does not say how much funding was provided or when the subdivision is expected to be completed.

In February 2009, DGP acquired four vacant lots of land on Putty Road, Garland Valley for $300,000. The Garland Valley properties are subject to a mortgage to NAB as partial security for a total indebtedness of $4,190,000. DGP continues to own this land. According to Ann, the deceased told her that he had bought a couple of hundred acres along Putty Road so she could ride horses and he could ride his dirt bike. Marie describes the land as acquired for “land banking” and future development.

The last property acquired by DGP, which it continues to own, is land in Dural that was acquired on 5 September 2011 for $640,000 and funded by a loan of $512,000 from the Bank of Queensland. The Dural property is located next to Marie’s Pellitt Lane property. Marie says the plan is to build townhouses on the two lots. Ann describes the deceased telling her that he and Lionel had bought the property.

From about 2001, the deceased and Lionel had business dealings with Peter Hunt in relation to a seafood business in Tasmania, which was operated by Coastal Waters Seafood Pty Ltd (CWS) and CWS’s holding company, Fishinthenet Investments Pty Ltd (FITN).

In about 2005, DGP made a loan to CWS of $243,334 and acquired 40 shares in FITN. In November 2009, DGP acquired 50% of the shares in FITN. According to Marie’s evidence, in December 2012, FITN was sold to a third party and DGP received approximately $1,062,500 for its 50% shareholding and the loan was repaid. FITN was deregistered in 2015.

Ann says that the deceased told her that he and Lionel had lent money to the Hunt family. Marie gives evidence of a discussion with the deceased and Lionel about the seafood business in 2002 but she was otherwise not involved in any meetings or discussions about it.

In 2007, DGP made an investment in a landfill operation in Bulla, Victoria by acquiring a majority stake in the two companies that owned and operated the site, Bulla Quarry Developments P/L (Bulla) and BTQ Group P/L Ltd (BTQ).

The deceased and Lionel negotiated the purchase. Ann describes the deceased telling her that he and Lionel had just bought the site at Bulla and “we are the proud owners of a landfill facility”. An internal NAB memorandum refers to the Pamplin family’s ownership stake in the business.

Lionel played a greater role in managing the landfill business. He travelled there regularly. Marie was a director of both companies until 2013, when Lionel took on the role.

The landfill business investment was lucrative and provided cash income. According to the deceased's 2008 Affidavit, the business turned over about $75,000 –$80,000 per week. Ann says that she regularly witnessed Lionel bring cash from the landfill business and divide it between himself and the deceased. According to Lionel and Marie, Lionel brought the cash to Marie who then distributed it to herself, the deceased and Lionel and there was no split just between Lionel and the deceased.

DGP sold its stakes in Bulla and BTQ in 2017 for undisclosed sums.

Peak on Andrew was established on 14 March 2008 in relation to a potential mixed use development in Andrew Street, Adelaide (Andrew St property) by Mr Gregory Chin (an architect who had lodged a DA and was looking for a partner to invest) who was the sole director and shareholder. Peak on Andrew is the trustee of the Peak Unit Trust, which was established on 17 March 2008 by Mr Chin.

On 19 August 2008, Marie became the sole director and shareholder of Peak on Andrew, having been appointed a director on 1 August 2008.

On 4 September 2008, Peak on Andrew acquired the Andrew St property for $1,200,000, funded by a loan secured by a mortgage in favour of NAB. On 21 August 2008, the deceased, Lionel, Marie and Mircon provided personal guarantees to NAB for $840,000 for Peak on Andrew’s debts.

In 2008, the deceased told Ann that he had just bought a development site in Adelaide.

Development consent was granted on 7 August 2008 but the development did not eventuate.

On about 9 October 2018, Marie transferred her shares in Peak on Andrew to DGP. The units in the Peak Unit Trust were owned by Marie and now by DGP.

According to Marie, the Andrew Street property has been rented since 2008. .

In about 2013, the deceased identified a property to purchase in Broadwater, Glenorie. On 8 February 2013, Halcrows was incorporated as the vehicle to acquire the property, which it did on 22 April 2013 for $140,000. The settlement funds on purchase, of $130,567.11, were paid from DGP's NAB account. Halcrows continues to own the Glenorie property.

Marie is the sole director and shareholder of Halcrows, which is the trustee of the Halcrows Road Trust, a discretionary trust established on 1 February 213 by deed made that day. The deceased, Lionel and Marie are the specified beneficiaries of the Halcrows Road Trust. Marie says she was advised to purchase the property in a trust to minimise land tax and avoid a concentration of investments.

Mircorp was incorporated on 21 November 2013. Marie was appointed sole director and company secretary and DGP is the sole shareholder.

Mircorp was established to conduct overseas trade. There was no evidence of any trading activity by Mircorp at the hearing.

From 2002, Mr Loccisano continued to borrow money for the X-Dist business.

In late 2002, the deceased asked Mr Loccisano to transfer shares in X-Dist to secure payment of moneys that had been lent to him and directed that the shares be transferred to “Marie’s name”. The evidence is unclear, but it suggests that DGP may have received some shares in X-Dist around this time.

In late 2003, X-Dist went into administration. According to the Report as to Affairs dated 16 December 2003, X-Dist had unsecured creditors of $2,619,979, of which Marie was listed for $444,446. A Deed of Company Arrangement was later executed, which Marie signed as a creditor.

Mr Loccisano then established Corell Holdings Pty Ltd (Corell), which operated another footwear business.

Mr Loccisano continued to borrow money from the deceased and Lionel and his evidence refers to asking the deceased for a loan of $3 million, which the deceased agreed to and directed be repaid to DGP by electronic transfer. From November 2004, payments were made to DGP by Footwear Trading and Corell, with some payments made to Mircon in 2011. A schedule of electronic transfers attached to Ann's submissions (which was not disputed by the Defendants) identifies payments totalling $3,982,722.85 from Footwear Trading and Corell during the period 12 November 2004 to 6 May 2011.

On or around 31 January 2011, DPG became the sole shareholder of Corell. According to Mr Loccisano, the deceased asked him to transfer his shares in Corell to DGP. Ann says that at this time, the deceased said to her, “we are now the proud owners of a shoe importing business”.

On 13 July 2011, Corell was wound up in insolvency. The Report of Affairs of the company records that DGP had made loan advances to Corell in the amount of $5.6 million.

Lionel and Marie say that the money lent to Mr Loccisano’s businesses was from DGP and not from the deceased and Lionel, and Marie was involved in approving them. I consider it likely that many were cash loans lent to Mr Loccisano and his companies but not all money came from DPG and the loan were not all approved by Marie (DGP’s sole director and shareholder). This is based on a document Marie says she prepared, which refers to a loan of $90,000 in February 2002 (before DGP was established) and a loan of $125,000 on 2 July 2002 (before DGP’s bank account was established) and Marie’s evidence in cross-examination that she could not recall who made the loans (T484, T482).

On 2 March 2010, Mr Loccisano established a new company, OSCO (the ninth defendant), which also ran a shoe wear business.

According to Mr Loccisano, in about 2012, the deceased directed that OSCO take over the businesses of the Corell group of companies (which had by then been deregistered) and it became the lessee of factory units in Dural. Ann says that about this time, the deceased told her that “[OSCO] is a company that me and Lionel just opened”.

Money was lent to OSCO and it seems that funds were misappropriated by Mr Loccisano.

On 2 July 2013, Mr Loccisano made a statutory declaration (witnessed by Mr Winter) that he had incurred debts in OSCO’s name without authority, transferred Footwear Trading's debts to OSCO and forged documents intending that employees and creditors would believe that Footwear Trading had transferred its business to OSCO. OSCO’s 30 June 2014 financial statement records that OSCO owed the DGP Trust $3,374,373 in loans.

After the deceased’s death, of the 26 issued shares in OSCO, 20 were registered in DGP’s name and two each were registered in the names of the deceased, Lionel and Marie. Since 2 August 2019, Marie has been the sole director and company secretary of OSCO.

NMOS was acquired on 15 July 2010 to purchase a shoe manufacturing factory in China. NMOS owned 2 shares in OSCO before they were transferred to DGP. Marie is NMOS’s sole director and shareholder.

NMOS is the registered owner of a BMW motor car that the deceased drove before his death.

It is common ground that Lionel travelled to China and Vietnam in relation to the footwear business.

Marie is the registered proprietor of the Pitt Town properties, which were purchased on: 14 November 2005 for $1,000,000 (funded by a loan of $650,000 from NAB) (XX5 Pitt Town); 12 February 2007 for $775,000 (funded by a loan from NAB and used as security for a multi property facility) (XX2 Pitt Town); and 12 July 2010 for $1,060,000 (funded by a loan from NAB and secured by a mortgage for a $3,200,000 facility) (XX7 Pit Town).

Marie continues to own the Pitt Town properties.

Lionel and his de facto spouse, Jackie, lived in XX5 Pitt Town before Marie purchased it. Ann says that in about 2005, Lionel approached the deceased and asked if they could buy XX5 Pitt Town because it had development potential.

The deposit for XX5 Pitt Town of $100,000 appears to have been paid by DGP and Ann says that the deceased told her that he was responsible for obtaining the NAB loan (of $650,000). The NAB loan assessment states that: “the original plan was to purchase the property in the name of [DGP] as trust (sic: trustee) for the [DGP Trust] with Adrian and Lionel to improve the land, using their excavating expertise and to sell or develop… however, they have now decided on the advice of their accountant to purchase the property in Mrs Pamplin's own name and hold the block for up to 5 years…”.

Around the time XX5 Pitt Town was acquired, the deceased said to Ann, “You, me, Lionel, and Jackie are now the proud owners of 25 acres at Kenthurst”. She gives evidence that after it was bought, the deceased and Lionel renovated XX5 Pitt Town. Lionel continues to reside at XX5 Pitt Town.

As to XX2 Pitt Town, the deposit and stamp duty were paid from the DGP’s bank account with the balance of the purchase price coming from the NAB loan facility. On 26 November 2007, NAB recorded that “The group also owns an unencumbered property at XX2 Pitt Town Kenthurst. Construction of a new dwelling is presently underway on this property and is being funded by the members of the group”, with the key persons identified as the deceased and Lionel.

Around the time XX2 Pitt Town was acquired, the deceased said to Ann that he was buying the property for them to live in, it was on two titles so he could do a boundary adjustment and subdivide, eventually they would sell and “It’ll be half Lionel’s just like XX5 is half mine.” She also says that Lionel referred to XX2 and XX5 Pitt Town, as his and the deceased’s properties in a discussion in 2010. Lionel did not deny that discussion but says that he and the deceased never owned XX5 Pitt Town. Ann gives evidence that in relation to XX2 Pitt Town, there were utilities in her name that were paid for by the deceased or Mircon, renovations were undertaken by the deceased, she and the deceased used the property to run livestock and horses, and they also purchased furniture, white goods and other inclusions without Marie's involvement.

I am satisfied that XX2 Pitt Town and XX5 Pitt Town were intended to be for the use of the deceased and Lionel respectively. This is based on the above matters and the notations of ‘AP’ and ‘LP’ in Marie's 30 June 2007 balance sheet and the Pamplin Family Group Structure Chart (as at 28 June 2013), with ‘AP’ signifying the deceased (Adrian Pamplin) and ‘LP’ signifying Lionel Pamplin. While there is a reference to “rent” in those documents, there was no other objective evidence to suggest that Marie, as registered proprietor received rent from the deceased and Lionel for those properties.

According to Marie, as at 21 October 2021, XX2 Pitt Town was rented.

Like the others, the deposit for XX7 Pitt Town was paid from DGP’s account. Marie gave evidence that she paid the balance of the purchase price after the loan of $700,000 from NAB. I do not accept that evidence. There are no contemporaneous documents, such as bank statements, supporting Marie’s assertion. The NAB records referring to “the Clients” (who I infer is a reference to the deceased and Lionel) having also purchased XX7 Pitt Town “in the name of Marie”. Ann also gives evidence that around the time XX7 Pitt Town was purchased, the deceased told her that they had just “added a new property to the Pamplin dynasty” and “Me and Lionel are starting to accumulate some properties in Kenthurst”.

In 2007, the Russell Island property was sold and transferred by the deceased and Lionel to DGP.

On 11 September 2018, DGP sold the Russell Island property for $20,000.

Ann gives evidence that to her observation, the deceased continued to conduct himself in business as though nothing had changed after May 2002. She observed him, on an almost daily basis, talking business on the phone to Lionel and third parties, directing Marie to do things in relation to business affairs, and drafting and sending email instructions to Marie.

Marie gives evidence that Lionel and the deceased’s work on property developments and for the other businesses was part of their management role, which included sourcing new business ventures, for which they were paid fees (or a salary) as contractors for DGP or employees of Mircon. The Defendants also contend that the deceased failed to work productively for any substantial period for Mircon or otherwise, and the Court should find that he slept for 14 to 16 hours per day based on the medical issues he suffered. I reject that submission, do not make that finding and accept Ann's evidence at [209] above.

Ann's evidence is supported by: emails which record the deceased (and Lionel) giving instructions to Marie about business related affairs; Marie’s oral evidence, when she accepted that it was going to be “business as usual with the deceased and Lionel doing the normal things [they had done for the company but now she had the shares]” (T398.25-49, T399.34-44); and Lionel’s evidence in chief, that there was no practical difference in the way the deceased and he conducted themselves in their day-to-day activities and their dealings with Marie leading up to and following 2002 (Lionel at [153]).

While acknowledging that the deceased’s physical and mental health issues (such as migraines) may have impacted his ability to work on occasion and that he did not travel due to a fear of flying, overall, the evidence satisfies me that the deceased worked productively throughout the period from at least 1995 until his death. The evidence of the property and other business transactions set out above, which the deceased was involved in, together with contemporaneous records (see for example, the emails in Exhibits M and N) reveal that the deceased had an ongoing capacity to conduct complex business affairs, including expressing opinions about a range of town planning and other legal matters and was actively involved in the affairs of the various companies including according to Marie’s evidence, directing where DGP Trust distributions were to be paid, including to Ann. I place little weight on the medical reports relied on by the Defendants as they were prepared in the mid-1990s, predating the date of the alleged agreement by around seven years. There was no independent evidence that the health conditions reported on continued to afflict the deceased to the extent that he was unable to work productively, as the Defendants alleged.

In 2013, the deceased turned his mind to estate planning, including obtaining life insurance. Ann’s evidence suggests that this may have coincided with a time when the deceased's relationship with Lionel changed as she observed them arguing more.

Ann gives evidence of a conversation recounted to her in 2013 by the deceased between he and Lionel about splitting up the assets and going their separate ways. She says the deceased said to her, “I told them if you two don’t like it, we can split everything and you and mum can fuck off and fend for yourselves.” Ann also gives evidence that she heard the deceased talking to Lionel about business matters and said that “it’s my way or it's not happening”, and the deceased often said to her:

Lionel agreed that he and the deceased argued about business matters, the deceased told him to “fuck off” on occasion but could not recall the conversations deposed to by Ann.

During 2013, the deceased discussed his affairs with his advisors, including Mr Winter, with Ann and with Mr Marianne as part of brokering life insurance.

On 11 April 2013, Mr Winter sent an email to the deceased (to the Mircon email address that the deceased used) that attached an amended will (which is not in evidence) and sought instructions.

The next day, the deceased sent an email to Mr Winter, which states:

The following month, the deceased gave Ann a handwritten document with a diagram showing Marie at the top, the deceased and Lionel below and Ann and Jackie underneath them. Underneath the diagram, the documents states:

In May 2013, the deceased made enquiries about obtaining life insurance cover for around $5 million. On 16 May 2013, he sent an email to Ann, which states as follows:

On 21 June 2013, the deceased and Lionel met with Mr Marianne from DIB Financial at the Pellitt Lane property and they signed an authority for him to obtain insurance for them of $5,000,000 life cover and $3,000,000 TPD cover. Mr Marianne recorded information taken during the meeting in a document titled “Fact Find”, that both the deceased and Lionel signed, and which states:

The Fact Find form also records the deceased and Lionel as “Self-employed”, their occupation as “Management Consultants” to DGP and their main duties as “consulting to family business”.

On 24 June 2013, the deceased sent an email to Mr Matthew Read, which states:

Pausing here, by this time Mr Aboud was doing the accounting work for the Pamplin family. He was not called to give evidence.

I infer that the deceased’s reference to the will is the one he was preparing with Mr Winter. There are no documents, other than the email to Mr Read that refers to a testamentary trust being drawn up or advice about a complete restructure of finances at this time.

According to Ann, about one month before he died, the deceased said to her:

On 25 June 2013, Mr Marianne sent an email to AMP in relation to life insurance for the deceased and Lionel which states:

On 5 July 2013, Mr Marianne sent an email to Mr Chris Schreurs about the life insurance proposal which states:

On about 25 July 2013, Mr Marianne met with the deceased and Lionel and gave them a document entitled, “Financial Plan, Adrian, Pamplin & Lionel Pamplin”, which repeated much of what was in the Fact Find document. The deceased and Lionel both signed the Financial Plan, which notes (CB2F366):

According to an internal email Mr Marianne wrote in November 2016, Marie was also present at the 25 July 2013 meeting.

On 26 July 2013, Mr Marianne applied for life insurance with AIA on behalf of the deceased in the amount of $5,000,000. The application nominated Ann and Marie to be equal beneficiaries.

On 19 August 2013, Mr Marianne sent an email to AIA, which states:

On 22 August 2013, AIA offered to insure the deceased and issued a document, Special Acceptance Terms (SAT), that was subject to exclusions and premiums being 50 per cent above the quoted rates.

The deceased did not complete or sign the SAT before he died between 23 and 24 August 2013.

After the deceased’s death, Ann and Marie made competing applications for a grant of administration of the deceased's estate which were resolved in Ann’s favour by Lindsay J’s judgment.

Ann deposes that in 2006, the deceased received an insurance payout of $75,000 and told her he was putting it into Mircon, “to give us more borrowing power”. She also says that Lionel received a payout of $150,000 in 2010 and deposes to an argument between the deceased and Lionel about Lionel not using the money for the businesses.

Lionel says he was not aware of the deceased putting any money into Mircon after 1995 and the deceased did not transfer any part of his compensation payout to Mircon or DGP. Marie says that, to her knowledge, the amount the deceased received from his payout (after expenses and legal fees) was about $5,000-$6,000 and he did not put $75,000 into Mircon in 2006, this last statement being supported by the company bank statements for that year.

In the absence of documents referring to these payments to Mircon or other objective evidence, I am not satisfied that Ann has established that the deceased and Lionel paid those amounts or any part of their payouts to Mircon or DGP after 2002.

Mircon continued to trade after Marie acquired legal ownership and control of the company. According to Marie, Mircon engaged the deceased and Lionel as contractors and its principal income streams were earthmoving and distributions from DGP.

Mircon’s assets and liabilities as at 30 June 2012 and 2013 were:

DGP’s Trust financial statements for 2014 and 2013 record:

The deceased and Lionel provided numerous guarantees to the NAB after 2002. Other than the guarantee provided on 21 August 2008 in relation to the Peak on Andrew, they were all provided in support of the loan facilities advanced to DGP and Marie was a co-guarantor. The guarantees that the deceased and Lionel gave to NAB during the period 2003 to 2010 are as follows:

Marie (but not the deceased and Lionel) also provided personal guarantees to secure CWS’s loan facilities with NAB in 2004 and gave a guarantee to NAB on 10 March 2010 in relation to DGP loan facilities for up to $5,534,723.

The NAB records in evidence include credit memoranda in relation to the Pamplin family business.

A NAB short form credit memorandum dated 17 July 2008 states:

A NAB document, titled “Business Memorandum of Increase”, dated 3 May 2010 refers to similar matters to that in the 17 July Memorandum and also refers to Marie as “the group matriarch and controls most of the financing and the administrative facets for the group”, the “asset holder and director of the company entities”, and the person who earns rental income from the Pitt Town properties and trust distribution from the family trust, and to the deceased and Lionel as being paid contractor fees from the Mircon entity.

Another NAB document, “Credit Memorandum Personal”, created on or prior to 2010, states:

In the SFASC, Ann alleges that in about 2002, the deceased and Lionel on the one hand, and Marie on the other, entered into an oral agreement or understanding that continued until the deceased’s death or that they held a common assumption until that time. The agreement or understanding and what the common assumption provided are said to be in the same terms, which included that:

Ann pleads that the agreement or understanding or common assumption was oral (comprising conversations in about the early 2000s until mid-2002 between the deceased, Lionel and Marie, and occasionally accountants from Lower Russell & Farr and solicitors from Reimer Winter) and/or was partly express and partly implied from the facts and circumstances, referring to, amongst other things, the context of a possible Crime Commission investigation, advice that everything should be in Marie’s name and the establishment of trusts.

Ann asserts that the parties proceeded on the basis of the agreement or understanding and in reliance on the common assumption to the deceased’s detriment, which gave rise to:

Ann also made a claim to a trust in relation to the Pamplin Family Superannuation Fund which was not pressed at the hearing.

In their defences, Marie and Lionel deny the existence of the pleaded Agreement and common assumption and raise defences under s 23C and/or s 54A of the Conveyancing Act and under the Limitation Act. They also raise some different matters in defence to the Arrangement Claims, as follows.

Marie says that: she caused DGP to be incorporated and the shares to be issued to her; from 1992 to 2002, the deceased was unable to work productively due to ill-health; from 1995 onwards, Marie made greater capital contributions to the business that she, the deceased and Lionel conducted; in 2002, she, the deceased and Lionel agreed that she would take sole ownership of Mircon and would be retained by the DGP Trust to perform services, with Mircon retaining the deceased and Lionel as managers; Lionel and the deceased were employed despite the fact that the deceased could not work for substantial periods of time; and after 2002, Marie was Mircon’s sole director and responsible for accounts, bookkeeping and funding.

Lionel says that: from 1995 to 2002, Marie made greater contributions to businesses that he and the deceased conducted than they did; in early 2002, he, the deceased and Marie agreed that Marie would acquire all Mircon’s and ALPEC’s shares and Mircon would employ the deceased and Lionel and after May 2002, the deceased and Lionel were employed by Mircon to provide management services and were paid for them.

In their final written submissions, the Defendants submit that Ann had departed from her pleaded case that the agreement was oral and partly express and partly implied because, in closing submissions, Ann asked the Court to infer the existence of the agreement or understanding from conduct alone. They submit that Ann is not entitled to depart from her pleaded case, which requires some ‘oral agreement’ and about which there is no evidence.

Despite some pleading inadequacies in the SFASC, I am not persuaded by that submission.

First, the elements of, and motivation behind, the entering into of the alleged agreement or understanding are pleaded, as are the facts and circumstances which give rise to them, which includes conduct. In my view, it is not an improper departure from the pleading for Ann to establish, or seek to establish, an agreement or understanding by relying on conduct alone, even if that is less than all of the facts and circumstances Ann pleaded in support of the existence of that agreement, understanding or assumption.

Second, in my view, the basis on which Ann’s case was run, including all the conduct ultimately relied upon by Ann, was clear to the Defendants, who were able to and did seek to meet them at trial and in submissions.

Third, to the extent it is necessary to establish an oral agreement, I consider that it may readily be inferred that there were discussions if an agreement or common assumption arose from the conduct relied on.

Ann contends that the agreement, understanding or common assumption arose in mid-2002, when the deceased and Lionel determined to divest themselves of their assets and business undertakings by selling property that they and Mircon held and establishing everything in Marie's name as a form of asset protection regime, also described as a ‘warehousing’ arrangement.

She submits that the Court would find the agreement was made or the common assumption was held based on the conduct of the parties, the terms of the contemporaneous documents, referring in particular to Mr Lower’s 14 May 2002 letter and Mr Marianne's Fact Find in 2013, her own evidence and that of Mr Loccisano about what the deceased told them, and the evidence from Mr Burrows. She submits that the Court may also draw inferences from the evidence adduced (or not adduced) by the Defendants, referring to the practical difficulties she had confronted in obtaining information and the Defendants' failure to adduce evidence on matters critical to the determination of the principal issues in dispute.

Ann submits that the case theory propounded by the Defendants is implausible as it fails to acknowledge the desire for asset protection and the brothers' concern about a renewed investigation by the Crime Commission and, to the extent the theory suggests that Marie was substantially funding all developments, it is not supported by Marie's oral evidence, where she was unable to identify the source of her supposed funds or how much she had allegedly advanced.

Ann submits that the evidence also supports a finding that the arrangement and common understanding continued after 2002, referring to contemporaneous documents such as the NAB memoranda and the communications with Mr Marianne, Mr Burrows’ evidence that, in many respects, he acted upon the instructions of the deceased and Lionel, Marie's inability to say how the various funds, companies and assets in her name were managed post-2002, and the fact that the deceased and Lionel occupied properties and used possessions (such as their BMW cars) that were owned by Marie or companies she controlled as if they were their own.

Ann submits that the evidence necessary to establish the arrangement need not have the sort of precision required for a contract, the scope of the joint understanding can change over time and the Court could have regard to conduct occurring both prior to and subsequent to the making of the agreements: Makaritis v Makaritis (No 2) [2022] NSWSC 1690 at [164] (Parker J); Irwin v Pamplin [2021] NSWSC 208 at [37] (Parker J).

The Defendants submit that the evidence does not support the existence of an agreement or understanding or that the parties held the common assumption of the nature alleged.

They submit that the change in the way the deceased, Lionel and Marie operated from mid-2002 was the consequence of circumstances that were not related to asset protection. They explain the change by reference to a shared “predicament”, which was described in their closing written submissions as follows:

The Defendants submit that the salient points in the strategy put forward in Mr Lower's 14 July letter and the restructuring of the affairs from mid-2002 offered the deceased and Lionel two things, namely the prospect of employment with a regular income (noting that whether this was as employees or contractors is immaterial) and the chance to build significant long-term wealth for them and their families via distributions from the DGP Trust and the trust's accumulation of capital.

They submit that Mr Burrows’ fax of 1 July, which outlined the “new regime”, does not support Ann's alleged agreement or common assumption because it did not refer to a critical integer, namely that the deceased and Lionel were the real beneficial owners on a 50:50 basis.

The Defendants describe Ann's submissions in relation to the alleged agreement as “Kafkaesque” as they provide no detail as to precisely what the parties agreed to do, and say that the underlying premise of the agreement, understanding or common assumption that the deceased and Lionel were concerned about the Crime Commission and the risk to their assets, is unfounded and did not exist.

They also submit that the evidence does not establish the agreement or common assumption propounded or that the parties acted in accordance with it because: Ann and Mr Loccisano's subjective evidence (which they submit should be rejected) falls short of establishing those matters and is contradicted by the objective evidence (which they say shows that the deceased was familiar with using trusts and Marie was integral to and a key person in relation to the business arrangements post May 2022); Mr Burrows' evidence runs contrary to the suggestion that the deceased and Lionel ran the Pamplin businesses; Marie conducted her affairs in her name and in DGP Trust's name; at no time did the deceased or Lionel act inconsistently with the proposition that Marie and the DGP Trust owned assets, such as by claiming an entitlement to Marie's assets, or trust assets. They also submit that the disclosures made by the deceased to Ann in 2013 proves there was no arrangement or common understanding as they established he knew and understood what a trust was, that the DGP Trust terms did not operate to give him half of the trust assets to his estate when Marie died, he had no entitlement to Marie's assets when he died and he understood he owned nothing and wanted to leave what he owned (being the proceedings of the life insurance policy) to Ann and Marie. They also submit it shows that the deceased was a liar, as he told Ann that he had made a will (when he had not) and there is no evidence he was having a testamentary trust prepared.

Having considered the parties’ submissions and the totality of the evidence, I am satisfied and find that there was an understanding reached between the deceased and Lionel, on the one hand, and Marie on the other and that they held a common assumption from around May 2002, which they proceeded upon in the terms as asserted by Ann which arose expressly and from conduct and conversations between the deceased, Lionel and Marie. This is for two reasons.

First, I find the Defendants’ evidence and explanation as to why they say the new regime occurred to be implausible having regard to the objective evidence and the issues with Marie and Lionel's evidence, and I reject it.

Consistent with my findings, I reject the underlying factual premise of the Defendants’ contentions that the deceased and Lionel remained indebted to Marie and she was Mircon's largest unsecured creditor, the deceased had health issues that adversely impacted his capacity to work in any significant way, and the deceased and Lionel were not concerned about the Crime Commission and the risk to their assets.

As to the other matters raised by the Defendants as supporting their rationale, the evidence is unclear as to precisely what wealth the deceased and Lionel had obtained by mid-2002. There is evidence that the deceased lost money on shares and had borrowed money from Ann’s mother, Margaret Irwin, however, he must have had access to significant funds to buy $180,000 of shares. As to the loan from Margaret, she deposed that she loaned the deceased $70,000 in the early 1990s for three years and a further $65,000 in 2011, each of which was repaid. The deceased and Lionel were also able to lend significant sums of money (of around $40,000–$90,000) to Mr Loccisano prior to mid-2002 and they had properties they could sell (which they did in 2002). Those matters do not support a finding that their financial position was sufficiently dire or uncertain that they needed the security of income from companies legally owned by Marie to pay living expenses, rather than funding themselves as they had before through property developments and the businesses they legally owned and controlled.

There was also no certainty of better income or access to funding from the new regime, compared to the pre-May 2002 way of doing things. To the contrary, the objective evidence is that the deceased’s taxable income fell after the new regime was put in place in 2002. I consider it likely that the deceased (and Lionel) received cash payments in excess of the income that was declared but I am unable to say by how much and in respect of what years. As to funding, the objective evidence shows that the deceased, Lionel and their companies could and did obtain large loans from prudent financial institutions (such as NAB) and there was nothing to suggest that Marie had some source of money that would enable her to fund developments and invest in property, such as the Pitt Town properties, without borrowing money which, at least until 2010, the brothers had to provide personal guarantees for.

As to the contention that the new regime came about because setting up a trust was thought to be a “good idea”, in my view, that makes no sense in circumstances where the Pamplin Discretionary Trust already existed and could presumably have been varied to provide for Marie as a beneficiary, if thought appropriate.

Second, and more significantly, in my view, the existence of the asserted understanding or common assumption is supported by the objective evidence, particularly the contents of Mr Lower’s 14 July letter, Mr Burrows’ facsimile of 1 July, the NAB memoranda and Mr Marianne's Fact Find and other written communications. Overall, that evidence satisfies me, on the balance of probabilities, that:

As to this last point, as Ann submits, given the deceased and Lionel’s many years in business and their personalities (which came across as somewhat forceful from the documents), it is inherently unlikely that they simply decided to take a “backseat role”, become mere contractors, and hand the title and full control of their properties and future businesses to Marie. This is particularly as Marie had no real experience in property development or the brothers' other businesses and no prior experience as a director or company secretary of any corporation or as the controlling mind of a trust.

The brothers’ equal sharing of financial responsibilities, post May 2002, also supports the finding that it was the deceased and Lionel who conducted themselves as the proprietors of the business rather than contractors or employees, and that Marie was ostensibly, but not actually, the owner and in control of things. That continued sharing is manifested by: the deceased and Lionel giving personal guarantees in the same amounts and at the same time in relation to the NAB borrowings for DGP and Peak on Andrew; each applying for insurance in mid-2013 to cover their respective half-portions of the business indebtedness to NAB of $2.5 million each; and the contents of other contemporaneous documents, particularly the NAB memorandum and Mr Marianne's communications, which refer to the brothers as key players and decision makers and to Marie not being in a position to facilitate and manage the businesses to ensure they run profitably and being the legal owner for asset protection reasons.

I do not take much from Marie also giving guarantees or that the deceased and Lionel were no longer guarantors from 10 May 2010. Given Marie’s role as director and sole shareholder of DGP, the legal owner of the various assets (such as the Pitt Town properties), and that by 2010 the brothers had no assets in their names, it is not unexpected that NAB required guarantees from Marie and not the deceased and Lionel. To my mind, that matter is a consequence of the asset protection strategy employed rather than pointing to an absence of the understanding or common assumption itself.

Considered in the above context, Ann’s evidence of the statements made to her by the deceased, including in Lionel’s presence, her evidence of some of Lionel’s statements in her presence, and her evidence that she saw the deceased and Lionel divide and share cash derived from the landfill business, is credible and compelling, in my view. Those statements include: that everything was being transferred to “Mum’s name”; that “we’re going to set up a trust for the assets and make mum the trustee on paper but we’ll still be running the show… mum will own it on paper for peering eyes”; that they continued to “still own the shit”; the deceased telling Ann about new assets that “they” (Lionel and he) had acquired (such as the landfill facility, the Pitt Town properties, the Garland property and the Dural property); and the deceased saying to Lionel (in front of Ann) that he would “take his half” of “his money”. I accept Ann’s evidence that the deceased and Lionel made those statements and did divide the cash and I am persuaded that they are likely to reflect the truth of what occurred, namely there was an understanding or the holding of a common assumption by them (and Marie) as outlined above. The deceased’s statements not only corroborate the existence of the arrangement between, or common assumption held by, the deceased, Lionel and Marie, but also evidence its continued existence and the deceased’s reliance upon it and performance of its terms.

Further corroborative evidence of the existence of the understanding or common assumption is Ann’s testimony that Marie said, in about 2008, that she felt bad that the boys paid for everything, and Mr Loccisano's evidence that the deceased said to him in Lionel’s presence (which Lionel did not deny but could not recall), that any shares in a company for he (the deceased) and Lionel will be held by Marie and he put things into her name to protect it because of the Crime Commission.

As to Mr Burrows, he did give evidence that Marie was involved in business discussions with him, including about the assets of the DGP Trust, that she provided him with paperwork to prepare a Business Activity Statement and that he required her approval and instructions for matters. He also gave evidence that he did not act on instructions given by the deceased or Lionel and disagreed that they carried on any business together after 2002. While I do not doubt Mr Burrows’ evidence, it is not sufficient to displace the picture painted by the totality of the evidence, which is that the brothers were in charge and Marie’s role in the new regime was more akin to her previous role, of assisting with bookkeeping for the brothers’ businesses (albeit with more responsibilities due to her role as sole director of various companies), and that Marie relied on others for direction in relation to financial matters, including from the accountants and her sons. In my view, this was apparent from Marie’s evidence, for example, her evidence that she left the deceased and Lionel to discuss business matters with third parties and creditors and that Ann’s payments from DGP for a “wage-split” were at the direction of the deceased. Marie also did not understand the terms of the DGP Trust Deed, could not satisfactorily explain Ann’s distributions from the DGP trust (as recorded in the trustee resolutions but which she asserted she knew was a mistake) and referred to the wage split payments coming from DGP although the entity paying the deceased’s wages at that time was Mircon.

Consistent with Marie’s lesser role in the business, in cross-examination, Marie was also unable to recall how she came to lend monies to DGP, including her loan of $2.5 million in 2012 or identify, in approximate terms, the quantum of the unpaid distributions said to be owing to her by DGP, which was somewhat remarkable evidence given the sums involved.

As to the Defendants’ contentions regarding the deceased’s statements to Ann in 2013, I do not accept that his statement “all my shit is in order” is a dying declaration. Even if it were, it does not, in my view, militate against the existence of the arrangement having regard to the totality of the evidence. Further, the statement that the deceased made about the need for the other half of the proposed life insurance (of $2.5 million) tends to favour, rather than detract from, the existence of an arrangement as it indicates an understanding by the deceased and Lionel that they were each responsible for 50% of DGP’s debt.

I accept that the statements by the deceased in 2013 indicate that he knew what a trust was and could be read as suggesting that he did not expect his estate to receive an entitlement from Marie’s assets when he died and raises a question as to the existence of a particular aspect of the arrangement Ann relied on, namely that Marie would reconvey to the deceased and Lionel the assets and right on request by either of them or by their respective estates upon their death. However, as Ann’s senior counsel submitted, it is possible that the testamentary trust was intended to document the existence of the arrangement or perhaps deny it. Nevertheless, considered objectively, I am not persuaded that those statements are sufficient to outweigh the evidence that overwhelmingly points to an arrangement and a common understanding that they would create an asset protection regime that involved Marie having ownership and control on paper only and the deceased and Lionel maintaining a beneficial interest in the assets that they transferred and that were subsequently acquired on an equal basis.

For these reasons, I am satisfied and find that from about May 2002 and continuing until the deceased’s death, the deceased and Lionel on the one part and Marie on the other, entered into an understanding and proceeded on a common assumption in the terms outlined above.

I am also satisfied that the deceased, Lionel and Marie conducted themselves in accordance with the understanding and proceeded in reliance on the common assumption from May 2002 until the deceased’s death by doing the following:

I am satisfied that the deceased, Lionel and Marie acted and conducted themselves in accordance with the understanding and in reliance on an assumed state of affairs, namely that Marie would own and control the assets on paper with the deceased and Lionel the true equal owners, and that the actions undertaken by them and the business transactions undertaken would not have been in Marie’s name and legal control or ownership but for that understanding or assumed state of affairs.

Ann’s primary case, as advanced during closing submissions, is based on an express trust or common intention constructive trust.

Ann submits that it may be inferred that the relevant intention to create a trust existed in circumstances where the deceased was well-versed in placing assets in the name of others whilst manifestly preserving his own interest in them, and where he referred more than once to the nominal or “on paper position”. She submits that the Court can draw the inference that the family members also formed the intention to create the trust relationship, noting that under the new regime, the brothers intended to continue to control the existing assets and undertakings, which she says is evident from the fact that they were the named recipients of Mr Lower’s and Mr Burrows’ 2002 advices and were the parties who initiated the transfer of assets. She submits that it may be inferred that Marie also formed the intention to create a state of affairs which required the imposition of the trust obligation referring to, by way of example, to her acquiring XX5 Pitt Town, rather than DGP as trustee acquiring it and the source of the funds likely being from Mircon’s activities (as recorded in the NAB documentation).

As to the terms of the trust, Ann submits that the factual position is that the deceased and Lionel made equal contributions. She points to them being equal shareholders in Mircon, SPD and ALPEC, sharing in the benefits of property developments and equal amounts in relation to Mr Loccisano’s loans prior to the regime change in 2002, which continued after May 2002, with the sharing of cash from the landfill operation, the providing of guarantees and their respective partners securing the benefit of the same model BMW cars on the same day. She submits that such matters indicate a common intention that the deceased and Lionel would each beneficially own half of the trust assets.

She submits that the recognition of a trust involves no difficulty in relation to the assets directly owned by Marie or the defendant corporations associated with her and there is no reason why a trust cannot be declared over, for example, her shares in DGP.

The Defendants deny that the requisite common intention to establish an express trust exists.

The Defendants take issue with the factual matters relied on by Ann as the foundation for the express trust claims. They submit that there is no evidence that the deceased and Lionel made direct contributions to the acquisition of assets by Marie or the DGP Trust; as the brothers’ involvement was in “sponsoring” business and property opportunities; and Marie was the ultimate decision maker about whether assets would be acquired, how they would be purchased and what loans would be advanced and the wealth that was presumably generated was achieved because of Marie's prudent financial management.

They also submit that it was nonsense to say that the deceased and Lionel shared in the benefits of their property development, given the evidence of them undertaking separate developments before 2002 and the absence of evidence that they shared the profits and expenses from them, noting that the Broken Bay units were sold for a price difference of $20,000 and there is no evidence that this amount was shared.

They also say that the loans to Mr Loccisano from 2002 were advanced by Marie and DGP, Marie also gave guarantees and the cash from the landfill site was given to Marie, not shared between the deceased and Lionel.

They also submit that Ann’s contentions of an express trust would result in Marie being excluded as the beneficial owner of the property and a beneficiary of the DGP Trust, which would not be fair when she curated the assets, was a guarantor for DGP’s indebtedness and accepted liability for the NAB loans.

I reject that submission. This is for the reasons set out above and the fact that there is no evidence to suggest that Marie's “prudent financial management” or “business acumen” created wealth in this case or that she contributed much to the acquisition, development and improvement of the assets acquired by DGP, the other corporate entities or the Pitt Town properties that she acquired herself.

The Defendants also submit that the express trust for which Ann contends would “collide” with existing express trusts, namely the DGP Trust and the Halcrows Trust, arguing that the Deeds in relation to those trusts are incontrovertible, and that the deceased, Lionel and Marie have acted inconsistently with the existence of the understanding or common assumption because at no time did either of them act inconsistently with the proposition that Marie and the DGP Trust held the assets and the deceased and Lionel together had no entitlement to them.

The applicable legal principles were not in dispute.

Ann’s oral closing submissions referred to the principles set out by Murphy J in Rambaldi v Mullins (No 2) [2016] FCA 977 at [388]–[399]. In summary:

In this case, there is no trust instrument or clear statement of intent based on evidence of, say, a conversation between the three parties themselves. Thus, the question of whether there was an intention to create a trust must necessarily be resolved by resorting to other evidence, such as the conduct of the parties, from which intention to create a trust may be inferred. To impute an intention to create a trust, it is necessary to look at the nature of the transaction, any particular provisions of the agreement between the parties and the whole of the circumstances attending to the relationship: Walker v Corboy at 397 (Meagher JA).

In Korda v Australian Executor Trustees (SA) Ltd (2015) 255 CLR 62; [2015] HCA 6, French CJ stated (at [5]) that:

If the inference to be drawn is that the parties intended to create or protect an interest in a third party and the trust relationship is the appropriate means of creating or protecting that interest or of giving effect to the intention, then there is no reason why in a given case an intention to create a trust should not be inferred: Bahr v Nicolay [No 2] (1988) 164 CLR 604 at 618–619; [1988] HCA 16.

Applying these principles to this case, I have concluded that an inference is to be drawn from the parties’ conduct and statements that they intended that Marie would protect the interests of the deceased and Lionel in respect of the assets they were transferring to her and the future assets she would legally own and control in accordance with the understanding that I have found, that the trust relationship is the appropriate means of giving effect to that intention, and that and it may be inferred that the parties intended to create a trust in respect of those assets.

The starting point is that this is not an ordinary commercial transaction where it might be expected that the parties would use language that clearly articulates an intention to create a trust. Rather, it involves a private family situation where imprecision of thought and expression is to be expected. An informal declaration, such as using words like the money is “as much mine as yours” or a reference to property as “ours”, may be sufficient to give rise to or evidence an intention to create an express trust. Nor is it necessary that the creator of the trust is aware that it is a trust they are creating.

On the facts as I have found them, the very purpose of the arrangement, namely asset protection or ‘warehousing’, was to place existing and future business assets in the hands of Marie so that she, rather than the deceased and Lionel, would have legal custody and control of them on behalf of her sons. Marie was to receive, and did receive, assets that had been jointly held by the deceased and Lionel and was to acquire new assets via companies to be established or in her name directly but on the basis that the deceased and Lionel would not have “direct/legal ownership” and “all legal ownership would be held in Marie’s name for asset protection reasons”. In my view, the inference to be drawn from those circumstances is that it was intended by the parties that Marie would protect her sons interests in those assets and hold or apply them for their benefit.

The language used is also indicative of an intention to create a trust, in my view, given the references by the deceased to “making mum trustee on paper”, “still going to be 50/50 spilt” (referring to he and Lionel) and “everything is in mum’s name but we and Lionel still own the shit”, and Lionel saying that “we put all our shit in mum’s name”. Such language manifests a shared recognition by the deceased and Lionel that they were the true owners of the assets. In other words, they were the beneficial owners with Marie only legally in control.

As to the matters raised by the Defendants, the changes that occurred in May 2002 were to the deceased’s and Lionel’s businesses, not to Marie’s as she did not have a business at that time. The changes established a transfer of the deceased’s and Lionel’s jointly owned businesses and the establishment of a new entity, DGP, whose property and other business interests the deceased and Lionel undertook, just as they had in the past. There is no evidence that Marie provided prudent financial management or business acumen to DGP, Mircon or the other entities. To the contrary, the evidence suggests that she contributed little to the acquisition, development and improvements to the assets acquired by DGP, or to the management of DGP and the other entities. Having regard to her role compared to that of the deceased and Lionel, in my view, the descriptor of “warehousing” in not inapt in this case and supports an inference of an intention of create a trust. Marie was, in effect, storing the assets transferred to and later acquired, including the investments in other entities as a front for her sons.

I have already dealt with the issue of the guarantees and why Marie’s inclusion is not as significant as the Defendants suggest. For the reasons set out above, I do not accept the Defendants’ contentions that the deceased and Lionel were had not contributed equally in terms of what they had “transferred” to Marie or their activities post May 2002.

As to the submission regarding fairness in relation to Marie’s position, as Ann submits, it seems clear that Marie received some financial benefits from 2002 and there is no evidence to support the assertion that she “curated the acquisition of assets”.

I accept that DGP and the DGP Trust were established with the benefit of advice from accountants and solicitors and the decision to place assets in a trustee company was a conscious one as was, for example, the decision taken to acquire the Pitt Town properties in Marie’s name, rather than as assets of the DGP Trust. However, the position remains that the new structure was put in place and the assets that were sold and acquired by DGP and Marie were for the specific purpose of asset protection pursuant to the arrangement that I have found existed and continued to exist until the deceased’s death, and I consider that the parties intended for Marie to hold those assets and the profits derived from them for and on behalf of the deceased and Lionel as the legal but not the beneficial owner. It follows, in my view, that the express trusts extend beyond the shares in Mircon and ALPEC that were transferred to Marie (and the financial benefits derived from them) and extend to the shares and units in DGP and the other entities in which Marie holds or held interests, namely Halcrows, NMOS, OSCO, Peak on Andrew, X-Dist, Corel and the Peak Unit Trust, together with the financial benefits Marie derived from them, as well as to the Pitt Town properties that Marie acquired in her name.

In this case, there is certainty of object or beneficiary; the deceased and Lionel. There is also certainty in respect of subject matter; namely the shares and units that Marie holds or held in the entities referred to above (and the financial benefits derived from them) and the Pitt Town properties. For the reasons set out above, I am satisfied that there is certainty of intention to create an express trust.

As to quantum of interest, I accept Ann’s submission that 50% is appropriate in light in the equality of interests in the assets that were transferred to Marie and DGP and the joint approach to their activities since. As White JA said in Galati v Deans [2023] NSWCA 13 at [72] (Galati v Deans):

On the conclusion I have come to, other than in respect of her claims of express trust and/or estoppel in relation to DGP as trustee of the DGP Trust (which I deal with below) it is unnecessary to determine Ann’s alternative claims based on constructive and resulting trusts, estoppel and contract . However, as they were the subject of submissions and in case I am wrong, I have set out below my reasoning in relation to each of them, although in a more summary form.

