Turner v Richards

1. [1]

   LEEMING JA: I agree with Payne JA that while there should be a grant of leave, the appeal should be dismissed. That is because I agree, for the reasons that his Honour gives, that (a) no error has been shown in the reasoning of the primary judge leading to his not being satisfied that the meeting in 2019 alleged by Mr Kieran Turner took place, (b) if this Court were to redetermine that issue based on the record of the hearing, I would not be satisfied that the meeting in 2019 took place, and (c) it is unnecessary and therefore inappropriate to determine ground 2. I agree with the orders proposed by Payne JA.

2. [2]

   PAYNE JA: These proceedings involve a narrow question relating to several corporate entities associated with the Heartland Motor Group. Ms Joanne Richards and Ms Bernice Hooker, the first and second respondents, are sisters. The applicant is Mr Kieran Turner, who I will refer to as KT to distinguish him from his brother Anthony Turner, the fifteenth respondent, who I will refer to as AT. KT is the nephew of Ms Richards and Ms Hooker; his mother, the late Ms Kathryn Turner, was the sister of Ms Richards and Ms Hooker.

3. [3]

   The issued share capital of the holding company of the Heartland Motor Group, B.G. Webb Pty Ltd (“BG Webb”), is owned by Mr and Mrs Webb’s descendants. Ms Richards and Ms Hooker (Mr and Mrs Webb’s surviving daughters) hold the majority of the shares in BG Webb. KT, personally and through his ownership of the shares in Turnercorp Pty Ltd, owns or controls a minority of the issued shares in BG Webb.

4. [4]

   BG Webb in turn owns all the shares in the third respondent, Bernley Corporation Pty Ltd (“Bernley”). Since 28 June 2013, Bernley has owned 599 of the issued shares in the fourth respondent, Heartland Group Pty Ltd (I will refer in these reasons to this company as “Heartland Group” and to the corporate group of related entities, including Heartland Group, as “the Heartland Motor Group”). One share in Heartland Group is owned by its wholly owned subsidiary, the fifth respondent, Boyded Industries Pty Ltd (“Boyded”) as trustee for the Rossfield Group Trust (“Trust”). The remaining corporate respondents, the sixth to thirteenth respondents inclusive, are all (directly or indirectly), subsidiaries of Heartland Group.

5. [5]

   On 4 July 2024, by Amended Originating Process filed at the hearing before Black J in the Corporations List, Ms Richards and Ms Hooker sought relief against KT, against the Heartland Motor Group and against AT. The primary judge had earlier ordered (on 7 June 2024) that the issues raised by the Originating Process be heard separately, and in advance of a cross-claim that had been foreshadowed by KT seeking relief for oppression. Only Ms Richards, Ms Hooker and KT took an active role in the proceedings. The respondent companies did not seek actively to participate in the resolution of the dispute between their shareholders and directors. The Australian Securities & Investments Commission (“ASIC”) (the fourteenth respondent) and AT each filed submitting appearances.

6. [6]

   The narrow issue in this case relates to the purported appointment of AT as a director of various Heartland Motor Group companies on 6 December 2022. That narrow issue turns on the acceptance or rejection of a single conversation in 2019, which was not recorded in any contemporaneous document, in which KT asserted that he had been validly appointed as chair of the board of directors of all of the companies in the Heartland Motor Group for so long as he retained his direct or indirect shareholding in BG Webb. Two of the participants in that alleged conversation, KT’s grandmother and KT’s mother, had died before the hearing. The primary judge was not satisfied that a conversation occurred in the terms asserted by KT.

7. [7]

   The primary judge went further and concluded that even if KT was the chair of the board of directors of all of the companies in the Heartland Motor Group on 6 December 2022, the primary judge would in any event have found that AT’s appointments as director of various Heartland Motor Group companies expired on the passage of the last date after which an AGM should have been held under those companies’ constitutions.

8. [8]

   On 19 July 2024, the primary judge delivered his decision: In the matter of Heartland Group Pty Limited and others [2024] NSWSC 875. Orders were made on 15 August 2024. Leave to appeal from those orders is required under s 103 of the Supreme Court Act 1970 (NSW) because they concerned a question ordered to be determined separately. It is appropriate that leave should be granted.

9. [9]

   For the reasons that follow, the appeal should be dismissed.

Relevant facts

1. [10]

   Prior to 6 December 2022, KT and Ms Richards were the only directors of the companies related to Heartland Group. On 2 December 2022, KT gave notice to Ms Richards convening board meetings of, inter alia, Heartland Group, Boyded and Rossfield Nominees (A.C.T.) Pty Ltd (the 13th respondent) (“Rossfield Nominees”) to consider proposed board resolutions appointing AT as a director of each of those companies. Those proposed resolutions relied on powers contained in each of the constitutions of those companies for the board to appoint directors, in most cases for a limited term.

2. [11]

   On 6 December 2022, at the board meetings of Heartland Group, Boyded and Rossfield Nominees, Ms Richards called for a vote as to the chair. KT asserted that he had already been appointed the chair of the relevant companies. KT voted in favour of resolutions appointing AT as a director of each of the companies. Ms Richards voted against those resolutions. KT purportedly exercised his casting vote as chair in respect of those resolutions. It was common ground that those resolutions were valid only if KT could exercise a casting vote as chair of the relevant meetings.

3. [12]

   KT’s case was that he had been appointed the chair of all the companies in the Heartland Motor Group at an informal meeting with his grandmother, mother and aunt (Ms Richards) which was alleged to have occurred between about January 2019 and June 2019. In an affidavit affirmed on 26 June 2024, the applicant stated:

4. [13]

   Paragraph [60] immediately above was admitted, by agreement of the parties, subject to a limiting order under s 136 of the Evidence Act 1995 (NSW) as evidence of KT’s understanding only.

5. [14]

   Ms Richards did not recall being present at a meeting with KT between January 2019 and June 2019 as described by him and denied that any such meeting could have occurred. The primary judge found that such a meeting could have occurred but made no finding adverse to Ms Richards’ credit. The primary judge did not find it necessary to reach a finding as to KT’s credit and noted that it was preferable that he did not, where KT’s credit “will likely be in issue in the wider oppression claim that he has foreshadowed, possibly subject to the outcome of this hearing” (at [15]). The primary judge concluded (at [15]) that “I cannot reach a state of actual persuasion, and am unable to find on the balance of probabilities, that the 2019 Meeting took place in the manner or substantially in the terms set out in KT’s evidence”.

6. [15]

   Whether or not the 2019 Meeting took place in the manner or substantially in the terms set out in KT’s evidence was the crucial issue before the primary judge and the only real issue on ground 1 of the appeal.

7. [16]

   The primary judge undertook a conventional process of fact finding about a disputed conversation about which there was no contemporaneous record. The primary judge was not satisfied that a conversation in the form deposed by KT occurred. His Honour analysed the available evidence in detail from the commencement of the period during which KT contended the 2019 Meeting occurred. No challenge was made by either party to these conclusions of fact.

8. [17]

   The relevant background to the alleged meeting was that KT had been the CEO of companies in the Heartland Motor Group since about 2009. In 2017, KT took an 18-month sabbatical in France from the Heartland Motor Group, returning to Australia in early 2019. Although KT asserted that the critical conversation took place “between about January 2019 and June 2019 following my return from living in France” there was no precise evidence about when KT returned to Australia beyond “early 2019”.

9. [18]

   The first documentary evidence relevant to this issue is that, on 4 February 2019, Ms Richards and KT exchanged text messages about the fact that Mrs Webb (Ms Richards’ mother and KT’s grandmother) was then in hospital and as to the nature of her condition. Although precise dates are not available, Mrs Webb was in hospital on 4 February 2019. Ms Richards gave evidence that her mother was in hospital for 6-8 weeks in February-March 2019.

10. [19]

    On 9 February 2019, KT and Ms Richards sent text messages, in apparently civil terms, as follows:

11. [20]

    On 14 February 2019, Ms Richards and KT exchanged text messages, at about the same time as an email sent by Ms Richards to KT:

12. [21]

    On 14 February 2019, Ms Richards emailed KT, copied to Ms Hooker, Ms Turner and Mrs Webb, as follows:

13. [22]

    It is to be noted that it was KT’s case before the primary judge that the critical conversation “would likely have taken place prior to KT’s attempt to sell his interest in the group”. There is no precise evidence about when KT first notified Ms Richards of his attempt to sell his interest in the group but it is likely, given the contents of Ms Richards’ email, that it was some time before 4 February, when Mrs Webb was hospitalised, given the reference to “thinking carefully about it” and communication of a response being “delayed because of mum’s illness”. It is noteworthy that in KT’s recounting of the critical conversation, there is no reference whatever to any proposal by KT to sell his interest in the group.

14. [23]

    Also on 14 February 2019, by a subsequent email to Ms Richards, copied to Ms Hooker, Ms Turner and Mrs Webb, KT advised that “while I was in France” KT had been approached by a dealer to buy his 10% interest in the Heartland Motor Group but didn’t progress it “out of respect for you girls”. KT asserted that he was confident of achieving a price of $[XX] million for his stake and that “once I sign the deal up I will notify you accordingly”.

15. [24]

    On 19 February 2019, Ms Richards responded:

16. [25]

    On 19 February 2019, KT then responded, expressing views about the difficulty of selling the whole group in the market at the time and observing, in a manner that suggested increasing impatience on his part:

17. [26]

    Communications concerning KT’s potential sale of his interest in BG Webb continued with emails dated 26 February 2019 from Ms Richards to KT and 26 February 2019 from KT to Ms Richards. The communications became increasingly aggressive.

18. [27]

    By late February 2019, there was an issue about whether additional directors should be appointed to BG Webb. On 27 February 2019, Ms Richards wrote by email to KT and advised that:

19. [28]

    Ms Richards also suggested that she would arrange for a solicitor to contact KT’s solicitor.

20. [29]

    On 28 February 2019, KT replied to Ms Richards, copying Mrs Webb, Ms Hooker and Ms Turner in his response and said:

21. [30]

    KT also expressed discontent with Ms Richards’ approach to his proposed sale of his interest in BG Webb and referred to the possible sale of that interest to a third party.

22. [31]

    On 1 March 2019, KT sent a text to Ms Richards in respect of a price for the sale of his shares in BG Webb.

23. [32]

    Also on 1 March 2019, communications from a lawyer, Mr Hugh Scott, commenced. Mr Scott’s firm sent a letter to Ms Richards, Ms Hooker, Mrs Webb and Ms Turner comprising an engagement letter and disclosure and costs agreement, which described the relevant legal services as “advising generally regarding Heartland Motor Group”.

24. [33]

    On 6 March 2019, by email Mr Scott advised Ms Richards, with copies to Ms Hooker and Ms Turner but not Mrs Webb:

25. [34]

    The attached costs agreement and retainer letter was addressed to Ms Richards, Ms Hooker, Mrs Webb and Ms Turner but provided for signature only by Ms Richards; it allowed other parties to accept by conduct, but the primary judge found that there was no evidence that they did so.

26. [35]

    On 7 March 2019, by email, Mr Scott advised KT’s solicitor with a copy to KT that:

27. [36]

    That email referred to the receipt of consents to act as directors from Mrs Webb and Ms Hooker and attached copies of those consents and requested that KT execute a circulating resolution to make the relevant appointment.

28. [37]

    Although the extent of Mr Scott’s retainer was raised in cross-examination, the primary judge decided that it would not be appropriate to reach findings as to the extent of that retainer as “these matters may well be in issue in the balance of the proceedings”.

29. [38]

    On 14 March 2019, by email, Mr Scott wrote to KT, with a copy to KT’s solicitors, in respect of discussions concerning a possible sale of KT’s interest in BG Webb, observing that nothing had been agreed, nor committed to, including the structure and terms of any transaction. He advised that he not received a response from KT to emails requesting further information and observed that:

30. [39]

    Mr Scott also referred to a “proposed transaction” with BG Webb, although the content of that transaction is unclear, and followed up as to the circulating resolution attached to his earlier email.

31. [40]

    The primary judge found that relations between the parties were “tense” by mid-March 2019. On 18 March 2019, Mr Scott sent an email stating that his clients did not approve the transaction set out in a draft contract, (which was not in evidence), because the price exceeded the value of KT’s shares in BG Webb. He also said that:

32. [41]

    On 18 March 2019, KT responded to Mr Scott’s email set out above as follows:

33. [42]

    On 18 March 2019, KT also sent a text to Ms Richards, in somewhat hostile terms, as follows:

34. [43]

    Communications about these matters continued on 2 April 2019, when Mr Scott again confirmed that his clients did not wish to buy KT’s shares in BG Webb at the price which KT proposed.

35. [44]

    On 16 April 2019, by email, KT advised Mr Scott that, absent a circular resolution, presumably permitting the transaction, the proposed purchaser of his shares in BG Webb would “walk”.

36. [45]

    On 16 April 2019, Mr Scott responded that his clients had “at all times acted reasonably and with everyone’s interests, including the company’s, foremost in their approach” and stated that:

37. [46]

    On 19 April 2019 KT responded, in strong terms, that:

38. [47]

    On 27 June 2019, KT said in an internal email (not copied to Ms Richards) that he wished to increase his “CEO salary” and his “Chairman’s salary.” The primary judge observed, however, this matter would be explicable by a practice that accepted his taking the role of chair, consistent with the group’s prior practice of combining the role of chief executive and chair.

39. [48]

    The primary judge recognised that the respective recollections of KT and Ms Richards and their evidence as to the 2019 meeting could well be distorted by their respective economic interests in KT retaining or Ms Richards (with Ms Hooker) obtaining control at board level of the Heartland Motor Group. The other persons who are alleged to have attended that meeting have died and there is no contemporaneous recording that the meeting occurred or what was said at it.

40. [49]

    The primary judge found that there was a very limited period in which that meeting could have occurred, before the applicant and Ms Richards became involved in contentious discussions about the sale of KT’s shares in BG Webb and the increasingly fraught discussions about whether the other shareholders would consent to that course. Once the share sale discussions had commenced, the primary judge was not convinced that the meeting would have occurred without reference to those sale discussions or that the meeting would have so readily resulted in the applicant’s appointment as chair.

41. [50]

    The primary judge found that Ms Richards acted as chair of directors’ meetings while KT was on his 18-month overseas sabbatical and for at least one meeting after his return. By mid-2022, the dispute about board control of the companies had emerged. The primary judge noted KT asserted at directors’ meetings of Bernley and Heartland Group on 29 May 2024, that he was “voted Chairperson in 2018 for the duration of while he is a shareholder”, but observed that by then the dispute was well-advanced.

42. [51]

    The primary judge noted that KT’s account of what was said allegedly commenced with his reference to his return from France but does not refer to the failed discussions about the sale of his interest. The conversation would have had to have occurred when Mrs Webb was at her home, where the meeting is alleged to have occurred, and not during her period of hospitalisation.

43. [52]

    No contemporaneous documents refer to or record the 2019 Meeting or the conversation. Other than Ms Richards, the other people present at the suggested meeting have died. The primary judge was not persuaded by Ms Richards’ evidence that the 2019 Meeting could not have occurred because she was estranged from the applicant and because it was not recorded in her diary.

44. [53]

    The primary judge accepted that it was possible that an agreement was reached in 2019 to the effect set out in KT’s evidence. This was because Ms Richards as a director of companies within the Heartland Motor Group and its shareholders had previously accepted, as a matter of practice, that the applicant would act as the companies’ chair while he was also chief executive officer of the Heartland Motor Group, as his predecessors had done. The parties proceeded on the basis that the CEO would act as chair until Ms Richards and Ms Hooker sought to take control of the companies’ boards in 2022. KT did not contend that there was any form of estoppel or acquiescence arising from the conduct of the parties, which would prevent Ms Richards and Ms Hooker subsequently taking the course they adopted in 2022.

45. [54]

    The fact that his Honour was not persuaded by Ms Richards’ evidence that the 2019 Meeting could not have occurred did not have the consequence that he accepted KT’s evidence of what was said at that meeting. His Honour found that “a wider range of possibilities is obviously available”. The primary judge concluded:

46. [55]

    Accordingly, the primary judge held that the 6 December Resolutions that appointed AT as director of the companies, relying on the applicant’s casting vote, were invalid. AT was not effectively appointed a director of Heartland Motor Group companies by the 6 December Resolutions.

Grounds of appeal

1. [56]

   The applicant’s draft notice of appeal, contained two grounds:

2. [57]

   It was common ground that unless the applicant succeeded in relation to ground 1, ground 2 did not arise.

Ground 1 of the notice of appeal

1. [58]

   The primary judge adopted a conventional approach to fact finding in a case based on an alleged oral agreement. His Honour had regard to the fallibility of human memory which increases with the passage of time, particularly where disputes or litigation intervene: Watson v Foxman (1995) 49 NSWLR 315 at 318-319; Hoy Mobile Pty Ltd v Allphones Retail Pty Ltd (No 2) [2008] FCA 810 at [41]; Varma v Varma [2010] NSWSC 786 at [424]-[425].

2. [59]

   His Honour also had regard to the fact that objective evidence, where available, is likely to be the most reliable basis for determining matters of credit that arise as to the affidavit evidence: Armagas Ltd v Mundogas SA [1985] 1 Lloyd’s Rep 1 at 57; Re Colorado Products Pty Ltd (in prov liq) [2014] NSWSC 789 at [10]. The primary judge noted the matters relevant to the assessment of spoken words in the context of a contractual dispute, which were identified by Hammerschlag J in John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451:

3. [60]

   His Honour bore in mind the observations of Bell P (with whom Bathurst CJ agreed) in ET-China.com International Holdings Ltd v Cheung [2021] NSWCA 24 at [27]-[29] quoting with approval Legatt J in Gestmin SGPS SA v Credit Suisse (UK) Ltd [2013] EWHC (Comm) 3560 at [22]:

4. [61]

   There was every reason for the primary judge not to be satisfied about the reliability of KT's evidence of an asserted 2019 agreement. I do not accept the applicant’s submission that the decision of this Court in Tjiong v Chang [2025] NSWCA 25 at [41] and [502] intended to change the method of fact-finding in cases involving alleged oral agreements. The Court in Tjiong was not describing a new legal principle. The application of Tjiong leads to no different conclusion in this case. The point made by Basten AJA in Tjiong at [41] was that in a case where there is disputed oral evidence, all the evidence must be considered together. This task, the primary judge undertook here. Price AJA in Tjiong at [502] made the point that oral testimony should not lightly be disregarded in a case where there was no cross-examination casting doubt on the evidence and where there was no question of the reliability of the evidence. Here there was cross examination of KT about his account and a significant question about the reliability of that account.

5. [62]

   No error has been shown in the conclusion of the primary judge, essentially for the reasons his Honour gave, that he was unable to reach a state of actual persuasion that the 2019 Meeting took place in the manner or substantially in the terms set out in KT’s evidence.

6. [63]

   KT’s case was essentially a simple one. Shortly put, it was that in the absence of an adverse credibility finding about KT’s evidence there was no reason not to accept his evidence about the 2019 agreement. KT stressed that the primary judge made no adverse finding about his credibility. KT emphasised that what he said was a realistic possibility, namely that the meeting could have occurred before 14 February 2019. Accordingly, it was submitted that the primary judge erred in not reaching a state of actual persuasion that the alleged 2019 oral agreement had been reached in the terms asserted by KT.

7. [64]

   I am unable to accept this submission. The primary judge made a finding of fact. Although no adverse credibility findings were made against KT or Ms Richards, the primary judge's failure to be persuaded by KT’s evidence was affected by his Honour's assessment of the reliability of that evidence, having seen and heard KT and Ms Richards being cross-examined.

8. [65]

   As Lord Pearce said in Onassis v Vergottis [1968] 2 Lloyd’s Rep. 403 at 431:

9. [66]

   In Lee v Lee (2019) 266 CLR 129; [2019] HCA 28 at [55], Bell, Gageler, Nettle and Edelman JJ made clear that a court of appeal is bound to conduct a “real review” of the evidence given at first instance and of the judge's reasons for judgment to determine whether the trial judge has erred in fact or law. Appellate restraint is, however, warranted in relation to a trial judge’s findings of fact unless those findings are “glaringly improbable” or “contrary to compelling inferences” if those factual findings “are likely to have been affected by impressions about the credibility and reliability of witnesses formed by the trial judge as a result of seeing and hearing them give their evidence” (emphasis added).. This principle of restraint applies to findings of secondary facts which are based on a combination of these impressions and other inferences from primary facts.

10. [67]

    KT’s evidence was given more than five years after the date of the alleged conversation in a context of ongoing hostility and litigation between the parties. The conversation was unsupported by any contemporaneous record and was inconsistent with a number of such records. I reject the applicant’s submission that the reliability of KT’s account was not challenged before the primary judge. The principal submission on behalf of Ms Richards at the trial was that KT’s evidence about this conversation should not be accepted as reliable. The reliability of KT’s account was expressly challenged in cross-examination.

11. [68]

    The applicant submitted that there was nothing exceptional about the subject matter of the 2019 Meeting that might cause anyone to wish to record it. I do not agree. If such an agreement had been reached, it would have been a significant matter in the history of the Heartland Motor Group. While the Heartland Motor Group had a practice of the CEO of each company in the group acting as chair of the company, never before had there been a formal agreement to appoint a chair, in advance, dependent upon the CEO continuing to hold or control shares in BG Webb. There would have been every reason to have documented such a significant change.

12. [69]

    Such contemporaneous documents as there are do not support the existence of an agreement in the terms asserted by KT. The high point of the applicant’s case is what the applicant submits is “a relatively contemporaneous” email of 27 June 2019 recording KT’s understanding that he was chair of the Heartland Group of companies. While this document does contain a reference to a subjective belief on KT’s part consistent with his case, at best it is neutral. The date of the email, 27 June 2019, is months after the conversation, if it occurred, must have taken place. The document is more consistent with the primary judge’s finding that it was a reflection of a long standing informal company practice of the CEO acting as chair, rather than a result of the asserted agreement.

13. [70]

    It is true that the minutes of a directors’ meeting of BG Webb on 30 November 2022 contain the following:

14. [71]

    By November 2022, relations between KT and Ms Richards had become fraught. Despite the claim by KT the “he was the chair” there is no record of his asserting that an agreement had been made with, inter alia Ms Richards, that he be appointed chair for so long as he held or controlled shares in BG Webb.

15. [72]

    There is also a recorded claim by KT of the existence of the asserted agreement on 29 May 2024, where KT is recorded as saying he was "voted Chairperson in 2018 for the duration of while he is a shareholder". As well as referring to the wrong year, the primary judge observed that by 2024, the dispute between KT and Ms Richards was well-advanced. Further, KT participated in and signed minutes in a series of 2021 meetings of various of the Heartland Group of companies which record the separate election of KT as chairperson “of the meeting”: Boyded Industries Pty Ltd directors minutes 7 June 2021 (signed by KT on 22 June 2021); Chicago Properties Pty Ltd directors minutes 7 June 2021 (signed by KT on 22 June 2021); Heartland Blacktown Pty Ltd directors minutes 7 June 2021 (signed by KT on 22 June 2021). These company records are inconsistent with the existence of the oral agreement KT asserts was made. If such an agreement existed there would be no need separately for KT to be elected as chairperson “of the meeting”.

16. [73]

    The primary judge was entitled to find, having considered all of the evidence, that his Honour was simply not persuaded that KT had proved to his satisfaction that a conversation occurred in the terms asserted by KT. The case was decided by considering whether KT had discharged his onus of proof. No doubt if his Honour had made a credibility finding, it would have been difficult for him to sit on the potential future stages of the proceedings. His Honour was also no doubt conscious that there was a possibility that more cogent evidence might come to light in the continuation of the trial that bore upon findings his Honour might have made as to credibility or reliability of the evidence he was considering.

17. [74]

    The primary judge had the advantage of seeing and hearing KT and Ms Richards give evidence. Weight must be given to the advantage that the primary judge had in those circumstances. No error has been shown in the conclusion of the primary judge that his Honour was not satisfied of the existence of the oral agreement KT asserts was made.

18. [75]

    I would dismiss ground 1.

19. [76]

    Even if error had been shown in the decision of the primary judge and it became necessary for this Court to itself determine the issue in accordance with s 75A of the Supreme Court Act, I would conclude that the applicant has failed to persuade me that the 2019 Meeting took place in the manner or substantially in the terms set out in KT’s evidence. This is for the following reasons.

20. [77]

    First, I harbour significant doubts about the reliability of KT’s account. KT cannot place when the conversation occurred, save for it being between about January 2019 and June 2019. The agreement, if it had been made, was a matter of significance for the Heartland Group of companies. KT’s inability to place the conversation any more precisely than it having occurred at some time in the first six months of 2019 is a factor tending against acceptance of his account.

21. [78]

    Secondly, KT’s asserted recollection was remarkably specific for a conversation which occurred five years ago and not recorded anywhere until the affidavit of KT was sworn in June 2024. If a conversation in the terms asserted by KT had occurred, it is remarkable that there is essentially no trace supporting the existence of this agreement in any cotemporaneous material. To the extent that the contemporaneous documents address this topic at all, they tend against acceptance of KT’s evidence about an agreement reached at a meeting in 2019. On the basis of the minutes of the various Heartland Motor Group companies in evidence, I harbour significant doubts that the 2019 Meeting took place in the manner or substantially in the terms set out in KT’s evidence.

22. [79]

    Thirdly, the asserted terms of the agreement raise a significant question on their face. It is significant that, in a conversation which the applicant now submits must have occurred in January or early February, KT mentions the new financial year, even though it was then months away. This is a matter which casts doubt on KT’s account.

23. [80]

    Fourthly, a very short time after the alleged conversation, the applicant was actively trying to sell his shares in BG Webb. Despite there being a good deal of increasingly heated correspondence between KT and Ms Richards (and her legal representative), there is no mention whatever of any agreement that KT be appointed as permanent chair for so long as he owned or controlled shares in BG Webb. If, in the very recent past, such an agreement had been reached, I would expect to see some reference to it in the correspondence between the principal protagonists. The absence of any reference is a factor tending against acceptance of KT’s account.

24. [81]

    Fifthly, the terms of the alleged conversation in 2019 are also notable that in the context of KT’s affidavit where all other conversations are referred to (in the conventional form) as comprising “words to the following effect”: see the conversations at [43], [45] and [46]. By contrast, the critical conversation is said to have occurred “in the following terms”. This apparently deliberate decision to assert the exact terms of the conversation which occurred over 5 years ago causes me to doubt the reliability of KT’s account.

25. [82]

    Sixthly, KT’s account of the critical conversation included a statement that he produced at the meeting a document which “compared the salaries of both positions and have them here for you”. The applicant led no evidence of the existence of any such document. The only document in evidence which addressed any issue of payment of the chair was dated 27 June 2019, months after this conversation, if it occurred. There was no evidence to suggest that, after February 2019, KT went from receiving no salary as chair to receiving a salary as chair. Indeed, there was no evidence of KT being paid anything for being chair of the companies. This remuneration question was specifically referenced in KT’s account of the critical agreement. The topic was well within KT’s capacity to explain but was left unaddressed in KT’s evidence. This is another matter which causes me to doubt the reliability of KT’s account.

26. [83]

    Even if I had discerned error in the decision of the primary judge in the way his Honour dealt with the alleged 2019 conversation, after the re-hearing (s 75A(5) of the Supreme Court Act) I am not satisfied that a conversation occurred in the terms asserted by KT.

27. [84]

    Ground 1 should be dismissed.

Ground 2 of the notice of appeal

1. [85]

   It is common ground that if ground 1 was dismissed ground 2 did not arise.

2. [86]

   The primary judge found that the articles of association of each company provided that a director who is appointed by other directors of the company continues to hold office until the next following ordinary general meeting of the company. Although it was a requirement that an annual general meeting of those companies be held each calendar year, no ordinary general meeting of the companies had been held since 6 December 2022.

3. [87]

   The primary judge considered the principle said to be established by Re Consolidated Nickel Mines Ltd [1914] 1 Ch 883. His Honour stated that the facts of this case, involving the construction of a proprietary company's articles of association, were relevantly indistinguishable from those considered in Gosford Christian School Ltd v Totonjian (2006) 201 FLR 424; [2006] NSWSC 725 and Singh v Singh; Flora t/as Flora Constructions v Budget Demolition & Excavation Pty Ltd [2008] NSWSC 386. His Honour distinguished the decision in Camenzuli v Hawke [2022] NSWSC 168 in so far as it relied on the absence of reciprocity between those who had failed to call the annual general meeting as to who stood to benefit from the continuance of the directors in office. Even if he had upheld ground 1, the primary judge would have held that AT ceased to hold office as a director of Heartland Group and Rossfield Nominees on 31 December 2023.

4. [88]

   The applicant’s challenge to Re Consolidated Nickel Mines Ltd, Gosford Christian School, Singh v Singh and the possible application of a different principle said by the applicant to have been recognised in Camenzuli should await a case where determination of those issues is dispositive.

5. [89]

   Ground 2 should be dismissed.

Conclusion and orders

1. [90]

   For the foregoing reasons I propose the following orders:

   1. (1)

      Leave to appeal granted.

   2. (2)

      The draft notice of appeal found at Tab 3 of the White Folder stand as the notice of appeal.

   3. (3)

      Appeal dismissed.

   4. (4)

      Applicant to pay the first and second respondent’s costs.

2. [91]

   ADAMSON JA: I agree with Payne JA and with the additional remarks of Leeming JA.