E Co v Q (No 3)

1. [1]

   HER HONOUR: On 13 April 2018 I published my reasons for judgment in this matter (ADM v FDGK [2018] NSWSC 442 – my principal judgment), which in essence involves a dispute between the first defendant and his three sons (and two companies in which each of the four family members is involved and through which the family members had engaged in a joint family business venture – extending both to farming and non-rural activities). In this judgment I will adopt the anonymised terms used in my principal judgment for the reasons set out therein.

Principal judgment

1. [2]

   In the principal proceedings the plaintiffs had made a number of claims arising out of the same broad set of facts. In summary, I found that the plaintiffs’ respective claims in proprietary estoppel had been made good (see the summary at [45]-[81] of my principal judgment) as had a claim based on a joint endeavour constructive trust, though I considered that the relief on that basis would effectively be subsumed in the relief to be granted on the individual plaintiffs’ jointly made proprietary estoppel claim (see [46] of my principal judgment).

2. [3]

   Relevantly, I found that each of the sons had the expectation, when entering into the new family business arrangement in the period after meetings that had taken place between one or more of them and their father on 18 and 25 September 2002, that the first defendant would make his farms available to them during his lifetime for the use of the farming business that was to be transferred to the new business entity (E Co) (and in that sense that the first defendant would “hold” – or perhaps more accurately hold onto or retain ownership of – the farms for his sons during his lifetime to be used for the purposes of that family business); and that the farms would be left to the sons on his death.

3. [4]

   I was satisfied that the first defendant knew that each of his sons was entering into the new family business arrangement in that expectation and that, in doing so, each of his sons was making a life-changing decision. Further, the first defendant accepted that he understood it was his sons’ expectation, at the time that E Co entered into the lease agreement in respect of his farms, that E Co would be conducting business on the farms until the first defendant died (though the first defendant qualified this by reference to whether the sons made a success of the business); and I found that the first defendant encouraged this expectation in his sons (see [50] of my principal judgment).

4. [5]

   I was satisfied that each of the sons had acted in reliance on the said expectation in performing work for the purposes of the new family business structure (through E Co in particular) and in not choosing to take steps to further his own career or interests elsewhere (see [59]; [60] of my principal judgment) and that this was to the detriment of each of the sons such that it would now be unconscionable for the first defendant to be permitted to act otherwise than in accordance with the expectation he created or encouraged in his sons (and of which he did not ever disabuse them) (see [61] of my principal judgment).

5. [6]

   As to the separate proprietary estoppel claim made out by E Co, I considered that any relief in that regard would in effect be subsumed by the relief to be provided to the individual plaintiffs (see [62] of my principal judgment). (That, however, assumes that the relief to be granted involves an acceleration of the sons’ interest or equity in the farms, something which I considered to be appropriate but which, as I will explain shortly, has given rise to the present dispute.)

6. [7]

   I made various findings in relation to the first defendant’s cross-claim but do not propose here to set them out. I also made findings as to an alternative proprietary estoppel claim by the third plaintiff but again it is not necessary here to set those out.

7. [8]

   In my principal judgment, I set out my views (expressed at various points in conclusory terms) as to the appropriate relief to be granted to make good the expectation on which the sons’ jointly made proprietary estoppel claims were founded (see the summary from [75]ff in my principal judgment and in the conclusion section of my principal judgment from [1216]ff). By way of summary, at [77]-[81] of those reasons, I said:

8. [9]

   The power of the Court to impose conditions upon the grant of relief to give effect to the plaintiff’s equity in a proprietary estoppel case is a flexible one. The power should be viewed as an essential part of the exercise of the power to grant relief in light of “all the circumstances of the case”, as described in Giumelli v Giumelli (1999) 196 CLR 101 at 125; [1999] HCA 10:

9. [10]

   In his work on proprietary estoppel, Professor McFarlane observes (Ben McFarlane, The Law of Proprietary Estoppel (Oxford University Press, 2014) at [9.70]):

10. [11]

    In S & E Promotions Pty Ltd v Tobin Brothers Pty Ltd [1994] FCA 331; 122 ALR 637 the Court (Neaves, Gummow and Higgins JJ) said at 653:

11. [12]

    In terms of the “clean break” to which I referred at [70] of my principal judgment, I was firmly of view (see [75] of those reasons) that a clean break was necessary:

12. [13]

    I was not persuaded (as had been the thrust of submissions for the first defendant on this issue) that acceleration of the sons’ interest in the first defendant’s land would be unconscionable or out of all proportion to the equity established by the sons, provided that the first defendant were to be compensated for the loss of future rent from that land (see [76] of my principal judgment). The first defendant had argued, in the event that the sons’ estoppel claims succeeded, for relief in terms of a monetary sum (as had occurred in Giumelli v Giumelli) (see T 1421.25ff).

13. [14]

    When I published my principal judgment on 13 April 2018, I indicated to Counsel the broad findings I had made and the ambit of the relief that I had in mind. I made no orders in that regard other than to direct the parties to prepare short minutes of order to reflect my reasons and to forward those, and any brief written submissions in relation to those orders, to my associate by 24 April 2018 (which I extended to 27 April 2018).

14. [15]

    As is clear from [79] of my principal judgment, one matter in relation to which I contemplated the parties might wish to make submissions was the proposed order that, as a term of the relief to be granted under which the sons’ interest or equity in the farms would be accelerated, the sons should acquire the first defendant’s shares in the plaintiff companies (at a value representing the present worth of those shares, independently valued, calculated on the assumption that the first plaintiff was in a position to continue its farming operations on the properties but having regard to the requirement – which I also thought appropriate to impose in that context – that the first plaintiff pay to the first defendant the book value of the cattle transferred to it in 2003 and the advances made to it over the years (without interest)). The payment of those sums to the first defendant was part of the terms on which I considered it would be appropriate to accelerate the sons’ interest or equity in the first defendant’s farms. However, as is also clear from [80] of my principal judgment, I contemplated that there might not be a buy-out of the first defendant’s shares and indicated that I would hear submissions as to my view that in that event there should be no repayment of moneys advanced by the first defendant or for the transferred cattle until the first defendant’s death.

15. [16]

    It should here be made clear (if there were any room for doubt) that the proposed imposition of a condition on the acceleration of the sons’ interest or equity in the farms (for the payment of a sum by way of a notional market rent for the balance of the first defendant’s life expectancy or by way of a repayment of loan advances or for a payment for the book value of the transferred cattle) was what might be described as a “constructed” element of the relief in order to ensure so far as possible that the acceleration of the sons’ interest or equity in the farms (which seemed to me strictly to go beyond making good their expectation, though I note that the plaintiffs argued against that proposition) did not unduly prejudice the first defendant or render the relief to be granted wholly disproportionate in all the circumstances.

16. [17]

    The direction for the preparation of brief written submissions was perhaps unduly optimistic having regard to the volume of paper with which I had been deluged before and during the course of the hearing. In any event, to the extent that it was aspirational, that aspiration proved to be unfulfilled.

17. [18]

    What transpired was a dispute as to the ambit of submissions that could properly be made by the plaintiffs in relation to the issue of the relief to be granted (including as to whether the plaintiffs should be permitted to adduce any further evidence) and as to whether leave was required (and, if so, ought to be given) for the re-opening of the hearing to deal with the matters sought to be raised in that context. That dispute arose in the following way.

Submissions as to Proposed Final Orders

1. [19]

   Initial submissions as to the proposed final orders were forwarded on behalf of the plaintiffs, on the one hand, and the first defendant, on the other hand, on 27 April 2018 as had been directed.

2. [20]

   (I interpose to note that, in the case of the defendants, although the submissions are couched as being from both defendants, the second defendant has not played any active role as a party – as opposed to his role as the first defendant’s solicitor – in the proceedings and I will therefore refer to the submissions throughout these reasons as the first defendant’s submissions.)