In relation to a constructive trust, Ann contends that Marie holds a half interest in the shares in the corporate entities and the assets and financial benefits she derived from them, as well as the Pitt Town properties on a constructive trust. She referred to the principle articulated by Deane J in Muschinski v Dodds (1985) 160 CLR 583 at 613, namely, that a legal owner is not permitted to use their common law rights as owner to abuse or subvert the intention which underlay their acquisition and possession of those rights, although Ann’s case proceeded on the basis of a common intention constructive trust.

There was no dispute that the applicable legal principles relating to a common intention constructive trust were outlined by Griffiths JA in Koprivnjak v Koprivnjak [2023] NSWCA 2 at [24], approving a summary of the primary judge, Peden J, who in turn adopted a statement of the legal principles by Ward JA (as her Honour then was) in Bassett v Cameron [2021] NSWSC 207, as follows:

Ann relies on her submissions in relation to the express trust claim. She emphasises that the deceased and Lionel transferred their shares in Mircon and ALPEC to Marie for no consideration, giving rise to a presumption that she held the property on trust for the transfers, that they did not change this modus operandi after May 2002 and they dealt with each equally, contending that although their precise roles varied, in general they continued to work and operate in the same way as they had before until the deceased’s death. She says that the court can assume that the parties continued to operate on the basis of their common arrangement without material change until the deceased’s death.

She also submits that the deceased acted to his detriment in reliance on the common intention and that it would be unconscionable for Marie to refuse to reconvey the disputed properties and assets to the deceased. She submits that, again, the maxim that equity favours equality applies to determine the respective beneficial shares of the deceased and Lionel.

The Defendants submit that Ann’s claim must fail because the Court would not be persuaded that she had established, at any relevant time, a common intention as it was alleged.

I accept Ann’s submissions in relation to a common intention constructive trust.

I do not accept the Defendants’ submissions that Ann has failed to establish the common intention alleged. In this case, the common intention alleged is that Marie would hold her shares and units in the corporate and trust vehicles on behalf of and for the severable benefit of the deceased and Lionel so as to give effect to the arrangement between them. For the reasons set out above in relation to the existence of the understanding and common assumption and an express trust, I am satisfied that the parties held that common intention. As I have found, the effect of the arrangement and common understanding was that Marie was to hold the assets on paper as legal owner in name only and the beneficial interest would reside in the deceased and Lionel whilst ever the arrangement continued, which it did until the deceased’s death.

For the reasons set out above, I am also satisfied that the deceased and Lionel relied on the common intention. The common intention was, in my view, the contributing cause and reason why the deceased (and Lionel) transferred their shares in Mircon and ALPEC to Marie, agreed to the structure that provided for the asset protection regime and the business transactions and the acquisition of the Pitt Town properties that were undertaken by or through companies owned or controlled by Marie.

As to the detriment, as the principles above recognise, a less stringent test applies to the requirement of detriment once the common intention has been established. I am satisfied that there is detrimental reliance in this case.

I accept Ann’s submission that the deceased and Lionel acted to their detriment when they acted in accordance with the understanding and in reliance of the common assumption. Although I am not satisfied that they contributed the moneys they received from their compensation/insurance claims, the deceased and Lionel transferred their joint interest in the shares of three companies (Mircon, ALPEC and SPD) to Marie and the Russell Island property to DGP, which was not worthless as the Defendants’ submissions suggest.

In doing so, they lost access to the value of the assets held by Mircon at that time, namely the South St property lot and the future financial benefit of carrying out the Castle Hill property development which, as I have found, was going to be conducted not by Marie, but by Mircon until things changed in May 2002.

It is true that there is no evidence that ALPEC had any assets of its own and was winding down but I infer that was the consequence of the advice from Mr Lower and Mr Burrows, rather than the business being intrinsically worthless, noting that the principal income stream became earthmoving, presumably based on the business that had been run by ALPEC.

The Defendants submit that there was no detriment because the deceased continuously affirmed the arrangements and did not assert any interest in the assets of the DGP Trust or any other property. Those matters might be said to not plainly point to the deceased having conducted himself in reliance on the understanding or suffered a detriment. However, on one view it simply reflects that the deceased was comfortable with the arrangement at that time and had no need to assert a right to property at that time.

In any event, Ann’s evidence indicates that the deceased had asserted rights, at least vis-à-vis Lionel. As to the submission that the deceased did not comply with the agreement because he did not transfer his share of the Buckingham St property into the DGP Trust, the answer to that is that property was not part of the arrangement because it was not an existing business venture. In any event, that property was not in the deceased’s name but was held on trust for him.

Nor do I accept that it is speculative to suggest that were it not for the DGP Trust, the deceased and Lionel would have continued to undertake developments in their own right after 2002. The submission of modest returns on the development is not supported by evidence and ignores the fact that they continue to perform developments with financiers lending them money. Their contention that Marie was capable of and did inject capital is also not supported by the evidence. The added detriment is the lost opportunity of developing properties, running the businesses and making investments in their own name.

In these circumstances, and as equity favours equality, I am satisfied that it would be unconscionable if Marie was able to resile from the common intention as expressed and deny Ann’s claim, as the deceased’s administrator, to an interest in the venture assets such that a constructive trust would arise in respect of a 50% interest in the venture assets.

Ann’s closing submissions do not refer to her resulting trust claim and the Defendants’ closing submissions treated them as abandoned. In reply submissions, Ann confirmed that her resulting trust claim was pressed. The claim relates to Mircon and ALPEC only as Ann did not press the claim in relation to the Pitt Town properties during oral closing submissions (T799).

Ann relies on the same factual matters as supported its common intention constructive trust claim, save to note that Marie received the shares in Mircon and ALPEC as a volunteer.

In my view, the evidence establishes that the deceased (and Lionel) transferred his shares in Mircon and ALPEC to Marie for no value, such as to give rise to a resulting trust over those shares in the deceased’s favour. Where a person transfers personal property to a third party for no consideration, it will be presumed that the third party holds the property on (resulting) trust for the transferor: Galati v Deans at [51] (White JA).

Ann pleads three types of estoppel claims.

First, a proprietary estoppel in respect of the Pitt Town properties, where she claims that Marie is estopped from denying that half of those properties are beneficially owned by her. In light of my findings that the Pitt Town properties are subject to an express trust or a constructive trust in favour of Ann, and as this was presented as a further alternative, I have not dealt with this claim.

Second, she pleads an equitable estoppel against DGP, in its capacity as the trustee of the DGP Trust. She claims that in reliance on the common assumption (which is alleged to constitute a representation) and a further representation made at the time DGP became the trustee of the DGP Trust (comprising aspects of the common assumption referred to above), DGP became estopped from exercising its discretion to distribute trust income and capital (pursuant to the DGP Trust Deed) other than to cause the said income and capital to be distributed, ultimately, to the deceased and Lionel evenly, or as they may direct (DGP Trust Estoppel Claim).

Third, she pleads an estoppel claim that alleges that by reason of the deceased and Lionel acting on the assumption, Marie came to hold shares in Mircon, ALPEC, DGP, Peak on Andrew, NMOS, Halcrows, X-Dist and OSCO, units in the Peak Unit Trust and became the owner of the Pitt Town Properties, and that she and the companies are estopped from denying that Ann (on behalf of the deceased) holds a half interest in the “Further Venture Assets and Activities” (Venture Assets Estoppel Claim). She also claims that Marie (and the companies) are obliged to convey to Ann a half interest together with such profits and other financial benefits Marie and the companies have derived therefrom.

The applicable legal principles were set out in Ann and the Defendants’ submissions and were not in dispute.

Both parties referred to Gill v Garrett [2020] NSWSC 795 at [415]–[417], where Slattery J summarised the principles as follows:

Ann contends that, in the event the Court determines that there is no legally enforceable agreement or promise of the kind for which she contends, the expectation that has been created by the facts for which she contends is broadly that Marie would hold for the deceased and Lionel, severally and equally, their various interests in her name or in the name of the various corporations. She says that expectation was not withdrawn at any time by Marie.

She submits that Marie took steps to encourage the brothers to rely on the assumption that she would protect their assets generally (in accordance with the recommendations contained in Mr Lower’s 14 May letter and the regime in Mr Burrows’ 1 July fax) and says that the steps taken by the deceased, Lionel and Marie from May 2002 (broadly those steps outlined at [277], [288] and [289] above), encouraged the brothers to assume she would hold the assets for them, for asset protection reasons, and that she would hold them and future assets for their several but equal benefit. Ann contends that the assumption or expectation that they would share equally following May 2002 continued as they shared equally in business matters, such as in lending money, their business expenses and their financial liabilities under the guarantees.

Ann says that Marie knew that the brothers had relied upon the assumption or expectation, again referring, in broad terms to the matters relied on in support of an express and constructive trust and they acted to their detriment, referring to the matters I have outlined already when considering her constructive trust claim.

She submits that Marie’s denial of the deceased’s and Lionel’s interests in the properties and the assets held by Marie would clearly be detrimental to them and it would, in the circumstances, be unconscionable for Marie to be permitted to withdraw from the assumption or expectation.

The Defendants raised four matters in response to the estoppel claims.

First, they contend the estoppel fails because there is no assumption.

I do not accept that submission. For the reasons set out above in relation to the existence of the understanding and common intention, I am also satisfied that there was an assumption and the pleaded representations were made (which broadly align with aspects of the understanding/common assumption referred to earlier), including at around the time the DGP was appointed trustee of the DGP Trust.

Second, the Defendants submit that there was no reliance. They say that Marie took no steps to encourage the brothers to rely on the assumption, arguing that the assumption went beyond the contents of Mr Lower’s letter and it was not clear what expectations arose from the letter, in any event, and also relied on Lionel’s evidence as to the reason for the transaction, including funding by Marie. They also say that the DGP Trust does not reflect the assumption as it was a discretionary trust that nominated three specified beneficiaries.

I have already dealt with Lionel’s evidence about the loans and then Defendants’ contention for why the transactions took place and rejected it.

As to Mr Lower’s letter, what occurred did not conform with all of its contents and the assumption and representation pleaded do go beyond those matters (for example, it is pleaded that Marie or a company would acquire further venture assets). However, the importance of that letter is the unambiguous reference to asset protection, with the steps to be undertaken for that purpose as going to that process, consistent with the underlying premise on which the assumption was formed.

In any event, based on the findings set out above in relation to acting in accordance with the understanding and reliance on common intention, I am satisfied that the deceased and Lionel relied on the assumption.

As to the nature of the DGP Trust, I do not consider that this factor militates against reliance in the context where the establishment of DGP and the DGP Trust were a key plank of the asset protection regime and the de facto controllers of DGP and its legal owner were the ones who were the parties to the assumption.

Third, the Defendants say that the position in relation to the Pitt Town properties is problematic as there is no evidence that the brothers relied on any assumption in relation to these properties, which were purchased by Marie. Leaving to one side that I do not accept that contention, as set out above, I am not dealing with that claim given I have already found that the Pitt Town properties are subject to an express trust, or alternatively, a constructive trust.

Fourth, and in respect of the DGP Trust Estoppel Claim, they submit that an estoppel on the trustee is contrary to law as it breaches the principle that a trustee is not entitled to fetter the exercise of discretionary power. This issue also arises in relation to Ann’s express trust claim in relation to DGP as trustee for the DGP Trust, which I have not yet dealt with. I deal with both of these claims below.

That leaves the remaining estoppel claim, namely the Venture Assets Estoppel Claim, which, for the reasons that follow, I have not dealt with and reject. This is for the following reasons.

