Beale v Trinkler

2. Both Bucketts Way and the Branch have been valued for the parties and the parties agree as follows a) The Bucketts Way property will be transferred to Trinkler.

b) Any interest claim to beneficial interest, accretion, shares or options Trinkler has in the Branch Lane or Clemellway Pty Ltd will be surrendered or transferred to Philip Beale who owns and has owned since 2002 all the issued capital in Clemellway Pty Ltd and Aileen Beale will continue to hold her interest in Branch Lane unaltered in any way.

c) Clemellway Pty Ltd and or P. Beale on the one hand and Trinkler or the other shall share equally the cost of the conveyance and stamp duty in respect of the transfer of the Buckets Way from Clemellway Pty and Aileen Beale to Trinkler. d) Any and all guarantees of Trinkler for the loan from the National Australia Bank, Hamilton, Newcastle in respect of the Branch Lane is to be extinguished at the time of settlement of the transfer to Trinkler of Buckets Way.

e) Any and all guarantees of P. Beale for the loan from the Commonwealth Bank of Australia in respect of the Bucketts Way is to be extinguished at the time of settlement of the transfer to Trinkler of Buckets Way. f) P. Beale and Clemellway Pty Ltd will allow 50%of the accretion in value of Branch Lane above the original purchase price and stamp duty plus initial contribution.

g) Trinkler will allow 50% of the increase in value of Bucketts Way above the amount of the original purchase price plus stamp duty and initial contribution.

h) The parties agree to bring into existence any and all documentation including contracts or deeds necessary to effect the agreement herein.

i) Trinkler and Clemellway P/L will each pay half the stamp duty required to transfer Bucketts Way to Trinkler.

Philip Beale ……………………………………… Aileen Beale ………………………………………

Clemellway Pty Ltd ………………………………………" 5 Fagan Simm valued Branch Lane at $2.4M and Bucketts Way at $420,000. 6 The sole shareholder and director of Clemelle Way was to have been Mr Trinkler's first wife but she changed her mind. Mr Beale suggested members of Mr Trinkler's family as a replacement but Mr Trinkler rejected all of them. Finally, Mr Beale agreed to become the sole director and to hold the one issued share of Clemelle Way on trust for Mr Trinkler. Mr Beale signed the heads of agreement in his own right and on behalf of Clemelle Way. 7 Mr and Mrs Beale executed a mortgage and guarantee to secure an advance of $1,680,000 to refinance the loan with respect to Branch Lane and to pay Mr Trinkler under the heads of agreement. They also obtained the release of Mr Trinkler from his guarantee of the repayment of the Branch Lane loan. 8 Mrs Beale, Clemelle Way and Mr Trinkler executed counterparts of contracts for sale of Bucketts Way to Mr Trinkler. The exchange of counterparts was to take place on 2 August 2005. The day before, Mr Trinkler instructed his solicitor not to exchange the counterparts. Thereafter, Mr Trinkler took no steps to perform his part of the heads of agreement. On 17 November 2005 Mr Trinkler's solicitors purported to rescind the heads of agreement. Disputes subsequently arose with respect to the cattle breeding partnership and the rights and obligations of Mr Beale and Mr Trinkler thereunder. 9 Mr and Mrs Beale seek specific performance of the heads of agreement or, alternatively, the oral agreement that preceded it. Confinement of issues 10 The parties agreed that the cattle breeding partnership had been dissolved and its winding up was a matter for an associate Judge to undertake in due course. The parties also agreed that the land holding partnership had also been dissolved and should be wound up. It was agreed that if Mr and Mrs Beale obtained specific performance, that would establish the method of winding up. If they were not entitled to specific performance, the winding up would, again, be a matter for an associate Judge in due course. 11 Numerous lengthy affidavits had been served taking issue with allegations in prior affidavits that had little or no relevance to the central issue. In consequence, I ordered that the only affidavits the parties might read were those sworn by the valuers and the accountants and I limited oral evidence to the question whether the plaintiffs were entitled to specific performance in terms of their amended statement of claim and the defences to that claim to relief. Acquisition of beneficial interest in share 12 Mr Trinkler's primary submission was that Mr Beale as trustee in acquiring the beneficial interest in the share in Clemelle Way from Mr Trinkler bore the onus of establishing that he gave full value for the interest; he disclosed all information that could affect Mr Trinkler's judgment; he gave to Mr Trinkler the full benefit of his judgment; and he and Mr Trinkler were at arm's length. It was submitted Mr Beale had failed to discharge his onus. 13 As a rule against "self-dealing" it has been said that where a trustee sells trust property to himself the transaction is absolutely and ipso facto void (Denton v Donner (1856) 23 Beav 285 at 290; 53 ER 112 at 114). 14 It was submitted on Mr Trinkler's behalf that the same rule should apply where a trustee purchases a beneficiary's interest. That view found favour with Lord Erskine in Morse v Royal (1806) 12 Ves Jun 355 at 372; 33 ER 134 at 141. The Lord Chancellor said he would not have regretted it had the rule that a trustee cannot purchase from himself been extended to purchases from the cestui que trust.

15 The authorities establish, however, that "fair-dealing" rules apply in these circumstances rather than the "self-dealing" rule that applies to a trustee who purchases trust property from himself. 16 It was submitted that the "fair-dealing" rules are an application of the rule in Keech v Sandford (1726) Sel Cas T King 61; 25 ER 223. But that was a case of a lease held on trust where, upon refusal of a renewal, the trustee acquired a new lease for his own benefit. It was held that the new lease was held upon the same trusts as the old lease. 17 Chan v Zacharia (1983-1984) 154 CLR 178, upon which Mr Trinkler also relied, was likewise a case where an agreement for a new lease in favour of one partner acquired after dissolution of the partnership but before its winding up was found to be held on a constructive trust for those entitled to the property of the dissolved partnership. 18 The matters that Mr Trinkler submits Mr Beale must establish do not arise under the principle in Keech. Rather, they are the "fair-dealing" rules established under a different line of authority. They are stated thus in Jacobs' Law of Trusts in Australia, 7th ed (2006) LexisNexis Butterworths at [1747]: "But there is no rule of law forbidding a trustee to purchase trust property from a beneficiary; yet if a trustee does effect such a purchase, the transaction is open to review by the court and the onus will be on the trustee to show the following: (1) that the trustee gave full value for the interest, unless it is proved that the beneficiary intended to make a gift to the trustee, in which case it must be shown that the beneficiary knew the value of the gift; (2) that the trustee, before purchasing, disclosed all information which could affect the judgment of the beneficiary; (3) that if the trustee held a position in relation to the beneficiary which resulted in the beneficiary reposing confidence in the trustee's judgment, the trustee gave to the beneficiary the full benefit of the trustee's judgment; and (4) that the beneficiary, although not necessarily having independent advice, was 'at arm's length' from the trustee." 19 Meagher, Gummow and Lehane's Equity Doctrines and Remedies, 4th ed (2002) Butterworths LexisNexis at [5-160] suggests that the arm's length requirement adds nothing to the other elements and will be established if those other elements are established. 20 Jacobs cites what was said by Eldon LC in Coles v Trecothick (1804) 9 Ves 234 at 246-247; 32 ER 592 at 597: "As to the objection to a purchase by the trustee, the answer is, that a trustee may buy from the cestui que trust, provided there is a distinct and clear contract, ascertained to be such after a jealous and scrupulous examination of all the circumstances, proving, that the cestui que trust intended, the trustee should buy; and there is no fraud, no concealment, no advantage taken, by the trustee of information, acquired by him in the character of trustee. I admit, it is a difficult case to make out, whereever it is contended, that the exception prevails." 21 The requirements were stated by Cairns LC in Thomson v Eastwood (1877) 2 App Cas 215 at 236: "They were cases of this kind - cases where a trustee has entered into dealings with his cestui que trust - dealings which may be legitimate, but which, on the other hand, are open to examination when they are complained of. A trustee, for example, buys from his cestui que trust the trust property; there is no rule of law which says that a trustee shall not buy trust property from a cestui que trust , but it is a well known doctrine of Equity that if a transaction of that kind is challenged in proper time, a Court of Equity will examine into it, will ascertain the value that was paid by the trustee, and will throw upon the trustee the onus of proving that he gave full value, and that all information was laid before the cestui que trust when it was sold." 22 It was submitted on Mr Beale's behalf that the heads of agreement did not involve a purchase of trust property. I reject that submission. The heads of agreement identified Mr Beale's acquisition of Mr Trinkler's interest in the share in Clemelle Way as a surrender or transfer for consideration. If it was a transfer, it amounted to a purchase and the "fair-dealing" rules applied according to their tenor. If it was surrender, Mr Beale still acquired the equitable interest in the share for consideration in a transaction with no material difference from a purchase. 23 It was submitted that Mr Beale's holding of the legal title to the share did not involve the acceptance of any responsibility or dependence by Mr Trinkler upon Mr Beale in connection with the business affairs of the property holding partnership or the cattle breeding partnership and the rules with respect to careful scrutiny did not apply. 24 I reject that submission. Mr Beale held the share on trust for Mr Trinkler. By surrender or transfer Mr Beale acquired Mr Trinkler's equitable interest in the share. That constituted a purchase, or its equivalent, by a trustee of the interest of a beneficiary. In my view the "fair-dealing" rules applied. 25 Underlying these requirements is the more general equitable principle that a fiduciary shall not obtain any benefit or gain from a conflict of personal interest and fiduciary duty. The specific requirements of the "fair-dealing" rules should be understood in this context. If a trustee gains no advantage at the expense of the principal, the "fair-dealing" rules are not infringed. Full value 26 It was submitted on Mr Trinkler's behalf that Mr Beale did not give full value for his acquisition of the beneficial interest in the share in Clemelle Way. 27 After the heads of agreement had been signed and the contract for sale of Bucketts Way had been drawn, Mr Trinkler met a person who was prepared to offer $3M for Branch Lane. Mr Trinkler urged Mr Beale to negotiate a sale of Branch Lane for in excess of $3M. Mr Beale said he was not interested. He was committed to purchasing Branch Lane. 28 The contract for sale was drawn by a solicitor, Anthony Dicembre. Both he and Mr Beale advised Mr Trinkler to sign the agreement for sale as he was bound by the heads of agreement. Mr Trinkler signed a counterpart but thought better of it and instructed Mr Dicembre on 1 August 2005 not to exchange counterparts. 29 Daryl Kevin Ford owned the property adjoining Branch Lane. In late October 2005 he made a written offer to purchase Branch Lane for $3,240,000. He increased the offer to $3.5M on 6 July 2007. 30 Drew Edward Roberts, a registered valuer, prepared a valuation report. He valued Branch Lane as at April 2005 at $3,150,000. He adopted Mr Ford's offered price as the value of the property in November 2005 and reverted to the $3,150,000 figure as its value in January 2007. 31 On Mr Beale's behalf it was submitted that I should ignore Mr Roberts' valuation based upon Mr Ford's offer. Reliance was placed upon McDonald v Deputy Federal Commissioner of Land Tax (NSW) [1915] HCA 54; (1915) 20 CLR 231 at 239-240 where the High Court rejected evidence of negotiations that did not end in a concluded bargain: "But if the negotiations do not end in a concluded bargain, the field is at once open to a multitude of other considerations before the same point of opinion is reached. Excursions into the realm of collateral circumstances would be endless. They would so add to the cost, delay and uncertainty of litigation as on the whole to render a great disservice to the cause of justice." 32 These observations have not been well received. In Gregory v Federal Commissioner of Taxation (1970-1971) 123 CLR 547 McDonald was distinguished on the basis that the offer in question was followed by a concluded contract. 33 In Freestone v Parramatta City Council (1973-1974) 34 LGRA 35 at 49, Else-Mitchell J took the view that where the question was only of amount and the conditions of sale were relatively unimportant, an offer or concluded bargain - even though not carried into enforceable form - may be properly admitted as indicative of a fair price for land if it is clear that such price was reached as a result of normal negotiations between the parties. 34 In Goold v Commonwealth of Australia (1993) 42 FCR 51, Wilcox J made a close analysis of McDonald. At 57-58 his Honour pointed out that the observation set out above was made, not in relation to an offer to purchase the land the subject of a valuation, but rather an offer to purchase other land regarded as being comparable to the subject site. The High Court did not discuss the admissibility of an offer relating to the land to be valued. 35 Wilcox J endorsed the approach taken by Barber J in Phillipou v Housing Commission of Victoria (1969) 18 LGRA 254. There an adjoining owner, a church, offered to acquire the subject land first at price of $25,000 and later at $25,800. At 259 Barber J said: "The board rightly took into account the potentiality of the land, the likelihood of the Church authorities buying it, and being willing to pay something more than the market value because of its position, but just how much additional value should be allowed for this factor was a question of fact for the board. The contention that the value must necessarily be $25,800 because of the offers made by the Church was rightly rejected."

Wilcox J went on to say at 59-60 that it would be wrong to exclude offer evidence: "In light of Barber J's analysis, it would be anomalous and unjust for the courts to adopt a blanket rule excluding offer evidence. Such a rule might exclude cogent evidence of the interest of a particular purchaser in the land being valued, a person who was willing to pay more than ordinary market price."

His Honour went on to say that the tribunal had to consider carefully the question of genuineness of the offer and went on: "But it seems to me that, once the court is satisfied about genuineness, an offer by an arm's length party to purchase the land under valuation is something that the judicial valuer ought to take into account in considering the possibility of a sale at a price different from that indicated by conventional evidence, such as an analysis of comparable sales, or of a hypothetical development, or a calculation of the capitalised value of the rental return. How much weight should be given to such an offer is a question to be determined by reference to the facts of the particular case. In some cases, the appropriate weight may be minimal; in others considerable." 36 Wilcox J's judgment in Phillipou was adopted by Heerey J in Henderson v Amadio Pty Ltd (No 1) (1995) 62 FCR 1 at 122. It was applied by the New South Wales Court of Appeal in MMAL Rentals Pty Ltd v Bruning [2004] NSWCA 451; (2005) 63 NSWLR 167 at 183 [87]. (See, also, Caruana v Port Macquarie-Hastings Council [2007] NSWLEC 109 at [23]-[33]; Benzlaw & Associates Pty Ltd v Medi-Aid Centre Foundation Ltd [2007] QSC 233 at [123]-[128]). 37 Mr Ford's offers and Mr Roberts' consideration of the first of them are not inadmissible and I reject Mr Beale's submission to that effect. 38 Mr Roberts said that with the benefit of hindsight and with the offer from an adjoining neighbour who in his opinion was deemed to be prudent and knowledgeable, he adopted the offer figure as the market value of Branch Lane in November 2005. There was none of the analysis of genuineness to which reference is made in Goold and no analysis of the extent to which the offer may have included special value elements leading to an offer above market value. 39 In Maurici v Chief Commissioner of State Revenue [2003] HCA 8; (2003) 212 CLR 111 at 120 [16] the High Court said: "How is the land in its notionally unimproved state to be valued? The traditional, and usually unexceptionable method is to seek out relatively contemporaneous sales of comparable properties between parties at arm's length, unaffected by special circumstances, such as, for example, a strong desire by a purchaser to buy an adjoining property, and to use those sales as a yardstick for the valuation of the relevant land." 40 In Western Australian Planning Commission v Arcus Shopfitters Pty Ltd [2003] WASCA 295 at [55] a Full Court of the Supreme Court of Western Australia pointed out that the preponderance of authority was that although a sale to an adjoining owner need not be excluded from consideration as a comparable sale, it needed to be carefully analysed. 41 In cross-examination, Mr Roberts agreed with the proposition that it was inappropriate to take into account special value that properties might have to people like neighbours, but that was, in my view, precisely what he did in assuming the offer to be genuine and adopting it as market value without analysis of whether special value elements were involved. 42 Benjamin Andrew Hood, another registered valuer, prepared a valuation report of Branch Lane as at 27 April 2005 and in October 2005 he put a figure of $2.5M on the property at both dates. 43 It was submitted that Mr Beale had failed to discharge his onus of proof that he gave full value for the share in Clemelle Way because Mr Hood put a value $100,000 higher than that of Fagan Simm and Mr Roberts put an even higher value on the property, and the share was worth half the value of Branch Lane. 44 Neither Mr Beale nor Mr Trinkler was a land valuer. The logical course was that adopted under the heads of agreement for the appointment of an independent valuer to value the properties and for the parties to accept the valuations. It was submitted that, notwithstanding the adoption of this logical approach, if the land was worth more than the value attributed to it by Fagan Simm, Mr Beale had failed to give full value and the heads of agreement should be set aside. 45 I do not accept that a court of equity would endorse such an absolute and inflexible approach to the "fair-dealing" rules. Just as the scope of a fiduciary's duties will vary depending upon the sphere of activity in which the fiduciary undertakes to act for or on behalf of a principal, so, too, the "fair-dealing" rules must adapt to the relevant circumstances. 46 None of the authorities cited in Jacobs or in Meagher, Gummow & Lehane deal with a situation where the parties agree to the appointment of an expert and the acceptance of a valuation report as the basis for establishing the purchase price of the beneficiary's interest. 47 If by adopting such a valuation report a fiduciary obtains no benefit or gain from a conflict of personal interest and fiduciary duty; if the fiduciary gains no advantage at the expense of the principal: the "fair-dealing" rules are not, in my view, infringed even if Fagan Simm were mistaken as to the market value of Branch Lane. 48 The appointment of an independent valuer and the acceptance of his valuations did not involve Mr Beale taking advantage of his fiduciary position as trustee of the share in Clemelle Way. On the contrary, the appointment of the independent valuer precluded Mr Beale from benefiting from his fiduciary's role and it placed him and Mr Trinkler at arm's length because independent advice was sought by the partes. 49 Valuation evidence is a matter of opinion. It is not surprising that the Fagan Simm valuation differed from that of Mr Hood by a figure of $100,000. That does not establish that Fagan Simm had not expressed an opinion as to the market value of Branch Lane. It does not establish that the opinion was wrong. And it does not establish that Mr Beale failed to give full value for the equitable interest in the share in Clemelle Way. 50 Mr Roberts' valuation was far in excess of the Fagan Simm and Hood valuations. I am concerned that, notwithstanding his assertion to the contrary, Mr Hood was influenced by Mr Ford's offer in arriving at a valuation of Branch Lane at the earlier date of April 2005, the material date for consideration of the purchase price for the surrender or transfer of the share in Clemelle Way under the heads of agreement. In my view he gave too much weight to hindsight. The neighbour's offer had not been received when Fagan Simm performed their task. There is no suggestion that they lacked the expertise of competent registered valuers. Mr Beale was entitled to accept their valuation and in agreeing to pay a price based on that valuation he could not be said, in my view, to have failed to give Mr Trinkler full value for his share.

Mortgage value 51 Fagan Simm told Mr Beale by telephone of the values they attributed to the properties. Mr Beale wished to use the valuation of Branch Lane to raise funds from the National Australia Bank to refinance the loan on the property and to pay Mr Trinkler under the heads of agreement. NAB required the valuation to be made out to it thus the report was addressed to Mr Greg Page of NAB's Hamilton Branch. The valuation remained at $2.4M. It recorded the bank's instructions as follows: "We have been asked to assess the Current Market Value of the above property for Mortgage Purposes. Current Market Value is defined as being: " The estimated amount for which an asset should exchange on the date of valuation, between a willing buyer and a willing seller in an arms length transaction, after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion." "

The definition reflects that in Spencer v The Commonwealth of Australia (1907) 5 CLR 418 at 441. 52 Mr Roberts expressed the view that the valuation was for mortgage purposes and was not an estimate of market value. He said that when valuing for mortgage purposes, one took a longer view of the market, took out irregularities and arrived at a lower figure than market value. 53 Notwithstanding the clear statement that the value was current market value with a definition of what was meant by that term. Mr Roberts steadfastly maintained his view that the valuation was below market value as a mortgage valuation. I reject this evidence. The clear, unambiguous terms in which the Fagan Simm valuation report recorded the instructions do not allow of Mr Roberts' interpretation. Excess initial contribution 54 It appears that Mr Trinkler paid an amount in excess of his half share on the purchase of Branch Lane. Mr Trinkler's contribution was $323,458.85. His half share was $274,601.40. The excess was $48,857.45. 55 Roger Huntington, the accountant who drew up the partnership accounts, did not include the excess because it was not relayed to him by Anthony Peter Croese, the accountant for Mr Trinkler and his company Burra Investments Pty Ltd. 56 Mr Croese recorded, as a movement in Mr Trinkler's capital account with the partnership, deposits by Mr Beale to Burra Investments of $50,000 and $85,818.75. The question was whether either of these payments was in reimbursement of the additional amount paid by Mr Trinkler on the acquisition of Branch Lane. 57 The evidence was inconclusive. I am not satisfied that either payment served this purpose. 58 It was submitted that Mr Beale did not give full value for the share in Clemelle Way because the $48,857.45 was not taken into account. 59 The heads of agreement are clear. Mr Trinkler is entitled to the recovery of his initial contribution. Since it is accepted that he paid an additional $48,857.45, that must be taken into account as part of Mr Trinkler's initial contribution. Cattle breeding partnership 60 It was submitted that because the heads of agreement provided for the continuation of the cattle breeding partnership; because the profits from it were used to service the loan on Branch Lane; because the profits ran at approximately $50,000 per annum; Mr Trinkler was required to continue to contribute his share of approximately $25,000 for the benefit of Clemelle Way and Mrs Beale and, in consequence, Mr Beale as trustee did not give full value for the share in Clemelle Way under the heads of agreement. 61 I reject that submission. The heads of agreement clearly contemplated that the original loan with respect to Branch Lane would be discharged and Mr Trinkler released from his guarantee. Responsibility thereafter under any refinancing arrangement rested with Mr Beale, Mrs Beale and Clemelle Way. Onus discharged 62 As to the other elements of the "fair-dealing" rules, there was no lack of disclosure on Mr Beale's part and Mr Trinkler had the full benefit of Mr Beale's judgment in drawing up the heads of agreement. Furthermore, the heads of agreement were discussed with Mr Dicembre over the telephone and a suggested addition to it, albeit, in Mr Beale's favour, was inserted. 63 In my view, there was no abuse of Mr Beale's position as trustee of the share in Clemelle Way and he has overcome his onus of proof as a trustee purchasing trust property from his beneficiary. Uncertainty 64 It was submitted in Mr Trinkler's behalf that the heads of agreement failed for uncertainty. It was said that they failed to identify a purchase price for the transfer of Bucketts Way and failed to identify how the allowances in cl 2(f) and cl 2(g) are to be brought to account. 65 As to the former objection, cl 2 of the heads of agreement in stating that the parties had had Bucketts Way and Branch Lane valued, contemplated that, subject to allowances, the purchase price for Bucketts Way and the consideration for the surrender or transfer of equitable interest in the share in Clemelle Way were to be at those valuations. 66 As to the latter objection, the allowances were to be 50 per cent of the accretion in value of the properties over the original purchase price and stamp duty together with the initial contributions. 67 Thus, the consideration for the surrender or transfer of the share in Clemelle Way was to be $713,086. This was made up of 50 per cent of the valuation for Branch Lane of $2.4M less the original purchase price of $1,550,000 and stamp duty of $70,744, an amount of $389,628. To that was to be added Mr Trinkler's initial contribution of $77,500 as half the deposit, $35,372 as half the stamp duty and half the balance of the settlement moneys funded by the parties of $161,729 together with the additional $48,857, a subtotal of $323,458. 68 The consideration for the transfer of Bucketts Way was to be $131,033. 50 per cent of the valuation of $420,000 less original purchase price of $200,000 and stamp duty of $5492 gives a subtotal of $107,254 to which is to be added the Beale initial contribution of half the deposit at $10,000, half the stamp duty at $11,033 and half the balance of settlement moneys funded by the parties of $2746, a subtotal of $23,779. 69 Thus the Beale interests were obliged to pay Mr Trinkler a net amount of $582,053. 70 While the heads of agreement did not specify the consideration for the transfer of Bucketts Way or the consideration for the surrender or transfer of the share in Clemelle Way, a method for determining those amounts was specified in the heads of agreement and, as demonstrated above, the consideration for each transaction could be ascertained by following the formula. 71 In Cudgen Rutile (No 2) Pty Ltd v Chalk [1975] AC 520 the Privy Council rejected an argument that a contract was illusory because it lacked a price if the means by which the price could be fixed could be found. Lord Wilberforce, who delivered the judgment of their Lordships, said at 536: "A further argument, against a conclusion that a valid and enforceable contract was constituted by the authority to prospect of September 15, 1966, was put by counsel for the respondent: this was that a number of essential terms, namely, the character of the lease, the areas to be included, and the term, were not fixed by the authority to prospect but were left to be determined by the minister. Where this situation exists, it was said, there is no effective contract, or to use a phrase of Sir Fredrick Pollock, a contract which is illusory. Examples of the judicial use of this concept are the judgment of Cussen J in Beattie v Fine [1925] VLR 363, 369 and the judgment of Windeyer J in Placer Development Ltd v Commonwealth of Australia 121 CLR 353. Their Lordships consider that, in modern times, the courts are readier to find an obligation which can be enforced, even though apparent certainty may be lacking as regards some terms such as the price, provided that some means or standard by which that term can be fixed can be found (cf. Hillas & Co Ltd v Arcos Ltd (1932) 147 LT 503; Sweet & Maxwell Ltd v Universal News Services Ltd [1964] 2 QB 699 and Godecke v Kirwan (1973) 47 ALJR 543)." 72 In my view the heads of agreement do not fail as an illusory contract. Misrepresentation 73 Mr Trinkler claimed he was entitled to rescind the heads of agreement on the basis of misrepresentation by Mr Beale and, further, that he was entitled to rescind the heads of agreement for misrepresentation under the Trade Practices Act 1974 (Cth) or the Fair Trading Act 1987. 74 Mr Trinkler said that when told by Mr Beale of the valuations by Fagan Simm, he said to Mr Beale that he was surprised that one property had more than doubled in value and the other had not gone up anywhere near as much. He said that Mr Beale replied with words to the effect: "I guess its because the AMP property is rural land". Reference to the AMP property was a reference to Branch Lane. Mr Beale denied that the conversation took place. 75 According to Fagan Simm, the value of Bucketts Way rose by 110 per cent. The value of Branch Lane rose by approximately 55 per cent. 76 Mr Trinkler was sufficiently acute to notice the difference in value. If the conversation did take place, I am not satisfied that it induced Mr Trinkler to enter into the heads of agreement nor that he relied upon it. Indeed, it was not put in submission that Mr Trinkler relied upon the alleged representation. It was put that Mr Beale deflected Mr Trinkler's doubts about the Branch Lane valuation. 77 If Mr Beale made the observation, it was nothing more than a lay remark. Mr Trinkler knew that Mr Beale had no expertise in land valuation. It was the lack of such expertise by Mr Beale and Mr Trinkler that led to the agreed appointment of Fagan Simm to value both properties. 78 Further, it was not established on the evidence that the observation was inaccurate. 79 I need not decide whether Mr Beale made the representation because I am of the view that if it was made and if it was a mistaken view, Mr Trinkler did not rely upon it nor was he induced by it to enter into the heads of agreement. Rescission 80 The letter of 17 November 2005 purporting to rescind the heads of agreement put the right on a number of bases. First, it was contended that the agreement to acquire the beneficial interest in the share in Clemelle Way was voidable at the instance of Mr Trinkler. For the reasons already given, I am of the view that that ground was not open to Mr Trinkler. 81 Secondly it was put that the valuation of Branch Lane materially understated the value of the property. For the reasons set out above that argument was not open to Mr Trinkler nor the suggestion that the heads of agreement was incomprehensible. 82 Thirdly, it was put that the heads of agreement was executed by Mr Trinkler under a unilateral, if not mutual, mistake that the market value was as stated in the Fagan Simm valuation. Again, in my view, that ground was not open. 83 Fourthly, it was put on the basis of misrepresentations as to the value of the land both by Fagan Simm and Mr Beale in attributing the difference in the rates of increase in market value of the two properties to Branch Lane being a rural property. For the reasons expressed above I am of the view that that basis for rescission was not open contractually nor as a statutory right. Breach of duty 84 It was alleged that Mr Beale owed Mr Trinkler fiduciary duties as an adviser, trustee and co-venturer. It was alleged that if Mr Beale acquired Mr Trinkler's beneficial interest in the share in Clemelle Way that transaction was procured by Mr Beale in breach of his fiduciary duties. 85 There was evidence from Mr Trinkler, disputed by Mr Beale. Mr Trinkler said that Mr Beale inspected one of his income tax returns and expressed the view that Mr Trinkler could service a loan of $1M. Mr Trinkler claimed that he looked after the cattle breeding and he relied on Mr Beale to look after the other aspects of their relationship including the subdivision of the properties. He claimed that Mr Beale made representations as to his ability to obtain subdivisional approval within a relatively short period of time. 86 These matters were not raised as a basis for rescission of the heads of agreement. Nor do I see how they could found an argument that Mr Trinkler was not bound by them. 87 In my view the heads of agreement contained a perfectly rational means of winding up the land-holding partnership. The authorities support the proposition that specific "fair-dealing" rules apply to the acquisition of the beneficial interest in the share of Clemelle Way. For the reasons set out above I am of the view that Mr Beale did not breach those rules. 88 I do not accept that, in addition to those rules, the general fiduciary duties defined by the sphere of activity in which a fiduciary undertakes or agrees to act for or on behalf of a principal were breached by Mr Beale, or that Mr Beale procured the acquisition of the beneficial interest in the share in Clemelle Way in breach of such duties. 89 Both Mr Beale and Mr Dicembre asserted that Mr Trinkler was bound by the heads of agreement and obliged to sign the contract for sale. It was alleged that this constituted a misrepresentation as to the effect of the heads of agreement and breached Mr Beale's alleged general fiduciary duties. 90 I have found that the heads of agreement are enforceable. It follows that the allegation of misrepresentation must fail. 91 In any event, Mr Trinkler did not exchange counterparts and refused to enter the contract for sale. Conclusion 92 In my judgment, Mr and Mrs Beale are entitled to specific performance of the heads of agreement. That should affect a winding up of the land-holding partnership. As indicated at the beginning of these reasons, orders should be made for the winding up of the cattle breeding partnership by an associate Judge. The amended cross claim should be dismissed. 93 I will hear the parties on the appropriate terms of orders and I will hear the parties on costs. I direct the parties to bring in short minutes of order reflecting these reasons.

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