In the matter of Gerringong Storage Pty Ltd

The Plaintiff, Ms Quine, brings these proceedings seeking relief in respect of the affairs of Gerringong Storage Pty Ltd (“GSPL”) which is the trustee of the Gerringong Storage Unit Trust (“GSUT”). I first set out the background facts and a chronology, drawing on the pleadings, the affidavit evidence and Ms Quine’s chronology.

It is common ground (Second Further Amended Statement of Claim (“2FASC”) [1]-[3], Defence to Second Further Amended Statement of Claim (“Defence”) [1]-[3]) that GSPL was incorporated on 20 August 2015 and its directors were then Mr Stuart Quine (Ms Quine’s then husband); the Second Defendant, Mr Scott; and the Third Defendant, Ms Sullivan; and that Mr Quine then held 300 shares in GSPL; Ms Sullivan then held 300 shares in GSPL; and Mr Scott held 175 shares in GSPL.

It is also common ground (2FASC [4]-[4B], Defence [4]-[4B]) that, as I noted above, GSPL was the trustee of GSUT on the terms of a trust deed dated 20 August 2015 (“Trust Deed”). Initially, 775,000 units in the Unit Trust were issued; the Fourth Defendant (“EOS”) (which is trustee of a superannuation trust in which Mr Scott is a member or beneficiary) subscribed to and still holds 175,000 units in GSUT; the Fifth Defendant (“TKS”) (which is the trustee of a superannuation trust of which Ms Sullivan is a member or beneficiary) subscribed for and still holds 300,000 units in GSUT; and Mr Quine and Ms Quine each subscribed to 150,000 units in GSUT.

It is also common ground (2FASC [6], Defence [6]) that, until 27 September 2024, GSPL as trustee for GSUT owned land and premises in Gerringong, New South Wales (to which the parties refer as either the “land” or the “premises”) and carried on a storage business at the land by which parts of the relevant premises were leased or licensed to third parties; and that, on or about 27 September 2024 (while these proceedings were on foot) GSPL (under Ms Sullivan’s and Mr Scott’s control) transferred the land and premises and the business conducted on them to the Sixth Defendant, Gerringong Commercial Hub Pty Ltd (“GCH”). The Defendants plead (Defence [6(c)] that, at the time of that transaction:

It is also largely common ground (2FASC [8]-[11], Defence [8]-[11]) that the premises compromised uncovered storage spaces, covered spaces, shipping containers and industrial units; that CBK Constructions Pty Ltd (“CBK”), an entity related to Ms Sullivan and/or her husband Mr Sullivan, occupied part of the premises; that Eye on the Garden Pty Ltd (“EOG”), an entity related to Mr Scott, occupied part of the premises until November 2022; and, from about November 2018, Ms Quine began using a part of the premises for a business, although she subsequently declined or failed to pay rent and her right to occupy the premises was terminated by GSPL.

The Trust Deed (Ex J2, 272) set out (in cl 6) the requirements for a transfer of units in GSUT, a matter on which Ms Quine relied to contend that the parties had not reached a concluded agreement in respect of the transfer of units in GSUT, and Schedule 5 of the Trust Deed in turn set out an instrument of transfer of units. It has not been necessary to address that contention given the conclusions that I have reached on other grounds. Clause 8 of the Trust Deed set out the powers and discretions of the trustee and aspects of that clause plainly informed the scope of the parties’ obligations in respect of the conduct of GSPL’s affairs as trustee of GSUT, and the conduct of GSUT. The clause conferred several “absolute powers and discretions” on GSPL which included, in cl 8.10, the power:

Clause 8.17 empowered GSPL to use or lease or licence the property or any part of it on such terms as it saw fit and specifically to permit any unitholder “to have the use of the property with or without payment of rent or outgoings and on such other terms as [GSPL] thinks fit”. That clause plainly excluded any contention it was not open to GSPL, or its directors, to allow occupancy of the land or the premises to unitholders in GSUT or their associates on a rent free basis or at less than market rent. Clause 8.27 of the Trust Deed permitted GSPL to employ or engage any person, and to pay that person’s expenses and other remuneration for services of that person, and contemplated the person engaged could be a unitholder and that that payment “shall be construed as a payment as a result of such employment and not on account of their position as a Unitholder”. Clause 8.23 allowed GSPL to deal with any related party of GSPL in such manner as it sought fit, including selling or disposing of property of the trust fund.

It is common ground (2FASC [12]-[14], Defence [12]-14]) that, on 5 November 2018, Ms Quine acquired from Mr Quine all of his 150,000 units in GSUT, she subsequently became a director of GSPL and acquired Mr Quine’s shares in GSPL; and, since that date, Ms Quine had held 300,000 units (38.7%) in GSUT; TKS has held 300,000 units (38.7%) in GSUT; and EOS has held 175,000 units (22.6%) in GSUT; and Ms Quine has held 300,000 shares (38.7%) in GSPL; TKS has held 300,000 shares (38.7%) in GSPL; and EOS had held 175,000 shares (22.6%) in GSPL.

It is broadly common ground (2FASC [15], Defence [15]; Ex J2, 844) that, on 3 December 2020, during a meeting of the then directors of GSPL, Ms Quine proposed that CBK, EOG and her entity trading from the premises enter into leases or licence agreements with GSPL and that they pay market rent and outgoings to GSPL for their respective use of the premises; and Ms Sullivan and Mr Scott expressed the view that the existing arrangements should continue. This exchange recognised that the business operated by GSPL had been conducted, prior to Ms Quine’s acquiring shares in GSPL and increasing her interest in GSUT, on a basis that (as the Trust Deed permitted, as I noted above) the shareholders and unitholders and associated entities (including Ms Quine and her associated entity) would occupy part of the premises on payment of less than market rates; Ms Quine sought to change that position from December 2020 and her view did not prevail.

On 17 December 2020, Ms Quine obtained a report from an accountant addressing “concerns pertaining to various financial transactions of [GSUT]”, which identified further information requested by the accountant (Ex J2, 996). Correspondence between the parties’ solicitors then followed (2FASC [16]-[17], Defence [16]-[17]). On about 1 April 2021, a resolution was carried at a meeting of members of GSPL to remove Ms Quine as a director of GSPL and Ms Quine does not contest the efficacy of that removal. I will refer to further correspondence between the parties in determining a dispute as to whether a binding settlement agreement was reached between them below.

On 17 October 2021, GSPL contended that Ms Quine owed $20,693.12 in arrears of rent for the land and, under s 127(1) of the Conveyancing Act 1919 (NSW), gave her one month’s notice to terminate her implied tenancy in writing (Ex J2, 1606, 1998-1999). Further correspondence followed which I address in dealing below with the dispute as to whether a settlement agreement was reached.

At least by 16 April 2022, Ms Quine made clear that she would be commencing these proceedings shortly. I will address the events surrounding the subsequent transfer of the Gerringong property by GSPL to GCH in dealing with Ms Quine’s claim to a constructive trust below.

Ms Quine reads her affidavit dated 1 July 2024 which referred to the nature of GSPL’s business and its shareholders and to the unitholders in GSUT. She outlined, in evidence admitted with a limiting order under s 136 of the Evidence Act 1995 (NSW) (“Evidence Act”) as submission only, the matters which she considered had the result that she was being oppressed as a shareholder of GPSL and a unitholder in GSUT which included the matters relied on in these proceedings. She referred (Quine 1.7.24 [27]) to the payment by GSPL of fees for bookkeeping, yard maintenance, consulting fees and cleaning fees to entities associated with Ms Sullivan and Mr Scott and to the circumstances surrounding the acquisition of an interest in GSPL and the trust by her former husband and herself. She acknowledged that she “did not have much to do” with GSPL or GSUT at that time and that conversations concerning those matters largely took place between her former husband and Mr Scott. That matter does not support her claim that the business was established as a quasi-partnership, at least so far as she was concerned, although she says that she nominated herself to do bookkeeping and make inquiries regarding clients and states that she undertook those roles (Quine 1.7.24 [33]). Ms Quine also referred to having obtained additional interests in GSUT and a shareholding interest in GSPL following her divorce from her former husband, and says that she ceased as bookkeeper for the business, GSPL and GSUT after her divorce and that Ms Sullivan assumed that role.

Ms Quine also addressed the position in respect of the occupation of storage units at the premises by entities associated with her and her former husband and then by her after her divorce, and by Mr Sullivan and Mr Scott. She also referred, in evidence admitted with a limiting order under s 136 of the Evidence Act as to her belief, that Mr Scott and his associated business and Ms Sullivan and her associated business had not paid rent or outgoings at a “fair or commercial rate” in respect of their occupation of the premises (Quine 1.7.24 [44]). She addressed the circumstances in which she occupied several lots on the premises from about December 2020 until her lease was terminated. She referred to an agreement that rent should not be charged in respect of certain spaces reached at the time of the COVID-19 pandemic (Quine 1.7.24 [55]), although the parties gave no real attention to that agreement in submissions.

Ms Quine also addressed her concerns as to “unexplained” expenses (Quine 1.7.24 [60]ff). She did not press claims in respect of a significant number of these expenses at the hearing and I address the claims as to those categories of expenses that were pressed below. Ms Quine also addressed her difficulty in obtaining access to financial information concerning those matters and discussions as to those matters at a directors’ meeting on 3 December 2000. She referred to the report which she obtained from an accountant in December 2020 (Quine 1.7.24 [89]ff) which was admitted with a limiting order under s 136 of the Evidence Act as the statements made by the accountant and not as proof of the fact. She also referred to the circumstances in which she was removed as a director of GSPL in April 2021, and no challenge was brought to the efficacy of that removal; to the fact that she stopped paying rent and contributing to the accountants of the business (Quine 1.7.24 [106]); to the circumstances in which her lease over parts of the premises was then terminated, and to the further requests she and her solicitors made for access to documents and financial information concerning GSPL and GSUT. She addressed, at some length, her views as to financial information that was subsequently made available to her.

Ms Quine also read the affidavit dated 21 October 2024 of her solicitor, Mr Lethbridge, which addressed the circumstances in which Ms Quine and her legal representatives became aware of the sale of the property from GSPL to GCH, a transaction which I address below. By an affidavit dated 11 November 2024, Mr Wright, who is also a solicitor acting for her, addressed several aerial images of the land and the premises. By her affidavit dated 12 November 2024, Ms Quine in turn addressed matters which arose from her observation of those images and gave further evidence as to the occupation of the premises by interests associated with Mr Scott and Ms Sullivan, expenditures by GSPL, her claim to have been excluded from the management of GSPL after she had become a director of GSPL and the fact that she did not become aware of the sale of the premises by GSPL to GCH until 15 October 2024. I refer to the circumstances in which her solicitors had previously been provided information anticipating that sale below.

By an affidavit dated 16 December 2024 in reply, Ms Quine responded to, and took issue with, several aspects of Ms Sullivan’s evidence, although it is not necessary to address disputes as to those matters in order to resolve these proceedings. Ms Quine was cross-examined relatively briefly including as to the parts of the premises which were occupied by the several parties and her failure to pay rent for her occupancy of the premises.

Turning now to the evidence led by the Defendants, by his affidavit dated 6 December 2024, Mr Scott referred to the events at the time that GSPL was established; to his discussions with Ms Quine’s former husband as to the opportunity to purchase the premises and to an arrangement that had been in place since the inception of GSPL that each party would have one rent free spot and pay rent for other spots that they occupied; to the fact that he had occupied one rent free spot from the commencement of the business until he vacated the premises at the end of November 2022; and to the fact that his son was now using that rent free spot in the premises. He also addressed the rent free arrangement reached at the time of COVID-19, which he attributes to a suggestion made by Ms Quine, a matter which is denied by Ms Quine. It is not necessary to resolve the dispute as to that matter. Mr Scott also referred to difficulties that arose when he and Ms Quine occupied adjoining spaces in units 5 and 5A in the premises, to a subsequent dispute with Ms Quine’s father, and to his view that the expenditures that are challenged by Ms Quine are legitimate business expenses of GSPL with the exception of legal fees which he acknowledges ought to be adjusted. Mr Scott was cross-examined, relatively briefly, and indicated his lack of involvement with the challenged expenditures. I accept his evidence in that respect.