First, the Venture Assets Estoppel Claim overlaps with claims that I have already considered and determined in favour of Ann, namely the express trust and constructive trust claims in relation the shares and units held by Marie in Mircon, ALPEC, DGP, Halcrows, NMOS, Peak on Andrew, X-Dist, OSCO, the Peak Unit Trust and the Pitt Road properties.

Second, the estoppel pleaded purports to operate in respect of Marie and the “said companies”: SFASC at [71]. It is unclear which entities are the “said companies”. Assuming they are the eight companies referred to in [67] of the SFASC, I note that four of them (BTQ, Bulla, CWS and FI) are not parties to these proceedings and no relief is sought in relation to them. As to the remaining four companies, I have already considered and determined claims in favour of favour of Ann in relation to three of them, Mircon, DGP and Peak on Andrew, which leaves Mircorp, a company which was incorporated after the deceased’s death. Given there is no allegation that the understanding or common intention extended beyond the deceased’s death, and I make no finding to that effect, I reject the claim in relation to Mircorp.

Third, and in any event, in my view the pleading in the SFASC of the Venture Assets Estoppel Claim is inadequate, given how sparsely it is pleaded and the particulars it lacks. Amongst other things, it asserts that the “said companies” acquired properties pursuant to the Agreement without identifying what they were and also contends that the deceased’s knowledge was imputed to the said companies which, assuming it includes Mircorp, could not occur since the deceased died before Mircorp was incorporated.

Ann claims that an express trust arose over half of the DGP Trust assets (and the financial benefits derived therefrom), with DGP as trustee (not Marie) or alternatively, that DGP holds half of the assets (and financial benefits) on constructive trust for the deceased.

Ann claims that the express trust or constructive trust arose in the same way as her other trust claims, relying on the agreement and common assumption. She submits there is no reason why DGP as trustee is not also bound by the common intention to create a trust for the benefit of the deceased and Lionel as it was brought into existence as an integral part of the arrangement that was formulated in mid-2002, as part of the asset protection strategy. She submits that the Court can infer that DGP became bound by the principals’ agreement and, as a court of equity, can restrain DGP from exercising its discretion qua trustee in a way which would defeat that agreement if it were to distribute its assets inconsistently with the agreed 50-50 split.

As already noted, Ann also advances a claim against DGP of equitable estoppel, which I refer to as the DGP Trust Estoppel Claim. Like the restraint that Ann seeks in relation to her express trust claim, Ann claims that DGP became estopped from exercising its discretion to distribute trust income and capital (pursuant to the DGP Trust Deed) other than to cause the said income and capital to be distributed in accordance with their common assumption, in circumstances where the deceased relied on the common assumption (which is said to constitute the representations made) in agreeing to permit assets to be transferred to DGP as trustee of the DGP Trust (such as Russell Island in 2007) and DGP to acquire, retain and deal with assets, to carry on business and earn income therefrom. Ann claims that the deceased acted to his detriment as he would not have permitted DGP as trustee to take such steps other than in the belief that he would be entitled to take a half-share of the assets under its control, that DGP as trustee of the DGP Trust knew of those matters (including that the controllers of DGP were the deceased and Lionel and that DGP was their alter ego) and it would be unconscionable for DGP as trustee to resile from the common assumption/representation.

The Defendants deny these claims on a similar bases as their denial of the other claims, namely that, there was no arrangement or common assumption, no intention to create a trust and no detrimental reliance by the deceased. For the reasons set out above, I am not persuaded by those submissions. As I have said, I also do not consider that establishing the DGP Trust as a discretionary trust with the benefit of advice is as significant as it might be in other cases given DGP and the DGP Trust were established as key planks of the new asset protection regime. In my view, it may also be inferred that DGP actually knew of and was bound by the terms of the understanding or common assumption based on the knowledge of its director, Marie, and those who were in fact managing and controlling its operations, namely the deceased and Lionel, being imputed to it.

The key issue raised by these claims is whether the relief sought by Ann, seeking to restrain and/or limit the exercise of the powers of DGP, as trustee of the DGP Trust is available in the context where the DGP Trust is a discretionary trust.

The Defendants submit that Ann’s contentions breach the principle that a trustee is not entitled to fetter the exercise of a discretionary power (such as a power of distribution) in advance, citing Thacker v Key (1869) LR 8 Eq 408 and In Re Vestey’s Settlement [1951] Ch 209. They say that Ann’s claim that DGP’s powers as trustee should be circumscribed to prevent it from making distributions of income and capital other than equally to her and Lionel would involve a breach of the non-fettering principle and would thus be unenforceable, arguing that the Court “has no power to entertain such a claim”.

In her written submissions in reply, Ann noted that she “does not contend for the superimposition of a trust in respect of the assets of the separate trusts”. She submits that a court of equity may recognise the “resulting equitable interest by restraining DGP from exercising its discretion qua trustee in a way which would defeat that agreement”. She submits that the agreement or common assumption would be defeated if DGP was to distribute assets inconsistently with the agreed 50-50 split, and it would also be defeated if DGP distributed assets without the consent of the deceased or his successor. She says that a term can be readily implied to the effect that the deceased was entitled to call upon DGP to distribute the trust assets in accordance with the common intention, referring to the deceased’s statements, such as telling Ann, “I told them if you two don’t like it, we can split everything and you and mum can fuck off and fend for yourselves.”

Ann submits that such a restraint is consistent with the principles of equitable estoppel and that there is “no reason in principle why trust powers cannot be the subject of an estoppel”.

She also referred the court to two English cases, which she submits supports her position and the availability of the remedy.

The first is Catchpole v The Trustees of the Alitalia Airlines Pension Scheme [2010] EWHC 1809 (Ch) (Catchpole), a case concerning a pension scheme with a large membership. A member of the pension scheme was misinformed by the trustee that her long-term partner was a “spouse” under the scheme rules (despite not being married) and therefore would be entitled to death benefits in the event that the member died, which was incorrect. The member died and the partner was refused benefits on the basis that they did not meet the definition of “spouse” under the scheme rules. In proceedings brought against the trustee, the partner asserted that had the representation not been made, he and the member would have married. Warren J found that the trustee was estopped from retreating from the representation and referred to the issue of an estoppel applying to a trustee. At [47], his Lordship recorded:

The Court noted there had not been full argument on the impact to other beneficiaries in granting the surviving partner the relief sought: [53]. The Court also noted that had the representation not been made, the surviving partner and deceased member would have married thereby entitling the surviving partner to death benefits and the only thing standing between the surviving partner and the death benefits under the trust was the misrepresentation: [55] and [57].

The second case is Fielden v Christie-Miller & Ors [2015] EWHC 87 (Ch) (Fielden), which was an application to strike out a cross-claim involving the trustees of estates in adjoining real property. The trustees agreed to give a party (‘Sam’) a life interest in the assets of the trust (including a farmhouse, which had been occupied for some time by a Stephen and his family) and to give Stephen a tenancy in the farmhouse. Later, the trustees executed a deed to hold a separate estate (which included the farmhouse) for Sam absolutely. Stephen claimed among other things, that he had an absolute interest in the farm on the basis of a proprietary estoppel which the trustees sought to strike out because the imposition of an estoppel would fetter the discretion of a trustee in future. Sir William Blackburn said [39]:

These authorities do not stand for a general proposition that a trustee’s powers may be fettered by an estoppel. As observed by Judge Hacon, in English & Ors v Keats & Ors [2018] EWHC 673 (Ch) at [41] (English v Keats):

English v Keats concerned a series of trusts of shares held for the benefit of three children. An attempt was made to give each child an interest in possession under the respective trusts. Deeds of appointment were prepared, but defectively executed, and the error was not discovered until the death of one of the settlors, who was also a trustee. The children sought to remedy the defect, including by a claim in estoppel. Judge Hacon considered the issue of estoppel in relation to a trustee’s position and said:

The Defendants submit that the proposition advanced by Ann stands in contrast to the law as developed in Australia, where the position is that it is the duty of the trustee to follow the terms of the trust, which cannot be fettered and the English cases relied on by Ann are of little weight.

In J D Heydon and M J Leeming, Jacobs’ Law of Trusts in Australia (8th ed, 2016, LexisNexis), the learned authors referred to the trustee principle relied on by the Defendants, as follows (at [16-14]):

The Defendants also referred to Owies v JJE Nominees Pty Ltd (in its capacity atf Owies Family Trust) [2022] VSCA 142, a case in which the Victorian Court of Appeal considered the duty of a trustee of a discretionary trust, where the trust deed described the discretion of the trustee as “absolute and uncontrolled”. The Court did not accept the proposition that the trustee's powers could be fettered:

The Defendants submit that the fettering obligations of the trustee by reference to an estoppel would fall foul of this proposition. They contend that rather than exercising its continuing responsibility, Ann says that the Court should require the trustee to adopt a “universal rule” or “act under the dictates of another” under pretext of an estoppel, which the Defendants say would have the effect of prejudicing other discretionary objects of the trust (who are not joined to these proceedings, despite their interests being affected).

Reference was also made to Fitzwood Pty Ltd v Unique Goal Pty Ltd (in liq) [2001] FCA 1628; 188 ALR 566 at [121] (Fitzwood), where Finkelstein J said:

Ann submits that an estoppel of a trustee’s exercise of discretion falls outside the scope of this principle. She relies on the English decisions referred to above and the following statement in L Tucker, N Le Poidevin and J Brightwell, Lewin on Trusts (20th ed, 2020, Sweet & Maxwell) at [29-097];

In oral closing submissions, Ann also referred to Public Trustee v Smith [2008] NSWSC 397; 1 ASTLR 488, a case in which White J (as His Honour then was), considered an argument that a common law estoppel by convention bound the exercise of a power of appointment by a trustee (at [83]-[97]) and accepted that if an estoppel bound the original trustee, it would similarly bound any successors to that office: at [85]. Ultimately, his Honour concluded that no estoppel was made out but contemplated that, if the estoppel was established, it might be effective.

I accept the Defendants’ submission that the English cases relied on by Ann can be distinguished from the position we are dealing with here, particularly Catchpole and Fielden which concerned pension schemes. Catchpole was also determined without an appearance by the respondent and Fielden on a strike-out application.

The general principles to which I was referred also highlight the fundamental nature of a trustee’s duty to act in accordance with a trust deed and that an agreement to fetter the exercise of a discretionary power is likely to be unenforceable.

However, as I read the English cases and the observations of White J in Public Trustee v Smith, they do not say that equity by way of an estoppel cannot operate as a practical fetter or limit on a trustee. Rather, they emphasise that such occurrences will be rare and highlight the particular difficulties where, for example, the membership or group of beneficiaries who may be impacted by the estoppel is very large, such as in a pension scheme, and that the position of the discretionary objects needs to be considered.

This case does not involve a pension scheme and the pool of beneficiaries is small. More significantly, the Specified Beneficiaries of the DGP Trust are all parties to the arrangement and held the common assumption prior to the creation of the DGP trust on the facts that I have found. Also, unlike the cases to which I was referred, I am satisfied that the trustee in this case, namely DGP, actually knew of and was bound by the terms of the understanding or common assumption which was formed as part of a regime that involved a warehousing arrangement through and with the knowledge of that trustee.

It seems to me that it would be a perverse outcome if parties to an arrangement which, in the circumstances of this case, give rise to an express or constructive trust in respect of half of the shares in the trustee company is unable to obtain relief to ensure that the trustee does not otherwise deal with its assets in a manner that may defeat the operation of such a trust. This is particularly where Ann does not contend for the superimposition of a trust in relation to the assets of the separate trusts and it is unclear what, if any, impact the estoppel alleged would have on the non-Specified Beneficiaries.

