Brenner v First Artists' Management Pty Ltd

The affidavit and other evidence

1. The Applicants rely on Mr Sharp's affidavit dated 13 October 2017, which set out his account of the background to the acquisition of the property in Anambah in New South Wales by JSMOT in which Mr Sharp, the late Melody O'Toole and Ms McCall had an interest. That provides background to the wider proceedings but does not advance the application to set aside the rejections of the proofs of debt. Mr Sharp also stated in that affidavit, by way of bare assertion, that Ms O'Toole and he had performed or paid for specified categories of work at the Anambah property (Sharp 13.10.17 [27]). That paragraph, and other parts of Mr Sharp's evidence, would have been rejected or admitted with a limiting order under s 136 of the Evidence Act 1995 (NSW) as a submission rather than proof of the asserted fact, had objection been taken to it. Mr Johnson did not object to evidence of that kind, having regard to the time which would have been taken in dealing with the many paragraphs of Mr Sharp's evidence in that form, and accepted that the difficulties with evidence in that form could be treated as going to its weight.
2. Mr Sharp also referred (Sharp 13.10.17 [20]) to a conversation with Ms McCall, in which he referred to the fact that he and Ms O'Toole would live in the main house at the Anambah property and Ms O'Toole would use the office for the running of her bookkeeping business, Ms McCall accepted that proposition, and Mr Sharp said that: "I will supply plant and machinery and maintain and improve the [property]. Because I'm a licenced builder, and because I have experience with farm machinery, it would make sense for me to provide my skills as labour or find extra labour if required and the money that is generated by the [property] including any rent from the second house should be reinvested and will help fund extra labour costs, and if required, be used for maintenance and repairs, and to make improvements to the [property]."
3. Mr Sharp's evidence is that Ms McCall agreed to that proposition and said she would inject money and Ms McCall also agreed that Ms O'Toole and Mr Sharp would not pay rent or agistment for their occupation of the property. Mr Sharp relies on that conversation as providing authority for him to undertake work at the property and charge JSMOT or the Trust for doing so. It seems to me that conversation did not provide such authority since, at the highest, it involved an offer by Mr Sharp to supply plant and machinery and maintain and improve the property, apparently on the basis that he and Ms O'Toole would be permitted to live on it without paying rent or agistment, and did not extend further to authorise him to charge JSMOT or the Trust for the costs of supplying what he had offered to supply.
4. Mr Sharp also there set out, in conclusory form, several broad categories of work that he claimed Ms O'Toole and he had performed or paid for and improvements made at the property (Sharp 13.10.17 [27]). Mr Sharp also refers to a conversation as to repair of a driveway at the property (Sharp 13.10.17 [28]) and to Ms McCall's agreement to the repair of that driveway, but that conversation also involved no arrangement as to the payment of costs of that work by JSMOT or the Trust, where Mr Sharp and Ms O'Toole were then occupying the property without paying rent or agistment. Mr Sharp also referred to a further conversation with Ms McCall in which she agreed to pay half the costs of payment of third party work on the driveway (Sharp 13.10.17 [30]). That conversation, at best, could support a claim against Ms McCall rather than a claim against JSMOT or the Trust.
5. The Applicants rely on a further affidavit of Mr Jeffrey Sharp dated 22 August 2018 which expands on his evidence as to the circumstances of acquisition of the Anambah property. Mr Sharp there refers to a conversation with Ms McCall in which they agreed that Mr Sharp, Ms O'Toole and Ms McCall would inject funds into the property for maintenance and repairs; to improvements that Ms McCall insisted Mr Sharp and Ms O'Toole make to the property; and to the purchase of an irrigation licence as part of improvements to the property (Sharp 22.8.18 [26]). Again, it seems to me that Mr Sharp's evidence, at best, may support a claim by him against Ms McCall under any agreement that he and she would contribute to the costs of the property, and does not establish any authority for him to incur costs on behalf of JSMOT or the Trust without any corporate decision that he should do so. Mr Sharp also refers to a further conversation (Sharp 22.8.18 [31]) which contemplates that Ms McCall would help with funding for maintenance and improvements. That conversation again appears to contemplate Ms McCall and possibly Mr Sharp and Ms O'Toole would fund those matters, rather than that he had any authority to incur obligations on behalf of JSMOT or the Trust in that regard. That view is consistent with Mr Sharp's evidence of his then understanding (Sharp 22.8.18 [32]) that: "I believed that we had a verbal commitment from [Ms McCall] to share the costs of improvements required on the properties on a 50% - 50% basis."
6. Mr Sharp again referred in that affidavit (Sharp 22.8.18 [42]), also in conclusory form, to work that he claimed that he and Ms O'Toole had performed or paid for and improvements made at the property in the period since its purchase in 2010, within several categories. Mr Sharp also there referred to a report dated 30 January 2018 of the Receivers to the Court and indicated (Sharp 22.8.18 [54]) that he "dispute[d]" certain negative adjustments made by the Receivers to his claims. In an application of this kind it is, of course, not sufficient for Mr Sharp to dispute the Receivers' assessment of his claims, and the Applicants bear the onus of establishing that those claims should be allowed. Mr Sharp also set out, by way of bare assertion, reasons why he considered the Receivers' negative adjustments to his claims were unwarranted (Sharp 22.8.18 [55]) and the areas in which he disputed the Receivers' treatment of his claims (Sharp 22.8.18 [92]).
7. The Applicants relied on a further affidavit of Mr Sharp dated 29 January 2019 which referred to further submissions and documentation that he had provided to the Receivers and to the Receivers' supplementary report dated 15 October 2018 to the Court. That affidavit annexed a significant number of documents on which Mr Sharp relied in the application, and also annexed affidavits and statutory declarations of third parties who did not give evidence in the application. Although no objection was taken to those affidavits and statutory declarations, I give little weight to out of Court statements by third parties in that form, where the Applicants did not seek to lead their evidence by affidavit read in the proceedings or expose those witnesses to the possibility of cross-examination.
8. The Applicants also relied on a further affidavit of Mr Sharp dated 7 June 2019. Mr Sharp there referred to his lack of training and qualifications as a company director and to his understanding that Ms McCall was a "silent partner of the business" and did not want any involvement in its day-to-day management. It may be unfortunate that Mr Sharp accepted appointment as a company director without informing himself of the obligations and limitations associated with that role, and if he perceived Ms McCall as being a "silent partner" rather than, as she was, a director of JSMOT. That, however, cannot change the legal standards that are applied in determining whether the Applicants have established their debts and claims against JSMOT or the Trust. Mr Sharp's evidence was also that (Sharp 7.6.19 [19]): "Had I known then that the treatment of the money I had spent on behalf or for the benefit of JSMOT would become this difficult or would have caused me to end up in litigation, I certainly would have undertaken different measures to buy items for JSMOT using money that was clearly JSMOTs. I would also have caused JSMOT to enter into express written loan agreements from myself or my related entities, to ensure that I was a secured creditor of [JSMOT]." There are two obvious difficulties with that proposition. The first is that the Court must have regard to the events that occurred, not the events which might have occurred had Mr Sharp approached matters differently. The second is that Mr Sharp in any event had no authority, as a single director of JSMOT, to cause it to undertake the steps that he claims he would have caused it to undertake.
9. Mr Sharp also gave evidence in conclusory and generalised form, repeated throughout that affidavit, that particular expenditures were incurred for JSMOT or for its benefit and to improve its property. Mr Sharp's evidence is also that Ms McCall did not advise him that she wanted to be involved in any business decisions (Sharp 7.6.19 [22]). That also cannot establish that Mr Sharp, as a single director of JSMOT, had authority to commit it or the Trust to substantial expenditures. Mr Sharp there also set out the several categories of expenditures incurred and now claimed by the Applicants, which I will address below in dealing with the Applicants' claims. As I noted above, Mr Sharp led evidence, by way of bare assertion, that those various categories of expenditure were, for example, "undertaken solely for the benefit of JSMOT, in order for JSMOT to be in a position to generate an income for its business" (Sharp 7.6.19 [37]). Evidence in that form can be given little weight. That evidence does not advance the position as to his authority to commit JSMOT to the relevant expenditures.
10. By a further affidavit dated 9 August 2019, Mr Sharp gave evidence of his record keeping practices, namely that he initially stored invoices received for JSMOT (although the expenditures in issue were often not addressed to JSMOT and were not paid by JSMOT) in his car, then photocopied them and placed them into cardboard folders which he kept in boxes at the property between 2010 and 2017; and to his delivery of those documents to an accountant, Mr Wong, who was retained to prepare financial accounts for JSMOT in August or September 2017, who then provided them to the Receivers. Mr Sharp also there says that, in preparing his 7 June 2019 affidavit, he satisfied himself that he had incurred the amounts referred to in the relevant invoices for JSMOT and its business. That may be so, but it has the difficulty that Mr Sharp needed to satisfy the Receivers, and now the Court, rather than himself of that matter, by evidence which has sufficient weight to allow the Receivers or the Court to reach a conclusion in that respect. Mr Sharp also refers in that affidavit to an issue which had arisen in the course of the hearing, that invoices for fuel purchases for which he claimed reimbursement also included other items such as food or drink, which had not been excluded from the claims. He indicated, on the second day of the hearing, that he had instructed his solicitors to prepare a schedule of the items excluded from the invoices which he did not claim. No such schedule was ultimately provided.
11. Mr Sharp's affidavits had substantial exhibits which were tendered. Mr Sharp also tendered four lever arch folders of documents that included the relevant invoices. The Applicants also relied on a detailed schedule of their rejected claims, which identified the evidence on which they relied (MFI 1). That schedule fairly identifies certain invoices that are not pressed, including duplicate invoices, and Mr Rose acknowledged in submissions that a set-off identified by the Receivers would also reduce the balance of the claim. It will not be necessary to address that schedule in detail, given the findings that I reach on wider grounds.
12. There was also reference in the course of submissions to draft financial statements prepared by Mr Wong apparently on instructions from and on the basis of documents supplied by Mr Sharp. Although ultimately the Receivers commissioned Mr Wong to complete the accounts, it did not seem to me that those accounts advanced the Applicants' case, given the issues as to the adequacy of the documents relied upon in their preparation and the extent to which they apparently depended on the instructions given by Mr Sharp. There is also no suggestion that the accounts addressed the question of whether Mr Sharp had authority to commit JSMOT to the relevant transactions, or the legal basis of any claims for recovery by the Applicants, which I address below. The Applicants (and the Receivers) did not call Mr Wong to give evidence in the application, although it is not necessary to draw any inference that his evidence would not have assisted them in that respect. I give little weight to those accounts in the determination of this application.
13. The Receivers rely on the affidavit dated 28 June 2019 of Mr Pirina, which refers to the appointment of the Receivers to the Trust, and to the reports previously provided by the Receivers to the Court and orders previously made, by consent, for the sale of the Anambah property, which permitted the Receivers to accept a release of claims by Ms McCall or Mr Sharp for existing liabilities owed by the Trust to them as part of the consideration for sale of the property. Mr Sharp now seeks to establish the very substantial claims that are in issue in this application for that purpose. Mr Pirina also refers to the steps which were taken in respect of the adjudication of the claims of Mr Sharp and the other Applicants, leading the Receivers to partly admit the claims in the amount of $934,407 and reject claims in the amount of $1,869,431 for the reasons summarised in a letter dated 13 March 2019 from the Receivers to Mr Sharp's legal representatives (Pirina 28.6.19 [30]), namely that there was no supporting documentation for them; supporting documentation for the claims was illegible; details in the supporting documentation were insufficient to justify admission of the claims; or the supporting documentation was not addressed to JSMOT and the claims did not appear to relate to JSMOT. I will find below that the rejected claims, and possibly other claims that were allowed by the Receivers, were also not admissible to proof on the basis that they were not costs authorised by JSMOT or to which Mr Sharp had any claim by way of contract, unjust enrichment or otherwise.
14. Ms McCall in turn relied on her affidavit dated 28 June 2019, much of which was not read, which was relevant only so far as it acknowledged (McCall 18.6.19 [18]) that Mr Sharp had been conducting farming activities; livestock feeding; equine breeding and agistment services; arena hire; sales of bloodstock and producing lucerne hay on the property. Little or no attention was given in the proceedings to the manner in which any income from those activities had been applied.

JHPL's claim for "equipment hire" by JSMOT from Jimelda Pty Limited (deregistered) and from JHPL

1. This claim in the amount of $613,250 relates to the hire of equipment by companies associated with Mr Sharp and Ms O'Toole to JSMOT for the purpose of its business in the years 2011 to 2018.
2. By way of background to this claim, a company named Jimelda Pty Limited ("Jimelda") was incorporated in August 2011 and purportedly entered a Master Hire Agreement with JSMOT on 1 September 2011 to hire plant, equipment, goods and accessories to JSMOT, for an annual fee. A winding up of Jimelda commenced on 17 February 2016, and appears to have been initiated by Mr Sharp as executor of the estate of Ms O'Toole, as Jimelda's sole shareholder and director, and Jimelda was deregistered on 27 November 2016. A new company incorporated by Mr Sharp, JHPL, purportedly provided hire services to JSMOT under a second Master Hire Agreement dated 1 March 2016, again for an annual fee and invoiced JSMOT for hire fees payable for the years ended 30 June 2011to 30 June 2017.
3. It appears that the Master Hire Agreement dated 1 September 2011 between Jimelda and JSMOT and the later Master Hire Agreement dated 1 March 2016 between JHPL and JSMOT were each copied from a third party's hire agreement, since there remains a reference to that third party as the "owner" of the relevant goods, and those agreements are in substantially identical terms (Sharp 29.1.19 Annexure A; CB 1, 118, 127). The Master Hire Agreement with Jimelda was purportedly signed as an agreement by Melody O'Toole as authorised officer of Jimelda and by Mr Sharp for JSMOT, and the Master Hire Agreement with JHPL was purportedly signed as an agreement by Mr Sharp on behalf of JHPL and also by Mr Sharp for JSMOT.
4. Mr Sharp's evidence was that, on or about 1 September 2011, he "on behalf of JSMOT" entered into the Master Hire Agreement with Jimelda for the purpose of JSMOT having the benefit and use of plant and equipment owned by Jimelda (Sharp 7.6.19 [30]). Mr Sharp confirmed in cross-examination that he did not recall ever discussing the Master Hire Agreement between Jimelda and JSMOT with Ms McCall (T73-T74) and he could not recall when the document was signed (T75). Mr Sharp also refers to an intention that the assets of Jimelda be transferred to him after Ms O'Toole passed away and to his having incorporated JHPL on 26 February 2016 (Sharp 7.6.19 [30], [32]). He also refers to his understanding that JHPL was transferred all rights, debts, receivables and obligations of Jimelda once Ms O'Toole had passed away. There is evidence that equipment owned by Jimelda was transferred by its liquidator to JHPL, but there is no evidence that that transfer extended to debts or claims of Jimelda, as distinct from that equipment. Mr Sharp's evidence in cross-examination was that he was not aware of any notice given to JSMOT of the transfer of goods that were the subject of the Master Hire Agreement to JHPL and that he doubted that he informed Ms McCall of that transfer (T76). That cross-examination, understandably, did not extend to any notice of assignment of debts or claims of Jimelda to JHPL, where Mr Sharp had given no positive evidence of any such notice.
5. Mr Sharp also claims, by way of conclusory assertion, that hire of the relevant equipment permitted improvements by JSMOT on the relevant property (Sharp 7.6.19 [36]) and asserts (Sharp 7.6.19 [37]) that: "The above works were undertaken solely for the benefit of JSMOT, in order for JSMOT to be in a position to generate an income for its business, which was the growing of hay and the agistment of horses on the property, as well as generating rental income for the rent of the houses and apartments located on the property."
6. JHPL also relied on invoices dated 30 June 2011 to 30 June 2017, which included invoices purportedly issued by JHPL for several years prior to its incorporation and prior to the execution of the Master Hire Agreement between JHPL and JSMOT. These invoices each referred to the hire of plant and equipment "[a]s per Schedule A". A Schedule A was not attached to the invoices, although Mr Sharp attached a single version of schedule A to his affidavit which contained a lengthy list of equipment. Mr Sharp's evidence in cross-examination was that he could not recall, as a director of JSMOT, receiving any invoices from Jimelda in respect of the Master Hire Agreement dated 1 September 2011 (T77). Mr Sharp initially claimed in cross-examination that the first invoice issued by JHPL, dated 30 June 2011, was prepared at that time, when JHPL did not in fact exist, but subsequently altered that evidence in cross-examination to advance a claim, not previously raised in his affidavits, that he and Ms O'Toole had previously prepared a handwritten invoice (presumably to be issued by Jimelda rather than JHPL) which he had copied in the invoice dated 30 June 2011 (T78). Those handwritten documents were not tendered in evidence in the application. Mr Sharp also acknowledged, in cross-examination, that JHPL had not been incorporated when an invoice was purportedly issued by it on 30 June 2012 (T78); and gave evidence, in cross-examination, that the invoices dated 30 June 2013 and 30 June 2014 were also retyped from an earlier handwritten invoice after JHPL was incorporated (T79-80). Mr Sharp accepted in cross-examination that the invoices relied on in respect of the hire by JHPL were prepared for the purpose of allowing Mr Wong to bring JHPL's claims to account (T86).
7. Mr Rose indicated, in submissions prior to Mr Sharp's cross-examination, that he was not able to offer any explanation in respect of invoices purportedly issued by JHPL prior to the execution of the Master Hire Agreement between JHPL and JSMOT (T57-58). Mr Johnson submitted that those invoices were recent creations, for the purposes of making claims in the receivership, and Mr Sharp appears to have accepted that in cross-examination, while maintaining they had a basis in the earlier handwritten documents that have not been tendered.
8. By his affidavit dated 7 June 2019, Mr Sharp also referred to irrigation hire for which $145,750 was claimed, referable to the hire of irrigation equipment charged in amounts of $33,000 at annual intervals between 30 June 2014 and 30 June 2017 and amounts of $2,750 charged at annual intervals between 15 July 2017 and 15 November 2017. He gives evidence, again in conclusory terms, that the sole purpose of the installation of the irrigation system was for JSMOT to grow various crops in the future and that hire of the irrigation system was by JHPL under the second Master Hire Agreement. It might also be noted that there is no suggestion that any consideration was given to whether it was cost effective for JHPL to hire the irrigation system from JHPL, as distinct from purchasing it or obtaining it under a hire purchase or similar arrangement from an arm's length third party.
9. JHPL claims payment for plant and equipment hire for the financial years ending 30 June 2011 and 30 June 2012 at $55,000 per annum and $66,000 per annum for the financial years ended 30 June 2013 to 30 June 2017. Part of that claim relates to the equipment hire by Jimelda, which is now deregistered and therefore has no continuing legal existence, as distinct from JHPL. Mr Rose identified the basis of JHPL's claim as a debt due under the first Master Hire Agreement dated 11 September 2011 between JSMOT and Jimelda, as "transferred" to JHPL; a debt due under the second Master Hire Agreement dated 1 March 2016 between JSMOT and JHPL; and, alternatively, "as work done or materials provided by [JHPL] or its predecessor, Jimelda for JSMOT at JSMOT's request (having been requested by [Mr Sharp] on JSMOT's behalf)".
10. The Receivers rejected the claim for plant and equipment hire and irrigation hire on the basis of insufficiency of documentation. JHPL contends that the documentation supporting the claims is adequate. I am not persuaded by that submission and, in any event, JHPL has not established the basis of any legal right of recovery of the amounts claimed, because Mr Sharp did not have JSMOT's authority to commit it to the relevant agreements and transactions and they cannot found a claim or debt against it.
11. The claim by JHPL in respect of equipment hire by Jimelda must fail because there is no evidence of any novation or assignment of any claims by Jimelda against JSMOT or any debts owed by JSMOT to Jimelda to JHPL, which has no standing to recover such claims or debts. As Mr Johnson points out, there is no evidence that claims of Jimelda or any indebtedness by JSMOT to Jimelda was assigned to JHPL, or that notice of any such assignment was given to JSMOT; and the sole director and shareholder of Jimelda died on 24 April 2015 and could not have authorised transactions after that date. Jimelda was subsequently the subject of creditor's winding up in February 2016, and the claims of Jimelda that are now advanced by JHPL were also not recorded as an asset of Jimelda in documentation relating to the voluntary winding up.
12. The claim by JHPL in respect of equipment hire by Jimelda and itself must also fail because Mr Sharp did not have actual or ostensible authority to enter the transactions on behalf of JSMOT as a single director. There is no evidence that a corporate decision was made by JSMOT, by resolution of its directors or any informal agreement between its directors (which would necessarily have included Ms McCall) authorising Mr Sharp to enter the Master Hire Agreements or other transactions in issue. The conversations between Mr Sharp and Ms McCall, to which Mr Sharp referred in his affidavit, contemplated that Mr Sharp and Ms O'Toole would provide equipment for use at the property, but did not extend to authorising them or companies associated with them to charge for that equipment, or to do so at any agreed rate. There is nothing implausible in an arrangement that did not provide for payment for the use of that equipment where Mr Sharp and Ms O'Toole were occupying the property without payment of rent or agistment fees.
13. The parties did not address the applicable legal principles as to a director's authority in any detail. However, I should note that it seems to me that Mr Sharp could not have established (had he tried to do so) that he had actual or implied authority to bind JSMOT as a director, except by joining with other directors in passing a resolution at a directors' meeting: Northside Developments Pty Ltd v Registrar-General (1990) 170 CLR 146 at 198; 205; Junker v Hepburn [2010] NSWSC 88 at [39]-[48]. It seems to me that Mr Sharp also could not have established (had he tried to do so) that he had implied authority on the basis that Ms McCall had stood by while he, as a single director, entered transactions outside authority, so as to acquiesce in that conduct (see, for example, Brick & Pipe Industries Ltd v Occidental Life Nominees Pty Ltd [1992] 2 VR 279 at 360-361; (1991) 6 ACSR 464), where there was no evidence that Ms McCall was made aware of the relevant agreements or transactions so as to acquiesce in them, and Mr Sharp's evidence of a lack of communication with her suggested that she was not. It seems to me that Mr Sharp also could not have established (had he tried to do so) ostensible authority to enter the relevant agreements or transactions, which would not arise from a representation by him to a third party (still less to his associated entities) where he had no actual authority from JSMOT to enter the relevant agreements or transactions: J C Houghton and Co v Nothard, Lowe and Wills Ltd [1928] AC 1; [1927] All ER Rep 97. It seems to me that there is no scope for the application of ss 128 and 129 of the Corporations Act 2001 (Cth), to which Mr Rose briefly referred in oral submissions, or the indoor management rule, where Mr Sharp and the companies associated with him plainly knew the matters relevant to his lack of authority to bind JSMOT.
14. The parties also did not address the legal principles applicable to quantum meruit or restitution in submissions in any detail. I should nonetheless make several general comments as to the scope for such a claim in respect of the claims by JHPL, which will also be relevant to other claims on that basis to which I refer below. I recognise, of course, that a claim for restitution may be available where a party acted non-officiously in conferring a benefit and the recipient of that benefit knew that it was not conferred gratuitously and failed to exercise a reasonable opportunity to reject it: Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221; Lumbers v W Cook Builders Pty Ltd (in liq) [2008] HCA 27; (2008) 232 CLR 635.
15. However, there is limited scope for a claim for quantum meruit or unjust enrichment in respect of a benefit that is "officiously" conferred on another party. In Brenner v First Artists' Management Pty Ltd [1993] 2 VR 221 at 257, Byrne J observed that: "The [restitutionary] obligation will not arise where the services were provided "officiously" (Goff and Jones, Law of Restitution, 3rd ed; (1986), pp. 42 ff); or where they were volunteered (Birks, An Introduction to the Law of Restitution, (1985), pp. 100 ff). This means that the plaintiffs in the present case must show that they performed the services in circumstances where the law requires that payment be made."
16. In Lumbers v W Cook Builders Pty Ltd (in liq) above at 656-657, the High Court emphasised the importance of a request for the provision of services in order to support a restitutionary claim, and also recognised the relevance of whether a defendant had an opportunity to reject the provision of the relevant benefit: see also Woolcorp Pty Ltd v Rodger Constructions Pty Ltd [2017] VSCA 21 at [132]. A valid request will not be established where a person did not have authority to request services. In Darkinjung Local Aboriginal Land Council v Darkinjung Pty Ltd (in liq) [2010] NSWCA 351, the Court of Appeal dealt with a situation where a request was made without authority, purportedly on behalf of an incorporated body, and Tobias JA (with whom Hodgson and Macfarlan JJA agreed) observed (at [76]) that: "Subject to some possible exceptions such as the doctrine of necessitous intervention, a quantum meruit in the case of an ineffective contract depends upon a request which, in the case of the company requesting the provision of services, in turn depends upon the authority of the relevant officers of the company to make that request."
17. In Re The Spanish Club Limited [2015] NSWSC 661 at [36], I referred to that decision and summarised the relevant principles (by reference to the parties' submissions in that case) as follows: "… a claim for restitution is not available to a mere volunteer and … a claim for quantum meruit based on a request will require evidence that the act was done at the defendant's request: Rover International Ltd v Cannon Film Sales Ltd [1987] BCLC 540 at 545; Progressive Pod Properties Pty Ltd v A&M Green Investments Pty Ltd [2012] NSWCA 225 at [62]-[63] … a claim for quantum meruit in a case of this kind will depend on the authority of the officers of the [requesting party] to make the relevant request: Quarante Pty Ltd v The Owners Strata Plan No 67212 [2008] NSWCA 258 at [119]; Darkinjung Local Aboriginal Land Council v Darkinjung Pty Ltd (in liq) [2010] NSWCA 351 at [4], [76]; The Dominion Insurance Company of Australia Ltd (subject to scheme of arrangement) [2013] NSWSC 898 at [43]."
18. JHPL's claim for unjust enrichment or quantum meruit in respect of these services must fail since Jimelda and JHPL were each a volunteer, where there is no evidence of a request or an acceptance of the services made with appropriate corporate authority. Mr Sharp, as a single director of JSMOT, cannot unilaterally thrust the services and the substantial liabilities arising from them on JSMOT or the Trust.
19. For these reasons, the application by JHPL to set aside the Receivers' rejection of its proof of debt should be dismissed and it should pay the costs of that application.

Mr Sharp's claim for "Jeff Sharp Wages"

1. Mr Sharp initially claimed $541,666.65 described as "Jeff Sharp Wages". The Receivers originally accepted this claim at a reduced rate of $42,000 per annum in their first report to the Court, but rejected the claim entirely in respect of the proof of debt. The latter position seems to me to have been correct for the reasons noted below.
2. By a letter dated 17 September 2018 (Sharp 29.1.19 Annexure A), Mr Sharp had referred to a claim for "wages" against JSMOT in the sum of $100,000 per annum for works he had undertaken on the property, including but not limited to managing and maintaining it; undertaking improvements to it; building and construction works on it; project management works on it; management of agistment activity; and preparation, growth, cultivation and maintenance of hay and lucerne.
3. By his affidavit dated 7 June 2019, Mr Sharp also referred to a claim for wages totalling $320,437.17, being the difference between the amount that he had claimed of $100,000 per year and the amount the Receivers had initially allowed for the financial years ending 30 June 2013 to 30 June 2017 and the further period to 19 November 2017. Mr Sharp claimed, in conclusory form, that he had worked for JSMOT in the operation of its business and set out, also in conclusory form, broad categories of work said to have been done while "employed" by JSMOT. Mr Sharp asserted that the average annual wage for a farm manager with his level of experience could range from $80,000 to $130,000 per annum inclusive of taxation and superannuation. In cross-examination, Mr Sharp claimed to have kept written notes and a diary supporting the work done (T71), which were not tendered in this application.
4. Mr Johnson points out that the Applicants led no evidence consistent with Mr Sharp's employment by JSMOT, such as a wages book; evidence of any PAYG deductions made in respect of wages; or any book or record evidencing or recording the terms of his engagement; or any income tax return recording Mr Sharp's payment of tax on the basis that he was an employee of JSMOT; or any work superannuation guarantee charges or workers compensation policy paid or maintained on that basis. The absence of such evidence tends strongly against Mr Sharp's original claim that he was an employee of JSMOT or was due wages by JSMOT.
5. There were also substantial difficulties with other documents tendered by the Applicants in support of the Applicant's original claim for Mr Sharp's "wages" including purported PAYG payment summaries for the years ending 30 June 2013 to 30 June 2017 which purported to record tax withheld of $40,000 in respect of gross payments of $100,000 (Ex A5, 1849-1853). Those documents, on their face, suggested that wages were in fact paid by JSMOT to Mr Sharp, and tax was in fact withheld on that basis. Mr Rose fairly did not press those documents as "bona fide documents", although they had apparently been provided to the Receivers and would have given a false impression as to that position. It appears those documents do not record either the fact that wages were paid to Mr Sharp or the fact of tax deductions, and were prepared to illustrate the position as it would have existed had Mr Sharp been paid wages and had PAYG tax been deducted, which it was not. There are obvious and wider difficulties where the documents on which Mr Sharp relies include documents prepared to illustrate the position for which he contends, as distinct from the position that existed in fact.
6. Mr Sharp's claim shifted in the course of the application away from a claim that he was an employee of JSMOT and towards a claim for quantum meruit. In submissions, Mr Rose identified the basis of that claim as a claim in quantum meruit for the reasonable costs of work performed by Mr Sharp as an employee or contractor of JSMOT; or as work done by him for JSMOT at JSMOT's request, having been requested to do so on JSMOT's behalf; or as money due by JSMOT to him on accounts stated between them. This claim must also fail where JSMOT had not authorised the relevant work; nor had it requested or accepted that work by any proper exercise of corporate authority; and there is again nothing implausible in an arrangement that did not provide for payment for Mr Sharp's work, at market rates or otherwise, where he and Ms O'Toole were occupying the property without payment of rent or agistment. The claim for unjust enrichment or quantum meruit in respect of these services must also fail since Mr Sharp was a volunteer, where there is no evidence of a request or an acceptance of the services made with appropriate corporate authority.

Claim for Sharp Earthmoving

1. Mr Luke Sharp, who is Mr Jeffrey Sharp's brother and trades as Sharp Earthmoving, claims an amount of $89,870 for earthmoving services against JSMOT.
2. By a statutory declaration dated 12 September 2018, annexed to Mr Jeffrey Sharp's affidavit dated 29 January 2019, Mr Luke Sharp, who did not give evidence in the proceedings, stated that he was employed by Ms O'Toole and Mr Sharp to carry out earthworks and supply a bulldozer (owner/operator) "for JSMOT" at the property and carried out earthworks from about 12-20 June 2013, 19 August-27 September 2013 and 3-5 April 2014, and that the total invoice amount of $89,870 was set-off against a $92,000 loan that he owed to Mr Sharp, with the shortfall of $2,130 being paid.
3. In his affidavit dated 7 June 2019, Mr Sharp also referred to the claim by Sharp Earthmoving for money payable to Sharp Earthmoving for work done on JSMOT's land between 2013 and 2014 totalling $89,870. Mr Sharp seeks to support this claim as follows (Sharp 7.6.19 [65]): "On various occasions as evidenced in the invoices raised by Sharp Earthmoving; [Ms O'Toole] and I employed Luke Sharp as a private contractor to (firstly) carry out earthworks and (secondly) dry hire a D8N Caterpillar Dozer and operator, on behalf of JSMOT, to level 80 acres of river flats on JSMOT's land, to excavate a pad for a new 12 bay machinery shed, excavate a water channel, and spread soil dumped by Emmafield on JSMOT's land. These expenses were incurred solely for the purpose of preparing the property for the cultivation of Lucerne crops for the sole purpose of generating a future income for JSMOT."
4. Mr Rose notes that Mr Luke Sharp's claim is put as a claim for a debt due under a verbal agreement reached with JSMOT, by Mr Jeffrey Sharp on JSMOT's behalf; secondly, as work done or materials provided by Mr Luke Sharp for JSMOT at JSMOT's request, having been requested by Mr Jeffrey Sharp on JSMOT's behalf; and, third, as money due from JSMOT to Luke Sharp on accounts stated between them. Mr Rose indicates that Mr Jeffrey Sharp alternatively claims the amount as due and payable to him as money lent by him to JSMOT; or money paid to him to Mr Luke Sharp at JSMOT's request, made by Mr Jeffrey Sharp; or as money due from JSMOT to Mr Jeffrey Sharp on accounts stated between them. Mr Johnson responds that none of the invoices issued by Mr Luke Sharp are addressed to JSMOT and that Luke Sharp did not give evidence in the application. Mr Johnson submitted that claim should be rejected in the absence of any documents supporting a claim against JSMOT in its capacity as trustee, and having regard to the suggested inconsistencies and inadequacies of Mr Jeffrey Sharp's evidence.
5. The Receivers rejected this claim on the basis that the supporting documentation indicates the payment was not a liability or expense incurred or approved by JSMOT or unitholders, and Mr Luke Sharp had failed to demonstrate that an agreement existed between him and JSMOT for claims of this nature. Both of those contentions seem to me to be correct, where the agreement was plainly formed between Mr Jeffrey Sharp and Mr Luke Sharp; the amount payable was set-off against a liability owed by Mr Luke Sharp to Mr Jeffrey Sharp; and the transaction was not authorised by JSMOT. There is no evidence that a corporate decision was made by JSMOT, by resolution of its directors or informal agreement between its directors (which would again necessarily have included Ms McCall), authorising Mr Sharp to enter these transactions. A claim for quantum meruit or unjust enrichment is also not available where the transactions were not authorised, for the reasons noted above.

Claim by Mr Jeffrey Sharp trading as Jeff Sharp Constructions

1. Mr Jeffrey Sharp also claims $71,162.20 for amounts invoiced by him, trading as "Jeff Sharp Constructions" between July 2013 and April 2017. Mr Sharp's evidence, in conclusory form, was that he paid for that construction work using his own funds, although his evidence did not elaborate how he paid that amount to himself or how it overlaps with his claim for wages for work also said to have been done by him over the relevant period. Mr Rose indicated that Mr Sharp pressed this claim as work done by him as an independent contractor for JSMOT at JSMOT's request, made by him and, secondly, as money due from JSMOT to him on accounts stated between them.
2. The Receivers rejected this claim in respect of Jeff Sharp Constructions on the basis that the supporting documentation indicated the payments were not a liability or expense incurred or approved by JSMOT or unitholders, and Mr Sharp had failed to demonstrate that JSMOT had gained a benefit in assuming the liability of meeting the expenses. It seems to me they were correct in that view. Each of the claims in respect of this amount must also fail where the relevant transactions were not authorised by JSMOT, for the reasons noted above.

Claims for payments to third parties

1. Mr Sharp also claims reimbursement for multiple charges incurred with third parties. It appears that Mr Sharp had initially claimed the amount of $498,723.39 in his proof of debt in respect of invoices, and that claim was admitted by the Receivers for $164,920.21. Mr Sharp's claims in respect of items described as "Jeff Sharp - Various Invoices" was pressed in the amount of $333,803.18.
2. Mr Rose initially contended, in submissions, that the Receivers' determination rejecting Mr Sharp's claim for various invoices was invalid because the Receivers had not properly advised him which invoices, totalling $333,803.18, were rejected. It appears that this submission may have partly turned on a misapprehension as to the manner in which a set-off had been treated by the Receivers, and I do not understand it to have been pressed.
3. I will refer to examples of these claims below, and how Mr Sharp described them, and also to difficulties with some of the documentation supporting the claims. I leave open the question of the accuracy of those descriptions and of the alleged purpose or result of the expenditures, which it is not necessary to determine in order to determine this application. I also note that it is possible, given a lack of clarity as to this issue at the hearing, that the Receivers have already allowed claims as to some of these items.
4. For example, Mr Sharp refers, in his affidavit dated 7 June 2019, to several claims under the heading "Rural Industrial Contracting" which he says concern earthworks and demolition works on the property (Sharp 7.6.19 [38]). Mr Sharp's evidence is that he contracted the services of Rural and Industrial Contracting "on behalf of JSMOT" to carry out works, which are described in general terms, in order to enable JSMOT to improve its river flats and assist in the cultivation of lucerne to generate income in the future (Sharp 7.6.19 [42]). His evidence, again by way of assertion, is that all accounts and invoices were paid using his own funds (Sharp 7.6.19 [43]).
5. By way of other examples of the many claims in this category, Mr Sharp claims repayment of amounts, usually involving multiple separate expenditures, including $1,374.69 to K & C Harris in multiple charges in between 12 January 2011 and 30 August 2017, which Mr Sharp claims were for nuts, bolts and other items for the upgrading of the property; $575.43 to Valley AG and Tractors on 3 January 2017 for unidentified materials for the purpose of repairs and maintenance of machinery for the property; $10,777.29 to KP & DC Machinery in multiple expenditures between 27 November 2010 and 1 November 2017, also related to repairs, maintenance and the upgrade of the property; $733.27 to Hydraulink Newcastle in multiple expenditures in 2012 and 2013, said to relate to hydraulic hoses, fittings and repairs in respect of the upgrade and improvement of the property; $390 to Kennards Hire in two expenditures in 2015 relating to the hire of machinery for the purposes of repairs, maintenance and the upgrade and improvement of the properties; and $5,071 to Helping Hand in multiple expenditures as to labour services in 2015 and 2016 for construction, repairs, maintenance and improvements on the properties.
6. Mr Sharp also claims reimbursement of $994.51 to Heritage Gardens in several expenditures in 2016 and 2017 for the purchase of plants and other items for the property; $931.90 to Cherry Road Nursery in several expenditures between 2010 and 2012, again for plants and other items for the benefit of JSMOT; $9,171.90 to Alpine Nurseries in two expenditures in 2015 relating to plants, shrubs and other materials for the property; $2,733 to Simply D'Vine Nurseries in several expenditures in 2017 also relating to plants, shrubs and other materials for the benefit of JSMOT; $1,644 to Tharwa Propagation Nursery in several expenditures between 2015 and 2017 for the same purpose; $2,370.70 to Hills District Farm Machinery in several expenditures between 2010 and 2017 referable to the purchase of materials for the benefit of JSMOT for repairs, maintenance and upgrading and improving of the properties; $4,948.70 to Hunter Irrigation in multiple expenditures in respect of irrigation fittings, taps and pumps for the purpose of supply of water to the property; $3,236.31 to Gasweld in many expenditures from 2010 to 2017 referable to small tools, blades and fittings and clamps; $5,401 incurred on 20 September 2012 for Grader Hire.
7. Mr Sharp claims reimbursement of $31,345.04 to Farmers Warehouse, concerning many expenditures between 2010 and 2017, for the purposes of repairs, maintenance and the upgrading and improvement of the properties; $8,228 to Emmafield Pty Ltd, incurred in June 2013 for the use of tipper trucks to transport and cart soil around the river flats; $8,250 to Thomas Smith Electrical in several expenditures, incurred between 2011 and 2013 and referrable to electrical repairs, maintenance and improvements on the properties; $10,177.29 to WD & CA Everett, an earthmoving contractor to repair the carriageway leading to the property and to upgrade it; $5,967.50 to Wilson Landscaping in November 2016, said to have been referrable to the supply of chicken manure to be spread over the river flats and paid using his own funds; $3,660 to Quarry Products in several expenditures for the supply of road base for the carpark and internal driveways; $45,913.59 for the purchase of materials from Carrolls Wholesale Timber for specified items; $7,604.21 to CNW Electrical in many expenditures, for repairs and maintenance and upgrading and improvement of the properties, including specified items; $10,756.81 to Bunnings, for many expenditures between 2010 and 2017, for the purpose of upgrading the properties and referrable to many items; and $6,060.15 to ASAP Plumbing & Electrical in three expenditures referable to repairs, maintenance and improvements on the properties.
8. Mr Sharp also claims reimbursement of $11,488.20 to Maitland City Council in many expenditures for compulsory payments on behalf of JSMOT for council rates; $8,513.67 in many expenditures to Energy Australia for electricity bills; $4,383.59 to Water NSW in several expenditures for water allocation from the Hunter River to the property; $19,173.83 to Elgas in many expenditures for gas at the properties and service and maintenance of gas cylinders; $25,314.36 to Reece for many expenditures between 2010 and 2017 said to have been referrable to irrigation and other items for the property; $2,150.74 to Officeworks in many expenditures between 2012 and 2017 described as items such as "filing, accounting, photocopying"; $28,802.40 to Riverbend Quarry in several expenditures said to have been referrable to supply of road base for the carpark and internal driveways on the property; an amount of $10,653.03 to PW Saddington Hardware in many expenditures said to have been referrable to the purchase of various items for alterations and additions to the property; $4,840 to Pace Bulk Haulage said to have been referrable to the transfer of chicken litter to the property, which was spread over the river flats in October and December 2014, for the purpose of preparing the property for the cultivation of crops; $9,913.26 to Masters in many expenditures referable to items purchased, by way of hardware items, for the improvement of the property; $11,611.88 to Kenthurst Nursery in several expenditures, relating to expenditures for plants and shrubs during 2010 and 2011; $11,919.32 to Lysaght referable to the purchase of items to construct a hay and machinery shed; $7,650 to Lydon Everett for the purchase of Angus cows; and $1,345 to Husky Oils in several expenditures said to have been referrable to oils, air filters and other products to maintain tools and machinery.
9. There are difficulties with some of the documents on which Mr Sharp relies, including the lack of an addressee for many invoices, the general descriptions of what was acquired, the lack of evidence of payment of the invoiced amounts, and issues as to the weight that can be given to those documents. For example, an invoice dated 4 July 2010 from Mr Sharp and Ms O'Toole for the provision of 10 bar gates for the total cost of $1,040 and GST of $104 is purportedly supported by a quotation provided by Farmers Warehouse some 7 years later, on 15 November 2017, for the provision of the same items at the same price, bearing a handwritten notation "price reference only". It strains credulity that Farmers Warehouse, some 7 years after the event, was charging exactly the same price, to the dollar, for items provided by Mr Sharp and Ms O'Toole some 7 years before and Mr Rose fairly conceded, in submissions, that he did not have an explanation for this difficulty and that the accumulation of difficulties of this character did not assist Mr Sharp's claim (T46).
10. Mr Sharp also claims many other expenditures of a similar character as to which evidence is given in substantially the same form, identifying the nature of the materials in a general way; asserting that they were used for the improvement of the property; and asserting that they were paid using Mr Sharp's own funds, without establishing that matter by anything more than Mr Sharp's statement to that effect. Mr Sharp does not seek to explain whether the funds used to make the payments, which he describes as his own, were in fact derived from the conduct of agricultural and equestrian activities on the property, which he and Ms O'Toole had, as I noted above, undertaken without paying rent or agistment fees. It might seem that there could be an element of duplication if Mr Sharp could both pay expenses from income derived from the Company's property and then also claim reimbursement for the same expenses from the Company. The generality of Mr Sharp's evidence as to the manner in which he paid such expenses makes it impossible to identify whether, and the extent to which, that approach underlies his claims.
11. Mr Sharp also claims amounts paid for fuel in the amount of $115,854.62, comprised of multiple charges for diesel and petrol over the period between 2010 and 2017. Mr Sharp acknowledges, in his affidavit evidence, that the Receivers' notice of rejection indicated that they were not satisfied that the detail in the supporting documentation was sufficient. I would reach the same view. The supporting documentation does not demonstrate that these costs were incurred only, or even primarily, in respect of work on the property, and that proposition turns on the unlikely assumption that Mr Sharp never engaged in any form of private travel for which fuel was consumed. Mr Sharp also made no attempt to exclude personal expenses from the relevant claims. Although a later affidavit indicated that his solicitors would submit a revised schedule excluding such expenses, they did not do so.
12. The Receivers rejected the claim for "Jeff Sharp - Various Invoices" on the basis that supporting documentation had not substantiated details of payees, nature of payments; date of payments; amounts or basis or charges; executed agreements; and lack of authority from both unitholders or the board. Mr Johnson points out that many or most of the invoices as to which Mr Sharp claims reimbursement were not addressed to JSMOT in its own right or as trustee.
13. Mr Rose identifies the basis of this claim as an indemnity or right of reimbursement for debts incurred by Mr Sharp acting as an agent for and on behalf of JSMOT, in equity and at common law under the law of agency; as money lent by him to JSMOT at its request, having been requested to do so by him on JSMOT's behalf; as money paid by him for JSMOT at its request, having been requested by him on JSMOT's behalf; and as money due from JSMOT to him on accounts stated between them.
14. There is no evidence that these expenditures were authorised by any formal resolution or informal agreement by the directors of JSMOT (which would again necessarily have included Ms McCall), either authorising Mr Sharp to enter the transactions generally or authorising specific transactions; there is no evidence of any corporate decision that the expenditures were justified; and the evidence that they were paid by Mr Sharp personally and from his own resources is, at best, slender. The conversations to which I have referred above were consistent with Mr Sharp and Ms O'Toole or the shareholders bearing such expenditures rather than JSMOT or the Trust doing so. The claims on those bases must also fail by reason of Mr Sharp's lack of authority to enter the relevant transactions as agent or on behalf of JSMOT, so that they were not within his authority or the scope of any agency. To the uncertain extent that these expenditures related to the property or to JSMOT, a claim for unjust enrichment or quantum meruit must also fail since Mr Sharp was a volunteer in procuring those services, where there is no evidence of a corporate decision by JSMOT to request or accept those services. Mr Sharp, as a single director of JSMOT, could not unilaterally decide to acquire these services and thrust the liabilities arising from them on JSMOT or the Trust.
15. Mr Rose also submitted that JSMOT had power to undertake various steps under the Trust Deed without unitholder authority, beyond that already conferred in the Trust Deed. It is not necessary to address that submission, where JSMOT had not, by an exercise or proper corporate authority, undertaken any such step. Mr Rose also submitted that JSMOT and any officer of JSMOT was entitled to be indemnified out of the Trust fund against liabilities incurred by them in the execution or attempted execution of the Trust, under cl 6.2(a)(1) of the Trust Deed. That submission does not assist Mr Sharp, where the relevant acts were not acts in the execution or attempted execution of the Trust, or within the scope of that indemnity, where they were not authorised by JSMOT on behalf of the Trust.
16. Mr Rose also relied on cl 6.2(a)(4) of the Trust Deed for the Trust, which provides that JSMOT and any officer of JSMOT is not responsible for certain matters. That provision also does not assist Mr Sharp, where no attempt is made to hold him responsible for such matters. That provision is in the nature of a protection against a liability, rather than creating obligations on the part of JSMOT or the Trust for reimbursement of amounts incurred in unauthorised transactions by its officers. Mr Rose also relies on cl 25.1 of JSMOT's constitution, which allows an indemnity for liabilities incurred by Mr Sharp as a director of JSMOT. There can also be no suggestion that that clause operates as an indemnity for expenses incurred by a director, in unauthorised transactions.
17. For completeness, I recognise that Mr Rose also submitted that there were inconsistencies in the approach adopted by the Receivers, and that invoices by Mr Sharp and Ms O'Toole in similar form had been admitted in some cases and rejected in other cases. That is, perhaps, not surprising given the number of invoices which the Receivers were asked to address and the nature of the documentation supporting them. In any event, that submission does not seem to me to assist Mr Sharp, since it does not follow that the Receivers have wrongly rejected invoices for which reimbursement is claimed by Mr Sharp, and it is equally possible that they have wrongly allowed such invoices on other occasions, where they ought to have rejected them. However, as I have noted above, Ms McCall does not seek to challenge the Receivers' determination to the extent that they have allowed such invoices.

Orders and costs

1. I note, for completeness, that the findings that I have reached above may be inconsistent with the basis on which the Receivers have proceeded in allowing some of the claims previously made by Mr Sharp. However, no challenge was brought by Ms McCall to the Receivers' existing determination and the parties conducted this application on the basis that it was not in issue.
2. For these reasons, the Interlocutory Process filed by Mr Jeffrey Sharp, Mr Luke Sharp and JHPL should be dismissed. The Applicants must pay Ms McCall's and the Receivers' costs of and incidental to the Interlocutory Process.

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