3. [21]

   Accompanying the plaintiffs’ submissions were, among other things, draft letters of instruction to various proposed experts (the appointment of which was contemplated by the draft orders proposed by the plaintiffs). Both parties also forwarded material relating to the costs orders to be made though it was the first defendant’s submission that, until the determination of what were described as the “variables” (such as the future rent to be payable and matters not referred to in my principal judgment such as stamp duty and capital gains tax liabilities), the question of costs could not be determined. Senior Counsel for the first defendant maintained in oral submissions that no regard should be had to any of the material included with the respective submissions in relation to costs until after orders were made in relation to the relief to be granted. The affidavit of the second defendant (which had been provided to my associate in advance of the hearing on 1 May 2018 but which I had not by then had an opportunity to read) was therefore not sought to be read by the first defendant and I have put aside, for the purposes of the present judgment, those parts of the material forwarded to me by both sides in relation to costs (although I will say something in due course as to the plaintiffs’ proposal that an expert be appointed by the Court to assess the costs prior to the determination of final relief in order to enable final orders to be made in relation to the set-offs contemplated in my principal judgment).

4. [22]

   In their written submissions dated 27 April 2018, the plaintiffs identified five issues arising in respect of the relief “as formulated in” my principal judgment: first, the need to calculate the quantum of the various set-offs there contemplated (as to the costs liability, the acceleration of future rent, and the value of the first defendant’s shares in the first plaintiff), in respect of which it was submitted that there was a need to appoint appropriate experts with relevant expertise; second, as to the party which should bear the liability for the acceleration of future rent (i.e., the first plaintiff, being the lessee, or the individual plaintiffs – I interpose that this may affect the resolution of the third issue identified by the plaintiffs); third, the assumptions on which the share value should be determined; fourth, the terms of a “reasonable payment regime which will not jeopardise [the first plaintiff’s] ongoing business and operations” (see [1235] of my principal judgment); and, fifth, the terms on which the orders should “make provision for a payment regime and for security to be provided for the payment of those amounts (over the properties) if payment of the said amounts is not made at the time of the transfer of the properties to the [individual] plaintiffs” (see [1243] of my principal judgment). A sixth issue identified was as to the implications of taxation in respect of the remedy to be granted by the Court.

5. [23]

   The set of orders proposed by the plaintiffs made provision for the entry of judgment in their favour but contemplated that final orders not be made in respect of any one payment until all the various amounts had been quantified and that the final determination of matters of quantification be set down for a hearing estimated at up to one day to be held in three or four months’ time. The orders also contemplated (as adverted to above) the appointment by the Court of experts pursuant to r 31.46 of the Uniform Civil Procedure Rules 2005 (NSW) in order to quantify the various amounts to be payable as between the parties, namely: an expert costs consultant; an expert rural land valuer (to determine the market value and market rent of the first defendant’s farms); an expert actuary (to determine the net present value of the net future rent of the properties to the first defendant during his expected lifetime); and an expert forensic accountant (to determine the value of the first defendant’s shares in the first and second plaintiffs). The curriculum vitae of each of the proposed court-appointed experts was provided with the material prepared by the plaintiffs.

6. [24]

   The first defendant proposed an alternative formulation of orders which it was said more closely reflected the reasons in my principal judgment and was said to be the more time and cost efficient. The variables identified by the first defendant in this regard (leaving aside the question of costs) were: the date by which transfers of the first defendant’s land should occur; the net present value of the market rent for the properties for the period from the date of judgment and calculated according to the period of the first defendant’s life expectancy; the time for payment of the future rent amount; stamp duty and capital gains tax liabilities on the transfer of the properties; the value of the first defendant’s shares in the first and second plaintiffs, and the basis for that valuation; the amount of past rent; the judgment sum; security for payments due to the first defendant; and interest.

7. [25]

   Broadly speaking, the first defendant’s position (accepting that expert valuers should be appointed to value the market rent of the properties and the first defendant’s shares in the first and second plaintiffs – as indeed I had contemplated in my principal judgment) was that there was no need for debate as to the instructions to be given to the valuers (on the basis that such instructions could be incorporated into the terms of the order and that, should the valuers require any further information, the parties should provide such information on request). The first defendant did not agree that an actuarial determination was required for the purposes of determining the net present value of future rent payable (submitting that the 3% discount rate ought to be ordered in line with Todorovic v Waller (1981) 150 CLR 402 at 423-424; [1981] HCA 72); and did not agree that there should be an assessment of costs in advance of the making of final orders.

8. [26]

   The issue which gave rise to the need for the present ruling was that foreshadowed at [33]-[34] of the plaintiffs’ submissions dated 27 April 2018, namely as to the import of the conditions that I had considered in my principal judgment should be attached to the acceleration of the sons’ interest or equity in the farms. Those submissions were as follows:

9. [27]

   Pausing there, it should be noted that the relief sought in the second further amended statement of claim (filed in court on 4 September 2017) included both orders for the transfer of the farms to the sons (see, for example, the prayers for relief at 4, 5, 27) or to the first plaintiff (see prayer 6), whether by way of specific performance of the claimed trust or the relevant family business agreement (neither of which I ultimately held to have been established and hence not the basis of the relief I considered to be appropriate) or otherwise, and an order, further or in the alternative to other claimed relief, that the first defendant during his lifetime be restrained from selling, transferring or otherwise disposing of his legal or beneficial interest in the farms (see prayer 11(a)).

10. [28]

    The position of the plaintiffs in oral submissions (at T 4.6) on 1 May 2018 was that:

11. [29]

    Senior Counsel for the plaintiffs foreshadowed (see T 4.18) the possibility of argument as to the scope of what could now be argued in terms of remedy and having noted that in these kinds of application about remedy the court might have “different views” as to what could be the subject of further submissions and further evidence, foreshadowed that the plaintiffs might be left in a position where they would make an application on the basis of unfairness (see T 7.15ff).

12. [30]

    In essence, as I understood it, the position of the plaintiffs was that they were seeking to be heard in relation to the way in which I had considered that relief ought be granted in order for there to be a clean break between the parties (at least insofar as this involved a condition for the payment of a notional market rent); that this would involve the adducing of further evidence; and that a point might be reached where the plaintiffs would be put to an election between alternative remedies (acceleration of their interest or equity in the farms on the one hand or the imposition of a remedial constructive trust on the other). Senior Counsel for the plaintiffs made clear that the plaintiffs were not seeking to reopen any findings or order on any matter except remedy (see T 9.50) but did foreshadow submissions as to certain aspects of the relief (in particular the issue of market rent) in respect of which the plaintiffs did not consider that they had had an opportunity to be heard and about which they say there was no evidence to inform my judgment (as to the appropriateness of such a condition on the proposed relief) (see T 11.30ff).

13. [31]

    Both sides embraced the need for finality (or a final “wash-up”) (see T 18.1; 20.2; 27.28) but there was debate as to how that could be achieved and whether it should include deciding the costs component in the equation (as part of the contemplated set-offs) at a stage prior to the making of final orders.

14. [32]

    The first defendant “actively oppose[d]” the suggestion that there be any further hearing (and any further evidence). His position was that the plaintiffs were seeking in effect to re-ventilate my reasons (see T 33.45; T 34.9) in relation to the payment of a future rent; and that that issue had been canvassed in submissions at the hearing (referring in particular to paragraphs [32]-[47] of the plaintiffs’ supplementary submissions on relief of 10 October 2017) and should not be permitted to be re-canvassed (see T 39.16ff).