In my view, Ann, as the deceased’s administrator, should be able to rely on the arrangement and the common understanding that was held, as a representation as to a state of affairs that the business would be run in a particular way, which included the incorporation of DGP and the DGP Trust, as giving rise to an estoppel preventing DGP from dealing with the income and capital of the DGP Trust other than in a manner than is consistent with the terms of the arrangement. Even if this would impact other Non-Specified beneficiaries (about which little was said), that does not in my view, warrant departure from concluding that it would be unconscionable for Marie, Lionel and DGP to deny what is claimed. Ann is not asking the court to impose a universal rule on the trustee; but is seeking to mould relief to suit the issue in this case. The Court, in giving effect to her claim, is applying the “cardinal principle of equity that the remedy must be fashioned to fit the nature of the case and the particular facts”: Warman International Ltd v Dwyer (1995) 182 CLR 544 at 559; [1995] HCA 18.

Accordingly, and for these reasons, I am satisfied that it is appropriate to grant relief in this case of the nature sought by Ann in relation to DGP in its capacity as the trustee of the DGP Trust. The effect of this will not be to compel DGP to exercise its power in a particular way in the future but to disable it from doing in respect of 50% of its assets.

Ann claims that the agreement or understanding gave rise to a contract which included an implied term that Marie, Mircon, DGP, Halcrows, NMOS, Peak on Andrew, Mircorp and OSCO (and BTQ, Bulla, FI and CWS, who are not parties to these proceedings) would convey to the deceased and Lionel, severally, the “Further Venture Assets and Activities” on the request of the deceased or at the time of his passing, whichever was the first to occur, which Marie and Lionel have breached.

The Defendants deny the existence of a contract or that it has been breached.

The principles relating to the formation of an oral contract were summarised by Sackar J in King v Adams [2016] NSWSC 1798 at [65]–[69] and are well known. They recognise that a contract may be inferred from the acts and conduct of parties as well as or in the absence of their words, with the question in that class of case being whether the conduct of the parties, viewed in the light of the surrounding circumstances, shows a tacit understanding or agreement. In such a case, the conduct of the parties must be capable of proving all the essential elements of an express contract.

In order for a contract to arise, the parties must intend to create legal relations. Whether the parties intended to do so requires an objective assessment of the state of affairs between them: Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95; [2002] HCA 8 at [24].

In this case, I do not consider that the terms of the understanding or the common assumption are too uncertain to be a contract or that there is an absence of consideration on the part of Marie (as the Defendants contend). However, I am not persuaded that the parties intended to the arrangement to give rise to legal obligations in the nature of a contract. Considered objectively, the family relationships, the history of the deceased’s and Lionel’s business dealings which were built on some level of trust, the relatively informal nature of the new regime post-May 2002 and the asset protection purpose, satisfy me that the parties are unlikely to have intended to create legal relations, such as to give rise to a legally binding contract.

Accordingly, Ann's claim based on contract fails.

The Defendants invoke s 23C and/or s 54A of the Conveyancing Act as a substantive defence to Ann's claims based on an express trust and contract. In their final written submissions, they submitted that Ann’s claim asks the Court to ignore the statute, which it would not do.

In response to the Defendants reliance on 23C of the Conveyancing Act (which Ann accepts applies), Ann submits that the arrangement pursuant to which the trust was created was partly performed by the deceased and Lionel, such that it does not preclude the trust, referring to the law of part performance in JD Heydon, MJ Leeming and PG Turner, Meagher, Gummow & Lehane’s Equity Doctrines & Remedies (5th ed, 2015, LexisNexis) at [20-185].

Ann also says that it would be unconscionable for the Defendants to rely upon ss 23C or 54A of the Conveyancing Act to deny or defeat her asserted interest, in the knowledge of the agreement and continuation of the assumption and the deceased’s reliance on the assumption.

The doctrine of part performance has generally been applied in the context of the enforcement of contracts: Heydon, Leeming and Turner, Meagher, Gummow & Lehane’s Equity Doctrines & Remedies at [20-180].

The question of whether equity applies part performance to the creation of an oral express trust was considered by Robb J in Meshumar v Otmy (2018) 97 NSWLR 615; [2018] NSWSC 125. His Honour concluded that part performance could apply in such circumstances, notwithstanding the absence of any contract to be performed, referring to the comments of Bryson JA in Khoury v Khouri (2006) 66 NSWLR 241; [2006] NSWCA 184 at [90]. His Honour stated at [427] and [443] as follows:

In my view, Robb J’s analysis is convincing. It is difficult to see why, in a case where an express trust over assets may fail for want of writing and there are acts capable of being partly performed (such as here, resigning directorships and transferring shares and land), the doctrine of part performance should not apply.

Absent any contention by the Defendants that part performance could not, in principle, apply to cases of this kind, I consider, consistently with Robb J’s analysis, that the principle can apply to the situation in this case, namely a declaration of an express trust not in writing to the express trust pleaded here.

I have also concluded that part performance has been established in this case. The various actions of the deceased and Lionel, in particular transferring the shares in Mircon and ALPEC and the Russell Island property to Marie for no value, together with resigning their directorships and arranging for the establishment of DGP and the DGP Trust, were acts clearly referable to the arrangement or common assumption that I have found existed. The deceased and Lionel continued to perform by working together under the new structure in the same manner they had prior to mid-2002 including by providing personal guarantees to NAB in connection with the property developments and making improvements to the Pitt Town properties.

It follows that I consider that the non-compliance with the statutory requirements that an express trust in relation to land be evidenced in writing has been overcome in this case as there have been sufficient acts of part performance.

In any event, if I am wrong about that, for the same reasons outlined earlier in respect of the constructive trust claim, I am satisfised that it would be unconscionable for the Defendants to rely upon the statute to deny or defeat the interest assets. Further, based on my conclusion that a constructive trust arises, the issue of the want of writing and effect of the statute do not arise.

For these reasons, the Defendants’ Conveyancing Act defence fails.

The Defendants also plead that the Arrangement Claims are statute barred.

They submit that any cause of action to recover land commenced in 2002, the limitation period expired in 2014 (referring to the Limitation Act, ss 26, 27 and 65), and as the proceedings were commenced in 2018, Ann’s claims against land are statute-barred. Section 27 of the Limitation Act provides that an action on a cause of action to recover land is not maintainable if brought after the expiration of a limitation period of 12 years running from the date on which the cause of action first accrues to the plaintiff or to a person through whom the plaintiff claims.

Section 65 of the Limitation Act provides that rights to recover land, or to enforce an equitable estate or interest in land after the expiration of the limitation period, are extinguished.

Ann submits that the Limitation Act does not apply as it does not extend to any purely equitable claim not the subject of the Limitation Act and, in any event, the Defendants’ submissions do not acknowledge the operation of s 38 of the Limitation Act which operates to postpone the limitation period provided the land is not in adverse possession and there is no suggestion on the evidence that this was the case.

I accept Ann’s submission that the limitation defence raised by the Defendants does not apply in this case. This is for three reasons.

First, the limitation defence only applies to claims to recover land or an equitable interest in land and, as such, does not apply to Ann’s express trust claim in respect of, for example, the shares in DGP or Mircon.

Second, the limitation defence does not preclude a claim founded on an estoppel, as a purely equitable claim: Bryant v Bryant (2014) 17 BPR 33,511; [2014] NSWSC 374 at [27].

Third, the pleaded defences assume that time runs from the creation of the trust in 2002. As Ann submits, this is not supported by authority or s 38 of the Limitation Act.

The cause of action accrues once the defendant acts inconsistently with the trust, such that it would be unconscionable for one party to retain the other’s contributions: Payne v Rowe (2012) 16 BPR 30,869; [2012] NSWSC 685 at [99]. Further, and in relation to the cause of action under s 38 of the Limitation Act, this only begins from when the plaintiff seeking to recover the land first discovers or may with reasonable diligence have discovered the facts giving rise to the cause of action: Scott (Trustee), in the matter of Stolyar (Bankrupt) v Stolyar [2022] FCA 691 at [575].

In this case, the 12 year limitation period did not commence in 2002 because there is no evidence that Marie acted inconsistently with the trust until after the deceased’s death and she has never “occupied” the trust property (namely the Pitt Town properties) without the deceased or Lionel’s consent or otherwise in a manner adverse to them.

Since it was established, DGP, as trustee of the DGP Trust, made determinations that distributions of income be made to beneficiaries, which included Marie, Ann, Chantelle Pamplin (Lionel’s daughter) and Mircon. The distributions are referred to in resolutions recorded in the DGP Minutes of Meetings and in the financial statements of the DGP Trust.

It is common ground that between 2006 and 2012, DGP determined that distributions of income be made to Ann totalling $451,000.00 (Trust Distributions), as follows:

Ann says that despite the determinations, no part of the Trust Distributions have been paid to her or applied for her maintenance, education, benefit or advancement of life.

In the SFASC, Ann advances a claim in her as a right (and not as administrator of the deceased’s estate) for payment of those monies from DGP. She says that upon making the determinations, each of the Trust Distribution amounts immediately and absolutely vested to her benefit and, in breach of trust, DGP failed or omitted to pay any part of them despite demand being made on 13 April 2018. She seeks an order that the amount of $451,000 plus interest to be paid to her or alternatively, relief on the basis of monies had and received.

Although Marie’s defence denies that Ann was ever a beneficiary within the meaning of “General Beneficiary” (as that term is defined in the DGP Trust Deed), in the Defendants’ final written submissions, they did not dispute that Ann was a “General Beneficiary” for the purposes of this proceedings and her claim.

However, the Defendants deny that Ann is entitled to payment of the Trust Distributions and say that the claim should be dismissed for three reasons.

First, the Defendants say that the Trust Distributions were in fact paid.

Second, they say that: the Trust Distributions were made to Ann with the knowledge of the deceased, without protest; the deceased thereby encouraged an assumption on the part of DGP that the Trust was valid and effective; DGP acted on the basis of that assumption to its detriment by continuing to make distributions to Ann and others and by conducting the business on the basis that it was entitled to do so in accordance with the terms of the DGP Trust Deed.

Third, they contend that Marie has applied her energies and resources and conducted the affairs of the companies (including the third to ninth defendants), on the assumption that the DGP Trust was a valid and subsisting trust and, in the circumstances, the deceased is estopped from denying it is valid and effective and from asserting the claims made (including the Arrangement Claims).

They contend that by pleading an entitlement to be paid Trust Distributions and suing DGP for payment, Ann has made an election to pursue rights which is inconsistent with the Arrangement Claims by which she seeks to impeach the DGP Trust Deed.

The factual issue raised by this claim is whether the Trust Distributions were, in fact, paid to Ann, to someone else or not at all.

Ann’s position on this is straightforward. She says the Court would not be satisfied that the Trust Distributions have been paid to her, noting that DGP contends they were paid in cash and the lack of records from DGP. She also says that the Court would reject Marie’s defences.

The Defendants ask the Court to find that the Trust Distributions were, in fact, paid to Ann based on the following matters which are, I accept, established on the evidence:

The Trust Distributions made to Ann are referred to in Ann’s tax returns for the financial years ending 30 June 2006 to 30 June 2012. It also appears that tax was paid on the Trust Distributions.

Ann gave evidence that it was not until the proceedings before Lindsay J that she had seen all other tax returns and became aware they contained statements about income she had received. She says that the only tax return she was aware of (but had not seen) was in relation to the 2012 financial year, when the deceased handed her a refund cheque drawn by the ATO made payable to her (which had a post-it note on it setting out the banking details of Mircon) and told her that she was drawing “wages from the company”. Ann says that until then, she was not aware that she was being paid on paper by one of the Pamplin companies and also says that did not retain the ATO funds as she banked the cheque into Mircon’s account as directed by the deceased.

Ann’s tax returns for the financial years 2006 to 2011 were prepared by Mr Burrows and include Marie’s address on them. The tax return for the financial year 2012 shows Ann’s address, with Mr Aboud’s address for service. None of them are signed by Ann.