By her affidavit dated 6 December 2024, Ms Sullivan also addressed the circumstances in which GSPL was established in 2015 and purchased the land; referred to the circumstances in which CBK and EOG paid rent for spaces additional to rent-free units; and pointed to Ms Quine’s failure to pay rent to GSPL and to the subsequent entry by CBK and EOG into written leases with GSPL and to Ms Quine’s not having entered into such a lease. She also addressed the appointment of Ms Quine as a director of GSPL, although she identified an issue as to whether Ms Quine consented to that appointment, which it is not necessary to resolve; and she addressed the directors’ meeting held on 3 December 2020, Ms Quine’s removal as director on 9 March 2020, and the circumstances in which rent free occupancy of the premises was permitted during the COVID-19 pandemic. Ms Sullivan also dealt with Ms Quine’s access to financial information and set out the matters on which she and Mr Scott rely to contend that an agreement to purchase Ms Quine’s shares in GSPL and units in GSUT had been reached on 2 June 2023. I will address the claim in respect of that agreement below. Ms Sullivan addressed the circumstances of the transfer of the property from GSPL to GCH, which it is now accepted took place in breach of trust. She also responded, in some detail, to aspects of Ms Quine’s evidence and to the complaints made by Ms Quine in respect of expenditures, some of which are now not pressed.

By a further affidavit dated 22 January 2025, which was read only in part, Ms Sullivan again addressed the transfer of the land from GSPL to GCH, and contended that land was transferred on the basis of a value of $2.25 million and that Ms Quine’s approximate 39% interest in the premises (or more precisely GSPL and GSUT) had a value of approximately $877,500 which is the amount recorded on the transfer of the land. For completeness, she also gave evidence of her understanding that TKS and EOS were not required to pay stamp duty on their portion of the value of the land which was being transferred between related parties.

Ms Sullivan was cross-examined at some length, including as to aspects of GSPL’s administration and several of the expenditures which were in issue in the proceedings. She was not an impressive witness, and claimed to recall some matters of detail that might assist the Defendants but generally did not recall and claimed to be unable to comment on other matters without further inquiry. Ultimately, little turned on her cross-examination given the concessions made by the Defendants in respect of legal costs charged to GSPL and other less significant expenditures, and the difficulties with aspects of Ms Quine’s claims other than in respect of the sale of the land from GSPL to GCH in breach of trust, which I address below.

I first address a preliminary issue raised by a Cross-Claim dated 6 December 2024 (“CC”) brought by Ms Sullivan, Mr Scott, EOS and TKS. Broadly, the Cross-Claimants contend that, on 2 June 2023, they and Ms Quine reached a binding agreement to sell her shares in GSPL and her units in the trust at a specified price so that, they contend, she has no continuing interest in the conduct of GSPL and GSUT other than to receive the agreed purchase price under that agreement.

I first set out the correspondence between the parties that is relevant to this claim. After Ms Quine’s removal as a director of GSPL on 1 April 2021, by letter dated 28 April 2023 (Ex J2, 1746) the solicitors for Ms Sullivan, Mr Scott, EOS and TKS put an offer for Mr Scott and Ms Sullivan to purchase Ms Quine’s shares in GSBL and for EOS and TKS to purchase Ms Quine’s units in GSUT for a purchase price of $500,000 and otherwise on the terms of a written sale and purchase agreement, on the basis that Mr Scott and Ms Sutherland would pay the legal costs involved in having that agreement drawn up and any reasonable legal costs Ms Quine might incur in obtaining an independent review of the draft agreement. They requested Ms Quin’s indication as to whether she “agrees to this proposal” by 5:00pm on 26 May 2023.

On 15 May 2023, Ms Quine asked Mr Scott and Ms Sullivan to produce accounting records for GSPL and GSUT for her review (Ex J1, 1750-1751). By email dated 17 May 2023 (Ex J2, 1753) Ms Quine’s solicitor repeated that request and advised the solicitors for Mr Scott and Ms Sullivan that:

On 19 May 2023, Mr Scott and Ms Sullivan’s solicitors provided Ms Quine’s solicitors (Ex J2, 1754) with some documents relating to GSPL and GSUT, namely its tax return in respect of the trust, GSPL’s financial report for the period ended 30 June 2022 and a document relating to payments owing by Ms Quine.

On 26 May 2023 at about 3:00pm, Ms Quine sent a text message to Ms Sullivan stating that “I want $580k you can pay the legal cost of that or I’ll take it to court? Let me know” (Ex J2, 1810). The Cross-Claimants rely on this email and subsequent events for a claim that Ms Quine had agreed to sell her shares and units to them, which I address below.

By a letter dated 30 May 2023, the Cross-Claimants’ solicitor characterised Ms Quine’s text message as a “counteroffer” by Ms Quine to the Cross-Claimants proposal of 28 April 2023 and requested an estimate of Ms Quine’s associated legal costs, as this “will assist… in determining whether or not to accept [Ms Quine’s] [counter]offer” (Ex J2, 1811).

By email dated 2 June 2023 at about 10:09am, Ms Quine’s solicitor sent an email (Ex J2, 1813) stating that “[p]rior to being in a position to put forward and [sic] proper settlement offer my client requires some further information concerning the financials of the [GSUT]…” and requested further financial information relating to GSPL and GSUT and itemised accounts of several costs recorded in the financial statements. On 2 June 2023 at about 12:56pm, Ms Sullivan sent a text message to Ms Quine (Ex J2, 1810). stating that “[y]our offer is accepted. We will instruct solicitors to prepare the paperwork”.

By letter dated 5 June 2023 (Ex J2, 1817), Ms Quine’s solicitor “denie[d] that there is any binding agreement between the parties concerning settlement”. By email dated 6 June 2023 (Ex J2, 1819), Mr Scott and Ms Quine’s solicitors responded:

Ms Quine subsequently pursued access to the financial records of GSPL and GSUT, without success, for a considerable period (Ex J2, 1826-1827, 1908).

On 28 June 2023, the Cross-Claimants indicated their willingness to offer Ms Quine $580,000 for all her shares in GSPL and all her units in GSUT (Ex J2, 1909). On 14 July 2023, the Cross-Claimants again proposed (Ex J2, 1926-1927) that Ms Quine sell all her shares in GSPL to Mr Scott and Ms Sullivan, and all her units in GSUT to EOS and TKS, for a total purchase price of $580,000 and otherwise on the terms of a share purchase agreement.

On 20 September 2023, the Cross-Claimants again proposed that Ms Quine sell all her shares in GSPL to Mr Scott and Ms Sullivan, and all her units in GSUT to EOS and TKS, for an increased purchase price of $680,000, on the basis that GSPL would pay any dividends owing to her, less any rent owed by her, and that she must vacate the [l]and on or before settlement.” (Ex J2, 1990-1991). On 3 October 2023, Ms Quine offered to sell all her shares in GSPL to Mr Scott and Ms Sullivan, and all her units in GSUT to EOS and TKS, for a total purchase price of $780,000, on terms that she be paid any outstanding dividends and no adjustment should be made on account of rental arrears (Ex J2, 1995). I recognise that these subsequent negotiations were not necessarily inconsistent with the existence of an earlier agreement to acquire Ms Quine’s shares in GSPL and units in GSUT on less favourable terms, where they arguably sought a commercial resolution where Ms Quine did not accept that any earlier agreement had binding effect.

On 19 October 2023, after Ms Quine was (as I noted above) given one month’s notice to terminate her lease of the premises on 17 October 2023, she invited the Cross-Claimants, by no later than 26 October 2023, to draw up a Deed of Settlement and Release in line with their proposal of 20 September 2023 with specified modifications (Ex J2, 2002-2003).

Also on 19 October 2023 (Ex J2, 2003.1), Ms Sullivan advised the lender to GSPL, Westpac, that:

By email dated 26 October 2023 (Ex J2, 2006) the solicitors for Mr Scott and Ms Sullivan advised the solicitors for Ms Quine that Mr Scott and Ms Sullivan considered Ms Quine’s offer acceptable but they were unable to accept that offer by that day and requested that the offer be kept open for another 21 days to allow Westpac to review the proposal. Ms Quine agreed to that suggestion by email from her solicitors dated 31 October 2023 (Ex J2, 2008), but requested as a sign of good faith that her dividends are now paid, noting that she was vacating the premises and required the dividends to pay for relocation and storage costs.

By email dated 6 November 2023 (Ex J2, 2010) to the solicitors for Mr Scott and Ms Sullivan, Ms Quine’s solicitors noted a lack of response to Ms Quine’s request and indicated that if Mr Scott and Ms Sullivan had not confirmed the proposed settlement agreement put forward by Ms Quine as acceptable and agreed to the immediate payment of dividends by 10 November 2023, then proceedings would be commenced seeking orders foreshadowed in earlier correspondence.

On 10 November 2023, Ms Quine’s solicitors then put a more qualified position and advised, by a “without prejudice” communication (Ex J2, 2015) that was tendered without objection, that:

Mr Scott and Ms Sullivan’s solicitors responded by a without prejudice email dated 14 November 2023 (Ex J2, 2017-2018), also tenders without objection that the dividend for FY 2022 would be paid on that same day and the dividend for FY 2023 would be paid after the accountant had finalised GSPL’s tax return, within the coming weeks, and apologised for being unable to provide a timeframe to respond to the offer, where Westpac had requested an amended trust deed and the solicitors were working on that and would respond once Westpac had confirmed a timeframe.

A settlement on those terms was not finalised and, on 13 December 2023 (Ex J2, 2039-2045), Ms Quine’s newly appointed solicitors withdrew her previous proposal (Ex J2, 2029-2030) and pressed her request for production of financial records of GSPL and GSUT.

By letter dated 22 March 2024 (Ex J2, 2301-2302), the Cross-Claimants’ solicitor advised that, if Ms Quine commenced proceedings, they would file a Cross-Claim "based on the principles of promissory estoppel” for specific performance of an agreement between the parties dated 19 October 2023. That position was inconsistent with a binding agreement, in different terms, having arisen from the earlier exchange of emails.

By email dated 3 April 2024 (Ex J2, 1611), Ms Sullivan advised Westpac that:

The surrounding correspondence at this time does not indicate the basis for such optimism, and it seems possible that this email contemplated, not agreement with Ms Quine, but a sale of the premises to a new entity without her involvement, which I address below.

By an email dated 8 April 2024 (Ex J2, 2307.2 – 2307.3) the solicitors acting for Mr Scott and Ms Sullivan referred to earlier emails concerning Ms Quine’s settlement offer made on 19 October 2023; they expressed the position that Ms Quine had “induced” their clients to pay dividends in accordance with the terms of that offer and attached a draft share sale agreement for review by Ms Quine and advised that Mr Scott and Ms Sullivan were ready to settle on 18 April 2024. By email dated 16 April 2024 (Ex J2, 2307.1 – 2307.2), they followed up as to any changes required by Ms Quine to the share sale agreement and the preparation of documents for a settlement. Ms Quine’s solicitor responded on the same day (Ex J2, 2307.1) advising that:

Returning now to the Cross-Claimants’ claim that a binding settlement was reached, they seek, inter alia, a declaration that they (or some of them) and Ms Quine had reached a binding and enforceable agreement on or about 2 June 2023 ("June 2023 Agreement") to the effect that the Ms Quine would transfer to the Cross­Claimants (or some of them) the entirety of her rights and interests in the issued share capital of GSPL and in the issued units in GSUT for consideration of $580,000 and an order that the June 2023 Agreement be specifically performed.

The Cross-Claimant’s plead (CC [2]) that, by the letter dated 28 April 2023 (to which I referred above), they made an offer to Ms Quine (“28 April Offer”) which was capable of immediate acceptance by her and which was expressed as remaining open for her acceptance until 5:00pm on 26 May 2023 with terms to the effect that Ms Sullivan and Mr Scott would purchase Ms Quine's shares in GSPL; EOS and TKS would purchase Ms Quine’s units in GSUT; the purchase price payable to Ms Quine for the shares in GSPL and the units in GSUT would be $500,000; the Cross-Claimants would pay the legal costs of drafting a written agreement to record the said purchase; they would pay Ms Quine’s reasonable legal costs regarding an independent review of that written agreement; and they would pay her reasonable legal costs associated with completion of the sale of the shares and units. The Cross-Claimants also rely on Ms Quine’s text message to Ms Sullivan at 3:00pm on 26 May 2023 (to which I referred above) stating "I want $580k you can pay the legal cost of that or I'll take it to court? Let me know" and on Ms Sullivan’s text message to Ms Quine at 12:56pm on 2 June 2023 (to which I also referred above) stating "Hi. Your offer is accepted. We will instruct solicitors to prepare the paperwork".

The Cross-Claimants then plead (CC [3]-[4]) that Ms Quine’s text message on 26 May 2023 was a counteroffer with terms that:

The Cross-Claimants rely on Ms Sullivan’s text message in response to contend that, on 2 June 2023, they communicated to Ms Quine their acceptance of that counteroffer and (CC [5]) that:

The Cross-Claimants claim (CC [6]-[7]) that they are entitled to specific performance of the Binding Agreement and say that they are ready, willing and able to perform the entirety of their obligations under the Binding Agreement and that.