15. [33]

    As I indicated in the course of the submissions on 1 May 2018 (which took place in the course of a rather busy duty list and therefore with some interruptions), I was of the view that if, in the course of submissions as to a particular aspect of the relief and the orders to be made to reflect my reasons, it became apparent that there was an argument that what I had thought to be the appropriate “pathway” for relief (to use the terminology of Nicholson J in Rodda v Ian Rodda Pty Ltd [2015] SASC 95) would not have the effect that I had considered to be appropriate then I should make sure that I was in a position to satisfy myself, in light of whatever the evidence would be in relation to that issue, that that was in fact the appropriate relief (see T 42.24ff). In discussion with Counsel I explained the way in which I understood the plaintiffs’ position as follows:

16. [34]

    By the end of oral submissions on 1 May 2018, having indicated that I was proposing to accede to the plaintiffs’ submission that I should set the matter down for a further hearing on particular dates in November 2018, I made directions for the first defendant to serve on the plaintiffs any proposed amendments suggested to the orders proposed by the plaintiffs and to the proposed letters of instruction to the persons proposed to be appointed as court appointed experts and listed the matter before me for directions at 10am on 7 May 2018 (again, a duty list day for me).

17. [35]

    What then occurred was that the first defendant forwarded to the plaintiffs and my associate on 4 May 2018 a marked up set of proposed orders and proposed amendments to certain of the letters to the proposed experts; followed, on 7 May 2018, by further submissions as to the proposed orders – in effect seeking further consideration of the course that had been proposed during the hearing on 1 May 2018 and to which I had indicated I was prepared to accede; and the plaintiffs forwarded supplementary submissions on the final orders, largely responding to the position they understood was being taken by the first defendant “that the Court is prevented from departing from their [the defendants’] interpretation of the reasons of the Court delivered on 13 April 2018”.

18. [36]

    When the matter came before me on 7 May 2018, the plaintiffs sought to read two affidavits: an affidavit sworn 7 May 2018 by the solicitor for the plaintiffs (Mr Michael Fitzgerald) and an affidavit sworn 7 May 2018 by a registered real estate valuer (Mr Martin Tremain), being the valuer proposed by them to be appointed by the Court to value the market rent for the properties. No objection was taken by the first defendant to the former affidavit (provided it was read in substance as a submission – and, other than as to the fact and results of Mr Fitzgerald’s electronic search of my principal judgment for particular words, that is how I have read this affidavit). Objection was, however, taken to the latter affidavit on the basis that there was no leave given for such an affidavit and that the first defendant was prejudiced in that, if this issue were now to be dealt with, he would have sought to put on evidence of the valuer that he contends should be appointed. Mr Tremain’s affidavit broadly goes to his experience in rural valuation/agricultural leases and his office’s previous valuations of certain of the first defendant’s properties for mortgage purposes. It was sought to be relied upon by the plaintiffs to establish his independence and expertise. I indicated that I would read that affidavit on the basis that, before any appointment of a court-appointed expert to value the rural properties, I would permit the first defendant an opportunity to adduce evidence as to the valuer proposed by him. (As I have not yet had the benefit of any transcript of the directions hearing on 7 May 2018, it may be that this is not precisely how I framed this ruling but that was my intent and, in any event, in light of the course I now propose to take this issue does not arise.)

19. [37]

    When the matter was before me (as I say, during the course of the duty list) on 7 May 2018, the bulk of the argument (which took about 2 hours), rather than being as to the respective versions of the proposed orders as amended following the debate on 1 May 2018 (as I had contemplated would occur), was as to whether an application to reopen the hearing was necessary for the plaintiffs to be able to raise the matters they now wish to raise on the market rent issue and, if so, whether such leave should be granted.

20. [38]

    Senior Counsel for the first defendant emphasised the importance of identifying the nature and timing of any application that was being made by the plaintiffs and the basis on which that application was being brought. Senior Counsel for the plaintiffs confirmed that the plaintiffs’ position was that the Court should accept that on any question as to the form of relief the plaintiffs were at liberty to put on further evidence and submissions but that, if I were against them on that issue, then they would make an application to re-open the hearing. That “fallback” application was on the basis that the plaintiffs had put (at the hearing) a form of relief on one basis (as I understand it this was a reference to their submissions at the close of the hearing last year as to compensation for the loss of future rent on the acceleration scenario to which I have already referred) and that, in considering relief on a different basis (i.e., by reference to a market rent “divorced from the historical arrangements” as between the parties), I had proceeded with no evidence to inform that decision and without the benefit of submissions as to the effect of moulding relief by way of a rent condition on that basis.

21. [39]

    At the close of the argument, I reserved my decision on those issues and indicated that I would list the matter for judgment at 10am on 14 May 2018 (the first defendant having sought confirmation as to the date of my ruling in order, as I apprehend it, to be clear as to the time frame within which any application for leave to appeal therefrom would need to be brought if the first defendant were so advised to make such an application).

Summary

1. [40]

   By way of summary, I am not persuaded that leave to re-open is strictly necessary in order for the plaintiffs to be permitted now to make submissions as to the appropriate form of relief (or conditions to be attached thereto) that I had concluded in my principal judgment would be appropriate but I have concluded that leave is necessary if the plaintiffs wish to adduce further evidence going to the issue of relief since, in effect, that amounts to a re-opening of the evidence in the hearing. That said, to the extent that such leave is necessary, then for the reasons set out below I would grant it.

2. [41]

   The first defendant emphasises that the reasons for judgment published on 13 April 2018 were final and that directions were made for the parties to bring in short minutes reflecting those reasons. Attached to the first defendant’s submissions is a schedule of the passages in the judgment which the first defendant identifies as setting out the considered basis of the orders that were found to be appropriate (namely: the application of the “clean break” principle ([1225]); the transfer of properties/acceleration of expectations ([1216]); the payment of the present value of the future rent of the properties for the next 12 years ([1242]; [76]-[77], [1217]-[1222]); and that the parties be liable in respect of the payment of various sums, with those amounts to being subject to a set-off ([78]-[79]) (those being, any price for the shares in the first and second plaintiffs; the amount due under the W Deed [1236]; and the amount of the first defendant’s loan account with the first plaintiff [1233]-[1235]).

3. [42]

   The first defendant’s schedule also identifies references in the reasons to this being the appropriate relief, namely: the headnote (by which I assume the first defendant means the catchwords on the coversheet of my principal judgment, which I interpose to note do not form part of the reasons and cannot in my opinion properly be called in aid of the first defendant’s submissions for that reason); and the following paragraphs: [77]; [78], [79]; [1216]; [1217]; [1222]; [1223]; [1225]; [1236]; and [1241].

4. [43]

   The first defendant notes that, when this matter was before me on 1 May 2018, I made clear that the reasons for judgment would be published that day, which the first defendant says is consistent with the matter of relief having been decided (referring to what I said at T 1.22 and T 2.32). Pausing here, what I was there referring to was the uploading of my principal judgment on CaseLaw so that it was publicly accessible (there having been a delay in that occurring due to my concern to ensure that the reasons had been appropriately anonymised). Had it not been for the need to ensure proper anonymisation of the reasons, my principal judgment would have been uploaded to CaseLaw on 13 April 2018. Relevantly, the only orders I made on 13 April 2018 were procedural in nature. They were entered into the Court’s computerised record system on that date. No final orders have been made, let alone entered. In that sense, the relief that I considered appropriate as at the time of publication of my reasons remains simply the proposed relief – there has been no final decision or order in that regard.

5. [44]

   In this regard, I note what was said by Santow J (as his Honour then was) in Wentworth v Wentworth [1999] NSWSC 638 at [8] as to “entry” of judgment:

6. [45]

   A judgment or order of this Court is now taken to be entered when it is recorded in the court’s computerised record system (UCPR 36.11(2)). In Bailey v Marinoff (1971) 125 CLR 529; [1971] HCA 49, Barwick CJ said (at 530):

7. [46]

   As noted, no orders were made on 13 April 2018 in respect of final relief. That aspect of the matter was not finally decided. Notwithstanding that my reasons for judgment set out the views and conclusions that I had reached as to the question of relief, it must have been clear that in a number of respects (not limited to the share value condition but including matters such as any payment regime or the like) the final orders still needed to be formulated. I am here drawing a distinction between the reasons I published in relation to my views (expressed, I accept, in places as conclusions) as to the appropriate relief to be granted and the entry of judgment or orders making provision for such relief. The latter has not occurred. (See the similar distinction drawn by Gzell J in Citibank Ltd v Papandony [2002] NSWSC 678 (at [1]).

8. [47]

   The significance that the first defendant attaches to what he refers to as the “timing issue” is to emphasise that any application now by the plaintiffs (whether that be, for example, an application to adduce further evidence or to re-ventilate the decision encompassed in my principal judgment to accelerate the relief on a particular basis or for leave, if that be necessary, to re-open the hearing for that purpose) is one that is made after the giving of judgment (by which I take the first defendant to mean after the publication of reasons for judgment) and before the judgment has been entered (by which I take him to mean before the final orders have been entered) (see [7] of the first defendant’s further submissions dated 7 May 2018).

9. [48]

   The first defendant notes that the submissions called for (at [79] and [1225]) of my principal judgment are limited to the question of relief in connection with the acquisition of the first defendant’s shares in the first and second plaintiffs. It is argued that the plaintiffs’ proposed short minutes of order do not “reflect” the principal judgment because the proposed orders envisage a further hearing at which (by proposed order 35(k)) submissions would be heard as to whether the properties are transferred inter vivos (in accordance, the first defendant says, with my principal judgment) or upon the death of the first defendant (which he says is not in accordance with my principal judgment). In this regard, the first defendant says that the plaintiffs’ submissions of 27 April 2018 (at [12]) seek to argue for an entitlement of the plaintiffs to elect whichever remedy they prefer when that matter has been decided. That certainly appears to be the import of what the plaintiffs are now seeking and it is true that in my principal judgment I did not frame the proposed relief as including such an election. However, I do not accept the proposition that the question of relief has been finally decided (in the absence of finalisation and entry of the orders).

10. [49]

    The first defendant maintains that this is an application by the plaintiffs (of a kind ordinarily brought by way of notice of motion in accordance with UCPR 36.16) to re-open the judgment handed down on 13 April 2018 but which has not yet been formally entered. The first defendant accepts that there is power to do so (withdrawing a submission made at one stage that it was not open for me to do so – see T 38.40 on 1 May 2018) but argues that that power should not be exercised in the present case.

11. [50]

    The first defendant emphasises that, to succeed on such an application, an applicant needs to show that “without fault on the part of that person [the applicant] has not had an opportunity to be heard as to why that judgment should not be pronounced” (citing Brennan J, as his Honour then was, in Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300 at 308; [1993] HCA 6). The first defendant notes that Mason CJ (who dissented in the result in that case) observed that the public interest in the finality of litigation “will not preclude the exceptional step of reviewing or rehearing an issue when a court has good reason to consider that, in its earlier judgment it has proceeded on a misapprehension as to the facts or the law” (see p 302). Autodesk (No 2) was an application to vacate a judgment earlier given by the High Court (reported in Autodesk Inc v Dyason (1992) 173 CLR 330; [1992] HCA 2), allowing the appellant’s appeal with costs. The application was made before that judgment had been perfected by the “entry” of the judgment.

12. [51]

    The first defendant also points to the statements made in Autodesk Inc (No 2) that the jurisdiction to re-open is not to be exercised “for the purpose of re-agitating arguments already considered by the Court; nor is it to be exercised simply because the party seeking a rehearing has failed to present the argument in all its aspects or as well as it might have been put” (per Mason CJ at p 303) and that “a sufficient opportunity to argue a ground is given when the ground is logically involved in a proposition that has been raised in the course of argument before the court or is to be considered by the court as an unconceded step in determining the validity of a conclusion for which one of the parties contends” (per Brennan J at p 308).

13. [52]

    The first defendant maintains that it cannot be said (contrary to the proposition put by the plaintiffs on 1 May 2018 at T 6.10) that the plaintiffs were not heard (in the sense described by Mason CJ and Brennan J in Autodesk Inc (No 2)) as to the payment of market rent, again pointing to the plaintiffs’ written submissions dated 10 October 2017 which addressed the question of what amount of rent should be payable by the plaintiffs at [32]-[47] (that submission being rejected by me at [77] of my principal judgment); and noting that this issue was the subject of oral submission for the first defendant on day 19 of the hearing (at T 1407.10 and T 1407.25 – see further below). The first defendant points to: the statement in my principal judgment (at [29]) that the rent initially struck in 2002/3 was “apparently considered to be a commercial rent”; the reference (at [247] of the principal judgment) to evidence in the fourth plaintiff’s notes indicating that the rent struck in 2003 was 5% of the value of the properties at that time; the reference (at [559] of the principal judgment) to the fourth defendant’s estimate as to the value of the land as at October 2009 as being $31.7m to $44.6m; and to the discussion and decision on this point at [1217]-[1222] of my principal judgment. The first defendant argues that this discussion shows that the plaintiffs have been heard on this issue.

14. [53]

    Insofar as the plaintiffs complain that there was no evidence as to the market rate of rent, the first defendant maintains that such a submission fails at the outset because such evidence was clearly able to be obtained at the time of the hearing.

15. [54]

    The plaintiffs dispute the proposition that the question of rent as a condition of relief was fully argued at the hearing. They point to the absence of evidence of market rent before the Court and to the absence of evidence as to what impact a liability to pay market rent for the lifetime of the deceased would have on the plaintiffs individually or jointly. It is submitted that the lack of such evidence reflected the lack of any pleading by the defendants as to the equitable conditions of relief; and that there was no submission about such conditions by the first defendant in opening or in closing submissions in chief. The plaintiffs submit that the onus lay on the first defendant in this regard. They say that it is not for them to adduce evidence and make submissions on the full range of conditions that might be considered necessary if relief were to be granted to them. They say that they made submissions as to one set of appropriate conditions and that, if another set were to be pressed, then that set had to be the subject of evidence and submissions from the first defendant. (The first defendant, as I understand his position, does not accept that he bore any onus in this regard.)

16. [55]

    The plaintiffs submit that this is a proper case for the Court to exercise the power of its own motion to re-open those parts of the reasons which relate to the terms of the relief to be granted, including the provision of an opportunity for the plaintiffs to elect for or against a “clean break”.

17. [56]

    Reference is made to the approval, by the Full Court of the Federal Court (Rares, Murphy and Davies JJ), in Colin R Price & Associates Pty Ltd v Four Oakes Pty Ltd (2017) 251 FCR 404 at [168]; [2017] FCAFC 75 of the following passage by Kenny J in Inspector-General in Bankruptcy v Bradshaw [2006] FCA 22 at [24]:

18. [57]

    The plaintiffs point out that in Colin R Price, their Honours noted that examples where the Federal Court has permitted re-opening after reasons for judgment but before orders have been made or entered include The Silver Fox Company Pty Ltd v Lenard’s Pty Ltd (as trustee for the Baker Family Trust) (No 2) [2004] FCA 1310 at [22] per Mansfield J and ICI Chemicals & Polymers Pty Ltd v Lubrizol Corp Inc [1999] FCA 662 at [16]; 45 IPR 617 per Emmett J, his Honour then sitting in the Federal Court. (Both those cases were ones in which the re-opening involved only submissions and not further evidence; and were cases in which one of the counsel was under a misapprehension as to the case of the other party.)

19. [58]

    In Colin R Price, the Full Court said (at [175]):

20. [59]

    The plaintiffs also point to what was said by Rothman J held in Bosevski v Avopiling Pty Ltd (No 2) [2018] NSWSC 205 at [18]-[19]:

21. [60]

    The plaintiffs also rely upon the consideration given by Rothman J to the relevant principles in Permanent Custodians Ltd v Geagea (No 4) [2016] NSWSC 934 at [15]-[19]. There, at [15], his Honour said:

22. [61]

    Pausing there, the distinction drawn by Rothman J in Geagea (No 4) between the issue of “reasons for judgment” and “final judgment”, as I understand it, treats the issue of “final judgment” as being the entry of an order for judgment; but, in any event, what appears to be accepted by his Honour is that the making of further submissions after the issue of reasons but before the entry of judgment involves a re-opening of the hearing.

23. [62]

    In Geagea (No 4), Rothman J considered the statements of the High Court in EIliott v R; Blessington v R (2007) 234 CLR 38; [2007] HCA 51 at [31]-[32] and in Autodesk Inc (No 2) at [2]-[4]. His Honour then observed (at [19]):

24. [63]

    The plaintiffs also note that this Court’s power to vary its own orders, even after entry of those orders, on the basis that those orders had “unintended consequences”, was upheld in Newmont Yandal Operations Pty Ltd v The J Aron Corporation (2007) 70 NSWLR 411; [2007] NSWCA 195 (at [60]; [79] per Spigelman CJ; Santow JA and Handley AJA agreeing); though that, I note, was a case in which the slip rule had also been invoked. Spigelman CJ observed (at [29]) that variation of an order of the Court after entry of judgment is an “exceptional” course.

25. [64]

    The plaintiffs argue that in the present case the first defendant did not plead and did not submit (and, more relevantly, for present purposes, the Court did not raise with the plaintiffs):

26. [65]

    As to (c) above, the plaintiffs maintain that the Court does not have any evidence of market rent, and that they have not been afforded an opportunity to be heard on whether the imposition of a term as to market rent is appropriate, in circumstances where the first plaintiff succeeded in its claim in proprietary estoppel but where, according to the first defendant’s submissions on orders, the current market rate could be 5 times (i.e. $500,000) to 10 times (i.e. $1,000,000) the past rent struck in 2014 (of $100,000 per annum). The plaintiffs then say that this could result in the plaintiffs being required to pay the first defendant somewhere between $3 million and $6 million for future rent. The plaintiffs argue that this figure bears no relationship to what the parties had agreed in the past and that such an approach is inconsistent with the findings made as to detriment at [1169]-[1172] of my principal judgment. It is submitted that it is unlikely such a result was in the contemplation of the Court.

27. [66]

    Accordingly, the plaintiffs maintain that this is an appropriate case for the Court to exercise its inherent power, after reasons but before the entry of orders, to permit further evidence and submissions on the conditions for relief. As adverted to earlier, if that submission does not find favour with the Court then the plaintiffs seek leave to re-open the hearing to adduce such evidence and make such submissions.

Determination

1. [67]

   There is no doubt that there is power for the Court to set aside or vary a judgment or order of the Court if a notice of motion for the setting aside or variation is filed before entry of the judgment or order (r 36.16(1) of the UCPR). The power to do so after the judgment or order is entered is more limited (see rr 36.16(3A) and (3B)), though nothing in r 36.16 affects any other power of the Court to set aside or vary a judgment or order (see r 36.16(4)).

2. [68]

   In the present case, as I have now said more than once, no final orders have been entered. Reasons for judgment have been delivered but no judgment (in the sense of a verdict for one or other of the parties) has been entered. That is because, as I had thought was made plain by the reasons set out in my principal judgment, I contemplated that it would be necessary for input from the parties to formulate the precise terms of the relief that I proposed to order. So, for example, insofar as any complaint is now made by the plaintiffs that I did not raise with them at the hearing issues such as what would be a reasonable timeframe for repayment of advances that would not prejudice the ongoing business operations of the first defendant or what might be a reasonable repayment regime, that is precisely the kind of detail that I anticipated might be able to be agreed between the parties or, if not, would be the subject of submissions as to the appropriate orders to reflect those matters (and I thought I had indicated as much when publishing my reasons on 13 April 2018 insofar as I adverted to the possibility that it might be necessary to raise finance to make the payments on which acceleration of the sons’ interest or equity in the farms was to be conditioned).

3. [69]

   Of some relevance in this context is the fact that, in the first defendant’s own submissions as to the proposed final orders, the view I expressed in my principal judgment as to the appropriate relief was subject to some challenge (that being in relation to interest on certain of the amounts in question); and both sides have referred to taxation considerations that were not identified in my principal judgment as a potential matter for submissions in relation to the final orders. As to the question of interest, for example, in oral submissions on 1 May 2018 (at T 53-54) the submission was made for the first defendant that the loan account ($2.1m) (which I had indicated at [79], [80] and [1225] should be repaid without interest) should be treated in the same way as the unused proceeds from the sale of Property No 12. (At [1223] of the judgment I had expressed the opinion that it was appropriate that the first defendant account for three-quarters of the sale proceeds (with interest from the date of settlement of the sale).) The first defendant in his written submissions took the position that the treatment of interest in this regard should be uniform and that interest should either apply or not apply to both amounts (see at [14]), but the ultimate submission was that no interest should accrue on either account ([14]). To my mind this highlights that the process contemplated in relation to the submissions as to final orders was one that was seemingly understood by both sides to encompass the possibility of some change to the views I had expressed in the reasons as to the appropriate relief to be granted or the terms in which that relief should be couched.

4. [70]

   I specifically noted that the parties might wish to make submissions on the issue as to the proposed buy-out of the first defendant’s shares in the first and second plaintiffs because, as I noted in my principal judgment, I did not consider that this had been addressed in submissions. By contrast, the question of the rent that might be payable as a condition of relief accelerating the interest or equity of the sons in the first defendant’s farms was the subject of at least some submissions by the plaintiffs (after the issue of acceleration of relief had been raised in the course of the hearing of closing submissions) and the first defendant in closing submissions expressly challenged the assumption that the rent would have remained at the reduced ($100,000) figure. I certainly did not anticipate that the plaintiffs might wish to put any further submissions on the question of any notional rent (having put their case on that issue in the 10 October 2017 submissions).

5. [71]

   At T 1407.2, in closing submissions at the trial, Senior Counsel for the first defendant said:

6. [72]

   The first defendant’s own evidence provided a basis for scepticism as to whether, in light of the breakdown of the relationship between the first defendant and his sons, any agreed new rent going forward would have been at the reduced level – see his evidence at T 846.27 describing the reduction from $300,000 to $100,000 as a “hell of a change”.

7. [73]

   At T 1418.28, Senior Counsel for the plaintiffs said:

8. [74]

   There was then the following exchange in the course of submissions by Senior Counsel for the plaintiffs in reply (from T 1455.13):

9. [75]

   At T 1468.28, Senior Counsel for the first defendant in effect had the last word on that issue:

10. [76]

    From the above, it can be seen that while the condition to be imposed on acceleration of relief (in terms of a notional rent payable for the term of the first defendant’s life expectancy) was a live issue in discussion in the course of closing submissions, the debate did not focus on what might have been a market rent for the properties (the plaintiffs in effect tying that issue to the reduced rental figure or at best the initial agreed figure of $300,000). Further, I accept that at the conclusion of the exchange extracted above at [74], the plaintiffs may have been left with the understanding that what was in contemplation was a rental based on the lease agreement (whether at the initial figure or the reduced figure), though I had not understood the question of future rent to be so confined. I certainly accept that I did not call for submissions (nor was there evidence) as to the proposition that a market (or commercial, to the extent that those terms may be interchangeable) rent might be more appropriate in the present context.

11. [77]

    Pausing there, the term “commercial” rent came from the evidence to which I have referred in my principal judgment suggesting that the rent had been struck at a level that would satisfy the tax office that the arrangement was arms’ length or not uncommercial (see [254]] of my principal judgment; and in this context I note that the fourth plaintiff’s notes suggest the figure was determined as a percentage of the value of the properties – see [247] of my principal judgment). The notion of “market rent”, as used by me when referring to the proposed relief in my principal judgment, was intended to encapsulate the notion of rent payable by a willing but not anxious lessee to a willing but not anxious lessor along the lines of the test articulated in Spencer v The Commonwealth (1907) 5 CLR 418; [1907] HCA 82. That may or may not equate in any particular case to a rent accepted by the tax office as being not uncommercial – hence my doubt as to whether the terms “market” and “commercial” are necessarily interchangeable.

12. [78]

    In circumstances where I considered at the time that I published my principal judgment (and thought I had indicated this at the time the reasons were handed down) that there would be a need for careful formulation of the final orders, and that there would likely be submissions in relation thereto, I am of the view that leave is not necessary for the submissions now sought to be made by the plaintiffs in relation to the final relief (at least insofar as the issue is as to the proposed “market rent” condition). I also consider that, by reference to the authorities I consider below, leave is either not necessary or should be granted to permit submissions as to whether the more appropriate order in all the circumstances would be to permit the plaintiffs an election between acceleration of the relief and the declaration of a constructive trust.

13. [79]

    However, if the plaintiffs wish (as they clearly do) to adduce further evidence in relation to the rental position then in my opinion that would require leave to re-open the hearing. In this regard, I note that there is a distinction between the Court receiving further submissions after the close of a case, and receiving further evidence, as Gzell J observed in Citibank Ltd v Papandony at [8]:

14. [80]

    In the earlier reasons published by Gzell J on 14 May 2002 in that case (Papandony v Citibank Ltd (Supreme Court (NSW), Gzell J, 14 May 2002, unrep)) his Honour said (at [43]), that:

15. [81]

    On 27 June 2002, his Honour gave leave to the applicant to file in court a notice of motion seeking leave to re-open certain issues. His Honour approached the matter on the basis that, where reasons for judgment had been delivered but judgment had not been entered, it was appropriate, when considering whether to re-open the matter to admit new evidence, to take account of general considerations relating to the administration of justice; the degree of culpability of the successful party; any lack of due diligence on the part of the unsuccessful party; and any unlikelihood that the result would have been different if material had been made available as directed by the Court.

16. [82]

    This is a case where, similarly, although reasons have been delivered, judgment has not yet been entered. The power to re-open a judgment before it has been entered is discretionary (see Wentworth v Rogers [2002] NSWSC 921 at [11] per Barrett J (as his Honour then was). After a judgment has been entered, the power to alter it is much more limited (see Smits v Buckworth (No 2) (Supreme Court (NSW), Young J, 14 November 1997, unrep) at 6-7). I have already referred to what is meant by the entry of judgment in this context.

17. [83]

    Both parties referred to the High Court’s decision in Autodesk Inc (No 2), where the Court considered an application to re-open its own judgment (which had been pronounced but not entered).

18. [84]

    Mason CJ (there in dissent as to the result) observed (with reference to the judgments in State Rail Authority v Codelfa Construction Pty Ltd (1982) 150 CLR 29; [1982] HCA 51) (at p 303) that:

19. [85]

    Brennan J, as his Honour then was, in the majority at p 309, said:

20. [86]

    In considering Autodesk Inc (No 2), it should be borne in mind that the considerations affecting a final appellate court’s decision to re-open its own judgment may be different to those affecting a first-instance court asked to make the same decision (see Wentworth v Rogers [2002] NSWSC 921 at [7]). This may be because a final appellate court is responsible for disposing of a case upon the basis which appears to it to be correct (see Autodesk Inc (No 2) at 317), such that, on one view, more caution is required before permitting one party to re-open the case.

21. [87]

    Kirby P, as his Honour then was, in Wentworth v Rogers (No 9) (1987) 8 NSWLR 388 said (at [394E-F]):

22. [88]

    It is useful here to note that in Wentworth v Wentworth (at [16]), Santow J set out some examples of where a court of first instance has exercised the power:

23. [89]

    The decision referred to in (iv) above is instructive in this regard. There, the parties were corporate entities in the Farrow group of building societies and companies that collapsed in 1990 (see [165] of the judgment). All of the parties were in liquidation. Claims were made by the plaintiff against the defendants alleging security rights over certain land ranking in priority to, or pari passu with, the those of the defendants; and alleging that the first defendant held the land on trust for the plaintiff. The plaintiff also invoked a claim under the principles in Barnes v Addy (1874) LR 9 Ch App 244.

24. [90]

    Hansen J, having heard the matter over a number of days in March 1997, gave judgment in December that year, concluding that a particular advance of moneys out of the plaintiff’s funds was made by or at the instigation of a director of each company for an improper purpose and not in the interests of the plaintiff but for the benefit of another entity in the group. Hansen J found that the directors concerned were acting in breach of their fiduciary duty and that each of the defendant companies knew of that breach of duty. His Honour described the issues in the case as numerous and complex. His Honour concluded that the plaintiff could trace its funds into a particular property and to the net proceeds of sale of that property and that this led to proprietary remedies against the first and second defendants. His Honour, at the conclusion of the judgment, raised an issue as to a claim for equitable compensation against the second defendant to the extent that the plaintiff did not recover the full value of its loan from the proceeds of sale of the property in question and went on to set out his view as to the orders that should be made, drawing counsels’ attention to the orders which his Honour proposed to make.

25. [91]

    In this regard, his Honour later said:

26. [92]

    After adjourning the matter to 19 December 1997 and then to February 1998, by which time there had been oral and written submissions as to the form of the relief, and before the orders had been authenticated, his Honour considered a submission for the defendants that the plaintiff’s application for him to reconsider the conclusion and orders contained in the reasons for judgment should not be entertained. The defendants conceded that, the orders not having been authenticated, there was power to do so but it was submitted (among other things) that the plaintiff had had adequate opportunity to address the matter of equitable compensation at trial and chose not to do so (see [175]-[176]). There was no application to re-open the case to adduce further evidence. The only application was “that what [his Honour] said so briefly in the second last paragraph of [his] judgment and the third proposed order be further considered or reviewed in the light of submissions now so succinctly put by counsel” (see [175]). His Honour noted that the matter was to be dealt with in light of the facts as found and prior conclusions expressed in the judgment.

27. [93]

    At [179], his Honour said:

28. [94]

    His Honour did not accept the defendants’ submission that the plaintiff should in effect be “stuck” with the way it which it conducted its case or that the defendants should not be prejudiced by being exposed to a review of the case on that point. His Honour said that it could not be said that the conduct of the case by the plaintiff manifested an intention to abandon a claim for equitable compensation and said that:

29. [95]

    His Honour considered that it was appropriate to consider further the judgment on whether equitable compensation should be ordered against the second defendant and ultimately made such an order.

30. [96]

    There are some obvious parallels with the present case. Here, I made findings on factual matters and conclusions as to the application of the law to those factual findings in my principal judgment. I outlined the relief that I concluded would be appropriate in all the circumstances and ordered the parties to prepare short minutes (and any submissions) to reflect the reasons I had given. Those reasons included not just the expression of my views or conclusions as to the appropriate relief but also the basis on which such relief was to be granted. I invited submissions as to one matter on which I was concerned that the parties had not had an opportunity to be heard (the share value issues). I anticipated that there would be other issues that might affect how the orders were formulated. I did not have in mind that there was any aspect of the rent condition on which the plaintiffs might have wished further to be heard but I accept that, focussed as the plaintiffs no doubt were on the manner in which they considered their claimed entitlement should sound in relief (and having limited their submissions in that context to the rental payable under the existing lease agreement – as reduced or as originally provided for), they would not necessarily have contemplated an order of the kind that I ultimately considered would be appropriate.

31. [97]

    But for the fact that the plaintiffs now seek to adduce further evidence, the position is akin to that in Farrow Finance (and, as already noted, Senior Counsel for the first defendant withdrew any submission that it was not open to me to permit the plaintiffs to make further submissions, though that course was actively opposed (T 38.40)). The only potential prejudice to the first defendant (apart from the question of delay in the final determination of the matter and I accept that that is a relevant consideration) is that on reviewing this matter I might reconsider the appropriateness of the market rent condition or might be persuaded that the plaintiffs should have the ability to elect between acceleration of the relief if such a condition were to be imposed and the imposition of a remedial constructive trust – and that the plaintiffs might then end up in a more favourable position than would be the case if the market rent condition were to be ordered as I had proposed in my principal judgment.

32. [98]

    Nicholson J considered Farrow Finance in Ian Rodda Pty Ltd v Rodda (No 2) [2015] SASC 128. The circumstances before his Honour were similar to those presently before me. In his primary reasons, his Honour had sought further submissions in relation to certain issues, including relief. During the course of a further hearing of those submissions, the defendants made an application to re-open the primary judgment so as to make submissions with respect to the date upon which any constructive trust, or obligation to pay equitable compensation, arose (see Rodda (No 2) at [9]). The application was made before the primary judgment had been entered.

33. [99]

    Nicholson J refused the application to re-open the judgment. His Honour distinguished Farrow Finance, saying (at [12]) (emphasis added):

34. [100]

    His Honour referred to the public interest in finalising litigation (at [21]), and then said (at [22]-[23]) (emphasis added):

35. [101]

    His Honour therefore refused leave to re-open the issue which the defendants had identified.

36. [102]

    The considerations raised by Nicholson J are instructive when applied to the case before me. There are important differences between the present case and the application which was before his Honour. First, the question which the plaintiffs here seek to re-open, being whether an obligation to pay an amount representing the net present value of market rent to the first defendant for the remainder of the first defendant’s life as a condition for the acceleration of the sons’ interest or equity in the farms, did not assume a central significance at the hearing. Second, the question which the plaintiffs seek to re-open is not, as I see it, an inter-dependent one. That is, whether the rent payable to the first defendant is calculated on the basis of market rent or on some other basis is not interrelated with other issues in the case. These two considerations would weigh in favour of the grant of leave (if leave were necessary, as I consider it is for the adducing of further evidence).

37. [103]

    I accept that, in considering an application to re-open in order to obtain particular relief, an important question is whether the party applying had an opportunity to address, or even chose not to pursue, that relief at the trial (see Safaro v Bonarrigo [2009] VSC 594 at [20] per Vickery J).

38. [104]

    In oral submissions on 1 May 2018, Senior Counsel for the plaintiffs submitted that nobody had ever contemplated that the plaintiffs should pay market rent for the properties (T 4.26) (emphasis added):

39. [105]

    Senior Counsel for the plaintiffs also submitted (T 7.47):

40. [106]

    The references to the history of the relationship between the parties can be seen as part of the plaintiffs’ broader submission that the plaintiffs were not heard on the issue as to market rent at the hearing, with the result (it is suggested) that now to deprive them of an opportunity to make those submissions would mean that procedural fairness was not afforded to the plaintiffs (T 7.13-7.18); and, second, that I did not have evidence before me to inform my judgment about the appropriateness of the market rent condition (T 11.33). However, references to the history between the parties need to be approached with caution. The proposed imposition of a condition to pay market rent has nothing to do with what the parties had previously agreed between themselves (though I accept that such an agreement might inform the nature of the condition to be imposed). Rather, this is a case where, although I considered that an immediate transfer of the properties to the plaintiffs was the most appropriate way to make good the plaintiffs’ expectation and give effect to the plaintiffs’ equity, I considered it also to be necessary that some condition be imposed upon that transfer in order to ensure that the plaintiffs did not gain an undue benefit at the expense of the first defendant by reason of the acceleration of their interest or equity in the first defendant’s land.

41. [107]

    It has been said in a number of cases that the purpose of the jurisdiction to vary judgments is not to permit parties to re-agitate arguments or to have a rehearing, and that it is not to be utilised as an appellate process. I have already noted the observation by Kirby P in Wentworth v Rogers (No 9) (1987) 8 NSWLR 388 at [394E-F] (see [87] above).

42. [108]

    In New Cap Reinsurance Corporation Ltd v Grant [2009] NSWSC 950, Barrett J (as his Honour then was) after referring to the decision in Wentworth v Wentworth to which I have referred above) said at [20]:

43. [109]

    In Paul’s Retail Pty Ltd v Morgan [2009] NSWSC 1343, (at [5]) Barrett J referred to the above principles as well settled. They are certainly apposite in the present case.

44. [110]

    In Compagnie Noga D’Importation et D’Exportation SA v Abacha ([2001] 3 All ER 513 at 526-527), in a passage preceding that cited by Barrett J in New Cap, Rix LJ said:

45. [111]

    In New Cap at [22], Barrett J distinguished between a case in which the application for leave to re-open was tantamount to an appeal and a case where it was not sought to disturb any of the court’s findings or reasoning “except to the extent that they have proceeded on a misapprehension” (there the misapprehension being about the absence of differentiation between the two groups of defendants and the need to attribute to the respective groups the debts and payments relevant to particular years). His Honour there held that the new evidence sought to be tendered should be received and taken into account so that, in making its decision, the court could proceed upon a correct basis as regards those matters “and thereby remedy the effects of the misapprehension which caused the original decision to miscarry”.

46. [112]

    As adverted to earlier, in Wentworth v Rogers [2002] NSWSC 921 (at [7]) Barrett J noted three matters central to the jurisdiction to re-open: first, whether the party seeking to re-open has shown that, without accident or fault on the appellant’s part, he or she has not been heard on a relevant matter; second, whether there has been shown an error in the court’s reasoning because of a misapprehension of the facts; and, third, whether there has been an error in the court’s reasoning because of some misapprehension of the relevant law, noting also the further consideration identified by Young J (as his Honour then was) in Twenty-First Australia Inc v Shade [1998] NSWSC 325, as to where an appeal to correct an inadvertent failure to deal in the judgment with important matters raised by Counsel would involve inevitable delay.

Conclusion

1. [113]

   In the present case, I am persuaded that the arguments put for the plaintiffs in the course of submissions as to the proposed final orders (on 1 and 7 May 2018) point to potential error in the proposed exercise of the discretion to impose, as a condition of relief, the obligation to pay a notional market rent – due to a misapprehension on my part as to the potential impact of such a condition on the plaintiffs (namely, as to their ability to retain ownership of the first defendant’s land). Whether such an order would necessarily have that effect, I do not know. It might be, as I had contemplated at the time the reasons were published, that finance could be obtained (secured over the properties) in order to enable the relevant payments to be made and the land to be retained. However, I am concerned that the plaintiffs have not addressed submissions or evidence in relation to that issue and, insofar as this was not raised directly by me as a potential outcome (even though the issue as to the amount of the notional future rent was the subject of some debate in the course of submissions), the plaintiffs might be said to have been denied procedural fairness if they were not now permitted to do so. In that regard, the present seems to me more closely to fall within the situation contemplated by Barrett J in New Cap at [20] as quoted at [108] above, namely that “a single judge whose decision is susceptible to appeal through readily available channels (with or without any preliminary need for leave to appeal) should allow re­opening after judgment where it is obvious to that judge that the decision has miscarried and that the miscarriage may be rectified and the situation retrieved by attention to the matter by that judge rather than by an appeal court”. The potential that I recognise there is for it to be argued that the decision I reached in relation to the proposed relief may have miscarried by reference to the matters now raised by the plaintiffs seems to me to point in favour of a re-opening of the hearing.

2. [114]

   I have taken into account the public interest in the finality of litigation. In my opinion that is promoted in the present case by having the question of relief finally determined at this stage of the litigious process on the basis of the evidence and submissions that the plaintiffs now wish to put before the Court on the issue as to the market rent of the properties (and, of course, the first defendant’s response thereto). A course that left open a potential challenge (of the kind squarely foreshadowed in the course of submissions on 1 and 7 May 2018) based on a lack of procedural fairness at this stage would in my opinion be more likely to lead to delay in finalising the proceedings at first instance (particularly if the ultimate determination of a procedural fairness complaint were to result in the remittal of the matter for further hearing) than allowing the submissions (and evidence) to be put before the Court before final orders at first instance are made. (I say this conscious of the fact that Senior Counsel for the first defendant was clearly adverting to the possibility of an application for leave to appeal if the hearing were to be re-opened.)

3. [115]

   As to the principles mandated by s 56 of the Civil Procedure Act 2005 (NSW), I accept that the inevitable delay in finalisation of the proceedings at first instance is not desirable. However, the same result would have been achieved had I taken an alternative course (of the kind that took place in Rodda) and indicated possible pathways for relief bringing the matter back for final submissions as to relief after the findings on the substantive issues in the proceedings without expressing the views that I did as to the appropriate relief (which was something I had contemplated at the time). The reality is that this is hard and long-fought litigation, in the context of which a delay from now until November this year is relatively short in the scheme of things. I am conscious of the fact that the overriding mandate for the conduct of litigation in this Court is not simply for the resolution of disputes to be quick and cheap but also that it be just.

4. [116]

   In all the circumstances I have concluded that leave should be granted to the plaintiffs for the re-opening of the hearing to permit the plaintiffs (and the first defendant if he wishes) to adduce further evidence and make submissions on the market rent issue (including its potential impact on the ability of the plaintiffs to retain ownership of the properties) together with any further evidence or submissions on other aspects of the proposed relief (as identified in the respective parties’ submissions to date on the final orders).

Orders now to be made

1. [117]

   In the circumstances, final orders in relation to the relief to be granted should be deferred until after the conclusion of the re-opened hearing. The debate as to the nature of the present application and whether what is being sought is a variation to a final decision as to relief as opposed to something encompassed within the contemplated submissions as to the final orders to give effect to the relief that I had considered was appropriate, makes it undesirable for there to be ongoing scope for debate as to the status of any orders made in advance of the further hearing that will now take place in November this year.

2. [118]

   As to the procedural orders to be made in that regard, I am of the view that the appropriate course (particularly in light of the dispute as to the identity of the proposed real estate valuer) is not to make orders for the appointment of a court-appointed expert valuer but to make orders giving each side leave to adduce expert evidence from a real estate valuer of their choice and for there then to be an expert witness conclave to identify areas of agreement and areas of dispute between the experts, with a view to the preparation of a joint report; and then for any cross-examination of those experts to be conducted concurrently. As discussed with Counsel when the proposed orders were debated, I am of the view that the experts should be given a set of alternative assumptions that accommodate each side’s position as to the assumptions on which the valuation is to be based, so that a proper comparison can be made depending on which set of assumptions is ultimately accepted as being the relevant set to be adopted.

3. [119]

   Insofar as the plaintiffs’ submission that evidence from an actuary is required in order to opine as to the applicable discount rate when determining the net present value of the notional future rent for the properties (whether that be a market rent or otherwise) having regard to the fact that they are rural properties, the leave to reopen will extend to permit the plaintiffs to adduce expert evidence of that kind if they wish to do so. It is a matter for the first defendant as to whether he wishes to adduce evidence to challenge that evidence. However, I am not proposing to order the appointment of a court-appointed expert for that purpose.

4. [120]

   As to the proposal that there be a court-appointed expert to value the shares in the first and second plaintiffs, ultimately there was no dispute by the first defendant as to what was proposed (other than that it might not be necessary if the first defendant was provided with certain information that had been requested as to investments recorded in the books of one or both of the first and second plaintiffs) and I will make orders of the kind proposed by the first defendant in that regard but with some amendment to take into account the debate as to whether any notional rent should be on a market or other basis and dependent on any actuarial evidence.

5. [121]

   I do not propose to make any order for a court-appointed expert to consider the question of costs at this stage. I accept the first defendant’s submission that the question of costs should await the determination of final orders, particularly if this may inform any later debate as to the basis on which orders for costs should be made. Any set-off (and I had contemplated in my principal judgment that amounts be set-off “to the extent feasible”) will have to be determined once all variables (and costs) have been determined.

6. [122]

   I will direct the parties through their legal representatives to confer as to the timetable contemplated by the following orders and to advise my associate by close of business on 18 May 2018 of the agreed dates (or, if there be no agreement, the alternative proposed dates) and if there is any amendment or variation sought (by agreement or otherwise) in relation to these orders for the purpose of the further hearing of this matter in November this year. The orders I make are as follows:

   1. (1)

      The hearing be re-opened to permit evidence (including expert evidence) to be adduced, and further submissions to be made, as to the final orders to be made in these proceedings including: as to the rent (market or otherwise) for the first defendant’s properties for the period from judgment to the balance of his life expectancy; as to the potential impact of a condition for payment of that rent on the relief proposed to be granted to the third, fourth and fifth plaintiffs by way of the acceleration of their interest or equity in the first defendant’s properties; as to the appropriate discount rate to be adopted for the calculation of the net present value of the notional future rent over the balance of the first defendant’s life expectancy; and as to the matters otherwise referred to at [64] of these reasons and the “variables” referred to in the first defendant’s submissions dated 27 April 2018.

   2. (2)

      List the matter for further hearing as to final relief on 19-21 November 2018.

   3. (3)

      Direct that the first defendant notify the plaintiffs within 28 days of provision by the plaintiffs to the first defendant of the last three years’ financial statements of the unlisted companies in which the second plaintiff holds shares as to whether the first defendant requires there to be a valuation of his shares in the first and second plaintiffs or agrees that those shares should be taken to have no or nominal value.

   4. (4)

      In the event that the first defendant requires there to be a valuation of his shares in the first and second plaintiffs, appoint Ms Fiona Bateman of Dolman Bateman pursuant to UCPR 31.46 to be the Court appointed expert in order to determine the value of the first defendant’s shares in the first and second plaintiffs in accordance with a letter of instruction in the form proposed by the first defendant but with: amendment to paragraph 7(b) to allow for alternative assumptions as to the rent to be payable for the subject properties in accordance with the expert evidence of the real estate valuers to be appointed by the respective parties in accordance with these orders; amendment to paragraph 7(c) to allow for the alternatives of a calculation by reference to forensic tables, as proposed by the first defendant or a calculation by reference to any expert actuarial evidence relied upon by the plaintiffs; and with the date for submission of the report a date [to be specified] after the timetable for expert evidence has been finalised.

   5. (5)

      Direct the plaintiffs to file and serve any further evidence contemplated by order 1 above, including expert evidence, by [a date to be specified].

   6. (6)

      Direct the first defendant to file and serve any evidence, including expert evidence, in response to the plaintiffs’ further evidence by [a date to be specified].

   7. (7)

      Where there is expert evidence by more than one valuer on any particular issue, the experts are to meet in conclave by no later than [a dated to be specified] and to prepare a joint report identifying the matters the subject of agreement and disagreement between the experts; such report to be filed and served by [a date to be specified].

   8. (8)

      The matter be relisted for further directions on [a date to be specified].

   9. (9)

      Direct the parties through their legal representatives, to confer as to the timetable to be set in accordance with the above orders and to advise my associate by close of business on 18 May 2018 if there is any amendment or variation sought (by agreement or otherwise) in relation to these orders for the purpose of the further hearing of this matter in November this year.

   10. (10)

       Costs in relation to the directions hearings on 1 and 7 May 2018, and the application by the plaintiffs to adduce further evidence and to make further submissions as to the final orders for relief, be reserved.