Twigg v Twigg (No 5); Lambert v Twigg Investments; Pty Ltd (No 4)

On 31 August 2020, I delivered reasons for judgment in this matter (Twigg v Twigg (No 4); Lambert v Twigg Investments Pty Ltd (No 3) [2020] NSWSC 1159) (the Principal Judgment). I found that the plaintiffs were entitled to succeed in their claim that the first defendant had breached his fiduciary duties to them by paying the proceeds of sale of the Twigg Group business to himself or entities he controlled and that to the extent that the plaintiffs could trace the proceeds of sale to assets still held by the first to thirteenth and fifteenth defendants, those assets were held on constructive trust for the plaintiffs. I went on to deal with the question into which assets the proceeds of sale could be traced and expressed my view on that question, leaving it to a later date, and if necessary after hearing further submissions, to make final orders reflecting the conclusions I had reached.

On 3 October 2020, the plaintiffs filed a notice of motion seeking a number of orders including an order that the Principal Judgment be corrected under Uniform Civil Procedure Rules 2005 (NSW) (UCPR) r 36.16 in a number of respects. I received written submissions from the parties on that issue (and a number of others) and heard oral argument on 20 November 2020. Following oral argument, I invited the parties to provide supplementary written submissions on some aspects of the plaintiffs’ application, leaving it open to the parties to make further oral submissions if I thought that was necessary or desirable. The parties also agreed at the hearing that a number of other ancillary issues, particularly costs, should be determined after I had delivered judgment on the plaintiffs’ application to amend my judgment. There are, however, a number of other issues raised by the orders sought by the plaintiffs which do not depend on the outcome of the plaintiffs’ motion that can be dealt with in this judgment.

I received further written submissions on 27 November 2020 from the plaintiffs and on 30 November 2020 from the first to thirteenth and fifteenth defendants on the plaintiffs’ motion. After receiving those submissions, the matter was listed for a further hearing on 7 December 2020. Prior to that hearing, the plaintiffs provided some supplementary written submissions.

Terms defined and abbreviations used in the Principal Judgment have the same meaning in this judgment.

As finally formulated, the plaintiffs seek the following orders under UCPR r 36.16:

UCPR r 36.16(1) provides:

The principles applicable to the exercise of the power to reopen a judgment under that rule are not in doubt. They are set out in the following statement by Mason CJ in Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300 at 303; which was unanimously approved by the High Court in Elliott v R (2007) 234 CLR 38 at [32]:

As the High Court pointed out in Smith v NSW Bar Association (1992) 176 CLR 256 at 265 (Brennan, Dawson, Toohey and Gaudron JJ), the power is discretionary.

The orders sought by the plaintiffs essentially seek to reopen the Principal Judgment in respect of four matters:

In my judgment, I recorded the following facts relevant to this aspect of the case (at [226-8]):

In his final written submissions, Max submitted that at about the time he acquired Albatross Avenue he sold shares in Cleanaway which he had acquired personally in connection with the sale of the Twigg Group business. Mr Potter, an expert retained by the plaintiffs, had stated in a report he had prepared for the purpose of the proceedings that Max had personally derived $9.3 million from the sale of those shares in around September 2008. Max submitted that the Court should infer from that evidence that a large proportion of the purchase price had been funded by the sale of the Cleanaway shares. On that basis, he submitted that Albatross Avenue did not form part of the traceable proceeds of the Twigg Group business. I accepted that submission. In doing so, I concluded that the admission made by Max in the affidavit filed in the Family Court proceedings was “speaking loosely” consistent with that submission, since Max obtained the Cleanaway shares in connection with the sale of the Twigg Group business.

The plaintiffs submit that the conclusion I reached proceeded on a wrong factual basis because I had overlooked the following material:

I have concluded that it is not appropriate that I should re-open the Principal Judgment in relation to Albatross Avenue.

In my opinion, it is appropriate to reopen the Principal Judgment in relation to the question of tracing where it can be shown that the judgment has proceeded on a clear error. The issue of tracing was a consequential issue going to the remedies to which the plaintiffs were entitled if they otherwise succeeded in the case. They raise complicated factual issues that received limited attention from the parties in final submissions. The plaintiffs are not entirely to blame for that. The case involved a large number of other issues. The discovery provided by Max was inadequate and a significant part of the material relevant to the question of tracing only emerged during the course of the hearing after protracted disputes concerning discovery. Some of the material was overlooked because it was not formally read or tendered in the Main Proceeding, but was relied on in connection with an application for a freezing order during the course of the hearing. Other material which ought to have been discovered only came to light after judgment was delivered. In addition, since the freezing order that was granted permitted Max to continue to deal with assets said to be impressed with the trust, the tracing exercise could only be finally completed in relation to some specific assets after judgment was delivered.

However, in the case of the Albatross Avenue property, I am not satisfied that the Principal Judgment proceeded on the basis of an error.

The objective evidence is that the purchase of Albatross Avenue settled on 4 September 2008. At that time, the evidence is that Maly Holdings paid the sum of $8,033,445.68 towards the purchase price. Of that amount, $54,586.12 had been in the Maly Holdings bank account since 26 August 2008, amounts totalling $5,475,858.78 were paid in on 3 and 4 September 2008 and the balance was made up by an overdraft of $2,503,791.28. Most of those facts are recorded in the Principal Judgment at [227]. As I recorded in that judgment, Mr Potter was unable to say where the amounts paid into the account or where the balance of the purchase price came from. However, it is apparent from an email dated 12 September 2008 from a broker to Max that sometime after 25 July 2008 Max started selling his shares in Cleanaway, the last of which were sold on 12 September 2008 for an amount of $2,824,347.44. The total amount Max received from his Cleanaway shares was $9,340,952.29.

The timing of the sale of the Cleanaway shares and the payment of amounts into the account of Maly Holdings suggest that the shares were sold to finance the acquisition of Albatross Avenue. That inference is reinforced by the fact that the account went into overdraft at the time of settlement, suggesting that the overdraft was permitted in the expectation that it would be repaid from the sale of the remaining Cleanaway shares shortly after settlement. It is true that the sale of the Cleanaway shares realised approximately $9.34 million, whereas the purchase price of the property was $10 million plus costs. But the sale of the Cleanaway shares still accounts for a large proportion of the purchase price.

Against these matters, of course, had to be weighed the admissions made by Max in his Family Court affidavit and in cross-examination and the schedule prepared by Pitcher Partners. But the schedule and affidavit were prepared at a high level of generality and were not entirely accurate. The admissions made in cross-examination were made by reference to the affidavit. As I pointed out in the Principal Judgment, the Cleanaway shares were provided to Max in connection with the sale of the Twigg Group business and in a broad sense it could have been regarded by Max as part of the proceeds of sale of the business. Moreover, if it was correct that the $10.5 million of the proceeds of sale were used to acquire Albatross Avenue, it is difficult to see why part of the purchase price was paid with a bank loan (in the form of an overdraft).

If I made an error, it was in balancing the objective evidence against the evidence contained in the Family Court affidavit (and Max’s admissions made by reference to that affidavit). That is not a sufficient ground to reopen my judgment. In effect, the plaintiffs are asking me to reconsider an analysis I undertook in the Principal Judgment.

One difficulty in dealing with this aspect of the plaintiffs’ application is that the issue of tracing is now framed somewhat differently from the way it was framed at the hearing and in final written submissions, or at least the way in which I understood it was framed.

In final written submissions, the plaintiffs sought to trace the proceeds of sale of the Twigg Group business to certain identified assets, although in some cases those assets were somewhat loosely described. That is how the issue is dealt with in the Principal Judgment. However, on the current application, the plaintiffs characterise their claim as a claim to all the assets of the Twigg Investments No 2 Trust with one exception to which I will come. That claim was put on the basis of a case that the only external sources of funds held by the trust or to acquire assets held by the trust were the proceeds of sale of the Byron Bay Beach Hotel (which I found were the traceable proceeds of sale of the Twigg Group business) and the proceeds of sale of a property known as Harkaway (of which I found $5 million to be traceable proceeds of the Twigg Group business). All other purchases and sales by the Twigg Investments No 2 Trust were made with assets, or represented assets derived, from those two sources. In oral submissions on the current application, Mr Elliott SC, who appeared for the plaintiffs, said that at the final hearing he had proceeded on the basis that that was common ground and consequently the plaintiffs final submissions were made on that basis without specifically stating that to be the case.

In any event, Mr Elliott sought to demonstrate by reference to portfolio income and expenditure summaries for the Twigg Investments No 2 Trust prepared by Pitcher Partners that that was the case, with one or two possible exceptions that were so small they did not need to be considered. Some of the summaries relied on by Mr Elliott were before the Court at the time of the final hearing. Others were annexed to an affidavit sworn on 3 June 2020 by Mr Corey Radcliff, Max’s solicitor. That affidavit was read during the course of the hearing on an application for a freezing order, but it was not formally read in the Main Proceeding. The plaintiffs did tender in the Main Proceeding two other affidavits of Mr Radcliff sworn on 1 June 2020 and 2 June 2020 that were prepared for the purposes of the application of a freezing order but not read by Max in the interlocutory application. They did not seek to tender the affidavit of 3 June 2020, since it had been read by Max. The affidavit of 3 June 2020 was not referred to in final submissions. Even then, the summaries that were available were not up to date.

So far as the affidavit of 3 June 2020 is concerned, whether it was formally before the Court on the final hearing or not, I do not think it was unreasonable for the plaintiffs to proceed on the basis that it was. The decision not to tender it formally was at most an oversight which was explicable on the basis that it was read during the hearing and on the basis that the plaintiffs were proceeding on the assumption that the Twigg Investments No 2 Trust only had the two sources of funds which I have identified. I do not think that the position the plaintiffs took could be described as a forensic one made during the course of the trial by which they are bound. Rather, they understandably proceeded on the basis that the affidavit was before the Court and the facts it disclosed were the facts on which the judgment would be delivered.

I had not understood that the plaintiffs’ submissions assumed that the only external sources of funds for the Twigg Investments No 2 Trust were the proceeds of sale of the Byron Bay Beach Hotel and Harkaway. There may be a question whether Max accepted during the course of the hearing that the case was to be decided on that basis. Certainly, however, Max does not suggest that that assumption is incorrect. It follows that the Principal Judgment proceeded on a misapprehension of the facts, and it follows from what I have already said that it should be corrected to the extent that the conclusions contained in it depend on that misapprehension.

The only question, then, in relation to the assets held in the Twigg Investments No 2 Trust is how to deal with the fact that on 25 February 2020 $3,542,740.73 (being part of the proceeds of sale of Harkaway) was paid to the Trust that did not form part of the traceable proceeds of sale of the Twigg Group business. The plaintiffs submit that applying the principles of Re Hallett’s Estate, Knatchbull v Hallett (1880) 13 Ch D 696 the Court should assume that money paid out of the trust after that date should be taken to have been paid out of the $3.54 million first, on the basis that a trustee is assumed to have been honest rather than dishonest and so is assumed to have paid his own money away first. Max does not take issue with that principle. He does, however, take issue with its application to the facts of this case.

The facts relating to the proceeds of sale of Harkaway are as follows:

The plaintiffs submit that applying Re Hallett’s Estate, the Court should infer that the $8.5 million included the $3,542,740.73 belonging to Max (on the basis that the transfer of trust money amounted to a breach of trust and Max is assumed to have paid away his own money first). The balance of the $8.5 million – $4,957,259.27 – were traceable proceeds belonging to the plaintiffs. Between 7 April and 14 September 2020, the total withdrawals from the CBA account were $5.4 million. They were repaid to the ANZ account. Again, Max is assumed to have withdrawn his own money first. Consequently, of the $5.4 million, $3,542,740.73 belonged to Max and the balance of $1,857,259.27 was traceable proceeds belonging to the plaintiffs, as was the balance of $3.1 million remaining in the CBA account. Between 7 April and 27 November 2020, Max withdrew $3,042,985 from the ANZ account. Again, he is taken to have withdrawn his own money first. On the above analysis, of the amount in the ANZ account, $3,542,740.73 belonged to Max. After the withdrawals of $3,042,985, that leaves an amount of $499,755.73 which belongs to Max. The balance of that account forms part of the traceable proceeds belonging to the plaintiffs.

Max criticises the above analysis because it does not pay sufficient regard to the timing of the payments. It lumps all the payments from the CBA account and all the payments from the ANZ account together. Max suggests two alternative analyses to deal with this issue. One is a simplified version of the other. On the simplified version Max assumes that the payment to the CBA account of $8.5 million includes the whole of the traceable $5 million (rather than the $4,957,259.27) and a payment from the CBA account of $2 million on 14 September 2020 as comprising traceable proceeds in its entirety. The alternative analysis uses the actual figures. It is convenient to take the simplified analysis.

On that basis, $5 million of the $8.5 million paid into the CBA account was traceable. Between 4 March 2020 and 13 September 2020, $3.4 million was paid from the CBA account to the ANZ account, leaving a balance in the CBA account of $5.1 million. Applying Re Hallett’s Estate, the $3.4 million must be taken to be Max’s money and so is not traceable. Between 4 March 2020 and 1 September 2020, the amount in the CBA account earned interest of $29,620.77. On 14 September 2020, a further $2 million was withdrawn from the CBA account and paid into the ANZ account. It is reasonable to treat the whole of that amount as part of the traceable proceeds from the sale of Harkaway, with the result that of the sum of $3.1 million (plus interest) remaining in the CBA account, $3 million (plus some interest) was traceable and the balance is not. Between 15 September 2020 and 23 September 2020 a number of identifiable assets were bought such as shares and gold bullion which are still held by the Twigg Investments No 2 Trust. In addition, there is a balance in the account of $413,734.65. Those assets and the balance of the account are traceable. However, other payments from the ANZ account were not made in exchange for identifiable assets and so those amounts are not traceable.

Of the two approaches, in my opinion the approach taken by the plaintiffs better fits with the principle stated in Re Hallett’s Estate. Once it is accepted that all of the assets of the Twigg Investments No 2 Trust were traceable proceeds of the sale of the Twigg Group business until the proceeds of sale of Harkaway were paid into the ANZ account, it is wrong to analyse the application of Re Hallett’s Estate by reference to the individual assets held by the trust. Rather, it is necessary to look at payments in and out of the trust. On that basis, of the amount of $8,542,740.73 paid to the trust on 25 February 2020, $5 million formed part of the assets of the trust to which the plaintiffs were entitled and the balance belonged to Max. Any payments within the trust can be ignored but any payments out of the trust are to be treated as coming from Max’s share of the money paid to the trust first. Consequently, all of the amounts paid for Max’s benefit are to be treated as coming from his share. That is the effect of the approach taken by the plaintiffs.

At the hearing, the plaintiffs claimed that the costs of acquiring and modifying five vehicles recently acquired by Max could be traced from the proceeds of sale of the Twigg Group business because those costs came from the Twigg Investments No 2 Trust. In the Principal Judgment, I found (at [224]) that one of those vehicles (a Porsche motor vehicle) could be traced from the proceeds of sale because the bank statements in evidence indicated that the purchase price of the vehicle was paid from the Twigg Investments No 2 Trust account to an account held in the name of BBH and from there to the vendor. In the case of the other vehicles, I observed (at [225]) that the bank statements showed regular and substantial transfers of money from the Twigg Investments No 2 Trust account to the BBH account. However, none of them matched the amounts paid for the vehicles. Moreover, as I said in the Principal Judgment, “[t]he plaintiffs have not produced any analysis of the account [that is, the Twigg Investments No 2 Trust account] which would permit the Court to conclude that the amounts transferred to the BBH account came from the proceeds of sale or that they were used to pay for the motor vehicles”. I therefore concluded that the amounts spent on the other four vehicles could not be traced to the proceeds of sale of the Twigg Group business.

The plaintiffs do not seek any orders in relation to one of the remaining four vehicles (a Hyundai Excel race car motor vehicle). But they seek to vary the Principal Judgment in relation to the other three.

As to those, for the reasons already given, the relevant part of the Principal Judgment proceeded on an incorrect basis – that is, that there were sources of funds held by the Twigg Investments No 2 Trust other than those I have identified in this judgment. It also did not take account of the information contained in Mr Radcliff’s affidavit of 3 June 2020. That affidavit annexed the bank statements for the BBH account and explained that the BBH account is funded by transfers from the Twigg Investments No 2 Trust. It follows from what I have already said that it is therefore appropriate to reopen the Principal Judgment in relation to this aspect of the plaintiffs’ case.

The facts relating to the remaining three vehicles are these:

It follows that, subject to the trade-in, the amounts spent on the vehicles can be traced to the proceeds of sale of the Twigg Group business. As to the trade-in, there is no information before the Court concerning the amount that Max received on the trade-in. That is something peculiarly within Max’s knowledge. In those circumstances, the amount of the trade-in should be ignored.

As the Principal Judgment records (at [221]), Twigg Co is another company controlled by Max which is used to acquire certain high yield assets. Virtually no submissions were made to the Court on the assets of Twigg Co during the final hearing. The plaintiffs apparently assumed that the position was the same as for the Twigg Investments No 2 Trust and Max did not specifically deal with it at all. There was, however, evidence before the Court in the form of an email dated 31 May 2020 from Pitcher Partners to Mr Radcliff showing the payment of $5.6 million to Twigg Co from the proceeds of sale of the Byron Bay Hotel and there was other evidence before the Court relating to sums of money paid or assets bought in the name of Twigg Co. Substantial additional evidence and submissions have been provided to the Court on the assets of Twigg Co in connection with this application. It is plain that the Principal Judgment proceeded on an incorrect understanding of the facts. For the reasons already given, it is therefore appropriate to reopen the judgment in relation to this aspect of the case.

The facts relating to Twigg Co are these:

It is apparent from this statement of the facts that all the amounts paid into the ANZ Twigg Co Account are the traceable proceeds of the sale of the Twigg Group business apart from the amount of $1,250,000 which was paid in on 30 June 2020. Max suggests that some other amounts are not traceable. So, for example, he says that the amounts of $15,500 and $50,000 paid out on 12 March 2020 are not traceable and that the amount of $220,302.50 received on 2 March 2020 is not traceable. But why that should be so is not clear. It is clear that the amounts of $15,500 and $50,000 were paid out from traceable assets (the money then in the ANZ Twigg Co Account) and then returned. Plainly, then, those amounts are traceable. The position perhaps is not as clear in the case of the $220,302.50. But, as I have said, the likelihood is that that was a return (with profit) of the investment made on 29 October 2019. The investment was made from traceable assets (the money then in the ANZ Twigg Co Account). It follows that the return of that investment is traceable.

The question, then, is how to deal with the $1,250,000 which was paid in on 30 June 2020. Max takes a similar approach to the approach in relation to the Twigg Investments No 2 Trust, which involves treating each payment from the account in the order in which they were made and each payment as a payment from an amount that was not traceable first. On that basis, he submits that the following assets are not traceable:

It appears to be common ground that it is desirable to identify which assets can be regarded as the traceable proceeds of the $1,250,000 and therefore which assets belong to Max. Items (a) and (c) are not in dispute. Indeed, the plaintiffs accept that Max is entitled to 100% of the interest in the CVS Lane – First Mortgage Fund. The dispute relates to (b).

It is not necessary to set out the complicated tracing exercise engaged in by the defendants to explain their conclusion. Part of it depends on the incorrect view that the receipt of the $220,302.50 was not a traceable receipt. Principally, however, it depends on the view that at the time the $500,000 was transferred from the ANZ Twigg Co Account to the CBA Twigg Co Account there were more than $500,000 in the ANZ Twigg Co Account referable to the $1,250,000 belonging to Max and therefore the payment should be treated as coming from those funds.

The plaintiffs are critical of that approach. They submit that certain amounts themselves can be traced from traceable proceeds and consequently ought to be treated as assets belonging to the plaintiffs. So, for example, in relation to the $500,000 paid on 17 April 2020 from the ANZ Twigg Co Account to purchase a Members Equity term deposit and repaid on 14 October 2020, they say it was that amount that was then transferred on 16 October 2020 to the CBA Twigg Co Account. Consequently, it forms part of the traceable proceeds of the sale of the Twigg Group business.

In my opinion, and with one qualification, the simplest way to deal with the $1,250,000 is to treat all payments out of the ANZ Twigg Co Account following receipt of that amount as coming from that amount until it is exhausted. However, I accept the plaintiffs’ submission that the $500,000 paid to the CBA Twigg Co Account on 16 October 2020 should be treated as an exception to this principle. That is so for two reasons. First, I accept the plaintiffs’ submission that it can be inferred from the timing of the payments that that amount is referrable to the Members Equity term deposit which was repaid on 14 October 2020 and which plainly came from traceable proceeds of the sale of the Twigg Group business. Second, an advantage of that approach is that the plaintiffs and Max are not treated as having an interest in the same investment. The only investment affected by this approach is the CVS Lane – First Mortgage Fund. On the plaintiffs’ approach, Max has a 100% interest in that fund. On Max’s approach he has a percentage interest. There is no suggestion that the investment has diminished in value. Consequently, there is little practical difference between the two approaches; and the plaintiffs’ approach simplifies the implementation of any orders. Moreover, if the asset has diminished in value, that would raise the question whether the Court should, applying the approach taken in Re Oatway [1903] 2 Ch 356, treat that investment as being made from Max’s share of the sale proceeds of Harkaway. Neither party specifically addressed that issue. Accordingly, I have concluded that the following payments are referrable to the $1,250,000:

As I have said, the plaintiffs raise a number of other issues regarding the final orders to be made by the Court. The resolution of those issues does not depend on the precise findings made on the application to reopen the Principal Judgment. Accordingly, it is appropriate to deal with them now.

The plaintiffs seek the following declarations from the Court, which are said to arise out of the Principal Judgment:

Max does not object to the Court making declarations consistently with the Principal Judgment. However, he submits that the declaration numbered 5 is unnecessary. In addition, he submits that the declarations sought by the plaintiffs do not accurately reflect the conclusions of the Principal Judgment. In particular, he submits that what I found was that certain payments were made in breach of trust, not that certain distributions were made in breach of trust. In addition, Max submits that the payments that were made were not made as set out in the proposed declarations. As the Principal Judgment records, the payments that were actually made did not correspond to the resolutions purportedly passed by Max setting out how the proceeds of sale of the Twigg Group business were to be distributed.

I can see no reason why the declarations sought by the plaintiffs ought not to be made. In my opinion, they fairly reflect the substance of the conclusions reached in the Principal Judgment. Each of the matters the subject of the declarations was contested at the hearing. I accept the plaintiffs’ submissions that the declarations are a means by which the plaintiffs’ rights are vindicated.

It was the plaintiffs’ contention at the hearing that the proper plaintiff was Mrs Twigg. That is because most of the sale proceeds of the Twigg Group business were received by the Ipswich Trust and the Brooklyn Trust and under the relevant trust deeds, in the absence of a resolution from the relevant trustee before the end of a particular year, the income of each trust in that year was distributed to Mrs Twigg. In the Principal Judgment (at [129]), I pointed out that one difficulty with that submission was that prior to 30 June 2007 (the end of the year in which most of the proceeds of sale were received) a total amount of $58,750,000 was paid out of the Twigg Plant Hire cheque account (in breach of trust). Given that, I concluded that the proper plaintiffs so far as those payments were concerned appeared to be the Corporate Plaintiffs.

In submissions filed in connection with the hearing on 20 November 2020, the plaintiffs took issue with the conclusion expressed in the Principal Judgment. They submitted that there was still no valid resolution for the distribution of assets prior to 30 June 2007. Consequently, all of the income of the trusts was distributed by the trust deeds to Mrs Twigg. That submission, however, begs the question of what was to count as income of the trusts as at 30 June 2007. The total amount paid in respect of the sale of the Twigg Group business was $113,804,668. As at 30 June 2007, the trusts continued to hold $55,054,668. But they no longer held $58,750,000. That sum had been paid away in breach of trust. As a consequence, in place of that sum, the trusts (more accurately, the trustees) became entitled to certain causes of action to recover the amounts paid away. If the trustees were successful, then the amount they recovered might well be regarded as income of the trusts in the year in which the recoveries were made. However, I do not accept that the right to bring those claims could itself be described as income that was distributed to Mrs Twigg on or immediately before 30 June 2007 in accordance with the trust deeds.

The question remains how to deal with this complication. The overwhelming majority of the sale proceeds of the Twigg Group business was paid to Ipswich Trust and Brooklyn Trust. In those circumstances, it is reasonable to assume that the traceable proceeds of the sale of the Twigg Group business relate to amounts paid to them as trustees of their respective trusts. On that basis, it is appropriate to apportion the traceable proceeds between the Ipswich Trust, the Brooklyn Trust and Mrs Twigg in proportion to the amounts to which each was entitled as at 30 June 2007. Of the total amount of $113,804,668, Mrs Twigg was entitled to $55,054,668 (the amount that had not been paid away by that date). On that basis, Mrs Twigg is entitled to a 55,054,668/113,804,668 share – that is, a 48% share of the traceable proceeds. Ipswich Trust and Brooklyn Trust are entitled to the balance in proportion to their shares of the sales proceeds. On the conclusions I reached (Principal Judgment at [128]), Ipswich Trust received $50,225,300 of the proceeds of sale and Brooklyn Trust received $41,978,347. On that basis, Ipswich Trust is entitled to 52% of a 50,225,300/92,203,647 share of the traceable proceeds – that is, a 28% share. Brooklyn Trust is entitled to the balance (a 24% share).

It is necessary in the orders to be made by the Court to fix times by which certain things should be done – such as handing over keys and documents of title and the delivery up of possession. In my opinion, it is appropriate that Max have five business days in which to do those things.

The parties agree that it is necessary for there to be an account in relation to the properties that the defendants hold on trust for the plaintiffs. They propose somewhat different orders to give effect to that agreement. The orders proposed by the plaintiffs are extensive. They are in the following terms:

Many of these orders are agreed by the defendants. There is a dispute concerning who should be a party to the account. However, I can see no reason why all the defendants (other than the fourteenth) should not be parties. There does not appear to be any real difference of substance between the parties. Accordingly, I can see no reason why orders should not be made in terms of those sought by the plaintiffs. However, given the time that has elapsed and the intervening Christmas period, the dates set out in the orders should be extended by six weeks.

The plaintiffs have indicated that they intend to bring proceedings against Pitcher Partners and for that purpose seek to be released from their implied undertaking and the obligations imposed by UCPR r 21.7 in relation to documents produced in the Main Proceeding and the UBE Proceeding. I can see no reason why the plaintiffs should not be released from those obligations. Pitcher Partners were intimately involved in the events giving rise to this litigation. For the reasons given in the Principal Judgment, there are questions concerning their conduct in those events. There is no reason why documents relevant to that conduct should not be available in a claim against them.

It is common ground that the Cross-claim and the UBE Proceeding be dismissed. The only question concerning the UBE Proceeding is whether costs should be paid on an indemnity basis and if so, from when. That answer depends on the position of costs in the Main Proceeding. I will deal with that issue then.

There are a number of issues in relation to costs. Consistently with the position reached at the last hearing, the parties should be given an opportunity to make further submissions on the question of costs before final orders are made.

The plaintiffs seek a continuation of an injunction granted on 2 June 2020 as varied on 3, 18 and 30 June 2020. I propose to give the parties an opportunity to make further submissions on whether the injunction should be continued and, if so, in what form.

The orders of the Court are: