Goulston v Bogasi Pty Ltd; Bogasi Pty Ltd v Sundell; Tamara Jane Goodwin as Administrator of the Estate of James Ralph Sundell v Bogasi Pty Ltd as Trustee for the James Ralph Sundell Trust

These proceedings concern the Sundell family. Without disrespect, I shall refer to family members by their given names.

I begin these reasons with a general overview of what follows in much greater detail. In this section, I avoid formality and technicality.

The origins of the Sundell family are in Sweden. The family’s wealth in this country came from the business of the sale of cars, car leasing, finance and construction. Readers of a certain age will recall the Sundell Motors group as a well-known retailer of Holden cars. Today the business is one of diversified investments.

For the purposes of these proceedings, the story begins with two brothers: Jim and Gunnar. They took over a successful family business from their father.

Jim and his wife Janette had three surviving children: Joakim (known as Kim), Anne-Katrine and Brett. Jim died in May 2017. Issues concerning Jim’s estate arise for determination in these proceedings.

Gunnar and his wife Merle had two children: Annmarie and Rickard. Gunnar predeceased Jim, dying in December 2006.

Jim and Gunnar trusted each other implicitly. This meant that not everything between them was formally documented. They established family trusts and a number of companies as the means for generating, holding and distributing the family’s wealth and shared the benefits generally equally between their respective halves of the family. The legal effect (if any) of that practice is another important issue in the proceedings, referred to as the Common Assumption. The Court has concluded that the admitted general practice of such sharing is not clear to the point of creating legally enforceable consequences.

After working overseas, Kim began to work in the family business from about 1996.

In late 1998 and early 1999, Kim negotiated two substantial transactions whereby the family business acquired large property holdings from the Elders Group and the ground leases of a shopping centre in South Australia. This was done using two trusts known as CPT1 and CPT2 (“CPT” standing for “commercial property trust”). The trustee of the trusts was a special purpose company called Elmach Pty Ltd. Of the 100 units in each trust, Jim and Gunnar agreed that Kim (through his private company Josunda Pty Ltd) would have 10 units in each trust in recognition of his central role in the transactions.

Kim is also the registered unitholder of the other 90 units in each trust. This is because, at the time of the transactions, no decision had been made as to how those units would be held. Kim agreed with Jim and Gunnar to “warehouse” those units (which are referred to in these reasons as the Elmach units). Because of what was said to be the absolute trust between Jim, Gunnar and Kim, the issues of for whom the Elmach units were being held, and on what terms, were left imprecise. The only point of clarity was that Kim was not intended to be the beneficial owner of the Elmach units. In the years that followed, it became clear that any inter vivos transfer of the Elmach units from Kim to any other person or company associated with the family business would incur significant stamp duty and capital gains tax (CGT).

Three companies in the family business relevant to these proceedings are Sundell Holdings Pty Ltd (in broad terms, as the name suggests, the holding company), Bogasi Pty Ltd (at the relevant times the trustee of both Jim and Gunnar’s family trusts and the ultimate residuary beneficiary of Jim’s will) and Three Crown Investments Pty Ltd (TCI) (in effect the “bank” of the family business).

Two non-family members are significant figures in these reasons. The first is Mr David Wooldridge. He is a trusted employee, having commenced as Chief Financial Officer of the family business in 1987. The other is Mr Wooldridge’s colleague, Ms Kellie-Anne Francis, who has been Group Accountant since 1999.

In early 2011, Kim commenced Family Court proceedings to divorce his wife Shara. As part of their dispute over what constituted their matrimonial assets, Shara claimed that Kim was entitled to the Elmach units. Jim, Sundell Holdings, Josunda, Bogasi and TCI all became parties to the Family Court proceedings and, with Kim, presented a great deal of evidence in support of the proposition that Kim did not have a beneficial interest in the Elmach units.

The Family Court proceedings were settled during the course of their hearing by Consent Orders made on 26 November 2012. Critically for the case at bar, those orders included Declarations that the Elmach units “are held by [Kim] on trust for [Jim] and/or his nominee”.

Another significant issue in this case arises from Kim’s claim that in or about April 2013 Jim verbally nominated Kim as the beneficial owner of the Elmach units pursuant to the Declarations (the Nomination). The Court has concluded that while, as a matter of fact, the Nomination did occur, on the proper construction of the Declarations Kim was not within the class of persons or companies who could be Jim’s nominee. The consequences of this conclusion will be a matter for further argument.

The Court has also been required to resolve a dispute between Anne-Katrine and Elmach over the ownership of Anne-Katrine’s home (the Beecroft property). This was purchased in late 2011 and is held as tenants in common between Anne-Katrine (as to 80%) and Elmach (as to 20%).

Anne-Katrine’s fundamental contention (although given different legal characterisations) is that Jim wanted each of his children to own their own home unencumbered by any debt. In accordance with that intention, Jim caused the Beecroft property to be purchased for her and, insofar as Elmach was put on the title, her case is that she is entitled to Elmach’s 20% interest without any actual cash payment by her.

The Court accepts, as a matter of generality, that Jim wanted to purchase the Beecroft property for Anne-Katrine. However, the Court has also found that due to a cashflow crisis in the family business at the time of the purchase, Elmach provided funds for the purchase, which resulted in it obtaining its share in the Beecroft property absolutely. On any sale of the Beecroft property, Elmach is entitled to a 20% share of the nett proceeds.

The Court has also considered various questions of construction posed about the will made on 9 November 2010. The will has already been the subject of probate proceedings determined by Justice Sackar: Re Estate of the late James Sundell [2019] NSWSC 1108. A present complication is that it is not clear whether the estate is solvent or insolvent (that to some extent being dependent on the outcome of these proceedings, among other things). The solvency of the estate is central to the order of its administration. The construction issue which may have the most significant consequence for the administration of the estate is the Court’s conclusion that after paying Jim’s debts (as strictly understood), the Administrator of the estate is directed to pay out of the estate analogously to Jim’s debts (and before anything else) amounts to Bogasi and other third party creditors of named family members in discharge of their debts to those creditors.

Among the many other issues presented by the parties, the Court has had to engage with two protean expressions: “the Sundell Group” and the Common Assumption.

As to “the Sundell Group”, much attention was devoted to whether or not Elmach was part of “the Sundell Group”. The answer to what was within “the Sundell Group” is “it depends”. If the expression refers to entities that could be called in aid of family members, then Elmach’s involvement in the purchase of the Beecroft property suggests it is. So does its inclusion in Group management reporting (see for example, the “Group Business Review” at [83] below). However, for formal legal and accounting purposes, the Court accepts the evidence of Mr Wooldridge and Ms Francis that the Sundell Group (or the Group) was at all material times relevantly the entities identified by Ms Francis in the chart which is Annexure A Annexure A - The Sundell Group at 18 November 2021 (92.1 KB, pdf) Annexure A - Corporate Structure of Sundell Group - text version (14.6 KB, docx) to these reasons and did not include Elmach.

As for the Common Assumption, there was no dispute that expressed at a high level of generality the Group was run by Jim and Gunnar for the broadly equal benefit of their respective sides of the Sundell family. However, as pleaded by Bogasi, the Common Assumption was alleged to be (omitting the particulars):

The Court is not satisfied that the Common Assumption, as a phenomenon with legal significance, has been established on the evidence to have existed.

Before summarising the Court’s findings, it is necessary to say something about how the Court has approached the numerous disputes between the parties. The proceedings occupied 20 hearing days, generated a 26 volume court book of approximately 11,600 pages and approximately 600 pages of closing written submissions. Each party had the full benefit of the skill and ingenuity of experienced solicitors and counsel. It is only to observe, and not criticise, to say that no properly identifiable forensic stone was left unturned and no arguable submission was omitted, left unanswered or not then the subject of detailed reply.

I have endeavoured to set out in what follows the full extent of the arguments presented by the parties. However, it is neither necessary nor practicable to determine every point raised by them. Accordingly, while the Court has carefully considered all of the arguments raised, this judgment records the determination of those matters which in my respectful opinion were dispositive of the issues presented.

With the benefit of this general overview, the Court's conclusions (other than as to the will construction issues) may be summarised as:

Mr A Byrne of Counsel appeared for Anne-Katrine. Ms J Needham of Senior Counsel (as her Honour then was) and Mr S Chapple of Senior Counsel appeared for Kim. Mr M Condon of Senior Counsel and Mr M Cleary of Counsel (as his Honour then was) appeared for Bogasi. Mr P Jammy of Counsel appeared for Elmach. Mr A Cheshire of Senior Counsel and Ms T Catanzariti of Counsel appeared for the Administrator. Mr A Ronayne, Solicitor, appeared for TCI. Mr CP Birtles appeared for Brett on the will construction motions.

The starting point of the litigation is proceedings 2019/390407 (2019 proceedings) which is Anne-Katrine’s claim about the Beecroft property. This claim produced three cross-claims.

Anne-Katrine’s Further Amended Statement of Claim seeks various declarations and orders directed to ensuring that she obtains the complete unencumbered legal and beneficial ownership of the Beecroft property. Anne-Katrine claims that the Beecroft property was purchased for her by Jim as a gift with the intention that she own it outright.

The relief sought by Anne-Katrine is opposed by the Eighth Defendant, Elmach because it asserts that it has a 20% beneficial interest in the Beecroft property on the basis that it provided funding for the purchase.

Pursuant to the First Cross-Claim in the 2019 proceedings (2019 First Cross-Claim) Elmach seeks an order that trustees for sale be appointed to the Beecroft property pursuant to s 66G(1) of the Conveyancing Act 1919 (NSW) (CA) with consequential orders to facilitate its sale. It is accepted this relief is contingent on Anne-Katrine failing to establish that she is entitled to the unencumbered legal and beneficial ownership of the entire Beecroft property.

The second cross-claim in the 2019 proceedings (2019 Second Cross-Claim) and the third cross-claim in the 2019 proceedings (2019 Third Cross-Claim) concern the dispute between Bogasi and Kim as to who is the legal and beneficial owner of the Elmach units in the unit trusts known as CPT1 and CPT2. Elmach is the trustee of CPT1 and CPT2.

Kim is the cross-claimant in the 2019 Second Cross-Claim. Kim claims that in April 2013, pursuant to a power of nomination recorded in the Consent Orders Jim made the Nomination. The 2019 Second Cross-Claim seeks declarations that Kim has been since April 2013 the legal and beneficial owner of the Elmach units. If the nomination was not effective at law, Kim seeks a declaration that Bogasi is estopped from denying that Kim is the legal and beneficial owner of the Elmach units.

Bogasi denies that Jim made the Nomination and contends that the objective evidence does not support the existence of that Nomination. Bogasi also asserts that no estoppel should be recognised for four reasons. First, a proper construction of the Consent Orders does not permit Jim to nominate Kim to be the full legal and beneficial owner of the Elmach units. Second, there is no nomination in writing, as would be required by s 23C of the CA. Third, any disclaimer of the interest by Jim was not effective because it was made before Jim accepted his interest in CPT1 and CPT2. Fourth, any such nomination would constitute a breach of fiduciary duty on the part of Jim with such duty being a duty owed to the members of the Sundell family for whose benefit the Elmach units were being held on trust or, alternatively, any such nomination was a fraud on the power.

The cross-defendants to the 2019 Second Cross-Claim are Anne-Katrine (First Cross-Defendant), Ms Tamara Jayne Goodwin in her capacity as Administrator of the estate (Second Cross-Defendant), Elmach (Third Cross-Defendant), Bogasi in its capacity as trustee of the JRS Family Trust (Fourth Cross-Defendant) and TCI (Fifth Cross-Defendant).

In parallel with its defence to the 2019 Second Cross-Claim, Bogasi is the cross-claimant in the 2019 Third Cross-Claim which seeks relief including:

Kim adopts a consistent position across the 2019 Second and Third Cross-Claims. That position can be summarised as:

The Cross-Defendants to the 2019 Third Cross-Claim are Kim (First Cross-Defendant), Elmach (Second Cross-Defendant), the Administrator (Third Cross-Defendant) and TCI (Fourth Cross-Defendant).

The 2022/96516 proceedings (2022 proceedings) are a dispute between Bogasi as trustee for both the James Ralph Sundell Family Trust (the Old Jim Trust) and the JRS Family Trust (the New Jim Trust), and Kim. Pursuant to an Amended Statement of Claim Bogasi seeks judgment against Kim for $13,964, 189.36 plus interest in the amount of $12,746,436.32 pursuant to s 100 of the Civil Procedure Act 2005 (NSW) (CPA). The money sought to be recovered is said to be money advanced to Kim by Bogasi as trustee for the two trusts.

By the time of closing submissions, there was no dispute that Bogasi was owed the principal amount of $13,946,189.36. The only outstanding issues related to whether Bogasi’s claim for interest was contrary to written agreements between Kim and Bogasi, whether Kim has a right to a set off having regard to cl 4 of the will.

The 2023/157660 (2023 proceedings) are a dispute between the Administrator and Bogasi in its capacity as trustee of the Old Jim Trust. The Administrator’s Amended Statement of Claim seeks orders for payment and declarations in relation to amounts said to be owing to the estate from distributions from both the Old Jim Trust and the New Jim Trust.

Bogasi, in its capacity as trustee of the Old Jim Trust, has also filed an Amended Cross-Claim in the 2023 Proceedings (2023 Cross-Claim), which traverses many of the issues addressed in the 2019 Second and Third Cross-Claims. Specifically, it seeks declarations that the Elmach units were held on trust for Bogasi or Jim and the legal representative of Gunnar or TCI before the making of the Consent Orders. It also seeks declarations that if Jim did exercise a right of nomination in favour of Kim in accordance with the Declarations, then Jim procured breaches of trust by Kim and/or that nomination constituted a breach of fiduciary duty. If those claims were made out, Bogasi sought an order that the Administrator restore the Elmach units to the current trustee of CPT 1 and CPT 2, Elmach, in accordance with the terms of a Master Trust Deed dated 21 December 1998.

On 12 February 2024, I made orders that only the prayers for relief in the 2023 Cross-Claim concerning whether Jim was liable for a breach of trust and whether the Administrator should restore the units to Elmach (if I accepted the Nomination had taken place) should be heard in these proceedings. The Administrator’s Amended Statement of Claim and all issues of quantum in Bogasi’s claim against the Administrator are to be determined after the hearing which is the subject of these reasons.

On 19 March 2024, I granted leave to Bogasi to amend the 2023 Cross-Claim by adding a claim, if the Nomination had occurred, alleging fraud on the power by Jim. I also heard this claim. However, the date from which that amendment took effect was left open for argument.

After the conclusion of the hearing of the three proceedings, the parties also requested the Court to resolve several issues relating to the construction of the will. A regime was put in place for any party who wanted a construction issue to be resolved by the Court to file and serve a notice of motion and for parties to file submissions in relation to the issues raised to the extent they wished to do so. Brett is not a party to any of the three proceedings but is a beneficiary of the estate. As such it became necessary to join Brett as a respondent to any motion concerning the construction of the will.

The first construction motion was filed by Kim on 1 July 2024 and sought a determination as to whether the effect of sub-cl 4(a) of the will is that any debts owed by any beneficiaries of the will to Bogasi as trustee of the family trusts are debts which Jim intended would be paid by his estate or are debts which need to be paid back by the beneficiary debtor.

The second construction motion was filed on 17 October 2024 by the Administrator. That motion raised three issues: first, whether sub‑cl 4(b)(ii) of the will required the Administrator to pay out the mortgage of Brett‘s principal place of residence; second, a determination concerning if the Administrator was required to pay a legacy pursuant to sub‑cl 4(a) or 4(b)(ii), how those legacies were to be paid; finally, the Administrator also sought advice on the question of if the estate became insolvent as a result of paying a debt pursuant to sub-cl 4(a) or 4(b)(ii) of the will, whether the Administrator would be justified in applying all assets of the estate, including Jim’s interest in a farm at Booral (Brett’s principal residence) towards payment of the estate’s liabilities, including any debts payable pursuant to sub-clauses 4(a) and 4(b)(ii) and whether any debts payable pursuant to sub-clause 4(a) or 4(b)(ii) are to be paid rateably according to value.

The third construction motion was filed by Bogasi on 22 October 2024. That motion asked the Court to determine whether on its proper construction cl 6 of the will required Jim’s interest in the “Booral Farm” devised to Brett to be limited only to Jim’s interest as a tenant in common of two of the parcels of land that formed part of the Booral Farm.

The following table summarises the main natural persons, and corporate protagonists involved in the three proceedings before the Court. References to the Sundell Group do not include Elmach and Finclear Pty Ltd but include the trusts and companies in the diagram which is Annexure A to these reasons.

The Court finds the facts to be as follows. Questions of credibility are dealt with in [334] to [398] below. Unless otherwise stated in these reasons, the Court generally accepts the evidence of Mr Wooldridge, Ms Francis, Mr Walker and Anne-Katrine but does not accept Kim’s evidence if it is not corroborated. To the extent that what follows sets out conflicting affidavit evidence, those conflicts which are necessary to resolve are dealt with in the course of considering the parties’ submissions.

The Sundell Group was created by Jim and Gunnar’s father. The family business originally involved construction and car leasing but eventually diversified into a number of different areas, including property investment, book publishing, advertising and investing in the stock market.

Gunnar and Jim took over the direction and control of the Sundell Group from their father. They were very close business partners and made all key business decisions together.

In 1962, Jim and Janette were married.

In 1973, Bogasi was formed and Jim and Gunnar were appointed directors.

On 19 October 1973, the Old Jim Trust and Gunnar’s equivalent TRGS Family Trust were established.

The Schedule to the TRGS Family Trust outlined who the beneficiaries were (noting that the first five primary beneficiaries were Gunnar’s family or, in the case of Irma Larssen, the longtime housekeeper and companion, treated like family, and the rest were Jim’s family):

The Old Jim Trust was in the same terms but with the order of primary beneficiaries reversed so Jim’s family were listed before Gunnar’s family (and the order of Jim and Gunner also reversed as additional members):

Bogasi was appointed as the trustee of both trusts. It was replaced in 2020 by Skiida Pty Ltd as trustee of the TRGS Family Trust. The Sundell Group’s business was operated on the basis that “in principle” (see the Memorandum of Wishes in [64] below) Jim and Gunnar’s families would share equally in the profits of the business through the mechanism of these family trusts. Bogasi was used to distribute the family’s wealth.

There was in evidence an unsigned document that from its terms must have been created at the time the family trusts were created. In its general tenor it is not dissimilar to the Memorandum of Wishes of March 1994 set out in [64] below. It is headed “THE G SUNDELL AND J SUNDELL TRUSTS ADVISORY DIRECTIONS TO BOGASI PTY LTD” and included:

On 16 August 1979, Jim made a will.

In the late 1970s, Jim met Mr Christopher Walker and the two men became friends.

In 1987, Mr Wooldridge joined the Sundell Group as the Group's Chief Financial Officer.

In 1991, Kim took up a position with a Swiss bank in London. He later lived in Canada.

On 27 March 1994, Jim and Gunnar created what was referred to as the Memorandum of Wishes. This set out their intention for the operation of the family trusts, including in relation to Bogasi. The Memorandum of Wishes was amended on 27 April 1994. It included (as amended):

On 27 July 1994, Jim revoked his 16 August 1979 will and made a new will.

Kim commenced working for the Sundell Group in 1996. According to Kim, he was asked by Jim to return from overseas to work for the family.

In June 1998, the Sundell Group completed a real property transaction known as the Elders Deal through T.I.T.E.S Pty Ltd (standing for “This is the Elders Sale”). The transaction involved the purchase from and lease-back to Elders of a number of properties. T.I.T.E.S was wholly owned by TCI. The transaction was a long term, 16 year investment deal with a maturity date in 2013, by which time that the assets would be owned by the Sundell Group unencumbered.

After the Elders Deal, another opportunity to acquire real property on a sale and lease-back basis was presented to the Sundell Group. Jim, Gunnar, Kim and Mr Wooldridge discussed the Sundell Group entering into what would become the CPT1 Transaction at the end of 1998. The meeting took place at Jim and Gunnar’s office at the Sundell Motors dealership at Chatswood.

At the meeting, it was discussed that the Sundell Group would retain ownership of the investment. Six months after the Elders Deal, Elders had approached the Sundell Group with an invitation to tender for a similar transaction relating to properties in Elders’ Queensland network. For each of the transactions, the representatives of Elders came to Kim in his capacity as Chief Investment Officer of the Sundell Group. Kim deposed in his affidavit in the Family Court proceedings (his evidence on this not being seriously challenged) that he had a discussion with Mr Wooldridge, his uncle Gunnar and Jim and that it was agreed at this meeting that Kim would take a 10% interest in the investment as a reward and that a trust would be established known as CPT1. Kim established Josunda, of which he was sole director and shareholder, to take his 10% share.

On 1 October 1998, Elmach was incorporated. Kim, Jim and Gunnar were appointed initial directors. Gunnar and Jim remained directors until each of their respective deaths, on 23 December 2006 and 22 May 2017. Mr Wooldridge was also a director from 23 December 2005 until 2 December 2019. Kim’s second wife, Daisy, was appointed as a director on 18 June 2018. Ms Francis and Mr Hogan were appointed as alternate directors on 27 May 2023. Kim is the sole shareholder of Elmach.

On 21 December 1998, the CPT1 Unit Trust (originally known as the Elders Property Trust No 1) came into existence pursuant to a Master Trust Deed, which was made on 21 December 1998 between Elmach (its name from 23 May 2001) as trustee and Josunda as manager. The next day, 90 ordinary units were issued to Kim and 10 to Josunda.

On 23 December 1998, the CPT1 Transaction settled. It is convenient to record that Bogasi alleges the CPT 1 Transaction was undertaken to give effect to the Common Assumption. The relevant particulars from the 2019 Third Cross-Claim are:

The purchase price for the CPT1 property portfolio was $12,698,104.16 drawn from a $13,000,000 loan from Adelaide Bank Limited (now Bendigo Bank). Other costs incurred to complete the transaction were borrowed by Elmach as trustee of CPT1 from TCI and amounted to $1,951,116.18.

At the time of settlement of the CPT1 transaction Kim agreed to warehouse the Elmach units. He said in an affidavit filed in the Family Court proceedings sworn on 15 September 2011:

Jim gave a similar version of events in the Family Court proceedings. He deposed in an affidavit sworn on 22 September 2011:

In his Family Court Proceedings affidavit sworn 25 September 2011, Mr Wooldridge said:

Between late December 1998 and January 1999, Kim presented an investment opportunity to Jim and Gunnar for the Sundell Group to purchase leases in a shopping centre in Noarlunga (South Australia). This became the CPT2 Transaction.

On 29 January 1999, the CPT2 Unit Trust was settled. 90 ordinary units were issued to Kim and 10 ordinary units were issued to Josunda. The CPT2 Transaction completed on 5 February 1999. The purchase price for the CPT2 Transaction was $4,481,130.70. Of that amount, $3,189,879.69 was borrowed from either Adelaide Bank or Westpac. The balance was funded by TCI.

In his Family Court proceedings affidavit sworn on 25 September 2011, Kim deposed that the arrangements for the CPT2 Transaction effectively ‘mirrored’ the CPT1 Transaction:

There can be no doubt that a motivation for the CPT1 and CPT2 transactions was to benefit the Sundell family.

On 24 September 1999, Mr Peter Muldoon, the Human Resources Manager of the Sundell Group, represented to Westpac that Kim’s salary with TCI for the three previous years was packaged at $250,000 annually.

In 2001, Kim became a non-executive director of GBST Holdings Ltd. Crown Financial Pty Ltd, acquired a significant interest in GBST and Kim became the Sundell Group’s representative on the board.

In December 2002, Mr Wooldridge prepared a document headed “Group Business Review December 2002”. That document included references to Elmach:

Later in that document Mr Wooldridge recorded that, “TITES, Primac [CPT1] & CPT2 were all profitable.”

Kim gave evidence that in or about December 2002 he had this conversation with Gunnar in the presence of Jim (the italicised words were admitted only as evidence of Gunnar’s state of mind):

Kim also gave evidence under cross-examination in the Family Court proceedings that before entering into the option agreement referred to in the next paragraph, Kim told Gunnar about the proposed agreement, to which Gunnar replied, “Great. He’s [referring to Jim] got financial responsibility for it.” Both this and the conversation referred to in the preceding paragraph are uncorroborated such that, conformably with the view I have taken about Kim’s credit, I do not accept that either conversation took place. The same conclusion applies to Kim’s evidence of later statements by Gunnar to the effect that the transfer of the Elmach units was Jim’s “problem”. Furthermore:

On 18 December 2002, an Option Agreement was entered into between Kim (as Grantor), Jim (as Grantee) and Elmach as trustee for CPT1 and CPT2 (referred to in the Option Agreement as “the Company”).

On 10 July 2004, Shara lodged a loan application with Westpac for the purchase of a property at XX Street, Mosman. Kim was listed as the guarantor of the loan and the loan application represented to Westpac that the units in Elmach had a nett value of $7,350,000 and were an investment of his. Kim also represented to Westpac that his income, which it is assumed was to be expressed per annum, was either $600,000 (or possibly $800,000 – the handwriting is unclear).

A file note by Gunnar records a conversation between him and Mr Wooldridge on 15 September 2004. It begins with the words "Long Discussion with DW". Point 4 of that file note records "Kim holds 100 units in "Elder" trust (as trustee) half of value !! Put in 50/50 Jim & G Family Trust."

For the financial year ending 30 June 2004, Kim received an annual salary package of $199,075 from GBST. On 22 December 2004, Kim sent an email to Ms Francis requesting his Sundell gross salary be increased to $200,000.

On 1 March 2005, the New Jim Trust and a new trust for Gunnar’s family were settled. For both trusts, Mr Wooldridge was the settlor and Bogasi was the trustee. Both trusts were in identical terms, which relevantly included:

In April 2005, Gunnar made a diary note of a conversation in which he records:

In April 2006, Kim received advice from PricewaterhouseCoopers about the tax implications of transferring the Elmach units from himself into hypothetical companies. The advice confirmed that this would lead to both CGT and stamp duty liabilities being created. The advice recorded as part of the “background”, that “[CTP1] has approximately $13 million in unrealised capital gains”.

In August 2006, Kim and Mr Wooldridge sought advice from Antunes Lawyers regarding the restructure of the Sundell Group’s holding of the assets held within CPT1 and CPT2.

On 11 September 2006, Bogasi purchased the Point Clare property.

On 23 December 2006, Gunnar died. On the same day, Mr Wooldridge was appointed a Director of Elmach. In due course, Jim as executor obtained probate of Gunnar’s will.

At this point, it is appropriate to record that in his defence to the 2019 Third Cross-Claim, Kim pleads that up until Gunnar’s death in December 2006, each of Jim and Gunnar exercised control in respect of the companies comprising the Sundell Group; that Jim and Gunnar operated the companies as an extension of their personas; says that a motivation of each of Jim and Gunnar but not the sole motivation, was to operate the companies comprising the Sundell Group so that support could be provided to, and benefits could be conferred upon, members of their respective families; says that at all times, Jim and Gunnar considered that they had and that they exercised, absolute discretion in relation to making provision for beneficiaries of the various trusts of which they exercised control; says that each of Jim, Gunnar and Kim trusted each other but otherwise denied the existence of any common assumption for the Sundell Group’s wealth to be shared equally between the families.

On 24 January 2007, Merle (Gunnar’s widow) was appointed as a director of Bogasi.

In May 2007, Mr Wooldridge consulted with Mr Alan Blaikie of Clayton Utz regarding a proposed restructure of the CPT1 and CPT 2 property portfolios. Written advice was prepared by Mr Blaikie and was addressed to Mr Wooldridge as “Chief Financial Officer of the Sundell Group”. The restructure never occurred.

According to Kim’s affidavit sworn on 23 December 2021, in 2007 Kim says he tried to raise the issue of whether the Elmach units should be transferred out of his name with Gunnar and Jim on multiple occasions. He says whenever he raised the issue that Gunnar would tell Jim “That’s your problem, Jim. You sort it out. It’s between you and Kim. It’s got nothing to do with me.” This evidence is not corroborated and is therefore not accepted.

On 5 February 2008, Kim sent an email to Mr Wooldridge attaching a document entitled “Actions for Bogasi”. Kim’s evidence was that he drafted this document as notes for himself. He sent it to his wife on 15 March 2008. Amongst the actions contemplated was:

Kim forwarded this email to Shara on 15 March 2008. The document was relied on by Kim in the Family Court proceedings to support his case in those proceedings that the Elmach units were being warehoused by him because of a “stuff up on settlement [of the CPT1 and CPT2 Transactions].”

On 11 June 2008, Jim made a codicil to his 1994 will:

On 15 November 2009, Anne-Katrine signed two Deeds of Acknowledgement with Bogasi. The first provided:

The second provided:

The evidence also included a Deed of Acknowledgment signed by Brett:

The Court infers Brett also executed a deed to the effect of that set out in [104] above. The three deeds in evidence are with Bogasi as trustee of the Old Jim Trust.

Kim also executed Deeds of Acknowledgement. They are undated and differ from those of his siblings in three respects:

In October 2009, Jim asked Mr Walker if he would agree to be nominated as trustee for a planned testamentary trust. According to Mr Walker’s 7 May 2020 affidavit in these proceedings, some time before then Jim said words to the following effect to him:

On 29 June 2010, at a board meeting attended by Kim, Jim and Mr Wooldridge, Elmach as the trustee for CPT1 formally resolved to issue 16 new units in CPT1 to Crown Financial for a consideration of $2,400,000. The par value was said to be $150,000 and a report on the value of CPT1 assessed the value of Kim’s interest in CPT1 as being in the range of $14.3 million to $16 million on a minority interest basis. The report assessed the range on a controlling basis to be between $17 million and $20 million. This report was tendered in the Family Court proceedings.

In June 2010, the Australian Taxation Office (ATO) commenced an investigation into Jim’s tax affairs as part of “Project Wickenby”.

On 25 June 2010, the amount of $2,150,000 was purportedly allocated from Kim’s unpaid present entitlement (UPE) loan account in CPT1 to Coastalwatch Pty Ltd. The transaction is described in the CPT1 accounts as “JJS advise CT1 to repay funds to CW re LLC loan.” On that same day, the amount of $2,150,000 was purportedly allocated to the Coastalwatch LLC (USA) loan account in the accounts of Coastalwatch. This had the effect of reducing the amount owed by Coastalwatch LLC to Coastalwatch from $2,153,194.05 to $18,900.96.

On 8 October 2010, Ms Vanessa Priest of the accounting firm WHK Horwarth sent Mr Wooldridge a draft letter prepared by Professor GS Cooper of Cooper & Co Chartered Accountants answering an ATO enquiry concerning whether Jim had a bank account in an offshore bank. On the same day, Mr Wooldridge replied ‘that has been approved by Mr Sundell for release’.

On 14 October 2010, Kim and Shara separated on a final basis.

On 9 November 2010, Jim made the will, appointing Kim and Mr Wooldridge as executors and including as originally executed:

On 24 January 2011, Ms Priest sent a memorandum to Sundell Holdings. This memorandum was sent in the context of providing a summary of a meeting that occurred in or after October 2010. Under the topic ‘the acquisition of a property by CPT1 to be used for private purposes’, the memorandum states:

In February 2011, Mr Wooldridge made handwritten amendments to the will, providing for Jim’s shares in Bogasi to pass to Anne-Katrine, Kim, Mr Walker, Mr Wooldridge and Mr Philip Nowell. Jim initialled the amendments but they were not witnessed. This became the subject of the probate proceedings. As a result of the handwritten amendments, cl 3 now read:

On 8 February 2011, Jim authorised Kim to liaise with the ATO on Jim’s behalf in regard to the Project Wickenby investigation.

On 28 February 2011, Elmach purchased the Clareville property. This was initially purchased as a residence for Jim. Anne-Katrine and her family lived in the property prior to moving to the Beecroft property.

In early 2011, Kim commenced the Family Court proceedings against Shara

On 15 March 2011, Shara filed a response to Kim’s initiating application in the Family Court proceedings. Shara sought the following property orders:

As will become apparent, whether or not Kim’s interests in CPT1 and CPT2 were part of his and Shara’s “net property”, and therefore potentially subject to her claim to 70% of that property, was a major issue in the Family Court proceedings.

In March 2011, Mr Wooldridge wrote to PWC requesting a copy of tax advice obtained some years earlier. In answer to an enquiry from PWC, Mr Wooldridge wrote to PWC on 24 March 2011:

On 13 April 2011, Mr Stell, the Sundell family solicitor, informed Kim that it was Jim’s intention to exercise the option to acquire units in CPT1 and CPT2 pursuant to the Option Agreement, subject to Jim receiving favourable tax advice:

The timing of this cannot be coincidental given the existence of the Family Court proceedings and Kim’s determination to distance himself from any entitlement to the Elmach units and Jim’s determination to protect the family assets from Shara.

On 14 April 2011, Kim swore an affidavit in the Family Court proceedings which included:

On 14 April 2011, Kim filed a financial statement in the Family Court proceedings which included statements that:

The financial statement also included this explanation of Kim’s interest in CPT1 and CPT2:

On 24 May 2011, Mr Wooldridge filed an affidavit in the Family Court proceedings in Kim’s case which included:

On 30 May 2011, Shara filed an amended response to Kim’s initiating application in the Family Court proceedings. The property orders which she sought in the amended response were the same as those in her original response (see [121] above).

On 17 June 2011, Elmach as trustee for CPT1 resolved to issue 3 new units in CPT1 to TCI for a consideration of $720,000.

The Old Jim Trust was valued at $18,916,000 as at 30 June 2011. The TRG Sundell Family Trust was valued at $19,216,000.

On 30 August 2011, Watts McCray (acting for Kim in the Family Court proceedings) sent a letter to Shara’s solicitors, Barkus Doolan Kelly, enclosing a document entitled “Estimate of Tax Consequences for Joakim James Sundell on Exercise of Options by Mr James Ralph Sundell pursuant to Option Deed dated 18 December 2002.” The letter included:

The introduction to Mr Wooldridge’s estimate was:

Mr Wooldridge’s estimate concluded:

On 7 September 2011, Mr Wooldridge and Ms Laura Hawes of Clayton Utz had a discussion (of which Ms Hawes made a file note) during which Mr Wooldridge said that, prior to the CPT1 transaction, it was agreed that Jim and Gunnar were to retain ownership of CPT1 and CPT2. Clayton Utz ultimately acted for Elmach, Jim, TCI, Josunda, Crown Financial and Bogasi in the Family Court proceedings. Ms Hawes’ file note included:

On 15 September 2011, a deed of rectification (prepared by Clayton Utz) was executed to amend the Option Agreement:

On 15 September 2011, Kim swore the affidavit in the Family Court proceedings which is extracted at [74] above.

On 16 September 2011, Kim swore an affidavit in the Family Court proceedings which included:

At the same time around September 2011, steps were being taken to purchase the Beecroft property. On 20 September 2011, Kim emailed Mr Stell (copying Mr Wooldridge) about the Beecroft property saying, “Dad wants to be able to go to auction on this next week”.

On 21 September 2011, there was an email exchange between Mr Stell and Mr Muldoon (the Group Operations Manager of Kim’s company Coastalwatch) with the subject ‘RE: WALKER SALE OF XXX STREET BEECROFT’

Mr Stell replied to Mr Muldoon’s email on 23 September 2011 at 9:35am:

On 22 September 2011, Jim filed an affidavit in the Family Court proceedings which included:

On 23 September 2011, Kim swore an affidavit in the Family Court proceedings which included:

The auction for the Beecroft property occurred on 24 September 2011. At paragraph [5] of her affidavit in these proceedings affirmed on 22 June 2020, Anne-Katrine deposes that at some time prior to the auction she had a conversation with Jim in words to the following effect:

Jim was the bidder at the auction and made the winning bid of $1.9 million. On the same date a “Contract for the Sale of Land” was executed for the Beecroft property. Anne-Katrine was recorded as the sole purchaser. The purchase price was $1.9 million which included a deposit of $190,000 payable that day. Settlement was to occur 63 days later.

It is Anne-Katrine’s position that at no time did she have any conversations with Jim about contributing to the purchase price of the Beecroft property, whether by finance from a bank or otherwise. Anne-Katrine deposes in her affidavit in these proceedings affirmed on 18 March 2022 that Jim paid the deposit on the Beecroft property using winnings from his racehorse.

On 25 September 2011, Mr Wooldridge swore an affidavit in the Family Court Proceedings which included:

On 28 September 2011, there was an email exchange between Ms Francis and Mr Wooldridge:

On 30 September 2011 Anne-Katrine signed a costs agreement with Mr Stell’s firm, Willis & Bowring, in relation to “all work relating to your purchase of property at XXXX Street Beecroft.”

On 8 November 2011, Crown Financial sold 3,000,000 GBST shares for $3,000,000.

On 11 November 2011, Westpac emailed Mr Wooldridge to indicate that Kim could be a co-borrower on the Beecroft property with Anne-Katrine:

Later that day, Westpac sent a further email to Mr Wooldridge:

On 16 November 2011, Merle (Gunnar’s widow) deposited $500,000 into an account used by TCI and Crown Financial (the common account). Mr Wooldridge accepted in cross-examination that the $500,000 from Merle was applied to purchase the Beecroft property (Tcpt, 8 May 2024, p 1473 (10)).

On 17 November 2011, Mr Wooldridge sent an email to Anne-Katrine attaching a Westpac loan application form and instructing her to complete it and return it to him:

On 17 November 2011, Shara filed a second amended response to Kim’s initiating application in the Family Court proceedings. That response joined Jim and TCI as third and fourth respondents and made significant changes to the property orders sought. Most relevantly to the issues at bar, these orders were sought:

On 18 November 2011, Westpac sent an email to Mr Wooldridge:

On 21 November 2011, Mr Wooldridge emailed Mr Stell:

On 22 November 2011, Jim deposited $250,000 into the common account.

On 23 November 2011 at 2:14pm, Adelaide Bank sent an email to Mr Wooldridge:

At 3:41 pm on 23 November 2011, Mr Wooldridge responded to Adelaide Bank:

On 28 November 2011 at 11:41am, Mr Wooldridge informed Anne-Katrine’s solicitors by email that:

On 29 November 2011 at 10:32 am, the solicitors for the vendor of the Beecroft property sent a letter to Anne-Katrine’s solicitors:

Less than an hour later, Mr Wooldridge sent an email to Jim and Kim with the subject heading “current cashflow position” (the Beecroft Email):

On 7 December 2011, Mr Wooldridge had this email exchange with Adelaide Bank about the proposed settlement of the Beecroft property on 8 December 2011:

The general ledger for CPT1 records that on 7 December 2011, $580,000 was credited for payment entitled “JRS Family Trust top up for Beecroft Settlement”. According to Ms Francis’ affidavits sworn in these proceedings, Crown Financial lent $580,000 to the New Jim Trust, which then lent those funds to Elmach (as trustee for CPT1), as a contribution to the purchase of the Beecroft property.

On 8 December 2011, a series of payments was recorded as being debited on the CPT1 general ledger:

The purchase of the Beecroft property was completed on 8 December 2011. The settlement statement records that the “total amount required for settlement (to be confirmed)” was $1,819,482.06. A transfer for the Beecroft property was signed by the vendor to Anne-Katrine for consideration of $1,900,000.00. A further transfer was also signed with Anne-Katrine as the transferor, transferring the property to Anne-Katrine Sundell (as to 80%) and Elmach (as to 20%) as tenants in common in unequal shares. Anne-Katrine and Elmach, as mortgagors, executed a mortgage to Adelaide Bank over the Beecroft property.

On 9 December 2011, Shara filed a third amended response to Kim’s initiating application in the Family Court proceedings. That response now joined Josunda, Crown Financial and Bogasi to the proceedings. The property orders in relation to CPT1 and CPT2 were the same as in the second amended response (see [156] above).

On 19 December at 4:41pm, Ms Francis emailed Mr Wooldridge asking him to look at the attached balance sheets for the New Jim Trust and confirm that they were accurate. The attached balance sheet is stated to be as at 19 December 2011 and records $1,606,816.32 as “Loan – JRS re AKS mortgage” with the annotation “80% Beecroft”.

On 20 December 2011, Mr Wooldridge emailed Ms Francis about the Beecroft property (“F/T” being a reference to “family trust”)

On 22 February 2012, TCI and Crown Financial sold in aggregate 1,000,000 GBST shares on-market at $0.87 per share for $870,000. Mr Byrne submitted this reflected the “other funding” option in the Beecroft Email.

Adelaide Bank sent this email to Mr Wooldridge on 27 February 2012:

At 3:05pm that day, Anne-Katrine sent this email to Adelaide Bank:

On 28 February 2012, Kim swore an affidavit in the Family Court proceedings which included:

On 29 February 2012, Shara filed a fourth amended response to Kim’s initiating application in the Family Court proceedings. That application contained these additions to the ‘Property Adjustment and Ancillary Orders’ sought:

On 1 March 2012, Jim swore an affidavit in the Family Court proceedings in which he said:

On the same day, Mr Wooldridge deposed to similar effect:

On 8 March 2012, Crown Financial sold 1,000,000 GBST shares on-market for a total price of $87,000. This was submitted to reflect the “other funding” option in the Beecroft Email.

On 15 March 2012, Kim filed an updated financial statement in the Family Court proceedings disclosing:

That updated financial statement again also included in a section headed “Additional Information”:

On 16 March 2012, submissions were filed in the Family Court proceedings on behalf of Elmach, Jim, TCI, Crown Financial and Bogasi prepared by Mr Peter Campton of Counsel (as his Honour then was):

The reference to declaratory relief sought by Kim (“the Husband”) and promoted by Jim contains a footnote reference to Jim’s amended response filed on 1 March 2012:

From early 2012, settlement discussions occurred between Kim and Shara.

On 21 March 2012, the hearing of the Family Law proceedings commenced before Fowler J.

On 22 March 2012, Kim was cross-examined concerning advice which he and Mr Wooldridge received from Ms Leah Chick of Clayton Utz in relation to the 90 units in his name in CPT1:

On 23 March 2012, Kim made an offer to settle the Family Court proceedings, with one of the terms being that Shara pay him the amount of $259,344.26. In addition, the offer sought these declarations:

On 27 March 2012, Kim made another offer to settle the Family Court proceedings on substantially the same terms as his offer of 23 March 2012, with the significant exception that the order originally proposing that Shara pay Kim $259,344.26 was amended to become an offer that Kim pay Shara $1,000,000. On 28 March 2012, an offer was made on behalf of Clayton Utz’s clients (but presumably with Kim’s approval) that included Kim paying Shara $3,000,000.

On 4 April 2012, Crown Financial sold a further 1,000,000 GBST shares on-market at $0.87 per share which Mr Byrne again submitted reflected the “other funding” option in the Beecroft Email.

On 16 April 2012, Kim’s solicitors in the Family Court proceedings circulated a proposed minute of order said to reflect the last offer advanced on behalf of Clayton Utz’s clients in those proceedings on 28 March 2012. That minute included:

On 14 May 2012, Kim’s solicitors put the offer set out in the preceding paragraph to Shara’s solicitors.

In an affidavit in the Family Court proceedings made on 15 May 2012, Kim said:

On 22 June 2012, Shara made Kim a settlement offer, including that Kim make a payment of $5,250,000 to Shara on terms including:

On 11 October 2012, Clayton Utz wrote to both the solicitors for Kim and Shara including:

On 31 October 2012, Clayton Utz wrote to Mr Wooldridge setting out the costs incurred by their clients in respect of the Family Court proceedings as at that date:

On 2 November 2012, a mediation was held between Kim and Shara in relation to the Family Court proceedings. As foreshadowed in the letter at [194] above,

On 8 November 2012, Kim’s solicitors wrote to Shara’s solicitors including:

Kim’s settlement offer then included two offers capable of acceptance, namely:

On 9 November 2012, Shara made Kim a counter offer, with one of the terms requiring Kim to make payment of $3,850,000 to Shara.

On 9 November 2012, Clayton Utz wrote to Mr Woolridge:

On 20 November 2012, Kim provided Shara with a further settlement offer that included two options capable of acceptance:

By letter dated 22 November 2012 (and received by Jim’s tax adviser Professor Cooper the next day), the ATO notified that amended assessments for Jim would be issued for the years ending 30 June 2000 and 30 June 2001 with interest and penalties. The reasons for decision included:

Also on 22 November 2012, Kim’s solicitors put a further offer of settlement to Shara that was open until close of business on 23 November 2012. On the same day, Kim instructed his solicitors that “every day that passes the offers are to drop $50,000”.

On 23 November 2012, Kim’s solicitors wrote to him advising him to accept Shara’s latest settlement offer:

On 26 November 2012, Kim emailed Shara with a settlement offer based upon the consent orders which she had proposed (and therefore including the property orders set out in [193] above). That email stated that “after discussion here this is [sic] what I am prepared to offer with the support of my dad.”

On 27 November 2012, the Family Court proceedings were listed again before Fowler J. The parties conferred and informed his Honour that an “in principle” settlement had been reached.

At 12:30pm on 27 November 2012, Ms Hawes emailed Mr Blaikie:

The “below advice” referred to by Ms Hawes was an email of advice from Mr Blaikie to Ms Hawes on 28 February 2012. While that advice is not presently relevant, the instructions for that advice in an email from Ms Hawes to Mr Blaikie on 24 February 2012 included:

At approximately 2:45pm on 27 November 2012, Mr Wooldridge had a telephone conference with Mr Blaike and Ms Hawes. Ms Hawes made a file note of the discussion. It is necessary to reproduce the file note in full:

At 4:02pm on 27 November 2012, Ms Hawes emailed Mr Blaikie:

At approximately 5:00pm on the same day, Ms Hawes spoke to Jim. Her file note of that conversation records:

At 6:13pm on 27 November 2012, Ms Hawes provided her file note of her conference with Mr Wooldridge (reproduced at [209] above) to Mr Blaikie.

The next morning at 8:35am, Mr Blaikie emailed his advice to Mr Wooldridge:

In paragraph 22 of his affidavit sworn on 23 March 2021, Mr Wooldridge said of the email referred to in the preceding paragraph “I printed a copy of this email and gave it to Jim the next time I saw him. I can’t now recall when that was.” His affidavit goes on:

On 28 November 2012, the Consent Orders were made by the Family Court. A letter from Mr Campton to Clayton Utz of 28 November 2012 provides a convenient history of how the settlement came about:

The Consent Orders included:

On 4 December 2012, Mr Wooldridge sent an email to Ms Hawes asking that Mr Campton provide written advice on the following issues:

Also on 4 December 2012, Mr Blaikie forwarded the ATO response (referred to in [202] above) including the statement of reasons dated 22 November 2012 to Kim. Mr Blaikie asked Kim when he (Kim) would be available to attend a meeting with Professor Cooper and himself.

On 7 December 2012, Mr Campton sent his advice to Ms Hawes:

On 12 December 2012, Mr Wooldridge emailed Ms Hawes:

Later the same day, Ms Hawes emailed Mr Campton:

On 26 February 2013, Ms Hawes followed up with Mr Campton:

In February 2013, $629,922.92 was debited to Kim’s loan account with the Old Jim Trust and recorded as being related to the following payments:

On 28 February 2013, Anne-Katrine became an alternate director of Elmach.

On 8 April 2013, 3 additional shares in Bogasi were issued to Jim. Mr Stell and Mr Walker were formally appointed directors of Bogasi. Mr Walker’s evidence (which the Court accepts) was that, at no time prior to or after his appointment, did Jim tell him that there had been any significant change to the ownership, structure or administration of the assets of CPT1 and CPT2.

On 10 April 2013 at 8:08am, Ms Hawes emailed Mr Campton:

Mr Campton replied at 8:20am:

On 28 April 2013, Jim was admitted to St Vincent’s Hospital, having collapsed at his birthday party.

According to his affidavit sworn on 7 May 2020, Mr Wooldridge says that he had the following conversation with Jim in April 2013:

According to Kim’s affidavit sworn on 17 December 2020, he had this conversation with Jim in April 2013 and which the Court finds to be the Nomination:

On 27 May 2013, Kim emailed his family law solicitors Watts McCray that he would not be complying with the Consent Orders given what he said had been significant damage to the Longueville Property at Shara’s hands and her failure to provide a specific painting as provided for in the Consent Orders.

On 28 May 2013, Watts McCray wrote to Kim setting out, among other things, the consequences of withholding payment required pursuant to the Consent Orders. Furthermore, given the significant interest potentially payable on the sum of $2,850,000 if it was not paid pursuant to those orders, Watts McCray recommended that Kim make payment to Shara on 28 May 2013 in accordance with the Consent Orders.

In May 2013, Mr Walker requested, and was provided with, copies of the trust deeds for the Old and New Jim Trusts and the equivalent old and new trusts for Gunnar. By email dated 29 May 2013 from Mr Wooldridge to Mr Walker and Mr Stell, Mr Wooldridge provided copies of the trust deeds and said:

On 31 May 2013, Mr Walker met with Mr Stell and Mr Wooldridge to review the trust deeds. Mr Wooldridge did not tell Mr Walker about the Nomination on that date.

On 8 August 2013, Kim sent an email instructing Watts McCray to bring an urgent application to set aside the Consent Orders and advising that Clayton Utz was acting on his behalf in respect of a Bankruptcy Notice which he had received from Shara.

On 9 August 2013, Clayton Utz wrote to ERA Legal requiring Shara to withdraw irrevocably the Bankruptcy Notice in writing, in lieu of which Kim would apply to the Family Court pursuant to s 79A(1)(a) of the Family Court Act 1975 (Cth) to have the Consent Orders vacated and apply to the Federal Court of Australia to have the Bankruptcy Notice set aside.

On 14 August 2013, Kim emailed Watts McCray asking them to be ready to file the s 79A application, to ‘set aside all the original orders’ in the event that the application to set aside the Bankruptcy Notice failed.

On 19 August 2013, at a hearing of the urgent application brought by Kim, Aldridge J declined to grant a stay of Order 27 of the Consent Orders, being the obligation to pay $2.85 million to Shara within six months of the Consent Orders.

On 21 August 2013, Watts McCray sent a letter to Kim confirming the outcome of the urgent application and noting advice received from two senior counsel to the effect that “the settlement achieved in November 2012 was extremely advantageous to you and could not be improved upon with further litigation”.

On 22 August 2013, the amount of $2,888,904.45, being the accrued amount payable under the Family Court settlement:

On 18 September 2013, Mr Bergamin of the Adelaide Bank wrote to Mr Wooldridge:

On 30 September 2013, Mr Bergamin followed up Mr Wooldridge asking whether Mr Wooldridge wanted to proceed with the discharge of the mortgage over the Beecroft property. It does not appear that Mr Wooldridge ever replied and the mortgage was not discharged at that time. Mr Wooldridge did not inform Anne-Katrine that he had received Mr Bergamin’s email.

On 31 July 2013, the $877,585.65 debt recorded in the accounts as being owned by the New Jim Trust to CPT1 in connection with purchase of the Beecroft property was paid (by way of offset arrangements between CPT1, the New Jim Trust and the Old Jim Trust). Mr Byrne submitted that the “debt” of $877,585.65 formed part of the accounts by reason only of Mr Woodridge’s failure to implement the arrangements in the Beecroft Email. He also submitted that $1,000,000 was intended to be, and should have been, offset against the $6,239,519.49 debt owing by CPT1 to the Old Trust, and that it was unnecessary for debt to be taken on by the New Jim Trust.

On 19 June 2014, the amount of $2,888,904.45:

On 29 January 2015, the ATO wrote to Jim requesting updated information concerning himself and his private structures for the period 1 July 2011 to 30 June 2014.

On 26 March 2015, Ms Francis sent a draft response to the ATO questionnaire to Mr Wooldridge before sending it to Jim’s accountants. Ms Francis said to Mr Wooldridge in her email ‘I don’t want to send until you happy with family trust calc [sic]’.

The draft of the ATO questionnaire as at 31 March 2015 did not disclose the trusts declared by the Declarations in response to a question whether Jim had any power with respect to a private trust.

In her affidavit in the probate proceedings, sworn on 19 September 2018, Anne-Katrine deposed to having a conversation with Kim in words to the following effect:

In his affidavit sworn on 7 May 2020, Mr Wooldridge said:

On 6 May 2015, Mr Wooldridge sent this email with the subject line “Your dads will” to Kim:

On 8 May 2015, Jim was hospitalised again.

On 11 May 2015, Kim sent an email to Mr Wooldridge with the subject line “Trust/Will and things” which included:

In his email Kim made no mention of the Nomination. Nothing was done in relation to ensuring that there was ‘supporting documentation for all significant transactions in the last seven years’ because according to Kim in his evidence in these proceedings the need for such a document was overtaken by Jim’s recovery.

In November 2016, Anne-Katrine was interested in purchasing a new residential property. On 10 November 2016, she emailed Kim about this. David Wooldridge responded to her email a few minutes later:

Further exchanges ensued and, on 11 November 2016, Mr Wooldridge wrote to Anne-Katrine:

On 14 November 2016, Anne-Katrine responded to Mr Wooldridge (and copying Kim) including:

At 5:39am on 14 November 2016, Kim emailed Anne-Katrine including:

On the same day at 9:52am, Anne-Katrine replied:

On 23 November 2016, Anne-Katrine emailed Ms Francis “can you send me the exact amount owing to the trust for [the Beecroft property] please.” Shortly after that Ms Francis emailed Mr Wooldridge in relation to Anne-Katrine’s email asking him “Per trust is $1.96m- is that all?”

On 1 March 2017 at 3:52pm, Anne-Katrine emailed Mr Wooldridge with her expected sale price for the Beecroft property and information about a property she was interested in purchasing.

At 4:26pm, Kim emailed Anne-Katrine (copying Mr Wooldridge):

Later the same day at 4:32pm, Mr Wooldridge responded to Anne-Katrine alone:

On 8 March 2017 at 2:45pm, Anne-Katrine emailed Mr Wooldridge “some calculations” concerning the acquisition of the sale of the Beecroft property and the acquisition of a new property. Her calculations included these statements concerning the Beecroft property: “current ownership 80/20” and “Elmach needs to balance on the books and your expertise would know how this is done.” One of the options which she raised in relation to the potential purchase of a new home is “keep the 20% with the company.”

At 4:24pm Mr Wooldridge responded to Anne-Katrine:

On 8 March 2017 at 4:42pm, Janette emailed Mr Wooldridge concerning Anne-Katrine’s proposed purchase saying:

At 5:40pm, Mr Wooldridge responded to Janette:

On 9 March 2017, Kim emailed Janette (copying Anne-Katrine):

Mr Walker’s document entitled “Research Notes” (the version in evidence is dated in its footer as 30 March 2017) included a note of a family meeting on 9 March 2017 attended by Jan, Jim, Anne-Katrine, Mr Wooldridge, Kim and himself:

The meeting became acrimonious, due to the disagreement between Kim and Anne-Katrine over funding Anne-Katrine’s plan to purchase a new home.

On 10 March 2017, Mr Walker emailed Mr Wooldridge including:

On 22 March 2017, Ms Francis emailed to Mr Wooldridge a series of spreadsheets with the subject ‘Beecroft Settlement’ and saying “Attached. Of course never simple! Let me know when you are free to discuss.” The attachment comprises a summary and various ledger and journal extracts.

In her affidavit affirmed on 4 February 2020, Anne-Katrine deposes that at some time in 2017, prior to her father’s death, she had a discussion with Mr Wooldridge in words to the following effect:

On 24 March 2017, Mr Walker emailed Mr Wooldridge saying, “further to developing my understanding of Bogasi and the group could you explain to me how and where Dean Stell fits into the group.”

On 27 March 2017 at 9:31 am Mr Wooldridge replied to Mr Walker

At 5:00pm on 27 March 2017, Mr Wooldridge emailed to Mr Walker and Mr Stell a large number of documents in response to Mr Wooldridge’s request (see [270] above) which Mr Wooldridge described as “the bulk of the info.”

On 28 March 2017, there was a meeting attended by various family members and others at the Pathways retirement village where Jim was living at the time. Mr Walker had prepared a set of questions for Jim on which he recorded in handwriting the answers Jim gave during the meeting (the handwritten answers are in italics below).

Mr Walker’s evidence of that meeting in his affidavit affirmed in these proceedings on 7 May 2020 was:

On 3 April 2017 at 1:43pm, Anne-Katrine emailed Ms Francis (copied to Mr Wooldridge): “Can you send me the current debt on (the Beecroft property) in regard to the JRS Capital Trust [sic] and Elmach. Can I also have the breakdown of the loan.”

At the same day at 5:57pm, Ms Francis replied to Anne-Katrine (copying Mr Wooldridge):

On 7 April 2017, Kim and Mr Wooldridge (as directors of Elmach) signed a discharge authority requesting Adelaide Bank to release its security over the Beecroft property.

On 27 April 2017 at 12:16pm, Mr Walker emailed Mr Wooldridge including:

On the same day at 5:54pm, Mr Wooldridge replied to Mr Walker (copying Mr Stell) including: “regarding the additional information requested as we discussed on the phone I will need to run this by the various directors of each entity – I will revert as soon as I have done that.”

On 11 May 2017, Anne-Katrine emailed Ms Francis “can you organise $3k to go through to my account?”. Ms Francis replied shortly afterwards, “Hi Anne, all requests from the Trust that are personal now need to go via David so please email him”.

On 12 May 2017, Mr Walker emailed Mr Wooldridge (copying Mr Stell):

The attached series of questions was headed “Bogasi Pty Ltd Questions on Notice – Three Crowns Inv” and comprised six closely typed pages of inquiries.

On the same day, Mr Walker emailed Mr Wooldridge and Mr Stell:

On 19 May 2017, a meeting of the directors of Bogasi was held at Pathways retirement village. Present were Jim, Merle, Mr Wooldridge, Mr Walker and Mr Stell. The minutes do not record discussion of the various questions on notice raised by Mr Walker. However, they do record a discussion as to what matters pertaining to Sundell Group companies should or should not be brought before the Bogasi board with a committee comprising Mr Wooldridge and Mr Walker being formed to consider that issue.

On 22 May 2017, Jim died at Pathways retirement village

On 16 June 2017, Mr Wooldridge acknowledged receipt of the Certificate of Title for the Beecroft property from Adelaide Bank. The form of the acknowledgement also had a place for Anne-Katrine to sign to acknowledge receipt. There was no evidence that the acknowledgement was ever drawn to her attention for her to sign. It was common ground that Elmach retains the Certificate of Title for the Beecroft property.

On 5 April 2018 at 3:05pm, Kim wrote to Anne-Katrine:

Anne-Katrine forwarded Kim’s email to Mr Walker who replied to Anne-Katrine:

On 26 April 2018, Kim emailed Anne-Katrine:

On 11 May 2018, Kim sent a further email to Anne-Katrine:

On 14 May 2018 at 7:25am, Anne-Katrine emailed Mr Wooldridge, Mr Walker and Mr Stell, including:

Later that day, Mr Wooldridge acknowledged receipt of her email and said he would discuss the matter with Mr Walker and Mr Stell.

On 15 May 2018, Anne-Katrine replied to Kim’s 11 May 2018 email (see [293] above):

On the same day, Kim replied to Anne-Katrine:

At 10:28pm on 15 May 2018, Mr Wooldridge sent an email to Mr Walker and Mr Stell, including:

On 16 May 2018 at 10:38am, Mr Stell sent an email to Mr Wooldridge:

Mr Wooldridge sent an email to Mr Stell and Mr Walker at 4:32pm, including:

Mr Walker then sent an email to Mr Wooldridge and Mr Stell at 4:46pm, including:

Also on 16 May 2018, Mr Wooldridge emailed Ms Francis:

Ultimately Ms Francis and Mr Wooldridge were able to locate thirteen transaction documents in relation to the purchase of Beecroft. These were provided to Kim.

On 23 May 2018, Kim applied for probate of Jim’s typed will dated 9 November 2018. On 23 August 2018, Anne-Katrine brought a cross-claim for probate to be granted over the hand-amended will (see [117] above). The status of the handmade amendments was the central issue in the probate proceedings. Justice Sackar delivered his judgment on 30 August 2019 granting probate of the will with the handmade amendments.

On 7 December 2018, Mr Walker sent this email to Mr Wooldridge under the subject line ‘Commercial Property Trust – Trust Deeds’:

Mr Wooldridge followed up his 7 December 2018 email to Mr Wooldridge at 7:22am on 12 December 2018:

On 12 December 2018 at 10:48am, Mr Wooldridge replied to Mr Walker (copying Mr Stell) replying:

There is no evidence that Mr Walker ever answered the question in Mr Wooldridge’s email. In cross-examination, Mr Walker said that he did not accept Mr Wooldridge’s email as a complete explanation of who owned the units in CPT1 and CPT2.

On 2 February 2019, Mr Wooldridge ceased to be a director of Elmach.

In February 2019, Mr Walker’s solicitors received a copy of the file from the Family Court proceedings. This included the terms of the Declarations. Mr Walker first became aware of orders 18 and 19 of the Consent Orders including the Declarations in March 2019.

On 5 August 2019, during the course of the probate proceedings, under cross-examination by Mr Ellison SC, Mr Wooldridge gave these answers:

During re-examination by Mr Meek SC (as His Honour then was) Mr Wooldridge provided these answers:

Kim had these exchanges with Mr Meek SC and Justice Sackar:

Kim also had these exchanges with Justice Sackar:

On 13 August 2019, Mr Walker sent the following email to Mr Wooldridge:

On 18 August 2019, Mr Wooldridge responded to Mr Walker and said, “this appears to be a request that is more appropriately addressed to Kim as the managing director for Elmach.”

On 19 August 2019, Bogasi resigned as trustee of Gunnar‘s family trust.

On 20 August 2019, Mr Walker sent an email to Mr Wooldridge (copying Mr Stell):

On 6 September 2019, the issue of the ownership of the units in CPT1 and CPT2 was raised in a Bogasi board meeting. The minutes of that meeting include:

On 14 October 2019, Mr Walker sent the following email to Mr Wooldridge:

On 21 October 2019, Mr Wooldridge sent this email to Mr Walker:

On 22 October 2019, Mr Walker sent this email to Mr Wooldridge:

On 29 October 2019, Mr Wooldridge, in response to Mr Walker’s 22 October 2019 email, sent this email:

On 18 November 2019, Mr Walker wrote to Mr Stell, including:

Mr Stell replied to Mr Walker (copying Mr Wooldridge) on 19 November 2019:

In February 2020, Kim filed the 2019 Second Cross-Claim in these proceedings. This is the first time that Mr Walker became aware of Kim asserting that the Nomination had occurred in April 2013.

On 25 August 2020, TCI lent Elmach as trustee for CPT1 the amount of $10,800,000. The purpose of the loan was to partially repay money borrowed by Elmach as the trustee for CPT1 from Adelaide Bank.

On 18 September 2020, the amount of $3,800,000 was allocated in the CPT1 accounts to pay down a loan owed to Adelaide Bank.

On 25 September 2020, Mr Walker sent Bogasi an invoice for $18,200 described as “To providing Trustee Directorship services to Bogasi, omitted from previous invoices, for the three months ended 30 March 2017”.

Between 28 and 31 October 2020, shares in Finclear to the value $12,500,000 were sold by Elmach as trustee for CPT1.

On 29 October 2020, an interim distribution was made from CPT1 to Kim in the amount of $10,595,916.49. On that same day there was a cash transfer from CPT1 to Kim in the amount of $10,736,500. Mr Byrne submitted these funds were capable of being used to repay the loan advanced by TCI on 25 August 2020 but were not.

On 17 February 2022, the loan agreement between TCI and Elmach as trustee for CPT1 was varied. The new maturity date for the loan became 31 July 2027.

As at 30 June 2023, the amount owed by CPT1 to TCI for the loan was $8,050,814.

In these proceedings I have applied the legal principles in relation to fact finding and credit which I summarised in Saravinovska v Saravinovski (No 6) [2016] NSWSC 964:

To these I would respectfully add and have applied this summary by Leeming JA (sitting at first instance) in Dedakis v Deligiannis; The estate of Rebecca Deligiannis (also known as Rebeka Deligiannis) [2024] NSWSC 1018;

Should the Court be satisfied that Jim did nominate Kim to have the full legal and beneficial ownership of the units, the effect of that finding is that the Elmach units would not form part of the estate. Obviously enough, the Court does not have the benefit of hearing Jim’s evidence as to whether or not he made any nomination for Kim to obtain the units. For this reason, courts are obliged to scrutinise carefully claims which are made against deceased persons’ estates.

In Plunkett v Bull (1915) 19 CLR 544, 548-549; [1915] HCA 14 Griffith CJ made the seminal statement for how courts should approach such claims:

A majority of the High Court (Kiefel CJ, Gageler J (as the Chief Justice then was) and Jagot J) recently referred to and approved Griffith CJ’s statement in GLJ v Trustees of the Roman Catholic Church for the Diocese of Lismore [61]; [2023] HCA 32 (2023) 97 ALJR 857 at 875:

In addition to the Court being required to scrutinise the evidence carefully, the Court will often seek to identify evidence which may corroborate the claim that is being made against the estate. However, as was made clear by Brereton J in Ashton v Pratt (No 2) [2012] NSWSC 3 at [18], this is not an absolute legal requirement:

Notwithstanding that corroboration is not an absolute requirement, the New South Wales Court of Appeal in Brown v New South Wales Trustee and Guardian [2012] NSWCA 431 at [67] (JC Campbell JA, Bergin CJ in Eq and Sackville AJA agreeing) held that the Court is entitled to regard any failure of the claimant to bring forward corroborative evidence which was or ought to have been available as a matter of significance. However, that does not mean that all possible corroborating witnesses must be called:

Brown at [52] also reiterated that while a claimant against a deceased estate must satisfy the Court on the balance of probabilities, the evidence in support must be enough to enable the Court to feel an actual persuasion as to the validity of the claim:

Kim submitted that Anne-Katrine’s evidence was not always responsive to questions and that she sought to use her time to provide impromptu character assessments of Kim and Mr Wooldridge. Kim’s submissions provide the example of:

It was also contended that her knowledge of her father’s business dealings were also very limited. Kim argued this was demonstrated from the number of questions to which she gave evidence to the effect that “I was not aware of it at the time” (see, for example, Tcpt, 25 April 2024, p 416(15)).

Kim submitted that the fact that Anne-Katrine was an alternative director for her father of Elmach does not overcome her alleged minimal knowledge of how the company operated and the fact she was only working 2-3 days per week from March 2013. For example, Tcpt,15 April 2024 416(45) and 417(7):

It was further submitted that Bogasi’s submissions misrepresented the level of knowledge that Anne-Katrine had about the Nomination. It was submitted on Kim’s behalf that Anne-Katrine’s affidavit in the probate proceedings acknowledged that Kim had been provided with ‘property’ from the Elders deal. It was submitted that the evidence changed in these proceedings to become that she thought her father may have given Kim “one of the properties” (Tcpt, 22 April 2024, p 450(50)):

Kim argued this demonstrated an attempt by Anne-Katrine to resile from her evidence provided in the probate proceedings, which is a matter the Court should consider weighs against her credibility.

I do not accept Kim’s criticisms of Anne-Katrine’s reliability as a witness. I accept Bogasi’s submission that she was honest and credible. I accept Anne-Katrine’s evidence, as far it went. It is this last qualification that is important. Even though she may have worked two to three days a week in the Sundell Group’s offices it is clear – and she did not seek to suggest otherwise – that she was not involved in the detail of how the business worked, or how things were done. She accepted (Tcpt,15 April 2024, p 421(20)) that her father did not give her much information about how the Sundell Group ran: “If there was something required to do, you’d ring the office”. While it was clear she now has a difficult relationship with Kim – who in his evidence said he had no love for his sister (Tcpt, 29 April 2024, p 829(23)) – I did not form the view that ill feeling so motivated her or otherwise detracted from the reliability of her evidence

Kim’s submissions challenged the evidence provided by Brett on the basis that it was too vague to be of any utility. It was submitted he was someone who had no involvement in the operation of the Sundell Group and no understanding of the entities in which his father had an interest.

The one conversation which Brett dates as occurring between February 2012 and September 2013 was submitted to be equivocal. In response to a request by Brett for the Ipswich property (an asset of CPT1), Jim responded that none of the "kids" would be getting "Ipswich" and that it was "staying in the company". Kim submitted that, on one view, the fact that Ipswich was to remain an asset of Elmach was entirely correct. On another view. it may very well have been an example of Jim deflecting Brett's request and avoiding a discussion he did not want to have (recalling that Jim did not permit any family member other than Kim to see his will). On either analysis, it was contended that the conversation sheds little light on whether Jim exercised a right of nomination in April 2013 (which, more likely than not, Kim submitted occurred after the conversation to which Brett refers).

Kim argued that the precision of Brett’s recollection was questionable, and he had little knowledge of the manner in which "the company" (to use his language) conducted its business. According to Kim, Brett’s evidence demonstrated that he:

Bogasi submits that Brett was a credible witness. I agree. Kim submits Brett’s evidence was too vague to be of any utility. I also agree. My impression of Brett was that while he was attempting to give his evidence to the best of his ability, he had very little to remember because he took the benefits of being a member of the Sundell family without asking too many questions. No criticism is intended by that observation.

I accept Brett’s evidence that Jim would have said words to the effect of “All you kids are going to be looked after by the company. No one of you will be the King”. However, that evidence is far too thin a reed to have any impact on the Court’s assessment of whether the Nomination was made by Jim, especially given the large amount of documents available in connection with the Family Court proceedings and what happened after the Consent Orders were made.

Similarly, Brett’s evidence about what was said about the Ipswich property is too tangential to bear the weight which Bogasi wishes to place upon it. In particular, the totality of the evidence has left me with the strong impression that information within the Sundell Group and family members was heavily “siloed” or compartmentalised, and that information was shared on a need to know basis.

Ultimately, Brett’s evidence played no dispositive role in the proceedings.

Bogasi submits that Kim was neither an honest nor credible witness and his evidence on critical issues should be wholly rejected, except to the extent that it constitutes admissions against his own interest.

Bogasi described Kim as conducting himself as an advocate, in distinction to a witness who was attempting to assist the Court, who was prone to avoiding answering questions and making long, non-responsive answers. It also contended that he was quick to volunteer information which was objectively improbable. For example, on more than one occasion he stated that his affidavits did not include information because of the choices made by his lawyers.

In closing oral submissions, Mr Condon SC also said that Kim’s affidavits in these proceedings contain embellishments which indicate he was trying to reconstruct events. For example, Mr Condon SC drew attention to Kim’s affidavit sworn on 17 December 2020 where he alleges that in the April 2013 conversation he had with his father, that Jim told him that the lawyers had effectively given unqualified advice that Kim could be the nominee. That same affidavit also contains an alleged conversation that Kim had with Mr Wooldridge in approximately April 2013. Mr Condon SC noted that Mr Wooldridge could not recall any conversation with Kim about the Elmach units before 2015 and therefore submitted this evidence was an uncorroborated conversation which Kim had in fact manufactured.

Kim challenges Bogasi’s purported attempt to rely on credit findings made by Sackar J in the probate proceedings to impugn Kim’s credit in these proceedings. Bogasi submits it is not relying on the adverse findings made by Sackar J but is instead relying on the evidence before the Court of Kim’s evidence being tested and the conclusion which can be reached objectively from the transcripts that he lied about the circumstances of the handwritten amendments to the will and the reasons for them.

In reply, Kim also submitted that Bogasi’s contention that he was neither an honest nor credible witness was inconsistent with Bogasi’s attempt to rely on his affidavits from the Family Court proceedings. It was further submitted by Kim that his position is corroborated by the documentary record and the actions taken by Mr Wooldridge and himself in relation to the Nomination. Kim’s submissions suggested that to assert that he should be disbelieved on these fundamental aspects of the case because of some “long, non-responsive answers and possible infelicities makes a mockery of the Court’s fine task of fact-finding which must take into account all of the evidence” (Kim’s closing submissions in reply, paragraph 55).

I accept Bogasi’s characterisation of Kim as a witness for the reasons advanced by Bogasi. My general impression of him was that he was an argumentative witness who was advocating, sometimes strenuously, for his position rather than doing his best to assist the Court irrespective of the consequences of an answer for his case. It is not necessary for the Court to identify specific untruths in his evidence, but there was certainly exaggeration as part of his advocacy. For the purposes of fact finding, the Court will only accept Kim’s evidence on any critical issue if it is inherently likely, against interest or corroborated by contemporaneous written evidence or other reliable testimony. The reasons for this conclusion may be summarised as:

Bogasi submitted that Mr Wooldridge’s evidence should not be accepted for six reasons:

Bogasi accepts that rejection of part of a witness’s evidence does not justify rejecting all of it (Kuligowski v Metrobus (2004) 220 CLR 363, [60] per Gleeson CJ, McHugh, Gummow, Kirby, Hayne, Callinan and Heydon JJ). However, when a party calls testimony known to be false, this conduct can amount to an implied admission or circumstantial evidence permitting an adverse inference (Lehrmann v Network Ten Pty Ltd [2024] FCA 369). Bogasi asks the Court to draw an adverse inference on the basis that Mr Wooldridge’s evidence cannot extend so far as to recall accurately the events of 2012 and 2013.

In reply, Kim submitted that no adverse finding of credibility can be drawn against Mr Wooldridge for his failure to inform Gunnar’s side of the family about the Nomination. This submission was said to be premised upon an incorrect assumption that Mr Wooldridge had, or considered that he had a positive obligation to convey that information, a premise for which Kim submits there was no evidence. According to Kim, the evidence demonstrates that Mr Wooldridge was discrete in discussing Jim's business affairs with family members. Mr Wooldridge’s evidence was that his discussion with Jim about the Nomination was personal between himself and Jim (Tcpt, 7 May 2024, p 1298(49)). Mr Wooldridge's evidence, which was unchallenged, in [54(e)] of his affidavit sworn 23 March 2021 was that "[t]he family trusts were also run very confidentially so that historically no beneficiary was aware of what had been provided to the others. This was the way it had always been". This extended to Jim's personal matters. Anne-Katrine's evidence was that when she asked Mr Wooldridge for a copy of the will in 2015, he responded that he would not give her a copy without first speaking with Jim. Similarly, Bogasi’s reliance on the fact that Mr Wooldridge did not tell Anne-Katrine about the conversation that he had with Jim was said to suffer from the same problem.

Kim also rejects Bogasi’s submission that Mr Wooldridge’s recollection of the conversation with Jim in April 2013 was “too good to be true”. He contended that it is entirely plausible that Mr Wooldridge would have a strong and precise recollection of the substance of that conversation. It followed a lengthy process in which Mr Wooldridge had obtained advice from Clayton Utz and Mr Campton over several months and culminated in a discussion with Jim in which Mr Wooldridge questioned and challenged Jim. It was submitted to be precisely the type of conversation of which Mr Wooldridge might be expected to have a better recollection, than other events that had less context or importance.

Finally, Kim refutes Bogasi’s assertion that Mr Wooldridge was a partisan witness, who presented material in a way that best protected Kim's interest in the litigation. It was argued by Kim that it does not follow from the fact that Mr Wooldridge's evidence did not assist Bogasi's case that he has an interest in assisting Kim's case. It was submitted there was no evidence that Mr Wooldridge has anything to gain by assisting Kim, and nothing to that effect was suggested to him in cross-examination.

Kim submitted it was noteworthy that Mr Wooldridge gave evidence in the probate proceedings which was read in Anne-Katrine's case and was harmful to the case advanced by Kim. Indeed, Mr Wooldridge remains the Chief Financial Officer of the Sundell Group, and therefore it was contended to be more likely that Mr Wooldridge had little to gain and much to lose in giving evidence in the way in which he did. Finally, Kim’s submissions observed that Mr Wooldridge has also sworn evidence on behalf of both Bogasi and Kim in these proceedings. He remains a director of Bogasi. Therefore, to suggest that there is a degree of partisanship in Mr Wooldridge's evidence is entirely without basis.

I have carefully considered Bogasi’s detailed criticism of Mr Wooldridge’s evidence. Some of that criticism has force. However, none of the criticism is sufficient to deflect me from the overall assessment I formed watching him give evidence during the trial, and again on review of the transcript and submissions, that, while his evidence was unsatisfactory in some respects, Mr Wooldridge was an honest witness upon whose evidence the Court could rely on critical issues. Insofar as his demeanour was concerned, he presented as a professional person who was a thoughtful witness doing his best to answer the questions put to him.

Moving past my direct observations of Mr Wooldridge, my assessment of him is that, for the reasons advanced by Kim recorded in [365] to [366] above, I take his evidence to be that of a non-partisan witness. This lends credibility to his evidence. There are two aspects to that description of “non-partisan”.

First, there is no evidence, and it was not put to him, that he stood to make any personal gain from the outcome of the proceedings (or that he was at risk of any retribution). This puts him in stark contrast to Kim, who has much to gain from this litigation.

Second, Mr Wooldridge did not present as having any particular loyalty to any one or more individuals (whether that be Kim, Anne-Katrine or anyone else) as opposed to loyalty to perform his job and loyalty to the Sundell family members (both sides) generally. It would be remarkable if he did not have that more generalised loyalty after more than 30 years of employment by the Sundell Group which, in practical terms, meant employment by the Sundell family.

I have reached my overall assessment of Mr Wooldridge notwithstanding taking into account three matters, in particular, which I found troubling at the conclusion of Mr Wooldridge’s evidence.

The first matter was his rigorous compartmentalisation of information. This was particularly evident in what I thought was his unnecessary obfuscation in the face of Mr Walker’s direct inquiries as a fellow director of Bogasi about the ownership of the Elmach units (see [316] above). My first impression was that behaviour did Mr Wooldridge no credit. However, I have concluded it must be remembered that whatever his closeness to Jim, Mr Walker was not a member of the Sundell family, and I formed the clear view, which is not a criticism of him, that whether by disposition or experience, or a combination of the two, Mr Wooldridge practised a high degree of discretion about the affairs of the companies and Sundell family members, both as against the world and as between themselves. In this respect I accept Kim’s submissions in [363] above and conclude that his discretion satisfactorily explains Mr Wooldridge’s failure to tell Merle, Mr Walker or Anne-Katrine of the Nomination.

As to discretion between family members in particular, reflection suggests it could not be otherwise. Mr Wooldridge first had to deal with the two, strong heads of the Sundell family, Jim and Gunnar, and then Kim (who is also a forceful individual based on my observation of him in the witness box). They were the controlling minds. But then he had to deal with the individual family members, who had been raised in an environment that whenever money or some other practical assistance was required, all they had to do was “ring the office”. I intend no disrespect by making that observation.

As a matter of ordinary human experience, I have no difficulty in concluding that Mr Wooldridge’s position would have been untenable if he had freely shared the business of one family member with another. I therefore accept that he only disclosed what he regarded himself as authorised to disclose by one Sundell to another. That Mr Wooldridge has been, and continues to be, in the Sundells’ employ after so many years bespeaks confidence by his employers in his discretion and efficiency.

The second matter is that, on the assumption that the Nomination was made, Mr Wooldridge did not take steps either to deal with any CGT liability Jim may have had or stamp duty liability that Kim may have had. I accept that failure, on one view, strongly supports the conclusion that there was no Nomination. However, given the personalities I have described, I accept that in relation to Jim, Mr Wooldridge did not pursue the CGT issue because Jim, in essence, regarded the Nomination as a complete answer, not least because Jim saw it as confirming what on the papers was the status quo. While that view was idiosyncratic and legally wrong, Jim was Mr Wooldridge’s ultimate “boss”.

As for Kim’s potential stamp duty issue, I conclude that it is plausible that Mr Wooldridge closed his eyes to the problem as “too hard”. He may, I speculate, have sought to take comfort in the absence of a written record of the Nomination. Whatever Mr Wooldridge’s internal justifications, his inaction is a failure on his part, but does not bespeak dishonesty that would cast doubt on my assessment of his basic truthfulness.

The third matter is Mr Wooldridge’s evidence before Sackar J in the probate proceedings. The issue arises from this paragraph of an affidavit made by Mr Wooldridge in the Family Court proceedings in a section headed “Control of Bogasi Pty Ltd” (what was the third line in the text is here emphasised in the light of Mr Wooldridge’s explanation set out in the next paragraph):

Mr Wooldridge was then taken to an extract of transcript of his re-examination by Mr Meek SC (as his Honour then was) in the probate proceedings on 5 August 2019:

On its face, Mr Wooldridge’s evidence can only be consistent, Bogasi submits, with the Nomination not having been made. Mr Wooldridge accepted the logic of that position when it was put to him, but ultimately responded (Tcpt, 2 May 2024, p 1165(39)):

Kim submitted that Mr Wooldridge’s explanation should be accepted because Mr Wooldridge had understood the question in the light of Mr Meek SC’s prefatory words “aside from the issue of the majority of units in CPT1 and CPT2 to Kim” and in the context of the probate proceedings which concerned the shareholding in Bogasi and the effect of Jim’s handwritten amendments, and not the ownership of the Elmach units. I accept that submission because of my overall assessment of Mr Wooldridge as a truthful witness and because I have come to the view that his explanation is a plausible one. If Mr Wooldridge had given his answer to a question from Mr Meek SC that was clearly directed in terms to the then current beneficial ownership of the Elmach units, then my view of the forensic significance for these proceedings of such an exchange would have been quite different.

I have also considered the other criticisms made by Bogasi of Mr Wooldridge’s evidence. Of these, the most potentially potent were in relation to Mr Wooldridge’s evidence about two conversations.

The first was his conversation (set out in [214] above) with Jim on the morning of 28 November 2012, after receiving Mr Blaikie’s email of 8:25am that morning (set out in [213] above).

The effect of Mr Wooldridge’s cross-examination was that, in the witness box, he had no actual recollection of the conversation. When it was put to him that he also had no recollection of the conversation when he prepared his affidavit in 2021, Mr Wooldridge said ((Tcpt, 2 May 2024, p 1174(12)) “I recalled I had a conversation, and I had the benefit of the [Mr Blaikie’s] email and look, I may have had some other notes at the time, like, I, I can’t recall.”

I accept Mr Wooldridge’s evidence that he spoke to Jim shortly after the receipt of Mr Blaikie’s email. This is because it is inherently plausible given that the advice was received and the Consent Orders were about to be sought. However, I do not accept Bogasi’s submission that Mr Wooldridge’s credibility should be adversely judged because he purported to give evidence of a conversation he could not then recall in the witness box. I find that the evidence of the conversation is a reconstruction based upon the email. However, a lay witness may well honestly say they recall something after looking at a document. It may have reminded them of something they had forgotten or, having no actual recollection, they will in fact have reconstructed it (“I would have said that”). A well drawn affidavit should expose what is the witness’ actual, unaided recollection (if any) and what the witness now actually recalls after looking at a document to refresh their memory. The evidence should go no further, because after that it becomes reconstruction. The way in which Mr Wooldridge’s affidavit is drawn (and his evidence in cross-examination) does not permit the Court to conclude that he was intending to mislead the Court by purporting to give evidence of a conversation of which he had no recollection even after refreshing his memory from Mr Blaikie’s email.

The second was his conversation set out in [249] above in May 2015 with Kim shortly before Jim was to undergo surgery. In his cross-examination Mr Wooldridge candidly accepted that, as he sat in the witness box, he could not remember that conversation. He did recall it once his recollection was refreshed by reading the conversation set out in his affidavit. However, he denied that in preparing his affidavit he had invented the conversation by reference to his email of 6 May 2015 (set out in [250] above). He adhered to his evidence that he had had that conversation and I accept that was the case.

Bogasi submits Mr Walker was a truthful witness. On the other hand, Kim asks the Court to find that Mr Walker is not a reliable witness. It was submitted that Mr Walker was not a prudent and diligent director of Bogasi. Kim relies on evidence adduced in cross-examination that prior to 2017, Mr Walker did not seek to review the financials or accounts underlying the proposed distributions at each meeting (Tcpt, 10 April 2024, p 228(7)) and generally “rubberstamped” the resolutions (Tcpt, 10 April 2024, p 228(28)). It was also contended that Mr Walker has benefitted financially from his directorship by charging exorbitant director’s fees. Finally, it was also submitted that Mr Walker has reconstructed the existence of a “common assumption” from reading affidavits in the Family Court proceedings despite being told by Mr Wooldridge that Kim owned the Elmach units. The documentary and circumstantial evidence viewed as a whole is said to contradict the existence of a “common assumption” and therefore provides the Court with a basis to make adverse credit findings against Mr Walker.

In his reply submissions, Kim further submitted that Mr Walker is a partisan witness. Particular concern was raised about Mr Walker’s apparent belief that Brett and Anne-Katrine’s loans were never meant to be repaid but Kim’s were (see Tcpt, 11 April 2024, p 318-319).

Kim also submitted that Mr Walker was prepared to swear to matters as they suited his purpose at particular times. Kim alleges that in the 2019 proceedings, he took the view that Brett’s and Anne-Katrine’s loans were not repayable, but was prepared to swear in an interlocutory application before Rees J that one of the “potentially ruinous effects” of the hiving off of Gunnar’s trusts to an independent trustee was the repayment of loans by beneficiaries – a position which was diametrically at odds with the position taken in these proceedings.

Contrary to Bogasi’s submission that contended that Mr Walker’s belated discovery of handwritten notes was to his credit (“honest and candid”), Kim submitted that it demonstrates the opposite – that Mr Walker did not produce his notes when required during the discovery process and only produced them when he felt he was being pressed on whether the shareholders’ meeting actually occurred. Putting to one side the fact that those notes do not support his contention, his belated production is, at the very least, said to be disturbing.

I do not accept Kim’s criticisms of Mr Walker. I find him to have been an honest witness doing his best to tell the truth according to his recollection and whose evidence the Court can accept. There can be no doubt that he was personally loyal to his old friend Jim, but had a professional approach to the role to which he had been appointed. I did not consider there to be any persuasive basis to conclude that Mr Walker was partisan against Kim and in favour of Brett and Anne-Katrine.

In forming this view, I took it as being to Mr Walker’s credit both that he accepted that in the early years of his appointment after 2013 he was generally a rubber stamp and that he should have been more active in those years before 2017. However, that approach is explicable, if not to be approved, given the nature of his appointment into what was a family company which was operated as an extension of Jim’s persona, and Mr Walker’s poor health at the time. As Jim’s capacity faded with age and ill health, Mr Walker properly sought to play a more active role. I accept his evidence concerning the directors’ fees which he could charge and do not regard his credit as having been adversely affected by his cross-examination on that subject, including insofar he issued retrospective invoices.

Ms Jennings-Jones is an expert accountant who prepared two expert reports on behalf of Bogasi in support of their debt claim in the 2022 proceedings. The First Report was produced on 12 October 2023 and the Second Report was produced on 9 April 2024.

Bogasi and Kim reached an agreement in relation to Ms Jennings-Jones evidence, specifically in relation to the quantum of Kim’s loan accounts. This agreement caused Bogasi not to press the credit adjustments to both of Kim’s loan accounts that had been identified by Ms Jennings-Jones in Section 3 of her Second Report dated 9 April 2024, which if accepted would have increased the quantum of the amount owed by Kim under his loan accounts to Bogasi. On the basis of the agreement reached between Bogasi and Kim, Ms Jennings-Jones was not required for cross-examination by any party. There was therefore no dispute that the Court could accept the evidence contained in both reports of Ms Jennings-Jones subject to the agreement reached between the parties.

The Court accepts that Ms Francis was an honest and credible witness within the limits of her knowledge and that her evidence should be accepted. I did not understand any party to suggest otherwise.

It was submitted on behalf of Kim that the Court should draw a Jones v Dunkel inference against Bogasi for its failure to call Mr Stell. Kim’s solicitor in these proceedings, Ms Vojvodic, outlined in her affidavit sworn 23 December 2021 that Mr Stell was unwilling to provide evidence on behalf of Kim. However, as a director of Bogasi from 2013 until 21 August 2020 and as Jim’s personal lawyer, it was contended that Mr Stell should have been able to provide evidence on any discussions he had with Jim around the period when the alleged nomination occurred. Therefore, Kim asks the Court to infer from Bogasi’s unexplained failure to call Mr Stell that he would not have assisted its case.

In reply, Bogasi submits that no Jones v Dunkel inference arises from not calling Mr Stell. He ceased to be a director of Bogasi on 21 August 2020. A former director is not someone who, by that fact alone, should be seen to be naturally in Bogasi’s camp. Bogasi relies on Wilcox J’s decision in Claremont Petroleum NL v Cummings (1992) 110 ALR 239 at 259 where his Honour declined to draw any inference on the basis that the former director was no less available to the other party in those proceedings.

Bogasi also submits that because Mr Stell informed Ms Vojvodic that he was “not willing to give an affidavit in the Sundell proceedings”, the Court can draw an inference that he was not prepared to assist any party in the proceedings. Kim’s submission was also suggested to be mere conjecture as to the evidence which Mr Stell might have given. Absent any evidence that Jim did speak to Mr Stell, there was no basis for the Court to draw any inferences about the absence of Mr Stell.

The Court accepts Bogasi’s submissions, in particular that there was no reason to call Mr Stell in the absence of evidence that Jim even had a conversation with him relevant to any issue in the proceedings. I will adopt the approach that found favour with Wilcox J in Claremont (at 259):

Reproducing them here again for convenience, the Declarations were:

It is pursuant to these Declarations that Kim alleges Jim purported to ‘nominate’ Kim as the beneficial owner of the Elmach units. A key issue in dispute in these proceedings was whether, as a matter of construction, Kim could be Jim’s ‘nominee’. According to Bogasi, the two questions raised by this issue were:

Bogasi’s primary submission was that the Declarations were declarations of the terms of an existing trust which only permitted Jim to nominate an entity within the Sundell Group as his nominee.

The starting point for Bogasi’s submissions is that these paragraphs of the Consent Orders were merely declaratory, in the sense that they recognised the pre-existing legal position of how the units were held prior to the Family Court proceedings. As a consequence, Bogasi submits the Declarations merely recognise but do not create the relevant trust (under which Kim was trustee of the Elmach units for Jim and/or his nominee). Therefore, the orders do not identify all of the terms of the trust, and the Family Court did not adjudicate upon any matters relating to the equitable rights otherwise attending the ownership of the Elmach units.

Additionally, because the Consent Orders were recognising the trust, it was contended by Bogasi that the orders had to reflect that either Jim was the nominee or that he had already nominated a nominee. The reference to “Jim and/or his nominee” in the orders should be read down, otherwise it was contended that the trust would be void for uncertainty if it was unclear who was the ultimate beneficiary of the Elmach units.

Bogasi submits that as the Consent Orders only declared the legal status quo prior to the commencement of the Family Court proceedings meant that it is not possible for the Court to construe Jim as having an unfettered power of nomination. His power of nomination was constrained by the terms of the trust.

The fact that the trust was the subject of a declaration was submitted to have the effect that the Consent Orders and the trust could only have operation between the parties to the Family Court proceedings. In support of this proposition, Bogasi relied on the decision of Pembroke J in Akjay v Hickey & Consent Orders Pty Ltd [2011] NSWSC 822 at [9]:

Bogasi submitted that the principles applying to the construction of express inter vivos trusts are the same as those applied to contract: Byrnes v Kendle (2011) 243 CLR 253, [2011] HCA 26 [102] (Heydon and Crennan JJ). Therefore the terms of the trust can be established by oral statements intended by the parties to form terms of the trust. This includes consideration of surrounding circumstances and subsequent conduct which provides evidence of the basis upon which the trust was formed (see Brynes at [110] to [113]). Bogasi submitted that the surrounding circumstances which the Court should take into account were the facts deposed in the affidavits read in the Family Court proceedings.

Bogasi submitted that the Court should find that the state of affairs in relation to the ownership of the Elmach units was:

Due to the issues which the Court was required to consider at the time of the Family Court proceedings, Bogasi submits that the Court never had to concern itself with which entity within the Sundell Group was the beneficial owner of the units. The only issue was whether Kim was the beneficial owner or not. In other words, the Family Court proceedings were conducted on the basis that Kim lacked both an immediate right to the Elmach units and any expectation of receiving them in the future. It was presumed that an entity within the Sundell Group would be the true nominee. It was certainly never advanced in the Family Court proceedings for Kim or any of the other parties opposing Shara’s claim that the Elmach units could become available to Kim as some time in the future.

Bogasi contended that evidence adduced during the Family Court proceedings demonstrated that the Elmach units would be held on trust for an entity within the Sundell Group. For example:

In addition to the affidavits in the Family Court proceedings, the following documentary and circumstantial evidence was contended to support a finding that the nominee was always intended to be a member of the Sundell Group:

In the alternative, Bogasi submitted that:

Bogasi submits this interpretation is consistent with the clear intention of the parties at the time the Elmach units were acquired. The interpretation is also submitted to be sufficiently clear and capable of being given effect because what constituted the “Sundell Group” was submitted to be capable of precise definition (Re Gulbenkian’s Settlement [1970] AC 508, 521). Reference was also made to Fullagar J’s willingness in Tatham v Huxtable (1950) 81 CLR 639 at 650 to construe, by reference to other parts of the will, the expression “beneficiary in the will” as excluding the executor, notwithstanding the fact that the executor was a beneficiary. In my respectful opinion, Fullagar J’s decision is a particularly apt example for the case at bar.

In reply, Kim submitted that Bogasi is a party to the 2019 Second Cross-Claim as a residuary beneficiary of Jim’s estate and as trustee of the Old Jim Trust. It was submitted that it was disingenuous of Bogasi to purport to represent Gunnar’s family in circumstances where Bogasi is no longer the trustee of Gunnar’s trusts. Similarly, it was also submitted that Bogasi’s submissions reflect an attempt also to represent TCI, despite TCI being separately represented in these proceedings. It was also submitted that the Family Court evidence had to be read in the context of the deponents wanting to prove that Kim was not the owner of the Elmach units.

Kim accepts that in ‘general terms’ the business of the Sundell Group was governed in accordance with a ‘common assumption’ as pleaded in [22] of the Further Amended Third Cross-Claim. However, he refutes any contention that the Common Assumption fettered Jim’s ability to deal with the Elmach units. The Common Assumption therefore does not impact the ordinary meaning of the Declarations.

Similarly, on the basis that the terms of the Declarations are clear on their face, Kim contends it is not necessary to have regard (as Bogasi contends) to pre-trust statements to identify the terms of the trust. However, in the event that the Court accepts that it is appropriate to have regard to pre-trust statements, the best evidence of intention is that of Jim. His evidence, outlined in his affidavit sworn on 22 September 2011, is that it was his intention at the time of the transaction:

This statement contains no reference by Jim to Bogasi or TCI. Kim submitted that Jim’s evidence demonstrates that the manner in which the trusts were funded reflected the beneficial ownership (“it was on this basis that I allowed other entities within the Sundell Group to advance funds to allow the transaction to complete”). That was submitted to be consistent with the evidence of later discussions between Gunnar and Jim, and finance extended by Jim’s side of the trusts (and not Gunnar’s) after 2002.

Kim also relies on Jim’s evidence that he (Jim) had a conversation with Kim and Gunnar in which it was agreed that "… that the units issued in his name should have been issued to me or entities under my control” and further that "[w]e agreed that an option agreement would effectively ensure that I had control over those units even if they notionally remained in Kim's name".

It was argued on Kim’s behalf that there is nothing in Jim’s evidence that suggests he felt somehow constrained in how he could deal with the Elmach units. The declaration that the units were held by Kim for “Jim and/or his nominee” simply reflected this unfettered discretion and was submitted to be consistent with the evidence which suggests the Sundell Group was run as an extension of Jim’s persona.

Three reasons were submitted on behalf of Kim as to why a proper construction of the Declarations allows Kim to be the nominee of the units.

First, the Declarations appear to be clear on their face and do not contain any express or implied restriction on Kim being the nominee. They did not identify all of the terms of the trusts, and the Family Court did not adjudicate upon any matters relating to the equitable rights otherwise attending the ownership of the Elmach units.

Kim rejects Bogasi’s submission that the term “nominee” referred to in the Family Court orders can only be a reference to an entity within the Sundell Group of companies or someone else who would hold the benefit of the units in CPT1 and CPT2 on trust for an entity in the Sundell Group and/or members of Jim’s and Gunnar’s families.

It was contended this submission is premised on Bogasi proving the existence of the “common assumption” which Kim says may have been a guiding principle for how business was conducted but was not binding on how Jim and Gunnar could run their businesses. Furthermore, it is also contended that the legal advice from Clayton Utz and Mr Campton ‘suggest unequivocally’ that the units were beneficially owned by Jim and he was not restricted in whom he might nominate as a beneficiary. I interpose that while it was unequivocal as to the first issue, the advice as to the second issue was less clear and, at times, contradictory.

Second, Kim’s ability to be the nominee is said to be supported by the way the orders reflect the evidence of how the units were legally held at the time the Consent Orders were made. In particular, the orders were contended to crystallise in writing the evidence that Kim had provided in his affidavits during the Family Court proceedings that he was simply “warehousing” the units subject to a direction by his father (see, for example [79] above). The Option Agreement was evidence that Kim was already subject to Jim’s direction for how the units were held, which is reflected in the terms of the order. The fact the Option Agreement was between Jim and Kim was also said to be consistent with the affidavit evidence that Gunnar believed issues concerning ownership of the units were for Jim to deal with (see [85] to [86] above). It was also submitted to support the proposition that Jim nominating Kim to be the owner of the Elmach units was not a breach of trust.

The evidence of the conversation that Jim, Gunnar and Kim allegedly had in 2002 (and which the Court does not accept occurred) was outlined in Kim’s affidavit sworn on 23 December 2021 at [25]. According to Kim, words were said to the effect of:

Kim submitted that even though he took steps with Mr Wooldridge to try to find a way to transfer the units without incurring stamp duty, when the issue was raised with Gunnar, he allegedly said “That’s your problem Jim. You sort it out. It’s between you and Kim. It’s got nothing to do with me”. This evidence (which the Court does not accept) was used by Kim throughout his submissions to contend that there was never a “common assumption” for the units to benefit the entire family as Gunnar had effectively conceded his interest in the units to Jim during the 2002 conversation.

Third, that the Declarations permitted Kim to be the nominee was also submitted to be consistent with the evidence that was already before the Family Court. Kim relies on Jim’s affidavit filed in the Family Court proceedings on 22 September 2011 where Jim deposed that he had discussions with Kim and Gunnar and that “[d]uring those discussions, Kim agreed with me that the Elmach units issued in his name should have been issued to me or entities under my control” (see [143] above). It was suggested this showed the Family Court was aware that Gunnar and Jim agreed that arrangements regarding the units were Jim’s responsibility. In light of this evidence and the ownership of the Elmach units being a fact in issue as a result of the orders being sought in the Family Court proceedings, Kim submitted that this is not a case where the Declarations were made without consideration of the underlying facts. It was also submitted that because Bogasi was a party to the proceedings, the Consent Orders preclude it from contending for a construction which is inconsistent with the evidence put before the Family Court.

During closing submissions, Ms Needham SC also submitted on Kim’s behalf that the purpose of the Declarations was not prescriptively to resolve all issues regarding the ownership of the Elmach units. Instead, it was required to address the more limited issue of whether the units at the time of the proceedings were Kim’s or not for the purposes of determining if Shara was able to obtain a property order against the units. Therefore, the Court should simply define the term ‘nominee’ in its ordinary terms.

This interpretation was also submitted to be consistent with the terms of the proposed orders sought by Jim in the Family Court proceedings including “A declaration that the units held by Applicant Husband in CPT1 and CPT2 are held for the benefit of Mr James Sundell, the Third Respondent in these Proceedings, or as he may direct.” The use of the word ‘direct’ was submitted by Ms Needham SC to be significant because it was said to reflect that Jim wanted the Court to provide him with a prospective power to nominate someone rather than for the Court to declare a trust pursuant to a set of pre-existing circumstances.

Ms Needham SC also relied on Jim’s affidavit in the Family Court proceedings sworn on 22 September 2011 where at paragraph [28] he deposed that “it was my intention, at the time of the transaction, that the property assets secured in the Elders deal would be held for the benefit of me or Gunnar or both of us.” Ms Needham SC conceded that does not indicate Jim intended for the Elmach units to be held by a natural person other than Jim and Gunnar, but submitted that needs to be read in the context of the 2002 conversation with Gunnar which effectively provided the scope for Jim to deal with the units as he pleased.

If Kim was found to be the nominee, his submissions record his consent to an order that he make a disclosure to the Queensland Revenue Office (or other appropriate revenue authority) and pay any duty which was subsequently assessed to be due and payable on the Nomination. It was submitted on Kim’s behalf that the Administrator should likewise be subject to such an order in relation to any CGT which may be properly payable on the Nomination.

In reply, Bogasi denies that it is attempting to assert a position inconsistent with the terms of the Declarations. Bogasi relies on Mr Campton’s advice on 7 December 2012 (see [219] above) where he states:

This advice shows that the Consent Orders do not create the terms of the trust but the arrangement as defined by the settlor and trustee which defines the terms of the trust. Therefore, Bogasi is not asserting a position inconsistent with the Consent Orders which provides a power to make a nomination. It is challenging whether a nomination has been made and the terms on which that nomination could be made.

Bogasi also rejects Kim’s contention that [58] of Jim’s Family Court affidavit supports the proposition that Jim had an unfettered right to nominate any person of his choosing. Bogasi argues this evidence is inconsistent with the thrust of the evidence adduced in the Family Court proceedings to the effect that the transaction could not have proceeded without the financial support of Jim and Gunnar through TCI and the strongly expressed intention of Jim and Gunnar that the retained portion of the investment was ultimately for the benefit of the entire Sundell family. It is also inconsistent with an admission made by Mr Wooldridge during cross-examination (see [472(3)] below) that he believed as at the time of the Family Court proceedings, that the units were owned 50/50 by the two sides of the family.

During closing submissions, Ms Needham SC submitted that Mr Wooldridge’s admission that at the time of the Family Court proceedings, he believed the units were held 50/50 needs to be read in the context of him not being aware of the conversation which allegedly occurred between Jim, Kim and Gunnar in 2002.

While accepting that the issue concerning the construction of the Declarations was primarily between Bogasi and Kim, Mr Chesire SC in closing submissions submitted on behalf of the Administrator that they should be construed as permitting Jim to nominate someone to be the owner of the units in the future rather than permitting him to be able to retrospectively nominate someone.

Mr Cheshire SC submitted that if the orders were intended to declare a retrospective nomination then the orders would have specified who the ‘nominee’ was rather than using the word ‘nominee’ at large. He also submitted that the legal advice that Jim received about the nomination, except for the advice from Mr Campton, all suggests that Jim was considering nominating Kim to be the owner of the Elmach units in the future rather than retrospectively. Mr Chesire SC submitted the advice by Mr Campton addressing the retrospective nomination can be explained by the fact that Mr Campton was simply responding to a question he was asked by Mr Wooldridge.

For the following reasons, the Court concludes that on their proper construction, the trust declared by the Declarations does not allow Kim to be the nominee and that the “nominee” means Gunnar or a company within the Sundell Group.

The orders do not create the relevant trusts. They declare in a way binding upon the parties to the Family Court proceedings a pre-existing state of affairs.

It is pellucidly clear from the evidence in the Family Court proceedings which has been set out above that the thrust of Kim’s case (and of those in like interest to him on this point) was to establish that Kim did not have, and never had, anything more than the legal title to the Elmach units and had no expectation of anything more, and that the beneficial owner was Jim. So much is apparent from the declarations sought in the various originating processes, including the declaration sought by Jim in his Amended Response (see [183] above). However, whatever its forensic purpose, the evidence in the Family Court proceedings is not to be read down because of the purpose: it must be accepted, having been relied upon again in these proceedings, in accordance with its terms.

However, it was also at least implicit and, in my view, explicit in Kim’s case that he personally could not in future have anything more than the legal title. So much is apparent from the evidence that he led as to the circumstances in which the trusts were created. That evidence makes it clear that from the time the trusts the subject of the Declarations were created, Kim was not ever intended to be the beneficial owner. There was no suggestion of him ever being the nominee.

This at least implicit basis of the case is also apparent from the fact that Shara agreed to the Consent Orders. It would be remarkable for her to have done so had there been any suggestion that a moment after the orders were made, Jim could vest the beneficial ownership of the Elmach units in Kim.

In my respectful opinion, the matters in the two previous paragraphs are part of the surrounding circumstances which the Court can take into account in construing the Declarations which I set out in what follows.

It is true that the Consent Orders do not identify all of the terms of the trust. However, that again is irrelevant to the task of construing the term that is the subject of the Declarations.

There is an issue, more theoretical than real, as to whether this Court is construing the Declarations as orders of the Family Court or as the terms of a trust. It is more theoretical than real because, as I shall next discuss, whatever the taxonomy, all roads lead to the Court having to consider the evidence given in the Family Court proceedings, in particular as to what was said and done around the time the Elmach units were purchased.

The principles for construing court orders were conveniently summarised by Markovic J in Scott (Trustee), Re (Bankrupt) v Stolyar (No 8) [2025] FCA 20 at [33] –[34]:

To the extent that ambiguity is required, I do not accept Kim’s submission that the Declaration is unambiguous. The fact that advice was sought as to whether Kim could be the nominee demonstrates that the content of the term “nominee” was reasonably open to more than one construction. That is ambiguity.

There is no judgment to be the “primary point of reference” in construing “nominee”. The Consent Orders were made without argument before the Family Court. Had there been any argument, I am confident it would have been recorded in Mr Campton’s reporting letter to Clayton Utz (see [215] above). What would have happened if the Court had required to be taken to evidence to warrant the making of the Declarations by consent, as it at least good practice and, in my respectful view, a requirement in the case of admissions or where there has been no pleading (as was the case here), is impossible to know: see BMI Ltd v Federated Clerks Union of Australia (1983) 51 ALR 401 at per Keely and Beaumont JJ at 412-413; Akjay at [7] to [9]; Bokhari v Bokhari [2014] NSWSC 1474 at [7] per White J (as his Honour then was). It might be that “the bastard conjunction ‘and/or’” (see P Herzfeld and T Prince, Interpretation (3rd ed, 2024, Thomson Reuters) at [5.270]) might have been avoided (although one of the few things not in issue in these proceedings) or some explication of “nominee” been given.

In the absence of a judgment and pleadings, it is the evidence to which the Court must have reference.

The same outcome follows if the declaration is construed as a term of the trust, invoking the principles of interpretation of contracts. The Court may have regard to the surrounding circumstances, whether or not an expression is ambiguous: Cherry v Steele-Park (2017) 96 NSWLR 548; [2017] NSWCA 295. Again, in the present case it is the evidence which provides the surrounding circumstances, being what was known to the settlor (Jim) and the trustee (Kim).

Kim and Jim’s evidence of what occurred at the times of acquisition of the Elmach units (see, for example, at [74], [75], [79], [139] and [143] above) was that the units were to be held for the benefit of the Sundell family, which was by Jim or Gunnar or a company within the Sundell Group. That is because assets held by any of them were generally applied for the benefit of the whole family. That evidence was also explicit that it was not intended that Kim would be the beneficial owner of the Elmach units. Kim was, as Mr Wooldridge told Ms Hawes in 2011 (see [136] above], “fairly new” to the business at the time the units were acquired, and was therefore not someone who obviously fell within the category of persons or entities that would ensure equality of benefit between the two sides of the Sundell family. With the passage of time, it is clear that Jim came to regard Kim as such a person by the time of the Nomination.

This outcome is also informed by another important surrounding circumstance being, as Kim accepts, that “in general terms” the business of the Sundell Group was conducted with the “common assumption” of equality of benefit between Jim and Gunnar’s families. The Court accepts the evidence of Jim and Mr Wooldridge to that effect in the Family Court proceedings in [177] and [178] above. However, it also accepts Mr Wooldridge’s characterisation that “in practice, this may not always occur but it is my [Mr Wooldridge’s] underlying intention that it occur, as far as it is possible to do so”.

The Court finds that the means of that outcome being achieved at the time the Elmach units were acquired was by assets being under the control of Jim, Gunnar or a company in the Sundell Group, where those companies were really an extension of the brothers’ personas. This does not involve a finding that Bogasi’s pleaded Common Assumption existed, but accepts a more general practice that informed how the brothers operated, relevantly at the time of the purchase of the Elmach units.

Kim submits that there is both clear independent and documentary evidence as well as several pieces of direct and circumstantial evidence which support the contention that Jim did nominate Kim to be the beneficial owner of the Elmach units.

The following pieces of evidence were said to corroborate independently and provide documentary proof that Jim did nominate Kim.

First, the alleged nomination is consistent with Jim wanting to ensure that Kim would settle the Family Court proceedings and that he would not incur significant financial hardship as a result of that settlement. Six reasons were advanced in support of this proposition:

Second, Kim submits that the documentary evidence shows that Jim and Mr Wooldridge sought legal advice as to whether Kim could be the nominee in accordance with the Declarations:

Third, Kim submitted that Mr Wooldridge’s evidence during cross-examination was substantially consistent with his affidavit evidence that after receiving the advice from Mr Campton, notwithstanding the concerns expressed by Mr Wooldridge, Jim was satisfied that he could nominate Kim pursuant to the Declarations to be the beneficial owner of the Elmach units. This was contended to corroborate Kim’s evidence that Jim did nominate him to be the holder of the units. When asked to “exhaust his memory” in relation to the conversation he had with Jim (see [229] above), Mr Wooldridge provided the following evidence:

Ms Needham SC submitted that this evidence was substantially consistent with the recollection of the conversation which Mr Wooldridge deposed to in his affidavit evidence.

Finally, there is the evidence from Kim himself that the Nomination occurred after Jim’s discussion with Mr Wooldridge. Kim’s evidence in his affidavit sworn on 17 December 2020 is that Jim said the following words at the time of the Nomination:

Kim further submitted that the following evidence of the conduct of Kim, Jim and Bogasi after April 2013 is consistent with the Nomination having been made.

First, after April 2013, Elmach resolved to make the following distributions from CPT1 and CPT2 to Kim and not to Jim or any other Sundell Group entity. It was contended to be significant that Jim was a director of Elmach until May 2017 which suggests these distributions were made with his approval consistent with his decision to nominate Kim to be the beneficial owner of the units:

Second, Kim subsequently directed that certain distributions that he received from CPT1 and CPT2 be paid to Bogasi and credited to his loan account with the Old Jim Trust. The following distributions were said to reflect this conduct:

Third, it was argued on Kim’s behalf that Bogasi acknowledged Kim’s ownership of the Elmach units by loaning money to Kim to assist him to pay the additional income tax he incurred by reason of the distributions he had obtained from Elmach. This was said to be confirmed by Ms Francis’ affidavit evidence:

The following loans from Bogasi were also said to provide proof of the Nomination because of the distributions Kim received from CPT1 and CPT2 in relation to his tax liabilities. It was submitted to be inconceivable that the directors of Bogasi (including Jim) would not be aware of these transactions:

Fourth, the ATO Private Group Structure Questionnaire which Jim was required to complete in 2015 was submitted to indicate that Jim had no interest in the units in CPT1 and CPT2 (see [247] above). This was suggested to be further documentary proof that Kim was the beneficial owner of the Elmach units.

Fifth, the evidence of Mr Wooldridge’s conversation with Kim in 2015 about the will was also submitted to confirm Kim’s position as the owner of the units. This conversation was contended to be demonstrated by Mr Wooldridge sending a copy of the will to Kim on 6 May 2015 (see [250] above) and Kim’s response on 11 May 2015 (see [252] above) which includes Kim inquiring “does Dean [Stell] need to redraw Dad’s will reflecting his wishes the transfer of share in Elmach to me in the event of his death or we don’t bother as they are already registered in my name.”

It was submitted that although Kim referred in this email to “the Elmach Share” currently in his name, he could only be referring to the units in CPT1 and CPT2 owned by Elmach because, first, at the time, Kim was already the owner of the only share in Elmach, and, second, his use of the plural in the final line would make sense only if he was referring to his units in CPT1 and CPT2 of which Elmach was trustee.

Finally, Kim submitted that the Nomination was corroborated by Anne-Katrine also having knowledge of the Nomination. Anne-Katrine’s knowledge was submitted to be established from two sources.

First, it was submitted that Mr Wooldridge informed Anne-Katrine that Elmach was Kim’s after she apparently asked Mr Wooldridge in 2017 “[w]hat’s going on with Elmach?” In response to Anne-Katrine asking how that happened Mr Wooldridge supposedly suggested “[t]hat’s between Kim and your father” (see [272] above). Kim submitted that a comfortable inference can be drawn from the fact that Anne-Katrine asked what was “going on” with Elmach that she was aware that Kim was the owner of more than one property that had been acquired by Elmach, and was in fact the owner of the whole of the units in CPT1 and CPT2. It was argued she was not questioning the fact of Kim’s ownership but was seeking an explanation from Mr Wooldridge as to how that occurred.

Second, in the probate proceedings, Anne-Katrine swore an affidavit where she noted that Kim told her that he “got the property from the Elders deal” (see [248] above). This evidence was apparently relied on to support a contention that the Bogasi’s shareholding was diversified in the will so that Kim was removed from control of the family trusts. The Court is asked to draw an implication that this evidence was used in the probate proceedings to underline that Kim had been provided for otherwise (“sorted”) by way of the property “from the Elders deal”.

Based on the facts set out above Kim submitted the Court can be comfortably satisfied that Jim did, in fact, exercise his rights under the Declarations to nominate Kim as the beneficial owner of the Elmach units.

In reply, Bogasi denies that Gunnar ever alienated his family’s 50% interest in the Elmach units in a conversation in 2002 (see [85] above). It was submitted that the following evidence shows that the 2002 conversation Kim alleges occurred between Jim, Gunnar and himself never occurred:

Bogasi also denies that the Option Agreement provides any basis for the Court to assume that Gunnar had relinquished any interest in the Elmach units. Kim gave evidence that the genesis of the Option Agreement was advice received from Clayton Utz, who believed that the grant of an option would give security back to the Sundell Group (Tcpt, 23 April 2024, p 605-606). Bogasi also contends that its form is not inconsistent with the general management approach of the Sundell Group which did not place decisive significance on the legal owner of a particular asset (Tcpt, 2 May 2024, p 1099(42)–1100(26)). Bogasi also relies on Mr Wooldridge’s 1 March 2012 affidavit in the Family Law proceedings where he deposed at [17]:

Bogasi also rejects that there is objective evidence capable of establishing that Jim was motivated to compel his son to settle the Family Court proceedings. According to Bogasi, Kim’s submissions do not refute the objective evidence that Shara’s application in the Family Court never asserted any claim directly targeting the Point Clare property, and at worst only sought a distribution from Bogasi pursuant to prayer 34A of her Fourth Amended Response (see [176] above). Bogasi relies on the evidence that Jim at the time did not understand that Bogasi was the owner of the Point Clare property and Kim’s inability to recall any of his then lawyers warning him that the property was at risk.

Additionally, Bogasi denies the characterisation that Kim was reluctant to settle the proceedings. It is submitted that the fact that Kim had made substantial offers to Shara from late March 2012 falsifies two propositions implicit in the agreement Kim now seeks to prove: that he did not want to settle and that settlement only occurred because of an agreement made in November 2012 between Jim and Kim that if Kim settled the proceedings, Jim would nominate him as the owner of the Elmach units

The correspondence in early November 2012 between Kim and Shara’s legal representatives was contended to be only capable of being read as indicating that Kim was prepared to settle without the inducement of the alleged promise. For example, at the mediation on 2 November 2012, he offered to pay $3.5 million subject to Shara paying expenses such as school fees and the children’s medical insurance. On 8 November 2012, he propounded two offers, one being for $3.5 million split over two instalments, with the parties equally bearing the costs of education. That Kim’s solicitors noted in their 23 November 2012 letter that Kim had resiled from the 8 November 2012 offer (see [204] above) was also submitted to be inconsistent with Kim acting on Jim’s insistence to settle the proceedings.

Kim’s affidavits also failed to explain why he made the offers on the terms he did. For example, it was unexplained why Kim’s 28 March 2012 offer involved an increase of $2 million from the offer communicated the day before (see [188] above). Bogasi asks the Court to draw an inference that the offer was precipitated by Kim’s experience of being cross-examined on 27 and 28 March 2012 and his fear that some of his testimony would expose unfavourable facts.

Bogasi disputes Kim’s submission that the evidence of Jim obtaining advice about the Nomination, proves the existence of the Nomination. Bogasi submits that Kim’s submissions leave unaddressed why Jim embarked on a course of action which he had been expressly told would attract CGT. It also submits that all of the advice shows that Jim was aware that lawyers believed the Nomination created risks. Bogasi submits it is unclear why Jim would proceed to ignore such advice.

Jim’s predisposition not willingly to put any family member into financial difficulties was also contended by Bogasi to have no bearing on whether the Nomination was made. It was suggested that Kim’s submissions fail to address that the evidence in the Family Court proceedings demonstrates that the circumstances in which the Elmach units were acquired meant that it was known by Jim, Gunnar and Mr Wooldridge that the units were intended to be for the benefit of the Sundell Group. Jim alleviated Kim’s financial difficulties by causing Bogasi to pay his legal fees which were put on his loan account, and the will on one construction provides for a form of repayment of Kim’s loan account.

Bogasi also refutes that the Nomination not being in writing or recorded was a further manifestation of the informal way in which Jim conducted business. Bogasi relies on the following extract from Mr Wooldridge’s cross-examination as evidence that Jim was generally quite diligent in the way that dealings about the units were recorded (Tcpt, 6 May 2024, p1229(18)):

Bogasi also rejects that the distributions paid to Kim provide any basis for the Court to conclude the Nomination occurred. Bogasi submitted that the underlying reasoning behind the distribution was part of a long-established procedure, divorced from any entitlement on Kim’s part to the beneficial ownership of the Elmach units.

In its submissions in reply, Bogasi outlined all of the distributions which Kim had received from the Elmach units, prior to the alleged nomination:

Bogasi submitted that Kim had adduced no evidence as to why he had received those distributions. In the absence of such evidence, Bogasi contends the Court cannot determine what, if anything, had changed by way of motivation for the distributions.

To the contrary, Bogasi argues these distributions are consistent with the terms of the Master Trust Deed for the units in CPT1 and CPT2. Clause 7.2 provides that no notice of any express or other form of trust will be entered in the register of unit holders and that the registered owner “will be the only person recognised by the Trustee as entitled to the Units registered in that person’s name…”. Clause 10.1 stipulates that a “Trustee will, in each Accounting Period, apply or set aside the whole of the Net Income to or for the benefit of the Unitholders in proportion to the number of Units registered in their name”.

Bogasi submits that these clauses demonstrate the distributions are not the product of a discretionary exercise on the part of Elmach’s directors, but occur simply by reference to the number of units registered in the name of the unitholder. Bogasi argued that it is for Kim to establish that Elmach recognised a different state of affairs after 2013. The distributions are no more than an acknowledgment of the state of the register that was unchanged after April 2013.

Relatedly, Bogasi submits that Kim cannot ask the Court to draw an inference about Jim’s state of knowledge of the distributions in the absence of any direct evidence on this topic such as resolutions of Elmach’s directors. Kim has failed to demonstrate that any knowledge Jim had of the distribution was an exercise of Jim’s discretion as a director of Elmach rather than a distribution referable to cl 10.1 of the Master Trust Deed.

Bogasi also denied that the email Kim sent to Mr Wooldridge in 2015 about his father’s will provides evidence that the Nomination occurred (see [252] above). It is argued that the email would have referred to the Nomination had it in fact occurred rather than referring to a “wish”. Kim’s request for the transaction to be documented was also said to be inconsistent with the advice relied on that the Nomination did not need to be in writing and the apparent inclination of Jim to accept such advice.

In reply, Bogasi also denied that Anne-Katrine can be taken as having knowledge of the Nomination. The affidavit Anne-Katrine swore in the probate proceedings, which Kim now relies on to establish her knowledge, is submitted to not identify which “property” Kim apparently received in the Elders deal. This imprecision was submitted to show that the evidence cannot establish Anne-Katrine’s knowledge of the Nomination.

Finally, Bogasi denied that the ATO questionnaire supports Kim’s claim to the Elmach units because the evidence suggests no one turned their minds to the status of the units having regard to the Consent Orders. Bogasi submitted that the evidence did no more than demonstrate Mr Wooldridge was “sloppy” in settling the document.

During closing oral submissions, Mr Condon SC submitted that Gunnar’s diary notes in 2004 and 2005 where he was considering the ownership structure of the units (see [89] and [92] above) were inconsistent with Ms Needham SC’s submission that Gunnar relinquished his interest in the units in 2002. Mr Condon SC also refuted that the large difference in Kim’s settlement offers to Shara was explained by Jim pressuring Kim to settle. Instead, the difference was submitted to be explained by Kim having been cross-examined in the witness box in the days before the final settlement. Kim’s experience in the witness box was contended to be the more likely reason for the settlement rather than pressure from Jim to settle the proceedings.

As I have already recorded, Bogasi’s primary case is that the conversations asserted by Kim never occurred. As the alleged nomination will derogate from the assets the estate, Bogasi submitted (and the Court accepts) that the Court will need to scrutinise the evidence very carefully to see whether it is true or untrue (see GLJ v Trustees [61]). It was also correctly submitted that Kim bears the onus of demonstrating that there was a Nomination.

Bogasi contends that the matters identified in Watson v Foxman (1995) 49 NSWLR 315 at 318-9 have only limited relevance where Bogasi contends that Kim and Mr Wooldridge have given knowingly false evidence. However, they otherwise have relevance. For example, even if Jim did discuss the alleged nomination with Mr Wooldridge, the Court would need to be satisfied that the words uttered constituted an immediate and unqualified assignment of the equitable interest in the Elmach units.

It was submitted on behalf of Bogasi that the Court would be cautious with the evidence provided by Kim and Mr Wooldridge because:

Given that the conversations are uncorroborated, particular significance attaches to the likelihood, or otherwise, that Jim made the Nomination. Three reasons were put forward as to why the Nomination is inherently unlikely:

Bogasi also rejects Kim’s claim at [19] of the 2019 Second Cross-Claim that he was promised the Elmach units after he had suffered significant detriment. Three submissions were made in response to this proposition:

Bogasi also challenges Mr Wooldridge’s evidence as a “reconstruction” that the legal advice Jim received in relation to the Consent Orders empowered Jim to nominate Kim. To the contrary, that evidence was submitted to demonstrate objectively that Jim had received advice that any such nomination was fraught with legal risk. For example, Bogasi relied on Mr Blaikie’s communication of 28 November 2012 (see [213] above) which warned strongly against a nomination as being a fraud on the Family Court and stated that “it is best not to follow this course of conduct without specific favourable advice from [Kim’s] family lawyer.” Further, Mr Campton’s communication of 10 April 2013 (see [227] above) specifically warned that differing issues attached to the date, form and terms of the nomination, especially as to how it was recorded and any limitations or restrictions. The implications of those words are considered below.

Bogasi also rejects that there is any evidence corroborating Kim’s contention that the Nomination was made orally on two occasions. The first conversation was one alleged to have occurred between Jim and Mr Wooldridge in April 2013 where Jim purportedly exercised his right of nomination pursuant to the Declarations. The second conversation was also said to have occurred between Jim and Kim in April 2013 in which Jim informed Kim of the nomination.

For the following seven reasons, Bogasi submitted that these conversations never occurred. First, in cross-examination, Kim gave evidence that he had three conversations about the nomination in April 2013. Kim gave evidence that he had two conversations in April: the first April 2013 conversation at the North Sydney office for the Sundell Group (Tcpt, 23 April 2024, p 635(32)), and the second at lunch on Blues Point Road (Tcpt, 23 April 2024, p 646(13)). They were separated by a couple of weeks. The third conversation occurred earlier in March 2013 (Tcpt, 23 April 2024, p 644(36)). This further conversation was not referred to in Kim’s 17 December 2022 affidavit. The inconsistency between Kim’s affidavit evidence and oral evidence on such a critical issue as to when the Nomination occurred would lead the Court to conclude that no nomination happened.

Second, there is no written evidence corroborating the alleged nomination. No written file note or diary note was recorded by Kim, Mr Wooldridge or Jim (Tcpt, 23 April 2024, p 636(11)). Kim also agreed he never told Mr Walker about these conversations in April 2013, or Brett or Anne-Katrine (Tcpt, 23 April 2024, p 636(38)). It was submitted to be remarkable that no contemporaneous note was prepared recording the Nomination given the value of the Elmach units and the significance of the transaction to the Sundell Group’s businesses.

Third, Bogasi submitted that doubt must attend whether these meetings ever actually occurred. The evidence adduced during cross-examination was that by 2013, Jim was attending the office once every three or four weeks. Kim was attending only one or two days a week.

Fourth, the contemporaneous written communications indicate that there was no nomination. First, Kim’s email dated 11 May 2015 to Mr Wooldridge inquiring whether the will needed to be updated never mentioned the Nomination. The reference to “wishes the transfer of share in Elmach to me in the event of his death…” was also said to be instructive. It postulates a transfer upon Jim’s death and not one that had already occurred. Second, the responses submitted to the ATO’s questionnaire in 2015 are also inconsistent with the exercise of any right of nomination on the basis that Jim did not disclose any liability for CGT.

Fifth, the fact of the Nomination was never communicated to anyone else. Kim’s evidence during cross-examination was that he told neither Mr Walker nor Mr Stell (a solicitor) about the alleged nomination (Tcpt, 23 April 2024 p 636(38)); and he could not recall whether he had told Anne-Katrine by 2015 (Tcpt, 23 April 2024 p 637(22)).

Sixth, for the reasons submitted at [361] above, Mr Wooldridge is submitted to not be a witness of credit. The high point of Mr Wooldridge’s evidence was that he was not at liberty to tell anyone else about the Nomination. Six reasons were advanced to refute this proposition:

Seventh, Bogasi also contends that Kim’s request to his solicitors on 14 August 2013 to file an application pursuant to s 79A of the Family Law Act 1975 (Cth) is inconsistent with the alleged nomination. It was submitted to be inconceivable that Kim would seek to revoke the orders pursuant to which the alleged nomination had been made.

Bogasi further contended that Kim’s case required him to persuade the Court that Jim acted in defiance of repeated advice that the Nomination could not and should not be retrospective and that he did so with the intent of evading CGT or otherwise acted recklessly with his obligations as a taxpayer. Bogasi put forward four reasons why the Court should not accept these premises:

Kim’s evidence during cross-examination was also submitted to reflect that he was incurious about recording the alleged nomination. He accepted in cross-examination that, as at 2015 when he sent the email to Mr Wooldridge about the will, he expected the Nomination to have been documented (Tcpt, 29 April 2024, p 823(38) and 824(39)).

The informal and oral nature with which the Nomination was made was also submitted to be inconsistent with the potential CGT consequences of the Nomination. For example, the 30 August 2011 letter from Watts McCray to Shara’s solicitors attaching a document prepared by Mr Wooldridge estimated that approximately $5.5 million in CGT would be payable if the option in the Option Agreement was exercised.

There is no evidence of anyone making any enquiries of Jim about who should bear the CGT tax liability. Kim also never asked his accountants to consider the CGT tax consequences and was submitted to have falsely asserted that Clayton Utz might have done so (Tcpt, 29 April 2024, p 824(44), 825(38) and 826(15)). This assertion was said be unsustainable in circumstances where Kim accepted that he did not know of any conversation that Jim or Mr Wooldridge had with those lawyers (Tcpt, 29 April 2024, p 826(20-38)).

Bogasi also submitted that the following explanation Kim provided as to why he did not ask for the Nomination to be recorded was ‘facile’ (Tcpt, 29 April 2024, p 827):

Recording the Nomination was submitted to be an inexpensive exercise. That evidence was also submitted to be inconsistent with Kim’s evidence that he expected the Nomination to be recorded.

It was submitted to be telling against an act of nomination that no one saw fit to tell Anne-Katrine about the alleged nomination even though she was an alternate director of Elmach at the time of the Nomination. Anne-Katrine was an alternate director from 28 February 2013 until her father’s death on 23 May 2017.

Bogasi further submits that it was unlikely that Jim would have nominated Kim in light of the evidence which records that there was significant tension between Jim and Kim at the time of the Nomination. The evidence of this tension was submitted to be reflected in the following paragraphs of the judgment in the probate proceedings:

In summary, these paragraphs were said to record that around the time of the Family Court proceedings, Jim was takings steps to diversify the control of Bogasi away from Kim. These paragraphs were also submitted to indicate that Jim was well-used to documenting legal matters. This was inconsistent with the informal way the Nomination occurred despite it being a multi-million dollar transaction.

Bogasi rejects Kim’s contention that the catalyst for the Nomination was an agreement between Kim and his father to the effect that Jim would look after Kim in return for Kim settling the Family Court proceedings. Bogasi contends that the Court cannot find the conversation took place in the terms alleged in the absence of any evidence corroborating the conversation.

Bogasi submitted it was significant that no legal representative has been called to give evidence to the effect that the pressure for the settlement came from Jim. Elmach’s solicitor, Mr Bloemendal, acted for Kim and the Sundell Group companies including Bogasi in the Family Court proceedings. He was not called to give evidence. Therefore, Bogasi asks the Court to draw a Jones v Dunkel inference that Mr Bloemendal’s evidence would not have assisted Kim.

Bogasi submits that the real motivation behind Kim settling the Family Court proceedings was the effect of Kim’s cross-examination from Shara’s counsel which was submitted to expose Kim’s evidence as being false in material respects and in part motivated to mislead his wife and the Court.

Bogasi further submitted that the legal advice Mr Wooldridge and Jim received makes it inherently improbable that any nomination occurred. Mr Blaikie’s 28 November 2012 advice (see [213] above) was said to indicate that Jim would be the beneficial owner of the relevant units and if the units needed at some point to be vested in someone other than Jim there would be a need to use the nomination power. Furthermore, there would be a potential CGT event arising when Jim disposed of the units unless it was as a result of his death and the disposition of the units in his will to some other member of the family. Bogasi submitted it was inconceivable that Mr Wooldridge and Jim did not discuss the significant tax consequences of the Nomination, yet no mention of any such discussions was to be found in the evidence.

Bogasi also refutes Kim’s contention in cross-examination (Tcpt, 2 May 2024, p 1109(46)) that he had never seen Mr Campton’s advice dated 10 April 2013 (see [227] above). This was said to be unlikely given his evidence that in his conversation with Jim in April 2013 he had been told there was “no impediment” to making the Nomination. The use of the word “impediment”, being a word used in Mr Campton’s advice, was submitted to indicate that term had been taken from Mr Campton’s advice and used in his affidavit evidence.

Mr Campton’s advice was also submitted to be incapable of being read as saying that the Nomination could be made. To the contrary, it was submitted a reasonable reader of the advice would have understood that Mr Campton was concerned about the date any nomination should take effect from, how it was to be expressed and whether the nomination should be qualified, by reference to the prior dealings between Jim and Gunnar.

It was submitted to be inherently unlikely that the Nomination was made in the face of the appropriately cautious legal advice referred to above. As well, it is inherently unlikely it occurred because the same tax issues (CGT and stamp duty) that bedevilled discussions about transferring the Elmach units over the years since 1999 still persisted in April 2013 (as was made clear by Mr Blaikie and Mr Campton).

In reply, Kim submitted that the email correspondence between Kim and Mr Wooldridge in 2015 does not suggest that the Nomination never occurred. The absence of a reference to the Nomination in that email was submitted to be unsurprising given the email was between two persons who knew about the Nomination and refers to, but does not summarise, a conversation they just had which was allegedly about that very topic.

Kim also refutes Bogasi’s contention that it was unlikely the Nomination would have occurred because Jim was “disappointed with Kim for dragging Bogasi into the Family Court proceedings.” Kim relies on Jim’s Family Court affidavit sworn on 23 September 2011 where he made references to “trusting Kim’s ability and skill” (at [18]) and at [33] “I am proud that Kim was able to demonstrate such business acumen…” These statements are said to be inconsistent with Bogasi’s characterisation of their relationship.

Kim also rejects that the Court should find the Nomination did not occur because it is unlikely that Jim would have ignored legal advice concerning the potential tax risks associated with the Nomination. Kim submitted that Bogasi’s argument is premised on an assumption that Jim slavishly and unwaveringly followed the tax advice he received. It was suggested this ignored that Jim was the subject of an investigation in 2010 in the context of the Project Wickenby task force. Moreover, it was contended that Bogasi’s case relies on Jim accepting and acting upon the advice of Mr Blaikie. However, on any analysis, Jim did not do so. Even on Bogasi’s case, assuming that Jim continued to be the owner of the Elmach units, he failed to disclose the income received on his tax return, an act which was in itself contrary to Mr Blaikie’s tax advice.

Kim also rejects Bogasi’s contention that it was ‘remarkable’ that Mr Wooldridge did not discuss with Kim his potential liability for stamp duty if the nomination was to be made. This submission was contended to assume wrongly that Mr Wooldridge had a positive obligation to discuss Kim’s personal tax affairs with him, in circumstances where Kim was privy to the same advice about stamp duty. That Mr Wooldridge did not interfere in Kim’s tax affairs in circumstances where Kim was a sophisticated man of business was submitted to be entirely plausible.

Kim also asked the Court not to accept Bogasi’s assertion that the failure by Mr Wooldridge to obtain a record of the Nomination in writing speaks to the falsity of his evidence as to the Nomination having occurred for three reasons:

Kim also refutes Bogasi’s submission that Mr Wooldridge’s evidence in the probate proceedings supports a conclusion that Jim made no nomination. It will be recalled that Mr Wooldridge was referred to his affidavit where he observed that, aside from the issue of the majority of units in CPT1 and CPT2 to Kim, "[a]t no other time during my engagement or involvement with the Sundell family have significant commercial or business assets been placed solely whether legally or beneficially under the control of any single member of the Sundell family" and that position held true until Jim's death.

Kim rejects that this evidence suggests the Nomination never occurred. It was submitted that the answer needs to be read in the context of Senior Counsel prefacing the question with “aside from the issue of the majority of units in CPT1 and CPT2” and that Mr Wooldridge himself says he did not believe that he was being asked to consider the legal or beneficial ownership of CPT1 or CPT2. The explanation was submitted to be entirely plausible having regard to the opening words of Senior Counsel’s question, and the subject matter of the probate proceedings (which was concerned with the shareholding in Bogasi and the effect of Jim’s amendments to his will, and not with the ownership of CPT1 and CPT2).

Kim also contends that Bogasi’s argument that the 2015 ATO questionnaire is not consistent with Kim being the nominee is circular because the questionnaire also clearly records Kim as the legal and beneficial owner of the units in CPT1 and CPT2. Kim suggests that for Bogasi’s argument to be correct (that because Jim had received tax advice three years earlier that a disposition of those units would likely result in a CGT liability the fact that no CGT liability was recorded in the ATO questionnaire means that the Nomination did not occur), the ATO questionnaire would have to have recorded Jim as the legal and beneficial owner of the units in CPT1 and CPT2 (because, on Bogasi’s case, that is the only basis upon which no CGT would be payable).

In closing submissions, Ms Needham SC noted that Mr Blaikie on 27 November 2012 informed Mr Wooldridge that if Jim was to be the beneficial owner of the Elmach units that he would have to declare future tax returns to reflect this position. The absence of any future returns by Jim declaring an interest in the units, and the responses provided to the 2015 ATO questionnaire, were submitted to be further evidence that the Nomination occurred.

Kim argues that the underlying problem with Bogasi’s submissions concerning the ATO questionnaire is that they ignore that Kim is recorded as the owner of CPT1 and CPT2, when this was the subject of careful review. Implicit in Bogasi's submission is that this must have been an error. The basis for this conclusion is that CGT would undoubtedly have been recorded. However, Kim submits there are alternative explanations:

Kim also refutes Bogasi’s submission that it was unlikely that the Nomination occurred because it would have exposed Jim to a likely CGT liability and Kim a possible liability for stamp duty. Kim submitted that the risk of him having to pay stamp duty is not a proper basis for the Court to draw an inference that the Nomination had not occurred because the benefit Kim would receive from obtaining the Elmach units would outweigh any possible stamp duty.

Kim submits the Court should accept Mr Wooldridge’s evidence that Jim believed the units were Kim’s and that because the units were already registered in his name nothing needed to be changed in order to give effect to the nomination. This rationale was also submitted to explain Jims’s position that no CGT needed to be paid (and whether or not it was correct as a matter of law should not influence findings as to Jim’s underlying intention).

Bogasi’s submission that the Court should not lightly infer that the Nomination occurred because the Nomination conferred a substantial benefit on Kim was submitted to be lacking context. In reply, Kim reiterated that the substantial benefit arose in the context of Kim suffering significant detriment including:

Kim further refutes that Jim had no intention of nominating Kim to be the owner of the Elmach units due to the allegedly fractious state of their relationship at the time of the alleged nomination. Kim submitted that any attempt by Bogasi to rely on findings of Sackar J from the probate proceedings, including as to the nature of Jim’s relationship with Kim, would be impermissible pursuant to s 91 of the Evidence Act 1995 (NSW). To the contrary, Kim reiterated that the evidence demonstrates their relationship was positive. For example:

Although it was accepted Jim amended his will to diversify the shareholding in Bogasi, Kim highlighted that Jim made no changes to his executors, reinforcing the continued level of trust that he had in Kim.

Kim also refutes Bogasi’s contention that it was unlikely that Jim would have acted in contravention of the “appropriately cautious” legal advice that he received. It was submitted that the evidence instead revealed that Jim was determined to obtain advice about the nomination of Kim in the face of what Jim believed was obfuscation by his lawyers. That conclusion is supported by the following:

Contrary to Bogasi’s submission that Mr Campton’s advice was “cautious”, it was submitted by Kim that this advice in fact supported Jim’s ability to nominate Kim. Jim’s persistence in obtaining the advice from Mr Campton despite his (Mr Campton’s) delayed response was submitted to reflect a determination on the part of Jim to nominate Kim as the beneficial owner and sits comfortably with the conversation that Mr Wooldridge had with Jim in April 2013. Ms Needham SC argued that the persistence of Jim demonstrated by his frustration towards the advice he was receiving from his lawyers, and his cavalier attitude towards the potential tax implications are a complete answer to Bogasi’s contention that the advice received and that the tax risks make it improbable that Jim did nominate Kim.

Ms Needham SC also argued that it is incorrect for Bogasi to assert that the Court would find it improbable the Nomination occurred on the basis that Jim would want to ensure that he was fulfilling all of his tax obligations. This was submitted to be a misplaced assumption on the basis that he was the subject of the Project Wickenby tax investigation and had to pay penalties associated with having offshore tax accounts.

During closing submissions, Ms Needham SC also submitted that no adverse inference could be drawn by the Court on the basis that no member of Gunnar’s family, or Anne-Katrine or Brett was informed about the Nomination. This non-disclosure was submitted to be consistent with the way that Jim ran the Sundell Group. For example, he directed that only Kim and David could see his will and Anne-Katrine and Brett both gave evidence that they were unsure where their personal funding from the Sundell Group came from.

For the reasons set out below, the Court finds that in April 2013 Jim and Kim had a conversation in words to the following effect:

The Court also finds that this is the nomination for the purposes of the Declarations, informing Kim as trustee that he now held the Elmach units beneficially. That, on its proper construction, the Declaration did not permit Kim to be the “nominee” is a different issue.

I have made this finding conscious of the degree of scrutiny that a claim of this kind requires where the other interlocutor is deceased. Had the only evidence of this conversation been Kim’s, then the Court would not have been satisfied to the requisite degree, both because of the scrutiny required and the view which I have taken about Kim’s credit.

The finding is made because Kim’s account is corroborated by these matters:

In reaching this conclusion I have kept in mind the following matters in particular, which I consider to be what weigh most heavily against the conclusion I have reached:

Finally, it is necessary to consider the matters raised by Bogasi in [494(1) and (3)] above – the “betrayal” of Gunnar’s family and allegedly unwarranted benefit conferred on Kim. These matters are, in my respectful view, related for reasons which I will next explain, arising from the fact that it is clear from the evidence of Jim, Kim and Mr Wooldridge that the Sundell Group operated on the basis that assets, whether held by Jim, Gunnar or a Group company were there to be deployed for the benefit of both sides of the family where possible.

Assuming, contrary to the view I have expressed, that the 2002 conversation (see [85] above) took place, two things can be said. First, Gunnar’s statement is premised on his apparent belief that the units were not “worth anything”. Second, he was not completely abandoning his interest in them given that he said, “if we can transfer them down the track, we can look at it again”. It appears he was leaving the “problem” of the transfer to Jim and Kim. However, I do not accept that by those conversations Gunnar was abandoning the benefit that his side of the family might get from the Elmach assets as part of how the Sundell Group operated.

So understood, neither Gunnar’s September 2004 (see [89] above) nor April 2005 file note (see [92] above) is inconsistent with the 2002 conversation. Nor is Jim’s evidence in the Family Law proceedings that he had conversations with Kim and Gunnar where it was agreed that the Elmach units should have been issued to Jim or entities under his control. That statement does not mean that the Elmach units would then be solely for the benefit of Jim’s side of the family.

The same point can be made about Bogasi’s argument that the Nomination is unlikely to have been made because it would have been an “unwarranted benefit” to Kim. That submission assumes that Jim subjectively intended to give Kim the Elmach units free of at least the moral obligation to support both sides of the Sundell family. That Jim did not have that intention is apparent from Jim’s statement to Mr Wooldridge, which the Court accepts was said, that “I am comfortable with it because I trust Kim and feel that if and when any funds or support is required from Kim to support the family he will do the right thing”. Having listened to the protagonists over many days, I have no doubt that at the heart of this litigation is the fact that other family members do not consider Kim has done “the right thing”. In Anne-Katrine’s case, for example, Kim should have ensured she has the benefit of the full value of the Beecroft property free of any claim by Elmach without actual cost to her. The assertion of the Common Assumption is the means by which Jim’s expectation, which the Court accepts Jim had of Kim, is sought to be given legal effect.

It is Bogasi’s contention that any purported oral nomination of the units by Jim to Kim must fail because it was not made in writing consistent with s 23C(1)(c) of the CA. That section provides:

Bogasi observes that Kim’s case does not identify the legal mechanism through which the Nomination occurred (for example, by way of assignment or a direction to the trustee to transfer the property pursuant to a revocable mandate). Notwithstanding this, Bogasi submits that irrespective of how the transfer needed to be effected, it would still constitute a ‘disposition’ which was required to be in writing for the purposes of the CA. As authority for this proposition, Bogasi referred to Arambasic v Veza (No 4) [2014] NSWSC 1109 at [143] where Sackville AJA held:

Bogasi rejects that Kim can claim that the Nomination did not need to be in writing as he was both the legal and beneficial owner of the Elmach units until some other disposition occurred for three reasons.

First, even if this was true, Bogasi submits it is now an abuse of process for Kim to assert a state of affairs which would be inconsistent with how the Family Court proceedings were run (i.e that Kim was only the legal owner of the Elmach units) (see Rinehart v Rinehart [2020] NSWSC 68, [603]).

Second, it was also submitted to be inconsistent with paragraphs [73] and [74] of his defence to the 2019 Third Cross-Claim where he expressly asserts that Jim was the beneficial owner of the Elmach units prior to the alleged nomination:

Third, the contention that the Nomination did not need to be in writing because he is both the legal and beneficial owner of the units was submitted to be inconsistent with the fundamental rule that a legal owner of assets does not hold a separate legal and beneficial interest. In DKLR Holding Co (No 2) Pty Ltd v Commissioner of Stamp Duties (NSW) (1982) 149 CLR 431 Aickin J said at 463:

It was also submitted that Kim had failed to identify the mechanism of the alleged transfer of title because he does not identify the terms of the transfer. Mr Wooldridge’s evidence during cross-examination was that the Nomination had retrospective effect. However, this was said to be inconsistent with Kim’s claim that the Nomination took effect from April 2013 and that retrospective assignments are not possible at law.

Kim rejects Bogasi’s submission that any nomination by Jim was a “disposition” of equitable title in the Elmach units and was therefore required to be in writing. Kim argues this submission assumes that that any nomination by Jim was a “disposition” of equitable title in the Elmach units for the purpose of s 23C(1)(c).

However, Kim submits the Nomination was a disclaimer of Jim’s interest in the units. A disclaimer of a present entitlement operates by way of avoidance, rather than by way of disposition: Re Paradise Motor Co Ltd [1968] 2 All ER 625; Carter v Federal Commissioner of Taxation (2020) 279 FCR 83; [2020] FCAFC 150 at [109] (this principle unaffected by the reversal of Carter in the High Court: (2022) 274 CLR 304; [2022] HCA 10). In this case, the effect of the disclaimer would be to unite the legal and beneficial interest in Kim. Therefore, there would be no need for writing under s 23C(1)(c) because there was no disposition of Jim’s interest.

It is submitted to be no answer that Jim had already accepted the beneficial interest and could not subsequently disclaim it. That is because a right of nomination must recognise the fact that Jim had not yet accepted the beneficial interest in the units. It was argued that to construe the Declarations otherwise would result in the word “nominee” (a deliberate choice) being construed as a synonym of “assignee”. That would render the words “and/or his nominee” otiose.

In the alternative, if s 23(1)(c) were to apply, Kim contends that s 23E(d) would apply. This provides that nothing in s 23C of the CA affects the operation of the law relating to part performance. The effect of s 23E(d) is that if a party alleging an oral disposition of an equitable interest that is required to be in writing by reason of s 23C(1)(c) can show that it performed acts which are “unequivocally, and in their own nature, referable to some such agreement as that alleged” then a court of equity will recognise the interest: Maddison v Alderson (1883) 8 App Cas 467 at 479; Pipikos v Trayans (2018) 265 CLR 522; [2018] HCA 39; Li v Tao [2023] NSWCA 310 at [55].

It is submitted that the conduct of both Kim, Jim and Bogasi is referrable to the Nomination, meaning no evidence of the Nomination in writing was necessary. The following evidence was contended to establish this proposition:

In the alternative, even if the Nomination was required to be in writing, Kim submits the conduct of Jim, Kim, Elmach and Bogasi is unequivocal in the way in which it reflects Kim’s legal and beneficial ownership of the units.

In reply Bogasi submits that Kim’s contention that the Nomination was a disclaimer assumes two things: first, that Jim was the beneficial owner of the units and, second, that he was free to dispose of the units as he saw fit. Bogasi denies that Jim was free to dispose of the units as he saw fit because the units were for the benefit of the Sundell Family.

Five further reasons were submitted in reply as to why there could be no disclaimer and any nomination had to be in writing:

In support of proposition (5), Bogasi relied on Carter, where the Full Court held at [109]:

Carter makes clear that a disclaimer has effect if the interest is rejected. Therefore, Bogasi submits that Jim’s affidavits claiming he has the beneficial interest in the units would be inconsistent with a disclaimer.

Further, Mr Condon SC submitted both in closing written submissions and in reply that the making of a nomination of itself does not necessarily dispose of any equitable interest (see Nguyen v Taylor (1992) 27 NSWLR 48, 59-60 (Meagher JA)). A nomination may be subject to terms. This was submitted to underscore the purpose of s 23C of the CA and the importance of dispositions (as defined in s 7) to be in writing.

Bogasi also rejects any contention by Kim that the doctrine of part performance has any application in this case for two reasons.

First, it submits that in Pipikos Kiefel CJ, Bell, Gageler (as his Honour then was) and Keane JJ stated at [50] that “part performance is relevant only in relation to contracts for the sale or other disposition of land”.

Second, it submits that it cannot be said that Kim part-performed anything in this case. There was either a nomination or there was not. Absent a nomination, Kim can point to no form of substitute performance or act which fulfils the condition precedent for the transfer of equitable title. In any event, Kim cannot demonstrate that he performed acts which are unequivocally, and in their own nature, referable to the alleged nomination.

Finally, during closing submissions Mr Condon SC also referred the Court to several authorities which stood for the proposition that a party cannot rely on the doctrine of part performance to overcome the writing requirements in s 23C of the CA. For example, Parker J in Elmzamtar v Bangladesh Islamic Centre of NSW Inc [2020] NSWSC 1161 reviewed several authorities which had considered this question, including the decision of the Court of Appeal in Powercell Pty Ltd v Cuzeno Pty Ltd [2004] NSWCA 51:

During closing submissions, Ms Needham SC submitted that Bogasi’s reliance on Pipikos was misplaced on the basis that case concerned s 26 of the Law of Property Act 1936 (SA) which is the South Australian equivalent to s 54A of the CA. That section does not include any reference to ‘dispositions’ in the sense used in s 23C of the CA. Ms Needham SC argued that the majority’s reference at [50] to “Given that part performance is relevant only in relation to contracts for the sale or other dispositions of land’’ was limited to the application of the South Australian context. Ms Needham SC submitted that the doctrine of part performance applies to equitable dispositions in NSW.

During oral submissions in reply, Mr Condon SC submitted that the Court would need to be satisfied on some principled basis that the obiter dicta of the majority of the High Court should not be followed. Mr Condon SC also submitted that the High Court’s statement as to the limits of part performance was not couched in terms which suggested the limitation only applied to the law of South Australia.

Mr Condon SC submitted that this Court was bound to accept the High Court’s dicta in Pipikos that the doctrine of part performance only applies in relation to contracts for the sale of land. He relied on the New South Wales Court of Criminal Appeal’s consideration of Ying v Song [2009] NSWSC 1344 (a decision of Justice Ward as the President then was) in Aerotropolis Pty Ltd v Secretary, Department of Planning and Environment [2023] NSWCCA 195 at [60]:

Mr Condon SC tendered the transcript from Pipikos which demonstrated that Nettle J had put to counsel whether the doctrine was only limited to a contract for the sale of land and counsel agreed to that proposition. This was submitted to be enough for the statement in Pipikos to become ‘seriously considered dicta’ and therefore binding on this Court. In the alternative, Mr Condon SC relied on the analysis in Meagher, Gummow and Lehane’s Equity Doctrines and Remedies (5th ed, 2014, Lexis Nexis Butterworths) at 12.100 and following for the proposition that the doctrine was limited to contracts for the sale of land.

For the reasons which follow, the Court determines that s 23C of the CA did not require the Nomination to be in writing. It is therefore unnecessary to consider the arguments raised concerning part performance.

Each of the protagonists made some reference to the construction of the Consent Orders, but in my respectful opinion without giving that issue the prominence it requires. Before turning to the CA, it is necessary is to construe the Declarations, being that the relevant Elmach units “are held by [Kim] on trust for [Jim] and/or his nominee”. To speak of a “nominee” necessarily requires a nomination, something which itself requires consideration.

In Lord v Trippe (1977) 51 ALJR 574 at 580-581, Mason J (as his Honour then was) said:

As part of identifying the content of a nomination, an important element is that it must be a nomination (from the Latin verb "nominare", meaning "to name" or "to call by name") to someone. In this case it must be a nomination to the trustee, because it is axiomatic that the trustee must know to whom the trustee owes their duties as such. For this reason, in my respectful view, “his nominee” in the Declarations (or as a term of the trust) has its ordinary meaning of a person identified by Jim to the trustee for the purpose of informing the trustee to whom the trustee owed their duties as such. This is no different to the conveyancing context where the purchaser informs the vendor of the purchaser’s nominee so the purchaser knows to whom title should be transferred. An uncommunicated nomination, or one made to someone other than the trustee, would not, on this analysis, confer on someone the status of the “nominee” for the purposes of the trust as declared.

In addition to the fact that the words used are “his nominee”, there are two other textual reasons why I have reached this conclusion.

First, the expression “and/or” in this context means to be held on trust for Jim and his nominee, or to be held on trust for Jim’s nominee alone. The fact that Jim could nominate that the Elmach units were being held for him and another person does not bespeak a nomination as effecting the transfer of any kind of interest. That possibility accords much better with the analysis that the purpose of the nomination was to inform the trustee of the identity of the beneficiary or beneficiaries.

Second, “nominee” and “assignee” are not naturally synonymous. While I accept there may be contexts in which “nominee” might be construed as including an “assignee”, this is not one of them. The fact that the declaration was framed by lawyers who would undoubtedly have been aware of the difference supports the conclusion that a distinction was intended.

Turning to the CA, s 23C provides:

Section 7 of the CA includes:

The question becomes whether a nomination which has the effect I have identified in the preceding paragraphs is a “disposition” of anything for the purposes of s 23C(1)(c) of the CA. In answering this question I respectfully adopt and apply Sackville AJA’s observation in Arambasic relied on by Bogasi (see [550] above) that:

The ordinary meaning of “disposition” in this context is “bestowal, as by gift or sale” (Macquarie Dictionary 4th ed (2006)). Given the construction which the Court prefers, a nominee, by reason of the nomination, does not have anything bestowed upon them by the nomination. The intention of the parties which the Court has identified in construing the Declaration is not that the Nomination was intended to convey or bestow any type of property right from the nominator to the nominee, but to inform the trustee.

Against the possibility that the Court’s conclusion that Kim could not be the object of a valid nomination is wrong, I will next deal with the question of what happened to Jim’s equitable interest as beneficiary in the Elmach units based on the Court’s view of the effect of the Nomination. For this, I am indebted to a paper by White J (as his Honour then was) entitled “The Nature of a Beneficiary’s Equitable Interest in a Trust”. In that paper, his Honour said (and I express my respectful agreement):

From Hope JA’s exposition, White J relevantly drew attention to two important points, being that a beneficiary’s interest in a trust is something imposed on the holder of the legal title (the trustee), and that the content of the beneficiary’s interest is a right to compel the trustee to adhere to the terms of the trust. As Hope JA said (at 518 – 519) (White J’s emphases):

Applying this analysis to the present case, Kim held the complete legal estate in the Elmach units. Under the terms of the trust, that estate was engrafted with Jim’s right to compel Kim to hold the Elmach units for his (Jim’s) benefit (that right constituting an equitable estate in the Elmach units) “and/or for the benefit of Jim’s nominee”. If Jim had nominated, for example, Gunnar in his stead, the source of Gunnar’s rights would be Kim’s obligation under the trust. Those rights would independently give Gunnar an equitable estate in the Elmach units, but that estate would exist by reason of Kim’s obligation and not be Jim’s equitable estate assigned to Gunnar. In the case of Jim nominating Kim, Kim would become the absolute legal and beneficial owner of the Elmach units in the sense that there would be no one with any right in equity to control how Kim dealt with the units. In both cases, Jim’s equitable estate would simply be extinguished by operation of the terms of the trust, as declared and construed, because by reason of the Nomination Kim’s obligation to Jim would have been brought to an end.

It might be said that this process is a disclaimer. If it were a disclaimer, then contrary to Kim’s submission and as was pointed out by Bogasi, it would fall within the definition of a “disposition” in s 7 of the CA. However, I accept Bogasi’s submission (see [563(3) to (5)], [564] and [565] above) that there could be no disclaimer because Jim had held the beneficial interest in the Elmach units since the time of their acquisition (or, perhaps more precisely, at the time it was agreed that Kim was “warehousing” the units).

It follows that the Court does not accept Bogasi’s submission that the Nomination was a disposition and so required to be in writing. However, the Court’s conclusion also does not involve acceptance of Kim’s contention that the Nomination was a disclaimer.

Bogasi submits that as the trustee of the Elmach units in accordance with the Consent Orders, Kim was under a duty to take reasonable steps to secure and retain control of the trust assets and was not authorised by the orders to vest assets in the name of a nominee unless permitted to do so by those orders.

Bogasi submits that Kim acted in breach of trust by consenting to the Declarations and requesting the Family Court make those orders in circumstances where:

In reply, Kim submitted that a breach of trust could only arise if the Court finds that Kim held the Elmach units on trust for Bogasi, Jim and Gunnar’s legal representative (who was also Jim), or TCI; and on a proper construction of the Declarations, Jim was permitted to transfer the equitable title to the units to anyone.

To the extent there was any breach of trust (which is denied) it was expressly consented to by Bogasi, Jim and TCI as they were all parties to the Consent Orders. Kim also rejects Bogasi’s claim that he must restore trust property and account for any benefits he has received since the Nomination. However, on Bogasi’s case, the right of nomination would have been exercised by Jim unlawfully. Bogasi cannot now assert that Kim should account to Jim’s estate for a benefit of which Jim expressly divested himself. To do so would be to approbate and reprobate.

Kim put forward two submissions as to why the Nomination was not a breach of fiduciary duty by either Kim or Jim.

First, it was contended that the following objective evidence demonstrates that no fiduciary duty arose:

Second, Kim submits that Bogasi’s claim that the Nomination constituted a breach of fiduciary duty is premised on Bogasi successfully proving the existence of the Common Assumption. There are three reasons why, according to Kim, there was no Common Assumption:

Kim accepts that Jim and Gunnar generally tried to benefit both sides of the family equally but argued the question the Court needed to answer was whether ‘this customary method of operation’ bound Gunnar and Jim, and after Gunnar’s death, Jim in his own capacity and as executor of Gunnar’s will, in such a way that there were no circumstances in which they were permitted to depart from it, or to conduct business in some other way if circumstances warranted. The following evidence was submitted to demonstrate the discretion which Jim and Gunnar retained:

Kim also contended that equality was not achieved by precise and equal splits of assets and distributions. Rather, equalisation was undertaken by way of adjustments to loan accounts. That occurred in two main ways:

For example, in relation to Kim’s failed investment in Coastalwatch LLC, Jim mandated that the losses would be attributed to Kim’s loan account (such that he took financial responsibility for the losses) and Gunnar’s side of the family were not impacted by the losses.

It was submitted on behalf of Kim that it was fatal to the narrative advanced by Bogasi that Kim granted the option to acquire the Elmach units only to Jim, and not to Jim and Gunnar (or to Bogasi or to TCI). Jim was granted the option because the funds that had been invested in Elmach had been advanced from the Old Jim Trust and New Jim Trust (and not from the trusts that benefitted Gunnar’s side of the family). Kim relied on Mr Wooldridge’s evidence from the Family Court proceedings where he explained that CPT1 and CPT2 was a “net borrower” of funds from the Sundell Group, and more specifically the trusts associated with Jim (and not Gunnar). Thus, Jim’s trusts (and not Gunnar’s) were creditors of CPT1 and CPT2 in the amount of approximately $8.5 million.

This arrangement was submitted to be consistent with the documentary evidence. Gunnar's side of the trust was not a substantial creditor from 2002. In contrast, the loans all rested with Jim's side of the family. Ms Francis’ affidavit sworn on 22 December 2021 explains that from at least 2010 onwards, the Old Jim Trust and New Jim Trust were significant creditors of CPT1 and CPT2. It is for this reason that Jim received the benefit of the option and that, when discussing the issue of CPT1 and CPT2, Gunnar observed to Jim that the transfer of the CPT1 and CPT2 units was Jim's problem and it was "… between you and Kim. It's got nothing to do with me".

In the alternative, even if Jim was bound by a Common Assumption to deal equally between the two families, Kim also contends that Bogasi is also required to show that Jim was required to deal equally within his own family. He argues no such finding can be made from the evidence.

Kim also attacks the probative value of the evidence which Bogasi relies on to support the existence of the Common Assumption. The claim principally rests upon references to each side of the family being benefitted equally in Family Court affidavits. While Mr Walker indicated (Tcpt, 10 April 2024, p 210(3)) that there were “documents which demonstrate … that the CPT units are owned, held for the whole family” (Tcpt, 10 April 2024, p 210(3)) no other documents were produced in response to a Notice to Produce issued by Kim.

Furthermore, the fact that Bogasi is no longer the trustee of Gunnar’s trusts is said to hinder Bogasi’s ability to establish that the Elmach units should be returned to Bogasi due to the existence of the Common Assumption. Gunnar’s side of the family would continue to have no interest in the trust. It is only if Bogasi were successful in having the units declared to be held by TCI, would Gunnar’s side of the family have a 50% interest in them.

Were the Common Assumption binding on Jim and Gunnar, Kim argues the Court should have expected to have heard from the new trustee of Gunnar’s trust, Skiida, or Gunnar's wife (or her estate) and children in vocal support of that claim. As with Merle, neither of their children Annemarie or Rickard has been called. Their silence, in the face of knowing of the proceedings, was suggested to be instructive. Their silence was submitted to confirm the position that Gunnar was happy for Jim to shoulder the burden and, later, the benefit of the CPT1 and CPT2 transactions, and that while he may have later, privately, reconsidered this, he did nothing to unravel that position during his lifetime.

Kim also refutes Bogasi’s reliance on Jim’s statement in his affidavit at [5] in the Family Law proceedings dated 1 March 2012 to prove the existence of the Common Assumption:

Kim contends this passage must be read in the light of Jim and Gunnar’s control of the income which flowed from Sundell Holdings through Bogasi to their own trusts. Each brother was able to treat the funds in his trusts as his own, and Jim could deal with the distributions from the Old and the New Jim Trusts as he wished.

Finally, if the above submissions are not accepted, then Kim contends that any breach of fiduciary duty is Jim's alone. Kim held the units at Jim's direction and on trust for his father. The above submissions as to disclaimer are submitted to sufficiently demonstrate that there was no breach of trust about which Bogasi, TCI, or Jim's and Gunnar's estates can complain.

In reply, Bogasi argues that the evidence placed before the Family Court and the evidence of Ms Francis and Kim establish the Common Assumption. At paragraph 11 of her affidavit sworn on 20 December 2021, Ms Francis recited the elements of the Common Assumption and, in paragraph 12, deposed that those elements were consistent with how the Sundell Group accounts were operated and how day-to-day operations of the business were conducted:

In his cross-examination, Kim conceded that a motivation of each of Jim and Gunnar was to operate the companies so that support could be provided to, and benefits conferred upon, members of their respective families, and that the intention of both men was to share the wealth of the Sundell Group (Tcpt, 22 April 2024, p 496(47)):

In the alternative, Bogasi relies on [34] of its pleading in the 2019 Third Cross-Claim which pleads that Kim remained the registered owner of the Elmach units for the benefit of the members of Jim and Gunnar’s families; to give effect to the Common Assumption; and, subject to the direction of Jim and Gunnar. Therefore, Bogasi argues its claim does not require it solely to prove the existence of the Common Assumption but can also be established because the evidence shows Kim agreed to warehouse the units for the benefit of both sides of the family.

Bogasi also argues that Kim’s submissions mischaracterise the effect of the Common Assumption. Bogasi does not assert that Jim had to distribute the Elmach units, for example, absolutely equally between the two sides of the family, let alone equally within the families. Instead, the Common Assumption was submitted to merely require that Jim ensured the units remained an asset available to be shared, directly or indirectly to the benefit of the families.

In reply, Bogasi refutes for the following reasons that the evidence relied by Kim disproves the existence of the Common Assumption:

Bogasi also denies that the Option Agreement is dispositive proof that the Common Assumption does not exist. Five reasons were submitted in support of this proposition:

Finally, Bogasi also denies that it was necessary to join a representative of Gunnar’s estate or family to the proceedings to prove the existence of the Common Assumption. Their presence or absence was submitted to be irrelevant to the objective proof of what the parties understood the position to be from 1998/99 until April 2013.

Much, if not all, of this issue falls away because the Court has concluded that the Declarations, properly construed, do not permit Kim to be the nominee. Accordingly, Jim’s nomination of Kim was invalid and, subject to issues of estoppel, Kim continues to hold the Elmach units on trust for Jim’s estate and should account for any benefits he has received.

Insofar as this issue focusses on Jim’s conduct in making the Nomination, the language of breach of trust is inapt given that Jim was the beneficiary of the trust. On the view the Court has taken, Jim’s nomination of Kim was invalid. If the Court were to persist with the analysis in terms of breach, it is Kim who breached the trust because a fundamental duty of a trustee is to act in accordance with the terms of the trust. By, in effect, accepting the Nomination as having given him full beneficial ownership of the Elmach units (as opposed to having rejected the Nomination as invalid), Kim breached the trust, with any remedy for that breach being at the suit of Jim as the beneficiary. While not the subject of submissions, I do not see how any suit could be brought by any person or entity who could have been the subject of a valid nomination, given whether and, if at all, any of them became a valid nominee was entirely in Jim’s discretion.

The next matter is Bogasi’s suggestion that Kim acted in breach of trust by consenting to the Consent Orders. The allegation is made by reference to a trustee’s obligation to take reasonable steps to secure and retain control of trust assets. It depends upon the Court accepting Bogasi’s contention that the beneficiaries of the trust were Bogasi, or TCI, or Jim and Gunnar’s legal representative. However, on the Court’s construction of the Declarations, Kim could not have committed the alleged breach of trust (being to consent to the Consent Orders), because the class of possible nominees does not include Kim, but otherwise includes Gunnar (or his legal representative) and the entities of the Sundell Group.

Finally in this section, I turn to the Common Assumption. The use of the word “assumption” may have led to some confusion, given its association with the law of estoppel. However, it was not deployed in that way. Bogasi’s written submissions refer to it as “an important, but not determinative aspect” of the 2019 Third Cross-Claim, in which the Common Assumption is pleaded as:

This pleading demonstrates another way in which the term Common Assumption is apt to confuse: it does not plead an assumption as such, or that anyone held it. It is really an assertion of how Jim and Gunnar ran the Sundell Group.

Kim accepts that in broad terms that is how the Sundell Group was operated. The Court so finds based upon the evidence of Mr Wooldridge and Ms Francis referred to in [178] and [610] above. That finding has informed, as a surrounding circumstance, the Court’s construction of the Declarations insofar as Jim, Gunnar and (at their behest) the companies in the Sundell Group gave effect to that way of operating the Group. However, tied up in it were the overall general discretions of Gunnar and Jim and, as Mr Wooldridge said and the Court accepts, the need from time to time to act in accordance with the realities of a particular situation.

The difficulty for Bogasi according to Kim (and whose submission on this the Court accepts), is that Bogasi appears to wish to elevate the Common Assumption into something akin to a legally binding obligation. I am satisfied that rather than “assumption” it is better described as a shared precatory “aspiration”. The Court was not presented with any satisfactory formulation of the Common Assumption in the nature of a universally applicable standard or rule. That should not be surprising. The law well understands that family relationships based on mutual trust and affection can give rise to longstanding arrangements with substantial financial and other consequences, but which are not capable of enforcement by reference to some cause of action or another, not least because they are incapable of sufficiently certain expression.

Bogasi submitted that the Common Assumption informed the construction of the Declarations. The Court has accepted that proposition only to the extent to which Kim has accepted that is how Jim and Gunnar ran the Sundell Group. However, for the reasons in the previous paragraph and by reference to the evidence which the Court has accepted as to how Kim came to hold the Elmach units, Bogasi’s submission that, as part of the terms on which Kim came to hold those units, Kim agreed to hold them to give effect to the Common Assumption (as alleged by Bogasi) is rejected. Kim held the Elmach units on the trust declared by the Declarations properly construed. Other terms will be implied into that trust by statute or the general law of trusts. However, both its inherently uncertain form of expression and the actual evidence, do not support a term of the trust being application of the Elmach units or their income in accordance with the Common Assumption as pleaded by Bogasi.

Kim argues that Bogasi cannot now deny that Kim is both the legal and beneficial owner of the Elmach units by reason of a conventional estoppel. A conventional estoppel operates when both parties have adopted the same assumption as the conventional basis of their relationship: Ryledar Pty Ltd v Europhic Pty Ltd (2007) 69 NSWLR 603; [2007] NSWCA 65 at [199]-[200], referring with approval to the statement of principles by Brereton J in Moratic Pty Ltd v Gordon [2007] NSWSC 5 at [32]-[33], where his Honour identified the matters necessary to establish conventional estoppel as being that:

In Ryledar at 645, Tobias JA referred to Amalgamated Investment & Property Co Ltd (in liq) v Texas Commerce International Bank Ltd [1982] QB 84 at 121 in which Lord Denning MR observed:

Similarly, in Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd (1986) 160 CLR 226, Gibbs CJ, Mason, Wilson, Brennan and Dawson JJ observed at [244] that:

While detriment is an element of conventional estoppel, there is no requirement that either party must have induced, or acquiesced in, the adoption of the assumption by the other, and in particular there is no requirement that either know that the other may incur detriment by reliance on the assumption: Moratic at [37].

In this case, Kim submits the following facts establish that after the making of the Consent Orders, Jim did not intend to claim the beneficial interest in CPT1 and CTP2 for himself and instead wished for Kim to have the benefit of the Elmach units. This evidence was submitted to establish the existence of a conventional estoppel:

Kim’s own conduct is also contended to indicate that he considered himself to be the legal and beneficial owner of the Elmach units. Kim relies on the evidence that he declared income he received from the units as part of his taxable income, the alleged conversations he had with Mr Wooldridge in 2015 about reflecting the nomination in the will, and a conversation he had with Anne-Katrine where he stated to her that he received nothing in the will because he “… got the property from the Elders deal”.

Kim’s ownership of the Elmach units was also said to be well-known within the Sundell Group (particularly Mr Wooldridge and Ms Francis) and the Sundell family. Kim relies on an alleged conversation in 2017 between Anne-Katrine and Mr Wooldridge where she asked about Elmach, and Mr Wooldridge stated that it was Kim’s. When asked how it happened, Mr Wooldridge responded that it was “… between Kim and your father.”

In reply, Bogasi submits that the evidence reflects that Kim had a fixed and unshakeable position in relation to the Elmach units. Reliance was placed on Kim’s affidavit sworn on 17 December 2020 in these proceedings where he deposes that had anyone asked him to transfer the Elmach units to anyone, he would have refused as Jim had given them to him. In these circumstances, Bogasi argues that it is difficult to see how anyone could have caused Kim to renounce his claims to ownership of the units absent proceeding to judgment. Bogasi suggests that the evidence indicates that Kim’s position is founded unequivocally in what occurred in April 2013 and as such, events thereafter had no bearing on Kim’s thinking. Therefore, Kim’s estoppel claim is submitted to be artificial.

In reply, and in furtherance of its closing submissions in chief, Bogasi provided further submissions denying that Kim has suffered any detriment by Bogasi now seeking to resile from its alleged acknowledgement that Kim was the owner of the Elmach units:

Bogasi submits that Kim receiving distributions from the Elmach units does not assist Kim’s claims for a conventional estoppel for two reasons. First, Bogasi claims that Kim had been receiving distributions for approximately 10 years preceding 2013 and therefore these distributions were a continuation of the status quo. Second, the distributions he received were as a result of the operation of the Master Trust Deed and not any discretionary consideration by the directors of Elmach.

It was stated that the law requires any representation or assumption founding an estoppel to be clear and unequivocal: Waterman v Gerling Australia Insurance Co Pty Ltd (2005) 65 NSWLR 300; [2005] NSWSC 1066 at [91]. Bogasi rejected that the continuation of the payment of distributions simply carrying on that which had occurred before 2013 constitutes any such representation.

Bogasi also rejects that the ATO questionnaire provides support for Kim being the beneficial owner of the Elmach units. Bogasi submits it is relevant that Kim never pleads that he was aware of the contents of the questionnaire. His affidavit evidence does not assert that he became aware of the questionnaire's contents, let alone what it represented about the Elmach units. At paragraph [125] of his affidavit sworn on 17 December 2020, he simply deposes to becoming aware that the ATO had requested a further audit; states that he was not involved in the preparation of the information for the reply; and attributes to his father a statement that says nothing about what was in the questionnaire. In paragraph [126], he does no more than identify and annex the completed questionnaire. His affidavit does not otherwise suggest he has read the questionnaire.

Bogasi submits that the Court can conclude that Kim’s silence as to whether he read or understood the contents of the questionnaire indicates that he feared to say anything on the topic and a Ferrcom inference can be drawn that any testimony on this point would have exposed facts unfavourable to him.

Bogasi also relies on Kim’s oral evidence where he stated that:

For the reasons set out above as to his credit, Bogasi submits that Mr Wooldridge’s evidence as to the alleged conversations he had with Jim about the Nomination cannot be accepted.

Bogasi also contends that Kim’s conventional estoppel claim is effectively shut out by the competing estoppel constituted by the Common Assumption. Additionally, as a party to the Consent Orders, Bogasi submitted that Kim cannot rely on an estoppel as an alternative means to obtain the Elmach units, absent an express nomination as required by the Declarations.

The circumstances which were submitted to make it unlikely that the Nomination ever occurred were also submitted to be relevant to showing that there was never an assumption that Kim was the owner of the units.

Finally, it was also submitted that there were four reasons why Kim cannot establish that he will suffer a detriment as a result of Bogasi contending the units are not owned by him (see Thompson v Palmer (1933) 49 CLR 507).

First, Bogasi argues that it was both telling and a point adverse to Kim’s credit that notwithstanding that he pleads that a departure from the alleged mutual assumption would cause him detriment because Jim never made any other inter vivos property provision for Kim and his claim that he resolved the Family Court proceedings to his detriment at his father’s request, Kim never discussed this material in his affidavits. Bogasi relies on the following exchange to demonstrate that Kim was intending to be an advocate, rather than a witness, avoiding answering a question he appreciated would undermine his case (Tcpt, 30 April 2024, p 969(4)):

Second, all of the matters that Kim contends would cause him a detriment are incapable of causing him a detriment because all the matters pleaded predate 2013, before the Nomination was alleged to have occurred.

Third, contrary to Kim’s submissions, Bogasi contended that:

Fourth, Bogasi submits that even where there are alleged acts of detriment which occurred after April 2013, these cannot be substantiated:

In relation to (4), Bogasi submitted that Kim’s evidence was vague as to whether he could obtain financing from TCI and at odds with the assertion in his affidavit evidence that he would have been able to obtain such a loan (Tcpt, 1 May 2024, p 1039(18)):

Bogasi submitted there were a further two reasons why the Court would not assume that Kim could borrow money from TCI in the absence of financial records from TCI outlining its financial position and whether it was possible for any loans to be provided. First, because around the time of the Finclear transaction (FY2015), TCI had made a significant loss. Second, Bogasi contends it is unlikely that the board of TCI would have approved such funding. One of the directors of TCI was his mother, Janette, who Bogasi contends did not have a favourable view of Kim in light of the evidence of her discussions with Jim expressing concerns that he would take control of Bogasi. Another director was Mr Wooldridge, who gave no evidence about whether it was possible to obtain the loan.

In reply, Kim submitted that it was unfair for Bogasi to make specific references to Kim’s taxable income in specific years to claim that he was not underpaid. Kim being underpaid was said to be Mr Wooldridge’s affidavit evidence that Jim said to him that Kim being underpaid was a motivation for him to nominate Kim to be the owner of the units:

According to Kim, Jim’s reference to Kim’s compensation was in the context of the wealth that Kim had generated. That Jim appreciated this was submitted to be evident from other sources, most notably the portions from Jim’s own affidavit as to the appreciation he had of Kim bringing in business to the Sundell Group.

Kim refutes Bogasi’s submission that there is insufficient evidence on which the Court can base a finding that Kim understood he was the owner of the Elmach units and reiterates that the following documentary evidence is consistent with Kim’s belief he was the owner of the units:

Kim also denies that this documentary evidence reflects a position that had existed prior to April 2013. Kim argued this submission ignored that in November 2012 the Family Court had provided clarity as to who owned the Elmach units and the fact that Kim received the dividends prior to April 2013 was emblematic of the confusion which existed as to the legal status of the units. That confusion was said to be resolved after the Nomination. It was further submitted that Jim was left in no doubt by Mr Blaikie that he was entitled to receive distributions from CPT1 and CPT2, and was advised that he should have received them historically, and certainly should declare them in the future.

In this context, it was submitted that the payment to Kim of distributions from CPT1 and CPT2 after April 2013, the recording by Kim of that income in his tax returns, and the failure by Jim to record that income in his tax returns, cannot be dismissed as simply a continuation of the status quo. It reflected a deliberate decision made by Jim, which is consistent with him having made the Nomination.

It was also argued by Kim that Bogasi’s submission that the distributions paid to Kim were decisions taken by Elmach and not by Jim and Kim cannot be accepted on the basis that:

Bogasi also put forward five further submissions why, as a matter of law, Kim cannot rely on the doctrine of conventional estoppel:

In closing oral submissions, Mr Condon SC reiterated that the matters which Kim pleads in the 2019 Second Cross-Claim as forming part of the mutual assumption that Kim was the beneficial owner of the units, do not relate to mutual dealings between Kim and Jim. For example, the fact that Kim declared in his personal income tax return and paid income tax on the distributions was submitted to not be a dealing between Kim and Jim. The fact that he obtained a loan from Bogasi was also submitted to not be a dealing between Kim and Jim because Jim’s knowledge cannot be imputed to Bogasi. Similarly, the fact that Jim may have represented to the ATO in 2015 that he had no legal or beneficial interest in the Elmach units was not a matter of mutual dealing, in the absence of evidence that Kim relied on that questionnaire as informing him he was the owner of the units.

Kim argues that Bogasi is precluded from denying that Kim is the owner of the Elmach units due to its delay in bringing the claim. There was no dispute that the relevant principles are set out in Crawley v Short [2009] NSWCA 410, Young JA (Allsop P and Macfarlan JA agreeing):

Kim submits the following demonstrates that Bogasi knew or ought to have known that Kim was asserting ownership of the Elmach units, as early as 2013:

Furthermore, it is argued that whether Mr Walker had actual knowledge of the Nomination is irrelevant. It is Bogasi’s knowledge that is key. As Kim maintains the evidence shows Jim (as the controlling mind of Bogasi) made the Nomination and allowed Bogasi to make payments consistent with that Nomination, he argues Bogasi had knowledge of the Nomination. Mr Walker is taken to have constructive knowledge as a director of Bogasi given he failed to take basic steps to acquaint himself with the assets of the trusts of which Bogasi was a trustee.

Kim contends that as a result of the delay, he is prejudiced because key witnesses who he could otherwise have called to support his case, namely Jim and to a lesser extent Merle, are no longer available to give evidence. It was submitted that Jim’s evidence would undoubtedly have cast a different complexion on the matter. Jim could have provided evidence about whether he intended Kim to be the owner of the Elmach units. He could have provided evidence about whether Kim was intended to have received distributions from those units. Bogasi’s own evidence is that up until May 2017, Jim attended and participated actively in all Bogasi directors’ meetings. During his lifetime, Jim had the discretion to make decisions with regard to investments and provision for beneficiaries and there was no occasion when the board made a decision against his wishes.

That prejudice is unconscionable because Bogasi had previously acquiesced over many years to Kim receiving the benefit of the Elmach units and had conducted its affairs since 2013 on the basis that Kim was the legal and beneficial owner of those units.

In reply, Bogasi submits that because laches only operates as a defence to an equitable claim, it cannot be relied upon by Kim in relation to the 2019 Second Cross-Claim where he is the cross-claimant.

Laches was also submitted to be unavailable as a defence to Bogasi’s claim for a declaration that Kim is a trustee, and not the beneficial owner of the Elmach units, on the basis that a declaration of right is now a statutory remedy (see Supreme Court Act 1970 (NSW) s 75). Bogasi relies on the dictum of McDougall J noted in Smith v Coastivity Pty Ltd [2008] NSWSC 313 at [83]:

In closing submissions, Ms Needham SC submitted that it was erroneous for Bogasi to suggest that the defence of laches cannot apply to a declaration on the basis that the purpose of declarations is to clarify issues of facts or law on the basis of underlying facts or premises. If there has been a delay in bringing a claim with the underlying facts, then Ms Needham SC contended that could be taken into account in relation to whether a declaration should be made. It was also clarified that the laches claim was brought in relation to Bogasi’s 2019 Third Cross-Claim which also seeks a variety of consequential orders in addition to the declarations, including an order that Kim restore the assets together with all profits made and an order that Kim provide an account of the profits he has earned and benefits otherwise received by his purported ownership of the Elmach units.

Bogasi also relied on the following passage from L Ho in “The Importance of Being Earnest: The doctrines of Laches and Acquiescence” in P Davies, S Douglas & J Goudkamp, Defences in Equity (2018, Hart):

Bogasi contends it is merely vindicating a right to have the trust assets returned, as Kim is not entitled to the Elmach units. Therefore, the doctrine of laches would not apply.

In the alternative, to the extent that the doctrine has any practical application, the Court must examine all of the circumstances to determine where the balance of justice lies. That determination involves an assessment of, inter alia, the degree of change which has occurred, the degree of diligence which might reasonably have been required and whether the balance of justice or injustice is in favour of granting the remedy, or withholding it: see, P Young, C Croft & M Smith, On Equity (2009, Thomson Reuters) at [17.120] p1166.

Bogasi denies that the matters relied upon by Kim constitute a legitimate laches defence. As previously submitted, the payment of distributions, and the consequential arrangements made to pay the tax thereon, had commenced in about 2003. The degree of diligence expected of someone such as Mr Walker, is to be judged against the fact that the situation had not altered after April 2013. Merle’s death cannot be a disadvantage, because she died in 2024 and Kim could have obtained evidence from her. Jim’s death would not be a disadvantage to the extent that he was acting in breach of duty.

Bogasi further denies that Mr Walker should have taken further steps to acquaint himself with the true position as to the ownership of the Elmach units. This was submitted to be an unrealistic expectation for the following reasons:

Bogasi also submitted that it cannot be fixed with the knowledge of the Nomination from April 2013. At that time the directors of Bogasi were Jim, Merle, Mr Wooldridge, Mr Walker and Mr Stell. Only Jim and Mr Wooldridge had direct knowledge of the Nomination. Whilst the ordinary proposition is that the knowledge of Jim and Mr Wooldridge would be imputed to Bogasi, this is not the case where some apparent fraud is being undertaken by those directors (see Bluemine Pty Ltd (in liq) v AKA (Civil) Pty Ltd [2022] NSWCA 160 at [235]-[236] (Gleeson, Leeming and Mitchelmore JJA)).

In this case, Bogasi contends that Jim was a party to a breach of fiduciary duty which operated to the disadvantage of Bogasi; and Mr Wooldridge knew of the circumstances which made that a breach of fiduciary duty. Therefore, their knowledge of the Nomination cannot be imputed to Bogasi.

Kim also argues that Bogasi cannot now claim an interest in the Elmach units on the basis that the subject matter of the present proceedings overlaps entirely with the interest asserted by Jim in the Family Court proceedings. If Bogasi considered that it had any interest in the Elmach units, it was incumbent upon Bogasi to raise that claim at the time. Its failure to do so means that it cannot now raise a contrary position in these proceedings due to the existence of an Anshun estoppel and res judicata.

A res judicata operates where there is a final decision of a judicial tribunal. The fact that the parties resolved the Family Court proceedings by consent does not mean that the orders of that court were not final and do not operate as a res judicata. In Kinch v Walcott [1929] AC 482 at 493, Lord Blanesburgh observed:

Kim argues that this is not a case where “the fact that a judgment is entered by consent may … make it hard to say what was necessarily decided by the judgment”: Chamberlain v Deputy Commissioner of Taxation (1988) 164 CLR 502 at 508 per Dean, Toohey and Gaudron JJ (see also Kanakaridis v Westpac Banking Corporation [2015] FCA 1146 at [62] per Beach J; State of Western Australia v Fazeldean on behalf of the Thalanyji People (No 2) [2011] FCAFC 156 at [21] per Allsop CJ, Marshall & Mansfield JJ; Bryant v Australia & New Zealand Banking Group Ltd [1995] FCA 755 per Lindgren J). The order eventually made being, relevantly, the Declarations, was sought in Jim’s application, and all parties (including Bogasi) consented to that specific order as to the ownership of the Elmach units being made.

The second element that must be satisfied is that the ‘cause of action' adjudicated upon in the Family Court proceedings must be identical in substance with that propounded in the later one: Trawl Industries of Australia Pty Ltd (in liq) v Effem Foods Pty Ltd (1992) 36 FCR 406 at 41. In the Family Court proceedings, the cause of action arose under Part VIII of the Family Law Act. Under that Part, the Family Court had (and has) power to declare the title or rights that a party has in respect of particular property (s 78), and to make orders altering property interests (s 79). Kim submits that it is clear from the terms of the Consent Orders that the parties (including Jim and Bogasi) were concerned with determining their respective entitlements to the Elmach units. Thus, Kim submits, the proceedings were concerned, in part, with determining and adjusting the parties' interests in respect of those units and Bogasi cannot now use these proceedings as an attempt to amend the determination made in the Family Court pursuant to the Consent Orders.

In the alternative, Kim claims that Bogasi is estopped from denying Kim’s entitlement to the units on the basis of an Anshun estoppel. An Anshun estoppel arises where the matter relied upon in the second action was so relevant to the subject matter of the first action that it would have been unreasonable not to rely on it: Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589. Kim submits that Bogasi’s claim to the Elmach units was directly relevant to the Family Court proceedings and should have been raised in those proceedings.

Kim also argues that the Consent Orders also operate as a contract between the parties: Minero Pty Ltd v Redero Pty Ltd (Unreported, Supreme Court of New South Wales, 29 July 1998). The parties (including Kim, Jim and Bogasi) agreed to conduct their affairs with each other on the basis of the facts assumed in the Consent Orders, including that the Elmach units were held on trust for Jim and/or his nominee. They are all (including Kim, the estate, and Bogasi) estopped from denying that fact: Con-Stan Industries.

Where a cause of action has been the subject of final determination, the determination of issues that are its essential foundation may be the basis of an issue estoppel if another cause of action is set up. The principle was explained by Dixon J in Blair v Curran (1939) 62 CLR 464. His Honour observed at 531:

The fact that the orders are by consent does not preclude the application of issue estoppel: Ekes v Commonwealth Bank of Australia [2014] NSWCA 336 at [110]. A positive declaration in the form made in the Family Court proceedings operates in law as either res judicata or an issue estoppel and such an order is final as between the parties to the proceedings: Coles v Wood [1981] 1 NSWLR 723 at 727. Therefore, Kim argues Bogasi cannot now seek to amend the effect of the orders by claiming it is the owner of the Elmach units.

Kim therefore also submits that Bogasi is prevented from advancing a claim to the Elmach units contrary to the Consent Orders by reason of an issue estoppel.

In reply, Bogasi submitted that Kim has not pleaded any reliance on issue estoppel as part of his defence to the 2019 Third Cross-Claim and contends that the Court decline to entertain any submissions on this doctrine by Kim. Bogasi contends that had the matter been pleaded, Bogasi would have had the opportunity to seek to adduce evidence as to why the claims were not advanced in the Family Court proceedings. For example, Bogasi may have called Mr Bloemendal (Elmach’s solicitor on the record) as a material witness in the matter, given his involvement in the Family Court proceedings.

Bogasi submits the position is the same position in relation to the submissions founded on res judicata. Bogasi does not accept that Jim and it “were concerned to determine their respective entitlements to the units”. Bogasi claims it would have led additional evidence on this topic. Nevertheless, it contends that it is far from clear that the parties in fact had that intention. The focus of the proceedings was resistance to Shara’s claim for a property adjustment order pursuant to s 79 of the Family Law Act. This was contended to be consistent with:

Finally, Bogasi submit that the doctrines of res judicata and issue estoppel can have no application where Kim and Bogasi were, in this respect, in the same interest in the Family Court proceedings (See Break Fast Investments Pty Ltd v Gravity Ventures Pty Ltd (No 1) [2015] VSC 497 at [56] (Judd J)).

In approaching the issue of conventional estoppel, it is necessary to be precise about what it alleged against whom and in what capacity.

In Kim’s defence to the 2019 Third Cross-Claim, he pleads:

The estoppel is pleaded against Bogasi, Jim and TCI. The alleged convention is that, after the Nomination, Kim was the legal and beneficial owner of the Elmach unit shares. The reference to “conduct” is clarified in the particulars by directing attention to the 2019 Second Cross-Claim, which in the relevant paragraphs pleads an estoppel by convention. However, importantly, insofar as the estoppel is alleged against Bogasi and TCI, it is because they “were aware of and acquiesced” in the matters alleged. This is amplified in paragraph 19A of the 2019 Second Cross-Claim.

The attempt to include Bogasi and TCI in this way is at least an implicit recognition that if there was an estoppel by convention, it could only have been between Kim and Jim in their personal capacities. There is no pleading in the 2019 Second Cross-Claim that, in relation to the Nomination, either of them was acting on behalf of any other natural or corporate person. Furthermore, while in the most general sense it may be accepted that the various companies in the Sundell Group were the corporate personas of Gunnar and Jim, that is not sufficient in law to visit the alleged conventional estoppel on any of those companies. Nor is there anything in the Consent Orders to suggest that the references to Kim and Jim in the Declarations go beyond their personal capacities. That is consistent with all of the evidence led in the Family Court proceedings to the effect that Kim had no personal beneficial interest in the Elmach units and that those units were held on trust for Jim personally.

The 2019 Second Cross-Claim relevantly pleads:

An initial point is that the claim against TCI must fail, insofar as the conventional estoppel claim is concerned, and I have already noted it is pleaded as between Kim and Jim personally. There is no suggestion anything Jim did was as a director of TCI. As for the more general plea in paragraph 119, the particulars refer to paragraphs 1-20 of the 2019 Second Cross-Claim, which in paragraph 19A includes a cursory allegation of knowledge and acquiescence on the part of TCI because Jim was a director of TCI. However, there is no allegation that anything Jim is alleged to have done was done in his capacity as a director of TCI. It follows that to the extent that TCI is sought to be estopped, that case fails.

Kim’s claim fails because it does not satisfy the third element of Brereton J’s summary in Moratic: that the assumption must be mutual by reason of communication as such and that the parties have conducted their relationship based on that mutual assumption. I accept Mr Condon SC’s submission that there is a complete absence of evidence of mutual communication of the assumption and a relationship based on that assumption, referred to in the authorities as the requirement of mutual dealing.

As to the issue of a mutual assumption, there can be no question that as a result of the Nomination each of Jim and Kim independently believed that Kim was the legal and beneficial owner of the Elmach units. However, I accept Bogasi’s submission that there is no evidence of communication between them as to that assumption, which was not the same thing as the making of the Nomination itself.

A conventional estoppel only applies for the purposes of the transaction or relationship in which the convention was adopted: P Keane AC KC, Estoppel by Conduct and Election, (2023 Thomson Reuters, 2023) at 8-018. That can only be the relationship between Jim and Kim personally. In my respectful opinion, Mr Condon SC is correct to point out that none of the matters particularised in paragraph 18 of the pleading set out in [688] above concern subsequent dealings between Jim and Kim. There is no transaction between them which Kim can identify that would be subject to the alleged convention. Insofar as, for example, Elmach as trustee made distributions from CPT1 and CPT2 to Kim on which he has paid tax, Kim has not demonstrated any basis on which Elmach could be bound by and said to be acting in accordance with the alleged convention.

Were it necessary to consider the question of the detriment alleged by Kim upon a departure from the assumption, I would have concluded that nothing he has pleaded (even if proven) as such (see paragraph 19 of the 2019 Second Cross-Claim) would constitute relevant detriment such as to render a departure from the convention by the estate, as successor to Jim, unconscionable. I also accept Bogasi’s submissions set out in [643] to [647] above as to Kim not having demonstrated any detriment.

I should add for completeness, that even if the estoppel had been made out, that would not necessarily have been the end of the matter. The Court has found the Nomination was ultra vires and therefore the estate is entitled, subject to any defences, to the Elmach units. Whether in those circumstances it would be unconscionable for the estate to seek to recover more than just the Elmach units (for example, past distributions to Kim in respect of them) is not a matter that has been argued. Nor has another potentially available contention, being that any detriment to Kim by departure from the convention can be cured by permitting him to retain those benefits while being required to give up the Elmach units.

In relation to laches, the Court accepts this is relevant only as a defence to Bogasi’s claim in the 2019 Third Cross-Claim. This defence fails for the reasons advanced by Bogasi (subject to one qualification which I deal with in what follows).

First, the Court accepts that if Bogasi is correct, it is seeking to vindicate its rights as a beneficiary against a bare trustee or, if it is wrong (as the Court has found) it is, as the ultimate residuary beneficiary, nevertheless vindicating the rights of the estate (in lieu of the Administrator taking such action) as the beneficial owner of the Elmach units (due to the invalidity of the Nomination). So understood, laches has no application.

Second, even if the doctrine applied, the Court does not accept that the prejudice advanced by Kim is sufficient to enliven the defence. The submissions summarised in [667] to [669] above are accepted. Furthermore, if there had been any mutual dealings which could have supported Kim’s allegation of a conventional estoppel, he must necessarily have been involved in them and could have given evidence of them.

The qualification to which I refer in [695] above is that irrespective of the consequences of Jim’s knowledge, I do not accept Bogasi’s submission that Mr Wooldridge’s knowledge of the Nomination would not be attributed to it. In my respectful opinion, it would be attributed for the reasons advanced by Mr Cheshire SC set out in [1066] below. However, this conclusion does not assist Kim because I remain of the view that the unavailability of Jim does not cause Kim unconscionable prejudice by reason of Bogasi’s delay. This is so for three further reasons:

Turning to res judicata, Anshun estoppel and issue estoppel, the Court accepts Bogasi’s submission that because these defences were not pleaded, Kim should not be permitted to rely on them because Bogasi may have taken a different forensic approach in relation to the evidence which it might have called.

In any event, none of those defences would have assisted Kim, for the reasons advanced by Bogasi.

In particular, I accept the submission that what is in issue in these proceedings (which start with and primarily turn on an event which post-dates the Family Court proceedings, being the Nomination) is different to the cause of action in the Family Court proceedings, being the allocation of property interests as between Kim and Shara. The issue in relation to the Elmach units in those proceedings was whether or not Kim was their beneficial owner. A declaration could just have been made that Kim was not the beneficial owner. It was not essential as between Kim and Shara to determine who the beneficial owner was: what was essential was to determine who it was not.

Next, I accept the submission that res judicata and issue estoppel, and by parity of reasoning I would add Anshun estoppel, cannot arise between parties who were in the same interest in the Family Court proceedings (here Bogasi and Kim). The law was summarised by Goldberg J in Yates Property Corporation Pty Ltd v Boland (2000) 179 ALR 664:

In the Family Court proceedings, Kim, Jim, Bogasi and the other Sundell Group entities were in common interest against Shara that Kim was not the beneficial owner of the Elmach units. There was also no dispute or adjudication as between them that Jim was the beneficial owner. There was no conflict of interest between them, there was nothing to be decided as between them in order to give Shara the relief she claimed, and there was no dispute between them that had to be judicially decided.

Finally, insofar as Kim contended that the Consent Orders operated as a contract about how the parties (including Kim, Jim and Bogasi) agreed to conduct their affairs as between each other, in my respectful opinion that is to mischaracterise the contract. The parties to the Family Court proceedings agreed to settle their dispute by, inter alia, consenting the Consent Orders. The agreement was between Shara, on the one part, and Kim, Jim and the Sundell Group entities in common interest with them, on the other part. I do not accept the contract was one that bound those latter parties inter se, who were in like interest, so as to prevent the beneficial ownership of the Elmach units being litigated as between themselves in subsequent proceedings.

Bogasi submits that Jim, Kim and Gunnar adopted a mutual assumption that the Elmach units were owned in order to give effect to the Common Assumption: that is they assumed that the units would be owned by Bogasi, or alternatively Jim and Gunnar, or TCI to augment the common pool of assets available to the Sundell Group and which could be shared between the two families. Bogasi’s submissions as to the existence of the Common Assumption are at [610] to [613] above. As a result of this adopted mutual assumption, Bogasi submits that Kim is estopped from “denying that he owns the [Elmach units] to give effect to the Common Assumption” (2019 Third Cross-Claim, [106]).

Bogasi submits there is no impediment to an estoppel claim being exercised against a discretionary power (Irwin v Pamplin (No 4) [2024] NSWSC 73, [360]). In Pamplin (No 4) Henry J held:

A conventional estoppel was said to arise here on the basis that both parties have adopted the same assumption as the conventional basis of their relationship. In this case the Common Assumption as pleaded by Bogasi was the assumption which formed the basis of the relationship: Ryledar at [119] to [200].

Whilst detriment is an element of conventional estoppel, Bogasi submitted that unlike other estoppels, there is no requirement that either party induced, or acquiesced in, the adoption of the assumption by the other, and there is no requirement that either knew the other may incur detriment by reliance on the assumption: Moratic at [37].

Bogasi contends that the asserted estoppel in this case is closely aligned with, and gives effect to, the basis upon which Kim came to become the legal owner of the Elmach units. The trust arose to protect the interest of the Sundell Group, as manifested through Jim and Gunnar. Bogasi submits there is no evidence that purpose ever changed and its existence was instead reinforced by the evidence propounded in the Family Court proceedings. It was submitted to be significant that the Declarations were only possible because of the evidence adduced in those proceedings.

Further, it was contended that neither Jim nor Kim had the authority, or power, to alter that purpose, partly because the purpose benefited Gunnar's descendants, and partly because by April 2013, the board of Bogasi included other persons. There was also clear detriment on the basis that if Kim was allowed to depart from the Common Assumption, then Jim and Gunnar’s estates would lose a significant income producing asset.

In reply, Kim submits that even if it can be established that there was a mutual assumption that somehow fettered the power of Jim (or Jim and Gunnar) to deal with their own assets, it is not enough for Bogasi to ‘assert’ detriment being the loss of the value of the asset. There must be a relevant connection to the mutual assumption in that the detriment must arise from the reliance on the mutual assumption. That detriment is not a result of any reliance upon the mutual assumption.

Because the Court has not found the Common Assumption to exist, this claim falls away. However, I will set out my views in any event. This claim compounds the allegation of a Common Assumption with a further defined allegation of “the mutual assumption”. So much is apparent from Bogasi’s pleading of the alleged convention:

For convenience, I set out again Bogasi’s pleading of the Common Assumption:

Relying on the Common Assumption to ground an estoppel highlights the difficulties which have already led the Court to reject Bogasi’s case in relation to it (see [620] to [624] above). However, the use of that expression and “the mutual assumption” also raises another caution. While definitions are a useful drafting technique, the repeated use of such defined terms, especially when capitalised, risks giving them a weight or reality that can distract from the Court’s task of establishing whether they in fact existed. With no disrespect intended to anyone in this case, constant invocation of a defined term can subtly (or not so subtly) slip into an ipse dixit. It is the evidence underlying the definition to which the parties and the Court must attend.

Turning to the elements of the alleged mutual assumption:

It follows that the claim must fail because three of the four elements of the alleged mutual assumption have not been made out.

There are three other reasons why the claim fails. First, insofar as Bogasi contends that the parties bound by the alleged convention are Jim, Kim and Gunnar, no mutual dealing subject to the convention has been identified. Second, the Court accepts Kim’s submission set out in [711] above. Third, to the extent detriment is required, the pleaded detriment (2019 Third Cross‑Claim, par [104]) to “the families of Jim and Gunnar [suffering] a significant disadvantage, in that they would not have access to the income generated by the aforesaid units or the units themselves” is too vague or indistinct to be detriment of the kind that would engage a conventional estoppel.

Bogasi submits that if Jim did nominate Kim to be the owner of the Elmach units pursuant to the Declarations, then that nomination would constitute a fraud on the power. This was so irrespective of whether the power was fiduciary: Commonwealth v Colonial Combing, Spinning and Weaving Co Ltd (1922) 31 CLR 421, 471. Nevertheless, Bogasi’s primary position is that the power was fiduciary in light of the Common Assumption and the circumstances in which the units came to be acquired for the benefit of the Sundell Group.

Bogasi pleads that Jim was obliged to exercise the power of nomination in good faith and without regard to his own interests. The purpose for which the power was conferred can be ascertained by reference to extraneous evidence. This circumstantial evidence is especially relevant in the absence of any documentary evidence as to the terms of the power.

For the reasons submitted in support of proving the Common Assumption, Bogasi submits that the scope and purpose of the power of nomination was directed to benefitting the Sundell Group and both sides of the Sundell Family.

Bogasi submits that Jim nominating Kim as the owner of the Elmach units would constitute a fraud on the power because it would provide Kim with the beneficial ownership of the units without any accommodation being made for Gunnar’s side of the family or the Sundell Group more generally and would have no regard for the Common Assumption.

It was also contended to be relevant that, on Kim’s case, the power was exercised to compensate him for the personal disadvantage he faced by having to settle the proceedings, including bearing the legal costs of the other Sundell Group parties. This was demonstrated by many of the matters which Kim identified as the justification for the Nomination in the 2019 Second Cross-Claim, being matters which speak to his personal interest: the fact that Jim had made no provision in his will for Kim; and that Jim had to pay the legal costs of companies within the Sundell Group. Satisfaction of those needs did not advance any interest of the Sundell Group. To the contrary, on Kim’s case, he received the benefit of the Elmach units because of his assisting the Sundell Group.

Bogasi submits that the power of nomination, properly exercised, required Jim to survey the range of objects and possible beneficiaries who might take the Elmach units pursuant to the exercise of that power. For the same reason, he was obliged to consider that the opportunity to acquire the Elmach units belonged to Bogasi and was bound to exercise the power of nomination in good faith and without regard to his own interests.

The fact that (assuming it occurred) Jim acted in defiance of concerns expressed by his lawyers, and assuming (on the evidence provided by Mr Wooldridge) he had a power to alter the equitable rights retrospectively, only serves to reinforce the Nomination being a fraud on the power. Bogasi relies on Mr Wooldridge’s evidence where he allegedly told Jim that a retrospective nomination contradicted what the Family Court had been told and Jim purportedly saying ““well, I guess there could be a different opinion. Just look at lawyers they always have different opinions, so I’m not worried about it.” This evidence indicates that Jim was acting in defiance of legal advice which would suggest his actions constituted a fraud on the power.

Bogasi relies on the following excerpt from Mr Wooldridge’s cross-examination to establish that he exercised the nomination for an ulterior purpose (Tcpt, 6 May 2024, p 1241(1)):

Mr Wooldridge’s affidavit sworn 7 May 2020 at [23] indicates that Mr Wooldridge pointed out to Jim that what he was doing “appeared on the face of it” to contradict what was said during the divorce proceedings to which Jim reportedly said “I will address them if it becomes an issue”.

Therefore, in acting in this way, Bogasi submits that Jim acted contrary to the Common Assumption; failed to consider the range of other potential beneficiaries; favoured his son over others with a view to discharging whatever personal obligations he felt had to Kim; and secured nothing in return for the Sundell Group.

In reply, Kim relies on his earlier submissions which contend that the Declarations should not be construed as requiring that any nomination had to benefit the Sundell Group and both sides of the family.

This issue does not arise because of the view the Court has taken of the construction of the Declarations. The issue is resolved by the proper construction of “nominee”.

Even if that construction is wrong, and assuming Kim could, on the proper construction of the Declarations, be the nominee, Bogasi’s fraud on the power submission would fail because it involves a category error.

Bogasi’s written submissions begin with the submission “What Jim had was a power to distribute trust assets to a nominee”. I respectfully disagree. For the reasons set out in [576] to [581] above I do not accept that what Jim had was a “power” of the kind that attracted the principles on which Bogasi relies. He was entitled, as the beneficiary, to inform Kim, as the trustee, of the identity of another person to whom Kim would owe his duties as trustee in respect of the Elmach units. This was not a distribution of trust assets. Subject to any issue of construction such as who could be the “nominee” or any other relevant term of the trust, Jim had an unfettered entitlement of nomination in the sense which I have identified.

I am fortified in this conclusion by Thomas’ definition of a power as “in the main, to signify an authority or mandate conferred on, or reserved by, a person to deal with, as well as dispose of, property which he himself does not own. Thus, a power is distinct from the dominion that a man has over his own property” (G Thomas, Thomas on Powers, (2nd ed, 2012 Oxford University Press), at 1.01). In this case, Jim had “owned” the beneficial interest. Similarly, a dispositive power relates to the power of someone to dispose of a beneficial interest not their own (Thomas on Power at 1.14).

Bogasi claims that Elmach should be removed as trustee of CPT1 and CPT2. Kim and his current wife are now the sole directors of Elmach. Bogasi alleges that in FY2020 and FY2021 Kim has caused Elmach as trustee of CPT1 to distribute to himself nearly $11 million; and in those same years has caused the company as trustee of CPT2 to distribute in excess of $2.7 million. Those distributions have been made notwithstanding that these proceedings challenging his entitlement to the ownership of the Elmach units have been on foot since 2019.

Bogasi submits that Kim’s cross-examination demonstrates that he intended to continue distributing profits earned by CPT1 and CPT2 to himself until a court orders otherwise (Tcpt, 1 May 2024, p 1051(29)):

For example, he accepted that for FY2024, Elmach proposed to distribute the nett profits as trustee in accordance with the unit-holding on the register (Tcpt, 1 May 2024, p 1052(14)):

Bogasi submitted that Elmach has, at Kim’s direction, acted in a way to benefit himself at the expense of the beneficial owner of the Elmach units. There is no prospect of a change in approach on his part having regard to the deep antipathy between Kim on the one hand and Bogasi and the rest of the family on the other hand.

It was contended by Bogasi that the dominant consideration in the exercise of the power to remove trustees is the interests of the beneficiaries and whether the efficient management and implementation of the trust will be facilitated. It is not whether the trustee had committed a breach of trust. While not every mistake will induce a court to remove a trustee, acts or omissions which show a want of proper capacity to execute the duties or of reasonable fidelity may justify such a course: see, for example Kanjian Holdings No1 Pty Ltd v Kanjian [2021] NSWSC 839 at [1038]-[1040].

Bogasi submits that it should be made trustee of the Elmach units because it has a long history of acting as a trustee and contends was always intended to own the lion’s share of the units. It contends that Elmach was always intended to form part of the Sundell Group; or (in the alternative) it folded into the Group once it became apparent that there would be no public offering. In short, the intention of Kim and Gunnar was that the trustee be part of the Sundell Group. Bogasi submits that it now represents that Group.

Bogasi argued that if it is successful in its claims, it (or an alternative beneficial owner) will almost certainly terminate the trusts of which Kim is the trustee, and demand a conveyance of the property. It is to be inferred that they will then become beneficiaries of a trust controlled by someone who is entirely antithetical to their interests. The likelihood reinforces the need to appoint a new trustee.

Bogasi also seeks an order that Kim account to Bogasi for distributions made to Kim from CPT1 and CPT2 from 2002 to 2023.

Kim submitted that resolution of this issue may need to await the Court’s factual findings. In any event, Kim contends that as the trust is a unit trust, there is no difficulty with Elmach remaining as trustee, because no discretions are exercised in relation to the distributions of the two unit trusts. If, however, the Court determines that Elmach should nonetheless be removed, then it is submitted that an independent trustee should be appointed as trustee of the two unit trusts. Given Bogasi's hostility (which is currently controlled by Anne-Katrine and Mr Walker and makes no distributions to Kim) it would not be appropriate to have Bogasi or TCI as a trustee of the unit trusts, given Josunda's 10% interest in each trust.

The relevant principles in relation to the removal of a trustee were summarised by Pike J in Teterin v Linrod Pty Ltd [2024] NSWSC 1635, which I gratefully adopt:

Implicit in Bogasi’s submission is the proposition that Kim and his wife, as the controllers of Elmach, would not abide by the Court’s determination of the interests in the two trusts. The Court would be slow to draw that conclusion, accepting Kim’s submission that there is no discretion to be exercised in any event. On the other hand, it is also clear that there is deep hostility between Kim and the other family members involved in the proceedings. Especially in a family situation, such hostility may be a sufficient reason to discharge a trustee even in the absence of breaches of trust.

Given the Court has concluded that the Nomination was ineffective as ultra vires, there is much to be said for Kim’s submission that an independent trustee be appointed. Although the Court has no evidence of this, given the amounts of money involved, the Court’s experience in such matters would suggest that the costs of such a trustee would not be a factor against their appointment.

Nevertheless, I have come to the view that determination of this question, in default of agreement, is best reserved to when the Court is considering the various issues that are likely to arise in relation to the orders to be made to give effect to the Court’s findings in these reasons. The parties should have an opportunity to make any further submissions on this question as they may be advised in the light of those findings.

Insofar as Bogasi seeks an order that Kim account for distributions made to Kim from CPT1 and CPT2, that will also be a matter for further submissions based upon the Court’s findings. For example, Kim has already indicated there may be issues such as just allowances to be considered.

As summarised at [29] above, pursuant to her Further Amended Statement of Claim dated 16 May 2023, Anne-Katrine seeks various declarations and orders intended to ensure that she obtains the complete unencumbered legal and beneficial ownership of the Beecroft Property as her family home. Anne‑Katrine claims that the Beecroft property was purchased for her by her father as a gift with the intention that she own the property outright.

Elmach claims it has a 20% beneficial interest in the Beecroft property on the basis that it provided funding for the purchase, and that Jim always intended that Anne-Katrine repay this amount. Elmach seeks orders that a trustee for sale to be appointed pursuant to s 66G of the CA and consequential orders to enable the property to be sold.

The resolution of this dispute requires the determination of the following questions:

Anne-Katrine contends that the objective evidence demonstrates that Jim intended her to have full legal and beneficial ownership in the Beecroft property. The following submissions were made in support of this proposition.

First, the Beecroft Email sent by Mr Wooldridge on 29 November 2011 to Jim and Kim with the subject line ‘current cashflow position’ was submitted to be incontrovertible evidence of Jim’s intention for how the Beecroft property was intended to be funded (which I reproduce here again for convenience):

The Beecroft Email was submitted to contain a ‘contemporaneous memorialisation’ of a discussion with Jim on matters concerning the Beecroft property. It was significant that an email recording a discussion was sent, given what was said to be the informal way business was conducted within the Group. It was submitted that Mr Woolridge conceded during cross-examination that this was a record of Jim’s intentions (Tcpt, 8 May 2024, p 1385(11)):

The email was submitted to demonstrate that Jim intended the funding for the Beecroft property to be structured in the following way:

It was contended that the Beecroft Email did not express any intention by Jim that Kim would be responsible for any funding procured by Jim to purchase the property or that any interest Elmach had in the property was intended to provide security to Elmach in respect of the funding arrangements and agreed by Jim.

Second, Anne-Katrine also relies on the conversation that Mr Walker had with Jim in 2009 (see [109] above and which the Court accepts occurred) as further evidence that Jim intended to provide Anne-Katrine with an unencumbered property.

Third, Jim recording in a sub-account labelled “Loan-JRS re AKS mortgage” amounts he had borrowed from within the family trust structure for application to the purchase of the property was submitted to demonstrate that it was Jim who was responsible for providing funding for the Beecroft property and demonstrates that Anne-Katrine is not responsible for any amounts or encumbrances in relation to the property.

Anne-Katrine also submits for the following reasons that Kim was also aware that Jim intended to buy the Beecroft property for Anne-Katrine:

In reply, it was submitted that the Beecroft Email cannot be elevated to an “instruction” by Jim as to how the Beecroft property should be purchased. Instead, it should be viewed by the Court as a document containing a discussion of the parties who would assume the liability for the transaction, but did not identify that adequate funds were immediately available to complete the purchase.

In particular, it was submitted that the email references that the Old Jim Trust is lending “the money” to Anne-Katrine out of the repayment from CPT1 of monies owed, but what constitutes “the money” is not specified. Further, while the email records an expectation that $500,000 would come from funds deposited by Merle, there is no suggestion that Jim would assume the obligation of this $500,000 to Merle or TCI. The $250,00 sourced from a “loan repayment on JRS bogasi account” was submitted to have been used to meet operating expenses, but even if it had been applied to the Beecroft property there would have continued to have been a funding shortfall. The only certain source of funding outlined in the Beecroft Email was that Elmach would be contributing $1,000,000 from the substitution account but this still left $868,520.39 needed to purchase the property. Therefore, the email cannot be classified as an ‘instruction’ or a record of Jim’s resolute intention as to how the property was to be funded.

Even if the Beecroft Email is treated as recording Jim’s instructions, Elmach submits that there can be no legal consequence arising from those instructions not being implemented. There is no pleaded case for rectification of contractual provisions or a case where Anne-Katrine seeks to sanction Ms Francis and Mr Wooldridge for a breach of a purported duty to follow instructions. Mr Jammy submitted that the only juridical basis for Anne-Katrine to obtain a 100% interest in the property is whether sub-cl 4(b) of the will requires the Administrator to repay Elmach the value of its 20% interest.

Alternatively, even if the instructions had been implemented according to the Beecroft Email, Elmach submits that it would still be owed the remaining 20% of its interest valued at $411,704.07. Jim would still be indebted to Crown Financial in the amount of $190,000 for the deposit which was incurred before 29 November 2011 and was unaffected by that email.

According to Elmach, had the ‘instruction’ been implemented, of the $1, 869,269.72 needed at settlement:

If this funding arrangement had occurred, Anne-Katrine would still own her 80% share of the Beecroft property, but Jim would now owe $190,000 to Crown Financial (for the deposit) and $500,000 to Merle. Elmach would also still be owed $411,704.07. Mr Jammy contended that sub-cl 4(b) of the will did not envisage and would not apply to a situation where Elmach owned 20% of the property and $690,000 was owed to other parties. Therefore, even if the “instructions” had been implemented, Anne-Katrine would not have enjoyed unencumbered total ownership of the Beecroft property.

Finally, Elmach submitted in reply that the fact that after 2013 Adelaide Bank no longer required Elmach to be a co-owner of the Beecroft property does not negate the fact that Elmach paid for it’s 20% interest in the property and remained a 20% owner of the property.

Elmach submits that neither Jim’s general intentions concerning the purchase of housing for his children, his specific intentions concerning the purchase of the Beecroft property either before or after the purchase of the property, or the express wording of the will support the conclusion that Anne-Katrine owns the full beneficial and legal interest in the Beecroft Property. The following reasons were put on behalf of Elmach to support this conclusion.

First, whilst Elmach accepted that Jim may have had discussions with individuals including Mr Walker about various strategies to provide houses for his children, this strategy was never implemented.

For example, Mr Walker recalled that in around October 2009 he had a conversation with Jim that if one of Jim’s children wanted to buy a house, Jim would lend him or her the money for the purchase, Jim would take a mortgage as security for this loan to protect the property from claims by any other creditors of the child in question, and when he died, Jim would subsequently forgive the loan so they would own their homes outright without any obligations.

However, Elmach contends that for the six properties bought by the children prior to the purchase of the Beecroft property none of the properties was paid for in the manner proposed by Jim:

In summary, for the six properties bought by Jim’s children prior to the Beecroft property purchase:

This evidence was submitted to indicate that whilst Jim may have intended to provide unencumbered housing for his children, and may have indicated as such to Anne-Katrine in relation to her purchase of the Beecroft property, no such steps were taken by Jim to implement or act upon this intention.

Second, the will was submitted not to provide any basis for the Court to determine that Jim intended for Anne-Katrine to have the full legal and beneficial ownership of the Beecroft property. Clauses 4 and 5 of the will relevantly provided:

Three reasons were put forward on behalf of Elmach as to why the will did not support Anne-Katrine’s contention that Jim intended for her to own the Beecroft property outright:

Third, contrary to the first two submissions, even if it is found that Jim did have an intention for Anne-Katrine to be the full legal and beneficial owner of the Beecroft property, Elmach submits this intention cannot displace the actual manner in which the purchase of the property was funded. Four reasons were put forward in support of this submission:

Fourth, Elmach submitted that it was not necessary for Anne-Katrine to have unencumbered ownership of the Beecroft property to realise Jim’s (accepted) general intention to support his children to purchase a property. This intention was contended to be satisfied by cl 5 of Jim’s will which attempted to bequeath Jim’s property at Point Clare to Anne-Katrine, despite Bogasi being the registered proprietor of the Point Clare property.

Elmach relies on a conversation Kim had with Jim in approximately 2013 where he said to his father “Dad, Bogasi owns the Point Clare, not you.” Kim’s evidence is that his father’s response was “Anne-Katrine will have 80% of the value of Beecroft which is a similar amount to the value of Point Clare so it doesn’t matter.”

This conversation was submitted to demonstrate that at a date after the will was made Jim considered whether or not his intentions had been fulfilled by the current property arrangements for Anne-Katrine, despite his awareness that Anne-Katrine would only own 80% of the Beecroft property.

Elmach’s submissions also record that an agreement was reached between Anne-Katrine and Bogasi for Anne-Katrine to become the owner of the Point Clare property. This arrangement was said to be instructive for two reasons. First, it was submitted to establish that Jim’s general intention has been achieved as Anne-Katrine has had the benefit of a house in respect of which she has not been required to make any financial contribution, and ownership of 80% of another house. Second, it also reflects an understanding by Jim that it was not within his power to give assets which he did not own, including the 20% of the Beecroft property owned by Elmach.

Finally, Elmach submitted that the evidence of discussions and events after the purchase of the Beecroft property provide further evidence that Jim never had an intention for Anne-Katrine to have full legal and beneficial ownership of the property. Four reasons were put in support of this proposition.

First, it is significant that Jim remained a director of Elmach after the purchase of the Beecroft property, had access to loan accounts which demonstrated Elmach was the 20% owner of the property and did not take steps to amend those records. This was contended to show that Jim was aware that Elmach was a 20% owner of the Beecroft property, took no steps to correct this status quo and therefore had no intention for Anne-Katrine to be the 100% owner of the Beecroft property.

Second, Elmach relied on various conversations which purportedly occurred between Kim and Jim where Jim was said to have told Kim that Anne-Katrine had to repay Elmach the value of its interest in the Beecroft property. The first conversation allegedly occurred in late 2013 or early 2014 when Kim informed Jim that he could not devise the Point Clare property to Anne-Katrine as Bogasi was in fact the registered proprietor. Jim is alleged to have acknowledged that Anne-Katrine only owned 80% of the Beecroft property.

Kim also deposed that he had two conversations with Jim in 2016 where he confirmed that Anne-Katrine had to repay Elmach for its 20% interest in the Beecroft property. In his 5 August 2020 affidavit, Kim deposed that Jim said words to the effect that “I told Bubs that she has to repay you the 20% in Beecroft”. Kim deposed to a further conversation in the following terms in his 8 May 2020 affidavit:

Elmach submitted that it was never put to Kim that these conversations did not occur and that Anne-Katrine’s evidence does not contradict the existence of the conversations. Her evidence is contended only to suggest that her father never told her she had to repay the money. Therefore, these conversations are submitted to be further evidence that Jim never intended Anne-Katrine to own the Beecroft property outright.

Third, the contentious Pathways meeting (see [276] above) is also said to be further evidence that Jim was aware that Elmach was the 20% owner of the property. It is not in dispute that Kim asserted at the meeting that Elmach would need to be paid for its interest in the Beecroft property. It was submitted that these discussions illustrate even as late as a few months before his death, Jim remained aware Elmach was the beneficial owner of 20% of the Beecroft Property and would need to be paid for its share if the property was sold.

Finally, Elmach denies the existence of Mr Walker’s alleged discussion with Jim about the Beecroft property on 28 March 2017 (three weeks after the Pathways meeting). It is Mr Walker’s evidence that during that discussion Jim told him that he intended Anne-Katrine to be the full legal and beneficial owner of the Beecroft property and requested Mr Walker to “talk to Mr Wooldridge and get it sorted”. Elmach provided five reasons why the Court should find this conversation never occurred:

First, Anne-Katrine submitted that for the reasons put forward by Bogasi any evidence by Kim of discussions he had with Jim about his intentions concerning the Beecroft property should not be believed unless they are corroborated by documentary evidence. The evidence relied on by Elmach at [781] above was submitted to be undermined by Kim’s response to this question which asked (Tcpt, 9 May 2024, p 1539(36))

Second, whether Jim had the requisite intention to give the Beecroft property to Anne-Katrine was submitted not to be a question of will construction but whether the funding arrangements at the time of purchase indicate that Jim had the requisite intention. It was contended on Anne-Katrine’s behalf that the funding arrangements of the property demonstrate this intention.

In any event, Elmach’s submission that sub-cl 4(2)(b) only applied to properties which were encumbered by a mortgage from a bank was said not be supported by the plain language of cl 4 for two reasons. First, the use of the words “my just debts” in the chapeau would plainly cover a liability of Jim to Elmach by reason of there being any unpaid amount in connection with the advancement of the excess funds in the “substitution account” for the purchase of the Beecroft property. As it was Jim who purchased the property as a gift for Anne-Katrine and procured the funds through Elmach or CPT1, these funds would constitute a debt of Jim. Second, it was submitted there was no basis to confine the expression “amounts secured by mortgage” in sub-cl 4(2)(b) to only account for registered mortgages with commercial banks.

Third, it was contended that it was erroneous and reductive for Elmach to rely on how other properties had been purchased for the other children to disprove Jim’s intentions which specifically related to the purchase of the Beecroft property. Circumstances relevant to those purchases may not have applied or been relevant to the purchase of the Beecroft property.

Fourth, it was contended that it was unreasonable to treat the intentions expressed by Jim to Mr Walker around 2009 as a dogmatic and strict rule which would always apply. Mr Byrne’s submissions reiterated that the Court could only determine Jim’s intentions about Anne-Katrine’s ownership of the Beecroft property based on the circumstances at the time of the purchase.

Fifth, the arrangements and negotiations concerning Anne-Katrine’s ownership of the Point Clare property were submitted to have no bearing on the determination of what Jim’s intention was for the Beecroft property or provide a basis to extrapolate or infer Jim expected gifts that under his will would be subject to negotiations with entities within the Sundell Group or third parties. It was also submitted that Kim’s evidence about conversations with his father about his will were unreliable on the basis that his evidence concerning the Point Clare property had demonstrated a lack of credibility. In particular, while Kim deposed in his affidavits that he was not directly involved in the purchase of the Point Clare property or was aware that Bogasi was the purchaser of the property, after being shown documents by Mr Byrne relating to that purchase he conceded during cross-examination that he was involved in providing instructions in relation to the purchase of that property (Tcpt, 9 May 2025, p1529(17)):

Elmach submitted in reply that Kim’s admission during cross-examination is confined to stating that Jim did not expect Anne-Katrine to contribute personally to the purchase price of the Beecroft Property and does not extend to an admission that Jim never expected Anne-Katrine to repay Elmach for its 20% interest. Mr Jammy also submitted that Kim was not cross-examined about the discussions he had with his father in 2013 and late 2016. On this basis, they should be accepted. However, Mr Byrne submitted the following exchange shows that Kim was challenged about the veracity of these conversations and the Court should find that there has not been a contravention of the rule in Browne v Dunn (Tcpt, 9 May 2024, p 1555(17)):

Sixth, Mr Byrne submitted that the Court should place limited weight on Elmach’s submission that Jim did not positively refute Kim’s assertion at the Pathways meeting that Anne-Katrine had to pay back Elmach’s 20% interest in the Beecroft property. It was submitted that the Court needed to consider that Jim was in the final stages of his life, was suffering from cognitive decline and that the evidence demonstrates the discussions had on that day were heated, chaotic and therefore would have been difficult for Jim to comprehend. The evidence of Mr Wooldridge was submitted to be particularly relevant to demonstrating the volatile nature of the discussion at the Pathways meeting (Tcpt, 8 May 2024, p 1465(3)):

Seventh, Mr Byrne refutes Elmach’s submission that the absence of a file note taken by Mr Walker about his alleged meeting with Jim on 28 March 2017 means the conversation never occurred. Mr Byrne submitted that it was unreasonable to expect Mr Walker would take a file note of every conversation he had with Jim given they had been friends for over 50 years and that it would be unreasonable to expect him to have recorded all interactions in his task document. He further submitted that the file note Mr Walker created containing a list of issues to be raised with Jim (see [276] above) provides contemporaneous and corroborating documentary evidence that the meeting occurred and it was never put to Mr Walker that this document was fraudulent.

It was further submitted that Elmach erroneously submits that Mr Walker did not immediately act upon Jim’s instruction to talk to “Woolie” and “get it sorted”. Mr Byrne relies on the various emails between Mr Walker, Mr Wooldridge and Mr Stell throughout 2017 (see, for example, [294] and [298] to [302] above) to demonstrate that Mr Walker did act upon Jim’s instruction. In reply, Elmach submitted that Mr Walker’s evidence does not suggest that Jim denied Elmach’s ownership but that he simply told Mr Walker to go get Mr Wooldridge to “sort it out.”

Finally, it was submitted that there was no basis for Elmach’s claim that Jim was aware from the accounts of the Sundell Group that Elmach held a 20% beneficial interest in the Beecroft property. The following pieces of evidence were said to contradict this proposition and demonstrate that many decisions were made about Sundell Group matters without Jim being shown the accounts:

There was no dispute that at what might be termed an aspirational level, Jim intended Anne-Katrine to own her home completely and free of debt to anyone. That accords with the love and affection that might be expected from a parent, especially a wealthy one, for their child. However, for all the effort the parties devoted to the question of Jim’s intentions, Anne-Katrine’s case fails because, as Mr Jammy submitted, Anne-Katrine has not demonstrated any legal basis which would permit that aspiration to be translated into an entitlement to the 20% of the Beecroft Property currently registered in the name of Elmach. In other words, Anne-Katrine has not shown any equitable or other basis to go behind the ownership of the Beecroft property as recorded in the Torrens register.

In considering the evidence about Jim’s intentions:

The difficulty for Anne-Katrine is that such evidence as there is which is consistent with the approach set out in the preceding paragraph, substantiates Jim’s aspirational intention and nothing more.

It is helpful to begin with Anne-Katrine’s Further Amended Statement of Claim, which seeks this relief:

The critical paragraphs of her pleading are:

The nature of the trust alleged and how it was said to arise remained less than clear throughout the case. Jim’s intention, without more, is not enough to create rights in Anne-Katrine to a free transfer of Elmach’s interest.

As I discuss further in the next section, I accept Mr Wooldridge’s evidence that even if the Beecroft Email records what was discussed with Jim, the purchase could not be done in that way due to the Group’s liquidity issues at the time. It was done as it was ultimately recorded in the books of the Group, including with $1,000,000 being provided by Elmach from the substitution account in return for which Adelaide Bank required a mortgage over the 20% purchased by Elmach. That is unsurprising: the amount in the substitution account was in effect a form of security in favour of the bank and it was replaced by the mortgage which Adelaide Bank ultimately released.

It follows that I do not accept Mr Byrne’s submission that a mistake was made in how the transaction was recorded in the Group’s books. Mr Byrne was indefatigable and ingenious in what was in effect a retrospective analysis of how he submitted the transaction could have been done to give effect to the Beecroft Email and Jim’s intention. It is just not what happened.

I next turn to the question of construction of cl 4 of the will, which I set out here again for convenience:

I deal with the construction of the will more fully from [1087] below. However, I set out here what is sufficient to dispose of Anne-Katrine’s argument.

The chapeau expressly extends what might otherwise be Jim’s “just debts” to the matters referred to in sub-clauses (a) and (b), which would otherwise not be debts owed by Jim, but by the persons referred to in those sub-clauses (noting the superfluous reference to Jim in sub-cl (a)), including Anne-Katrine. The intention is clear, being that those persons be rendered free of the identified debts.

I accept Mr Byrne’s submission that there is no reason to read down “mortgage” to mean only a mortgage to a commercial bank. Nor is there any doubt that the Beecroft property was and is Anne-Katrine’s “principal residence” for the purposes of sub-clause 4(b). However, there are two reasons why Anne-Katrine is not assisted by the will:

For completeness, I accept that one of Jim’s “just debts” could be, for example, a debt to Anne-Katrine to enable her to buy out Elmach’s share for fair value. However, no such debt has been established in these proceedings. Nor can I see any basis, as a matter of construction, how it could be said that Administrator was required to put Anne-Katrine in funds out of the estate to enable her to buy out Elmach’s share of the Beecroft property.

In summary, Anne-Katrine accepts that Elmach was involved in the funding of the purchase of the Beecroft property. However, it is her primary position that Elmach was only recorded as a ‘notional’ holder of a 20% interest in the property to satisfy a condition imposed by Adelaide Bank for short-term access to funds in the “substitution account” set up as part of the Elders Deal in 1998. Anne-Katrine also submits that Mr Wooldridge misapplied instructions from and agreed with Jim regarding the source of funds and accounting for the purchase of the Beecroft property. As a result, it is contended that the accounts of the Sundell Group erroneously suggest an outstanding payment of $411, 704 due to Elmach in connection with the notional 20% interest. This outcome was not consistent with Jim’s instructions and was also a consequence of the wrong funding arrangements being applied to purchase the property.

According to Anne-Katrine, after the Beecroft property was purchased at auction on 24 September 2011 and the $190,000 deposit paid, the following steps were taken to fund the balance of the purchase price, given the undisputed liquidity crisis facing the Sundell Group at the time.

The evidence demonstrates that attempts were by Mr Wooldridge to obtain finance from Westpac. As indicated by Westpac’s emails to Mr Wooldridge on 11 November 2011 (see [152] and [153] above) Westpac required disclosure of both Kim and Anne-Katrine’s financial positions because they were both required to be both borrowers and guarantors of the mortgage. Mr Byrne submits it is ‘self-evident’ that Jim would not have wanted disclosure to Westpac of Kim’s assets given his assets (and the extent of his assets) were a subject of dispute in the Family Court proceedings at the time. The Court accepts that submission.

Mr Wooldridge’s 21 November 2011 email to Mr Stell (see [158] above) indicates that Mr Wooldridge approached Adelaide Bank around this time about the possibility of using funds in the substitution account for use as short-term funding for settlement of the Beecroft property. The funds in this account were intended to be applied to the purchase of properties to be leased by Elders as a result of the Elders Deal.

It was argued by Mr Byrne that Adelaide Bank agreed to release the funds subject to certain conditions which were outlined in their 23 November 2011 email to Mr Wooldridge (see [160] above). This included that Elmach (as one of the parties to the Elders arrangement) would be recorded on the title of the property as holding a 20% interest. It was submitted by Mr Byrne that any condition imposed by Adelaide Bank in relation to the substitution account was redundant by December 2013 when the Elders Deal ended and the substitution account was no longer required.

These arrangements were then the subject of the crucial Beecroft Email which Mr Wooldridge sent to Jim and Kim. Mr Byrne’s submission summarised at [753] indicates what Anne-Katrine submits were the intended funding arrangements.

Settlement occurred on 8 December 2011 with approximately $1,800,000 needing to be paid. According to Anne-Katrine, on 7 December 2011 Ms Francis made arrangements with Adelaide Bank for $1,000,000 to be transferred from the substitution account, and around $800,000 to be transferred from a CPT1 trading account with Adelaide Bank into the trust account of the vendor's solicitor. Also on 7 December 2011, Jim deposited $580,000 into the common account, for application, as may be necessary, to settlement of the property. This funding was in addition to the $500,000 already contributed by Merle and the $250,000 paid by Jim into the common account on 22 November 2011. That the $580,000 contributed by Jim was loaned to CPT1 to assist with the purchase, was accepted by Ms Francis and Mr Woolridge.

On 19 December 2011, Ms Francis emailed Mr Wooldridge a balance sheet for the New Jim Trust for him to confirm it was accurate. The balance sheet recorded a loan to AKS for $1,606,816.32 for “AKS mortgage” which is 80% of the Beecroft property purchase price. The draft balance sheet, under the heading “Assets”, also includes a highlighted line item “Loan-Commercial Prop Trust No1” in the amount of -$837,585.65 (indicating, by its negative value, that that amount was not an asset but rather owed by the New Jim Trust to CPT1).

It was submitted on behalf of Anne-Katrine that the way the funding was recorded in the balance sheet Ms Francis sent to Mr Wooldridge is inconsistent with the Beecroft Email. In particular, no account was made for the $1,000,000 offset against CPT1’s debt to the Old Jim Trust in excess of $6,000,000 or Merle’s $500,000 deposit on 16 November 2011. Mr Byrne contended this excluded $1,500,000 in funding that had been procured and applied to the settlement and covered the funding gap by creating a loan from the New Jim Trust to CPT1 in the amount of $837,585.65 and an asset in CPT1’s balance sheet in the amount of $411,704.

Mr Byrne submitted this error was caused by Mr Wooldridge failing to show Ms Francis the Beecroft Email. Ms Francis admitted during her cross-examination that the first time she saw the Beecroft Email was in the week before her cross-examination (Tcpt, 14 May 2024, p1604(29)):

Further evidence that the Beecroft Email had not been acted upon was submitted to be demonstrated by Mr Wooldridge’s reply to Ms Francis’ email on 20 December 2011 (see [171] above). It was submitted the email diverged from the Beecroft Email by suggesting that the $1,000,000 from the substitution account was to be accounted for to pay for CPT1’s notional 20% interest in the Beecroft property with the unused balance to repay a “pre-existing loan”. The effect was that the $1,000,000 from the substitution account was not applied in the accounts to reduce CPT1’s liability to the Old Jim Trust (then in excess of $6,000,000) but was instead applied in part to create a notional asset for CPT1 as if Jim intended that the funds be used by Elmach to acquire an interest in Anne-Katrine’s family home.

Mr Byrne submitted that the effects of this ‘error’ permeated through the rest of the General Ledger for CPT1. For example, the sub-account entitled “Loan-JR Sundell Family Trust” (which was the loan owed by CPT1 to the Old Jim Trust) included no reduction in the debt owed by CPT1. The evidence shows that during the 2012 Financial Year, the size of the debt increased from $6,239,519 to $6,999,511.82, by reason of a transfer in the amount of $759,992.32 on 30 June 2012 with the description “Tfr Kim trust distribution debt to his FT loan”. This evidence was submitted to underscore that the “instructions” in the Beecroft Email were not complied with.

Similarly, the ledger for the “Loan-JRS Family Trust” sub-account (which records borrowing, lending and related transfers between CPT1 and the New Jim Trust) indicates on its face that CPT1 provided funds (by way of a loan to the New Jim Trust) to cover in part the Beecroft Property settlement with only a $580,000 reduction to reflect Jim’s deposit into the common account on 7 December 2011. It was submitted that this demonstrates no account was made of Merle’s $500,000 contribution or the $250,000 loan repayment which was referred to in the Beecroft Email.

Mr Byrne submitted that had the “instructions” in the Beecroft Email been followed, the funds sourced would have been enough to cover the costs of the settlement. It was submitted to be significant that the $877,937.65 balance of the sub-account “Loan-JRS Family Trust” (suggesting that the New Jim Trust was indebted to CPT1 in that amount), is approximately half of the sum of funds that the Beecroft Email records were sourced and applied to the settlement: that is, $1,750,000, comprising the $1,000,000 offset against CPT1 debt to the Old Jim Trust, Merle’s $500,000 deposit, and the $250,000 loan repayment.

During closing submissions, Mr Byrne also submitted that because the recipients of the Beecroft Email were all directors of Elmach, there was an agreement for the funding arrangements outlined in that email to be followed. He submitted that this reflected Elmach, by its three directors, agreeing that it did not have any beneficial interest in the property.

Finally, Mr Byrne also submitted that Kim conceded that any accounting error would flow through the Sundell Group’s accounting system (Tcpt, 9 May 2024, p 1546(21)):

The effect of this submission is that the current ledgers reflect a mistake in how the Beecroft property was funded which should not have been made, and which neither accurately reflect Jim’s intention nor the funding which was available at the time.

In reply, it was submitted that Anne-Katrine’s submissions erroneously treat the $500,000 provided by Merle as being attributable to Jim even though Jim assumed no obligations in respect of those funds. This has the effect of causing Anne-Katrine to ‘double-count’ these funds when analysing how the purchase of the Beecroft property was or should have been funded.

Elmach also submitted in reply that Mr Byrne’s submissions contain an assertion that the funds provided by Jim between December 2011 and February 2012 were intended by him to be applied to the purchase of the Beecroft property notwithstanding the following:

Elmach also submitted that Anne-Katrine’s submissions contain further misunderstandings as to how the settlement was funded:

It is Anne-Katrine’s primary contention that if there are any amounts owing to Elmach because of the purchase, they have arisen as a result of the alleged accounting errors caused by Mr Woolridge and Ms Francis.

It was further submitted by Mr Byrne that if the Court finds that Jim did not nominate Kim to be the owner of the Elmach units and they remained part of the Sundell Group, any accounting errors could be ameliorated by adjusting the Sundell Group accounts to reflect how Jim intended to fund the Beecroft property purchase.

It was also submitted that if Jim’s intentions had been implemented “properly” Elmach could not have asserted a right to, charged and received, rent on its notional 20% interest in the Beecroft property. It was submitted that since 2011 Elmach has collected $200,000 in rent which ought not have been charged and which Elmach is liable to reimburse with interest. It was submitted this amount could be used in part to account for Elmach’s asserted entitlement to $411,704.

In the alternative, if the Court found that an amount was required to be paid to Elmach and this could not be rectified nunc pro tunc by adjusting accounting records in the Sundell Group, then three submissions were advanced as to why Anne-Katrine could not be held personally liable to pay Elmach.

First, it was submitted that the funding arrangements establish that Jim sourced the funds on his own account within the Sundell Group. The funding arrangements were said to be a legal relationship between Jim and Elmach which would indicate Jim (now his estate) would be liable for any outstanding payments to Elmach. This proposition was contended to be supported by the fact that none of the ledgers or accounts which were used to fund the purchase of the Beecroft property suggest that Anne-Katrine was personally responsible for making the repayments.

Second, Elmach’s 20% interest was recorded on the title of the Beecroft property to fulfil a requirement for funding imposed by Adelaide Bank. Once that requirement became unnecessary in 2013 it is submitted that Elmach’s role as a notional 20% interest holder was redundant. The absence of evidence of Elmach requesting or receiving security for its interest was submitted to suggest it has no entitlement to repayment from Anne-Katrine.

Finally, and in the alternative, if the Court found that Anne-Katrine was personally liable to pay Elmach, Elmach’s 20% notional interest was said to be a security over an unpaid amount which would constitute an equitable mortgage. Mr Woolridge accepted during cross-examination that in May 2017 he arranged for the certificate of title for the Beecroft Property to be transferred from Adelaide Bank to Elmach (Tcpt, 8 May 2024, p1438(9)):

This evidence was submitted to demonstrate that Elmach held the certificate of title as a way of ensuring security of the notional 20% interest it was registered as holding in the Beecroft property. Mr Byrne relied on authorities to the effect that an equitable mortgage may be established over a property by the holding of title documents with the intention that the land be security for the payment of a debt (see Theodore v Mistford Pty Ltd (2005) 221 CLR 612 at [22]).

Therefore, it was submitted that the Court should find that any amount required to be paid by Anne-Katrine to Elmach was, for the purposes of sub‑cl 4(b) in the will, an amount secured by mortgage over Anne-Katrine’s principal residence and as such, it would fall to the Administrator to make any payments owed to Elmach on Anne-Katrine’s behalf.

Elmach submits that the Court should find that Jim purchased 80% of the Beecroft Property using funds provided by CPT1 and Crown Financial but that he did not purchase the remaining 20%, which was paid for by Elmach using funds from CPT1.

As Anne-Katrine’s submissions make clear, it is not in dispute that at the time the Beecroft property was purchased in September 2011, the Sundell Group was facing a liquidity crisis. This caused the settlement for the property, originally scheduled for 1 December 2011, to be delayed to 8 December 2011.

A satellite dispute arose between the parties as to the cause of the liquidity crisis. It was suggested by Mr Byrne to Mr Wooldridge during cross-examination that the liquidity crisis was caused by extensive payments of funds from TCI to Coastalwatch, a company of which Kim was a director and which was facing hardship. It was also suggested to Kim by Mr Byrne that the Family Court proceedings contributed to the cash-flow crises. Mr Wooldridge and Kim believed that many of the liquidity issues were caused by funds which were previously available to TCI in an account held with MF Global Australia Ltd (MFGA) being frozen when MFGA was placed in voluntary administration on 1 November 2011.

However, Elmach correctly submits that the cause (or causes) of the cash flow issues facing the Sundell family at the time is irrelevant and that this was a problem which needed to be resolved by the Group.

According to Elmach’s submissions, the following steps were taken to fund the purchase of the Beecroft property in light of the liquidity issues.

First, according to Mr Wooldridge’s affidavit evidence, he had a conversation with Jim who informed him that $400,000 would be needed with the remainder to be provided through a loan from a bank. On 17 November 2011, Mr Wooldridge sent Anne-Katrine the Westpac Loan Application form (see [155] above).

Second, after it became clear that Anne-Katrine could not obtain funding from Westpac, Mr Wooldridge took steps to determine how the required funding could be sourced from entities associated with the Sundell Group. Mr Wooldridge’s evidence is that he concluded that only Elmach as trustee for CPT1 could provide such funds, but this could only be achieved if it acquired a 20% interest in the property as a precondition to the Adelaide Bank releasing funds held in its substitution account.

Third, Mr Wooldridge sent the Beecroft Email to Kim and Jim. Elmach denies that the email should be treated as being a record of “instructions” from Jim as to how the Beecroft property should be funded. Elmach submits the email only records the outcome of one or more discussions as to how Mr Wooldridge thought the funding for the Beecroft property should be achieved. To the extent that the email records an “instruction” by Jim, the instruction is contended to not go beyond a statement of intent to fund the purchase. Elmach submitted that the evidence from Mr Wooldridge and Kim during cross-examination was consistent in confirming that the email was not an instruction but merely Mr Wooldridge advising how the funding from the property may be sourced.

Elmach also contends that the email is not inconsistent with funding arrangements actually in place for three reasons. First, the email records that approximately $1 million in funds will be sourced from CPT1’s substitution account, as negotiated with Adelaide Bank, and which sought a first registered mortgage and required that a 20% interest would be transferred to Elmach. The email also records that while CPT1 will provide the funds, a corresponding obligation would be met by Jim who was to assume this liability through the mechanism of a repayment of part of the amount owed to him by CPT1. The amount of funds would then be treated as a loan from Jim to Anne-Katrine, in return for which the Old Jim Trust would register a second mortgage over the Beecroft property.

Second, the Beecroft Email does not specify the exact amount that would be repaid by CPT1 to the Old Jim Trust and whether this was intended to reflect the whole of the purchase price or the 80% not paid for by Elmach. It was further submitted the email does not account for where the balance of the amount needed would be sourced but is merely confined to how funds repaid to the Old Jim Trust out of the $1,000,000 advanced from the substitution account are to be treated. Nor does it suggest that Jim would personally be providing the remainder of the funds. The funds were merely sourced from funds loaned by Merle to TCI and from the repayment of a $250,000 loan. However, there is no record of who would be debited these funds.

Third, the email accurately records the intention that Elmach is to own 20% of the Beecroft property. It was contended that there is nothing in the email that expressly states or impliedly suggests that:

Fourth, according to Elmach’s submissions, the purchase of the Beecroft property was funded as follows:

The effect of these funding arrangements was that Jim had funded $190,000 of the purchase (via a cheque from TCI drawn against the common account) and Elmach had funded the balance of the funds. According to Elmach, Ms Francis was then responsible for recording the obligations of the parties involved such that Elmach would pay for its 20% share (which amounted to $411,704.07 – including its share of the deposit) and would be owed any funds that it had expended beyond that amount.

According to Elmach, the amount that Elmach had expended beyond its own obligations was $877,585.65. This figure is arrived at by deducting the $580,000 provided by Crown Financial, $411,704.07 constituting Elmach’s share of the purchase price and an amount of $192.34 (being Elmach’s share of the rates payable on settlement) from the $1,869,482.06 paid by it at settlement. It was this amount of $877,585.65 which was then attributed to Jim by Ms Francis, representing his obligation to Elmach for Anne-Katrine’s 80% share of the Beecroft property.

As a consequence, within Jim’s loan account Ms Francis created a new sub-loan titled “Loan JRS – re AKS mortgage”. This nomenclature is submitted to be a misnomer as no mortgage was involved but that is of little consequence. The amount owed by Jim in this sub-loan was $1,646,816.32 which comprised three amounts: the $190,000 lent from the common account for the deposit, the $580,000 lent by Crown Financial at settlement and the $877,585.65 lent by Elmach at settlement.

Elmach also rejects Anne-Katrine’s submission that Jim’s obligation being treated as a loan owing to the New Jim Trust rather than as a credit given by the Old Jim Trust contravened Jim’s instructions and created errors for how the Beecroft property was purchased. Four submissions were made on Elmach’s behalf in reply.

First, each family member’s loan accounts with the Old and New Jim Trusts were used interchangeably. This means that each family member’s nett obligations to the trusts involved a consideration of both their Old and New Jim Trust loan accounts.

At the date of purchase of the Beecroft Property, Jim had a credit in his loan account of approximately $6.2 million. Had the $1.6 million obligation been debited to his Loan Account with the Old Jim Trust, his nett position would have been a remaining credit of $4.4 million (due to his current liabilities with the New Trust). Instead, the $1.6 million was debited to his loan account with the New Jim Trust, which left his credit with the Old Jim Trust unaffected. His nett position was $1.6 million less due to the new loan meaning this nett balance was a credit of $4.4 million, which is the same result as if the amount had been debited to Jim’s Old Jim Trust account.

Second, treating the loan in this manner caused no prejudice to Jim. While he may have been charged interest on his loan from the New Jim Trust, he was earning interest from his credit with the Old Jim Trust. The amount by which that interest would have been reduced had the Old Jim Trust credit been reduced would have been equivalent to the interest paid on the New Trust loan.

Third, in any event the transaction only concerned Jim’s liability for 80% of the Beecroft property and did not involve or affect Elmach’s funding of the remaining 20%.

Fourth, it was submitted that the transaction did not conflict with Jim’s instructions. Elmach contends that the Beecroft Email only reflects a general instruction by Jim to fund the purchase of the Beecroft property. The remainder of the email is said to reflect the proposal from Mr Wooldridge as to how this could be achieved. The email demonstrates that Jim appreciated that Elmach was obtaining a 20% interest in the Beecroft property and was only required to fund 80% of the purchase price.

Elmach also disputes Anne-Katrine’s submission that Mr Wooldridge provided incorrect instructions to Ms Francis as to how the transaction should be funded in his email dated 20 December 2011. The arrangements outlined in this email are contended to be consistent with the arrangements contemplated by Jim. According to Elmach, the email confirms that:

Three submissions were made on behalf of Anne-Katrine in reply to Elmach’s submissions on how the purchase was funded.

First, it was submitted that Elmach’s submissions contain a false premise that it was within Mr Woolridge’s mandate to find and apply funding for a transaction irrespective of contrary explicit instructions from Jim (including the Beecroft Email). This premise was inconsistent with Jim’s 23 September 2011 Family Court proceedings affidavit that Mr Woolridge’s mandate to procure funding and arrange distributions was always subject to Jim’s approval. Mr Byrne submitted this exchange during cross-examination also demonstrates that Mr Wooldridge knew it was a mistake not to implement the instructions outlined in the Beecroft Email (Tcpt, 8 May 2024, p 1385(11)):

Second, Anne-Katrine rejects Elmach’s argument that the Sundell companies’ liquidity crisis necessitated Mr Woolridge ignoring Jim’s instructions in the Beecroft Email. It was submitted by Mr Byrne that email contained several funding solutions under the heading ‘other funding options’ and Mr Wooldridge in fact implemented one of those solutions, being the sale of the GBST shares. This was contended to show that the existence of the liquidity crisis did not warrant Mr Woolridge ignoring Jim’s instructions as those instructions provided several solutions to rectify the crisis and fund the Beecroft property purchase in accordance with Jim’s intention.

Finally, Anne-Katrine also disputes Elmach’s submission that so long as Jim’s nett financial position across his Sundell Group (and Elmach accounts) remained the same, it was of no consequence whether assets and liabilities came to be recorded against the Old Jim Trust, the New Jim Trust, CPT1 or otherwise. It was submitted Jim would have wanted his instruction implemented properly because around the time the Beecroft property was purchased Shara was claiming that CPT1 was owned by Kim personally. As a result it was submitted to be unlikely that Jim would be indifferent to how loan accounts recorded transactions between the family trusts and Elmach or CPT1.

It was submitted that the effect of creating a new debt owed by the New Jim Trust to Elmach and leaving CPT1’s debt to the Old Jim Trust (in excess of $6,000,000) unchanged also had the effect of recording in Elmach’s accounts (a company whose ownership was in dispute in the Family Court proceedings) a proprietary interest in the family home of one of Jim’s children. Therefore, it was submitted this approach was prejudicial to Jim and Anne-Katrine, and was an outcome which Jim would never have intended.

Elmach accepts that the $877,585.65 owed to CPT1 by Jim (through the New Jim Trust) in respect of Anne-Katrine’s 80% share of the Beecroft property was repaid to Elmach on or about 31 July 2014. However, Elmach submits that the $411,704.7 contributed by Elmach for its 20% interest has never been repaid.

Elmach further contended that Anne-Katrine is also aware that Elmach’s 20% interest has never been repaid. During cross-examination, Anne-Katrine confirmed that at no stage had Jim ever informed her that he considered that Elmach had been repaid for its share (Tcpt, 22 April 2024, p 465(26)). She confirmed that she was not upset with the requirement that Elmach needed to be paid for its share, but that she was shocked at the suggestion that she personally might have to make that payment (Tcpt, 22 April 2024, p 470(21)).

Elmach also relies on the email Anne-Katrine sent Mr Wooldridge on 8 March 2017 which contained “some calculations” concerning the sale of the Beecroft property (see [263] above). Elmach submitted the calculations recorded Anne-Katrine’s understanding that Elmach owned 20% of the property which would account for approximately $380,000 of the potential sale price, and that it would have to pay CGT on its share.

In reply, Mr Byrne submitted that Elmach’s reliance on Anne-Katrine’s understanding as at March 2017 of whether she would have had to make payment to Elmach in respect of their 20% interest in the property is of no assistance. That understanding was said to have been based on Anne-Katrine honestly accepting information provided by Mr Wooldridge which was based on ‘erroneous accounts’ that had been caused by Ms Francis and Mr Wooldridge not following Jim’s instructions. This had the effect of $411,704 being recorded as being owed as a debt to Elmach which Mr Byrne submitted caused Ms Francis and Mr Wooldridge to believe Elmach had a beneficial interest in the property. It was submitted Anne-Katrine’s ‘understanding’ could not be treated as an admission but rather a reflection of the erroneous information provided to her.

The Court accepts Elmach’s submissions and, in particular, finds that the Beecroft property was paid for as Elmach contends because that reflects how the relevant transactions were contemporaneously recorded in the books and records by Ms Francis. The Court accepts her evidence of this at [18] to [35] of her affidavit sworn on 4 April 2020.

As I have already set out, I do not accept that the Beecroft Email represents or records an instruction from Jim to Mr Wooldridge as to how the transaction was to be effected. I accept Mr Wooldridge’s evidence (Tcpt, 8 May 2024, p 1399(14)):

Even if there was a “mistake” or “failure to follow instructions” of the kind for which Anne-Katrine contends, whether in the execution or recording of the transaction, I repeat my conclusion that Anne-Katrine has not demonstrated any legal or equitable entitlement to have it “corrected”.

The outcome of the transaction was that Elmach was the legal and beneficial owner of 20% of the Beecroft property. This conclusion is supported by the undisputed fact that amidst all the accounting steps that were and have been taken, the $411,704.07 which represents Elmach’s share of the purchase price has never been recorded anywhere as a loan to anyone, especially to Anne-Katrine. There was no debt (or “unpaid amount” to use the expression in Mr Byrne’s submissions, which assumes someone had to pay it) from Anne-Katrine to Elmach for that amount. In other words, Elmach paid that amount in return for an asset, being its 20% share which it owned absolutely, subject only to the interest of Adelaide Bank as mortgagee.

Finally, the submission that Mr Wooldridge holding the title deed on behalf of Elmach for the Beecroft Property could have been an equitable mortgage cannot succeed for these reasons (applying the principles to be found in Young, Croft, Smith, On Equity, (2009, Thomson Reuters), at 649):

There are four other observations to be made.

First, Mr Wooldridge’s evidence set out at [835] above goes no further than his acknowledging that he received and held the title deed. There is nothing in his evidence to suggest either that he thought (if it was relevant) that his doing so was as a form of security, or that he thought there was any debt owed by Anne-Katrine to Elmach. While no finding is necessary, given his role the most likely characterisation is that he was holding the deed on behalf of both owners in his capacity as the person in charge of the family office.

Second, it may be accepted that “mortgage” in sub-cl 4(b) of the will would include an equitable mortgage. However, it follows from [872] above that, contrary to Mr Byrne’s submission, there was relevantly neither an amount nor an equitable mortgage secured by it as between Elmach and Anne-Katrine in respect of Elmach’s 20% share of the Beecroft property that would engage cl 4.

Third, even if there were an “amount secured by mortgage” the will is silent where that relates to a share in the principal residence that is not owned by Anne-Katrine. To bring it within the cl 4 is beyond any exercise in construction and would require an attempt at rectification (which is not sought) that would be far from certain of success.

Fourth, no “just debt” owed by Jim to anyone has been identified which, if discharged, would have the effect of requiring Elmach to transfer its share in the Beecroft property to Anne-Katrine for no consideration.

Even if Elmach does hold a 20% interest in the Beecroft property, that 20% interest is a “notional interest” and Elmach holds that interest on trust for Anne-Katrine. Mr Byrne submitted that Elmach only acquired a 20% interest to fulfil a requirement imposed by Adelaide Bank in exchange for $1,000,000 to be released from the substitution account. This requirement ceased to exist after the substitution account became redundant at the conclusion of the Elders Deal in December 2013.

Anne-Katrine relied on her earlier submissions in support of her contention that Jim intended her to have unencumbered full legal and beneficial ownership of the Beecroft property to establish that any interest Elmach had was held on trust for her.

In reply, Elmach said it was fallacious for Anne-Katrine to refer to Elmach’s interest in the property as “notional”. As a registered proprietor as to 20% of the Beecroft property, its 20% interest had legal effect and accompanying rights pursuant to s 42 of the Real Property Act 1900 (NSW). Even if Elmach’s interest was necessitated by Adelaide Bank’s conditions for funding, this did not undermine Elmach’s claim to having a beneficial interest in the Beecroft property. Mr Jammy also submitted that irrespective of whether it was consistent with Jim’s intention, Elmach did pay for its 20% share in the Beecroft property and has not been paid back for that interest, therefore establishing Elmach’s genuine entitlement to a beneficial interest in the property.

Elmach submits that it holds its 20% interest in the Beecroft property for itself for four reasons.

First, it is submitted that Anne-Katrine has failed to provide evidence of any conduct on behalf of Jim, Elmach or any other person which could be taken as evidence of establishing the creation of a trust. If an amount equivalent to the whole of the purchase price of the Beecroft property had been debited to either of the Jim’s loan accounts with the family trusts (or financed by him in any other way) Elmach concedes that it may have been possible for Anne-Katrine to argue that Elmach was a 20% owner of the Beecroft property in name only and held its interest on trust for Anne-Katrine. However, Elmach relies on its earlier submissions to demonstrate that Jim knowingly assumed responsibility for only 80% of the purchase price.

Second, Elmach rejects Anne-Katrine’s submission that the Beecroft Email provides any basis for her to suggest that Elmach held its 20% interest on trust for Anne-Katrine. Four reasons were provided in support of this submission:

Third, Elmach submitted there is no prior or other contemporary (or even later) correspondence that either expressly or indirectly suggests that Elmach was intended to hold its share on bare trust. There is also no evidence of any communication that Elmach or its directors agreed that CPT1 would hold its interest in the Beecroft property on trust for a third party. It was also contended that there is no record of any communication with Adelaide Bank to indicate that Elmach was interpreting the Bank’s requirement that it was to own 20% of the property as meaning bare ownership rather than beneficial ownership.

Finally, Elmach rejected Anne-Katrine’s claim at [34] of her Amended Statement of Claim that Elmach holds its 20% interest on trust for Anne-Katrine or alternatively for Bogasi or a subsidiary controlled by it. Neither Jim nor Bogasi contributed to payment for Elmach’s share of the Beecroft property or had any claim to the funds used for this purpose. It was also submitted that Elmach has never given those funds or its interest in the Beecroft Property to Bogasi or to Anne-Katrine.

In reply, it was submitted on behalf of Anne-Katrine that the Beecroft Email cannot support Elmach’s contention that their 20% interest was intended to be held beneficially. The email is said plainly to reflect that Elmach (and CPT1’s) involvement would be confined to procuring the $1,000,000 in the “substitution account” and then offsetting that amount against CPT1’s large debts to the Old Jim Trust. It does not convey any intention that Elmach or CPT1 use those funds to purchase a beneficial interest in the Beecroft property.

Further, Anne-Katrine rejects Elmach’s submission that there is an absence of “prior or other contemporary correspondence” regarding Jim’s intention as to how Elmach was to hold its 20% interest in the Beecroft property. The Beecroft Email is submitted to be the best and only evidence required to prove that Elmach was never intended to hold the interest on trust. It was submitted that the reference in the email to Elmach holding a 20% interest in the property because of an Adelaide Bank requirement along with other funding sources which would have covered the settlement in full, provides evidence that Jim never intended Elmach to hold a 20% interest in the property. It is also submitted to be ‘plain’ that Jim intended (following Anne-Katrine transferring a notional 20% interest in the property for $1) that Elmach would hold that interest on trust for Anne-Katrine. The only purpose of the transfer was to comply with an Adelaide Bank requirement for further funding, not to provide Elmach with a 20% interest. The absence of an express reference to Elmach acquiring the 20% interest in the Beecroft property ‘beneficially’ in the Beecroft Email is submitted to be persuasive evidence that Elmach held its interest on trust for Anne-Katrine.

During closing oral submissions, Mr Jammy submitted in reply that irrespective of whether the Adelaide Bank requirements for Elmach’s 20% funding in Beecroft ceased to exist, the reality was that Elmach had still paid for its 20% share of the Beecroft property and was entitled to be paid for that share by whoever it might be transferred to.

Conformably with the disposition of the previous aspects of Anne-Katrine’s claims, the Court accepts Elmach’s submissions. There is no basis in the evidence to conclude that Elmach held its interest in the Beecroft property on trust for anyone. Nor is it informative or accurate to describe Elmach’s interest as “notional” because it was acquired by Elmach “only” to comply with a requirement of Adelaide Bank.

Adelaide Bank was releasing what was, in commercial substance, a form of security it had, being funds in the substitution account and, unsurprisingly, wanted security over the asset which the funds were being used to acquire. It would make no commercial sense for Adelaide Bank to request or agree to taking security over an asset to which the mortgagor was not beneficially entitled.

Finally, and contrary to Anne-Katrine’s submission, the fact that there is no express reference to Elmach acquiring its interest “beneficially” in the Beecroft Email fortifies the Court in its conclusion. If something other than beneficial ownership was in contemplation, it is something which would be expected to have been the subject of express reference. In other words, absent express words to the contrary, in ordinary commercial parlance a reference to ownership of an asset which would be the subject of a mortgage is, in my respectful view, a reference to beneficial ownership.

According to Elmach, the determination of this issue requires the Court to construe the effect of sub-cl 4(b) of the will, which provides a direction to Jim’s trustees to pay out of his estate “all of my just debts and testamentary expenses including but not limited to... All amounts secured by mortgage over… the principal residence of Anne-Katrine Sundell….”

Elmach’s primary position is that if Anne-Katrine wants the full legal and beneficial ownership in the Beecroft property it is incumbent upon her to provide the funds personally.

Five submissions were made on behalf of Elmach as to why the express words of sub-cl 4(b) provide no basis for the Administrator to be required to take steps to ensure that Anne-Katrine obtain full legal and beneficial ownership of the Beecroft property:

In the alternative, should the Court be persuaded to make a declaration requiring the Administrator to take steps to ensure that Anne-Katrine can obtain full and unencumbered ownership of the Beecroft property, Elmach submits its interest should be purchased using funds provided to Anne-Katrine by the Administrator (if there are sufficient funds).

In reply, it was submitted on behalf of Anne-Katrine that this issue does not depend upon the construction of the will, but is instead dependent upon the Court’s findings as to the creation and disposition of legal and equitable interests in the Beecroft property at the time of and after its purchase. Even if the Court finds that an amount remains payable to Elmach in respect of the Beecroft Property, it remains Anne-Katrine’s position that because it was always Jim’s intention that the Beecroft property be held on trust for Anne‑Katrine by Elmach and anything that had to be repaid to Elmach was repayable by Jim, the Court can order the Administrator to make any such payment to Elmach.

The bases upon which Anne-Katrine submits the Court can require the Administrator to take steps to ensure she can obtain full ownership of the property are:

It was further submitted that as the evidence purportedly demonstrates that Jim procured funding so that he could purchase the Beecroft property as a gift for Anne-Katrine and did not intend for the property to secure any funds advanced by Elmach, Elmach would be required to sue the Administrator in respect of payment and not Anne-Katrine.

The Administrator must give effect to the terms of the will. For reasons already given the Court:

Anne-Katrine provided no further submissions as to why a trustee should not be appointed pursuant to s 66G(1) beyond her previous submissions that Elmach does not and cannot have a proprietary interest in the Beecroft property.

Elmach conceded that its success on this issue is contingent on Anne-Katrine failing to establish that she is the full legal and beneficial owner of the Beecroft Property. Should the Court accept that Elmach has a 20% interest in the property (as it has), four reasons were advanced in favour of the Court appointing a trustee to sell the property.

First, Anne-Katrine was at all times aware that, at the time of purchase, 20% of the property was going to be owned by Elmach. Evidence in support of this proposition included:

Second, when Anne-Katrine first expressed a desire to sell the Beecroft property she was reminded on several occasions that Elmach had a 20% interest in the property. This proposition was evidenced by:

Third, Kim and Mr Wooldridge have attempted to persuade Anne-Katrine to arrange for the purchase of Elmach’s 20% interest in the Beecroft property on several occasions:

Finally, correspondence from Kim’s lawyers to Anne-Katrine was relied upon to show that Anne-Katrine was warned that if a consensual resolution to the payment out of Elmach’s interest in the Beecroft property was not possible, then Elmach would proceed to seek the appointment of a trustee for sale by the Court.

As no proposal has been forthcoming and the co-owners of the Beecroft property remain in dispute, Elmach submits this is a situation where the Court would appoint a trustee for sale of the Beecroft property pursuant to s 66G of the CA.

The law in relation to applications for an order under s 66G of the CA is well-settled. Applied to the facts of this case, it is that Elmach, as a co-owner of the Beecroft property, is entitled to an order as of right, except in very limited circumstances. These include contrary contractual rights, or fiduciary or equitable proprietary obligations that would be inconsistent with the making of an order. The result of the Court’s determination of Anne-Katrine’s claim is that there are no such circumstances that would apply to negative Elmach’s entitlement to an order.

The Court will make the order sought by Elmach. However, it is clear from the evidence that a major reason why the issues between Elmach and Anne-Katrine have not been resolved has been Anne-Katrine’s belief, which the Court accepts she has held in good faith, that Jim never meant for her to pay for the 20% share of the Beecroft property held by Elmach. The Court has found against Anne-Katrine on that point. Elmach is entitled to be paid for its share of the Beecroft property by whoever purchases it, and Anne-Katrine is not entitled to look to the estate to pay for that share on her behalf.

In these circumstances, the Court urges the parties now to attempt to achieve a negotiated outcome in relation to Anne-Katrine’s ownership and occupation of the Beecroft property, resulting in either Elmach’s share being sold to Anne-Katrine, or orderly arrangements for sale being made which ensure continuity of accommodation for Anne-Katrine. If no agreement can be reached, then the Court will appoint trustees for sale of the Beecroft property.

There is no dispute that Kim is liable to pay a sum of $13,964,189.36. Bogasi originally asserted that Kim owed a higher figure, relying on an expert report from forensic accountant Ms Michelle Jennings-Jones. The adjustments proposed by Ms Jennings-Jones were considered (and refuted) in the opening submissions filed on behalf of Kim. During the course of the proceedings, an agreement was reached as to the principal owing on the loan account on the basis that Bogasi would not press for those further adjustments.

In the event that Kim is found not to be the beneficial owner of the Elmach units, Kim submits that any further adjustments (as to both credit and debits) should be the subject of a further accounting. In the light of the Court’s findings, the Court will hear that parties as to this.

Bogasi’s claim includes a claim for interest pursuant to s 100 of the CPA, calculated from the date on which those funds were advanced. Ms Jennings-Jones calculates that interest claim to be $12,746,436.32.

S 100(1) of the CPA provides:

Bogasi submitted that the debt which constitutes the cause of action arises instantly upon the making of the loan independently of any need to make a demand for repayment: Young v Queensland Trustees Ltd (1956) 99 CLR 560, 566 (Dixon CJ, McTiernan and Taylor JJ). It follows that, for the purposes of s 100, the cause of action arose in each case upon the making of the advance, and not the making of any demand.

Bogasi relied on the following evidence that Kim gave during his cross-examination as proof that he is aware that interest was intended to accrue on these loans (Tcpt, 30 April 2024, p 913-915):

Bogasi asserts that the award of interest is compensatory in character, consistent with the purpose of interest under s 100 (see Screenco Pty Ltd v RL Dew Pty Ltd (2003) 58 NSWLR 720; [2002] NSWCA 319 at [66]). While Bogasi accepts that the award of interest under this section is discretionary, Bogasi relied on Kim’s concession that the loans accrued interest as evidence that there would be no unfairness if the Court awarded interest. Mr Condon SC accepted that Kim’s ‘concession’ was ambiguous as to which loans he was accepting would attract interest.

In reply, Kim submits that it is disingenuous to assert that loans advanced to him were, in substance, part of his salary structure and that is a basis on which interest should be paid on those loans in circumstances where (1) Bogasi is seeking to now recover those loans from him; and (2) Bogasi extended that same loan facility to other members of the Sundell family and has taken no steps to call upon those loans, or claim interest in respect of them.

Kim also refutes that he unconditionally accepted that some of the loans would attract interest. The concession was submitted to be in respect of Division 7A amounts that were added to Kim’s loan accounts from time to time (reflecting a proportion of interest payments that Bogasi had to pay to TCI).

It was submitted that those interest payments were submitted to have been expressly identified by Ms Jennings-Jones in her report and form part of the principal amount claimed by Bogasi. Kim submits that Ms Jennings-Jones properly deducted those Division 7A interest charges from her interest calculation to avoid a calculation of interest upon interest.

The fact that those Division 7A charges accrued to Kim’s loan account and form part of the principal claimed by Bogasi was contended to be a reason against (and not for) the imposition of further interest because the principal claimed by Bogasi already includes an interest component.

It is accepted that the purpose of an award of pre-judgment interest is to compensate the plaintiff for its loss. However, the Court retains a discretion as to whether or not to award interest under s 100: Global Risk Alliance Group Services Pty Ltd v Harmer (No 2) [2024] NSWSC 234 at [9]. Although it may be that the cases in which a Court will decline to make an order for the payment of interest are rare (see Falkner v Bourke (1990) 19 NSWLR 574 at 576), it is submitted that this is such a case. There is a compelling basis on which the Court should decline to award interest, being:

During closing submissions, Mr Chapple SC also submitted that it would be antithetical to the notion that interest under s 100 is intended to be compensatory if interest was held to run from the advance of the funds (as interest is normally calculated). Instead, if the Court were minded to order interest under this section, Mr Chapple SC submitted that interest should run from the date of the demand for payment which was when Bogasi filed its Statement of Claim in the 2022 proceedings.

Kim contends that a compelling discretionary factor is that in 2010, Kim signed two Deeds of Acknowledgment with Bogasi (one as Trustee of the Old Trust and the other as Trustee of the New Jim Trust) which reflected that Kim acknowledged that amounts which had been loaned to him by Bogasi on behalf of the trust were repayable and “in the meantime are interest free.” Bogasi’s reliance on s 100 is submitted to be an attempt to circumvent the Deed. A further discretionary factor is the undisputed fact that Brett and Anne-Katrine also have loan accounts with Bogasi, but no steps have been taken to recover their debts, and there has been no suggestion by Bogasi that interest is payable by them.

Even if the Court were minded to award interest, Kim’s submissions note that any such award is intended to be compensatory in recognition for the period in which the successful party has been “kept out” of their money. While the cause of action to recover money repayable on demand accrues from the date on which the money is advanced, the obligation to repay that money does not arise until a demand is made. Therefore, Bogasi cannot assert that it has been “kept out” of its money for any period longer than from when it made its demand for repayment. To the extent that interest is payable Kim contends that interest should run from no earlier than when the demand was made. Bogasi made no such demand prior to the filing of the Statement of Claim.

In reply, Bogasi submits that Kim’s defence does not identify any grounds for denying the effect of s 100. In paragraph 24A of his defence, he asserted affirmative defences, including defences in the event that he is liable to pay some or all of the amount claimed by Bogasi:

This failure purportedly occasioned procedural unfairness to Bogasi, which contends it could have led evidence as to why it did not call upon the loans owned by Brett or Anne-Katrine to the extent they were relevant. In any event, no issue of unfairness or discrimination arises. Kim accepted, without any complaint, that at least some of his loans bore interest. These concessions make irrelevant the evidence of Ms Francis relied upon by Kim and refute any proposition that an award of interest in this case would work an injustice to Kim. Further, the fact that Bogasi has not claimed interest from Anne-Katrine or Brett is legally irrelevant.

During closing submissions, Mr Chapple SC contended that Bogasi could not claim it suffered a procedural unfairness by not being able to call evidence in relation to why Bogasi did not call upon Brett and Anne-Katrine’s loans as to their knowledge of whether they believed their loans would be called upon was only, and could only have been, adduced during cross-examination.

Bogasi also refutes that the Deed of Acknowledgment of the Old Jim Trust forecloses a claim of interest on monies advanced after its execution: Sub-clause 1 (b) thereof states that the past payments made to Kim constitute loans made by Bogasi; and that the loans sums are repayable on demand and, until such time, are interest free. This was to be distinct from the terms of the deed for the New Jim Trust which speaks of future loans by it and interest on those loans being interest free. Even if the Deed of Acknowledgement was given effect, it was submitted by Mr Condon SC that at its highest the Deed would mean that interest would not be awarded for moneys advanced before the date of that document.

According to Bogasi, up until 30 June 2009 Kim’s expenses were recorded in the Old Jim Trust. For FY2010, his expenses were recorded in the New Jim Trust, but the balance was transferred back to the Old Trust on 30 June 2010. The same thing happened for FY2011 and FY2012. From 1 July 2012, the expenses were again recorded in the Old Jim Trust and no new transactions were recorded in the New Jim Trust loan account thereafter. As such, the loans are governed by the terms of the Old Jim Trust, which does not preclude the award of interest on future loans.

In closing submissions in reply, Mr Condon SC relied on McLean v Commonwealth of Australia (Unreported Supreme Court (New South Wales), 22 August 1996) at [5] to [8] as authority for the proposition that delay in asserting a claim for interest will ordinarily not displace an entitlement to that interest. Reliance was also placed on the decision of Black J in Krajovska v Krajovska [2011] NSWSC 1026 where his Honour cited the Court of Appeal’s decision in Kalls Enterprises Pty Ltd (in liq) v Baloglow (No 3) [2007] NSWCA 298 at [6] and considered whether there was any prejudice to the defendant as a result of the plaintiff’s delay in bringing the claim for interest:

These authorities were submitted to demonstrate that it is only where the defendant is able to show an injustice that delay in making a claim of interest will preclude the plaintiff from obtaining that interest. Mr Condon SC submitted that it was not possible for Kim to demonstrate any such prejudice: it was argued that it was within Kim’s power to repay Bogasi at any time he wanted to and he also accepted that some of the loans were repayable.

Mr Condon SC submitted that Kim’s submissions ignore that Bogasi incurred a financial cost as a result of the payments that they made to Kim. For example, in the 2014/15 financial year Bogasi paid $425,780 which was debited to Kim’s Old Jim Trust loan account. The source of the money was TCI and therefore Bogasi had to pay interest to TCI for the money it loaned to Bogasi. Bogasi paid $55,064.11 for Division 7A interest to TCI in that year.

The Court accepts Kim’s alternative submissions. It will, in the exercise of its discretion, order that pre-judgment interest is payable on the agreed sum of the debt claim from the date of filing of Bogasi’s Statement of Claim, being a demand for repayment, in particular for these reasons:

Kim relies on cl 4 of the will to set off any debt owing by Kim to Bogasi. Kim asserts that to the extent that Jim’s estate is in funds, any debt owing by the estate to Bogasi will be paid out of the estate.

If cl 4 does permit Kim’s debts to be paid by the estate, Kim suggests a set-off should occur because the Administrator is seeking to recover from Bogasi the sum of $11,332,305.86, plus interest. Assuming that both debts are proved, the movement of money is contended to become circular: Bogasi must pay its debt to the estate, which must use that money (in part) to pay on Kim’s behalf his debt owed to Bogasi. Thus, and by analogy with, the rule in Cherry v Boultbee (1839) 4 My & Cr 442; 41 ER 171 (that whenever a person seeks equity in respect of a fund, but owes money to that fund, the debt to the fund must either first be paid or an accounting had), it would be inequitable in the circumstances for Bogasi to recover money from Kim without it satisfying its corresponding obligation to make payment to the estate.

In reply, Bogasi submits that Kim incorrectly asserts the rule in Cherry v Boultbee is applicable. Bogasi relies on the judgment of Palmer J in Otis Elevator Co Pty Ltd v Guide Rails Pty Ltd (in liq) [2004] NSWSC 383; (2004) 49 ACSR 531 to the effect that the principle only operates where the claimant on a fund is also a debtor thereof.

By contrast, there are no reciprocal obligations between Kim and Bogasi in this case. Kim owes money to Bogasi. Whether Bogasi owes money to someone else (for example, the Administrator) depends upon the determination of the claim the estate brings against Bogasi. The obligations Bogasi has to the Administrator were submitted not to involve Kim, and Kim was not entitled to effectively subrogate himself to the Administrator’s claim to force a set-off based on the rule in Cherry v Boultbee. Further, the equity is enforceable by the estate’s legal personal representatives but no such right is asserted by the Administrator. Therefore, Mr Condon SC submitted during oral submissions that the conscience of Bogasi cannot be affected by the making of a will by Jim, a private act and a document to which Bogasi is not a party.

During closing submissions, Mr Chapple SC submitted that whilst Bogasi is not a party to the will, it is the residuary beneficiary under that will. The rule in Cherry v Boultbee was submitted to apply by analogy on the basis that Bogasi, as the residuary beneficiary under the will is seeking to obtain the residue of the estate (being the Elmach units) without putting the estate in funds to pay its debts. Mr Chapple SC conceded that the circumstances of this case cannot be conformed within the precise parameters of Cherry v Boultbee. Therefore, to avoid any prejudice to Kim, he submitted in the alternative that judgment should not be entered in the 2022 proceedings pending the determination of the Administrator’s claim in the 2023 proceedings so that all outstanding cash payments to the Administrator can be dealt with together.

Bogasi submits that Kim is not entitled to a set-off under cl 4 of the will. While Bogasi accepts that the clause has to be read as a whole, it submits the words in sub-cl (a) are merely illustrative and do not otherwise qualify the plain meaning of the expression “my just debts and testamentary expense.”

Bogasi also rejects Kim’s pleading that it is inequitable for Bogasi to call on its debt without paying the sum allegedly owed by Bogasi to Jim’s estate on the basis that the doctrine of set-off cannot apply where, as in this case, there is an absence of mutuality and there is no equitable ground which impeaches Bogasi’s claim.

As to what constitutes ‘mutuality’ in claims for a set-off, Bogasi relied on the judgment of Giles J (as his Honour then was) in Murphy v Zamonex Pty Ltd (1993) 31 NSWLR 439 at 464-465:

Bogasi submitted there is no relevant mutuality because there is no corporate act by Bogasi which gives rise to a commitment or obligation which impeaches its title to sue, and the parties to the transaction differ. The first relevant relationship is between Bogasi as creditor and Kim as debtor. The second relevant relationship is between the estate and Bogasi as debtor.

The different parties to the transaction was a key reason why the Court of Appeal held that there was no mutuality in Hawes v Dean [2014] NSWCA 380 (Barrett JA, with whom Bathurst CJ and McColl JA agreed) at [63] to [66]:

Similarly, in this case Bogasi contended that the transactions are entirely separate and distinct. In particular, the alleged loan accounts came into existence separately, involved different transactions and were between different parties. Additionally, the alleged unfairness of Kim’s inability to rely on cl 4 of the will, relates to a matter (being the creation of the will) to which Bogasi was not a party and about which it was not consulted. Bogasi also submitted that it is relevant that the will post-dated many of the transactions upon which Bogasi sues.

Bogasi also relied on the judgment of Ward ACJ in Mao v Bao (2023) 113 NSWLR 26; [2013] NSWCA 278 at [59] in which her Honour noted (Mitchelmore JA concurring) that unconscionability is not of itself sufficient to establish a defence of equitable set-off:

Relying on Mao, it was submitted that it is insufficient for Kim to point to financial embarrassment to the estate by Bogasi’s alleged delinquency.

Furthermore, Bogasi submitted that Kim: (1) does not plead any matter which would impeach Bogasi’s title to sue; (2) never cross-examined a director of Bogasi as to why it had not accepted the estate’s demands for repayment; and (3) fails to plead any delinquency on Bogasi’s behalf, instead merely asserting that Bogasi is liable to repay money to the estate.

In reply, Kim submitted that Bogasi’s construction of cl 4 which contends that sub-cl (a) is illustrative only and does not qualify the meaning of the chapeau in cl 4 is a strained reading. To give effect to the need to read cl 4 in its entirety, Kim submits that sub-cl (a) is not “merely” illustrative in that it does not qualify what is to be understood as Jim’s “just debts”. To the contrary, sub-cl (a) illustrates in an inclusive way the type of debts that are to be treated by the Administrator as Jim’s debts. To construe cl 4 otherwise would render sub-cl (a) entirely otiose. In those circumstances, Kim’s case is that it would be inequitable for Bogasi to recover money from Kim without it satisfying its corresponding obligation to make payment to Jim’s estate.

In response to Bogasi’s contention that there is an insufficient degree of mutuality for Kim to rely on a set-off, Kim submitted that on his construction of the will, any debt owed by Kim to Bogasi is to be paid by Jim’s estate. In proceedings 2023/157660, the Administrator seeks to recover from Bogasi the sum of $11,332,305.86 (although this dispute has been hived off to be heard after these proceedings). The mutuality was contended to arise from the following factors:

Kim submitted that at the very least, any judgment against Kim should be stayed pending the determination of the Administrator’s claim against Bogasi.

The following paragraphs should be read with the Court’s general construction of cl 4 of the will in [1133] to [1144] below.

The references in the submissions to “analogous” or “in the nature” of the “rule” in Cherry v Boultbee is a consequence of having what, on one view, is a tripartite set of relationships: Bogasi as trustee claims a debt from Kim; Kim has a right to require the Administrator to pay his (Kim’s) debt to Bogasi as trustee; and the Administrator is suing Bogasi as trustee for a debt alleged to be owed to the estate. However, in my respectful opinion, that is not the apposite analysis for the purposes of the present argument.

Sub-clause 4(a) of the will is not “illustrative”. It has the effect of expanding the class of “just debts” to include, in this case, debts owed by Kim to Bogasi “as at the date of [Jim’s] death”. This gives rise to the question of to whom this just debt (by extended definition in sub-cl 4(a)) is owed. Another way of asking that question is, to whom should the money be paid so as to give the Administrator a good discharge of her obligation to pay the debt?

It may be accepted that the will cannot and does not effect a unilateral assignment of Kim’s debt to Bogasi to the estate. Kim remains indebted to Bogasi at law. However, at least as between the Administrator and Kim, the will on its proper construction requires the Administrator to pay Bogasi (as a just debt of Jim’s) the amount Kim owes Bogasi. This is because the will requires the Administrator to pay an amount owed to Bogasi and therefore it should be paid to the creditor – Bogasi. This would be done in practice by the Administrator informing Bogasi that she is making the payment on behalf of Kim, or paying Bogasi on terms that Bogasi must apply it to Kim’s loan account with Bogasi. On Kim’s side, the will gives him the right to compel the Administrator to pay out his debt to Bogasi.

Equity looks to substance rather than form. In this case it follows that Bogasi is entitled to be paid an amount from the estate in respect of Kim’s debt to Bogasi. It is unnecessary to consider whether Bogasi has a right against the Administrator by analogy with the position of a non-party beneficiary of a contract made between two other parties for the benefit of the non-party. For its part, Bogasi is alleged to owe a debt to the estate.

Viewed in this way, the Court concludes that Cherry v Boultbee does apply either by extension or analogy. The analysis makes it, in my view, inequitable (in the sense of affecting Bogasi’s conscience) for Bogasi to pursue Kim for his debt to it insofar as it is to be paid by the Administrator when Bogasi is alleged to owe money to the estate without the two amounts being set off. How much the Administrator will in fact be able to pay remains to be determined. Nevertheless, it follows that there cannot be a judgment (whether in favour of Bogasi or Kim) until the set-off is able to be calculated, including the determination of the estate’s claim against Bogasi.

In the alternative, if the approach which I have preferred is in error and Bogasi is presently entitled to a judgment against Kim, I accept Kim’s alternative submission that any such judgment should be stayed pending both the determination of the Administrator’s claim against Bogasi and (I would add) pending due administration of the estate in the sense of determining the estate’s liabilities and available assets and, therefore, its solvency or otherwise.

As part of Bogasi’s 2019 Third Cross-Claim and its Cross-Claim in the 2023 proceedings, Bogasi pleads that the Sundell Group operated under the Common Assumption. It will be recalled that this was pleaded to the effect that the brothers trusted each other and that Jim and Gunnar conducted the business activities of the Sundell Group in order to:

The evidentiary basis for the existence of the Common Assumption was said to be the various affidavits sworn by Mr Wooldridge, Jim and Kim in the Family Court proceedings.

The following aspects of Kim’s affidavits were submitted to demonstrate the existence of the Common Assumption and how the legal arrangements associated with the acquisition of the Elmach units were to operate in accordance with the Common Assumption:

Bogasi submitted that Jim’s evidence in the Family Court proceedings also made reference to the Common Assumption, which he called a ‘standing mandate’. According to this mandate, his affidavit deposed that he gave directions to Mr Wooldridge to make available funds by loan or distribution to various entities and family members comprising the Sundell Group as he considered necessary, appropriate, or commercially expedient. This included pooling all the finances of the Sundell Group to be distributed to both Jim’s extended family and Gunnar’s family.

Mr Wooldridge’s affidavits in the Family Court proceedings were also said to provide further evidence of the Common Assumption. For example, in his affidavit sworn on 25 September 2011, Mr Wooldridge deposed that Jim and Gunnar's "strongly expressed intention at all times" was that the Elmach units were for the benefit of the Sundell Group/Sundell family, and not for Kim and that he recalled being told this by Jim and Gunnar. At paragraph [27] of the same affidavit, he also deposed:

Mr Wooldridge’s affidavit sworn on 1 March 2012 also stated:

The evidence outlined at [961] to [964] above was submitted to constitute consistent and clear admissions as to the common understanding that the Elmach units were intended, by the concurrence of Jim and Gunnar, to benefit both sides of the Sundell family. It was also submitted to be significant that the evidence was provided on oath during the Family Court proceedings, which directly concerned the beneficial ownership of the Elmach units.

In reply, the Administrator submits that Bogasi’s own submissions reveal the ambiguous nature of how the Common Assumption is defined because Bogasi variously refers to:

Mr Cheshire SC in closing submissions also submitted there was no basis for Bogasi to assert that the purchase of the Elmach units represented a commercial opportunity for Bogasi. He submitted that it was Kim who found the opportunity and brought that opportunity to Jim and Gunnar. He also submitted that even if the evidence demonstrates that Kim was supposed to hold the Elmach units for somebody else, the evidence never explicitly specifies for whom Kim was supposed to hold them. Any allegation that Kim held them for a specific entity in the Sundell Group was submitted to be void for uncertainty and not sustainable on the evidence. At its highest, Mr Cheshire SC submitted it could be contended they were held on resulting trust for TCI as it was the source of the funding for the transition.

Bogasi submits that Jim’s consent to the Consent Orders demonstrates he was self-evidently aware of the existence of the trusts contained in the Declarations. Bogasi also contends that Jim was aware that Kim could not be a beneficiary of that trust.

If Kim's evidence is accepted (contrary to Bogasi's primary case), in the course of the hearing of the Family Court proceedings, Jim was worried that Shara was "going after the family assets", and there was a "small risk she could be successful". Jim also told Kim at that time, "I want to settle" and, "don't worry I will sort you out". That plainly foreshadowed (on the premise stated at the beginning of this paragraph) a consciousness on Jim's part that he was intending to transfer his interest in the Elmach units to Kim.

Therefore, Bogasi submits that Jim’s consent to the Consent Orders was an act undertaken in furtherance of the breach of trust as he would have had no intention to nominate anyone other than Kim at the time the Consent Orders were made. Kim acting in accordance with the alleged nomination would mean that Jim caused or intended to cause Kim to commit a breach of trust in light of both men being aware of the Common Assumption.

In reply, the Administrator submits that Bogasi’s submissions contain no analysis by reference to its pleaded case as to why it says a trust has been established. Instead, it is contended that Bogasi merely asserts that the Common Assumption informs the “true construction and the terms of the trusts”. The ‘nebulous’ manner in which the Administrator contends that Bogasi defines the Common Assumption means that any trust would fail for uncertainty.

The Administrator also refutes Bogasi’s submission that the trust it seeks to prove does not require that every member must be ascertained in order to satisfy the requirement of ‘certainty of objects’. While not every member has to be ascertained, the Administrator submits that Bogasi must still prove that it is possible to say with certainty whether or not any given individual is a member of the class of objects. The Administrator accepts that in relation to the Sundell Group, it can be accepted that this included Sundell Holdings and its subsidiaries, but submits it cannot be accepted that Bogasi and Elmach were part of the Sundell Group, and either of them not being in the Group would be fatal to Bogasi’s claim.

For the reasons submitted at [987] to [988] below, the Administrator also reiterated in reply that a lack of certainty also arises due to the inability to define with certainty whether anyone beyond Jim, Gunnar and their respective children is an object of the alleged trust (or trusts).

The Administrator also submitted that Bogasi’s fraud on the power case, whilst pleaded in addition to the breach of trust case, was inconsistent. The Administrator argued that if the Consent Orders were constrained by an obligation to give effect to the Common Assumption and the terms of the trust for which Bogasi contends, then consenting to those orders could not have amounted to a breach of trust.

Bogasi relied upon the alleged nomination and the fact that Kim obtained the beneficial interest in the Elmach units as rendering Kim’s consent to the Consent Orders a breach of trust. However, the Administrator submits that pleading subsequent events (being the Nomination) as rendering an earlier action (being the consent to the orders in the Family Court) a breach of trust is faulty logic.

The Administrator also contended that it is unclear why agreeing to the Consent Orders which allowed Jim to nominate Kim (assuming the Court agrees that the power of nomination extended to Kim) would be a breach of trust when:

The Administrator also contends that Bogasi merely asserts that Jim was aware of the terms of the trust, a necessary requirement to establishing that Jim procured a breach of trust. It is not self-evident that Jim was aware of the terms of the trust given the Administrator’s contention there are several different forms the trust may have taken.

For the reasons outlined earlier in these reasons, Kim submitted that there was no Common Assumption and Jim did not commit a breach of trust.

The Administrator disputes Bogasi’s contention that there was a Common Assumption which was the basis upon which Jim and Gunnar “conducted the business activities of the Sundell Group.” The purported Common Assumption, as pleaded by Bogasi in the 2019 Third Cross-Claim, was that assets could be moved between entities within the Sundell Group so as to “share in the Sundell Group’s wealth equally between their two families”

During closing submissions, Mr Cheshire SC accepted that there was some form of an arrangement between Jim and Gunnar that they would govern the Sundell Group in a manner which was fair. However, this was contended to only be a moral obligation based on general notions of fairness and cannot be considered to be legally binding.

The Administrator submitted that in order for Bogasi’s Common Assumption to have relevance to the case at bar and to establish that Jim did breach his fiduciary duty if any nomination occurred, Bogasi would need to establish that Elmach was a member of the Sundell Group. The Common Assumption, as pleaded, would have no legal effect on companies which operate outside the Group.

In this case, the Administrator relied on eight pieces of evidence to demonstrate that Elmach has never been considered by relevant employees and family members as being a part of the Sundell Group:

The Administrator also contends that the effect of Elmach being a company which sits outside the Group is that it precludes Bogasi from having any standing to pursue a cause of action against a company outside the Group. Bogasi owned the shares in Sundell Holdings and its function was to hold those shares (and thus the value of the underlying assets) on trust for the four trusts. Therefore, the Administrator contends that Bogasi has no interest in assets outside of those held by Sundell Holdings (and now only as to 50% since it has been replaced as trustee of Gunnar’s trusts) and so has no entitlement to pursue any cause of action in that regard. Bogasi can therefore only recover equitable compensation from the estate to the extent to which it can show that damage has been caused to Bogasi in its capacity as trustee for the Old Jim Trust.

The Administrator also challenges Bogasi’s entitlement to bring the claim due to the ‘reflective loss principle’ (which I considered in Haiye Developments Pty Ltd v Commercial Business Centre Pty Ltd [2022] NSWSC 937 at [442] and following). It was contended that the principle precludes Bogasi from pursuing a claim where the wronged party is one of its subsidiaries, such as Sundell Holdings, even though Bogasi may have suffered reflective loss in the form of the diminution in the value of its shareholding.

It was acknowledged that at times during the hearing witnesses suggested that the way assets were managed was not limited to the operation of the Sundell Group but was instead referable to being for the benefit of the family. For example, during cross-examination Mr Wooldridge said, “Jim and Gunnar worked together and if a family member or entity in the Sundell Group needed funds, Jim and Gunnar would find a way to source those funds from assets within their formal or informal control” (see Tcpt, 1 May 2024, p 1068(49)) Similarly, Mr Walker referred to assets being held for the whole family, which he later defined as Jim and Gunnar, their respective spouses, their descendants and their spouses, the family and for the family members (see Tcpt,11 April 2024, p 289(16)).

Any notion that the assets were managed by reference to the concept of the ‘family’ rather than focusing on the operation of the Group and the movement of the Group was submitted to be flawed and not reflective of the pleaded case. The notion of “family” was submitted to be unpleaded and ambiguous as it cannot be defined simply by reference to the beneficiaries in the four family trusts since the beneficiaries are not consistent across those trusts.

The difficulties associated with defining the family relationship was also submitted to affect the enforceability of any purported Common Assumption. The Administrator submitted that Bogasi only pleads that the assumption was that the Sundell Group’s wealth would be ‘shared equally between their two families’. However, it is not pleaded who forms part of each of those two family groups and any attempt to demarcate how the families were defined was submitted to be arbitrary

It was argued on behalf of the Administrator that even if the Court defined Jim and Gunnar’s families as being their direct descendants, this would be inconsistent with the way the four family trusts of which Bogasi was trustee were established. For example, the Old Jim Trust and Old Gunnar Trust were identical and did not draw any distinction between the two sides of the family, included Stella as a primary beneficiary along with her siblings and their spouses and children; included Irma Larssen who was described as the housekeeper; but did not include any other corporations or trusts save for a company known as Azrael Holdings which was wound up approximately 20 years ago. The new trusts for Jim and Gunnar were defined differently to the old trusts and to each other, but were broader and included companies, partnerships, trusts and charities related to family members.

The difficulty in any alleged Common Assumption was submitted to be exposed by Bogasi being replaced as the trustee of the Gunnar’s trusts. The Administrator queried whether the Common Assumption would now require Bogasi to operate Jim’s trusts consistently with the Common Assumption for both sides of the family or only for Jim’s side. The Administrator contended it would be surprising if there was a legal obligation arising from the Common Assumption that differed in its terms from the terms upon which Bogasi was required by the various terms of the trust deeds to hold assets, particularly when those terms themselves were not identical. The Administrator further submitted that the Common Assumption would impose an unlawful fetter that is not present in any of those four trusts, namely an obligation to distribute equally between the two families (as is pleaded in the 2023 proceedings).

Mr Chesire SC during closing submissions also submitted that Bogasi being removed as the trustee for Gunnar’s trusts also precluded Bogasi from being able to represent both sides of the family. Only TCI and Sundell Holdings were submitted to be truly representative of both sides of the family. Therefore, if the Elmach units were to revert to Bogasi, Gunnar’s side of the family may not get the benefit of the units, which would be contrary to the purported existence of the Common Assumption.

The Administrator also refutes the existence of a legally binding Common Assumption on the basis that the directors and shareholders of the various entities within the Sundell Group were not limited to Gunnar and Jim and were not identical. It was argued that each director owed a duty to the company of which he or she was at that time a director, and any question of whether there was fully informed consent to what would otherwise be a breach of that duty would require consideration of the position of differing entities and differing groups of people. The operation of the Sundell Group in accordance with the pleaded Common Assumption by Jim and Gunnar would have likely constituted a breach of their duties to the various entities, and also likely a breach by the other directors of their duties.

The notion of the Common Assumption requiring “wealth” to be “shared” equally was also submitted to be ambiguous and inconsistent with the evidence of what occurred. For example, the Administrator contended that the Common Assumption would require consideration of how to compare a cash benefit, an asset benefit, a paper benefit, and a benefit recorded as a loan (which may or may not be forgiven) so as to achieve the pleaded equality. The impossibility of achieving this task was submitted to disprove the existence of the Common Assumption.

The evidence also demonstrated that over time greater benefits have been paid to Jim’s family than Gunnar’s. Similarly, whilst it was undisputed that several family members have received financial support from the trusts, including to purchase new property, there was no evidence that a corresponding benefit was paid to the other side of the family.

Moreover, while the Common Assumption as pleaded purports to determine how assets within the Sundell Group were to be dealt with, it does not address how assets were to be brought within the Group and whether this arrangement was to be exclusive. The Administrator submitted the following evidence demonstrates the inconsistency with which assets were brought into the Group to disprove the existence of the Common Assumption:

The Administrator also rejects for the following reasons the position contended for by Bogasi that the CPT transactions were entered into to give effect to the Common Assumption:

Finally, the Administrator submitted that it was temporally illogical for Jim to be considered to have procured a breach of trust by encouraging Kim to enter into the Consent Orders. The fact that the Nomination was alleged to have been made in 2013 and the Consent Orders were made in November 2012 was submitted to indicate that Jim could not have procured a breach of trust in 2012 for a nomination which was made in 2013. Bogasi not pleading a case that Jim always intended to nominate Kim meant Bogasi could not properly maintain such an allegation.

In reply, Bogasi rejected the Administrator’s submission that the Common Assumption has no relevance to Elmach because that company sits outside the Group. The evidence was submitted to show that Kim’s ownership of the Elmach units was intended to be a temporary solution due to CGT and stamp duty considerations. At the time of their acquisition, the evidence shows that Jim and Gunnar agreed the units were to be owned by an entity within the Sundell Group. This contention was submitted to be supported by Mr Wooldridge’s evidence during cross-examination that he believed the Elmach units were effectively owned by both Jim and Gunnar at the time of the Family Court proceedings.

The Administrator’s contention that Elmach was not bound by the Common Assumption was also submitted to ignore the evidence which demonstrated that Elmach was historically part of the activities of the Sundell Group:

Bogasi also rejects, for two reasons, the Administrator’s proposition that Bogasi does not have standing to bring the 2019 Third Cross-Claim:

The Administrator’s contention that the Common Assumption as pleaded would likely have required Jim and Gunnar to have breached their director’s duties across various entities was also submitted to be erroneous for these reasons:

Bogasi also refutes the contention the Common Assumption is ineffective due to a lack of clarity as to which family members form part of the Sundell Group. The evidence was submitted clearly to demonstrate that the CPT1 and CPT2 transactions were broadly understood to benefit the direct descendants of Jim and Gunnar and that neither Jim nor Gunnar sought to make distinctions as to who was considered part of the Sundell family. This proposition was submitted to be supported by Jim’s affidavit in the Family Court proceedings dated 1 March 2012:

Contrary to the Administrator’s submissions, Bogasi does not contend that the Common Assumption meant that the wealth of the Sundell Group had to be shared equally and in a precise manner year on year. Instead, Bogasi submits it requires that the benefits are given to family members from time to time based on what Jim and Gunnar considered to be fair as between their respective families. The following evidence was submitted to support this proposition:

Bogasi refuted the Administrator’s submission that the ownership of various assets by various family members (as opposed to companies of the Sundell Group) undermines the existence of the Common Assumption. Bogasi submitted that this argument ignores evidence that the Common Assumption operated more generally to ensure that wealth was distributed equally between family members. Mr Wooldridge’s affidavit in the Family Court proceedings sworn on 1 March 2012 was relied on. Mr Condon SC submitted that Bogasi had standing to contend for the existence of the Common Assumption as a representative in its capacity as trustee of the Old Jim Trust.

The Administrator submitted the Court cannot find that Jim committed a breach of trust even if Jim did nominate Kim to be the beneficial owner of the Elmach units. The Family Court made the Consent Orders which included the Declarations that are binding upon Kim, Jim, Elmach, Bogasi and TCI (and indeed the other parties to those proceedings) as to the legal rights there stated. Consenting to orders that were endorsed by the Court and thus gave rise to a binding state of affairs cannot, it was said, amount to a breach of trust (or a procurement or inducement to a breach of trust). It was argued that Bogasi's consent to the Consent Orders operates as a consent to, and acquiescence in, any wrongful conduct of which it now makes complaint.

The Administrator submitted that any remedy Bogasi seeks would require Bogasi to go back to the Family Court and have those orders set aside. Similarly, making a nomination in accordance with those orders cannot have amounted to a breach of trust (or a procurement or inducement to a breach of trust).

Given that five alternative trusts are pleaded in relation to each of CPT1 and CPT2, the Administrator submitted it is difficult to see how it could be said that Jim had knowledge of any particular one, let alone that (as pleaded) he had knowledge of all of them. Mr Cheshire SC also submitted that it was insufficient to demonstrate that Jim knew the facts from which the Court may declare there was a trust. Bogasi would have to show some level of awareness by Jim that he was aware for whom Kim was holding the units on trust, and it was submitted that Bogasi could not demonstrate this level of knowledge on the evidence.

The Administrator argued that Bogasi could only be entitled to bring a claim for equitable compensation insofar as it alleges that Kim held the units on trust for Bogasi (rather than any other party or parties), being only one of the five pleaded alternatives as to the relevant trust. However, the Administrator’s submissions record that Bogasi pleads it was the trustee of the four family trusts and it is no longer trustee of Gunnar’s trusts. As Bogasi expressly identifies, it brings the Cross-Claim in the 2023 proceedings only as trustee for the Old Jim Trust.

It was further submitted that Bogasi could only recover compensation to the extent to which it could establish that had those events not occurred, financial benefit would have flowed to Bogasi for the benefit of the Old Jim Trust. However, this case was submitted to be flawed by the absence of any pleading of causation.

Finally, Mr Chesire SC submitted that it was important for this Court to recognise the Declarations stated that the Elmach units were held by Kim for ‘Jim and/or his nominee’. The fact that Jim could have been the holder of the units was submitted to mean that Kim could not have effected a breach of trust by merely entering into the Consent Orders when it was possible that Jim would be the beneficial owner of the units as well. Any attempt by Bogasi to claim that Kim was always intended to be the nominee was contended to be an impermissible submission because it was not pleaded.

In reply, Bogasi submits that the Administrator’s submissions misconstrue Bogasi’s case. Bogasi does not claim that the Common Assumption gives rise to the express trust pleaded in [36] of the 2019 Third Cross-Claim, namely that Kim held the Elmach units on express trust for Jim and Gunnar. Instead, the trust is submitted to arise because of the apparently clear intention of Jim, Kim and Gunnar that Kim would not be the beneficial owner of the Elmach units.

According to Bogasi, the true construction of the declaration is as Mr Blaikie advised in November 2012, namely that the beneficiary was either Jim or someone that had already been nominated. Bogasi submits that if the Court agrees with that construction, the only candidates to be the true nominee are TCI (as Gunnar believed from his notes of 2004/2005) or Bogasi. Bogasi’s entitlement to be the nominee is that it provided the loan monies in 1998/1999, and its position as a company which represents both sides of the family through trusts.

Bogasi further submits that it was an implied term of the express trust that the CPT1 units were beneficially owned by Jim and Gunnar to advance the Common Assumption. There is also no issue as to the certainty of object of the trust. It is submitted that there will be certainty of object if one can say whether or not any given individual is a member of the relevant class, without having to ascertain the definition of every member.

Bogasi clarified that the alleged breach of trust by Jim was his consent to the Consent Orders in circumstances where he had allegedly already agreed to nominate Kim as the owner of the units and where the beneficiaries of the trust created by the orders did not include Kim. This case is presented in the alternative to Bogasi’s case that Jim never nominated Kim to be the owner of the units.

The alleged arrangements and promises were contended to have been made by Kim and Jim acting in their personal capacities. Therefore, any consent which was given by Bogasi to the Consent Orders cannot operate as a consent to, and acquiescence in, any wrongful conduct by Kim or Jim. Two reasons were advanced in support of this proposition:

Bogasi further submitted that the Administrator had misconstrued its claim for equitable compensation. The submissions in reply clarified that in the 2019 proceedings, in the event Jim is found to have acted in breach of trust, Kim should be ordered to restore the assets of the trust (the Elmach units) together with all profits or benefits he has received from the purported nomination. This would include the distributions to Kim from CTP1 and CPT2, which on the evidence collectively amounts to $40 million. In the 2023 proceedings, Bogasi seeks orders against the estate for restoration of trust property (to the extent that this is possible) or in the alternative, equitable compensation for the value of the Elmach units as at the time of the Nomination, amongst other things. However, this issue is to be determined after these proceedings are concluded.

It was also contended by Bogasi that its claim that Jim committed a fraud on the power can succeed regardless of whether the Court considers that the Consent Orders created a fiduciary obligation (Commonwealth v Colonial at 427). The Administrator’s argument that the Consent Orders stand as a res judicata as between the parties to the proceedings must also be rejected. Any issue of res judicata was submitted to be irrelevant on the basis that the Family Court orders were silent on, and did not have to address, the distinct topic of the purpose for which the power was conferred.

Bogasi also contends that the Administrator’s submission misstates the law on whether equitable compensation can be sought for a claim in equity based on a fraud on the power. Bogasi relies on Houghton v Immer (No 155) Pty Ltd (1997) 44 NSWLR 46, 55-56 as authority for the proposition that a party wronged by a fraud on the power may recover equitable compensation. Therefore, it is not necessary for Bogasi to plead or prove a breach of fiduciary duty by Jim in order to bring a claim for equitable compensation in equity for fraud on the power.

The resolution of this issue is determined by the Court’s earlier conclusions, which I repeat here for convenience:

Bogasi submits that Jim committed a breach of fiduciary duty by nominating Kim after the Consent Orders were made because this nomination was a fraud on the power.

Bogasi submits it is entitled to seek relief because it was within the range of objects of the power of nomination. Bogasi otherwise relies on its submissions at [718] to [727] above.

In reply, the Administrator submitted that while Bogasi relies as against the Administrator upon Jim having both consented to the Consent Orders and made the subsequent Nomination, it is not possible as a matter of logic for the later nomination by Jim to procure or induce an earlier breach by Kim in agreeing to the Consent Orders.

In reply, the Administrator also submits that it is not open to Bogasi to submit that its fraud on the power claim can succeed irrespective of whether the power was fiduciary or not given Bogasi pleaded that the power was fiduciary.

Bogasi’s submission that “the scope and purpose of the power of nomination was directed to benefitting the Sundell Group and both sides of the family” was submitted to be inconsistent with its pleaded case and with the evidence which demonstrates that the Common Assumption (if found to exist) concerned the movement of assets within the Sundell Group to share wealth equally between the families of Jim and Gunnar. There is no pleading that assets outside the Group had to be applied so as to benefit the Sundell Group and had to be applied so as to benefit both sides of the family.

The Administrator also maintains the position that the Consent Orders did not import some implied restriction but submits in the alternative that Bogasi’s contention the power was fiduciary ignores the fact that Jim was entitled to do nothing and simply retain the units. The Administrator rhetorically inquired how any fiduciary obligation could attach to the Consent Orders when Jim was entitled to do nothing. Similarly, if assets were not divided but distributed to different members of the family from time to time, the Administrator submitted that Kim may properly be a potential nominee in accordance with the Consent Orders and Jim nominating Kim to be the owner of the units was not a fraud on the power.

Again relying on his earlier submissions, Kim submitted that there was no Common Assumption and Jim did not commit a breach of trust or fiduciary duty.

The Administrator submits that Jim did not commit a breach of fiduciary duty for six reasons.

The Administrator also denies Bogasi’s allegation that Jim breached a fiduciary duty by considering that he owned the Elmach units and could nominate Kim. Jim’s state of mind could not constitute a breach of fiduciary duty. The Consent Orders permitted him to keep the units or to nominate Kim, which is not inconsistent with what is pleaded as his state of mind.

As to the allegation that Jim breached a fiduciary duty by failing to require Kim to be bound by the Common Assumption, the Administrator submits there is no justification for implying this limitation into the Consent Orders, not only generally but also in the light of the fact that Bogasi does not suggest that Jim's entitlement to keep the units for himself under the Consent Orders was subject to the same limitation.

It was further argued that there could be no allegation that Jim breached a fiduciary duty by failing to survey the range of objects or potential objects. It was submitted this allegation is not premised on the existence of any trust or Common Assumption. The wording of the Declarations was also submitted to provide no fetter on who Jim could nominate as beneficial owner of the units

As to the allegation that Jim breached a fiduciary duty by failing to act in good faith in that he did not consider it was necessary to obtain legal advice about his rights and obligations under the Consent Orders, the Administrator argued that of itself could not amount to bad faith let alone a breach of fiduciary duty. In the alternative, the Administrator relies on the evidence that Jim did seek and obtain legal advice.

The Administrator also denies that Jim breached any duty by nominating Kim and thereby preferring the interests of his son. Given that all members of the family were related to him, it was submitted that the same allegation could be made regardless of who Jim nominated. In any event, the way the Common Assumption was pleaded meant that assets did not need to be split equally amongst family members, but simply that there was an equalisation of profit over time. The fact of the Nomination was not itself a breach of the Common Assumption.

Even if the Court does find that Jim breached his fiduciary duty, the Administrator submits that Bogasi cannot maintain a claim for equitable compensation in the absence of a pleading that Jim owed a fiduciary duty to Bogasi. In addition, Bogasi only brings this claim in its capacity as trustee for the Old Jim Trust. Thus, it could only recover compensation to the extent to which it could establish that had that not occurred, financial benefit would have flowed to Bogasi for the benefit of the Old Jim Trust. Mr Cheshire SC submitted that it was unclear the basis upon which Bogasi asserts that the units in the trust would have been Bogasi’s had Jim not nominated Kim to be the nominee.

In closing submissions in reply, Mr Condon SC submitted that Bogasi being within the class of objects that Jim was obliged to consider at the time of any nomination provides Bogasi with the necessary standing to bring its claim for a breach of fiduciary duty and fraud on the power (Thomas on Powers at [9.09] p 406). He also submitted that Bogasi can claim damages as the only residuary beneficiary of Jim’s estate because if Jim had not nominated Kim, the units would have stayed with Jim. Therefore, the measure of damages is the value of the units that Bogasi contends it would have received as the residuary beneficiary of Jim’s estate.

The Court has already determined that Jim’s capacity to nominate another person or entity as the person to whom Kim owed duties as trustee of the Elmach units was not subject to any fiduciary duty and did not attract the principles of fraud on the power. The Court accepts, by way of further support for its conclusion the Administrator’s submissions in [1026] above (excluding [1026](4)) and noting that the Court has found as a matter of construction that Kim was not a possible nominee.

A preliminary point arises concerning limitation in relation to the 2023 Cross-Claim. The Administrator commenced her proceedings on 17 May 2023. Bogasi’s original cross-claim was filed on 20 October 2023. There was no dispute that any claim in that pleading was taken to have commenced on 17 May 2023.

However, on 19 March 2024, pursuant to leave, Bogasi filed an amended pleading – the 2023 Cross-Claim. The original cross-claim pleaded that Jim procured or induced a breach of trust by Kim, the alleged breach being Kim consenting to the Consent Orders. The amendment added a new cause of action against Jim, being that if the Nomination had occurred, Jim committed a fraud on the power of nomination conferred upon him by the Declarations.

When leave to amend was granted, the question of the date from which the amendment raising fraud on the power would take effect was reserved for argument at the hearing. This involved determining whether, for the purposes of s 65 of the CPA, the cause of action arose “from the same (or substantially the same) facts as those giving rise to an existing cause of action and claim for relief” in Bogasi’s original cross-claim. If it did, then subject to the Court ordering otherwise, the amendment would be taken to have had effect from 17 May 2023 (the date the Administrator commenced the proceedings) pursuant to s 65(3).

There was no dispute that the applicable test was “whether the overlap between the essential facts on which each cause of action depends is so great that the two causes of action can be said to arise out of substantially the same facts”: New South Wales v Radford [2010] 79 NSWLR 327; [2010] NSWCA 276 at [72] per Sackville AJA (Beazley and Macfarlan JJA agreeing).

The Administrator’s essential submission was that s 65(3) did not apply to the amendment because the claim in relation to the Nomination was a different act, at a different time, and by Jim as principal rather than as Kim’s accessory. If it did apply, then the Administrator submitted that the Court should otherwise order because of the Administrator’s unexplained delays, in particular in not including the fraud on the power claim in the original cross-claim, and the prejudice caused by the proximity of the amendment to the hearing.

Bogasi submitted:

The Court accepts Bogasi’s submissions. In particular, the Administrator’s argument focuses on the three obvious differences between the two claims, but those differences do not address the extent of similarity of the facts on which the claims depend. The procuring a breach of trust claim included (and pleaded) the Common Assumption, the consenting to the Consent Orders and the making of the Nomination (this last being a fact material to the claim for equitable compensation or account of profits). The fraud on the power claim depended on all of these (together with some other facts alleged in the original pleading).

In my respectful opinion, it follows from the preceding paragraph that the overlap of essential facts between them is so great that I find the procuring a breach of trust and fraud on the power claims arise out of substantially the same facts for the purposes of s 65(3). Furthermore, I do not accept that the Administrator has demonstrated prejudice or any other sufficient reason to warrant the Court ordering otherwise. The Court concludes that for limitation purposes, the fraud on the power claim in the 2023 Cross-Claim relates back to 17 May 2023.

Bogasi pleads that the relevant breaches occurred in November 2012 in the case of the Consent Orders and April 2013 in the case of the Nomination. The claim against the estate was introduced by the 2023 Cross-Claim which was filed on 30 October 2023. Even if one takes into account that the 2023 proceedings were commenced by the Administrator on 17 May 2023, this was more than 10 years after the events relied upon by Bogasi, the cause of action accruing on the date of the breach.

In light of this reasoning, the Administrator submitted that Bogasi’s claim for a breach of trust is barred by reason of s 48 of the LA or alternatively by applying a limitation period by analogy (with s 48 or a liability to account under s 15) or alternatively under the doctrine of laches (discussed further below).

In reply, Bogasi's primary submission is that no limitation period under the LA is analogous to the claim in equity of fraud on the power (see s 23) and therefore the claims in the 2023 proceedings against the estate are not time barred. Alternatively, it submits that, s 47 of the LA applies, for which there is a 12-year time limitation period.

Bogasi also submits in the alternative that the claim for a fraud on the power is a cause of action based on fraud (see Wade v Trnka [2006] NSWSC 1097) and any limitation period does not run before the date on which the person having the cause of action first discovers, or may with reasonable diligence discover, the fraud (see s 55 of the LA).

Bogasi claims that Mr Walker’s evidence demonstrates that Bogasi was not aware of the claim it had for fraud on the power until Mr Walker received a copy of the 2019 Second Cross-Claim on 18 February 2020. This is the date from which Bogasi submits time would run for the purposes of s 55 of the LA.

Bogasi’s causes of action for breach of trust and breach of duty both arise as a result of the Consent Orders which were made on 28 November 2012 and the alleged nomination which was submitted to have taken place in April 2013.

At the time of the Consent Orders, the directors of Bogasi were Jim, Merle and Mr Wooldridge. Mr Stell and Mr Walker were appointed on 8 April 2013.

The Administrator submits that Mr Wooldridge must be taken to have had knowledge of the facts giving rise to the Common Assumption from at least 2012 because his affidavits in the Family Court proceedings are used to justify the existence of the Common Assumption. There is no explanation as to why he or Bogasi had not taken any action against the estate until 2023. The Administrator therefore asks the Court to draw an inference that Mr Wooldridge’s evidence would not have assisted Bogasi.

An inference was also submitted to be available that Merle’s evidence would not have assisted Bogasi. There is no explanation why Merle did not provide evidence for Bogasi as to her state of knowledge and the reason why proceedings were not brought against Jim earlier. The 2019 Third Cross‑Claim, relying upon the same matters, was commenced on 26 March 2021, and Merle did not pass away until March 2024.

The Administrator also relied on the evidence that, since 2017, Mr Walker was also aware of the facts which underpin Bogasi’s case. However, in spite of the knowledge of its directors, Bogasi commenced the 2019 Third Cross-Claim on 26 March 2021, which included pleadings of the Common Assumption, breach of trust and fraud on the power (being the allegations that are now made against the estate), but no relief (and in particular no equitable compensation) was sought against the estate. The Administrator asks the Court to infer that this was a deliberate decision.

Bogasi only advanced its claim against the Estate when it filed its 2023 Cross-Claim on 30 October 2023, but even then it was limited to the claim that Jim procured Kim's breach of trust by Kim consenting to the Consent Orders on 28 November 2012. Again, the Court can safely infer that the decision not to include at that stage any claim based upon a fraud on the power was deliberate. That latter claim was only introduced by the amendment filed on 19 March 2024.

The Administrator relied on the analysis of laches in Crawley (see [657] above).

In circumstances where Mr Wooldridge was aware at the outset in 2012 and 2013 of all the material facts and other directors became aware of those matters as time went on, and well before any attempt was made to seek equitable compensation, which was not introduced until October 2023 (in relation to the breach of trust claim) and March 2024 (in relation to the fraud on a power claim), there was a delay of over 10 years. The Administrator says this length of delay is unreasonable.

This delay was also submitted to have caused prejudice to Jim because if the claim had been made earlier, he might have wished to defend Bogasi’s case. The cogency of the evidence was also submitted to have been affected given documents might have been lost. The Administrator also submits she faced further prejudice by only being joined to the proceedings at the last minute, depriving her of the opportunity to prepare her own witnesses rather than relying on the evidence of other parties’ witnesses. Therefore, the Administrator asks the 2023 Cross-Claim be dismissed on the basis of laches due to the length of the delay and the significant prejudice which that delay has caused.

In reply, Bogasi submits the most significant prejudice identified by the Administrator appears to be death of Jim in March 2017. Bogasi refutes that the Administrator can claim prejudice due to Merle’s death in March 2024. Bogasi submits that it was open to any party, including the Administrator, to approach Merle at any point prior to her death.

Bogasi also submitted that the Administrator’s claim that it would be ‘unjust’ to allow Bogasi to bring its cross-claim because it was not filed until October 2023 is ‘perplexing’ given Bogasi contends that it is trying to protect assets from being removed from the estate. It also contends that the delay is explainable given Mr Walker was not aware of the claims being made by Kim until Bogasi was served with the 2019 Second Cross-Claim on 18 February 2020. Prior to this, and from 2017, the evidence from the trial was submitted to indicate clearly that Mr Wooldridge obfuscated every time Mr Walker tried to obtain information from his fellow Bogasi director about the ownership status of the Elmach units. Before then Jim was heavily involved in Bogasi and it is submitted that given Jim was the controlling mind of Bogasi and the wrongdoer, it would be unrealistic to count time against Bogasi so long as Jim was the principal force behind the company.

Bogasi contends that the limitation period is not 6 years, and in any event, that time does not run against it until after Jim's death for a multitude of reasons including that neither Jim, or Kim nor Mr Wooldridge ever disclosed matters relating to the alleged procurement or inducement of the breach of trust (including the fact of the Nomination) until well after Jim died on 22 May 2017. This is supported by the evidence Mr Wooldridge provided during cross-examination that he felt it was not his place to tell Mr Walker anything about the act of nomination despite Mr Walker asking from at least 2017 about what had occurred.

In an affidavit sworn on 3 April 2024, Mr Walker gave unchallenged evidence that he did not become aware that Jim had allegedly nominated Kim as the beneficiary of the Elmach units until he was provided with a copy of the 2019 Second Cross-Claim by Bogasi's solicitors on 18 February 2020.

Moreover, Bogasi’s primary submission is that the LA does not apply due to s 23 of the LA. Alternatively, it relies on s 47 of the LA which prescribes that a claim based on fraud and conversion of trust property must be brought within 12 years after the person with reasonable diligence discovers the facts giving rise to the cause of action. According to Bogasi, that period did not commence until 18 February 2020 when Mr Walker was first aware of the alleged nomination.

In the alternative, Bogasi submits that the claim against the estate, based on a fraud on the power, is a cause of action based on fraud (so much is consistent with Wade v Trnka). Therefore, Bogasi contends it can rely upon s 55 of the LA in reply to the estate's defence that Bogasi's claim is time barred. That provides that the time from when the cause of action begins to run in relation to fraud, until the date on which a person having (either solely or with other persons) the cause of action first discovers, or may with reasonable diligence discover, the fraud does not count in the reckoning of the limitation period.

On the evidence of Mr Walker, Bogasi was not aware of the claim against the estate until 18 February 2020 when he was provided with a copy of the 2019 Second Cross-Claim. Therefore, time did not commence to run on Bogasi's claim for fraud on the power until 18 February 2020.

In reply, the Administrator submitted that ss 23, 47 and 55 of the LA do not assist Bogasi. Bogasi’s claim was submitted to be “an action on a cause of action in respect of a breach of trust” and therefore the 6 year limitation period in s 48 applies. The Administrator submitted that s 47 is of no assistance because the claim against the Administrator is for equitable compensation, which is not within the scope of s 47.

Section 55, even if it applied, only postpones the bar until the person “first discovers, or may with reasonable diligence, discover the fraud”. The Administrator submitted that Kim’s conduct lacked the necessary dishonesty or moral turpitude. In any event, she submitted that Bogasi’s contention that the cause of action accrued when Mr Walker found out about the alleged nomination conflates Bogasi’s knowledge with Mr Walker’s knowledge. The Administrator submitted that as a director of Bogasi, Mr Wooldridge’s knowledge is also relevant, as is Merle’s. The Administrator invited the Court to make a Jones v Dunkel inference against Bogasi for its failure to obtain evidence from Merle during her lifetime. The Administrator also submitted that Mr Wooldridge’s and Merle’s potential knowledge must also be considered in relation to the issue of laches. It was contended that Mr Walker’s knowledge cannot be equated to Bogasi’s knowledge.

Mr Chesire SC rejected Bogasi’s contention that Mr Wooldridge’s knowledge should not be imputed to Bogasi. He submitted that Mr Wooldridge, by merely obtaining advice about whether the nomination could have occurred, could not be said to have engaged in any fraud such that his knowledge would not be imputed to Bogasi. Even if he did not tell other directors of Bogasi about the Nomination, Mr Wooldridge still knew about it, which is knowledge that can be imputed to Bogasi. Even if the Court was to treat Mr Wooldridge as acting as Jim’s agent by obtaining legal advice about the Elmach units, it was submitted that knowledge was still gained in a capacity as a director of Bogasi given it was a party to the Consent Orders. This was demonstrated by Mr Wooldridge being able to give instructions to Clayton Utz because that firm was acting for Bogasi in the Family Court proceedings. Mr Wooldridge would not have had authority to talk to Clayton Utz unless he was acting as a director of Bogasi.

Because the Court has found that both the procuring a breach of trust and fraud on the power claims fail, the limitation arguments do not arise for determination.

As the High Court made clear in Sidle v Queensland Trustees Ltd (1915) 20 CLR 557 at 560-561 (Isaacs and Powers JJ), the starting point for issues concerning the construction of wills is that a court must consider the will as a whole, prior to considering issues with any specific clause of the will:

In Fell v Fell (1922) 31 CLR 268 at 273-276, Isaacs J set out 10 “incontestable” principles as to how wills should be construed. These principles have been adopted “verbatim” in later cases as the starting point for construing a will:

In Watson v Ralph (1982) 148 CLR 646 at 654, the High Court held that a court is not permitted to depart from the words that a testatrix has used and must ascertain the testatrix’s intention using the words used. The court is not permitted to speculate ‘as to the intention of the testatrix’ and create a new will.

The first construction motion was filed by Kim on 1 July 2024. That motion sought for the Court to determine the following issues:

Clause 4 of the will provides:

It is common ground between the parties that at the time of Jim’s death, each family member was indebted to Bogasi in these amounts (in Kim’s case possibly subject to the 2022 proceedings):

Kim accepts that a strict reading of cl 4, which uses the language “all of my just debts and testamentary expenses” (emphasis added), would apply only to debts that were Jim’s personal debts. However, Kim submits that cl 4 must be read as a whole. Adopting such an approach, Kim submits that sub‑cl 4(a) demonstrates that Jim wanted the debts owed to Bogasi by Janette, Kim, Brett and Anne-Katrine to be discharged from his estate. Kim also contends that sub-cl 4(b) intends to discharge “all amounts” secured by mortgages that were granted to third parties in respect of properties which were not Jim’s personal properties.

Kim submits that the inconsistency between the chapeau to cl 4 and the sub‑clauses is resolved by the concluding words “including but not limited to” because that indicates a non-exhaustive intention on behalf of Jim to waive the debts of certain family members. Kim construes the effect of sub-clauses (a) and (b) is to signify that those debts are “Jim’s” debts for the purposes of cl 4.

Kim rejects the submission by Bogasi (see [1080] below) that the words in sub-cl (a) are illustrative and do not qualify the meaning of “my just debts and expenses” (emphasis added) because that interpretation subverts the testator’s clear intention. Kim submits that sub-cl (a) cannot be both ‘merely illustrative’ and have no concurrent operative effect. This construction is contended to render sub-cl 4(a) otiose.

While Kim’s submissions record that there is nothing unorthodox about a testator discharging the debts of third parties, it is accepted that such a discharge cannot have the effect that a third-party debt cannot be treated as a debt of the deceased. This proposition was outlined by the Privy Council in Commissioner of Stamp Duties (NSW) v Bone (1976) 135 CLR 223, 229:

Therefore, the effect of Kim’s construction of sub-cl 4(a) is that the “discharge” of the debts should be construed as a specific legacy to each of those third parties of the value of their respective debts at the date of Jim’s death. This would require the Administrator to pay a legacy to the trusts on behalf of Janette, Kim, Brett or Anne-Katrine which is equivalent to the debt they owe.

Bogasi’s submission is that cl 4 of the will is not capable of converting the debt due to Bogasi from Janet, Kim, Brett and Anne-Katrine into a debt owing by the estate to it and is merely a unilateral statement of a person incapable of binding Bogasi.

Bogasi’s primary interpretation of cl 4 is that the words in sub-cl (a) are merely illustrative and do not otherwise qualify the plain meaning of the expression “my just debts and testamentary expenses.” On this construction, the executors are not required to pay out from the estate debts which are due by any of the family members listed in cl 4.

In the alternative, Bogasi submits that pursuant to cl 4 Jim intended to indicate which debts should be paid in priority to the specific devises found in clauses 5 to 7 and the gift of the residue in cl 8 of the will. Bogasi further submits that by impermissibly aggregating the debts owed by others to Bogasi with his own debts, Jim signalled that those amounts be paid to Bogasi in priority to any other payment.

Bogasi relies on Gilbert v Fitzpatrick (1927) 39 CLR 151 in support of the proposition that cl 4 is merely a direction to the Administrator about how Jim’s debts and testamentary expenses should be paid. In that case, a testator directed that one of the trustees of the will should be paid out of the estate ‘the debt or sum of money owing by [the testator] to him the amount of which [the trustee] will disclose to [the other trustees].” Knox CJ and Rich J (at 155) concluded that the words of the direction were not sufficient to constitute a legacy but was a direction that the creditor trustee be paid that amount which the creditor trustee disclosed to the other trustees. In other words, the disclosure was conclusive of the amount owed.

Bogasi submits that Kim’s reliance on Bone is irrelevant because that case considered whether a debt owing to the estate itself could be extinguished, whereas in this case Jim is purporting to discharge debts of third parties owing to another third party. The debt being owed to the estate was submitted to be a key aspect of Lord Russell of Killowen’s reasoning in Bone at 229 where he held that in substance the debt remained outstanding as an asset of the estate “but… the debtor is in a position to deny an obligation to pay it to the extent that the specific legacy is effective as such.”

In reply, Kim submits that the question is not whether cl 4 of the will converts a debt owed to Bogasi by third parties into a debt owed by the estate to Bogasi but is rather whether that clause discharges the debts owed by third parties to Bogasi. Mr Chapple SC contended on behalf of Kim that Bogasi’s reliance on Gilbert was misconceived in circumstances where that case concerned whether a direction contained in a will that a debt owed by a testator be paid out of the estate does not convert that debt into a legacy but is merely an acknowledgment of indebtedness. Gilbert was said to be inapplicable to this case, which does not concern whether a debt is owed by a testator, but whether the testator (Jim) has released or forgiven a debt of a third party.

Brett concurs with Kim’s position that cl 4 should be construed as a legacy to each beneficiary in the amount equivalent to the amount of their debt at the date of the deceased’s death in accordance with prayer 1(a) of the Notice of Motion. Brett disputes Bogasi’s construction of cl 4 and submits that clause should not be construed as giving those legacies a priority over the specific legacies devised in clauses 5 and 6.

Three reasons were submitted on behalf of Brett for why Kim’s construction of cl 4 should be preferred to Bogasi’s.

First, Bogasi’s construction is contended to be inconsistent with s 46C of the Probate and Administration Act 1898 (NSW) (PAA Act) which addresses how ‘solvent’ and ‘insolvent’ estates should be administered.

Part 1 of the Third Schedule applies to insolvent estates. Funeral, testamentary and administration expenses have priority. Part 2 of the Third Schedule applies to solvent estates and outlines the order in which assets should be applied:

Contrary to Bogasi’s submission (which prioritises cl 4 over the gifts of real estate in clauses 5 and 6 of the will), Part 2 of the Third Schedule of the PPA Act stipulates that the fund retained to meet specific legacies is applied towards payments of debts before the specific gifts of real estate in clauses 5 and 6 of the will, subject to contrary intention appearing in the will.

Second, the inventory of property annexed to the Grant of Probate of the will is said to confirm that the statutory order of assets should apply. At the date of his death, the deceased had an interest in a farming property at Booral which he intended to give to Brett; had a significant credit to the Old Jim Trust loan account totalling $11,225,423 and had other assets with an estimated value of $110,139.30.

It was submitted on behalf of Brett that clear and conclusive proof is required to establish a priority outside of the statutory order: Re Leech; Milne v Daubney [1923] 1 Ch 161. The words of clauses 4, 5 and 6 are submitted to suggest they are independent gifts and contain no words which indicate that Jim considered there would be a deficiency of assets to meet his debts and other gifts. They also contain no words of priority.

Brett’s position is that the will creates a clear testamentary scheme which requires the debts of the beneficiaries named in cl 4 to any trust of which Bogasi is trustee to be repaid by book entry against his credit loan account to that trust. In reply, Bogasi contends there is nothing in the words of the will that requires Bogasi to take, by way of repayment, a credit of the kind alleged. This construction is said to be unreasonable on the basis that it is a construction which requires Bogasi’s consent to the proposed accounting arrangements which arise from that construction.

Third, if it is the case that the debts owed by the beneficiaries are too large or Jim’s credit loan account is too small then Part 2 of the Third Schedule of PAA Act requires the legacies to abate pro rata before the specific gift of the Booral farm cl 6.

Anne-Katrine agrees with the construction of sub-cl 4(a) proffered by Bogasi including its primary position that the words in sub-cl (a) are merely illustrative and do not otherwise qualify the plain meaning of the expression “my just debts and testamentary expenses” and the alternative construction that cl 4 is intended to indicate which debts should be paid in priority to the specific devises found in clauses 5 to 7 and the gift of the residue in cl 8 of the will.

However, there are two qualifications which Anne-Katrine makes to Bogasi’s submissions. The first qualification is that notwithstanding that an entry in the Sundell Group accounts may be ostensibly marked as a credit against Anne-Katrine’s name, whether it is properly treated as an “amount due and owing” by Anne-Katrine or Jim for the purposes of sub-cl 4(a) depends on the proper characterisation of the entry underlying the transaction. This submission makes clear that whilst some debts are marked as being Anne-Katrine’s debts, she submits they should be treated as repayable by Jim.

The second qualification is that Bogasi’s construction should not be taken to assume that an amount that may be characterised for the purposes of sub-cl 4(b) of the will as an “amount secured by mortgage over… the principal residence…of Anne-Katrine” is presumed or deemed to be a debt due and payable by Anne-Katrine and not Jim.

Anne-Katrine disputes Kim’s written submission that “the deceased considered the debts identified in sub-clauses (a) and (b) to be “his” debts in that he assumed liability for their discharge” as it assumes that any “amount secured by mortgage” in respect of the Beecroft property is a debt of Anne‑Katrine. It was again submitted on her behalf that whether a particular amount for the purposes of sub-cl 4(b) of the will is a debt of Jim, Anne-Katrine or another person or entity and is an “amount secured by mortgage” (whether registered, non-registered or equitable) is a matter resolved on the proper characterisation of the amount underlying the security arrangements.

Anne-Katrine further submits that the differences in the language used in sub-clauses (a) and 4(b) provide the Court with a further basis to determine that Jim intended to hold as one of his “just debts” any debts incurred in the finance of the purchase of Anne-Katrine’s home. This is because sub-cl 4(a) is contended explicitly to define debts as being due and owing by Jim and other beneficiaries. However, sub-cl 4(b) merely states “all amounts secured by mortgage over… the principal residences of my son Brett Julian Sundell and of my daughter Anne-Katrine Sundell….”. The use of the phrase “all amounts secured by mortgage” is ambiguous as to who owes the debts associated with the mortgage. This indeterminate language is submitted to support Anne-Katrine’s contention that cl 4 of the will shows Jim intended to assume responsibility for all financial arrangements relating to the Beecroft property, including repayment of any amount the Court may determine remains repayable to Elmach.

In reply, Bogasi submits that the Court should not be invited to determine the characterisation of the accounting entries in Bogasi’s financial records.

There can be no real doubt that, as a general proposition, Jim wanted to leave his children debt free in relation to the family trusts and, as to Brett and Anne-Katrine, their principal residences. As will be apparent from the Court’s reasoning on the question of set-off, the Court accepts Kim’s submission that on its proper construction sub-cl 4(a) brings amounts owed by Janette, Kim, Brett and Anne-Katrine to Bogasi as trustee by a process akin to inclusive definition within the class of Jim’s “just debts”. However, for the reasons set out in [1126] below, it is inapt to describe these as legacies: they are payments the Administrator is directed to make out of the estate. However, they are not debts of the estate. This is because Jim cannot unilaterally convert those amounts into debts owed by the estate. Accordingly, the Court will make a declaration in accordance with paragraph 1(a) of Kim’s construction motion, but substitute “that amount” for the words “a legacy”.

Insofar as there is any amount in the accounts of the trusts standing to Jim’s credit, in my view, it is open to the Administrator as creditor to direct Bogasi that those amounts be applied (pro rata if there is insufficient) to meet those specific amounts. However, that conclusion is not a matter of construction (contrary to Brett’s submission), because the will provides no more than the payments are to be made “out of my estate”.

Given the Court’s conclusions in relation to Anne-Katrine’s claim, it is not necessary to resolve her submissions concerning the characterisation of amounts expended in the acquisition of the Beecroft property being debts of Jim rather than of her. Sub-clause 4(b) of the will is not engaged in relation to the Beecroft property because there was no amount secured by mortgage over it as at the date of Jim’s death.

The second construction motion was filed by the Administrator on 17 October 2024. That motion sought for the Court to determine the following issues:

Prayer 1 of the Administrator’s motion seeks a determination whether sub-cl 4(b)(ii) of Jim’s will requires the Administrator to pay a legacy to Brett which is equivalent to the amount secured by mortgage on his principal place of residence as at the date of death or at the date of payment, as a legacy or a debt or if the gift is void for uncertainty.

Section 30 of the Succession Act 2006 (NSW) provides that subject to the contrary intention appearing in the will “a will takes effect, with respect to the property disposed of by the will, as if it had been executed immediately before the death of the testator.” Section 3 defines “property” as including “any valuable benefit”.

Brett accepts that s 30 of the Succession Act is predominantly used for the purpose of determining whether a specific gift has adeemed, or the quantity of a generic gift, but submits that the definition of “property” in section 3 is broad enough to include a general legacy. Applying s 30 of the Succession Act, sub-cl 4(b)(ii) would require the Administrator to pay to Brett a legacy which is equivalent to the amount secured by mortgage at the date of death of the deceased. There is no evidence of intention in the will to displace the application of s 30.

For the reasons outlined at [1085] to [1093] above, Brett submits that the gift in sub-cl 4(b)(ii) of the Will should be treated as a legacy and there is nothing to indicate an intention to confer a priority on payment of those legacies.

He also contends that the gift cannot be void for uncertainty. There is certainty as to object (Brett) and the subject matter of the legacy (being the amount secured by mortgage over Brett’s principal place of residence as at the date of Jim’s death). The amount owed would be revealed by conducting a real property search to determine the holder of any mortgage security and an enquiry with that entity would reveal the amount owed under the mortgage.

Prayer 2 of the Administrator’s motion seeks a determination as to whether the legacies in sub-cl 4(a) or 4(b)(ii) are to be paid in priority to other gifts or whether they are specific gifts which adeem or general legacies which abate rateably.

Brett’s submissions rely on the judgment of Dixon CJ in McBride v Hudson (1962) 107 CLR 604, 617 as authority for the distinction between general and specific gifts. Dixon CJ (Taylor and Windeyer JJ agreeing) held:

Whether a gift is general or specific determines from which part of the deceased’s estate the gift must be made and how they must be paid. In C Ford, Theobold on Wills (19th ed 2021 Sweet & Maxwell) at [21-001]-[21-002], the following points are made:

Brett submits that the legacies in sub-clauses 4(a) and 4(b)(ii) of the will are general legacies which the executors would ordinarily raise out of the testator’s general personal estate. There is nothing to suggest in the will viewed as a whole that the testator intended sub-clauses 4(a) and 4(b)(ii) of the will to separate assets from his personal estate for the purpose of meeting those gifts which would have the effect the gift is a specific legacy.

Should the assets of the estate be insufficient to meet them, it is submitted that the gifts must abate rateably and be applied before the specific gift of Jim’s interest in the farm at Booral in cl 6 of the will.

Prayer 3 of the Administrator’s motion seeks a determination whether the Administrator would be justified in applying all assets of the estate, including Jim’s interest in the Booral property, towards payment of estate liabilities, including any debts payable pursuant to sub-clauses 4(a) and 4(b)(ii); and whether any debts payable pursuant to sub-clauses 4(a) or 4(b)(ii) are to be paid rateably according to value.

Brett submits that the Administrator should apply the assets of Jim’s estate in accordance with the statutory order set out in Part 2 of the Third Schedule in the PAA if the estate is solvent. The general legacies outlined in sub-clauses 4(a) and 4(b)(i) of the will are contended to abate rateably before the specific gift of the Booral property to Brett.

Brett concedes that if Jim’s estate is insolvent he could not submit against orders being made permitting the Administrator to sell Jim’s interest in the Booral property. However, such an order is said to be unnecessary and premature at this stage given the current uncertainty as to the estate’s balance sheet.

It is convenient to deal with the overall construction of cl 4 at this point.

There is no dispute about the construction of wills, in particular that the will is to be considered as a whole and words are to be given their natural meaning (unless they have a technical meaning which is not rebutted by context).

The administration of the estate will depend upon whether it is solvent or insolvent. That is not something the Court can yet determine and will depend upon the outcome of these proceedings and any further disputes between the parties.

The structure of the will is clear:

Clause 4 is in terms a direction to Jim’s trustees to pay out of “my estate” all of “my just debts and testamentary expenses” (emphasis added). Pausing there, there is no particular difficulty or issue about the meaning of this last quoted section, although the “my” is important for what follows. Furthermore, in my respectful opinion, the structure of the will means “estate” refers to all of his assets other than those the subject of the specific legacies.

The “amounts” referred to sub-clauses 4(a) and (b) are to be ascertained as at the date of Jim’s death. In the case of sub-cl 4(a), this is explicitly stated. In the case of sub-cl 4(b), the same conclusion applies either by reason of s 30 of the Succession Act (the will takes effect as if executed immediately before Jim’s death) or (if necessary) as a matter of construction by reference to the express identification of time in sub-cl 4(a).

The references to Jim in sub-cl 4(a) (“owing by me”) and in sub‑cl 4(b) to any amount secured over his Booral property are surplusage, because anything he owed to any trust, or any mortgage he had granted over the Booral property, would be among his just debts. Apart from those two matters, the balance of sub‑clauses 4(a) and (b) concerns the discharge of debts owed by Janette, Brett, Anne-Katrine and Kim to third parties (third party obligations).

Clause 4 is a direction to the Administrator. The language of “including but not limited to” brings those third party obligations as far as the Administrator’s duties are concerned into the category of Jim’s “just debts” but they do not make them in law or equity Jim’s “just debts”. They remain a debt between, for example, Kim and Bogasi. As part of his right to compel due administration, Kim may (assuming the availability of funds) be able to compel the Administrator to pay Bogasi an amount equivalent to his debt to Bogasi (including by the application of any credit to Jim in the books of Bogasi). It is not necessary to decide whether, by analogy with contracts between A and B where A promises B to do something for C, Bogasi might also have a right to compel performance by the Administrator.

None of the foregoing detracts from the conclusion that the relevant debt remains from Kim to Bogasi and is not a debt from Kim to Jim (or his estate). For this reason, the principle affirmed by the advice of the Privy Council in Bone (that releases of a debt owed to the estate equate to a specific legacy in the amount of the debt to the debtor beneficiary) is of limited assistance because the debtor in that case was the beneficiary and not a third party.

Nothing in the language of sub-clauses 4(a) and (b) speaks of a legacy to Kim or the others named. Because it is a direction about how to pay estate assets, the language of “legacy” is in my view inapt. In the only similar case to which the Court was directed (In re Leach; Chatterton v Leach [1948] 1 Ch 232), in which the testator directed the executors to pay her sons debts to third parties out of residue, Vaisey J had no difficulty in characterising the relevant clause as a direction. In the case at bar, what is directed is payment out of the estate of all “amounts … due and owing…to any trust of which Bogasi” is the trustee or, implicitly, amounts owed to the relevant mortgagee. There is no suggestion that those amounts are to be paid to, for example, Kim in relation to debts owed by him. In the absence of express provision otherwise, the direction to “pay” must mean to pay the relevant creditor. In other words, the Administrator will fulfill the direction in cl 4 by paying the relevant amount to, for example, Bogasi on behalf of the relevant debtor of Bogasi such as Kim.

In reaching this conclusion, I have considered two alternative constructions. The first is that cl 4 is a series of specific legacies to the named persons in that amount to discharge their relevant debts. That would be the effect if the debts were owed to Jim (see Bone and In re Wedmore; Wedmore v Wedmore [1907] 2 Ch 277). However, as I have already noted, that is not this case. The second is that cl 4 is a legacy to the relevant creditors. However, that is not what cl 4 says and it would have been a simple matter for a clause expressly to that effect to have been used. Clause 4 begins “I direct” and it is nothing more or less than a direction to the Administrator.

The Court’s preferred construction also requires an important and practical distinction to be observed between “my [Jim’s] just debts” and the obligation to pay out the third party obligations. In my respectful opinion, and contrary to the position advanced by Bogasi, the direction (and the general law) requires the Administrator to pay Jim’s debts (strictly understood as such – and which would include any debt of Jim to Bogasi and to the mortgagee of the Booral property) from available assets (other than those the subject of specific legacies) and then, to the extent assets remain, to satisfy the third party obligations (rateably if there are insufficient assets to meet those obligations completely because the obligation on the Administrator is at least analogous to the payment of a general legacy). It also follows from this construction that the amounts to be paid in respect of the third party obligations are not debts of the estate – they are no more or less than a direction to the Administrator as to how to apply estate funds if there are funds available to do so after paying Jim’s debts and testamentary expenses.

It follows from the foregoing that the second construction motion is to be answered to this effect:

As to the third prayer, subject to any further submission any party may wish to make, my present view is that as a matter of the Court’s discretion this prayer should not be answered until the solvency of the estate or otherwise is known.

The third construction motion was filed on 22 October 2024 by Bogasi. That motion sought clarification on the following:

Clause 6 of the will provides:

Critical to the present issue, is the evidence adduced during the trial that the ‘Booral Farm’ comprises four parcels of land:

Bogasi submits that based on the legal principles outlined in Watson v Ralph (1982) 148 CLR 646 and principle 5 in Fell v Fell (see [1069] above), the reference to “my farming property at Booral, in the State of New South Wales” should be construed as referring to only the interests in the Booral farm which Jim himself owned.

Bogasi’s submission is that at the time of Jim’s death, Bogasi had owned Property 1 and 2 since 16 July 2008. According to the affidavit of Cheryl Ann Weston sworn on 23 October 2024, Property 3 was owned by Jim and Merle (Gunnar’s widow) as tenants in common in equal shares. Merle received her interest in Property 3 on 19 March 2010, after Gunnar’s death on 26 December 2006. Property 4 was also owned by Jim and Merle as tenants in common in equal shares with Merle again having received her interest in Property 4 on 19 March 2010.

Merle died in early 2024. Her interest in Properties 3 and 4 forms part of her estate. After his death, Jim’s interests in Property 3 and 4 were transmitted to the Administrator.

From these factual conclusions, Bogasi submits that Jim must have known that Merle owned an interest in Property 3 and Property 4 and that he had no right to devise or otherwise deal with those interests in the property. Therefore, the reference to “my” farming property in cl 6 could only be a reference to the parts of the property that he owned.

Clause 4 of the will directing Jim’s trustees to pay out of his estate ‘all of my just debts and testamentary expenses including but not limited to…. All amounts secured by mortgage over my farming property at Booral’ is submitted to support the proposition that cl 6 can only be construed as devising Properties 3 and 4 to Brett. At the time the will was made, only Property 3 was encumbered with a mortgage and Bogasi has never charged Properties 1 and 2. Bogasi argues this context suggests that Jim never considered Properties 1 and 2 to form part of his “farming property in Booral” and to be devisable to Brett in accordance with cl 6.

Additionally, Bogasi submits that this is not a case where a court will construe a gift as empowering the Administrator to get in what is otherwise Bogasi’s property. Bogasi’s position as a trustee for a discretionary trust was contended to signify that Jim had no power to arm his executors with the power to ensure Properties 1 and 2 formed part of his estate when they were impressed with a trust, and Bogasi was subject to obligations in relation to those properties as a trustee.

The following terms of the New Jim Trust Deed were submitted to demonstrate the broad scope of the powers vested in Bogasi as trustee. These were submitted to preclude Jim from being capable of fettering any power pursuant to any clause in his will:

As a result, Jim was not capable of devising Property 1 and Property 2 to Brett pursuant to cl 6 of the will. Clause 6 only devised Jim’s interest in Property 3 and Property 4, which are the two properties that Jim had an interest in as tenant in common.

No other party filed submissions in relation to this motion. The Court accepts Bogasi’s submissions. As a matter of construction, the reference to “my farming property” can only be reference to so much of that property as Jim had an interest in, being his interest as tenant in common in Property 3 and Property 4. The plain words of cl 6 of the will do not sustain a construction that would require the Administrator to seek to get Property 1 and Property 2 into the estate. The issue posed in the third construction motion will be answered “Yes”.

The parties will be given time to consider these reasons and determine what, if any, issues are outstanding between them as to the orders required to give effect to these reasons. Because of the complexity of the issues argued and the possibility that a party may wish to contend that some further issues arise (not least in relation to the construction motions that were determined on the papers), the Court will reserve further consideration of the proceedings generally.

Finally, on any view, the delivery of these reasons is not the end of the dispute. Issues will undoubtedly arise in giving effect to these reasons. There are also the matters which have been separated out for later determination. Finally, it would be unrealistic not to take account of the likelihood of appeals. The Court therefore also commends to the parties’ consideration whether the present moment is opportune for a further mediation to occur before the next substantial tranche of legal costs is incurred.