Mr Burrows says that he prepared Ann’s tax returns following meetings with the deceased, Lionel and Marie before the end of each financial year and he met her on one or two occasions prior to 2012. Ann’s evidence, which I accept, is that she has never met Mr Aboud. I also accept her evidence that she did not provide instructions in relation to the tax returns and did not know that they recorded the amounts of Trust Distribution made to her or that she was the intended recipient of the Trust Distributions during those years.

The Defendants referred to Marie’s and Mr Burrows’ evidence which referred to the distributions made by the DGP Trust to the beneficiaries and an income-split (“wage-split”) arrangement.

Mr Burrows described discussions with the deceased and Lionel in which they would discuss what money had been taken out and spent during the course of the year and what had been distributed amongst the family, and then they would do a trust minute. He said that he would have told Marie that if there were people in the family and monies had been spent and distributions and profits have been made, they could receive a distribution for tax out of the trust. Marie gave evidence that the distributions were made as part of a wage-split arrangement as between Ann and the deceased. She said that the deceased would direct the amount to be paid to Ann so that the taxable income he received from Mircon was reduced.

The Defendants submit that this evidence establishes that the DGP Trust minutes record what distributions were in fact made in the relevant financial year as, according to Mr Burrows’ evidence, the resolution accorded with what money had already been distributed from the DGP Trust. It was submitted that this evidence, together with the evidence that the deceased gave Ann money shows that Ann received Trust Distributions. They submit that the Court should not accept Ann’s evidence that she was ignorant to the wage-split arrangement and receipt of the distributions, notwithstanding her evidence that she had not approved her own tax returns and did not sign it for the 2012 financial year.

Ann submits that the Defendants’ contentions ignore the fact that none of the tax returns that record income by way of the Trust Distributions were signed by her. It was submitted that just because Ann was aware that wages had been paid (in an unknown amount, at an unspecified time, to an unspecified account by Mircon) is not sufficient to warrant a conclusion that she was aware and was in fact paid Trust Distributions from DGP. She also takes issue with the contention that she received $451,000 from 2006 to 2012 on the basis that monies were given to her by the deceased that was paid into her bank account.

I do not accept the Defendants’ submission that the evidence from Marie and Mr Burrows, together with the evidence that the deceased gave Ann money (in cash), shows that Ann received the Trust Distributions or that the Court should reject her evidence that she was ignorant of the arrangement.

I found Ann’s evidence on this issue to be persuasive. The fact that Ann did not seek to amend her tax return on the basis she did not authorise them is not a factor that I consider weighs against her credit or the reliability of her evidence on this aspect of the case. Ann’s evidence that she did not authorise her tax returns is supported by Mr Burrows’ evidence, who did not deal with her about that matter. The absence of Mr Aboud also makes it easier to draw the inference that I consider is available on the evidence that Ann did not authorise him to lodge the 2012 tax return in her name.

I accept that there were some inconsistencies in Ann’s evidence in relation to her tax returns, such as her evidence about the Commonwealth Bank home loan application made in December 2008. Initially Ann accepted that she provided evidence of her income to secure the loan and later said that the deceased wanted the loan, she did not handle the application and did not obtain the loan. That was shown to be incorrect as a loan of $150,000 was advanced by the CBA to Ann; to her credit, she accepted that error in cross-examination. Her evidence that she did not know anything about the tax returns over this period is also seemingly inconsistent with a statement in an affidavit she made in May 2015 that she signed her FY2008 tax return.

That said, overall, I found Ann’s evidence about her knowledge of (or lack thereof) of the basis which cash payments were made to her by the deceased, that, in 2012, she found out that she was being paid on “paper” by Mircon, and that she did not know about or receive payment of or know about the Trust Distributions to be convincing and I accept it. The objective evidence paints the picture of the deceased as a person in control of Ann’s finances. While Ann gave evidence in a clear and direct manner, overall, she presented as someone who was unsophisticated and unknowledgeable about business and financial matters and relied on and deferred to the deceased in respect of them.

I place little weight on Marie’s evidence about these matters. She contended that Ann received a wage-split from DGP despite accepting that Ann was only entitled to receive payment from the DGP Trust if she was the deceased’s spouse (which she does not accept), the entity paying the deceased’s wages was Mircon (not DGP), and the resolutions passed by DGP were unambiguous about the nature of the payments being trust distributions rather than wages. Marie also did not disclose what she described were the errors in making payments to Ann (on the basis that she did not consider her to be a spouse) to her accountant or refer to that matter in her affidavit and she could not explain why she did not do so. Nor could she readily identify the mistake, ultimately stating “well, I don’t understand what the machinations of the mistake because I believe…”. Marie accepted that she never kept a record of the payments that were allegedly made in various weekly sums on account of the wage-split, with the result that she did not know how much was paid to Ann on this account, and there seemed to be no basis for Marie to assert that she did not know why Mr Burrows recorded the payments in the way that was documented. Marie’s evidence that the Trust Distributions were paid by way of weekly cash payments was also unconvincing in circumstances where the 2011 financial year accounts disclose that there was $200,000 owing as unpaid Trust Distributions at that time. Further, other than the DGP Resolutions and Ann’s tax returns, there is no documentary evidence that Ann received or was paid the Trust Distributions in the relevant years.

I cannot exclude the possibility that some amounts paid to Ann by the deceased were referable to the Trust Distributions having regard to Mr Burrows’ evidence that suggests the amounts recorded in the DGP Trust minutes may have been based on payments made during the course of the year.

In light of Ann’s evidence and my finding that the deceased was intimately involved in DGP’s business and operated as a de facto director, I also consider it likely that the deceased was involved in and directed that payments were to be recorded as being made to Ann from DGP by way of Trust Distributions, likely for the purpose of reducing his income. However, those matters do not, in my view, establish that Ann was in fact paid those amounts by DGP or the deceased. Nor does it establish that DGP made the payments to the deceased himself.

In the absence of any financial records, such as bank statements or other documents, and considering the issues with Marie’s evidence compared to Ann’s, I do not accept the Defendants’ contention that I should find that the Trust Distributions were in fact paid to Ann.

I accept Ann’s evidence that she did not know about the Trust Distributions made in her favour and that she did not receive monies referrable to the amounts recorded and I am not satisfied that the Defendants have established that she did. Accordingly, I find that, on the balance of probabilities, Ann was not paid the amount of $415,000 by DGP for the Trust Distributions recorded in DGP’s records as having been distributed to her for the 2006 to 2012 financial years.

As to the defences, I do not accept the contention that Ann is estopped from bringing the claim because she is bringing inconsistent claims, on the one hand seeking to impeach the DGP Trust through her claims as administrator of the deceased’s estate, yet utilising resolutions made by DGP to claim payment for the distributions.

I am not persuaded that Ann is making inconsistent claims in this case. She does not seek to impeach the entirety of the DGP Trust or claim that it is invalid. Her claim, as I perceive it, asks the Court to grant relief in respect of rights arising in favour of the deceased from the understanding reached and common intention held by the deceased, Lionel and Marie that Marie would hold assets in name only on behalf of the brothers on a 50:50 basis. As Ann submits, the determination that Trust Distributions should be made to Ann is not inconsistent with such an arrangement or common assumption or the rights which she asserts flows from them because the distributions reflect a foreshadowed division of the assets of the joint endeavour, which DGP can be taken to have known about because of the deceased and Lionel’s effective control of that entity.

The Defendants’ estoppel defence contends that the deceased encouraged an assumption on DGP’s part that the Trust Distributions were paid with his knowledge. The issue I have is that this defence requires the Court to accept Marie’s evidence, including of detrimental reliance, which I do not. Marie’s evidence of her understanding of the relationship between the deceased and Ann lacked credibility for the reasons I have already explained, as did her evidence of the nature of her purported mistake in authorising the payments and how she allegedly became aware of that mistake (apparently because of the hearing before Lindsay J).

Further, the encouragement of an assumption by the deceased that the distributions were paid to Ann does not, in my view, lead to or encourage an assumption on the part of DGP that the DGP Trust was valid and effective, or establish the detrimental reliance as alleged.

To the extent that the Defendants also rely on a Limitation Act defence in relation to this claim, I accept Ann’s submission that the claim is not statute barred. This is because s 47(1)(c) of the Limitation Act prescribes a 12-year limitation period for a cause of action to recover trust property and the unpaid Trust Distributions are held on trust in accordance with cl 3 of the DGP Trust Deed.

In conclusion, I accept Ann’s submission that the appropriate factual finding is that the Trust Distributions were made at the instance of the deceased and Lionel in accordance with the joint endeavour and that Ann did not receive payment for them, and so find, and also find that the Defendants have not established their defences to this claim. Accordingly, I conclude that Ann succeeds on her claim to recover the Trust Distributions which DGP, as trustee, declared to be due and payable to her during the financial years ending 30 June 2006 to 30 June 2012 in the amount of $451,000.

In conclusion, I have found that Ann has established that there was an understanding or common assumption between the deceased and Lionel on the one hand and Marie on the other in the terms alleged by Ann and that from May 2002 until the deceased’s death, in furtherance of the understanding and on the faith of the common assumption, they engaged in various transactions, including but not limited to, the deceased and Lionel transferring assets to Marie for no value, establishing DGP and the DGP Trust and acquiring new assts and making investments into and with third parties. I have also found that the arrangement and common understanding was motivated by the need to create an asset protection regime which involved Marie taking ownership and control of transferred and new assets on paper only, with the shared intention that the deceased and Lionel retain a beneficial interest in the assets transferred and subsequently acquired on an equal basis.

I have concluded that Ann succeeds on her express trust claims in relation to the shares in Mircon and ALPEC that were transferred to Marie (and the financial benefits derived from them), the shares and units in DGP, Halcrows, NMOS, OSCO, Peak on Andrew, X-Dist, Corell and the Peak Unit Trust (together with the financial benefits Marie derived from them), as well as to the Pitt Town properties that Marie acquired in her name and, in the alternative, her constructive trust and resulting trust claims, noting that the resulting trust claims were only pressed in relation to Mircon and ALPEC.

I have also found that Ann succeeds on her claim in relation to DGP in its capacity as the trustee of the DGP Trust and consider it is appropriate to grant relief in this case of the nature sought by Ann, the effect of which will not be to compel DGP to exercise its power in a particular way in the future but to restrain it from doing so in respect of 50% of its assets.

I find that Ann fails on her contract claim and aspects of her further estoppel claim in respect of the “Further Venture Assets”.

I have also found that Ann succeeds on her claim to recover the Trust Distributions made to her during the financial years ending 30 June 2006 to 30 June 2012 in the amount of $451,000.

Based on my findings, I consider that Ann is entitled to declaratory relief in relation to the express trust that I have found exist (in the terms of Order 1 of the SFASC), an injunction restraining DGP from dealing with the income and capital of the DGP Trust other than in a manner that would cause less than 50% of the income and capital to be distributed to the estate of the deceased and an order that DGP pay to Ann $451,000 plus interest.

The relief sought by Ann in the SFASC and the orders made by Parker J on 20 August 2021 contemplate that Ann also seeks orders for Marie and the various entities to give a full account of their dealings with the property and profits held on trust for Ann, a receiver be appointed to Marie’s assets (except for the Pellitt Lane property) and the third to ninth defendants and Marie deliver up to Ann all personal papers in her possession belonging to the deceased. The parties’ submissions did not address those orders and so I have not considered them. I have made an order relisting the proceedings before the Equity Registrar on 29 February to enable the parties to obtain further directions in relation to those matters after consideration of the reasons.

As to costs, given the outcome, I see no reason why the usual order that costs follow the event should not apply and order the Defendants to pay Ann’s costs of the proceedings.

For these reasons, I make the following orders: