Two brothers, Johnathon and Frank Bugeja farm turf and vegetables on the Hawkesbury River plain at Agnes Banks. They now dispute whether Frank executed a deed. Johnathon says that on 30 October 2020 both he and his wife Rebecca signed duplicate counterparts of a deed and that Frank, and his wife Elizabeth, also both signed. Elizabeth admits, but Frank denies, signing the counterparts of the deed.
If executed, the counterpart deeds would oblige Johnathon and Rebecca to abstain from bidding at an auction to be held the following day for a nearby farming property known as "Stewart's Farm". Johnathon and Rebecca had expressed an intention to bid for Stewart's Farm. The rationale for the deeds was to avoid competition between the two couples that would drive up the price of Stewart's Farm to the disadvantage of one of them.
The incentive provided in the deeds for Johnathon and Rebecca not to bid was that if Frank and Elizabeth secured Stewart's Farm at the auction, they would be obliged to sell another parcel of productive land they owned to Johnathon and Rebecca. This other parcel of land (which is referred to in these proceedings as "No. 96") had special advantages for Johnathon and Rebecca: it was improved with a house and a shed and lay immediately adjacent to other Agnes Banks land they already owned.
Four signatures appear on the two counterpart deeds, one for each of the four parties. All the signatures are witnessed. On Johnathon and Rebecca's case, Frank, and Elizabeth both signed the deed at their home on 30 October 2020. On Frank and Elizabeth's case, Frank never signed the deed. The principal contest in the proceeding is whether Frank signed the deed.
Johnathon did not bid at the auction; he says he abstained from bidding relying upon Frank's and Elizabeth's execution of the deed. Frank was the highest bidder and secured Stewart's Farm. But after the auction, Frank denied he had signed the deed. He and Elizabeth refused to transfer No. 96 to Johnathon and Rebecca.
Johnathon and Rebecca now seek a declaration that they are entitled to purchase No. 96 from Frank and Elizabeth in accordance with the deed and seek specific performance of the deed. Alternatively, they seek to enforce an equitable estoppel holding Frank and Elizabeth to an alleged representation that if Johnathon and Rebecca did not bid at the auction for Stewart's Farm, that Frank and Elizabeth would transfer No. 96 to them, or alternatively that Frank and Elizabeth engaged in misleading and deceptive conduct within of the Australian Consumer Law ('ACL') s 18 to substantially the same effect as the pleaded estoppel.
These proceedings were heard over eight days between 18 - 26 September and then 20 November 2023. Mr S. Jacobs of counsel instructed by Christopher Edwards Lawyers appeared for the plaintiffs, Johnathon, and Rebecca. Mr A. Moutasallem of counsel instructed by Dot Legal appeared for the defendants, Frank, and Elizabeth.
Several members of the Bugeja family gave evidence in the proceedings. During their evidence they referred to one another by their first names. Without intending any disrespect to any party, it is convenient for the Court to do the same in these reasons.
The following is a narrative of the relevant history. This narrative represents the Court's findings on the matters covered, except to the extent that the context indicates that only the parties' allegations are being recorded in the narrative. For reasons of economy this narrative does not always include reference to versions of the facts that have not been accepted. But before commencing that narrative some observations are made about the credibility of the principal witnesses in the proceedings.
[2]
Credibility of Parties and Witnesses
Joseph Bugeja. Frank and Johnathon's father, Joseph, was deeply anguished by having to give evidence in these proceedings. Within minutes of entering the witness box, he broke down and the Court needed to adjourn to allow him to compose himself. His whole presentation was spontaneous, emotional, and confronting and ultimately incompatible with propounding a calculated and fraudulent scheme against his son Frank. He seemed impartial between his two warring sons but deeply distressed by their bitter conflict. He was overoptimistic about the possibility for their reconciliation but ever hopeful it might occur. Although he had long separated from and divorced their mother, Lilly, in what appears to have been acrimonious circumstances, they both shared this hopeful attitude about their son's relationship.
Joseph was a generally credible witness. He presented as generally reliable in giving his account of what he could remember but he was very vague at times, perhaps because of his age, on some matters of detail. Cross examination upon the wording of his affidavit revealed he had limited capacity to deal with abstract ideas, but this did not demonstrate lack of credibility in his evidence about what he observed. When it came to straightforward oral descriptions of the story of events that he witnessed his evidence came alive.
Joseph was sure that both counterparts of the deed were signed on the tray of the utility vehicle on the afternoon of 30 October 2020. His account of those events was sufficiently detailed to show that he was drawing upon genuine recollection in giving his account of what happened. Joseph successfully resisted all the attacks upon his credibility.
Frank's case challenged whether Joseph really understood what he had sworn his affidavits. There was some justification for this attack and his evidence was not wholly reliable. For example, he apparently signed his affidavits without an interpreter, although they were probably interpreted to him. He had difficulty in answering some simple questions. And he confused his affidavits with the deeds in the shed. He denied some of what was said in his own affidavit. But on the essentials of being at No. 25 and witnessing the signing of the deeds his first-hand eyewitness testimony was reliable.
Lilly Bugeja. Frank and Johnathon's mother, Lilly, came across to the Court as a strong, practical, and down-to-earth person who gave firm evidence about events to which she was committed by genuine memory. Like her former husband Joseph, she was plainly discomforted by having to give evidence in a dispute between her two sons. Like her former husband, she would do anything to restore peace within her family.
But she had clear memories of the conversations and events in which she was involved and stuck to her version of what happened in a manner which did not lead to any marked inconsistency or improbability. She was able to make concessions against her interests and explain the events in which she had been involved. She was able to draw upon detail to flesh out her recollections and give clear assent to or dissent from propositions put to her in cross examination.
Johnathon Bugeja. Although clearly angry with his brother Frank, the first plaintiff, Johnathon, came across as an honest and generally reliable witness. But his bias against his brother meant the Court approached all his evidence with caution. Despite this, the Court accepted Johnathon's account of events over that of his brother Frank and his sister-in-law, Elizabeth. Johnathon was able to give consistently detailed evidence of the context and background of various events in which he had been involved. He was prepared to make concessions about aspects of events he could not remember and did not try to exaggerate the quality of his memory. Mr Moutasallem pointed to some alleged inconsistencies between Johnathon's affidavit and oral evidence that these were the kind of minor differences that one might expect from a witness giving testimony from actual recollection.
Rebecca Bugeja. The second plaintiff, Rebecca, was an honest and reliable witness who was attempting to give as accurate an account that she could of the events in which she was involved. She was not a witness to the main events of the signing of the counterpart deeds. But her account of her subsidiary role is important in the Court's overall findings. The detail of her account was not damaged in cross examination. The Court generally accepts her evidence.
Jason Bugeja. Jason, Frank and Johnathon's brother, was very much in his brother Johnathon's camp, both financially and in family loyalty in this dispute. His evidence was therefore assessed cautiously. But his evidence was generally reliable, internally consistent and gave a probable and good pictorial account of the events in which he was involved.
Frank Bugeja. The first defendant, Frank came across as a slightly bored witness with an attitude of dismissive condescension of his brother Johnathon and the proceedings generally. His attitude to Johnathon was relentlessly negative. He seemed to hold the view that nothing bad that Johnathon might do would surprise him. He did nothing to disguise his disdain for his brother who was, he asserted, making false allegations against him. The Court approached with great caution anything that Frank said about his brother Johnathon.
But Frank had limited recollection on matters of contentious interest. He had little capacity to confront and explain apparent inconsistencies or anomalies in his own case. He either could not, or would not, draw upon a detailed recollection of events to assist the Court with an account of what happened on the various contested occasions. He was ready to denounce his brother at every opportunity. He was prepared to adhere unreasonably to improbable versions of the facts. The Court approached its assessment of his evidence with great caution.
Elizabeth Bugeja. The second defendant, Elizabeth, was not a witness upon whom the Court could rely. She was strongly committed to her husband's version of events in framing her own. She was hostile in her approach to anything said in Johnathon's case and defensive of any attacks made upon her husband. But to reject her evidence the Court needed to infer that she was giving an account that must be false. Despite the heavy burden of reaching this conclusion, the Court is confident that that is the correct inference about her evidence.
Elizabeth could not explain the inconsistencies within her own and her husband's version of events. She was prepared to deny the obvious and adhered to improbabilities. She could not elaborate with spontaneous detail her account of events or satisfactorily explain her reasoning during events, to persuade the Court that she was giving reliable evidence from her genuine recollection of those events. She gave the impression that her primary objective was to support her husband's account of disputed events.
Mr John Maait. Mr Maait was the solicitor who drafted the subject deeds. Despite his limited involvement in the events in contest he was able to give a reasonably reliable account based upon genuine memory. His account of a critical conversation on the afternoon of 29 October 2020 is more reliable and detailed than either of the accounts of Frank or Johnathon of those events. He could explain not only what he did but the logic behind it. He maintained a professional and ethical position throughout the events. He was conscious that Frank was his principal client and Frank's instructions therefore have a degree of dominance in his account of events. This is quite significant when the documents that he produced are evaluated.
Ms Jazzani Calalang. Ms Calalang is an agribusiness manager at the National Australia Bank (NAB). She gave wholly reliable evidence about Johnathon's dealings with the bank and his finance approval to allow him to bid at the auction.
Ms Melanie Holt. Ms Holt was called as an expert handwriting witness. Her report and oral evidence were thorough and professional. But the Court has reached the view that it cannot accept her conclusions in this case in light of (1) uncertainties in her report and (2) the weight of contravening non-expert evidence.
[3]
The Early Years
For several generations members of the Bugeja family have lived and farmed in Agnes Banks, a district almost 70 km northwest of Sydney's Central Business District. Agnes Banks, so named after the mother of an early settler, Andrew Thompson, straddles a fertile floodplain just below the confluence of the Nepean and Grose Rivers, where the Hawkesbury River commences. The Bugeja family properties lie on Yarramundi Lane on the southeastern bank of the Hawkesbury River not far from Richmond.
Lilly and Joseph Bugeja are the parents of Frank and Johnathon. They had a total of eight children. Frank is their fourth child and Johnathon their sixth. Another sibling, Jason, witnessed some of the events in dispute and gave evidence in the proceedings.
Frank conducts a vegetable farming business with his wife Elizabeth. Johnathon and Rebecca conduct a turf growing enterprise, known as "Always Greener Turf", in partnership with Jason. Both Frank and Johnathon are successful farmers and agribusiness entrepreneurs although their personal relationship has long been brittle.
[4]
The Bugeja Lots and Surrounding Land
The diagram in the Appendix to these reasons (taken from Exhibit A), shows the locations and relative positions of the parcels of land owned by the parties and relevant to the issues in these proceedings. The Bugeja family own two clusters of agricultural allotments situated a short distance from one another along Yarramundi Lane, which runs approximately parallel to the Hawkesbury River, which at that point flows generally from the south-west to the north-east. But for the property on which Frank and Elizabeth live, all the Bugeja properties lie on the Hawkesbury River side - the north-western side - of Yarramundi Lane between Yarramundi Lane and the Hawkesbury River.
The southern cluster of Bugeja properties lie close to the intersection of Yarramundi Lane and Crowley's Lane. This cluster comprises three properties. The first is 214A and 214B Yarramundi Lane, better known as "Stewart's Farm", which is the closest of this southern cluster of properties to the Hawkesbury River. Since the October 2020 auction, Stewart's Farm has been owned by Frank and Elizabeth. The next property in this cluster is 216 Yarramundi Lane ("No. 216"), which has long been the Bugeja family homestead and which Frank and Johnathon's mother, Lilly, now owns. The homestead area around No. 216 is large enough to permit profitable agricultural cultivation. The third property in the southern cluster is 25 Crowley's Lane, Agnes Banks ("No. 25"), a property owned and occupied by Frank and Elizabeth. This property is both their residence and the base for their farming operations. It is also the place that Johnathon says that Frank signed the disputed deed.
Stewart's Farm and No. 216 lie immediately adjacent to one another between Yarramundi Lane and the Hawkesbury River. No. 25 lies on the other side of Yarramundi Lane away from the Hawkesbury River but with an address in Crowley's Lane. As earlier indicated, Stewart's Farm is the closest to the river of the three properties in the southern cluster.
The northern cluster of Bugeja properties, 86, 96 and 106 Yarramundi Lane lie adjacent to one another a little over 1 km along Yarramundi Lane to the north-east from the southern cluster. Johnathon and Rebecca own No. 86. Frank and Elizabeth own No. 96. And Jason owns No. 106. All these properties are used for Bugeja family agricultural enterprises. Erected on No. 96 is a residence and a shed. In 2020, Johnathon, Rebecca and Jason ran and operated Always Greener Turf from No. 86 and No. 106. At the same time Frank and Elizabeth operated their vegetable farming enterprise from No. 96.
Several crossover arrangements complicate this picture. Together, Johnathon and Jason rented the homestead area around the house on No. 216 from their mother, Lilly, to use as part of Always Greener Turf. For many years various Bugeja family members had also leased 5 acres of Stewart's Farm from its then owner.
The layout of these two clusters of properties demonstrates the logic of the 30 October deed. Although Johnathon and Rebecca wanted to expand Always Greener Turf on Stewart's Farm, Frank and Elizabeth wanted a working property which was much closer to their home on No. 25 than was No. 96. It also made economic sense for Johnathon and Rebecca to acquire No. 96, so that they could reap cost efficiencies from conducting all their turf growing operations on the three adjacent properties in the northern cluster.
[5]
The Bugeja Family at Agnes Banks
Lilly is very attached to No. 216. She purchased the property with her then husband, Joseph, as approximately 16 acres of vacant land in about 1974. They built a main residence and a storage shed on the property. She raised all her children there. She and Joseph separated due to unhappy matrimonial differences in 2007 and were divorced in 2010. She retained No. 216 in their family law property settlement. Lilly and Joseph are now barely on speaking terms.
From about 2010 or 2011, Lilly agreed with Jason and Johnathon to lease No. 216 to them to grow and sell turf. That arrangement included Johnathon and Jason using the storage shed on the property to house their turf farming machinery from time to time.
Lilly moved away from No. 216 in 2013 up to Bilpin in the lower Blue Mountains on the Bells Line of Road. After moving away, Lilly has made the house on No. 216 available to various family members for occupation as required. Johnathon and Rebecca lived there between 2013 and 2018.
In 2020, Lilly spent about $60,000 renovating the main house on No. 216, including electrical and plumbing works and painting. After the works were completed, Lilly allowed one of her granddaughters, Taylor, to move into the shed, whilst Lilly leased out the main house to a paying tenant.
Lilly herself was interested in buying Stewart's Farm in the late 1970s or early 1980s but the transaction was never completed. Stewart's Farm acquired this name locally because prior to 2020 it belonged to a Mr William Stewart. Around 2015, Mr Stewart suffered a stroke, and his financial affairs were subsequently managed by his sister, Ms Peggy Mayhew.
Johnathon's interest in purchasing Stewart's Farm is undoubted. Between about 2016 and 2020 he leased 5 acres of Stewart's Farm to grow and harvest turf. Lilly confirms his interest. William Stewart died in 2016 and Johnathon put an offer in to buy the property soon afterwards to his executor, Peggy Mayhew, which was accepted on a non-binding basis. But a claim against the late William Stewart delayed the sale by four years. Throughout this period Johnathon maintained his interest in acquiring the property. Sale was ultimately authorised in September 2020. The orders for a sale are explained in a judgment of this Court given on 8 September 2020: Kevin John Lewis v Peggy Lillian Mayhew as executor of the estate of the late Peter William Stewart [2020] NSWSC 1215.
When Peggy Mayhew put Stewart's Farm up for sale Lilly was upset because Lilly thought Peggy was walking away from her agreement with Johnathon. Like Lilly, Johnathon was also upset. But this Court had ordered a sale by auction unless the plaintiff in those proceedings agreed to sale by private treaty: [2020] NSWSC 1215 [53(1), (4)]. Johnathon soon learnt that Frank was also interested in bidding at the auction as word came back to him that Frank too was having discussions with Peggy. Lilly formed the view that Peggy's real estate agent was encouraging both Frank and Johnathon to bid against one another for the property and she was uncomfortable about this.
Frank and Elizabeth lived in No. 96 and brought up their children there until about 2016. They then moved their family across to No. 25 and leased out the house on No. 96. But Frank continued to farm that property. At the time of the hearing, Frank and Elizabeth's children were 18, 14 and 9. When the family moved to No. 25 the children would have been 11, 7 and 2.
[6]
The Conversations at No. 96 and Jason's Place - Early Afternoon, 29 October 2020
The auction of Stewart's Farm was scheduled for Saturday, 31 October 2020. Johnathon says, and the Court accepts, that Joseph approached him on 29 October 2020 and pushed the proposal that Johnathon would not bid against Frank at the auction in exchange for Frank selling Johnathon No. 96. Joseph had mentioned this idea from time to time when Stewart's Farm looked like it might be coming up for sale. Rebecca and Johnathon saw the sense in being able to use all three Lots in the northern cluster, No. 86, No. 96, and No. 106, for Always Greener Turf. But relations between the brothers had been so poor for so long and the sale of Stewart's Farm so uncertain that the idea had not been taken very far in the past. This time Johnathon decided to approach Frank, who happened to be working on No. 96 at that time that day.
There is incomplete consensus about the discussion that followed between Frank and Johnathon at No. 96 although the differences in their versions of this initial conversation are not material. Johnathon went over to No. 96 where Frank was working and put to him Joseph's proposal in relation to the Stewart's Farm auction. Johnathon indicated to Frank that Joseph did not want them to bid against each other and proposed Joseph's idea.
As was the case when Johnathon showed interest to Frank in purchasing No. 96 previously, Frank was a reluctant seller of No. 96. Johnathon says, and the Court accepts, that Frank's first reaction was to suggest that Johnathon sell him No. 86, Johnathon's northern cluster farm adjacent to No. 96, and that Johnathon could bid for Stewart's Farm. But Johnathon said to Frank that Jason (the co-owner for No. 86) did not want to sell.
Frank says he said in response to the whole proposal, "I don't know how I feel about that" and that he would need to speak with Elizabeth, but he might consider it, but "only if we get mum's [Lilly's] property". Johnathon does not remember Frank stipulating at this point "only if we get mum's property" and the Court does not accept that it was said at this time. The Court prefers Johnathon's version where the two versions of this conversation at No. 96 differ. But both brothers agree that they did separately drive back to No. 106 and met up with Joseph and Jason a short time later. Frank's journey to No. 106, Jason's place, at least shows that he was interested in further discussions about this proposal.
The conversation at Jason's place is more contentious. Frank on the one hand and Johnathon, Jason, and Joseph on the other, give versions of this conversation at Jason's place. Johnathon's Jason's and Joseph's version substantially coincide and differ from Frank's version in material respects. Both sides agree that the conversation was in two parts and that in the middle Frank left Jason's place and went back to No. 25 to consult Elizabeth.
As to the first part of the conversation, Jason Joseph and Johnathon put the proposal again to Frank. According to Johnathon, in evidence that the Court accepts, a turning point was reached in this conversation when Frank pointed out that one of his objections to the proposal was that Jason and Johnathon would still be coming up and operating "mum's farm", No. 216. In response Johnathon suggested "you can take over that as well". The "that" in the statement was the lease that Johnathon had from Lilly of the agricultural land on No. 216. Frank knew that Johnathon was leasing this agricultural land on No. 216. He and any reasonable person in his position would have clearly understood that "take over that as well" meant take over Johnathon's lease of Lilly's land, because that is all that Johnathon had to offer him. The Court infers that is how he did understand the statement.
Frank says that in this first part of the conversation he said he would only consider the proposal if "I also got mum's [Lilly's] property" to which Frank says that Joseph replied, "she will let you buy her property". The Court does not accept that this was said either by Frank or by Joseph. As will be seen, a telephone conversation between Frank and Johnathon on the one hand and Lilly on the other a few hours later did not include Frank putting to Lilly a request to buy her property as a condition of the deal proceeding. And Frank knew Joseph had no colour of any authority to make such a promise, because Joseph was not on speaking terms with Lilly.
The brothers still both held abiding suspicions of one another. Joseph intervened and suggested that they consult a lawyer. Frank drove a hard bargain and stipulated further terms upon which he would sell No. 96 to Johnathon. He wanted additional compensation for features of No. 96 that he would be giving up by the sale, including agricultural land that was superior to Stewart's Farm. He said, "I want $10,000 per acre difference, for whatever Stewart's Farm sells for, plus $300,000 for the house and $100,000 for the shed." Johnathon agreed. Frank demonstrated he was a seller of No. 96 at the right price.
Frank left for No. 25 to consult Elizabeth. Both Frank and Elizabeth were reluctant about this proposal. But Frank could see the advantages of taking Johnathon out of the bidding for Stewart's Farm. Despite their reluctance and some disquiet on Elizabeth's part about her children not having continuing access to their childhood home, they decided to proceed. So much may be inferred from Johnathon agreeing to instruct Mr Maait shortly afterwards. But Frank and Elizabeth both say that they discussed an offer to buy Lilly's property. This again is improbable, both because the Court does not find them credible on this issue and Frank did not discuss it soon afterwards either with Lilly or with Mr Maait.
The second part of the conversation took place when Frank arrived back to No. 106 from No. 25 about, 30 minutes later, after speaking to Elizabeth. Frank immediately gave the go-ahead to see a lawyer. Jason telephoned Mr John Maait, a solicitor practising in the firm Norris Somers Maait at Parramatta, who had acted for members of the Bugeja family in the past. Mr Maait responded quickly and arranged for Johnathon and Frank to meet with them later that same afternoon in his office in Phillip Street, Parramatta. Jason said he contacted Mr Maait, because he knew Joseph and Frank had used his legal services before.
Frank's version of this second part of the conversation at No. 96 differs from Johnathon's. He says that he bargained for more money from Johnathon before they left for Mr Maait's office. But the Court does not accept that he did so. Frank had a taste for brinkmanship and driving a hard bargain with his brother, so he waited until they reached the lawyer's office to start increasing the price. In front of Mr Maait, somewhat to Mr Maait's embarrassment, and causing Mr Maait to wonder whether the brothers had really reached agreement, Frank upped his stipulations for the purchase of No. 96 to a differential of $15,000 per acre, that is $15,000 more than the price per acre at which he might secure Stewart's Farm at auction. Johnathon agreed in Mr Maait's office to a higher price but only at a differential of $11,000 per acre, the figure recorded in Mr Maait's draft deed.
Frank remained suspicious of his brothers, Johnathon and Jason. The Court accepts one part of his affidavit that describes his feelings at the end of this conversation at Jason's place. Frank says that he wanted everything to be put into writing by a solicitor and signed by all relevant parties "to make sure that I was not being tricked by my brothers and that everyone would hold up their end of any deal". Frank's evidence is accepted that he thought that Johnathon may not be able to afford to match his (Frank's) financial capacity in a bidding war at the auction. On the other hand, he did not want competition from Johnathon to force him to pay a higher price at auction. Frank was strongly motivated to stop Johnathon from bidding. Whatever may have been Frank's reservations about this proposal, it was made attractive to him by a good price for No. 96, which would be pegged to the sale price per acre of Stewart's Farm, and the knowledge that he would avoid the risk of paying more to buy Stewart's Farm.
Frank and Johnathon set out to Mr Maait's office in Frank's car. Mr Maait had told Jason to have Johnathon and Frank bring some ID, a current rate notice, and the title details of Stewart's Farm to assist him in drafting a contract. On the way to Mr Maait's office they called in to No. 25 where Elizabeth had these items ready for them. The Court accepts Johnathon's evidence that Elizabeth said to them "I hope you're not tricking us", reflecting both Frank and Elizabeth's suspicions about Johnathon's and Jason's motives.
[7]
Johnathon and Frank Telephone Lilly - 3:30 PM, 29 October 2020
Johnathon and Frank drove to Mr Maait's office together in Frank's motor vehicle about mid-afternoon on 29 October. On the way they decided to telephone their mother Lilly to discuss the proposed arrangement with her before they arrived at Mr Maait's office. In Johnathon's account of this telephone conversation, Frank asked his mother whether he could "take over" her property, provided he is successful at the auction for Stewart's Farm, and he sold No. 96 to Johnathon. This closely reflected the language that Johnathon had used earlier that day in the conversation with Frank on No. 106. According to Johnathon, Lilly confirmed this arrangement was suitable.
Johnathon's affidavit version of the conversation has him saying over the telephone to Lilly when they were both present in the car the following,
Johnathon: "If I let Frank buy Stewart's and he wins it at auction, can he take over your property and he will sell me his place."
Lilly: "Yes, as long as you're both happy."
There is an ambiguity in this version, inherent in the words "take over". In Johnathon's account these words meant "take over" Johnathon's present lease of Lilly's property for some time into the future and did not mean "buy" Lilly's property. Lilly's version of this conversation - set out below - makes clear that this is the correct interpretation of what was Lilly was conveying to her sons. As it turns out this was the meaning that was also conveyed to Mr Maait a short time later.
Frank's version of this conversation was different in material respects. Frank says that he and Johnathon were driving to Mr Maait's office in Frank's motor vehicle and that Johnathon initiated the call to their mother and that it proceeded as follows.
Frank: "Hi mum, me and Johnathon are driving over [to] the solicitors now. Johnathon has said that you would be willing to let me buy your property at 216 Yarramundi Lane if I sell my own farm to him. Are you okay with that?"
Lilly: "Hi boys, I would be okay with that arrangement, so long as you are both happy and not fighting. I want you to lease it for two years and then I'll sell it to you."
Frank: "As long as it's all in the contract, then we can consider it. We will tell the lawyer to include that in the contract."
Lilly: "Sure thing, Frank."
Apart from the Court's preference for Johnathon's credibility over Frank's, at least two matters favour Johnathon's version being the more probable: Lilly's more complete memory of the conversation and what happened shortly afterwards at Mr Maait's office.
Lilly's version was clear, and the Court accepts it. She was not directly involved in the initial discussions between Joseph, Jason, Frank, and Johnathon about Johnathon not bidding for Stewart's Farm. But she was rapidly accelerated into the discussions in the telephone call that Johnathon made on the afternoon of 29 October. The Court accepts her unwavering evidence that the following conversation took place:
Johnathon: "I've got Frank in the car with me"
Lilly: "What's going on?"
Johnathon: "Mum we are going to the solicitors to make an agreement that if I don't bid on Stewart's and Frank wins, Frank will sell me his property. Would you be happy to then lease your property to Frank if Jason and I move out?"
Lilly: "Yes"
Frank: "We are going to the solicitor"
Lilly: "So long as you boys are happy."
Frank and Johnathon: "Yes"
Lilly: "I'm happy to lease it to Frank so long as the agreement goes ahead."
This was clearly a discussion about Lilly leasing her property to Frank if he were successful at the auction. Lilly was adamant that she never said to Frank, or indeed to anybody else at this time, that she would sell No. 216. She says and the Court accepts that she had no intention of selling No. 216, as she never wanted to sell it. Moreover, she denies ever telling Joseph that she would agree to sell the property, not only because that was contrary to her intentions for the property but because she and Joseph are not on speaking terms.
When it was put to Frank in cross examination that Lilly did not promise him that she would sell her farm to him he strongly disagreed. When queried as to why there was "no price" for the purchase of No. 216 in the conversation with Lilly, Frank explained:
"No price that's why we probably didn't discuss a price because it was a lease at the beginning, and then she said she'll sell it to me. Lease it, and then sell it to me."
This evidence is difficult to accept, not least because Frank says in his version that there had already been a discussion at Jason's place earlier that day about purchasing Lilly's property at "market price". Moreover, his own original affidavit evidence does not support a conversation at No. 96 or at Jason's place about his buying Lilly's property "at market price".
Frank's evidence about Lilly's promise is unreliable. Despite his affidavit evidence to the effect stated above, in his oral evidence, Frank inconsistently stated that Lilly did not promise him the farm at No. 216, but that it was his brothers who told him that Lilly had agreed to sell him the property. He said that he relied upon Johnathon and Jason making statements to this effect, and that this was the reason he had sent messages to his mother after the auction on 2 November 2020 to see "if she wants to sell it or not and she couldn't give me an answer yes or no" to confirm the agreement. This is inconsistent with his affidavit version of the conversation in the motor vehicle.
But later in his oral evidence Frank returned to his affidavit version of his conversation with Lilly, saying in oral evidence:
"She said she will sell it to me, and lease it at the beginning, because she didn't want to kick Taylor out, she wanted to keep the lease for two years, and then sell it to me. That's why there was no price, because two years down the track, market value, which was probably a year ago."
Taylor is Lilly's niece. Frank further stated under cross examination that this idea emerged from Lilly on the telephone, as she appeared to be motivated to allow Taylor to continue living in the property for a period. Lilly had explained in her oral evidence that a reason she would not have agreed with her sons over the telephone to sell the property, was that she wanted Taylor to live there longer. And she does not accept that she discussed Taylor in the conversation with her sons that afternoon. The Court accepts her evidence.
There are at least four problems with Frank's version of this conversation. First, it is inherently implausible that Lilly, who struck the Court as a sensible and cautious person, would agree in a five-minute telephone conversation without prior notice of the discussion subject to sell the family home to which he was deeply attached at an unspecified price to Frank two years in the future. Secondly, Lilly does not agree that she said any such thing and the Court accepts her evidence. Thirdly if the conversation had taken place, it is expected that it would have included some discussion about how long Taylor would stay in the property before the sale took place and even on Frank's own version such a discussion did not take place. Fourthly, in the conference with Mr Maait held under an hour later, Frank did not give instructions to Mr Maait consistent with his having made this agreement with his mother, on a subject which he says was of critical importance to him.
[8]
A Conference with Mr Maait - 4.00pm on 29 October 2020.
Johnathon and Frank arrived together at Mr Maait's office. Mr Maait received them into his office at about 4.00pm and conferred with them for an hour or a little more. He made notes of the conference in the form of a preliminary handwritten agreement reflecting what he thought the brothers wanted. Mr Maait had the strong impression that the meeting was rushed. It was. Jason had only telephoned Mr Maait the same day and Johnathon and Frank wanted a binding agreement before the auction on Saturday, 31 October.
According to Johnathon, he and Frank both went into the conference with Mr Maait and "confirmed our instructions". Just what those instructions were was much debated. The Court wholly accepts Mr Maait's account of those instructions as the most reliable version of what happened in the conference, although his recollections are incomplete in some respects.
Both Johnathon, Frank and Mr Maait agree on one thing: that Mr Maait made clear at the beginning of the conference that he could only act for one of the two brothers and that was Frank. Mr Maait carefully sought to define his role and for whom he acted. Johnathon recalls Mr Maait explaining his reasons for this being that Frank (and Elizabeth) owned No. 96, the property that would have to be sold under the arrangement.
Mr Maait was reluctant to accept that he received any instructions from Johnathon, as he made it clear that he always regarded Frank, not Johnathon, as his client. Mr Maait was sure that the bulk of his instructions were given to him by Frank and the Court accepts that they were. He had little recollection of Johnathon giving him any specific instructions and was hesitant to agree to the suggestions of counsel for Frank that Johnathon played a leading role in giving instructions. This has important implications for Frank's case: Mr Maait's record of those instructions favours Johnathon's version, which must have been authorised by Frank to Mr Maait.
Johnathon recalls that both he and Frank instructed Mr Maait that Frank was to rent No. 216 from Lilly, instead of Johnathon and Jason. Johnathon further recalls that Mr Maait said of this proposal,
"I can include something about it, but the contract needs to be between Frank and your mum to be binding. But Johnathon, you need to vacate from here."
This statement accords with Mr Maait's notes - set out below - and was appropriate advice. Johnathon who was then renting agricultural space at No. 216 readily agreed to vacate that space in Frank's favour. Johnathon agreed in the conference to vacate No. 216.
Mr Maait recorded in his own handwriting the agreement that he believed the brothers had instructed him to draft, rather than take notes in a more conventional iterative manner. The handwritten draft document is dated 29 October 2020 with a file number within Mr Maait's firm of 5279. The document commences with the words "Mr Frank Bugeja" together with his street address, mobile telephone number and email. This structure further reinforces the conclusion that Mr Maait was acting for Frank. So does the heading which followed "Re Agreement with Johnathon Bugeja (brother)", implying that Johnathon is the brother of Maait's primary client, Frank. The instructions also record that Johnathon "owns Lot 96".
Mr Maait's preliminary draft is not lengthy. Written in his hand blue ink it said:
"Want an agreement drawn with brother Johnathon Bugeja by tomorrow on following terms: -
He and Johnathon both interested in attending auction for sale of [Stewart's Farm] house and land.
Want to sign agreement that he will go to an only he will bid for that property at auction.
If successful bidder at auction, he agrees to sell [Lot 96] on following terms to Johnathon:
same $ per acre as the purchase price paid for the property [Stewart's Farm], $11,000 per acre
plus $300,000 for the house & agricultural shed on the property
together with water licence
Johnathon to agree to relinquish current use to Frank of their mother's property [No. 216]
Frank to make own arrangements with his mother for taking over use of [No. 216]
Frank will enter into contract with Johnathon [within] 42 days of his own contract to purchase with a settlement period of 42 days from the date of the sale contract."
The notes then conclude with the full name and address of Johnathon and Rebecca and their email address and mobile telephone numbers. The form and language of this document reinforces the conclusions that Mr Maait was acting for Frank, that Johnathon agreed to vacate No. 216 and that Frank agreed to negotiate with Lilly about the terms upon which he could take over the use of No. 216.
The file that Mr Maait opened (Exhibit 3) that day to record the taking of instructions reinforces that Frank and Elizabeth were his clients. Mr Maait produced this file during the proceedings. The surviving contents of the produced file are spare, consisting of just a few documents inside a cardboard file cover entitled "File Number 5279". The title on the file cover is "Bugeja - Frank and Elizabeth" with their home address and mobile phone and email contact details. The file cover describes the instructions as "Contract with Johnathon and Rebecca Bugeja - proposed sale of real property". Inside the file are the handwritten notes described above and a rates notice addressed to Frank for his property at No. 25 and a sales advice from Raine & Horne recording the auction of Stewart's Farm setting out all the vendor and purchaser's information known to Raine & Horne and recording the sale price as $2,501,000. Other than a Raine & Horne brochure for the auction, there was nothing else in the file Mr Maait produced.
Frank's version of this meeting, set out below, is not accepted. But apart from what he says, the fact that the conference with Mr Maait took place at all reveals much about Frank's outlook in the moment. Frank went with Johnathon to Mr Maait's office content that he had reached a consensus with Johnathon about bidding at the auction that was sufficient for them both to jointly instruct Mr Maait to make a binding legal agreement. For example, whatever Lilly had said to them both in the car must have satisfied Frank, because he continued travelling to Mr Maait's office with Johnathon.
Frank's version of the conversation with Mr Maait was as follows:
Johnathon: "In broad terms, we want to prepare a written document which sets out that my wife and I won't bid at the auction for a property known as Stewart's Farm. This will allow Frank and Elizabeth the best opportunity to be successful at the auction. In exchange, if Frank and Elizabeth are successful, they will agree to sell Rebecca and myself their property."
Frank: "I also want you to include that I get the right to buy/rent my mother's property. In terms of reimbursement, we have agreed on $15,000 difference for each acre of land, $300,000 for the house [on No. 96] and $100,000 for the shed [on No. 96], but not what is in the shed, as well. My mum will need to sign the agreement as well."
Mr Maait: "OK, I can prepare a document called the deed for proposed sale on the terms that we have discussed today. I will prepare it this afternoon and have it to you in the next few days. Please note however that I can only act for Frank and Elizabeth, otherwise there will be a conflict."
Johnathon: "Understood, thanks John."
Frank: "Okay, I still want to consider whether we are to go ahead with this arrangement after I see the contract. Just to confirm, this isn't binding until we sign in front of a witness, right?
Mr Maait: "That's correct."
Frank's version is improbable. Mr Maait was a competent professional. Any statement by Frank that he wanted to "get the right to buy/rent my mother's property" would have immediately caused Mr Maait to advise Frank that Lilly could not be bound by this agreement and that Frank would need to negotiate the terms of the rental or purchase of No. 216 with her. That is what Mr Maait says that he did. Any statement such as "[m]y mum will need to sign the agreement as well" sounds improbable coming from the client, rather than the solicitor, but if said would have led to a different agreement involving Lilly too.
Based upon the wording of the disputed deed it was put to Frank in cross examination that he knew that he had only agreed to being responsible for obtaining Lilly's consent for "any agreement that might be required in connection with the proposed takeover and use and enjoyment of [No. 216]". The wording of the final deed is slightly different from Mr Maait's handwritten note but the effect is much the same. Frank stoutly denied that he had given these limited instructions to Mr Maait. But it is unlikely Mr Maait recorded something to which his own client had not agreed.
Frank sought to embellish his account during cross examination. He said that he had also instructed Mr Maait that because it was "mum's [Lilly's] farm, nobody can make decisions, she had to be there, her name had to be there, she had to sign, we had to make agreement with that, that is why when the deed come I never signed it". In short he is saying that (1) he told Mr Maait that Lilly had to be made a party to the deed, and (2) he refused to sign because she was not a party. This led the Court to seek clarification from Frank about what he did to follow-up his instruction and resulted in the following exchange:
"The Court: Did you tell the solicitor that your mother had to be there?
Frank: I suggested it, but I don't think he heard me.
The Court: What did you say to him?
Frank: I said, "Mum should be here", but we were arguing, and I don't think he heard me because really Mum should have been binding in that deal, she should have been in there. And it was too rushed, the last day before the auction. Why didn't they come to me 2 weeks ago, so we could've done it properly and I could've edited it, I could've got advice from my accountant. They pushed me and rushed me too much.
The Court: All right, but you say you said that "Mum should be here"?
Frank: Yes, but I'm not sure if he heard me.
The Court. Were you sitting just across the table?
Frank: Yeah, a bit far away and arguing.
The Court: Were you sure your mother should be there?
Frank: Well, it's her farm, that's why I was there, because it was my farm that we were going to do the deal on, so she should've been there, as well, to be fair to everyone.
The Court: Well, if he didn't hear you, did you say it again?
Frank: No, I didn't. I said it once."
The Court does not accept that Frank said to Mr Maait that his mother should be there. It is an incredible account: that if Frank was worried enough about making Lilly a party to raise that idea with Mr Maait that he would have not repeated his request if he thought Mr Maait had not heard it the first time but instead abandoned insistence on the idea; and that he would yet refuse the following day to sign the agreement because Lilly was not a party. The better view is that Frank was sufficiently convinced that he had the kind of consent from his mother, vague though it may have been, that he needed to proceed to instruct Mr Maait. This exchange badly fractured Frank's credibility, demonstrating his capacity both to exaggerate and invent conversations that did not take place.
[9]
Johnathon and Frank Enjoy a Pizza - late afternoon, 29 October.
After leaving Mr Maait's office Johnathon and Frank walked toward Frank's car. They paused at a pizza shop and Frank bought Johnathon a pizza. This apparently unremarkable act was unusual from Johnathon's perspective, because as he explained, "he bought me a pizza, which he never does". Johnathon explained that "I felt my relationship with Frank was back on track". The Court accepts that there was a consensus between Johnathon and Frank at the end of the meeting with Mr Maait.
This cameo moment of fraternal generosity, which startled Johnathon, is far more consistent with Johnathon's case than Frank's. It shows that Frank was content with what had happened in Mr Maait's office. If Frank is to be believed, he left the office with reservations about proceeding because he was still insisting that his mother be a party to the deed but had not received any assurance from Mr Maait whether and how that would occur. His evidence gives the impression that this was the deal-breaking issue which ultimately prevented him from signing the deed. If that is indeed what happened, Frank knew there was no agreement between the brothers until Lilly became a party to and signed the deed and it is difficult to account for him being sufficiently contented at this moment to break bread with his brother.
Johnathon too was relaxed in the moment. He wanted a written agreement for "peace of mind" because Frank's word was not good enough for him. And now Frank seemed prepared to sign an agreement based on the instructions that he had just given Mr Maait.
Frank seemed conscious of the danger of this evidence about this informal brotherly moment. In oral evidence he consciously distanced himself from any display of empathy towards Johnathon over a pizza. But to avoid displaying empathy he came up with a weirdly improbable scenario in which he purchased a pizza, because he was hungry, and then Johnathon merely took a piece of the pizza uninvited and unwelcome.
Frank did not again clearly raise the subject of his mother becoming a party to the deed as the basis for his reluctance to sign. It might be thought that in his discussions with Elizabeth or when he was being asked to sign the next day that he would point out the obvious that Lilly was not yet a party. The Court's findings below show that such a conversation did not occur at or about the time of signing, on either version of what happened. Had such a conversation occurred is likely that Johnathon and Joseph would have immediately done something to try and secure Lilly's consent to a sale transaction with No. 216 that was acceptable to Frank.
[10]
Mr Maait Perfects the Draft Deed - Early Afternoon Friday, 30 October 2020
Mr Maait turned his preliminary draft into a more formal document by the early afternoon of the following day. On 30 October 2020 he sent two emails to Frank and Johnathon attaching a draft deed of agreement for their approval and signature and requesting Johnathon to seek independent legal and financial advice. The first email was sent to Frank and Johnathon at 12:28pm. It attached a document entitled "Bugeja.pdf". The email referenced "my meeting and discussions with you late yesterday afternoon" and said, "I now attach for your approval and signing the proposed deed of agreement which you instructed me to prepare on very short notice ahead of the subject auction tomorrow". In the email Mr Maait confirmed yet again "that I'm only representing and advising Frank and Elizabeth in relation to this deed and any subsequent contract for the sale as between them and Johnathon and Rebecca". He recorded his belief that he had "explained in detail" the reasons why he could not act for or advise Johnathon and Rebecca, namely "to avoid any potential conflict of interest either now or in the future". He reiterated it was a matter for "Johnathon and Rebecca whether to seek independent legal, financial or other advice needed before signing the deed".
The Bugeja.pdf attachment to the 12:28pm email contained an error: it omitted Rebecca's name in the signature block on the last page. Mr Maait sent an amended version to both Frank and Johnathon at 1:54pm the same day.
The final deed describes Frank and Elizabeth as "vendors" and Johnathon and Rebecca as "purchasers". The deed set out the following four recitals:
A. The Vendors are the registered proprietors as joint tenants of the whole of the farming property consisting of land and house and agricultural shed comprised in [Lot 96] ("Vendors' property").
B. The Vendors and the Purchasers are each interest in purchasing the farming property known as [Stewart's Farm] ("new farmland") which is being sold by public auction on 31 October 2020 and which the Vendors and the Purchasers intended to bid for at the auction.
C. The parties have negotiated and agreed between each other that as a mark of goodwill and in consideration of the Purchasers' forbearance hereinafter referred to and each of the parties accepting the terms and entering into and signing this agreement, the purchaser will refrain from bidding for the purchase of the new farmland and that, as between them, only the Vendors will bid at the said forthcoming auction or otherwise seek to purchase the new farmland, to the intent that, if the vendors are the successful bidder at the auction, the vendors will purchase the new farmland beneficially for themselves to the exclusion of the purchasers.
D. The parties have agreed to the various matters hereinafter appearing.
Clause 1 of the operative part of the deed set out various interpretations. Clause 2 set out the rights and responsibilities of the parties as follows:
(a) The purchasers agree that they will refrain from bidding or otherwise interfering adversely in any way with the bid by the vendors to purchase and achieve ownership of the new farmland.
(b) In consideration of the purchasers' refrain and agreement referred to in (a), the vendors, if they are the successful bidders or otherwise the successful purchasers, whether through the auction or otherwise within 6 months following the auction, will prior to settlement of the purchase of the new farm land enter into a contract for and agree to sell the vendors' property referred to in recital A to the purchasers upon the following terms:
(i) The contract for sale will the in the 2019 standard form of contract for sale of Land of the Law Society of New South Wales and the Real Estate Institute of New South Wales.
(ii) The sale and purchase price for the vendors' property shall be worked out and agreed between the vendors and the purchaser to be at the same rate per acre paid by the vendors for the purchase of the new farmland, plus an additional agreed sum of eleven thousand dollars ($11,000) per each acre so as to reflect the agreed superior quality and utility of the Vendors' property.
(iii) In addition to the land valued agreed upon in 2(b)(i) the purchasers will pay the vendors a sum of three hundred thousand dollars ($300,000) as consideration for tl1e house, agricultural shed and other improvements included in the sale of the vendors' property.
(iv) The sale and purchase will include the vendors' Water Licence for and in respect of the vendors' property, and the vendors will do all things and sign all documents that may reasonably be required of them by the purchasers to facilitate the transfer to the purchasers of the said Water Licence simultaneously with or as soon as practicable following settlement of the said sale and purchase.
(v) Simultaneously with or as soon as practicable following the settlement of the sale to the purchasers of the vendors' property, the purchasers will do all things and sign all documents reasonably required of them to vacate and facilitate the taking of possession and use and enjoyment as farm land by the vendors of the farming property owned by the mother of Frank and Johnathon Bugeja and presently used by the purchasers as farming land.
(vi) The vendors shall be responsible for obtaining the consent and otherwise for any agreement that may be required in connection with the proposed takeover and use and enjoyment of the farming property referred to in the preceding subparagraph (v).
The terms of the deed concluded with provisions for the giving of notices (clause 3), further assurance (clause 4) and counterparts. The terms of the counterpart provision were as follows:
This deed may be executed in any number of counterparts each of which will be an original but such counterparts together will constitute one and the same instrument and the date of the deed will be the date on which it is executed by the last party.
Finally, the execution page is so entitled, and it declares that the document is "executed as a deed", under which two rectangular signature boxes appear, one each for the signature and witnessing of the deed by each party. The version set out below is that of the Bugeja.pdf attached to the 12:28pm email.
The version of the Bugeja.pdf deed sent at 1:54pm differs from the earlier version of the deed in that the words "and Rebecca Bugeja" are added into the lower signature box after Johnathon's name.
As it turned out the two counterparts of the deed that were signed by the parties were different in that one was the 1:54pm version and the other was the 12:28pm version. These differences are described in more detail later in these reasons. There were other differences in the way the two versions were printed which will also be discussed below.
[11]
The Disputed Signing - Mid-Afternoon, Friday 30 October
Only Johnathon and Joseph give an account of Frank and Elizabeth signing the deed counterparts about mid-afternoon on 30 October at No. 25. No one claims Jason was present at such an event. Elizabeth denies she was present when Frank or Johnathon signed any deed counterparts. Frank says that he was presented with a deed counterpart several times, but he refused to sign. Due to his age Joseph's account is slightly less reliable than Johnathon's, but he says he witnessed Frank, Elizabeth and Johnathon signing the deed counterparts in the Court accepts it as important corroborating evidence of Johnathon's account. The Court does not accept Frank and Elizabeth's version. Johnathon's and Joseph's account, supplemented by Rebecca's account is the more plausible and fits with the available objective evidence. The Court starts with their account.
Johnathon, Rebecca's, and Joseph's account. According to Johnathon and Rebecca on the afternoon of 30 October 2020, Mr Maait emailed a soft copy of the deed to them. Whilst at home, Johnathon printed the deed on their home inkjet printer. Johnathon informed Rebecca the deed had to be signed by the two couples before the auction. Rebecca could not accompany Johnathon to Frank's house at No. 25 at that time, as she had to collect their children. So, she signed the counterpart deed Johnathon had printed out in front of him in their kitchen in blue pen.
Johnathon says that he then drove to Joseph's house with his counterpart copy of the deed. There he asked Joseph to accompany him to Frank's house, so Joseph could witness both their signatures. Johnathon says that Joseph and he then drove separately to Frank's house at No. 25. When they arrived at Frank's house, Johnathon says that Frank and his son Michael were in the shed. Johnathon asked Frank, "you got the deed, are we going to sign it?" to which Frank replied in the affirmative and asked his son Michael to go and ask Elizabeth to come outside.
Johnathon further says that Elizabeth came out of the house at No. 25 a short time later with another counterpart copy of the deed which she had already printed on a laser printer. According to Johnathon the signings followed directly after this in a shed on No. 25, and took place on the rear tray of a utility motor vehicle.
Johnathon says that first he, Frank and Elizabeth signed the inkjet counterpart deed that he, Johnathon, had brought with him that day to Frank's house and which already had Rebecca's signature on it. He says he signed in a blue pen in front of Joseph, Frank, and Elizabeth. Johnathon says that he then saw Frank and Elizabeth both sign the inkjet counterpart deed that he had brought to the shed.
Johnathon says that he then signed the laser counterpart deed that Elizabeth had brought out from the house into the shed. Johnathon says that he then saw Frank and Elizabeth sign the laser counterpart.
Joseph's evidence generally supports Johnathon's evidence except in one respect. Joseph says that Elizabeth signed her counterpart before she came out to the shed. That is what Elizabeth says too. Although the Court rejects much of Elizabeth's evidence it accepts that she signed the laser counterpart before leaving the house. To the extent that Johnathon says that he saw Elizabeth sign her and Frank's counterpart in front of him, he is mistaken.
An important question arose on Johnathon and Joseph's account was who took which counterpart deed away from No. 25 after the signing. Johnathon says he recalls taking one of the counterparts home with him from the No. 25 shed for Rebecca to sign, whilst the other counterpart was left with Frank and Elizabeth. He says that the deed he left with Frank and Elizabeth was the one that he had organised for Rebecca to sign before he left their house that day and that he had brought to the shed. It was logical that he would leave this inkjet counterpart with Frank and Elizabeth: it did not need to be re-signed by Rebecca, unlike the laser counterpart.
Later that afternoon when Johnathon returned home from No. 25, he presented to Rebecca for signature the counterpart of the deed that already bore the witnessed signatures of Johnathon, Frank, and Elizabeth. This was the laser counterpart that Elizabeth had brought from the house, not yet signed by Rebecca. When it was given to her, according to Johnathon, Rebecca also signed this laser counterpart in blue pen, as she had the inkjet counterpart earlier in the day. Johnathon signed both counterparts in blue, possibly using the same pen as Rebecca.
Rebecca supports her husband's account and says, and the Court accepts, that Johnathon came home with the version of the deed signed by him, Elizabeth and Frank and said to her "we need to sign two copies of the deed, can you sign this one too". Her evidence is also accepted that when she signed this deed at home, it had already been signed by Frank, Elizabeth and Johnathon and witnessed in two places by Joseph.
Frank's Version. Frank's version of what happened is entirely different. He says that he came in from lunch to No. 25 on 30 October and Elizabeth presented him with a counterpart deed which can be identified as the laser counterpart and she said to him, "the lawyer sent us this document; it's called a deed for proposed sale. What do we do with it?"
This conversation sounds improbable from the start, as Elizabeth was generally familiar with the transaction from the discussion that Frank had had with her the previous day before going to Mr Maait's office. Frank says he read the deed and recalled it was very different from the discussions that he had held with Johnathon, Jason, and Joseph. He says he noted that it did not mention that Lilly's property, No. 216 was to be included in any deal and that Lilly was not a signatory. He says he declared to Elizabeth that they had "just try to trick us" and decided as he told his wife, "there is no way I'm going to sign a copy of it."
According to Frank he had a very good reason not to sign: the lack of a commitment from Lilly. He then says that on many occasions on the afternoon of 30 October both Johnathon and Joseph came over to No. 96 and pressed him to sign the deed. He says on one of these occasions a conversation took place between them to the following effect:
Johnathon: "Frank, the solicitor has sent us the deed, we need you and Elizabeth to sign it now."
Frank: "It's not what we discussed. I'm not signing it."
Johnathon: "Come on Frank, it would be so good for business if we had your property. That way Jason I could merge our two farms together."
Frank: "It's not happening. We are bidding at the auction and that's it."
The Court does not accept this conversation took place. Apart from the Court's general preference for the reliability of Johnathon as a witness, Frank was incapable of giving the most basic explanation about obvious questions that would have arisen from the stance that he alleged he was taking. Anyone in Johnathon's position who was keen to buy No. 96 and who believed that he had a consensus with Frank late on 29 October would have asked Frank on 30 October why the deed was "not what we discussed". Frank could never explain whether Johnathon asked such a predictable question on his version. If in reply Frank had explained what he now claims were his reasons, that would inevitably have prompted Johnathon to make a phone call to Lilly or to Mr Maait to try and resolve any uncertainty about Lilly's commitment to give over No. 216. It was as easy for Johnathon and Frank to make a mobile phone call to Lilly on 30 October as it had been on 29 October. Yet neither Johnathon nor Frank attempted to contact Lilly again on 30 October. The Court infers that no discussion took place of the kind that Frank describes.
Frank also relies upon a text message exchange between himself and Johnathon at 2:37 PM on 30 October as supporting his case that at that time he was refusing to sign the deed. But the effect of this message exchange is not clear. First, the language used in this text exchange and in many of the text messages between Johnathon and Frank and other family members is at times of baffling obscurity. The informal dialect some Bugeja family members use is difficult for an outsider to interpret. Secondly, Frank often adopts the persona of a prankster in his texted replies, sometimes sending images rather than language, but creating a puzzle for the objective interpreter of his correspondence.
Johnathon sent the initiating text of this exchange at 2:37 PM, saying "sign and send back" to him. It is logical that Frank would have sent this text at this time. He had encountered difficulties with his printer and Mr Maait had sent the final amended version of the deed through at 1.54pm. Frank says he understood this to be a request to sign the deed and send a copy back to Mr Maait. He replied saying "I'm pulling out". He says that was intended to convey that he was not going to sign the deed because it did not reflect the discussions that had occurred. Johnathon then replies, "Ok".
Johnathon says he did not take Frank's text "I'm pulling out" seriously and that after the text was sent all parties signed the deed counterparts. Johnathon's relaxed reply supports this interpretation. The Court accepts Johnathon's explanation as the best interpretation of these text messages within the family context. Johnathon might be expected to have protested strongly if he was taking this communication as a serious threat by Frank to pull out of the arrangement agreed with Mr Maait the previous day. "I'm pulling out" was light-hearted banter, which was even repeated by Frank to Johnathon in person on the day of the auction and generated mutual mirth.
Moreover, Johnathon's printer was not functioning properly. Mr Maait had to send him another soft copy of the deed after 1:54pm. The first two emails had been sent to Johnathon's domestic email address. Mr Maait re-forwarded his 1:54pm email to Johnathon's business email address at 2.49 pm, as a copy of Mr Maait's supplementary email at that later time to Johnathon clearly shows.
This means that Frank's text "I'm pulling out" at 2:37 pm was sent and received whilst Johnathon was waiting to receive a final printable version of the deed from Mr Maait. This exchange must have occurred before Johnathon claims he went around to No. 25 with the final printed deed. Johnathon's matter-of-fact response is consistent with in treating Frank's text message as a joke before proceeding to go and see him.
Elizabeth's Version. Elizabeth denies being present with her husband at any joint signing of the counterpart deeds. She gives an account that does not directly confront the evidence of Johnathon and Joseph other than to infer that because she was not there the signing could not have happened the way that they say it did. Close examination of her alternative narrative on 29 and 30 October is required, to assess its probability.
Elizabeth's primary affidavit account of her involvement in these events was corrected in several respects in a subsequent affidavit. In her corrected version she says that on 29 October Frank returned to No. 25, after what must have been the conversation at Jason's place. Elizabeth says that upon his return to No. 25 Frank explained the proposed arrangement to her the following way:
Frank: "Johnathon said he won't bid at the auction for Stewart's Farm. This will give us the best opportunity to be successful at the auction."
Elizabeth: "What's in it for them?"
Frank: "They want us to sell our property [No. 96] to them. They have also said that mum would let us rent and then buy her farm."
Elizabeth: "I don't know Frank; I don't feel too good about this. You don't have a good relationship with your dad or brothers…and how can they guarantee that your mum would agree to the deal?"
Frank: "I don't trust them either. I will only accept any deal if its prepared by a lawyer in writing and everyone signs off on it. But I think we should consider it."
Elizabeth: "Alright Frank, whatever you think is best. The kids aren't going to be happy about selling [No. 96]."
Although Elizabeth was not present at the discussions at Jason's place on 29 October, this conversation, if it is to be accepted, gave her the essentials of the proposed arrangement discussed between Frank and Johnathon, including what according to Frank was the proposal about buying No. 216.
Elizabeth says that "around midday" on 30 October she was preparing lunch inside the house at No. 25 when Frank came inside, and she says that she showed him a copy of a deed which she had received from Mr Maait and printed out. This must have been soon after Mr Maait sent through the 12.28pm version of the deed. That is the version Elizabeth printed out and ultimately signed. If she ever printed out the later 1.54pm version, she did not use it.
She says she showed it to Frank who said "this is not what I had discussed. There is no way I'm signing it." She says that Frank then left the house without signing the deed. This conversation contains little context in which Frank explained to Elizabeth why the deed was not "what I discussed". She says that she asked him the predictable question why the deed was different from what had been discussed and she says that she recalls him saying that "it should have his mum's signature on this… so he gets [reassurance] that…his mum's following with everything". This is certainly consistent with Frank's story that he raised this issue with Mr Maait. But it is odd that if the printed deed did not reflect what Frank thought had been discussed with Johnathon, Frank or Elizabeth did not telephone Mr Maait to correct the deed or at least discuss that course, so it corresponded with his instructions. After all, it was still to Frank's and Elizabeth's advantage to bind Johnathon and Rebecca not to bid.
Whilst Frank was back at work Elizabeth says that Joseph visited No. 25 on several occasions and that "mostly Joseph would come near the house" while Frank was away working. She says that Joseph said to her "But have you signed the deed yet?" and "Where's Frank, you both need to sign it [the disputed deed]", and "You need to sign it already" and "It has to be done". She says that Joseph's body language and tone of voice gave her the impression that it was important for the deed to be signed urgently. She says that she said to Joseph "I'm very confused, I wasn't at the meetings. Go and speak to Frank".
According to her Joseph left the house on No. 25 four or five times and returned during the space of a few hours to put pressure on her to sign the deed. She is remarkably vague about exactly where Joseph was having these conversations pressuring her, merely saying it was "around the house". She believed that when Joseph left he was going to look for Frank.
She says that finally after Joseph had left the house on the last of these occasions and because of the consistent pressure and feeling of urgency which Joseph had created she proceeded to sign the disputed deed without a witness being present. She said she was reluctant to sign a copy but felt pressured by Joseph and did so because "I always respected and continued to respect my father-in-law, Joseph and did not want to be that daughter-in-law that was a problem within the family".
She says that she called Mr Maait to confirm where she was to sign the deed. She says she asked Mr Maait what the document was, does it need to be signed in Mr Maait's office, where and how was she meant to sign it and did they need a witness. She said that her confusion was created in part because she was not at the original meeting. She did call Mr Maait. His invoice records such a call took place. She says that Mr Maait said to her words to the following effect:
"It's best if you and Frank sign on the right-hand side of the document. It's between you. It doesn't have anything to do with me. You can either have a single document and have everyone sign the same one, or you and Frank can sign a separate copy to Johnathon and Rebecca and then exchange your copies."
She recalls expressing confusion again "because I wasn't at the meeting" and asking whether she should email the signed copy back to Mr Maait, who she says then said to her:
"No, it's up to you. I've spoken with Johnathon and have told him what to do. He already knows what needs to happen. Maybe speak to Frank and he can sort it out with Johnathon."
Elizabeth's account of this conversation does not fit with the rest of her and Frank's testimony about Frank's expressed disquiet about the deed and her testimony about pressure from Joseph for her to sign the deed.
According to Elizabeth at lunchtime Frank had clearly told her that the form of the deed which she had printed out was not what had been discussed with Mr Maait the day before. She showed she was sufficiently self-assured to ring Mr Maait to clarify how the deed should be executed. But even though she says she was being harassed by Joseph, she makes no mention to Mr Maait (her and Frank's own lawyer in whom she could confide) of either Frank's disquiet about the inadequacy of the document, or about Joseph's inappropriate pressure upon her to sign it. She says she was "confused". Mr Maait was the ideal person to resolve any confusion.
Elizabeth's version and Mr Maait's version of their conversation coincide: they both agree that neither of these subjects was mentioned. He was not alerted to any disquiet on her part either about the document not reflecting the true agreement, or about Joseph's pressure on her to sign, which she must have perceived as underhand, given her husband's statement that the written document did not reflect the true agreement. It is inconceivable that if Frank was so firm that "there is no way I'm signing it", when she subsequently spoke to Mr Maait, she would not have shared his disquiet, her confusion and Joseph's pressure with her own lawyer.
Elizabeth says that after she signed the deed she walked outside the house with the signed copy of the deed and found Frank in the shed. She says that she placed the deed on the back of the utility which was parked in the shed and had a conversation with her husband in words to the following effect:
Elizabeth: "Here you go Frank, I don't want to deal with this anymore. Your Dad has been demanding that we sign it all afternoon."
Frank: "Why did you sign it? It's not what I had been discussing with Dad and my brothers."
Elizabeth: "I felt pressured by your Dad, I don't know."
She says that after leaving the disputed deed on the utility motor vehicle that she left Frank alone in the shed and went back inside the house. She says she does not know what happened to the deed after that because it was not on the utility when she returned to that area later.
Elizabeth's account of leaving the deed on the utility is improbable. Her attempts to explain away that improbability were unconvincing. She could not add any detail to her account. She did not show that she was drawing upon actual recollection rather than just adhering to a narrative that she needed to maintain.
First, Elizabeth says that when Frank came home from lunch, he made it clear "there is no way I'm signing" the deed. She knew that her husband was the only person who had been involved in the negotiations the previous day and he seemed convinced that the deed which Mr Maait had emailed to her should not be signed. Yet when Joseph came round badgering her to sign it up to four or five times at no stage does she use the obvious defence to Joseph that was available to her: that the absent Frank had told her it was not to be signed. It is inconceivable on her account that she would have interpreted Frank's statement as allowing her to sign the deed. It is difficult to accept that she was defending herself from Joseph's pressure without using this most obvious of defences. Her simple answer to Joseph's pressure would have been "Frank said that we are not signing it". She knew that Joseph was trying to have her to do the opposite of what her husband had said and to sign something that was "not what was discussed". But she could not give any sensible account of why she did not state the obvious to Joseph, instead she said "go and talk to Frank", "[Joseph] wouldn't listen" and "I didn't know what I was going to do".
Secondly, if she had any doubt about what she should do, as she claimed that she does, when Joseph applied the pressure to her, she could simply have telephoned her husband to ask him what to do. She had a mobile phone. He had a mobile phone. The Court explored with her whether she could have telephoned her husband who she agreed had a mobile phone. She became evasive saying, "I don't tell him to keep it with him" and "he does what he wishes" and "if he's on machinery he's not going to pick up the phone". But when asked why she didn't "just try and ring him" in the end she said "I wasn't thinking. I couldn't think straight" because Joseph was "demanding me to hurry up and sign it". Elizabeth struck the Court as an independent minded resourceful woman, yet all she could say unconvincing was "I didn't think about ringing Frank".
Elizabeth presented to the Court as a strong personality. She knew her own mind and would not be readily intimidated. She was confident and at times aggressive in the witness box. At one point in her cross examination, she loudly answered "bullshit" to emphasize her robust disagreement with counsel's question. Nor was Elizabeth a submissive daughter-in-law, who did not want to be, as she said, "a problem within the family". She understood her husband's decision not to sign the deed was fundamental to their financial wellbeing and that had greater priority in her life than accommodating Joseph's demands.
The Court does not accept that Joseph was so imposing a figure that he would have had this claimed effect upon her. Quite the contrary, the Jospeh that the Court saw, although three years after these events, was a retired farmer who understood farming but who at times was confused to the point that he could not distinguish between a counterpart deed and his own affidavit. By personality, education and life experience Elizabeth was most unlikely to have been intimidated by her far less sophisticated father-in-law. And Joseph was long past applying pressure to this daughter-in-law, against the wishes of his own tough-minded son, Frank. Moreover, Elizabeth was well able to engineer breathing space, while she tried to contact Frank.
Thirdly, if Elizabeth's story were correct, she could not explain why she went outside and placed the deed she had signed on a utility tray when she did, nor could she give a sensible account of her alleged conversation with Frank at this time. She says she went outside holding a copy of the deed and happened fortuitously to find Frank in the shed on the property. Despite finding Frank and being able to talk to him, she says she placed the deed on the utility rather than just giving it to him which would appear to be the more obvious thing to do. She says that she told Frank that she had signed it and he reiterated that the deed was not what had been discussed and she says she explained that she felt pressured.
All Elizabeth could remember was a limited sequence of the events of going outside and placing the executed deed on the utility but without giving significant detail. If what Elizabeth says were right, it would be expected that Frank would be angry with Joseph when Elizabeth told him of Joseph's pressure. Frank was finding out for the first time that Joseph had surreptitiously gone behind his back to urge Elizabeth to sign something that he was adamant should not be signed. But Frank's response to Joseph's conduct is not any part of Elizabeth's narrative. It might also be expected that Frank would declare that he would tell Johnathon he was not going to sign the deed, so Elizabeth was not harassed any further. Instead, Elizabeth's narrative has her just walking away into the house leaving Frank "alone in the shed", with the counterpart of the deed Elizabeth had signed on the back of the utility.
Fourthly, Elizabeth could not explain why she decided to walk outside the house at this time. Puzzled by this matter, the Court asked her several questions which produced a series of evasive answers that refused to engage with the issue:
The Court: So, did you give it to Frank, or did you put it somewhere?
Elizabeth: I put it on the Ute.
The Court: Who's Ute was that?
Elizabeth: I can't remember because I wasn't thinking straight.
The Court: But it was a Ute in a shed on [No.] 25?
Elizabeth: Yeah, possibly, yes.
The Court: Was there anyone else there apart from Frank and you?
Elizabeth: Just Frank was only there for a quick second, I saw him, he took off.
The Court: Why did you go out there? What made you go out there? How did you know Frank was there?
Elizabeth: I didn't know he was there.
The Court: Well, why did you go--
Elizabeth: Because then when I got out there, I sort of seen him there, seen him.
The Court: But what caused you to go outside the house, at all, to give the deed to anybody, particularly Frank?
Elizabeth: I didn't give it to him. I put it on the Ute.
The Court: What made you go outside the house?
Elizabeth: I don't know. I couldn't think straight. Joseph kept telling me, it needs to be done, it needs to be done. Rushing me.
The Court: Was Joseph there when you walked outside?
Elizabeth: No.
The Court: So, Joseph had left by then, had he?
Elizabeth: Yes.
On Joseph's and Johnathon's version there is a good reason she goes outside the house when she does: she is called outside by her son Michael, after Joseph and Johnathon arrive with their counterpart of the deed.
Fifthly, Elizabeth gives an account of what happened to the pen she used to sign the deed counterpart that she put on the utility. She said that she was "pretty sure I left [the pen] in the office [at No. 25]" because she could not understand why she would take a pen outside after signing the counterpart she had. She was sure that she did not give the pen and the signed counterpart to Joseph. This raises a potential conflict in Rebecca's evidence with the form of Exhibit 1 and Exhibit 2. The inference is open that the same black pen may have been used for all signatures on both deed counterparts apart from Rebecca's signature. This issue is discussed later in these reasons with Ms Holt's evidence.
Sixthly, Elizabeth's version is oddly improbable in yet another way. Why would Johnathon not come around with Joseph to No. 25 with the deed? Johnathon was just as keen as Joseph for the deal to be done. Johnathon had driven Frank the day before from No. 96 to Jason's place to discuss the matter further and then had travelled with Frank to Mr Maait's office. If he had undertaken all these travels, why would he not also go, as he claims he did, over to No. 25 with his counterpart of the deed to complete his work? Johnathon's absence and Joseph's presence from No. 25 is not a plausible account of Johnathon's likely behaviour.
Finally, perhaps the greatest problem with Elizabeth's version is that it does not explain how her signature comes to be on both the inkjet counterpart and laser counterpart of the deed. According to Elizabeth's version she only handles one counterpart, the laser counterpart, that she prints out at home and signs and then puts on the utility in Frank's presence. Her account never has her presented with or executing the inkjet counterpart which was brought to No. 25 by Johnathon or Joseph.
Moreover, the evidence points to only one counterpart being printed out by Johnathon and Rebecca and being signed by Rebecca. If Elizabeth's version is to be accepted and both counterparts have her signature on them then this version must somehow find its way into Joseph's hands, be brought to Elizabeth, and been signed by her. But neither Johnathon's nor Joseph's evidence supports Joseph carrying this inkjet counterpart with him.
Curiously, neither Frank nor Elizabeth would say whether at the relevant time in late October 2020 that the household at No. 25 had a laser printer. Calls were made for documents evidencing the purchase or maintenance of their family printer and none were produced. But by process of elimination, it can be inferred they must had a laser printer. Only two counterparts of the deed were created and Johnathon is clearly accounted for the inkjet counterpart and Elizabeth's signature is on both counterparts.
[12]
The Silence before the Auction - Overnight 30/31 October
There are no proven communications between Frank and Elizabeth on the one hand and Johnathon and Rebecca on the other hand, overnight 30/31 October and at any time before the auction. This does not sit well with Frank's version of events.
If Frank's and Elizabeth's version is accepted, at least one of several things is likely to have occurred. First, the failure to sign the deed left an important question uncertain for Frank: was Johnathon going to bid and drive up the price for Frank? On Frank's version of the confrontation at the failed signing, Johnathon gave Frank no assurance that he would not bid at the auction the following day. Frank had been sufficiently keen on binding Johnathon not to bid to go to Mr Maait. There are no overnight phone calls or text messages between the pair in which Frank seeks to explore with Johnathon what was going to happen the following day. For a person who knew he had just crashed what an agreement for Johnathon not to bid, Frank showed remarkably little interest in finding out whether Johnathon was now going to bid at the auction. Frank came across to the Court as having a direct and impulsive side and not comfortable playing his cards close to his chest. Yet he did not approach Johnathon that morning before the bidding started to find out what his brother was going to do when the bidding started. Their lack of communication is more consistent with Frank being confident that Johnathon would not bid.
Secondly, there is no evidence of Joseph continuing his campaign for the signing of the deed. This too is in tension with Frank's and Elizabeth's version. After all, according to Elizabeth, Joseph had harassed her to sign the deed four or five times in the space of several hours. Yet Joseph goes quiet from the afternoon of 30 October right up until the auction on 31 October. If Frank and Elizabeth's version is accepted Joseph should still have been pushing his idea to both his sons as relentlessly as he had been harassing Elizabeth.
Thirdly, if Frank's and Elizabeth's version is to be accepted the only thing standing in the way of very convenient consensus to save the brothers bidding against one another was the absence of Lilly's written commitment to sell No. 216 as part of the agreement. If this is what Lilly had said to Frank on the telephone on the way to Mr Maait's office as Frank maintains, then all Frank had to do to ensure that he could win Stewart's Farm without Johnathon bidding against him was to call Lilly to ask her to put in writing her agreement to sell No. 216 to him. This should have been perceived as a relatively easy task from Frank's perspective, yet no such communication took place.
[13]
The Auction - Saturday, 31 October 2020
On 31 October 2020, the public auction for Stewart's Farm took place. Frank attended the auction and registered to bid. So did Johnathon. Frank was ultimately successful with a bid of $2,501,000. Johnathon did not bid. There was only one other bidder. Frank says he was confused that Johnathon and Rebecca did not bid and he did not know why. He says that he thought that Johnathon was in debt and unable to raise the funds. The Court infers that Johnathon and Rebecca would have bid at the auction, if they did not believe that Frank and Elizabeth had signed the deed.
Lilly went to the auction on 31 October. She saw the auctioneer approaching Johnathon to encourage him to bid. She recalls Johnathon replying to the auctioneer's invitation, "No, my brother is bidding". This made sense to her, given the conversation she had had with them both on 29 October and is consistent with Johnathon acting on the basis that the deed was signed and operative.
Johnathon's and Rebecca's failure to bid is more significant than merely to make out the reliance element in their equitable estoppel and misleading and deceptive conduct cases. Their failure to bid needs to be assessed in the context of Johnathon's recent rapprochement with a brother whom he had long distrusted. If Frank's version is correct, Johnathon already knew that Frank had refused to sign the counterpart deeds and was repudiating their terms as not reflecting what had been agreed. If that is right Frank's repudiation must have meant that from Johnathon's perspective the temporary trust that seem to have emerged between the brothers on 29 October had disappeared.
But unless there was a financial reason for him not to bid, strangely Johnathon took the risk on auction day of not bidding. He missed out on the opportunity to buy Stewart's Farm, apparently calculating on Frank's case that he would be able to rely upon forging Frank's signature. This looks very like a reckless gamble on being able to outsmart Frank. The Court does not assess Johnathon to be either a gambler or a forger.
Relations between the pair were so poor that had Frank clearly communicated to Johnathon that he had changed his mind about their arrangement before the auction, the Court can confidently infer that Johnathon would have been strongly motivated by their personal rivalry to bid against him at the auction and would readily have done so. Johnathon's failure to bid is powerful contemporaneous evidence that Frank signed the deed.
[14]
Johnathon's Borrowing Capacity
Johnathon did not bid because he believed that to bid would be contrary to the deeds he had signed on 30 October and upon which he was relying in refraining from bidding. Johnathon's failure to bid was probably to Frank's financial advantage to an amount of approximately $300,000. Frank had told Johnathon he was prepared to bid to $2.8 million Stewart's Farm. Johnathon was prepared to pay up to about the same.
Frank's case was that the reason Johnathon did not bid is he did not have the financial capacity to do so. Johnathon's case answered this through Ms Jazzani Calalang, an agribusiness manager at the NAB, a bank. Ms Calalang and the NAB's records confirm that on 29 October 2020 the NAB conditionally approved a loan to Johnathon to acquire Stewart's Farm. After receiving information from Johnathon's accountant in late September 2020 including updated financial statements in early October 2020 and information about the proposed purchase, the NAB approved the loan. The NAB's approval was partly based upon Ms Calalang's recommendation that Johnathon was a good moral risk, and that the proposed loan was serviceable from income from his turf business.
Johnathon had discussed with the NAB using the conditional finance approval to put in a bid up to $2.4 million. Johnathon had an imperfect memory of his conversations with Ms Calalang and where his and her versions differ the Court accepts her version. But there was some flexibility for him to bid more. He had access to approximately another $250,000 in cash which would have allowed him to bid to at least $2.65 million. Depending how creatively that cash were to be utilised and how he deployed his resources he may well have the capacity to bid up to about $2.8 million making any prospective contest with Frank highly competitive. Lack of finance was not the reason Johnathon did not bid.
But Frank's case overlooks the more fundamental inference from Ms Calalang's evidence that Johnathon and Rebecca's application to the NAB supports their case that they were sufficiently interested in bidding at the auction to apply for finance. It is likely to have taken an agreement with Frank and Elizabeth, to dissuade Johnathon and Rebecca from continuing in the course represented by their successful loan application.
[15]
Family Text Messages - Early to Mid-November 2020
Interactions between family members after the auction also assist in unravelling what happened just before the auction. These interactions took place between Frank and Lilly, Frank and Johnathon and Frank and Jason and point to Frank changing his mind about the terms on which he had secured Johnathon's silence at the auction.
The parties debated the meaning of several text messages sent between Frank and Johnathon, mainly in the month after the auction. At 6:22 pm on the evening of the auction Frank sent a message to Johnathon forwarding a copy of a text message from the agent, Raine and Horne at Richmond, to facilitate payment of the deposit of $250,100. Frank's covering text message was, "[c]an you pay I [h]ave no money". Frank is clearly making a joke with this message. Johnathon had interpreted Frank's text as a request for part payment in advance on the sale of No. 96. Johnathon replies "go dig your tins up", which Johnathon explained meant that he was not going to give Frank the deposit money.
What is not said in the text messages that night and the following day, 1 November, is as significant as what was said in them. The next day Frank sends a text message to Johnathon with a video attached showing a tree being removed with the text "who is pushing the tree out. Who's got a dozer". This was apparently a playful reference to organising heavy earthmoving equipment to clear trees on Stewart's Farm. It elicited no reply from Johnathon. But it Frank's case is correct Frank had just secured Stewart's Farm after refusing to go through with signing the deeds. This meant that Frank would have Stewart's Farm and No. 96, contrary to the discussions the previous day. If this were right, some degree of anxious text messaging from Johnathon would be expected but there is none.
Lilly was under the impression from what Johnathon and Frank had said to her on the telephone on 29 October that Frank would be discussing with her a lease of No. 216. That is what happened. The next day, Sunday 1 November Lilly recalls having a conversation with Frank to the following effect to confirm that Frank wanted a formal lease:
Frank: "I want a proper lease."
Lilly: "That's fine."
Lilly had the impression that Frank would be contacting a lawyer to prepare a lease. She was ready to sign it when it was presented to her. But Frank never arranged a written lease.
Instead, Frank began to surprise Lilly in abrupt text messages commencing on 2 November demanding to buy No. 216, by when intra-family discussion seems to have started about whether Frank might have to pay capital gains tax on the sale of No. 96. Lilly sent a text message to Frank:
"Frank ring the account[ant] to see about you get exception for primary [producer] for stamp duty I read something"
Frank then replied:
"Sell me your farm
U can have the rent
For life
From the use."
Lilly is adamant that the subject of Frank buying the property, No. 216, from her was not discussed before the auction. Her behaviour at the time is quite consistent with that account and the Court accepts that evidence.
At the same time Lilly began to observe Frank behaving in a very entitled way in relation to No. 216, driving his vehicles across the property and using her shed on the property, all without her permission.
Further text messages on Sunday, 1 November 2020 or Monday, 2 November 2020 (the evidence is unclear) between Frank and Jason reveal that Frank became concerned that he may have to pay capital gains tax on the sale of No. 96, a factor he had not previously anticipated. The relevant part of the exchange between himself and Jason was as follows.
Frank: "dad just told me will be paying tax is that true [?]"
Jason: "[What] tax stamp duty"
Frank: "On the profit I make on my farm selling it to Johno"
Jason: "You've lived there for two years you shouldn't have to."
Frank: "Better not"
Jason: "Tell him cash"
Frank: "Fuck cash, I'll ask account[ant] tomorrow [accompanied by an extract of accounting advice taken of the Internet]"
Jason: "All dad is a Fukien troublemaker no wonder mum left him"
Frank: "He keeps saying u to pay big tax. He even just ring me now"
This conversation continued with Jason giving his accountant's opinion that because Frank had lived in No. 96 and was now buying another farm that there should not be any CGT liability on selling No. 96. Frank gave a more pessimistic report on Monday 2 November 2020 that his accountant, a Mr Dunn, was saying that Frank selling No. 96was "a big mistake". Frank then made inconclusive statements consistent with him attempting to renegotiate arrangements that he had made with Johnathon.
These text messages indicate that Frank was surprised when he found out after the auction about the possibility of having to pay capital gains tax on the sale of No. 96. This was one of the reasons why Frank became disenchanted with honouring his obligations under the deed.
On Frank's case it was beyond question on 2 November that he and Rebecca were not selling No. 96 to Johnathon and Rebecca. It is inconsistent with his case therefore how he could write about "the profit I make on my farm selling it to Johno", a transfer he now says he well knew then was not obliged to make.
Elizabeth said that after the auction Frank said to her, he needed to do his research and go and see his accountant. She thought that her husband was "too rushed" to see the accountant before the auction. But according to Elizabeth, Frank was ultimately not concerned about the amount of capital gains tax that might have to be paid on the sale of No. 96 if the deal went through.
The deed required that a contract for the sale of No. 96 from the defendants to Johnathon and Rebecca would be provided to them before settlement of the auctioned property. But the contract never came. When Johnathon enquired with Frank about the contract for sale of No. 96, he was met with obfuscation wither than direct denial of an obligation to transfer No. 96. Frank's response throws further light on his state of mind the time.
On 4 November 2020 Johnathon sent a text message to Frank with the simple question "where's my contract". Johnathon says, and the Court accepts, that this text message is explained by Johnathon anticipating receiving a contract for sale for No. 96 but it had not yet arrived. Johnathon clearly seems to be prompting Frank in this text, which is consistent with his belief that Frank was bound to sell him No. 96. Frank's interpretation of this text message is as a belated request for a signed counterpart of the deed. But this is artificial and unpersuasive.
On 9 November in frustration at not receiving a contract for No. 96, Johnathon sent a text message to Frank saying "Give me Stuart's [Stewart's Farm]". By this time Johnathon was annoyed at the lack of progress on getting a contract on No. 96 and was prepared to renegotiate the deed by taking Stewart's Farm instead. Without addressing Johnathon's proposition, Frank fudges, replying to Johnathon merely with videos of equipment on No. 96.
On 11 November in response to Johnathon writing, "I want contract" Frank sends more videos of equipment on No. 96, apparently enjoying aggravating Johnathon with opaque memes. Frank's response here indicates that by this time he was beginning to prevaricate about honouring his and Elizabeth's obligation to sell No. 96. It was easier for Frank take refuge in ambiguity and not to answer the texted question from Johnathon than to deny he had signed the deed. This is hardly the posture of a man who had taken a principled position on 30 October in refusing to sign the deed because it did not reflect the true agreement.
The same day in a different text message conversation in response to Johnathon's question "why u no do it", which should be translated as "why have you not given me the contract for No. 96". Frank once more plays games and texts back, "where is my contract. What u worried about." This "contract" is a reference to the lease that the deeds assumed Frank would negotiate with Lilly. So much is clear from a slightly earlier text message Frank sent to Johnathon, "Where's my lease tell mum", showing that the subject of Lilly providing a lease was on his mind.
[16]
Post Auction - Communications with Mr Maait - 5 to 7 November
After the auction Frank and Elizabeth gave Mr Maait instructions to complete their purchase of Stewart's Farm. Johnathon telephoned Mr Maait on 5 November to enquire "where the matter will go from here" and whether Mr Maait was "still acting for Frank". The best evidence of this phone call is recorded in a memorandum of fees that Mr Maait sent to Frank and Elizabeth two days later and is set out below.
Mr Maait met with Frank and Elizabeth on 6 November 2020, principally to discuss the purchase. Perhaps prompted by Johnathon's telephone call, Mr Maait enquired of Frank and Elizabeth whether he was instructed to do "anything further" in relation to the deed he had prepared and the transaction it contemplated now that they were successful at the auction.
If Mr Maait took any written note of instructions from Frank and Elizabeth concerning the disputed deed on 6 November they were not in his file (Exhibit 3) and were not otherwise able to be located. But Mr Maait had a recollection of instructions from Frank on this occasion which the Court accepts as accurate. Mr Maait says that Frank instructed him on that day to the following effect:
"I didn't sign the deed, and I don't want you to do anything about it".
Mr Maait has no clear recollection of Frank saying more than this to him about the disputed deed on this occasion. The lack of anything else in the file relating to the meeting on 6 November supports Mr Maait's recollection that Frank gave instructions to Mr Maait do nothing on this occasion. Mr Maait had other snippets of memory of what Frank said to him on 6 November 2020 including that Frank said to him not to "worry" or do any work in connection with the disputed deed. He followed those instructions and took no further action in connection with the disputed deed.
The lack of any further discussion between Mr Maait and Frank and Elizabeth about the disputed deed on this occasion would be significant if Mr Maait definitely had a copy of the deed with Frank's signature on it. Frank's failure to call out at this early time that his signature on any then available deed was a forgery would tell heavily against him. But Mr Maait's record keeping in relation to this file are not sufficiently comprehensive for the Court to be able to infer confidently whether there was a copy of the deed in his file on 6 November. There is no positive evidence that the deed was there, but equally there is no evidence that it was not. One thing which weakly suggests that one counterpart of the deed might already have been in the file is that there was no discussion about obtaining it between Frank and Mr Maait. But finding the deed may not have mattered much if Frank and Elizabeth were not going to proceed with it. But Mr Maait continued to act for Frank and Elizabeth in relation to the acquisition of Stewart's Farm and the issue of the disputed deed was put to one side.
Mr Maait's recollection of these instructions from Frank to do nothing further about the disputed deed is also supported by the email that he sent the following day to Frank entitled "Your agreement with Johnathon and Rebecca Bugeja", the email, addressed to Frank and Elizabeth relevantly provided as follows:
I refer to previous correspondence and I note that this matter is now finalised. Accordingly, I attach my tax invoice for your earliest kind attention. I would appreciate your kind remittance at your earliest convenience by direct deposit into the account referred to in the passive voice.
…
I thank you very much for your instructions and I shall be only too happy to hear from you with any questions you might have.
Mr Maait sent an invoice with this email to Frank and Elizabeth dated 7 November. The invoice was addressed to Frank and Elizabeth, not to Johnathon and Rebecca. The invoice for professional fees described the events on 29 October as "meeting with client - Frank accompanied by his brother Johnathon". It then charged for professional fees for "meeting with you and advising and acting on agreement deed with Johnathon and Rebecca Bugeja". The invoice of professional fees refers to the email sent to the parties with the draft of the disputed deed and gives the following detailed description of the events of 30 October 2020.
"Telephone from Johnathon x 2, asked me to resend the deed which he had not received. I sent again to his Hotmail address and to business one and he acknowledged receipt. He'll get is signed now and send it back to me. I explained options for signing. Was having difficulty with printer.
Telephone from Elizabeth Bugeja - asked how best to sign the deed and where exactly. I advised her best she and Frank sign on the right side of the box when a (sic) their names appear at the bottom of the deed and that they contact Johnathon and his wife and have them signed the same document and then make copies and send me a copy in each of them retain a copy, but if all of that was not feasible, they could sign one document themselves and then Johnathon and his wife can sign the other document can exchange them. I suggested that Frank and Johnathon speak and sort out exactly how they want it done."
Mr Maait's invoice suggests that in his conversation with Elizabeth he encouraged her, on at least one signing scenario he was discussing - not the one that was followed - to "make copies and send me a copy". The residue of that idea may have stayed with Frank and Elizabeth and prompted them to return it to Mr Maait.
The invoice then refers to the 5 November telephone call from Johnathon to Mr Maait, referred to above, as follows:
"Telephone from Johnathon B - he advised that his brother Frank was successful at the auction has bought the farm that they spoke to me about. He wanted to know where the matter will go from he[re] and whether I am still acting for Frank. I said I am but I cannot tell you what's going to happen in relation to his agreement with Frank until I meet with Frank and his wife tomorrow. He said he would consult his own solicitor and get them to write to me."
Johnathon's telephone call to Mr Maait, as recorded here, is important at several levels. There is no discussion between them about obtaining a signed deed which makes it seem more likely that Mr Maait did have a copy of the deed. But leaving aside whether the deed was in Mr Maait's file at this time, the text of the conversation implies that Johnathon is assuming at this time that the transaction will proceed. He is seeking to know what will happen next. This appears to be generally consistent with Johnathon believing that Frank had signed the deed.
[17]
Johnathon's Solicitors Write to Mr Maait - 17 November
Mr Maait heard little else concerning the disputed deed until 17 November 2020. On that day he received an email from Christopher M Edwards Solicitors in the following terms:
Dear Sirs
RE: Bugeja purchase from Bugeja - pursuant to Deed for Proposed Sale
We act for the Johnathon and Rebecca Bugeja in relation to their purchase from your clients, Frank and Elizabeth Bugeja, pursuant to the Deed for Proposed Sale dated 30 October 2020 (copy attached).
Please kindly forward a copy of the Contract for Sale for our review.
We note that pursuant to the Deed for Proposed Sale, your clients have agreed to enter into a Contract for Sale with our clients before completion of their purchase at 214A & 214B Yarramundi Lane, Agnes Banks.
We look forward to receiving the Contract for Sale at your earliest possible convenience.
Kind regards
Lisa Render
There is no sign in the Christopher Edwards letter of 17 November that Johnathon or Rebecca anticipated that Frank was going to say that he did not sign the deed. The letter merely maintains an agreement existed and forwards a signed copy.
By this time Mr Maait had sent his final invoice to Frank and Elizabeth. But he acted quickly when he received the Christopher Edwards email that arrived at 11:47am that day. At 11:55am Mr Maait forwarded the Christopher Edwards email to Frank and Elizabeth saying to them "I have just received this email and attached deed from Johnathon's lawyer please let me know your instructions on this as soon as possible. I will not do anything on this until I have your express instructions first." Mr Maait's immediate response and his caution would indicate he was conscious that the Christopher Edwards email with the signed disputed deed attached might require re-evaluation of the instructions Frank and Elizabeth had given him at the conference on 6 November. What instructions Frank and Elizabeth gave Mr Maait between 17 November and 20 November 2020 is not clear, but on the latter date, Mr Maait wrote back to Ms Render at Christopher Edwards declaring "I do not hold any instructions to act in this matter".
Mr Maait was not given instructions to take any active role in contesting the validity of the disputed deed including denying that Frank had signed it. This was a very timid response to the information Frank then had: on Frank's case his brother Johnathon was propounding a version of the disputed deed with a forgery of Frank's signature.
Mr Maait had little memory of Frank's instructions at this time. But his email response to the Christopher Edwards letter of 17 November is consistent either with Frank not asserting to his own lawyers that his signature had been forged on the disputed deed, or Mr Maait advising Frank that it was better to leave the subject alone. Mr Maait had no memory of Frank asserting to him that Frank's signature had been forged. But if the signature had been forged this is the time for Frank to deny it firmly with the benefit of Mr Maait's experience. The dangers of not denying it early were manifest.
Apart from the legal wisdom of a denial, it is strange that Frank was not so offended that his brother was propounding a forged document against him, that he did not immediately expose the forgery. There was every advantage to him in revealing the forgery immediately and no credible reason for him not to do so. Instead, Frank meekly withdrew, which was consistent neither with his character nor his case.
Nor did Frank directly confront Johnathon or Joseph upon realising that his brother or his father had forged his signature. It is to be expected that such disgraceful conduct would warrant an immediate intra - family rebuke. The Frank that the Court saw in the witness box was not the kind of man who would hold back for a moment from criticising his brother Johnathon. His oral evidence is replete with anti- Johnathon vitriol.
When questioned about his silence in the face of his discovery that Johnathon or his father probably forged his signature, Frank claimed he did not raise the alleged forgery with his family members, because "I didn't talk to them anymore". But that is contradicted, for example, by the extensive text messages between them in November 2020. Frank says that he told his solicitor Mr Maait that his signature had been forged. But Mr Maait does not recall that. None of this is the natural reaction of an innocent victim of a forgery.
Nothing else happened on this file in Mr Maait's office for the next eight months and on 17 June 2021 the file was archived in accordance with normal office procedures.
[18]
A Conversation at a Family Birthday Party - December 2020
About 5 to 6 weeks after the auction The Bugeja family gathered at the Richmond Club for a niece's birthday party. By this time tensions were high between Johnathon and Frank, because of Frank's refusal to issue a contract for sale for No. 96. Johnathon and Frank did not talk at this birthday party.
But Rebecca made a point of speaking to Elizabeth, nevertheless. Together with Jason's wife, Seda, they conversed about many subjects. The subject of Stewart's Farm came up. The Court accepts Rebecca's evidence that a conversation to the following effect took place between them:
Rebecca: "How's the [Stewart's] farm going it looks nice, its all cleared"
Elizabeth: "Frank is stressed, cleaning. I wish we never got the farm. He will hand our farm over, but he just needs time. Oh, we put a lot of work into that house [No. 96] you know."
Rebecca: "We're going to pay you for it."
Elizabeth here admits that she and Frank perceived some obligation to hand over No. 96. Such a statement cannot be reconciled with their other evidence that they had no obligation to hand it over because no agreement had been reached with Johnathon and Rebecca. It is also inconsistent with Elizabeth's own account of her knowledge of her husband's refusal to sign. It might perhaps be consistent with her changing her mind and expressing a moral obligation to hand over No. 96 after her and Frank's success in the auction. But she did not explain it this way in her evidence.
Elizabeth denies saying to Rebecca that she regretted the decision to purchase Stewart's Farm and denies signalling to Rebecca that she and Frank would sell No. 96 to Rebecca and Johnathon. But the Court prefers Rebecca's evidence on this issue.
[19]
Frank's Admissions - November 2021
Frank and Jason had several discussions after the auction about what had happened. One of these that Jason remembers occurred in November 2021 in their shared driveway between No. 96 and No. 106. The Court accepts Jason's evidence that Frank said to him, "I can't believe I listened to you, mum, and dad. I should never have signed the deed." And in the same conversation Frank also said, "Oh you guys fucked me over by getting me to sign the deed." And yet again "I don't want this farm now. I wish I never signed the deed."
In addition to these admissions by Frank that he had signed the deed, Jason says, and the Court accepts, that apart from the affidavit sworn in these proceedings Frank has never told him [Jason] that: Frank did not sign the deed; that he, Frank, did not do a deal to secure Johnathon not to bid at the Stewart's Farm auction; or, that Jason and Joseph were lying when they said that they witnessed Frank signing the deed.
[20]
Frank Confirms His Source to Lilly - Mid 2022
A conversation between Lilly and Frank in about mid-2022 indicates that Joseph was one source of Frank's information about Lilly selling No. 216 to Frank. The Court accepts Lilly's evidence that about mid that year Elizabeth was becoming anxious about the conflict between Johnathon and Frank told Lilly that she "needed to fix this". Mystified why she had any responsibility to fix a problem that she did not perceive was of her creation she telephoned Frank and had the following conversation with him.
Lilly: "Frank, what's Elizabeth talking about saying I need to fix this?"
Frank: "Dad told me you would sell your property to me."
Lilly: "He can say what he wants but it's my property, not his."
Frank: "He thinks it is his. He said you will sell it to me."
Not only did Joseph float with Frank the idea that Lilly might sell No. 216 to him but Joseph probably also suggested that Frank might be able to buy No. 216. But like all the family, Frank was aware of the hostile relationship between Lilly and Joseph. He knew Joseph could not speak for Lilly. This was a good reason for Frank and Johnathon to make the phone call on the way to Mr Maait's office for Frank to get some kind of direct assurance that he could use No. 216 in conjunction with Stewart's Farm.
And he did get an assurance that was sufficient for him to proceed. Frank was assured that he could use No. 216. But he was not given an assurance that he could buy No. 216. He was content with what Lilly told him and gave instructions to Mr Maait that were consistent with what Lilly had told him.
[21]
The Provenance of the Counterpart Deeds, Exhibit 1 and Exhibit 2
These reasons now digress to gather related evidence about the provenance and features of the two counterparts of the deed that became Exhibit 1 (the inkjet counterpart) and Exhibit 2 (the laser counterpart). The distinguishing features of these two counterparts and the respective sources from which they were produced are components of the Court's analysis of what happened on and after 30 October 2020.
Production of the Counterparts. The starting point for analysis is the tender of Exhibit 1 and Exhibit 2. At pre-trial directions hearings the Court asked the plaintiffs and the defendants to bring to Court for tendering at the hearing the original counterpart of the deed that each of the plaintiffs and the defendants then had in their possession. On the second day of the hearing, 19 September 2023, the Court received into evidence the two original counterparts which became Exhibit 1 and Exhibit 2 and placed them in plastic sleeves. The production of these original counterparts to the Court was accompanied by concessions about their provenance.
As to Exhibit 1, Mr Moutasallem produced this original counterpart on behalf of his clients, Frank and Elizabeth. He conceded that this was the counterpart deed in Frank and Elizabeth's possession at the time the Court made its request for production of any original counterparts from the parties. The concession was qualified by the statement that one explanation for it being in their possession was that it may have come to them from Mr Maait's office. But the concession did not include any statement as to how Exhibit 1 came to be in Mr Maait's office. That was left for later exploration with Mr Maait.
Exhibit 1 may be distinguished from the other original counterpart in two obvious ways: (1) it has no cover sheet and the four pages of the document include the same page, being page 2 of 4, twice, and it omits page 3 of 4, and (2) it is printed on an inkjet printer, as is explained by the handwriting expert, Ms Melanie Holt. Exhibit 1 will continue to be referred to throughout these reasons either as the inkjet counterpart or now as Exhibit 1.
Exhibit 1, the inkjet counterpart, was marked by Johnathon during his evidence not long after was admitted on 19 September 2023. Johnathon marked Exhibit 1 with yellow post-it notes to highlight indentations on the paper which he said were consistent with it being signed on the tray on the back of a utility motor vehicle. To assist in confirming the identity of Exhibit 1, those post-it notes were (1) numbered 1, 2, 3 and 4 on the outside of page 4 of 4 with the words handwritten by Johnathon, "lines in different directions" on one of those post-it notes and (2) were not numbered on the inside or topside of page 4 of 4, the signature page.
As to Exhibit 2, Mr Jacobs produced this original counterpart of the deed, on behalf of his clients, Johnathon and Rebecca describing it as "our counterpart". It was noted in the transcript as being the original deed produced by Johnathon and Rebecca.
Exhibit 2 may be distinguished from the original inkjet counterpart in two ways: (1) it consists of five pages, having a cover sheet and four subsequent pages, numbered consecutively 1 of 4, 2 of 4, 3 of 4, and 4 of 4, and (2) it is printed on a laser printer, as is explained by the handwriting expert, Ms Melanie Holt. Exhibit 2 will continue to be referred to throughout these reasons either as the laser counterpart, or now as Exhibit 2.
Exhibit 2 was also marked with post-it notes later in Johnathon's evidence. Johnathon placed yellow post-it notes on the front cover sheet numbered 1 of 4 and 1, 2 and 3 and on the back of page 4 of 4, the signing page, post-it notes numbered 4, 5 and 6, are all numbered by hand to indicate dirt stains that Johnathon says are consistent with the document being placed on the back of a utility at the time of signing. On the front of Exhibit 2 was also a post-it note marked with a handwritten "!" mark, which Johnathon says is consistent with an indentation created at the time of the signing on the back of the utility.
Mr Maait Surrenders His Stored Counterpart - November 2021. Mr Maait is uncertain about whether, and if so when, he received and held one of the counterparts of the disputed deeds. The uncertainty as to this first emerged when he was served with a subpoena from Christopher Edwards to produce documents from his archived file. Ms Alyce Cooper of Christopher Edwards, acting for Johnathon and Rebecca, had a conversation with Mr Maait in the week commencing Monday 15 November 2021 the content of which she describes in her email to him of 22 November 2021 as follows:
I refer to our telephone conversation last week wherein you confirmed you held the Original Deed that you produced a copy to the Court.
Mr Maait replied to Ms Cooper's email of 22 November 2021 on 23 November 2021 at 8:43 AM, indicating he had ordered the retrieval of the document from storage at Ms Cooper's request but had been advised by "your opponents" that Ms Cooper did not have their consent to the retrieval, so he cancelled it. At 9:18 am Ms Cooper clarified that she was not asking for the original deed, just a copy, and that she was happy to subpoena the original deed if required.
Mr Maait replied to her at 9:39 am, saying "I will order the deed from storage today". He indicates that it is up to the solicitors then acting for Frank and Elizabeth to agree with Ms Cooper about what happens to the deed when it was retrieved from storage.
Then on 24 November 2021 Mr Maait wrote to Ms Cooper saying "I have now retrieved the original deed from storage. I await your and your opponents' further advices." This is a contemporaneous document in which Mr Maait declares that he has retrieved the original deed from storage and is a reliable indicator that an original counterpart of the deed was kept by Mr Maait and was retrieved from his storage facility.
About two weeks later Christopher Edwards arranged for this original counterpart deed to be collected from Mr Maait's office. On 7 December 2021 Ms Kylie Ann Esky, an employee of Christopher Edwards collected an original counterpart deed from Mr Maait's office. Ms Esky signed an acknowledgement on a copy of the deed that was collected and left it with Mr Maait. The acknowledgement is partially legible but after Ms Esky's name the acknowledgement reads, "hereby acknowledges collecting the original Deed" this is followed by the date 7 December 2021 and Ms Esky's signature. The copy of the deed upon which the acknowledgement is placed is in the form of Exhibit 1, the inkjet counterpart. This a copy of the counterpart that Mr Maait had available from storage.
But a question arises how Mr Maait came to hold Exhibit 1 in storage. Frank denies giving it to Mr Maait. Under subpoena Mr Maait searched his security documents register, which nowhere records the receipt of the original Exhibit 1 inkjet counterpart, or indeed any counterpart, into Mr Maait's security documents.
Mr Maait inferred there was little doubt that at some stage the original inkjet Exhibit 1 signed counterpart of the deed came into his possession, but he has no independent memory of how it was received or of personally receiving either the original or a copy deed from anyone.
That original was either given to him by Frank, or by Johnathon, or by a third party on their behalf. The evidence is scant as to exactly what happened. Despite Frank and Elizabeth's denial, it is more probable that Frank gave it to Mr Maait. In the Court's view for the reasons which follow it is also possible, but far less probable, that Johnathon took it in and gave it to Mr Maait.
Finally, Mr Maait acknowledges receiving a scanned copy of the Exhibit 2 laser counterpart deed with the Christopher Edwards email of 17 November 2020. But he never had the original of the Exhibit 2 laser counterpart.
[22]
Inferences from The Counterparts and their Production
On Johnathon and Rebecca's account of events, a counterpart of the deed was left with Frank and Elizabeth, whilst a second copy was taken home to Rebecca for her signature. Johnathon and Rebecca did not see the original counterpart they left with Frank and Elizabeth again until after these proceedings commenced.
On Frank and Elizabeth's version of events, their copy was left on the tray of the utility vehicle, and they did not see it again. On their version Joseph might have picked it up and taken it away. On their version they did not pick up or retain any copy of the deed on 30 October.
The form of the original counterparts and the source of their production to the Court fit consistently with Johnathon and Rebecca's account of what happened on 30 October, as follows.
On 30 October 2020, Johnathon printed out the 1.54 pm version of the inkjet counterpart Exhibit 1. Rebecca signed it in their kitchen. Johnathon then took it and drove to Frank and Elizabeth's house at No. 25, briefly stopping at Joseph's house to ask Joseph to accompany him to Frank and Elizabeth's house to witness their signatures.
Johnathon and Joseph arrived together at Frank and Elizabeth's house. Johnathon saw Frank in the shed. Frank then sent his son Michael into the house to ask Elizabeth to come outside. Elizabeth came out to the shed with the laser counterpart, Exhibit 2.
The parties then signed both the inkjet and laser counterparts together on the utility tray, as earlier indicated in these reasons, and Joseph witnessed the signatures on both deeds. Johnathon then took home the laser counterpart, Exhibit 2, because it had not yet been signed by Rebecca. Johnathon then had her sign it.
Johnathon kept the laser counterpart, Exhibit 2, but by no later than mid-November he gave it, signed by Rebecca, to his own solicitors, Christopher Edwards. They kept the original and scanned it into a PDF document and attached the scanned copy to their email to Mr Maait of 17 November 2020. Christopher Edwards retained Exhibit 2 until it was produced to the Court.
Frank kept the inkjet counterpart, Exhibit 1, which Johnathon had brought to the meeting and which had already been signed by Rebecca. Unlike the laser counterpart Exhibit 2 which she had already signed before walking out of the house at No. 25 to greet Joseph and Johnathon, Elizabeth signed the inkjet counterpart Exhibit 1 in front of them.
After the signing Frank and Elizabeth kept the inkjet counterpart Exhibit 1, which was already signed by Rebecca and did not have to go back with Johnathon. Frank gave it to Mr Maait probably by no later than the time Frank conferred with Mr Maait on 6 November 2020. This conference certainly gave Frank the opportunity to give Exhibit 1 to Mr Maait, although Mr Maait did not record receipt of Exhibit 1 at that time. The original of Exhibit 1 was collected from Mr Maait in November 2021 and given by Christopher Edwards to the solicitors acting for Frank and Elizabeth, from whose possession it was produced to the Court on 19 September 2023.
It is possible but less likely that Johnathon kept both the executed copies and took them back home and he delivered Exhibit 1 to Mr Maait and kept Exhibit 2. But Johnathon was not Mr Maait's client. And there is no evidence either from Johnathon or Frank that Johnathon was authorised and asked to give anything to Mr Maait on Frank's behalf. Nor is there any evidence other than something Joseph said that this is what Johnathon did. Frank's case seeks to rely upon parts of Joseph's evidence to suggest that Johnathon delivered the inkjet counterpart of the deed to Mr Maait. But the Court is not confident Joseph was attending to and understood these questions rather than just speculating. There is thus little evidence to displace the Court's conclusion that Frank supplied the original executed inkjet counterpart Exhibit 1 to Mr Maait in about the first week of November 2020.
Both Johnathon and Frank each had much to gain on the afternoon of 30 October from having executed counterpart deeds in their hands, signed by the other. Frank wanted to eliminate a bidder who might cost him an extra $300,000 to purchase Stewart's Farm at auction. Johnathon wanted to secure No. 96. It is likely that they would have both kept an executed copy of the deed to protect their respective positions.
Johnathon still did not really trust Frank. Johnathon had said as much to Frank on the way to Mr Maait's office on 29 October. The Court accepts Johnathon's account of the following conversation in the car.
Frank: "What the hell do we need a lawyers for. Don't you trust me?"
Johnathon: "No I don't trust you, if you win, you get what you want, I need to make sure I get what I want."
Nor did Frank trust Johnathon. Frank wanted to reduce the competition to successfully bid for Stewart's Farm, which displaced his reluctance to sell No. 96.
But it seems unlikely that Frank would have delivered the inkjet counterpart Exhibit 1 to Mr Maait, if Frank then knew he was going to deny that he had signed it. This consideration raises the possibility that Johnathon may have delivered Exhibit 1 to Mr Maait. But Frank did not expressly deny that he had signed both counterparts until later. It is more likely Frank gave the counterpart to Mr Maait before he decided what position he was going to take on the deed, which he only did when he developed regrets about selling No. 96, which he described as "a very good farm".
Frank and Elizabeth's version of events has two major remaining gaps that are difficult to bridge. The first major gap on their version is that it is difficult to understand how the laser counterpart, Exhibit 2, by then signed by Elizabeth but not Rebecca, found its way back from the utility on No. 25 to Johnathon, who undoubtedly kept it and gave it to Christopher Edwards. Joseph or Johnathon picking up the deed from the utility tray is implausible. It would require Joseph or Johnathon to have come around to No. 25 and serendipitously stumbled upon the laser counterpart, or surreptitiously found the laser counterpart, even though they had not been present when Elizabeth placed it on the utility tray. And they must have improbably managed to pick it up and take it away from No. 25 either without being noticed by Frank, or without opposition from Frank, who did not see them. Then Johnathon and Joseph must have formulated some devious plan to forge Frank's, signature. Joseph had been a farmer all his life and came across to the Court as incapable of such Machiavellian calculation.
It is also unclear whether Frank was out in the shed when Elizabeth alleges that she brought out the signed deed and put it on the tray of the utility. The evidence is quite contradictory at exactly the point that one might expect it to be, if it were wrong. Elizabeth says Frank was there in the shed on No. 25, and she put the deed down his presence. But he firmly asserted in cross examination when it was suggested that Johnathon and Joseph arrived at No. 25, "No. Must be invisible, because I didn't see them." He was quite definite that he did not see Joseph and Johnathon at any time that he saw Elizabeth on No. 25 that day. He had "no idea" if she put it on the utility. He claimed to have gone back to No. 25 only to get some tools. But either way Frank and Elizabeth's evidence does not explain what happens to the laser counterpart of the deed and how it undoubtedly came into the possession of Johnathon. If it just disappeared it might be thought that it would worry him that a document signed by Elizabeth might be misused. There is no evidence that he ever asked Johnathon or Joseph whether they had seen it, or even that he had looked for it.
But even if Joseph's or Johnathon's presence late on 30 October at No. 25 can be explained and one of them did indeed find the laser counterpart bearing Elizabeth's signature, it is difficult to make any sense of the events of the next 24 hours that is consistent with Frank and Elizabeth's case. Given that he had been so persistent in seeking to have the deed signed on Frank and Elizabeth's case, Joseph's likely next reaction upon finding the laser counterpart unsigned by Frank would probably be to take the signed deed straight into Frank and Elizabeth's house and ask Frank to sign it once more. Secondly, Elizabeth and Frank might be expected to be interested to see who had collected Exhibit 2 from the utility as it had disappeared. But they could not give any account of what happened to it after it was placed on the utility and never asked Joseph or Johnathon or anyone what had happened to a document that was signed by Elizabeth.
The second major gap on Frank and Elizabeth's version was mentioned earlier in these reasons: how did Elizabeth's signature came to be on the inkjet counterpart, Exhibit 1? Elizabeth's evidence evolved in relation to her whether her signature is on both counterparts of the deed. In her second affidavit, which slightly revised the order of events in her first affidavit, she looked at the inkjet counterpart produced by Mr Maait, Exhibit 1, and said that the mark purporting to be her signature "does not look like my ordinary signature" and she deposed that she did not believe it was her genuine signature. But when she was shown the originals of the counterparts Exhibit 1 and 2 she agreed that the signature on Exhibit 1 "looks like" her signature and she agreed that the signature purporting to be hers on Exhibit 2 was indeed her signature. Based on this evidence, throughout these reasons the Court has reasoned on the basis that both signatures are her genuine signatures.
Elizabeth says that she brought Exhibit 2 out and placed it on the utility. In her second revised affidavit she talks about her printing out a second copy of the deed because she thought she may have signed the first copy incorrectly, and she then says she placed her signature on the second copy of the deed that she had printed out. Her evidence can be interpreted as suggesting she may have brought two signed copies of the deed out to the utility. But these were counterparts printed by her. On her version she never saw Exhibit 1, which was the inkjet version printed by Johnathon. She does not admit Johnathon brought anything to her for her to sign. Nor does she say that Joseph had a document signed by Johnathon for her to sign. Frank and Elizabeth's version is yet to explain how her signature came to be on the inkjet counterpart Exhibit 1 that ended up in Mr Maait's office. Frank and Elizabeth could never resolve this conundrum at the heart of their case.
One footnote should be mentioned at this point. Elizabeth attaches an unsigned copy of the 12:28 PM deed to her first affidavit. She would have had this in soft copy form at the time she saw her affidavit. It may indicate that she had given any signed copy to Mr Maait by that time, although no clear inference can be drawn from her using this unsigned copy in the proceedings.
[23]
The Forensic Handwriting Evidence:
The Court heard evidence from Ms Melanie Holt, a Forensic Document, Handwriting, and Signature Examiner. Ms Holt's testimony was thorough and generally apt to be accepted by the Court. But the difficulty in this case is that the other evidence, both direct and circumstantial, strongly points to the contrary of her expert evidence and the Court has reached the view that it should not accept her evidence in the face of the other evidence.
Authority makes clear that expert handwriting evidence should be evaluated together with the remaining evidence in the proceedings and should not be given a dominant role to the point where it might lead to a misapprehension of the weight of the remaining evidence, including circumstantial evidence about the genuineness or otherwise of disputed handwriting: Gawne v Gawne (1979) 2 NSWLR 449 at 453 ("Gawne") see also JD Heydon, Cross on Evidence, 5th Edition, Butterworths, [39105]. Gawne and cases like it illustrate that it may be a departure from sound reasoning to accept expert handwriting evidence as valid and then see whether the other evidence is sufficient to enable a conclusion to be drawn which is contrary to the expert handwriting evidence.
Other authorities also warn that expert handwriting evidence should be approached cautiously where the expert does not know the precise physical conditions under which the signature was written: Sumner v Booth (1974) 2 NSWLR 174 ("Sumner"). Here the Court has found that Frank's signature was probably executed on the tray of a utility. But the precise nature and strength of the backing beneath each signature and between the paper and the utility tray at the time that each signature was written, is uncertain.
Ms Melanie Holt gave expert handwriting evidence for Frank and Elizabeth. She provided two reports, the first dated 15 September 2021 and the second is dated 23 March 2022. The explanation for the two reports is that the first report of September 2021 was undertaken with respect to the laser counterpart (Exhibit 2) which was apparently the one that was available at that time as an original to Frank and Elizabeth. The second report of March 2022 was undertaken with respect to the inkjet counterpart (Exhibit 1), which was by then available for analysis by Ms Holt.
In preparation for her first report Ms Holt had specimen signatures of Frank and was asked to compare them with the questioned signature "F. Bugeja" on a document which she described as the "questioned deed" which was the five-page laser counterpart, Exhibit 2. Ms Holt concluded in her first report that noting certain limitations and assumptions her opinion was that there is "moderately strong support" for the hypothesis (described by her as "the alternative hypothesis") that someone other than the writer of the specimen signatures signed the purported "F Bugeja" signature on the questioned deed rather than the primary hypothesis that the writer of the specimen signatures signed the questioned deed.
In preparation for her second report, Ms Holt was given several specimen signatures of Frank and was given what she described as the "second questioned deed" which was the four-page inkjet Exhibit 1. Ms Holt concluded in her second report that noting certain limitations and assumptions her opinion was that there is "moderately strong support" for the hypothesis (described by her as "the alternative hypothesis") that someone other than the writer of the specimen signatures signed the purported "F Bugeja" signature on the second questioned deed rather than that the writer of the specimen signatures signed the second questioned deed.
In both reports Ms Holt's logic was that there were several unaccounted-for pen strokes and re-touches in the questioned signatures that were not observed in the specimen signatures and that the writer of the questioned signatures had misinterpreted the specimen writers motor habits and movements.
Ms Holt was not of the opinion in either her first or second report that the writer of the "F Bugeja" signature on Exhibit 1 was attempting to disguise their signature by hiding their normal writing habits. She thought that the nature of the divergences she observed between the specimen and the question signatures on Exhibit 1 and Exhibit 2 did not fit well with the general expectations of attempted disguise. She concluded that the question signature was an overall attempt to look like the specimen signatures but was divergent in significant aspects.
But despite her considerable expertise in the professional presentation of her evidence, several factors lead the Court to doubt Ms Holt's conclusions, quite apart from the strong evidence to the contrary already considered in these reasons. Ms Holt's judgment was always no more than one of "moderately strong support", indicating a degree of probability short of certainty. Parts of her report and her oral evidence tend to support Johnathon and Joseph's account. The parts of her evidence that are used to undermine their account are attended by uncertainties of various kinds. These matters are discussed below.
The same pen for Frank's Joseph's and Elizabeth's signatures? To the untrained eye, there appear to be noticeable similarities in the ink pattern laid down by the pen, or pens, used by the signatures for Frank, Elizabeth, and Joseph on both Exhibit 1 and Exhibit 2. The application of the ink for those signatures is consistent with a common defect in which insufficient ink being applied between two essentially parallel dark lines representing the outer boundaries of the pen's writing surface but with no ink applied between the dark lines. And there are similar defects that evident in writing of Joseph's name as a witness on both deeds. Ms Holt notes that Johnathon and Rebecca's signatures are in a different ballpoint blue pen, which is consistent with their account.
Ms Holt said little about this in her reports but she was cross-examined about this feature of the three signatures and the writing of Joseph's name as a witness. She agreed that they "look similar, and some of the same issues were being observed". Beyond this she was not prepared to say that the same pen or the same ink were used but look to her to be a "similar kind of ink". She inferred that more detailed studies would be required, for example to compare ink types, studies that she had not undertaken.
Ms Holt's expert observations currently is consistent with the evidence of the untrained eye that a pen exhibiting the same ink flow defect, possibly a fibre tipped pen was used for the signatures of Frank, Elizabeth, and Joseph on both documents. This is strong circumstantial evidence that they were signed at the same time by Frank and Elizabeth and Joseph, which is consistent with Johnathon's narrative and inconsistent with both Elizabeth's story of a separate signing inside the house and Frank's story of not signing at all.
Indentations on the Paper of Exhibit 1 and 2. Ms Holt examined the indentations on the paper, to see if she could see if one page of the deed had been signed over the top of another and left an indentation. Her examination (Exhibit 4) did not show that had occurred. All that can be said about that is that when the documents were signed on the tray of the utility that pages other than the signing pages of each counterpart do not seem to have been used as "backing" behind the page being cited above the checker plate hatching of the tray.
But evidence about exactly how the pages of the counterparts were configured when signing occurred is vague, as one might expect. It is one thing for the witnesses to see the signing taking place. It is another for them to take in exactly how many pages were behind the page being signed or whether some of the backing was used for the signing. The Court does not necessarily expect Johnathon or Joseph to have a good recollection of that aspect. Neither of them did but that is not a reflection upon the overall quality and credibility of their evidence. It just means there is very little evidence about this. Ms Holt's evidence can be accepted that there were very few indentations disclosed by exhibit D. But that does not prevent acceptance of Johnathon and Joseph's evidence about the signing.
Frank's emotional equilibrium when signing. Ms Holt was not called upon to assess the broader issues in the case that are presented to the Court. But at times her cross examination took her into areas that even were at the invitation of the cross examiner, either speculative or at the very periphery of her expertise. One of these was whether the form of Frank's signature might have been affected stress that he was under at that time.
The Court accepts that on the afternoon of 30 October 2020 that Frank had encountered a pump failure on his property, and he was having great difficulty in rectifying the failure and he was rushing around trying to fix that issue the same time as the deed was being discussed between he and Elizabeth. Apart from evidence such as annoyed text messages that Frank would send - for example in relation to flooding on his farm from Lilly's place in March 2021 - the Court observed his demeanour. He was a person who could become quite overtly agitated when stressed or frustrated by events beyond his control.
Ms Holt agreed that signatures are dynamic and that various factors can influence the way they are written including emotional state of the writer of the signature. But Ms Holt did not seem to think that such agitation would have much effect upon his signature, and she did not think that the differences between the specimen signatures on the question signatures could be explained by the signer being in a rush. In the Court's view whether Frank's established state of agitation would influence his signature, must depend upon among other things the degree of agitation was under and whether in his individual case that was likely to influence of his signature, a matter which is very difficult to discern with any accuracy here. That task is especially difficult in this case, because of the uncertainty of the potentially compounding effect of signing on the checker plate tray of a utility vehicle, an uncertain writing surface of the best of times.
Checker plate indentations on Exhibit 1 and Exhibit 2. The Court had the benefit of both the descriptions of witnesses and photographs that clearly showed that a steel crosshatching or "checker plate" raised pattern was evident in the steels tray at the rear of the utility in question. This pattern of forging steel may assist in preventing slippage in transit during the transportation of goods. But on at least Johnathon and Joseph's versions of events both counterparts of the deed was signed over the checker plate.
This was another area where Ms Holt's cross examination invited her to the very periphery of her expertise. There was debate between the parties as to whether Exhibit 1 and Exhibit 2 showed evidence of indentations from being pressed against the checker plate on the utility tray during the signing process. Johnathon was asked to identify on each of Exhibit 1 and 2 where he said that such indentations had occurred. He marked them in support of his case and the post-it notes are still on the original exhibits. He also identified areas where he said that there was dirt on the exhibits.
Leaving aside Ms Holt's evidence for a moment, to the untrained observer there appear to be some minor marks that might be consistent with being placed against checker plate. And it does appear to be some dirt or dust or impurities in places where Johnathon pointed such features out. But no scientific analysis was done comparing the placement of these marks with the known measurement of the checker plate pattern on the utility tray. Ms Holt's evidence did not support a checker plate pattern being noticeably indented into the paper by the Exhibit 1 and Exhibit 2 such that she could say that either counterpart had been pressed against checker plate when signing occurred. She could not discern such indentations even to her touch. She offered the view that there was no support for the documents being signed on the back of a utility.
In the Court's view there is too much uncertainty about how exactly the counterparts were configured at the time of signing to draw any reliable views as to whether Johnathon is correct, or about what dirt or indentations are present, or whether Ms Holt's evidence that no indentations were found is a significant feature. So much depends upon how the counterpart was held, how many sheets were below the signing page, how heavily the signing party pressed, whether other documents were underneath the counterpart being signed signing page and similar matters. The Court concludes for these reasons that Ms Holt's evidence about these features of the two counterparts does not provide a basis to reject Johnathon's and Joseph's account of the signing.
Elizabeth's signature and Frank's pen lifts. Ms Holt noted in her report that Elizabeth's signature exhibited unusual "pen lifts" (the lifting of the pen in an unaccustomed place during writing), which were not part of Elizabeth's normal writing habit. This observation would tend to throw a doubt upon whether Elizabeth's signature was genuine. But the Court accepts in part from Elizabeth's own evidence that has signatures on both counterparts were hers, as she did not in the end maintain any reservations about them. Thus, as the example of Elizabeth own signatures shows, it is possible for a genuine signature to contain "unusual pen lifts".
Mr Jacobs submits with some force on behalf Johnathon and Rebecca that this considerably diminishes such support that Ms Holt seeks to obtain for her doubts about the genuineness of Frank's signature from the unusual pen lifts in the form of his signature. The Court agrees that if unusual pen lifts can be reconciled with Elizabeth's genuine signature, they are unlikely to be decisive in rejecting the genuineness of Frank's signature. And the quality of the samples provided to Ms Holt are another factor that may well have made this pen lift comparison more difficult.
In conclusion on the issue of the expert evidence, Johnathon and Rebecca sought to retain their own handwriting expert, Mr Dubedat. He examined Exhibit 1 and Exhibit 2. But Johnathon and Rebecca did not serve or seek to rely upon rely upon any report from him in their case. The defendants asked the Court to draw a Jones v Dunkel [1959] HCA 8; 101 CLR 298; 32 ALJR 395 inference against Johnathon and Rebecca for their failure to call Mr Dubedat. The inference should be drawn. It can be accepted that Mr Dubedat's evidence would not have assisted their case and the Court can more confidently draw other available inferences against the plaintiffs' case by reason of his absence: Payne v Parker [1976] 1 NSWLR 191 at 201 per Glass JA. But that does not change the Court's conclusions about the expert evidence.
[24]
Analysis
The Court has concluded that contrary to the position they have taken these proceedings that Frank and Elizabeth signed both counterparts of the deed on 30 October. The question now arises as to what relief they should be granted. The plaintiff's principal claims are in contract, for misleading and deceptive conduct, in equitable estoppel, and based on other forms of relief.
Breach of Contract. Frank and Elizabeth are in breach of the contract represented by the deed. They were the successful bidders at the auction. They were therefore obliged by clause 2 (b) of the deed prior to settlement of the purchase of Stewart's Farm to contract with Johnathon and Rebecca to sell No. 96 under the 2019 standard form Law Society of New South Wales and the Real Estate Institute of New South Wales contract for the sale of land, on the price per acre and price for improvements provided for in clause 2(b)(ii) and (iii) together with Frank and Elizabeth's water licence for No. 96 as provided for in clause 2(b)(iv). In breach of contract, they failed to do this prior to settlement of their purchase of Stewart's Farm. The breach occurred no later than the date of settlement of Stewart's Farm. The precise date of breach may be the subject of further submissions.
Frank and Elizabeth's breach of contract will sound in damages unless the Court grants the remedy of specific performance. Some special considerations relevant here to the grant of the remedy of specific performance are dealt with below.
Misleading and Deceptive Conduct. Both Johnathon and Rebecca say that if Frank and Elizabeth had not signed the disputed deed that they would have attended the auction and bid against Frank and Elizabeth for Stewart's Farm. Johnathon agreed in cross examination that "the only reason [he] abstained from bidding was that [he] had a signed deed", signed by Frank. Mr Moutasallem used this answer to ground a submission that Johnathon and Rebecca could not maintain a misleading and deceptive conduct or estoppel case, in the alternative to contending that Frank and Elizabeth had signed the disputed deed.
That submission was partly effective. Johnathon and Rebecca cannot rely upon some any oral representation by Frank and Elizabeth that they had signed the deed. Johnathon's answer in cross examination precludes this so far as he is concerned. Moreover, Johnathon trusted Frank so little that he was unlikely to rely upon any statement that Frank made unless it was evidenced in writing under Frank's signature. That answer does not bind Elizabeth.
But Mr Moutasallem's point was essentially artificial. To the extent that Johnathon and Rebecca's case relies upon misleading conduct as distinct from oral representations both Johnathon and Rebecca relied upon Frank's and Elizabeth's conduct in signing the deed. Their signatures on the deed perfected the contract and are also the physical residue of their conduct. The plaintiffs also relied upon and acted upon Frank and Elizabeth's actions in signing the two counterparts of the deed.
But for Frank and Elizabeth's conduct in signing the deeds in front of Frank, Johnathon and Rebecca would have bid at the auction. Johnathon and Rebecca's decision to abstain from bidding at the auction was caused in this case by Frank and Elizabeth's conduct in placing their signatures on a document.
But Frank and Elizabeth's conduct in signing the deeds was not misleading or deceptive. The conduct represented they were prepared to be bound by the terms of the deed and the Court has found that they were so bound. It is difficult to see how their conduct was in any way misleading. Even if it were misleading, as the Court has upheld the contract made by reason of Frank and Elizabeth conduct there may be no loss attributable to any misleading conduct.
Equitable estoppel. Johnathon and Rebecca's case in equitable estoppel was also put in the alternative to the primary breach of contract case and does not need to be considered now that their contract case has succeeded.
Other relief. Johnathon and Rebecca advanced other arguments which the Court no longer needs to consider, as they have succeeded on their primary case. At one point they argued that even if the deed only contained Elizabeth's signature that would bind both Elizabeth and Frank. But she is not signing as his agent and the Court did not have to explore the merits of this argument any further.
Johnathon and Rebecca argue that they could take advantage of what was described as the "doctrine of benefits and burdens", that a person to take the benefit of the deed is bound by the even though they may not have executed it especially where the solicitor has approved the form of the deed: Lady Naas v Westminster Bank Ltd (1940) AC 366, at 373. But once again was not necessary for the court to consider this alternative case.
[25]
The Terms of Specific Relief
Johnathon and Rebecca and Frank and Elizabeth all signed the deed upon the assumption that Frank and Elizabeth would be able to obtain a lease of No. 216 from Lilly after Johnathon gave up his lease over that property. The only part of No. 216, which was to be re-leased to Frank and Elizabeth, was the agricultural area which at the time of the agreement was being leased by Johnathon. The arrangement in the deed did not extend to leasing the residence on No. 216.
Two questions arise: whether any grant of specific performance should be conditional upon Lilly granting a lease of No. 216 to Frank and Elizabeth for a term, so that they can use and enjoy that property as the terms of the deed contemplated; and if so, what should be the term and covenants of that lease.
The applicable law may be shortly stated. If a decree of specific performance is to be made, it must operate fairly and must not occasion hardship or oppression: J.D. Heydon, M.J. Leeming and P.G. Turner, Meagher Gummow and Lehane's Equity Doctrines and Remedies, 5th Editon LexisNexis Butterworths Australia 2015 [20-095] - [20-100]. The applicable law is concisely stated for present purposes by Meagher Gummow and Lehane in [20-095] - [20-100] (omitting case references) as follows:
Unfairness or hardship
Even if there is no fraudulent or innocent misrepresentation, or mistake, sufficient to justify rescission of the contract, the court is not bound to decree specific performance of every contract it will not rescind. It may refuse a decree of specific performance on the ground of hardship or unfairness.
A defence of unfairness does not rely upon the proposition that the contract to be enforced is, in a colloquial sense, unfair to the defendant. Thus, it is not sufficient, in order to make out the defence, for it to be established that the consideration was, from the defendant's point of view, greater or less, or the terms of the contract more onerous, than a person of reasonable prudence would have agreed to.
…
Unfairness is unfair, or unconscionable, conduct on the part of the plaintiff. Inadequate consideration or unbusinesslike terms may be evidence of, but do not necessarily constitute, unfairness. Adverse movement in the value of the land since the date of the contract is not, of itself, a material factor founding a defence of hardship. It was held not to be a bar to specific performance of a contract to buy land on which the purchaser hoped to build that he could not get a necessary third party to consent to that course. The same was true of a large increase in the value of the property sold between contract and conveyance, and of financial inability to complete in isolation. It seems that where the price has been fixed pursuant to a valuation which is erroneous (albeit there has been no fraud or collusion) this circumstance may afford a defence to a suit for specific performance.
…
Unfairness and hardship contrasted
A defence of unfairness focuses on the conduct of the plaintiff. It must follow from the nature of the defence that the unfairness which is relevant must arise from matters which occurred before or at the time when the contract was entered into. A defence of hardship, on the other hand, focuses on the effect upon the defendant of a decree of specific performance. Normally, hardship occasioned by the occurrence of commercial risks for which the plaintiff is not responsible will not suffice. But at least in exceptional circumstances, specific performance may be refused although the hardship to the defendant was not contributed to by any fault of the plaintiff. One would therefore expect the hardship which is relevant to be hardship as at the time the decree is made, and that events occurring after the contract was entered into would be relevant. Despite suggestions to the contrary, it seems reasonably clear that Spry is right in concluding that the balance of authority bears out those expectations. It is not, of course, sufficient for a defendant to show that the bargain in the circumstances has turned out to be a hard one. The relevant hardship to be identified is the hardship involved in a decree of specific performance as opposed to an order for common law damages, not the hardship flowing from the enforcement of the contract at law. The defendant must show that a decree of specific performance would impose hardship amounting to oppression outweighing the inconvenience to the plaintiff if the plaintiff is left to the remedy in damages. Specific performance must be 'highly unreasonable'.
Both unfairness and hardship are relevant in considering the grant of a decree of specific performance in this case. As to questions of unfairness, which are focused upon the conduct of a plaintiff seeking the remedy of specific performance, here Johnathon overcame Frank's doubts about this transaction by encouraging him to believe that Frank and Elizabeth would be able to use No. 216 in conjunction with their purchase of Stewart's Farm. Johnathon facilitated this by offering to vacate his existing lease over No. 216 and representing that as he understood it Lilly was prepared to make No. 216 available to Frank and Elizabeth, as she had to Johnathon and Rebecca. In the Court's view it would be unfair in the sense established in authority for Johnathon and Rebecca now to have Frank and Elizabeth specifically perform to their bargain without their representation of Lilly's willingness to lease No. 216 being made good.
Questions of hardship are also relevant. Looking at Frank and Elizabeth's position at the time that a decree of specific performance is being contemplated, compared with an award of damages at common law, the lack of Lilly's land, No. 216, being available to Frank and Elizabeth would impose hardship amounting to oppression on Frank and Elizabeth. The flexibility that they would have had in being able to rotate crops and being able to leverage the economies of scale from combining Stewart's Farm and No. 216, justified their release of the other source of their agricultural flexibility, No. 96, to Johnathon and Rebecca.
As to how long the lease should be, neither the parties' discussions nor the deed specified how long a lease Frank and Elizabeth should have from Lilly. The limited available evidence suggests that a substantial period is reasonable and was contemplated by both parties, although not discussed between them.
The Court asked Frank whether as a vegetable farmer he needed security of tenure to put in infrastructure and invest in fertiliser and pasture improvement on No. 216, to find out how far into the future he needed to plan to be able to use and enjoy No. 216 as an integrated part of his business. In response to this question Frank said that he would probably "want a 20-year lease". He explained he needed to rotate crops and that you can't grow the same crop on the same paddock all the time and that the need to rotate across a larger area of land meant a farmer of Stewart's Farm and No. 216 needed over several years to have access to the larger combined area of property to obtain the benefits of crop rotation.
When asked why he would need a lease for 20 years rather than 10 years or 5 years, he gave an answer that was not grounded in crop rotation but he said he nominated 20 years because "that's when I'll retire". The Court corrected him and said that it was less interested in his retirement than the economics of reasonably using and enjoying the property as a vegetable farm.
He then explained that he liked to "do things properly", cleaning all the drains, levelling the property, investing in taps and hydrants and new pumps, and for a short-term tenure of a year or so, it is simply not worth undertaking that kind of that investment. He said that putting in a reliable new water pipeline, new taps and new pumps was necessary because even short-term spillages of water, can kill crops, so the functionality of equipment is very important. He said it is also necessary to contour the land to avoid excessive run-off and to put in a sediment pond to avoid inundating neighbouring properties. He said that the overall financial investment that he said would be required, to install a main pump, settlement pond, another pump on the dam and other ancillary items would be about $200,000, not counting his own labour and without crediting the use of existing machinery. Frank made clear that the house on No. 216 was not needed for agricultural purposes but that the area represented about 12 workable acres and about 3 acres of waste.
A decree of specific performance conditional upon Lilly granting Frank and Elizabeth a lease of 20 years would be too long. Frank would only justify that on the basis that it would take him to retirement. Five years seems too short to repay the substantial investment required to provide for the water and landscaping infrastructure that would be required to take full advantage of the wider combined area for crop rotation provided by a lease of No. 216. Doing the best it can on the available information, in the Court's view making specific performance conditional upon the grant of a lease of 10 years is appropriate to satisfy the demands of fairness and the avoidance of hardship to Frank and Elizabeth in moulding relief in this case. Should there be disagreement about the other terms of such a lease the Court can settle them. But there seems no good reason to depart from ordinary commercial terms acceptable in the market for the lease.
But the basis of this should be clear. The Court cannot bind Lilly who was not a party to these proceedings. But if Lilly is prepared to offer a 10 year lease on suitably commercial terms then specific performance will be granted. If she is not then a further hearing will be required to see whether specific performance could be granted based upon any other adjustment of the interests of the parties, or whether the plaintiff should be left to their remedies at common law.
[26]
An Inquiry as to Damages
There will probably need to be an inquiry as to damages. Johnathon and Rebecca say that the house on No. 96 was tenanted, producing a rental return of approximately $450 per week at the date of the auction. Johnathon and Rebecca say that they were relying upon receiving this rental income had the property been transferred to them. Frank and Elizabeth should probably give an account of rents that they have received from No. 96 since the date they would have been required to settle on the sale of No. 96.
Johnathon and Rebecca seek to identify other claimable losses, which they say have resulted from Frank and Elizabeth's refusal to perform the deed. But whether such losses are foreseeable consequences of the breach of contract which the Court has found, has not yet been argued. For example, Johnathon says that he harvested 5 acres of turf from Stewart's Farm shortly after the auction with the intention of transplanting it to No. 96. As possession of No. 96 was not transferred, Johnathon says that the harvested turf could not be replanted on No. 96 and apparently could not be marketed, causing losses to the value of $120,000. He also says that he and Rebecca had plans to plant and harvest turf on No. 96 as part of their business. Whether these claimed losses were suffered by Johnathon alone or Johnathon with Rebecca or Johnathon with Jason is presently unclear.
If claimable such losses would need to be offset against interest on the money consideration payable to Frank and Elizabeth under the deed and any other transaction costs which Johnathon and Rebecca have avoided in the meantime due to lack of performance of the deed.
And Johnathon and Rebecca claim to have relied on the deed and in consequence to have taken decisions to their economic detriment. An inquiry as to damages will require the Court to consider whether the damages that the plaintiffs claim are caused by the defendants' breaches of contract and within the scope of loss and damage foreseeable at the time of making this contract. These matters have not yet been considered.
But it is highly desirable to reduce further disputation within this family and to try and reduce further legal costs associated with assessing damages, for there to be a mediation of all remaining loss and damage issues before such an inquiry as to damages takes place. The Court will explore this at the first directions hearing after these reasons are published.
[27]
Conclusions and Orders
The plaintiffs have been successful. An order for costs on the ordinary basis in the plaintiffs' favour would normally follow the event. But one or other party may wish to apply for a special costs order. Unless such an application is made returnable at the next date for directions, then the Court will order that the defendants pay the plaintiffs' costs the proceedings up to the grant of relief today.
For these reasons Court makes the following declaration, orders, and directions:
1. NOTE that the parcels of land affected by these orders are described within these orders in the same manner as they are in the judgment published today with these orders;
2. DECLARE that the plaintiffs are entitled to purchase from the defendants the land, house and shed, comprised in the certificate of title for No. 96 upon the terms set out in the deed executed by the plaintiffs and the defendants on 30 October 2020 ("the Deed");
3. ORDER that the defendants specifically perform and carry into effect the Deed by transferring No. 96 to the plaintiffs upon the terms provided for in the Deed;
4. STAY order (3) until Lilly Bugeja, the mother of the first plaintiff and the first defendant, grants a lease to the defendants of the agricultural land and improvements comprised in the certificate of title for No. 216 for a period of at least 10 years upon terms that are otherwise reasonably acceptable in the market for agricultural land in the district ("the lease terms enabling specific performance");
5. ORDER the defendants to submit to take a lease from Lilly Bugeja upon the lease terms enabling specific performance;
6. GRANT liberty to the parties to apply in the event that the defendants and Lilly Bugeja cannot agree by 31 August 2024 upon the form of the lease terms enabling specific performance for the Court to settle the terms to which the defendant should submit, but without binding Lilly Bugeja to offer such terms;
7. ORDER that the parties settle an agreed list of issues for the holding of an inquiry as to damages on the basis either,
1. that Lilly Bugeja does not offer a lease of No. 216 to the defendants and
1. the stay in order (4) is made permanent, or
2. the stay in order (4) is lifted but compensation is paid to the defendants for the absence of a lease on terms enabling specific performance of the Deed;
1. that Lilly Bugeja agrees to a lease of No. 216 upon lease terms enabling specific performance of the Deed and specific performance of the Deed takes place;
1. GRANT liberty to apply to the parties until the making final orders in these proceedings to vary the form of these declarations and orders better to give effect to the Court's reasons for decision published today and to incorporate matters not yet considered;
2. ADJOURN these proceedings for directions to 24 September 2024 at 9:30 AM, when the Court will consider making orders for the mediation of the balance of the issues in these proceedings before they are determined by the Court;
3. RESERVE costs but NOTE that on 24 September 2024
1. the defendants will be required to show cause why they should not pay the plaintiffs' costs of these proceedings on the ordinary basis, and
2. either party may apply for a special costs order.
[28]
Amendments
01 August 2024 - Formatting and typographical errors corrected;
Coversheet updated - Cases Cited and Texts Cited.
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 01 August 2024