Turning now to the parties’ submissions, Mr Bedrossian and Mr Munro who appear for the Defendants submit, in their written outline of opening submissions, that:

In their closing written outline of submissions, Mr Crossland and Mr Smyth, who appear for Ms Quine, respond that:

Mr Crossland and Mr Smyth contend that the two text messages on which the Cross-Claimants rely did not give rise to a binding agreement because, inter alia, their contents were too uncertain where the alleged offer did not address to whom units were being sold, or in which numbers to which unit holders; the alleged offer did not address what price was referable to which transfer of shares or units; and the two text messages did not identify any time for the payment of the funds or the purchase of the shares. They also contend that:

The applicable principles are well-established and I have here drawn on my summaries of them in The Owners – Strata Plan No 58087 v Matthews [2015] NSWSC 1906, ADG United Pty Ltd v EG Enterprises Pty Ltd [2019] NSWSC 745 and Re Leslie Muir Holdings Pty Ltd [2019] NSWSC 1519 at [27]ff. In Masters v Cameron (1954) 91 CLR 353 at 360–362, [1954] HCA 72, the High Court identified three categories of case which may exist where parties which have been in negotiation reach agreement upon terms of a contractual nature. The first category of case is one where the parties have reached finality and intend to be immediately bound to the performance of the relevant terms, but propose to have the terms restated in a form which will be fuller or more precise, but not different in effect. A second case is where the parties have reached complete agreement, but nevertheless have made performance of one or more of the terms conditional upon the execution of a formal document. A third case is one in which the intention of the parties is not to make a concluded bargain unless and until they execute a formal contract. At first instance in Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622 at 628, McLelland J identified a fourth case, where the parties were content to be bound completely and exclusively by the terms they had agreed, while expecting to make a formal contract in substitution for the first contract, containing, by consent, additional terms.

Whether a contract has been formed in this situation depends on the objective intention of the parties ascertained from the terms of the relevant document, read in light of the surrounding circumstances, and, if the terms of that document indicate that the parties intended to be bound immediately, then effect must be given to that intention irrespective of the subject matter, magnitude or complexity of the transaction: G R Securities Pty Ltd v Baulkham Hills Private Hospital Pty Ltd (1986) 40 NSWLR 631 at 634, 636; Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 (“XIVth Commonwealth Games”) at 548-9; Sagacious Procurement Pty Ltd v Symbion Health Ltd [2008] NSWCA 149 (“Sagacious Procurement”) at [66].

In XIVth Commonwealth Games at 540, Gleeson CJ observed that:

In Pavlovic v Universal Music Australia Pty Limited (2015) 90 NSWLR 605; [2015] NSWCA 313, Beazley P (with whom Bathurst CJ generally agreed and Meagher JA agreed) observed (at [64]-[65]) that whether parties intend to be immediately bound, where they have reached agreement as to the terms of a contract but have also agreed that a further, formal agreement is to be executed, is to be determined objectively, having regard to the “outward manifestations” of their intentions. Her Honour also observed (at [65]) that the question was “what each party by words and conduct would have led a reasonable person in the position of the other party to believe”. Beazley P also observed (at [69]) that the three classes of case in Masters v Cameron above no longer applied, if they ever were, as strict categories into which cases must fall. Her Honour noted (at [72]) that it was relevant to consider the commercial context and surrounding circumstances of the parties’ dealings in determining whether a binding agreement had come into existence. The Court of Appeal also there noted (per Bathurst CJ at [15] and per Beazley P at [118], with whom Meagher JA agreed), consistently with the case law to which I referred above, that the Court may have regard to subsequent conduct of the parties in determining whether, at an earlier juncture, the parties intended to enter into a binding agreement.

In Nurisvan Investment Ltd v Anyoption Holdings Limited [2017] VSCA 141 at [106] (“Nurisvan”), the Court of Appeal of the Supreme Court of Victoria similarly observed, in determining whether the heads of agreement in that case constituted a binding contract to enter into a share sale, that:

The fact that the parties might negotiate further, additional terms, that were not included in a first agreement, is not necessarily inconsistent with a conclusion that the first agreement constituted a binding contract between them: Nurisvan at [107]. The Court may have regard to the conduct of the parties after the date of entry into the alleged contract to determine whether they entered a binding contract: Sagacious Procurement at [105]; Nurisvan at [77]ff, [82]-[83].

Mr Crossland, with whom Mr Smyth appears for Ms Quine, also draws attention to the decision of Darke J in Ausko Cooperation Pty Ltd v Junapa Pty Ltd (2021) 20 BPR 41,523; [2021] NSWSC 615 at [45]-[46], where his Honour considered whether the parties had there reached a binding agreement for a new lease, and observed that:

I am satisfied that the exchange of emails between Ms Quine and Ms Sullivan did not give rise to a binding and enforceable agreement, having regard to the objective intention of the parties ascertained from the terms of the emails, read in light of the surrounding circumstances. I recognise that it is possible that, given a sufficiently attractive offer to acquire her shares and units, Ms Quine might have been prepared to accept that offer without pursuing her longstanding request for access to financial information concerning GSPL and GSUT. However, it seems to me unlikely here that the parties objectively intended to be immediately bound by the exchange of emails rather than a share sale agreement, where their earlier correspondence had addressed not only the intended preparation of that agreement but also the costs of preparation and Ms Sullivan’s review of it, recognising its significance for both parties. While the sale of the shares and units was not a particularly complex transaction, it would take place in circumstances that the parties’ relationship was poor and they had had been in dispute for some time, and it seems to me unlikely that either would have objectively intended that no more than an agreement as to price was necessary to resolve that dispute or that all other aspects of a resolution were so obvious that they did not require agreement between the parties.

It also seems to me that neither party had here by words or conduct led the other party to believe there was a concluded agreement, where critical issues were not resolved. Importantly, no agreement had been reached as to a time for completion for the sale or whether that completion was conditional on the Cross-Claimants obtaining finance to complete the transaction. It seems to me unlikely that either party, where their relationship was poor and they were already in dispute, would have been content to rely on an implied terms that completion would occur in a “reasonable” time, where a further dispute could readily arise as to that issue. I note, in passing, that no agreement had also been reached as to whether Ms Quine would warrant that her shares and units were unencumbered, and it seems to me unlikely that the Cross-Claimants would objectively have wished to acquire those shares and units at the nominated price while taking the risk that a lender had an equitable charge over them and Ms Quine had no economic interest in them. The subsequent conduct of the parties, including the Cross-Claimants’ later threat to enforce a later agreement in different terms, is largely inconsistent with their entry into a binding agreement by those emails. No question of waiver, or the exclusion of any waiver, arises where a binding and enforceable contract is not established. It is also not necessary to address Ms Quine’s claim that any binding and enforceable contract was abandoned by the parties where I have held that no such contract was established.

The Defendants’ Cross-Claim will therefore be dismissed and I address the balance of the issues in the proceedings on the basis that Ms Quine was at all relevant times a shareholder in GSPL and a unitholder in GSUT.

Ms Quine seeks, by way of a derivative claim brought on GSPL’s behalf, a declaration that GCH holds the Gerringong property and any funds it retains from the loan funds paid by La Trobe on or about 27 September 2024 on constructive trust for GSPL (Further Amended Originating Process (“OP”) [1A(a)]) and a declaration that Mr Scott and Ms Sutherland hold on constructive trust for GSPL any funds received by them from the loan funds paid by La Trobe on or about that date.

Turning first to Ms Quine’s pleaded case, it is common ground (2FASC [29A], Defence [29A]) that, as I noted above, by a deed of transfer dated 18 June 2024 and registered on 27 September 2024, Ms Sullivan, Mr Scott, EOS and TKS caused GSPL to transfer the premises to GCH.

Ms Quine pleads and the Defendants admit (2FASC [29B], Defence [29B]) that the transfer was a breach of trust by GSPL. Ms Quine also pleads and the Defendants deny that the transfer:

Ms Quine relies on several particularised matters in support of that allegation, which I address below.

The Defendants respond (Defence [29B]) that the transfer of the premises occurred for a consideration of $2.25 million, which was plainly a reference to the stated consideration rather than the amount then paid, and that:

Ms Quine in turn pleads (2FASC [29C], denied Defence [29C]) that:

I now turn to the events surrounding the transfer of the Gerringong property by GSPL to GCH. As I noted above, at least by 16 April 2022, Ms Quine had made clear that she would be commencing proceedings shortly. At least by 17 April 2024, discussions had occurred between Ms Sullivan and GSPL’s accountant concerning the establishment of a new entity, presumably to acquire the Gerringong property, and the Defendants’ solicitors had rightly then drawn attention to the “risk of not having moral high ground” arising from that course (Ex J2, 1837). Importantly, so far as Ms Quine seeks to establish fraud on the part of GCH, I do not understand that advice to have extended to a suggestion that the proposed transaction would be legally wrongful or fraudulent in its nature, and conduct that falls short of the “moral high ground” is not necessarily fraudulent in any relevant sense. Ms Sullivan claimed that she did not recall the relevant conversation in cross-examination (T103-104) although she acknowledged that the notion of setting up a new entity had been discussed with GSPL’s accountant and that she subsequently resolved to set up a new entity and transfer the property to that new entity (T105). GCH was incorporated on 12 June 2024 (J1, 2701).

By circular resolution signed by Ms Sullivan and Mr Scott and dated 17 June 2024 (Ex J2, 2606-2607), the directors of GSPL resolved that:

On 18 June 2024, GSPL and GCH entered into a deed (Ex J2, 2320) to transfer the land to GCH for $2.25 million (exclusive of GST) which recorded that GSPL had agreed to sell the property to GCH for $2.25 million and provided, in cl 1, that GSPL assigned and conveyed to GCH all right, title and interest in the property in fee simple. Clauses 3 and 4 dealt with tax implications of the sale. Clause 7 provided that:

By a valuation directed to the value of the property as at 21 April 2022 (Ex J2, 1666) Mr Kelkert (who now gives evidence as an expert witness for the Defendants, which I address below) valued the land and premises at $2,200,000 exclusive of GST. Mr Kelkert there noted that the market was then impacted by uncertainty caused by the COVID-19 pandemic and that there was significant valuation uncertainty in respect of that valuation. That valuation adopted a direct comparison approach and capitalisation approach after taking into account comparable sales evidence and Mr Kelkert noted that the property was operating as a storage site but that “any value of the business is considered to be tied up within the value of the rea[l] estate component”. In cross-examination, Mr Kelkert observed that the higher valuation which he now gives to the property, in his expert report led in these proceedings, reflects the likelihood that the property would be purchased for redevelopment purposes.

It appears that, on 7 August 2024, the Defendants’ solicitors provided Ms Quine’s solicitors with a link to a drop box which contained, inter alia, a copy of the directors resolution passed on 17 June 2024. They did not draw Ms Quine’s attention to that resolution and Ms Quine’s solicitors do not appear to have read it, since its effect would have been plain to any solicitor who had read it. I return to that matter below.

On 2 September 2024, La Trobe Financial Services Pty Ltd (“La Trobe”) approved an application by GCH for a $1.83 million loan facility, to be used “for Refinance [purposes] with equity/cash out” against a first-registered mortgage over the land and personal guarantees from Mr Scott, Ms Sullivan and others (Ex J1, 2675-2688). On 27 September 2024, Westpac discharged its existing mortgage given by GSPL over the land; GSPL transferred the land to GCH and La Trobe took a mortgage over the land from GCH (Ex J2, 2694, 2695-2696, 3045). A transfer of the land was stamped with the payment of duty on the basis that GCH had paid consideration of $877,500 (Ex J1, 2695-2696, 3046). The settlement completion record in respect of the property (Ex J2, 2712 -2713) also recorded payment of consideration of $877,500 and, for completeness, loan proceeds of $1,792,990 of which $1,030,414 described as vendor’s funds (and presumably included the amount paid to GSPL) and $756,915.44 was paid to Westpac described as “loan payout”.

By letter dated 15 October 2024 (Ex J1, 2706), GSPL’s solicitors advised Ms Quine’s solicitors that:

That letter went on to advise that:

An attached schedule referred to the property value; the repayment of funds to Westpac in respect of its loan, adjustments for trade debtors and creditors of GSPL and anticipated costs of a winding up and other costs; and identified an anticipated payment to Ms Quine, which was plainly to be funded by the cash amount that was paid in respect of GCH’s purchase of the property from GSPL.

Ms Quine’s solicitor responded by an email dated 15 October 2024 (Ex J1, 2710) contending (it appears, wrongly) that Ms Quine had not previously received a copy of the directors’ circular resolution authorising the sale of the premises and that:

By a further email dated 16 October 2024 to Ms Quine’s solicitors (Ex J1, 2715), the Defendants’ solicitors confirmed that the directors’ circular resolution authorising the sale of the premises to GCH had been provided to Ms Quine’s solicitors on 7 August 2024, by a drop box link which contained documents produced in response to a notice to produce dated 24 July 2024. They also attached a copy of the deed of transfer dated 18 June 2024 and other documents relating to the sale of the property. The solicitors also advised that:

I recognise that that contention has a somewhat self-serving character, but there is force in the proposition that a sale of the land and premises at fair value was likely an essential step in separating the parties and paying out the value of Ms Quine’s (or indeed Ms Sullivan’s and Mr Scott’s) interest in GSPL and GSUT, and the position there taken by Ms Sullivan and Mr Scott highlights the fact that the sale of the property to GCH (as long as it took place at its then fair value) would allow Ms Quine to be paid the value of her interest in GSPL and GSUT, rather than deprive her of the value of that interest. I also recognise that Ms Sullivan and Mr Scott did not act promptly or in a particularly transparent manner in disclosing the resolution approving the sale of the land and premises, although I accept that was in fact disclosed on 7 August 2024 in a manner that did not highlight that resolution. There was a shorter delay in disclosing the completion of the sale of land and premises, which had occurred on 27 September 2024, by the solicitors’ letter dated 15 October 2024.

I accept that, in a proper case, a constructive trust may be a proper remedy for a transfer of land made to a third party in breach of trust. However, an issue initially arose in these proceedings as to whether I could grant that relief where the interest of Perpetual Corporate Trust Ltd (“Perpetual”) as registered mortgagee of the land (presumably as custodian or nominee for La Trobe) would arguably be adversely affected by that relief and Perpetual had not been joined as party to the proceedings in respect of the claim for this relief, or given notice of the application and an opportunity to be heard as to the form of any relief to be granted; compare John Alexanders Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1; [2010] HCA 19 especially at [133], [161], although I recognise that that case concerned an unregistered rather than a registered mortgage. I raised that question for Ms Quine’s consideration in the course of her opening submissions, but she then took no step to address it.

In their written outline of closing submissions, Mr Crossland and Mr Smyth acknowledged that:

Subsequently, Ms Quine sought, in closing submissions and then by interlocutory process, to amend the relief sought to claim a constructive trust “subject to” Perpetual’s mortgage over the land and limited to GCPL’s “interest” in the land. I declined to permit that amendment, where Perpetual was also not given any opportunity to be heard in respect of it, for reasons set out in my earlier judgment dealing with that application. After the evidence had closed and the hearing was complete other than for her reply submissions, Ms Quine then brought a further application seeking to join Perpetual as party to the proceedings.

Ms Quine’s application to join Perpetual was heard on 28 March 2025, after all submissions in the proceedings were complete, and Mr Sirtes appeared for her on that application. Ms Quine read an affidavit dated 24 February 2025 of her solicitor, Mr Lethbridge, in support of that application. He set out an explanation for her not having joined Perpetual as party to the proceeding at an earlier point, by reference to decisions made by Ms Quine’s legal representatives as to the conduct of the proceedings. Ms Quine also read a second affidavit dated 19 March 2025 of Mr Lethbridge in support of that application. He there referred to an exchange of correspondence with a solicitor acting for Perpetual on La Trobe’s instructions and to an email dated 17 March 2025, by which Perpetual advised that it consented to be joined in the proceedings; would then file a submitting appearance in the proceedings; and neither consented to nor opposed the declaration of a constructive trust over the Gerringong property.

By written submissions dated 12 March 2025, Mr Sirtes outlined the circumstances in which Perpetual had not been joined as party to the proceedings. Mr Sirtes submitted that Ms Quine was “personally innocent” of the decisions made by her legal representatives in the conduct of the proceedings. Mr Sirtes rightly accepted that the late joinder of Perpetual would cause prejudice to the public administration of justice, but attributed that consequence to decisions of Ms Quine’s legal representatives rather than any decision on her part. I put aside the fact that Ms Quine would ordinarily be expected to have given instructions to her legal representatives as to the conduct of the proceedings and any application of the principle that she is ordinarily bound by her legal representatives conduct of the proceedings, where I will decide the question of Perpetual’s joinder on other grounds. Mr Sirtes also submitted that Ms Quine had not abandoned her claim for a constructive trust, although Mr Crossland had accepted the “difficulty” of establishing that claim where Perpetual had then not been joined as party, and I proceed on that basis. Mr Sirtes in turn addressed several matters which Ms Quine contends support the exercise of the Court’s discretion to permit an amendment to the proceedings to join Perpetual as party, having regard to ss 56 – 58 of the Civil Procedure Act 2005 (NSW) (“CPA”). Plainly, the facts that Perpetual does not oppose its joinder to the proceedings would file a submitting appearance rather than take an active role in the proceedings, and neither consents to nor opposes the relief sought by way of constructive trust, are matters which support its joinder to the proceedings, if that joinder would have any utility.

By their submissions made on 21 March 2025, the Defendants opposed the joinder of Perpetual to the proceedings, although Mr Bedrossian recognised that Perpetual did not itself object to its joinder. First, Mr Bedrossian submitted that Perpetual’s joinder to the proceedings had no utility, because Ms Quine had not properly pleaded a basis for relief by way of a constructive trust over the land. I address the question of the utility of Perpetual’s joinder below. Mr Bedrossian recognised that Ms Quine pleaded (2FASC [29C]) that GCH held the land on constructive trust for GSPL but submitted that she did not plead a basis for the imposition of that trust. I will assume below, without deciding, that this pleading was sufficient to raise an allegation of knowing receipt of trust property, to the extent that the factual basis for that allegation is elsewhere pleaded by Ms Quine. Importantly, Mr Bedrossian also pointed out that, although Ms Quine brought a claim for knowing assistance against several defendants (2FASC [29CA]), she did not bring such a claim against GCH, and he also submitted that Ms Quine did not plead the requisite knowledge or requisite assistance on the part of GCH to establish a claim for knowing assistance. I also return to these matters below.

Mr Bedrossian also submitted the application to join Perpetual was brought too late and involved too great a change in the conduct of the proceedings to be permitted. Mr Bedrossian took issue with Ms Quine’s claim that she had not abandoned a claim for a constructive trust in Mr Crossland’s closing submissions, and he emphasised the delay in her bringing the application to join Perpetual to the proceedings. Mr Bedrossian also submitted that, if Perpetual were joined as party to the proceedings, the Defendants would need to lead additional evidence, including addressing financial adjustments consequential upon the imposition of a constructive trust. I do not accept that submission where Ms Quine has always sought relief by way of a constructive trust, whether or not she had properly pleaded that claim or joined the necessary parties, and the Defendants had the opportunity to address those matters in their evidence in chief. There is no suggestion that they did not do so by reason of any assumption that a constructive trust would not be ordered because Perpetual had not then been joined as party to the proceedings.

In further written submissions made on 26 March 2025, Mr Sirtes and Mr Crossland submitted that, where Perpetual did not oppose its joinder to the proceedings, there was no barrier to its joinder and that there was no prejudice to the Defendants from that joinder where they could previously have led evidence responding to Ms Quine’s claim for relief by way of a constructive trust.

I advised the parties that I would address the question whether Perpetual should be joined as party to the proceedings in this substantive judgment. It is not necessary to reach a final view as to several of the issues addressed by the parties in submissions, including the lateness of the application and any prejudice to the Defendants in allowing it after the evidence and submissions had closed, in order to determine this application. I have concluded that the application should be dismissed where the joinder of Perpetual as party would have no utility, since an order for a constructive trust could not be made against GCH, irrespective of whether Perpetual was now joined as party to the proceedings, for the reasons that I address below.

As I noted above, Ms Quine pleads (2FASC [29C], denied Defence [29C]) that:

I noted above that this pleading does not identify the basis on which a constructive trust should be imposed as against GCH, as a result of the breach of trust pleaded as against GSPL. On the basis that Ms Quine likely sought to advance a claim in knowing receipt, my Associate (at my request) advised the parties on 13 March 2025, after the conclusion of substantive submissions, that I would allow them a further opportunity for them to make:

In supplementary submissions, Mr Bedrossian submitted that Ms Quine makes no claim against GCH based upon knowing receipt. I will assume, without deciding, favourably to Ms Quine, that Ms Quine’s pleaded claim for a constructive trust (2FASC [29C]) sufficiently raises that claim, where she elsewhere pleads other facts relating to the transfer of the land by QSPL to QCH. Mr Bedrossian also rightly submitted that there is binding authority that, in a knowing receipt claim, a proprietary remedy over Real Property Act land is not available against a third party unless an exception to statutory indefeasibility of title under s 42 of the Real Property Act 1900 (NSW) (“Real Property Act”) is established.

In supplementary submissions made on 26 March 2025, Mr Sirtes and Mr Crossland in turn contended that the Court could order a constructive trust in the knowing receipt claim, notwithstanding s 42 of the Real Property Act, where the Defendants had not specifically pleaded an indefeasibility defence. I accept that may be possible in a case where the application of s 42 of the Real Property Act is not raised by the parties or the Court, but that is not this case. Mr Sirtes and Mr Crossland rightly did not submit that I was obliged to disregard the application of applicable state legislation where I had raised that matter with the parties and they had been afforded (and fully exercised) the opportunity to make submissions about the issue. I should not disregard applicable state legislation in that situation.

It seems to me that the case law establishes that proprietary relief by way of a constructive trust would not be available to Ms Quine in respect of Real Property Act land, in a claim for knowing receipt of trust property, absent an exception to statutory indefeasibility under s 42 of the Real Property Act. That section relevantly provides that:

The reference to “fraud” in that section is “to be construed as meaning something more than mere disregard of rights of which the person sought to be affected had notice, and as importing something in the nature of personal dishonesty or moral turpitude” and involves “dishonesty on the part of the registered proprietor in securing his registration as proprietor”: Stuart v Kingston (1923) 32 CLR 309 at 329; [1923] HCA 17; Bahr v Nicolay [No 2] (1988) 164 CLR 604 at 614; [1988] HCA 16 ; Gerard Cassegrain & Co Pty Ltd v Cassegrain [2011] NSWSC 1156 at [168],

The availability of a constructive trust in these circumstances has been considered in cases including Macquarie Bank Ltd v Sixty-Fourth Throne Pty Ltd (1998) 3 VR 133 at 156-157 (“Sixty-Fourth Throne”) and Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22 at [193] (“Farah”), where the High Court observed (at [193]) that:

In Super 1000 Pty Ltd v Pacific General Securities Ltd (2008) 221 FLR 427; [2008] NSWSC 1222 at [213]-[237], White J (as his Honour then was) undertook a full review of the case law and observed that he was bound to follow that case law and that “at least no proprietary remedy is available against Super 1000 as an accessory to Mr McLay’s breach of fiduciary duty by having taken a mortgage over the company’s property.” His Honour there left open (at [235]ff) the possibility of a personal claim, which had not there been sought.

In Sze Tu v Lowe (2014) 89 NSWLR 317; [2014] NSWCA 462 (“Sze Tu”) at [225], Gleeson JA, with whom Meagher and Barrett JJA observed that:

In Turner at [101], White JA (Meagher and McCallum JJA concurring) subsequently treated Farah as binding authority that:

I have here partly drawn on my review of the relevant case law in Re Gillespies Cranes Nominees Pty Ltd [2024] NSWSC 1136, affirmed on appeal in Gillespie v Gillespie [2025] NSWCA 24.

In any event, it appears that Ms Quine seeks to establish the factual basis for an exception to indefeasibility under s 42 of the Real Property Act. As I noted above, she makes (2FASC [29B]) allegations of bad faith, fraud and dishonesty at least against Ms Sullivan and Mr Scott and their proprietary companies (who are alleged in 2FASC [29A] to have “caused” the transfer of the Gerringong property by GSPL to GCH), and possibly against GSPL and GCH as the transferee and now registered proprietor of the land.

The nature of these allegations is such that I should adopt the approach set out in Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34 (“Briginshaw”) and its equivalent under s 140 of the Evidence Act. Where a party advances allegations of impropriety, the Court must take account of the gravity of the matters alleged in deciding whether an inference should be drawn and, although the standard of proof remains proof on the balance of probabilities, the strength of the evidence necessary to establish a given fact to the civil standard may vary according to the nature of what it is sought to be proved. In Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 110 ALR 449 at 449–450; [1992] HCA 66, the plurality observed that:

Section 140 of the Evidence Act similarly provides that, in a civil proceeding, the Court must find the case of a party proved if it is so satisfied on the balance of probabilities and that, without limiting the matters that the Court may take into account in deciding whether it is so satisfied, it is to take into account the nature of the cause of action or defence, the nature of the subject matter of the proceeding and the gravity of the matters alleged. I approach the evidence on which Ms Quine relies to allege bad faith, fraud and dishonesty on that basis.

Ms Quine in turn particularises several matters in support of the allegation (2FASC [29B]) that the transfer of the land by GSPL to GCH was made in “bad faith” and was “fraudulent and dishonest” as follows:

I address these several matters in turn. It is plain that the consideration received by GSPL for the transfer of the land to GCH was substantially less than the then value of the land and it appears that Ms Sullivan and Mr Scott determined the amount that was paid by GSPL to GCH reference to what was necessary to pay out Ms Quine on the basis (which I have not accepted) that they had reached a concluded settlement with her. The Defendants rightly accept that sale of the land was in breach of trust, where QCPL did not receive fair value for the land, and I would readily find that that aspect of the transaction was imprudent on the part of Ms Sullivan and Mr Scott.

However, I do not accept that the timing and circumstances of the sale of the land by GSPL to GCH are such that I can find that it took place for the purpose particularised by Ms Quine of “depriving Ms Quine of the opportunity to have the Court make the orders she seeks in this proceeding”, where Ms Quine then sought relief by way of oppression and Ms Sullivan and Mr Scott then contemplated a winding up of GSPL and a distribution of its assets to its shareholders and unitholders in the trust, in the context of the settlement which they contended had been reached between the parties. I accept that the transaction would have had the consequence that GCH (as distinct from Ms Sullivan and Mr Scott personally) obtained ownership of the premises and the consequential benefits and detriments consequential on that ownership. I also accept that, as I have noted above, Ms Sullivan and Mr Scott contemplated a winding up of GSPL. Putting aside the fact that Ms Quine’s further claim that the transaction contravened s 491 of the Act is merely raised in particulars, it is not apparent to me that such a contravention could be established where a winding up of QCPL was not in fact implemented.

Having regard to the principles addressed in Briginshaw and s 140 of the Evidence Act, I cannot find on the balance of probabilities that the transaction was fraudulent or dishonest on the part of Ms Sullivan or Mr Scott, where GCH paid a substantial amount to GSPL to acquire the land; that amount was plainly calculated by reference to the amount that would be payable to Ms Quine, under the settlement which the Defendants then contended had been reached, and on a winding up of GSPL; and that approach would, in financial terms, have preserved Ms Quine’s entitlements under that settlement. The fact that the land was transferred to GCH, or that Ms Sullivan and Mr Scott controlled GCH, does not, without more, allow a finding of dishonesty where a sale of the land at fair value and a winding up of GSPL would not have been improper and the settlement negotiations contemplated Ms Quine’s exit from GSPL. The payment of that substantial amount to QCPL tends against a finding of fraud or dishonesty on the balance of probabilities, where it is at least equally probable that the transaction was a badly structured and ill-conceived, but honest, attempt to implement the settlement for which the Defendants contended so as to pay out Ms Quine.

I am not satisfied that fraud or dishonesty on the part of Ms Sullivan or Mr Scott is established so as to permit that fraud or dishonesty to be attributed to GCH or give rise to an exception to indefeasibility under statutory indefeasibility under s 42 of the Real Property Act in respect of a knowing receipt claim. The claim for a constructive trust on that basis therefore fails.

In supplementary submissions made on 26 March 2025, Mr Sirtes and Mr Crossland submitted that Ms Quine had pleaded (2FASC [29CA]) a claim for knowing participation in a fraudulent breach of trust. They identified the elements of such a claim, with reference to Simmons v NSW Trustee and Guardian [2014] NSWCA 405 and sought to assemble those elements from other parts of Ms Quine’s pleaded case. That submission failed to recognise the fact that that claim was, as I have noted above, expressly pleaded only against persons other than GCH and not against GCH. Mr Bedrossian in turn correctly pointed out that, although Ms Quine had pleaded a claim for knowing assistance against several Defendants, she did not plead that claim against GCH. He also submitted that Ms Quine did not plead the requisite knowledge or requisite assistance on the part of GCH to establish a claim for knowing assistance in a fraudulent breach of trust.

Ms Quine did not seek to amend her pleading to extend the claim for knowing assistance in a dishonest or fraudulent breach of trust made against other Defendants to GCH. Had she sought to do so, after the evidence and the submissions were complete, leave for that amendment would likely have been refused, having regard to ss 56-58 and 60 of the CPA.

The fact that Ms Quine did not plead a claim for knowing assistance in a dishonest or fraudulent breach of trust against GCH is sufficient basis to find that she cannot succeed in this claim. However, I should briefly note the elements of such a claim, which I summarised (in the context of a claim for knowing assistance in a director’s breach of fiduciary duty) in Re Sirrah Pty Ltd (in prov liq) (2021) 152 ACSR 212; [2021] NSWSC 413 at [152] as follows:

In Ancient Order of Foresters in Victoria Friendly Society Ltd v Lifeplan Australia Friendly Society Ltd (2018) 265 CLR 1; [2018] HCA 43 at [71], Gageler J observed that liability for knowing assistance will arise under the second limb of Barnes v Addy where the conduct which constitutes the breach transgresses ordinary standards of honest behaviour, and the participant has knowledge of circumstances which would indicate the fact of the dishonesty on behalf of the fiduciary to an honest and reasonable person.

The case law to which I have referred above points to the need for Ms Quine to establish the element of a dishonest or fraudulent design in order to establish a claim for knowing assistance to a breach of trust and indicates that that requires more than the fact of a breach of trust that is here admitted by the Defendants. For the same reasons that I am not satisfied that fraud or dishonesty on the part of Ms Sullivan or Mr Scott is established so as to permit that fraud or dishonesty to be attributed to GCH or give rise to an exception to indefeasibility under statutory indefeasibility under s 42 of the Real Property Act in respect of a knowing receipt claim, I am not satisfied (to the standard set by Briginshaw and s 140 of the Evidence Act) that GSPL’s admitted breach of trust had the character of a dishonest and fraudulent design which could found a claim for knowing assistance against GCH or support a constructive trust on that basis. For completeness, the element of assistance or participation on which Ms Quine here relies was also no more than the pleaded receipt of trust property by GCH, and there is plainly a question whether a third party which does no more than receive property that is transferred to it by another person can properly be said to have assisted a breach constituted by that transfer. It is not necessary to determine that question given the conclusions that I have reached on other grounds.

Mr Bedrossian also submitted that the same rationale that denies proprietary relief in a knowing receipt claim, absent an available exception under s 42 of the Real Property Act, extends to a knowing assistance claim. Mr Sirtes and Mr Crossland submit the contrary, that Turner (at [119]-[121]) is authority that s 42 of the Real Property Act does not exclude relief by way of constructive trust, in a claim for knowing assistance to a dishonest and fraudulent breach of trust. I have referred above to the observations of the Court of Appeal in Sze Tu that the High Court’s decision in Farah concerned whether the in personam exception extended to claims arising under both the knowing receipt and the knowing assistance limbs of Barnes v Addy. A differently constituted Court of Appeal may have taken a different view as to the availability of proprietary relief for knowing assistance in Turner, where White J observed (at [119]-[120]) that:

It is not necessary to determine any open question as to the effect of Farah, Sze Tu and Turner as to the availability of proprietary relief for knowing assistance here and it is preferable that I do not seek to do so, since Ms Quine did not bring a knowing assistance claim against GCH, no amendment application was made so as to extend that claim to GCH, and it was not established that GSPL’s admitted breach of trust had a dishonest or fraudulent character for the reasons noted above. This claim fails for those reasons.

Mr Sirtes and Mr Crossland addressed additional matters in their written submissions made on 26 March 2025, submitting that a constructive trust could be imposed on the basis of the “alter ego principle” (presumably on the basis that GSPL was an alter ego of Ms Sullivan and Mr Scott rather than simply a proprietary company which was controlled by them) or under the principle in Black v S Freedman & Co (1910) 12 CLR 105. It is not apparent that Ms Quine had pleaded the material facts of either of those claims to allow the Defendants an opportunity to respond to them. Mr Crossland had not referred to the relevant case law or the ongoing controversy as to the scope of “alter ego” liability [1] or to Black v S Freedman & Co in his written or oral closing submissions. Whether or not these claims might have been open on the pleadings or the evidence, they were not claims that Ms Quine developed at the hearing, and I will not determine them. I had also not granted leave for supplementary submissions so as to expand the case in this manner after the close of evidence and submissions. In accordance with well-established authority, I have disregarded the submissions as to those matters where they outside the scope of the invitation for further submissions and made without leave: Carr v Finance Corp of Australia Ltd (No 1) (1981) 147 CLR 246 at 257-258; [1981] HCA 20; Notaras v Waverley Council [2007] NSWCA 333 at [147]; Bull v Lee (No 2) [2009] NSWCA 362 at [8]. For completeness, Ms Quine also did not plead or develop any claim that GCH had itself acted so as to procure GSPL’s breach of trust.

As I noted above, Ms Quine also advances a further allegation (2FASC [29B]) against the Defendants including GCH as to the circumstances in which the land was subsequently mortgaged to secure an increased borrowing, and relies (2FASC [29C]) on that matter for a claim for compensation. This claim relates to the manner in which GCH funded the purchase of the land and was introduced by a late amendment to the pleading which was allowed where it was not opposed by the Defendants. The order sought (OP 1(a)]) is that:

It is not apparent from Ms Quine’s pleaded case, for example, what the several Defendants are alleged to have done in respect of monies advanced by La Trobe so as to found the relief claimed. Ms Quine also does not identify which funds are alleged to have been received and by whom from loan funds paid by La Trobe, or how any tracing exercise so as to identify such funds should be performed or what its result would be, or how those funds are held so as to impose a constructive trust upon them. The function of pleadings is well known, and they play an important role in identifying the case to which the Defendants must respond and the Court must decide so as to allow procedural fairness and a just resolution of the proceedings: Thorp v Holdsworth (1876) 3 Ch D 637 at 639; Banque Commerciale SA (in liq) v Akhil Holdings Ltd (1990) 169 CLR 279; Betfair Pty Ltd v Racing New South Wales (2010) 189 FCR 356; (2010) 273 ALR 664; [2010] FCAFC 133 at [49]ff. It is also not apparent whether the words “received by them” in this proposed order are intended to extend only to monies paid directly by La Trobe to the relevant Defendants, or to monies that were paid by La Trobe to GCH and in some way indirectly funded later payments to the relevant Defendants.

I should not (and likely cannot) make the order sought in respect of this claim where the material facts on which it is based are not apparent and the Defendants have not had a fair opportunity to respond to them. Second, it is not apparent how the borrowing from La Trobe (as distinct from the impugned sale of the land) constituted a breach of any relevant duty. Third, an order could not be made in this form, where neither the Court nor the Defendants could know its practical effect or what the Defendants are required to do to comply with it. Ms Quine did not seek to formulate any more precise order that could be made.

Ms Quine also seeks (OP [4A]), in a derivative claim, an order that the Defendants other than GSPL pay equitable compensation to GSPL in an amount calculated as:

In their written outline of closing submissions, Mr Crossland and Mr Smyth put this claim as follows:

Orders cannot be made on this basis. First, any loss that GSPL suffered occurred when that land was sold to GCH and matters concerning the loan by La Trobe to GHC have no impact on GSPL. Because GSPL does not now own the land, it will not suffer loss quantified by reference to “any sum owed”, implicitly by GCH to La Trobe or Perpetual as “secured over the [l]and”, with or without the specified adjustments.

It is, however, open to the Court to make an order for compensation in favour of GSPL to the extent that it has suffered any loss by reason of the admitted breach of trust in the sale of the land, either because the consideration payable was not paid in full by GCH or because the land was sold at undervalue. I now address these issues in turn. I proceed on the basis that I should adopt the approach summarised in Re Dawson; Union Fidelity Trustee Co Ltd v Perpetual Trustee Co Ltd (1966) 84 WN (Pt 1) (NSW) 399; [1966] 2 NSWR 211 where Street J observed that:

Consistent with the case law to which I have referred, the amount of equitable compensation recoverable by GSPL for breach of trust in respect of the sale of the land is properly determined as the amount by which the value of the land transferred in breach of trust, assessed as at the date of the hearing, exceeds that amount received by GSPL and paid by GCH in respect of the sale. The first step in that calculation is to determine the value of the land as at the date of the hearing. The parties led expert valuation evidence as to the value of the land, which I address below, and identified six issues to be determined (MFI 7), which I will identify below. The issues identified by the parties were not coincident with those addressed by the valuation evidence, and the valuers had widely divergent views as to the issues they had addressed. I directed a meeting between the legal representatives to seek to allow them an opportunity to narrow or reach common ground that would avoid their incurring further costs as to these issues, but no common ground was achieved. I subsequently required the parties to provide schedules setting out submissions made and the evidence on which they relied as to the valuation issues they had identified, in order to seek to crystallise the dispute as to these issues. That process again emphasised the extent of the differences between the valuers and the parties in this respect, rather than narrowing those differences.

For completeness, I also considered and heard the parties as to whether to appoint a third Court-appointed expert from a larger firm with experience in commercial or industrial sites in the Kiama/Gerringong area to undertake a review of the valuation reports led by the parties and the valuers’ joint report and express his view as to the value of the land. I concluded that that course should not be taken, where it would significantly increase the costs of the proceedings and delay their resolution and there was no reason to think that a third valuation report would narrow the existing controversy as to valuation between the parties.

I now turn to the valuation issues identified by the parties and the position put in their respective submissions in that regard. The first question identified by the parties was what, with reference to the size or other features of the land, should be taken into account in valuing the land? Ms Quine here submitted, and it is common ground, that the highest and best use of the land is for redevelopment, and the existing improvements on the land do not add any value to the land. Although the valuers differed as to the useable area of the land, Ms Quine accepted that an area of 6000 sqm should be treated as useable for redevelopment.

The Defendants address other relevant factors to be taken into account in the valuation process, including the location of the land. They submit and I accept that, importantly:

The second question identified by the parties was which property sales should be taken into account, as comparable sales, for the purposes of determining the market value of the land at the date of the hearing. I note below that this question was more difficult because of the lack of plainly comparable sales. Ms Quine addressed this question by ranking eight sales in descending order. I allow little weight to that approach, where that ranking paid limited attention to differences in location of the properties which affected the weight that could be given to them as comparable sales, which Ms Quine sought to adjust by somewhat arbitrary adjustments to which I refer below; and Ms Quine gave great weight to whether a sale was “recent”, which was of lesser significance than the location of the sales given the valuers’ evidence as to market price movements; I do not accept Ms Quine’s approach to one of those properties, 113 Shoalhaven Street, Kiama (“113 Shoalhaven”), for the reasons I set out below; and Ms Quine’s ranking of those properties was plainly skewed, perhaps unsurprisingly, to seek to achieve a higher rather than lower per square metre rate for the land. The Defendants instead place primary reliance on the sale of properties at Rowlins Road, Gerringong; 142 Shoalhaven Street, Kiama (“142 Shoalhaven”) and a property on the Princes Highway at Albion Park (“Albion Park Rail”) as comparable sales, without seeking to undertake any elaborate ranking of those or other properties. I address the evidence as to those properties below.

The third issue identified by then parties, which overlapped with the second, was the ranking of those comparables from most to least clearly comparable. This was an artificial exercise, where it tended to obscure the question of which properties were sufficiently comparable to assist with a valuation and which were not. Ms Quine’s submission as to this question was consistent with her submission as to the second question, and adopted much the same reasoning process. The Defendants submission ranked the comparable properties in the order in which they addressed them in respect of the second issue.

The fourth issue identified by the parties was what “notional adjustments”, if any, should be made to the prices of the comparable sales (or the square metre rates of those comparable sales) in order to determine the value of the land at the date of the hearing on a square metre basis? The formulation of this issue, and to some extent the valuers’ approach to it, assumed that the sale of a property in a quite different location in quite different circumstances could be treated as a comparable by applying an adjusting percentage, which had no apparent justification beyond the valuer’s nomination of that figure. For example, Ms Quine submitted, by reference to Mr Sharpe’s approach, that a 20-25% discount, averaged to 22.25%. should be applied to the sale price of 113 Shoalhaven for location and nominated other adjusting factors for other properties. While I accept this approach may be open in principle, it cannot be adopted where the adjusting factor is not sufficiently supported by the valuers’ qualifications and experience or any disclosed reasoning process. I return to that issue below. The Defendants addressed more specific adjustments for which they contended in respect of the three properties on which they relied as comparable properties.

The fifth issue identified by the parties was:

Ms Quine here identifies six radically different price per square metre rates by reference to six different properties, which at least partly depend on adjustments of the kind noted above. She then derives a single rate from them, although it is not apparent whether that reflects an average or some other calculated figure, or simply a preferred figure between the higher and lower end of the range of rates. This approach implicitly treats all six properties as being of equal assistance, which I do not consider to be the case. Ms Quine’s preferred figure is $750 per square metre; or alternatively $725 per square metre relying on 113 Shoalhaven; and she then suggests that, if neither of those figures is adopted, the Court could adopt one of several other approaches, variously deriving rates of $750, $616, $578, $565 or $540 per square metre. The Defendants put a simpler position, that a rate of no more than $475 per square metre should be adopted, largely by reference to the Rowlins Road Gerringong and 142 Shoalhaven properties.

The sixth issue identified by the parties is the value, as at the date of hearing, of the land as determined by reference to the answers to the issues noted above. Ms Quine here identifies several alternative outcomes, reflecting some but not all of the alternative valuation approaches she had put, submitting that the land should be valued at:

Unusually, in my experience, the order that I made for these submissions has ultimately not narrowed or substantially clarified the valuation issues between the parties. In this situation, I consider it preferable to address valuation issues by an assessment of the expert evidence led by the respective parties in their separate reports, their joint report and their cross-examinations, considered as a whole, rather than by seeking to determine sequentially the several and overlapping questions identified by the parties.

Turning now to the valuation evidence led by the parties, Ms Quine relies on the amended report dated 15 October 2024 of Mr Sharpe. Mr Sharpe’s valuation date for the Gerringong property was as at 15 October 2024 and was therefore reasonably proximate to the date of the hearing. Mr Sharpe had previously prepared a report for the purposes of a mediation reaching substantially the same result as his report led in these proceedings, although he had not then had regard to the sale of 113 Shoalhaven to Kiama Municipal Council, on which he placed significant reliance in his expert report in the proceedings, and which I address below. Mr Sharpe assessed the usable land area of the land as approximately 6,000 sqm, and noted that it included a former factory building of 817/sqm, and approximately 630/sqm of storage.

Mr Sharpe observed, in the executive summary to his report, that:

Mr Sharpe also there observed that likely buyers for the land included owner occupiers, a syndicate of private investors or developers, and noted a previous sale of the land on 7 September 2015 and again on 17 June 2024 for $877,500, although the latter was a reference to the sale from GSPL to GCH. He observed that the “highest and best use” for the land was considered to be redevelopment. Mr Sharpe also summarised relevant planning and site conditions, addressed the improvements on the land and environmental issues and provided further market commentary observing that:

Mr Sharpe addressed several potentially comparable properties in the South Coast, with different zonings and significantly different land and floor area rates. He referred to a smaller site in Gerringong which had also previously been used for storage, which had sold in August 2021 for a land value rate of $604/sqm and a gross floor area rate of $670/sqm. Mr Sharpe observed that market conditions had improved since that sale date, a proposition which was not wholly consistent with his wider market commentary, and suggested a higher gross floor area rate would be achieved for the land.

Mr Sharpe also referred to 142 Shoalhaven, which is close to the Kiama town centre and was previously used as a storage yard, and was purchased in September 2022 for the development of a self-storage facility at a land value rate of $624/sqm and a gross floor area rate of $694/sqm. Mr Sharpe fairly observed that that was a smaller site area with a superior location and observed that conditions had improved since the sale date, a proposition which was also not wholly consistent with his wider market commentary.

Mr Sharpe also addressed the sale of 113 Shoalhaven in November 2024, in conjunction with an adjoining property, to Kiama Municipal Council at a land value rate of $698/sqm and a gross floor area rate of $1075/sqm. Mr Sharpe expressed the view that that the most comparable sale was the sale of this property, which showed a very high land value rate and gross floor space ratio by comparison with other transactions, although he then acknowledged that location was superior to the Gerringong site and discounted his land value rate and potential gross floor area rate by 20 – 25% on that basis. Mr Sharpe’s reasoning disclosed no reason to accept that discount as sufficient, as distinct from a discount of 30 or 35% or higher, to take account of the significantly different circumstances of this sale, including the differences of location, the availability of two adjoining properties in the sale and the public purpose of the purchase of those sites by the Council. On a comparable transaction basis, Mr Sharpe arrived at a land value rate of $750 per square metre and a potential gross floor area rate of $833 per square metre and a value for the land of $4.5 million exclusive of GST.

The Defendants relied on the report of Mr Kelkert who, as I noted above, had previously valued the Gerringong property for the Defendants prior to its sale by GSPL to GCH on a different basis and at a much lower figure than that which he reached in his expert report in these proceedings. Mr Kelkert adopted a conventional definition of “market value” in respect of the freehold interest in the land and expressed the view, in agreement with Mr Sharpe, that the highest and best use of the property was a redevelopment of the land that maximised its floor area under applicable planning instruments, and he now valued the land on a vacant possession basis for redevelopment purposes as at 13 December 2024, which is also proximate to the hearing date.

Mr Kelkert also described the land, its services and dimensions and applicable town planning requirements and the structural improvements on the site. He observed, in respect of general market developments, that:

Mr Kelkert, like Mr Sharpe, approached the assessment of land values on a rate per square metre basis, identifying several factors by which that rate should be adjusted, and addressed comparable sales evidence. Mr Kelkert referred to the particular circumstances of the sale of 113 Shoalhaven to Kiama Municipal Council which I addressed above. Mr Kelkert also addressed the sale at Gerringong to which Mr Sharpe had referred, which I have considered above, and the sale of an industrial property at Albion Park Rail in December 2022 at a rate of $664 per square metre of site area, which he adjusted down to $565 per square metre having regard to specific features of the site. He also addressed the sale of 142 Shoalhaven to which I have referred above.

Mr Kelkert observed, in summary, that:

On that basis, Mr Kelkert valued the land at $3.5 million on usable site area and FSR site area, and allowed a nominal value of $50,000 for an area or riparian land with flooding concerns, to derive a total value of $3.55 million exclusive of GST for the land.

The valuation experts also prepared a joint report (Ex J1) which, regrettably, identified only limited common ground. They agreed as to the physical description of the land and that the highest and best use of the land was for redevelopment and that a market approach (or direct comparison) by reference to usable land area basis and floor space ratio or gross floor area basis was the preferable approach. They also broadly agreed that the area of land suitable for redevelopment was 6,000 square metres, although Mr Kelkert adopted a slightly higher area in that respect. They disagreed as to numerous significant matters, including market movement, the analysis of comparable sales having regard to the market movement, the adjustments applicable to comparable sales, and whether the sale of 113 Shoalhaven to Kiama Municipal Council was the most comparable sale (as Mr Sharpe considered) or Albion Park Rail and 113 and 142 Shoalhaven were the most comparable sales (as Mr Kelkert considered). These differences cause particular difficulty given the paucity of the available evidence as to potentially comparable sales.

In the joint report, Mr Kelkert again emphasised the factors that distinguish the sale of 113 Shoalhaven to Kiama Municipal Council, to which I referred above. Mr Sharpe sought to rely on additional sales evidence in the joint report and Mr Kelkert responded explaining why he did not consider that those sales were comparable, and the experts also addressed their differences in respect of the additional sales on which Mr Kelkert had relied in his initial report. Mr Kelkert also explained why he considered the sales in Wollongong local government area had limited utility in valuing the Gerringong property. I accept his evidence in that respect, where Wollongong is a main commercial and industrial hub with a significant population and a well-established industrial base, with superior road and rail access to Gerringong, and a level of industrial and retail development which does not exist in Gerringong. The experts also addressed their analysis of particular properties, in a manner which may have widened, and certainly did not narrow, their differences.

In the joint report, Mr Sharpe adopted a usable land area rate of $750 per square metre for a land area of 6,000 square metres and a gross floor area rate of $830/sqm for a gross floor area potential of 5,400 square metres resulting in a value of $4.5 million and Mr Kelkert adopted a lower land area rate of $565 per square metre for a land area of 6,200 square metres and a floor space rate of $625 per square metre on a potential floor area of 5,580 square metres, resulting in a value of $3.5 million together with the nominal value of $50,000 for the riparian land to which I referred above.

Mr Sharpe was cross-examined as to matters including the circumstances in which he was first approached by Ms Quine’s father concerning the dispute some two years ago, well before he was retained to provide a valuation for the mediation and later the proceedings. Mr Sharpe was also cross-examined as to the differences in respect of valuation arising in different commercial centres and the relevance of the size and population of those commercial centres and their distance from Sydney. He was also cross-examined as to the particular features of the comparable properties on which he relied, and that cross-examination demonstrated that the sale of 113 Shoalhaven to Kiama Municipal Council involved particular features which would not arise on any sale of the Gerringong property, although Mr Sharpe largely did not accept that proposition in cross-examination. He was also cross-examined as to the position in respect of Albion Park Rail, to which he gave less weight than Mr Kelkert, although he indicated that he had looked at the sale in the broad range of sales that were not included in his final report. Mr Bedrossian, with whom Mr Munro appears for the Defendants, put to Mr Sharpe that the totality of his report, including its exclusion of the Albion Park Rail did not provide a safe or reliable basis to assess the value of the Gerringong Property, and he disagreed with that proposition (T170). Mr Sharpe’s cross-examination exposed both the limited number of comparable sites that are available for a valuation and the significant difficulties with Mr Sharpe’s choice of comparable sites, and particularly with his reliance on the sale of 113 Shoalhaven to Kiama Municipal Council.

Mr Kelkert was also cross-examined at substantial length. That cross-examination included significant focus upon the features of comparable properties, which were largely not established by evidence and largely not accepted by Mr Kelkert as matters that would affect his conclusions. Mr Kelkert was also cross-examined at some length as to the position in respect of market movements, which he had broadly accepted had stabilised after a period of early rises. Mr Crossland sought, at one point, to establish by reference to a sale of a single property that there had been a significant rise in market values in the Kiama and Shellharbour local government areas, a proposition which was plainly inconsistent with both valuers’ evidence in chief and which I do not accept. Mr Kelkert was cross-examined at some length as to the sale of 113 Shoalhaven to Kiama Municipal Council, but that cross-examination did not establish that that site could properly be given significant weight as a comparable transaction. The approach taken by Mr Crossland to Mr Kelkert’s report seemed to be directed to undermining Mr Kelkert’s report in its entirety, and all aspects of his reliance on the several comparable transactions to derive market value for Gerringong property. That approach was perhaps surprising, where Mr Kelkert’s report would underpin the amount of compensation that would be recoverable by Ms Quine, if I was not persuaded by Mr Sharpe’s approach. Happily for Ms Quine, Mr Crossland largely did not succeed in undermining Mr Kelkert’s approach, so that that report has in fact underpinned the compensation which Ms Quine will recover for breach of trust, where I am not persuaded that the higher value attributed by Mr Sharpe to the land should be accepted.

I give limited weight to Mr Sharpe’s valuation, which it seems to me is significantly undermined by his heavy reliance on the sale of 113 Shoalhaven to Kiama Municipal Council to support the rates which he has adopted in his report and the experts’ joint report. Those rates cannot be sustained without that heavy reliance on the sale of that property and cannot be adjusted to exclude that reliance. It is, however, common ground between the experts that the Gerringong property has at least the value adopted in Mr Kelkert’s report, and I will adopt that value of $3.5 million (exclusive of GST) in calculating the compensation that is recoverable by GSPL in respect of the admitted breach of trust.

The second step in that calculation is to determine the amount that GCH had paid to GSPL on acquisition of the premises. Ms Quine’s particulars to 2FASC [29B] implicitly conceded that the Defendants paid $877,500 to acquire the land, consistent with the amount stated in the Deed and transfer. However, the Defendants plead (Defence [29B]) that the transfer of the premises occurred for a consideration of $2.25 million, which is plainly a reference to the stated consideration in the Deed rather than the amount then paid, and that “cash in an amount of approximately $690,000 was paid into an account under the control of [GSPL]” and then refer to the alleged June 2023 Agreement. In my view, as Mr Bedrossian fairly conceded, the Defendants’ pleaded case amounts to an admission against interest that GCH paid $690,000 at the point of purchase of the land (not including the amount paid to Westpac to discharge the land) against the consideration payable of $2.25 million. It seems to me that, as Mr Bedrossian also accepted, it is not open to the Defendants in closing submissions to resile from that admitted fact and now contend that GCH paid more than that amount.

The amount of equitable compensation payable by GCH to GSPL as trustee of GSUT (and by Mr Scott and Ms Sullivan jointly and severally with GCH, by the concession noted below) is therefore $2,053,084.56, being the value of the Gerringong land determined at the date of the hearing as $3.5 million, less $1,446,915.44, calculated as the sum of $756,915.44 paid by GCH to Westpac to discharge GSPL’s loan on the land and the amount of $690,000 that GCH paid (by the Defendants’ admission) to acquire the land.

Ms Quine alternatively pleads (2FASC [29CA]-[29CC]) that:

Mr Scott and Ms Sullivan conceded, in the course of the hearing, that they were jointly and severally liable for any order for compensation made against GCH. That concession was reflected in their Defence ([29CA]) as follows:

No such concession was made in respect of the claim against EOS and TKS and it is necessary to determine the claims against them. I have summarised the applicable principles in dealing with GCH’s position above, although I there noted that no claim for knowing assistance was made against GCH. For the reasons set out above, I am not persuaded to the standard required by Briginshaw and s 140 of the Evidence Act that GSPL’s transfer of the land to GPL, although in admitted breach of trust, had the character of a dishonest and fraudulent design. I accept that Ms Sullivan and Mr Scott knew the facts of the relevant transaction and that EOS knew what Mr Scott knew and TKS knew what Ms Sullivan knew. It is also not apparent that either EOS or TKS (as distinct from Mr Scott and Ms Sullivan) took any step to assist with the breach of trust, and Ms Quine does not plead or identify any relevant action taken by them in respect of GCH’s acquisition of the land. The claim for knowing assistance against EOS and TKS must therefore fail.

Ms Quine also claims compensation (2FASC [29CC], denied Defence [29CC]) quantified as “a sum equal to the difference between the sum secured by [GSPL’s] mortgage of the [l]and to Westpac and the new mortgage given by [GCP] over the [l]and.” I recognise that the relief available against a defaulting fiduciary and a person liable for knowing assistance can be different both in nature or quantum, although the parties did not address that complexity: Michael Wilson & Partners Ltd v Nicholls (2011) 244 CLR 427; [2011] HCA 48 at [106]. I can here see no basis on which the amount recoverable against Mr Scott and Mr Sullivan would be quantified on that basis, where the loss suffered by GSPL as, as I noted above, the amount quantified above. Mr Scott and Ms Sullivan concede that they are jointly and severally liable with GCH for that amount.

Ms Quine pleads (2FASC [29D]-[29I], partly admitted, not admitted or denied in Defence [29D]-[29I]), also as a derivative claim brought for GSPL, that:

The number and scope of the challenged transactions was narrowed in the course of the hearing (as set out in MFI1 and MFI 9) and they were organised in several categories in cross-examination.

The first category of transactions, which is the only category that remain in dispute, relates to the following invoices issued by CBK and EOG to GSPL as follows:

Ms Quine pleads (2FASC [29F], denied Defence [29F]) that the making of these payments or the act of causing the payments to be made was in each case:

The claim as to the first category of transactions is an allegation of contraventions of statutory provisions with criminal and civil penalty consequences. In determining this claim, I must again have regard to the approach identified in Briginshaw and its equivalent under s 140 of the Evidence Act 1995 (NSW) and I approach the evidence in this claim on that basis. It is also important to recognise that, here, Ms Quine’s case is not that services were provided by CBK or EOG to GSPL at an excessive rate, established by reference to any evidence of market rates, or that there was an overstatement of work done and the amounts paid were excessive by any identified amount. Her case is, instead, that the charges are recoverable in their entirety, which could only be established on the basis that they were improper in their entirety.

Ms Quine points to the fact that the relevant transactions took place between GSPL and companies associated with Mr Scott and Ms Sullivan, but dealings between a proprietary company and its directors or associated entities are a commonplace; are typically authorised by corporate constitutions; and, here, were also authorised by the trust deed of GSUT. Here, payments were made on invoice, which on their face related to the provision of services that a storage business would require. Ms Quine points out that the Defendants did not produce documents corroborating the invoiced amounts for some transactions on notice to produce, and I proceed on the basis that I could more readily draw an inference favourable to Ms Quine’s case and was available on the evidence, but that does not allow a finding in favour of Ms Quine that is unsupported by evidence. Ms Quine points to two transactions where the same amount was paid to CBK and EOG at the same time; I accept that supports an inference that Mr Scott and Ms Sullivan had agreed the same amount should be paid to each of the companies at that time; but it does not follow that the work for which those amounts were claimed had not been done.

I cannot find a contravention of s 180 of the Act here, so far as Ms Sullivan (or, possibly, Mr Scott) authorised payment of the invoices or acquiesced in their being paid. Those invoices related, on their face, to proper corporate expenditures; Ms Quine rightly did not expressly contend they were false or fraudulent, where she led no evidence that was capable of establishing that proposition; the amounts claimed by the invoices were not, on their face, so large or unreasonable that they required further investigation; Ms Quine led no evidence that a director of a proprietary company who received such an invoice would not, in exercising reasonable care and diligence, treat it as accurate rather than fraudulent and pay it as a debt properly incurred by GSPL; and that position does not change because companies related to Mr Scott or Ms Sullivan did the relevant work, absent evidence that the work was not done or was not charged at a reasonable rate. A contravention of s 181 of the Act is also not established here, so far as Ms Sullivan (or, possibly, Mr Scott) authorised payment of the invoices or acquiesced in their paying paid, for the same reasons that a contravention of s 180 of the Act is not established; and a contravention of s 182 of the Act is not established where the necessary element of impropriety is not established.

Ms Quine pleads (2FASC [29G], denied Defence [29G]) that, by virtue of the contraventions alleged in 2FASC [29F], GSPL has suffered loss and damage and is entitled to an order that Ms Sullivan and/or Ms Scott compensate GSPL for that loss or damage. That claim cannot succeed where the claimed contraventions are not established. Ms Quine also pleads (2FASC [29H]-[29I], respectively not admitted and denied Defence [29H]-[29I]) that the relevant payments were made without her knowledge, notice or consent and that Ms Sullivan and Mr Scott deliberately took no steps (prior to being forced to disclose them by Court order, or on exercise by Ms Quine of her rights as shareholder of GSPL or as a unit holder of GSUT) to disclose the payments in the Expenditures Document to Ms Quine. There is no suggestion that such knowledge, notice or consent was required when she was no longer a director of GSPL. I accept that Ms Sullivan and Mr Scott did not disclose the particular transactions to Ms Quine but that does not advance the challenge to their propriety. The claim in respect of this category of transactions therefore fails.

It is not necessary to determine Ms Quine’s claim as to the remaining three categories, where the Defendants concede liability. The second category relates to a single transaction (item 11) being the purchase, on 4 February 2019, from Square Australia, of a point of sale device for $1,297. The Defendants conceded liability for this claim.

The third category relates to “Netregistry’ Payments as follows:

The fourth category of this claim relates to payment of legal fees and other expenses as follows:

The Defendants concede liability as to this category of transaction but rely on a set-off of reimbursement of these amounts by Ms Sullivan made on the first day of the hearing. By paragraph 29I(i) of their Defence (MFI8), the Defendants pleaded, in answer to paragraphs 29D and 29I of the Second Further Amended Statement of Claim, that they had caused monies which had been withdrawn from the bank account of GSPL to be returned to that bank account so that GSPL had not suffered loss or damage by reason of those withdrawals and/or the Defendants were entitled to rely on the return of those funds as an offsetting amount in equity or under CPA s 21. Those amounts were there particularised by reference to deposits totalling $176,042 made by Ms Sullivan to that account on the first day of the hearing on 28 January 2025 (Ex J2, 3441.28), which the Defendants acknowledged were to be treated as repayment of legal expenses incurred by GSPL and not, for example, as a loan by them or subscription for equity in GSPL.

I do not understand there to be any dispute that the repayment of that amount should be offset against this claim, or at least reduces GSPL’s or extinguishes recoverable loss arising from the payment of those expenses. GSPL therefore succeeds in this claim only to the extent that the amounts which were wrongly paid out by GSPL exceed the amount repaid by Ms Sullivan, and I will leave the parties to calculate that amount. The parties took no point as to interest in that regard.

Ms Quine pleads (2FASC [29J]-[29L], partly admitted and partly denied Defence [29J]-[29L]) that, from 1 November 2018 to the present, Ms Sullivan and Mr Scott caused or permitted EOG to rent Unit 5 in the premises; CBK to rent Units 2 and 7 in the premises; and an entity or business known as “Bam Constructions” (“Bam”) to rent Unit 4; that, throughout the period during which the EOG, CBK and Bam have rented the premises, they have paid less than market rent; and that the fact that EOG, CBK and Bam have been paying less than market rent was known to both Ms Sullivan and Mr Scott. A further claim (2FASC [29M]) in respect of the use of an outside storage area was not pressed.

Ms Quine in turn pleads (2FASC [29N], denied Defence [29N]) that:

The Defendants also rely in response (Defence [29P]) on aspects of cl 8 of the trust deed for GSUT as authorising the relevant conduct.

Ms Quine’s claim here turns on the assumption, unsupported by evidence or by any case law to which Mr Crossland drew attention, that it is necessarily a breach of the Act for the directors of a company or corporate trustee to permit it to make a product or service available at less than market value or on discounted terms to a shareholder or unitholder, either generally or over the objection of a minority shareholder. No doubt, that course may have tax implications and may, in the case of a public company, require approval under Ch 2E of the Act. However, I do not accept that there is any general rule of law or corporate practice that prohibits a company taking that course, or its directors authorising or permitting it to take that course, and the essential premise of this claim is not established. This claim must fail for that reason.

It is therefore not necessary to address Ms Quine’s consequential claim (2FASC [29O], denied Defence [29O]), by virtue of the alleged contraventions of the Act, that Ms Sullivan and/or Ms Scott compensate GSPL for the damage suffered by it pursuant to s 1317H of the Act in the amount of $995,243.63 or some different amount.

Ms Quine seeks (OP [1]) a declaration that the affairs of GSPL are being conducted in a way that is oppressive to, or unfairly prejudicial to, or unfairly discriminatory to her and (OP [4]) an order, under s 233 of the Act, that GSPL be wound-up. I note, for completeness, that Ms Quine initially sought orders that the relevant Defendants sell their shares in GSPL and their units in GSUT to her for a “sum to be determined by the Court”, but rightly abandoned that relief in an amendment to the Originating Process where she had not led adequate evidence to support a determination of the question of the value of those shares and units. The Defendants indicated that they would consent to a different order that they buy out Ms Quine’s shares and units, but that was not to the point where Ms Quine did not seek that different order. The Defendants did not pursue any amendment to their Cross-Claim to introduce a claim for such an order and ultimately did not press such an order.

The applicable principles in respect of oppression are well-established and I have drawn my summary of them from my judgment in Re Gunyahweh Pty Ltd [2023] NSWSC 1133 at [130]ff. Section 232 of the Act provides that the Court may make an order under s 233 if:

Section 53 of the Act in turn identifies the “affairs of a body corporate” for several provisions of the Act, including s 232, as including the “promotion, formation, membership, control, business, trading, transactions and … dealings of the body” (s 53(a)) and “the internal management and proceedings of the body” (s 53(c)). The orders which may be made include, relevantly, an order for the purchase of any shares by any member (s 233(1)(d)) and an order that a company be wound up (s 233(1)(a)).

Section 232 of the Act and its predecessors extend to conduct involving “commercial unfairness” or where the conduct complained of involves a visible departure from the standards of fair dealing and a violation of the conditions of fair play, or a decision has been made so as to impose a disadvantage, disability or burden on the plaintiff that, according to ordinary standards of reasonableness and fair dealing, is unfair: Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692 at 704; Wayde v New South Wales Rugby League Ltd (1985) 180 CLR 459; [1985] HCA 68. Conduct may be oppressive even when a defendant believes that he or she is acting for proper purposes: Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; (2009) 257 ALR 610; [2009] HCA 25 at [176]. The principles applicable to a claim for oppression were summarised by Austin J in Tomanovic v Argyle HQ Pty Ltd [2010] NSWSC 152 at [39], and the Court of Appeal noted the parties did not challenge that summary of the applicable principles in Tomanovic v Global Mortgage Equity Corporation Pty Ltd (2011) 288 ALR 310; (2011) 84 ACSR 121; [2011] NSWCA 104 (“Tomanovic (2011 NSWCA)”) at [140]. Austin J there observed that:

I now turn to the pleaded factual basis of this claim. Ms Quine pleads (2FASC [7]; denied Defence [7]) that, from 20 August 2015, GSPL operated as a quasi-partnership in which Mr and Mrs Quine, Mr Scott and Ms Sullivan were the quasi-partners and particularises that claim on the basis that, inter alia:

Ms Quine contends (2FASC [19]-[20]) that, from November 2022 to date, Ms Quine made several requests of GSPL, Mr Scott and Ms Sullivan to permit Ms Quine to inspect the books of account of GSPL and GSUT and that GSPL continues to refuse to provide access to GSUT’s electronically stored accounting records for the period from March 2021. The Defendants contend (Defence [22]) that Ms Quine was given access, in October 2024, to electronically stored accounting records for GSUT for the period from 11 March 2021.

It is broadly common ground (2FASC [21]-[23], Defence [23]-[25]) that, on 17 October 2023, GSPL issued Ms Quine an eviction notice relying on her rent being in arrears in the sum of $20,693.12 dating back to March 2021. It is plain enough that Ms Quine had in fact failed to pay that rent. On 10 November 2023, Ms Quine vacated the relevant premises.

Ms Quine also pleads (2FASC [24]-[27]) a delay by GSPL in paying her a dividend for the financial year 2022 and that:

The evidence does not establish that Ms Sullivan or Ms Scott withheld the dividend payment to put any such “pressure” on Ms Quine, although I accept that they likely wished to confirm that Ms Quine had vacated the premises where she had failed to pay the rent due in respect of them. It is not necessary to decide whether that conduct was “unreasonable” or “excessive”, judged against an undefined standard and where Ms Quine had not paid that rent, where it is not necessary to determine Ms Quine’s oppression case for the reasons noted below. Ms Quine did not contend, as she might have, that the failure to pay the dividend contravened applicable provisions of the Act.

Ms Quine also pleads (2FASC [29], denied Defence [31]) that several acts and omission by Ms Sullivan and Mr Scott on behalf of GSPL are, or have been, oppressive to Ms Quine. Those acts are pleaded as:

It is not necessary to determine the oppression claim where it is common ground between the parties and I find below that I should make a winding up order in respect of GSPL on the just and equitable ground, where the present position is not tenable and no alternative relief is available. However, I will briefly address the conclusion that I would likely have reached as to some of these matters had it been necessary to determine them.

Ms Quine here relies (2FASC [29(a)]) on the fact that she was removed as a director of GSPL. I have noted that matter above and noted that the suggestion that the arrangement was a quasi-partnership, at least with Ms Quine, is weakened by the fact that she was not initially either a shareholder or a director of GSPL, although she was a unitholder in GSUT. Ms Quine also relies (2FASC [29(b)-(e)]) on the delay in payment of a dividend to Ms Quine and the long delay in allowing access to financial records. I have noted those matters above and they would, with other matters, have provided support for an oppression claim.

Ms Quine relies (2FASC [29(f)], [29(l)]) on the occupation of part of the premises at less than market rates above. Had it been necessary to determine that matter, I would likely have found that it did not support the oppression claim where it was not unlawful; was consistent with the basis on which the parties’ arrangements were established and contemplated by the terms of GSUT; and that benefit was available to Ms Quine until she ceased to occupy the premises following her failure to pay any rent. Ms Quine also relies (2FASC [29(g)-(h)]) on the issue of an eviction notice to her. I would not have found that matter to be oppressive where she had chosen not to pay the rent for the part of the premises she occupied, and I do not consider that the existence of a wider dispute or the delay in payment of dividends alters that matter.

Ms Quine relies (2FASC [29(i)]) on the circumstances of the transfer of the land out of GSPL to QHC in admitted breach of trust and I would have found that matter, alone or with other matters, was sufficient basis for relief in oppression. Ms Quine also relies (2FASC [29(j)], [29(l)]) on payments made to entities associated with Mr Scott and Ms Sullivan. I would not have found that the payments for services to CBK and EOG supported the oppression claim, for the reasons that they also did not support the claim for breach of directors duties, but I would have found that the payment of all or a large part of the Defendants’ costs of the proceedings out of GSPL’s assets was plainly oppressive and sufficient to establish the basis for a winding up order. However, I will ultimately make that order on the just and equitable ground, for the reasons noted below.

Ms Quine also seeks an order to wind up GSPL on the just and equitable ground. Ms Quine pleads (2FASC [30], admitted defence [32]) that it is ‘just and equitable’ to wind up GSPL, in circumstances where:

The "just and equitable" ground for winding up a company in s 461(1)(k) of the Act is not limited by particular categories: Re CNPR Limited [2018] NSWSC 989 at [8] and Re Spitfire Q Pty Ltd [2021] NSWSC 866 at [12]. Where a company was established on a basis of relationships of mutual confidence, a winding up order may be made on the just and equitable ground under s 461(1)(k) of the Act where irreconcilable differences emerge between its members: Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (2001) 37 ACSR 672; [2001] NSWCA 97 (“Fexuto”) at [89]; Nassar v Innovative Precasters Group Pty Ltd (2009) 71 ACSR 343; [2009] NSWSC 342 (“Nassar”) at [97]–[98]. The circumstances in which the Court may make a winding up order under s 461(1)(k) of the Act also include circumstances where the substratum of the company has failed: Re Catombal Investments Pty Ltd [2012] NSWSC 775 at [19]ff.

In Re Amazon Pest Control Pty Ltd [2012] NSWSC 1568 (“Amazon Pest Control”) at [17], I observed that:

In Read-Zorn v Origin Distillers Group Pty Ltd [2023] FCA 280 at [19]-[23], Jackman J summarised the applicable principles as follows:

In Haycraft v AF1 Services Pty Ltd [2023] FCA 774 at [73]ff, Stewart J observed that:

Section 467(4) of the Act applies where a winding up order is sought on the just and equitable ground and requires the Court to have regard to the availability of some other remedy and whether a plaintiff would be acting unreasonably in seeking to have the company wound up instead of pursuing that other remedy. However, there is no absolute rule that the Court will not wind up a solvent company, although winding up is a last resort: Re Pure Nature Sydney Pty Ltd [2018] NSWSC 914 at [76]. In Asia Pacific Joint Mining Pty Ltd v Allways Resources Holdings Pty Ltd (2018) 125 ACSR 227; [2018] QCA 048, McMurdo JA noted (at [46]) that:

In Snell v Glatis (No 2) [2020] NSWCA 166 (“Snell”), the Court of Appeal considered the comparative merits of a buy-out order and a winding up, in the context of an asset-holding company. Leeming JA (with whom Bell P and Meagher JA agreed) there held that an order made by the trial judge for the defendant to buy out a plaintiffs’ minority shareholdings in a group of companies should not have been made where there was insufficient evidence that the defendant could comply with that order within the specified timeframe, the company was not running a business but collecting rents on leased property, and winding up was a realistic means of securing to the plaintiffs their share of the value of the group and preventing ongoing oppression. Bell P (as the Chief Justice then was) also there observed (at [6]) that:

In Russell v Lee Holdings Pty Ltd (No 3) [2020] WASC 346, where the parties had exchanged buy-out offers and asserted their capacities to meet any orders made to that effect, Martin J treated the Court of Appeal’s decision in Snell as a counterweight to the authorities describing winding up as a remedy of last resort. In Re Crow Inn Pty Ltd (No 2) [2020] NSWSC 1749, Rees J referred to Leeming JA’s observation in Snell that the circumstances in which a shareholder must realise assets in order to meet a buy-out order lend themselves to the appointment of a liquidator for the purposes of ensuring that occurs independently of the parties. Although each party had there sought buy-out orders, Rees J instead ordered that the companies be wound up.

I am satisfied that an order to wind up GSPL on just and equitable grounds is properly made here given the failure of the relationship between the companies’ directors and shareholders; given the recent transfer of the land in breach of trust and the improper application of GSPL’s assets to payment of the costs of defending these proceedings to the advantage of Mr Scott and Ms Sullivan; and where neither party sought an order to buy out the shares and units of the other or led adequate evidence to support such a valuation or establish its capacity to fund a buy-out order.

Consistent with the lack of agreement between the parties as to the majority of issues in the proceedings, they also disagreed as to the identity of the liquidator to be appointed to GSPL, and invited the Court to resolve that disagreement, although they did not make any substantive submissions that the appointment of either liquidator was preferable to the appointment of the other. This issue is simply resolved where the Court’s ordinary practice, in an application for a winding up order, is to appoint the Plaintiff’s nominee, absent reason to the contrary, and the Defendants had not identified any reason not to take that course. For these reasons, I will appoint Mr Daran, who is nominated for appointment by Ms Quine and has consented to appointment, as liquidator of GSPL.

As I noted above, Ms Quine also sought an order that the liquidator appointed to GSPL be appointed as receiver of the assets of GSUT. Section 67 of the Supreme Court Act 1970 (NSW) provides that the Court may, at any stage of the proceedings, appoint a receiver by interlocutory order in any case in which it appears to the Court to be just or convenient to do so, and there are many cases in which the Courts have made such an appointment in favour of a liquidator appointed to a trustee company in respect of trust assets. That appointment can be made on the basis of a former trustee’s right of indemnity and exoneration in respect of trust assets, which is available even where a trustee’s office is vacated by reason of the appointment of a liquidator to the trustee company: Stansfield DIY Wealth Pty Ltd (in liq) (2014) 291 FLR 17; (2014) 103 ACSR 401; [2014] NSWSC 1484; Re Double Bay Property Management Pty Ltd (in liq) [2020] NSWSC 203; Re Glenvine Pty Ltd (in liq) [2020] NSWSC 866; Re Munja Bakehouse Pty Ltd [2024] NSWSC 6 at [30]. I will make that order, where I will make a winding up order.

I direct the parties to bring in agreed short minutes of order to give effect to this judgment, including as to costs, within 14 days and, in the event of disagreement, their respective draft orders and submissions not exceeding 5 pages in Arial font 12, one and a half spacing as to the differences between them.