Bullhead Pty Ltd v Brickmakers Place Pty Ltd

ESTOPPEL - Equitable estoppel - Representations that all claims against respondents were compromised - Clean hands - Dering v Earl of Winchelsea (1787) 1 Cox 318; 29 ER 1184 applied - Respondents not entitled to rely on estoppel due to lack of clean hands.

1 Charlie Lastrina ('Charlie') and Brett Buckland were once close friends. They holidayed together and would share regular walks along the Maribyrnong River. They fell out as a result of Buckland investing in a property development proposed and managed by Charlie. Buckland's company - Bullhead Pty Ltd - paid full price for its investment, while other investors got secret discounts. Bullhead sued the other investors but its claims failed because the trial judge found that Bullhead, with knowledge of the discounts, agreed to release the other investors. This application for leave to appeal concerns whether Bullhead agreed to the release and, if so, whether the release is enforceable.

2 Between January and March 2008, Charlie invited Buckland to invest in the proposed development of 43 apartments on land in Essendon, Victoria - to be known as 'Brickmakers Place'. Buckland agreed to invest through Bullhead, which then purchased 600,000 units in the 'Brickmakers Place Unit Trust' at an issue price of $1 per unit - $600,000 in total. The trustee of the Brickmakers Place Unit Trust was Brickmakers Place Pty Ltd.

3 There were four initial unitholders in the trust ('initial unitholders'). They and their directors were:

(1) Kyreli Pty Ltd, a company controlled by Charlie;

(2) Rubeo Pty Ltd, a company controlled by Charlie's brother, Domenic Lastrina;

(3) Naranda Hall Pty Ltd, a company controlled by Charlie's other brother, Aldo Lastrina; and

(4) Shey Pty Ltd, a company controlled by the Lastrina brothers' solicitor Elvis Jafer and his wife Ursula Simpson. Shey is the trustee of a unit trust. Jafer and Simpson each own 25 percent of the units. The other 50 percent is owned by a company controlled by Peter Weda, who was the real estate agent who represented the vendors of the land to the trustee.

4 The initial unitholding of the initial unitholders was 600,000 units each. Clause 5 of the unitholders agreement obliged the initial unitholders to subscribe for 600,000 units each at a subscription price of $1 per unit. Clause 3.2 of the unit trust deed contains an acknowledgment that the trustee had received the sum of $2,400,000 from the initial unitholders. But, unbeknown to Buckland, the initial unitholders had acquired their initial 600,000 units in the trust at a very substantial discount, contrary to the unit trust deed and associated unitholders agreement. They each, through companies controlled by them, paid only $65,000 (or 11 per cent) of the issue price mandated by the unitholders agreement. Thus, the initial 2,400,000 units in the trust were issued for the total sum of only $260,000, instead of the required $2,400,000 ('discounted units').

5 The initial unitholders acquired further units in the trust after their initial unitholdings. Each of those further units was acquired at the requisite issue price of $1 per unit, as follows:

(1) Shey - representing Jafer, Simpson and Weda - acquired 600,000 further units;

(2) Kyreli - representing Charlie - acquired 180,000 further units;

(3) Rubeo - representing Domenic Lastrina - acquired 180,000 further units; and

(4) Naranda Hall - representing Aldo Lastrina - acquired 180,000 further units.

6 There was one more investor: Jengeorgia Pty Ltd - a company representing the interests of Paul Christofilopoulos - which acquired 720,000 units.

7 Thus, the total unitholding structure - giving full effect to the discounted units - was as follows:

8 If the discounted units are disregarded, the unitholding structure of the trust was as follows:

9 Each unitholder was entitled to nominate a director of the trustee. But, apart from irregular unitholder meetings, the conduct of the development was left entirely to Charlie, whose company charged management fees to the trust for its services. There is no dispute about those fees.

10 The development, managed by Charlie, did not deliver a significant profit. If the recorded unit holdings, including the 2,400,000 discounted units are taken into account, the development only barely returned Bullhead's investment - a profit of $8,138 on a $600,000 investment over nearly six years. On the other hand, if the invalidly issued discounted units were set aside, the consequent increase in Bullhead's unitholding would, on the final accounts, increase its profit share to about $1,133,218.72. If the discounted units were not wholly set aside, but each initial unitholder was instead credited with 65,000 units, Bullhead's profit share would increase to about $806,478.

11 By November 2013, Charlie was telling Buckland that Bullhead would make a small $11,479 loss on its $600,000 investment. Upon becoming aware of the discounted units, Buckland and his accountant questioned Charlie about the reasons why they had been issued. Charlie did not answer their queries fully or honestly. In this context, there were negotiations about the manner in which the affairs of the trust would be finalised. All other unitholders, including Jengeorgia, supported Charlie's finalisation proposal. Buckland contends he did not, and that Bullhead's right to sue for breach of trust, and other remedies, remains.

12 Bullhead sued the initial unitholders and their directors (collectively, 'the respondents'). The trustee, being a necessary party, was joined as the first defendant but played no active part in the proceeding. Jengeorgia and Christofilopoulos were also joined as defendants, even though Jengeorgia paid full price for all its units and no claims are made against them. For unexplained reasons, they were represented by the solicitors for the respondents (who were the initial unitholders). In summary, Bullhead's principal allegations were that:

(1) the trustee acted in breach of the unit trust deed and the unitholders agreement in issuing the discounted units, and those breaches also constituted breaches of the trustee's fiduciary duties to Bullhead of honesty and impartiality;

(2) the trustee acted in breach of the unit trust deed and the unitholders agreement by distributing the profit on the development on the basis that the discounted units had been validly issued;

(3) each of the trustee's breaches was also a breach by each of the initial unitholders of the unitholders agreement, and of their fiduciary duties to Bullhead; and

(4) the trustee and the respondents were each variously liable to Bullhead for breach of trust, breach of fiduciary duty, knowingly assisting breaches of trust or fiduciary duty, or knowingly receiving the discounted units and the corresponding profit entitlement (collectively, the 'trust breaches').

13 Further, Bullhead alleged that Charlie engaged in misleading and deceptive conduct which induced its investment.

14 On this basis, Bullhead claimed that it was entitled to recover equitable compensation or damages from the respondents, calculated as its share of the development profit after adjusting the unit holdings of the initial unitholders to exclude the discounted units.

(1) endeavoured to justify the issue of the discounted units on commercial grounds;

(2) relied on statutory limitation of action defences;

(3) contended that Bullhead had released them from all claims under the terms of a 'finalisation agreement' entered into by all unitholders in December 2013; and

(4) alleged that Bullhead was estopped from contending that they could not rely upon the finalisation agreement.

16 Bullhead's reply denied the existence of the finalisation agreement,[1] and alleged (among other things) that:

(1) the trustee and the respondent could not rely on statutory limitation of action defences, because the discounted units were issued by the trustee and received by the initial unitholders in fraudulent breach of trust;[2]

(2) the alleged finalisation agreement was unenforceable, because it included a contract for the sale of land which was not evidenced in writing and signed by the person to be charged.[3]

17 The trial judge accepted all of Bullhead's principal claims (the 'Breach Findings'). In finding for Bullhead on these issues, the trial judge expressed strong condemnation of the conduct of the respondents - especially Charlie - and the trustee (under the effective control of Charlie at all relevant times). For example, in respect of the defence to the effect that the issue of the discounted units was legally and commercially justifiable, the trial judge stated that a document prepared by the Lastrinas' accountant in an endeavour to explain it was 'ambiguous and ... suggestive of some form of reverse engineering',[4] and that the improper issue of the discounted units on that basis was 'artificial, unnecessary, opportunistic and misconceived',[5] such that it should be considered dishonest and 'so unconscientious that it should not be allowed to stand'.[6]

18 In upholding Bullhead's reply and refusing to allow the respondents to rely on their limitation of actions defence, the trial judge described the issue of the discounted units, and the failure to inform Buckland of that fact before he invested, as 'dishonest ... opportunistic and artificial ... constituting moral turpitude ... and therefore fraudulent'.[7]

19 In refusing to allow an amended defence seeking to raise the equitable defences of laches and acquiescence, the trial judge stated that such a defence would fail because 'the Trustee and those liable as accessories do not have "clean hands" as I have found, and cannot rely on the proposed equitable defence'.[8]

20 Despite its success in obtaining the Breach Findings, Bullhead's claim was dismissed as the trial judge found against Bullhead on the finalisation agreement and estoppel issues.

21 Bullhead applies for leave to appeal. In response, the respondents do not seek to cross-appeal in respect of the Breach Findings, or the finding that Charlie engaged in misleading and deceptive conduct. They do, however, raise two issues by notice of contention. In summary, the following issues arise for determination:

(1) Ground 1:[9] Did the trial judge err in finding there was a concluded finalisation agreement? If not, did he nevertheless err in holding that all respondents were parties to that agreement?

(2) Ground 5: In circumstances where the finalisation agreement releases equitable claims for breaches of trust and fiduciary duty, is that release enforceable by the respondents?

(3) Grounds 2 and 3:[10] Did the trial judge err in his alternative estoppel finding, because:

(a) the respondents were not entitled to that equitable relief because they lacked 'clean hands'?

(b) there was no sufficient detrimental reliance by the Lastrina respondents?

(c) there was no detrimental reliance by the Shey respondents?

(4) Ground 4: Did the trial judge fail to give adequate reasons?

22 We turn to consider the issues for determination.

Ground 1: Was there a finalisation agreement? If so, who are its parties?

23 The trial judge found that the respondents had proved the existence of a finalisation agreement, under which Bullhead and the respondents agreed to settle all claims arising out of the affairs of the unit trust.[11] In making these findings, the trial judge gave careful consideration to the contemporaneous documents, the oral evidence of relevant meetings and conversations, and the commercial context. Bullhead contends that the trial judge erred in that process by:

(1) failing to take into account his earlier stern credit findings that Charlie had acted opportunistically, immorally, dishonestly and fraudulently. Viewed through that prism, the trial judge ought to have accepted Buckland's evidence of the disputed conversations and rejected Charlie's evidence;[12]

(2) finding there was sufficient certainty as to both offer and acceptance, in circumstances where the evidence was simply too ambiguous to justify those findings;[13]

(3) drawing inferences which were not open;[14] and

(4) finding that the initial unitholders and their directors were parties to the finalisation agreement, and thus entitled to rely on it as releasing Bullhead's claims against them.

24 By paragraph 1 of their notice of contention, the respondents contend that, even if the trial judge erred in finding that the offer giving rise to the finalisation agreement was accepted by email, the evidence nevertheless justifies a finding that the offer was accepted by Bullhead's conduct.

25 It is first necessary to set out the relevant facts concerning the alleged finalisation agreement, and the trial judge's reasons for finding that such an agreement was entered into.

26 The development took place between 2008 and 2013. Charlie was in charge of the development and reported its progress to unitholders at irregular meetings. By about August 2013, all apartments had been completed and all but 10 had been sold. In these circumstances, Charlie sent an email to all unitholder representatives on 22 August 2013. In that email, he reported as to the current financial state of the development in general terms, and drew attention to the fact that there were 10 remaining unsold apartments, with 'some interest' in only three or four of them. Details of the unsold apartments, and the asking prices for them, were set out.

27 On 30 October 2013, Charlie sent a further email to unitholders, enclosing financial statements for the trustee and noting that seven apartments remained unsold. He said it was his intention to arrange a unitholders meeting 'with a view of finalising Brickmakers Place Pty Ltd by 31 December 2013', and inviting any unitholder who required clarification 'on any items in the accounts' to email him prior to the proposed meeting. The notes to the financial statements disclosed that the initial unitholders had paid only $65,000 for their initial 600,000 units. Although this had also been disclosed in the financial statements for the year ended 30 June 2009, Buckland and his accountant gave evidence that they did not realise that the discounted units had been issued, and that they only became aware of the discounted units in November 2013.[15]

28 The proposed meeting was arranged for 26 November 2013.

29 A week before the meeting, the trust's accountant, Arthur Stasi, prepared a spreadsheet showing the projected cash return to each unitholder if the remaining unsold apartments (by then six apartments) were sold at: the 'list price'; a 10 percent discount; and at a 20 percent discount, respectively. The spreadsheet was prepared on the basis of rounded percentage unitholdings. This had the effect of overstating the entitlements of some unitholders and understating the entitlements of others. For example, Bullhead's entitlement was shown as a 12 percent unitholder, when in fact it held 12.4 percent of the issued units (including the invalidly issued discounted units). Thus, on the basis of the six unsold apartments being sold at their full list price, the spreadsheet incorrectly stated that Bullhead was entitled to $588,521, when in fact its true 12.4 percent entitlement on this basis was $608,138.

30 The evidence is not clear as to whether the Stasi spreadsheet was distributed prior to the 26 November 2013 meeting, although it was referred to in Charlie's email to unitholders dated 20 November 2013 (but not attached). In any event, by his 20 November 2013 email, Charlie proposed that each unitholder would take one of the six unsold apartments, in order to finalise the development.

31 At the 26 November 2013 meeting, there was discussion about the Stasi spreadsheet, and widespread dissatisfaction amongst the unitholders directed towards Charlie for the failure of the project to deliver on the projected profits.[16] Weda told the meeting that the unsold apartments were proving difficult to sell and the unitholders should consider discounting the list prices in order to get them sold. As an alternative to discounting the unsold apartments, Charlie proposed that each unitholder could take one of the apartments as a means of finalising the project. This proposal attracted no support.[17]

32 The Lastrina brothers then resolved to offer to purchase the six unsold apartments from the trustee, at their list prices, in order to finalise the development project.[18] As a result, Charlie telephoned Buckland on 28 November 2013 and communicated an offer from the Lastrina brothers ('the offer') as follows:

(1) the Lastrina brothers would purchase the six unsold apartments at their list price in order to finalise the development; and

(2) the Lastrina brothers would ensure that the distribution to unitholders would be $4,904,330, in accordance with the Stasi spreadsheet projection of sales of the six unsold apartments for their list prices. This involved the Lastrina brothers paying the additional expenses associated with winding up the trust.[19]

33 The trial judge initially described that part of the offer set out in sub-paragraph (2) above as being made by the 'Lastrina interests',[20] rather than the Lastrina brothers. However, the trial judge later described Charlie's evidence referring to the offer as 'the deal the Lastrina brothers were proposing'.[21] There is one other reference in the Reasons to 'the Lastrina interests',[22] but reading the Reasons as a whole it is apparent that the trial judge predominantly used the term 'the Lastrina brothers' when referring to the offer, or proposal, made by them. This introduces some uncertainty as to whether the Lastrina brothers were making the offer on their own behalf only, or were making the offer on their own behalf and also on behalf of their unitholding companies. Reading the Reasons as a whole, the trial judge clearly determined that the offer was made by the Lastrina brothers and their related unitholding companies. Bullhead does not seek to challenge that finding.

34 Charlie also telephoned Christofilopoulos, on behalf of Jengeorgia, and Simpson, on behalf of Shey, and made the offer to them on the same terms.[23]

35 On 2 December 2013, Buckland sent an email to Charlie, stating that he was 'waiting for feedback from [his] accountants' concerning the financial information contained in the Stasi spreadsheet.

36 Later on 2 December 2013, Charlie sent an email to Buckland concerning the offer, in the following terms:

Hi Brett

The meeting for tomorrow night has been cancelled. In reference to awaiting advice from your accountant, I am surprised that you didn't do that weeks ago when I sent you the financials. If [you] are awaiting advice from your accountant do I assume that you are not in agreeing to our proposal to take up the remaining units to put this company to bed. [The] proposal was to help the unit holders short term with their liquidity position and take advantage of not incurring further costs such as commissions and legal fees as well as further discounts on the units. The amount you as a unit holders would receive is the amount in [Stasi's] projected distribution as at 19/11/2013. The amount shown there is $588,524 this would be in full settlement, the majority paid before Christmas the balance paid early next year as soon as finance can be arranged. This offer was also on the [basis] that the contracts would be dated last year. All other unit holders have agreed to the proposal, but if you are unsure because you need your accountants advice please advise so I can [finalise things] with the other unit holders and if I leave one unit unresolved until you want things finalised.

Please advise

Charlie[24]

37 By this email, Charlie described the offer as a proposal 'to put this company to bed', and 'to help the unitholders short term with their liquidity position and take advantage of not incurring further costs'. He said that the amount Bullhead would receive if it accepted the offer 'would be in full settlement [with] the majority paid before Christmas [and] the balance paid early next year'. He added that the offer was conditional on the contracts of sale for the six unsold apartments being back-dated to the financial year ending 30 June 2013. He concluded by telling Buckland that all other unitholders - a reference to Jengeorgia and Shey - had accepted the offer.

38 On 3 December 2013, Buckland received an email from his accountant, Frank Demarco, seeking further clarification about the discounted units: 'can you provide me with a copy of the agreement in regards to this matter and reasoning for a discount being applied'. Demarco said that he needed this and other information 'so that we can finalise our opinion in regards to this matter'. On the same day, Demarco emailed Charlie seeking the same information 'at your earliest convenience so that we can finalise our opinion in regards to this matter'. Thirteen minutes later, Charlie emailed Demarco (copying Buckland and Stasi) stating:

Hello Frank

I do not understand, your office [had] copies of the agreement when you [were] conversing with Arthur Stasi at Cadells re Rmbc about 18 mths ago.

In reference to you having an opinion about a discount, [you're] entitled to that, but that is irrelevant as no one got a discount. Brett Was asked if he wanted to take a 10% stake in [the] project at a cost of $600,000 after it was purchased by us. He agreed and the documents reflect the same[.] [D]ifferent to [another investment] which Brett [came] in at the time of purchase. I have nothing to explain the documentation and discussions have always been consistent.

Regards

Charlie Lastrina[25]

39 This quick 'fob off' email was clearly untrue and involved deliberate concealment by Charlie of the reasons for the issue of the discounted units, which the trial judge rejected in strong terms.[26] Thus, as at 3 December 2013, Buckland had asked Charlie to explain the reasons for issuing the discounted units, and Charlie had flatly refused to provide any information. In both making the offer to Buckland, and in refusing Buckland's request for information through his accountant Demarco, Charlie was acting on behalf of all the Lastrina brothers and their related unitholding companies.

40 On 11 December 2013, Charlie wrote to Buckland about his failure to respond to the offer, as follows:

Brett

I have not had a response from you, I also am not happy hearing what is going on behind the scenes. I [feel] my honour and integrity is being questioned by someone I called a friend. But since we have now gone beyond that point lets stick to the facts.

You have been aware of the arrangement in the Brickies from day one, it was explained to you and documented as such. Now to turn around and try and create a different perception is insulting and offensive. The ball is in your court, the other unit holders have agreed to our suggestion with the units and I will be making distributions to them. Unfortunately you do not see our offer as a measure of good will, so I will be sorting things out with them and leave one unit in the Brickies as your entitlement, and I will delay paying any funds to [Bullhead] until this [matter] is [formally] resolved.

Take all the time you want, and if you want to call in auditors to check both documentation and financials you are welcome. However please provide such requests in writing and with enough notice and it will be at your cost.

Charlie Lastrina

Brickmakers Arms Pty Ltd[27]

41 The emphasised portions of this email were clearly false, as the trial judge found.[28]

42 Later on 11 December 2013, Demarco emailed Buckland with his advice. In summary, he advised Buckland that:

(1) neither the unit trust deed nor the unitholders agreement allowed the issue of discounted units;

(2) '[t]he only time the accounts have shown detailed listing of Units on issue is the 30th June 2013 financial reports, which were supplied on 30th October 2013';[29]

(3) although Charlie had advised that Buckland was 'well aware of the situation', he had not provided any documentary evidence to support that assertion; and

(4) in these circumstances, Demarco recommended that Buckland arrange to meet with Charlie and 'potentially obtain copies of paperwork which would support [Charlie's] argument that [Buckland was] aware of what [his] entitlements would be at the end of the project.'

43 In oral evidence, Demarco said that he advised Buckland to 'sit down with Charlie and try and work out what's happened in the project and try and come to some resolution'.[30]

44 Later again on 11 December 2013, Buckland emailed Charlie in response to his email earlier that day. Buckland referred to his disappointment at the outcome of the development project, questioned Charlie's assertion that he had acted improperly 'behind the scenes' in speaking with other unitholders, asked Charlie for information, and called for documentation. Buckland then stated:

Can you please formalise the structure of your verbal offer to me and to the other Unit holders so I have it in writing, so we can have a quick resolution.

Charlie, without question, I expect that all the documentation is in order but based on the outcome of the meeting on [26 November 2013] it may need to be addressed.

I am happy to meet with you and discuss this and any other matter that you may have.[31]

45 Three statements by Buckland in this email require emphasis. First, Buckland said he understood that the offer had been made to all unitholders, other than those representing the Lastrina brothers as offerors. Second, after receiving his accountant's advice, Buckland was seeking 'a quick resolution'. Third, Buckland was acting in the expectation that 'all the documentation is in order'.

46 In response, Charlie emailed Buckland on 12 December 2013 and stated:

Hi Brett

Forget what I might or might not be offering, [let's] just cut to the chase and tell me what you want?[32]

47 Charlie did not formalise the structure of the offer in writing. However the verbal offer from the Lastrina brothers had been confirmed in Charlie's 2 December 2013 email. Instead, the two men met, as suggested in Buckland's email and Charlie's response.

48 The meeting was on 13 December 2013. Charlie and Buckland gave contrary evidence as to what was said during the meeting. The only contemporaneous record of what might have been said is contained in an email from Buckland to Demarco on 17 December 2013, in which Buckland reported that he had met with Charlie, and stated:

The outcome was, he will be paying my capital back early next year. Nothing will be signed.

I need this time to think over Christmas. It has just been too much.

...

We will meet next year to decide what direction I take.

49 The trial judge described this key meeting and its outcome in the following terms:

Charlie gave evidence that he asked Buckland what he wanted to do about the deal the Lastrina brothers were proposing. He asserted Buckland replied that he 'probably will go with the deal, but need to talk with [my wife] first and I will come back to you.' Charlie acknowledged that Buckland raised issues about whether he had paid for the extra fit-out costs of the apartment he purchased in the development and that Charlie asked him what he wanted to do about the unsold apartments, but denies that he raised anything about the Discounted Units or wanting his capital back or his intentions to press on and seek an audit of the Unit Trust.

Buckland gave evidence that he demanded Charlie repay him his investment capital back, and that Charlie nodded his head in agreement to this. He stated that he further indicated to Charlie that he would 'probably press on with an audit of the Project.' He said Charlie asked him 'what I wanted to do about the remaining apartments, the Lastrina brothers wanted to purchase. I said to Charlie that I didn't have any objection at that time but I wanted to talk to my wife and my son about this before I committed to it.' He further stated that he specifically said to Charlie 'this is not an agreement to the finalisation agreement that was proposed.'

On 16 December 2013, after discussing the matter at home, Buckland sent Charlie an email which said 'Hi Charlie, you can remove the sign, Brett.' This was in reference to the 'for sale' sign that was outside the Brickmakers Arms. Charlie instructed Weda to remove the sign and the Lastrina brothers then took steps to arrange financing to purchase the remaining apartments in order to make the contemplated distributions and proceed to finalise the winding up of the Unit Trust.

On 19 December 2013 Charlie sent an email to both Buckland and Paul advising them that settlement had occurred on the remaining apartments [other than the six being purchased by the Lastrina brothers] and requesting they provide their bank details to organise a funds transfer before Christmas. Buckland replied the same day, providing his bank details. On 23 December 2013 Charlie sent a follow-up email to all Unitholders advising that he would be making a partial distribution that day, with the balance anticipated to be transferred in February the following year.

After receiving the email dated 16 December 2013 Charlie:

(a) heard nothing further from Buckland about any concerns he had until he sent his email on 24 March 2014;

(b) instructed Weda to remove the for sale sign on the remaining apartments at the Brickmakers Arms;

(c) took steps to borrow money to acquire (or to find other purchasers to do so) the remaining unsold apartments details of which are set out below;

(d) paid cash into the Unit Trust's accounts to enable the 'guaranteed' payments to the non-Lastrina Unitholders;

(e) sent an email dated 19 December 2013 to Paul and Buckland advising that the sale of the apartments which had already been sold to third parties had settled and requested their bank account details so that funds could be transferred before Christmas.

(f) sent an email on 23 December 2013 advising Buckland that $396,000 would be transferred to his nominated account that day and similarly advised Paul, Elvis, Ursula and Weda in respect to amounts due to Jengeorgia and Shey. The email also advised those Unitholders of the apartments that were to be acquired by the Lastrina brothers.

In late December 2013 Bullhead received a part distribution of $396,000 into its bank account.[33]

50 On 18 March 2014, Charlie sent an email to all unitholders, notifying them of the forthcoming final distributions 'to finalise the Brickmakers Place Unit Trust'. In that email, Charlie referred to the Stasi spreadsheet and the need to make minor corrections to the respective unitholders' entitlements based on actual, rather than rounded, percentages. This meant that Bullhead would be receiving $608,138 in respect of a 12.4% unitholding. Charlie concluded the email with the following:

These payments will be made in full settlement to Jengeorgia ... Shey ... and [Bullhead] for the Brickmakers Place Unit Trust. All other expenditure re creditors and the winding up of the Unit Trust will be the responsibility of the other 3 unit Holders [i.e. the Lastrina interests].

If you have any questions please do not hesitate to call me.

Please confirm your acceptance of the above.[34]

51 In response, Buckland sent an email on 21 March 2014 which included the following statements:

... I specifically record that Bullhead Pty Ltd (formally RMBC Investments Pty Ltd) does not accept that the issue of 2,400,000 units to 4 unit holders at a significant discount to the $1.00 per unit paid earlier by unit holders (including Bullhead Pty Ltd) was a valid, proper or effective issue of such units.

I may well also call in the auditors as you advert to but hope that it will not come to that.

It remains the case that relevant information has not been provided by Arthur Stasi to Frank Demarco & Associates regarding the above.

However, this E-mail is for the purpose of recording my position on both the previous and proposed further distributions of funds from the trust which is:

a. That no such distribution should be made unless it applies and is paid to all unit holders.

b. That distributions should be limited to the return of capital amounts respectively paid by unit holders to acquire units, and that all further cash funds held by the trustee should be retained pending resolution of outstanding issue; and

c. That the receipt of any such distribution by a unit holder (and specifically Bullhead Pty Ltd) is not to be taken as a release or surrender of any rights which that unit holder has in connection with the unit trust or the undertaking of the Brickmakers Arms project.

I hope that we can resolve all outstanding issues promptly and in a manner which reflects our longstanding relationship.

Regards,

Brett

52 On 15 April 2014, there was a 'board meeting' of the trustee at Charlie's offices. Buckland was, deliberately, not notified of this meeting and thus did not attend. The minutes record that those present at the meeting were Domenic Lastrina, Weda (as proxy for Ursula Simpson) and Charlie (for himself and as proxy for Christofilopoulos), and that the agenda was to 'discuss a[n]d resolve ... re Mr Brett Buckland's email changing his mind and not agreeing to the final distribution', and that it was 'unanimously resolved ... that final distribution of the remaining funds and property proceed as previously agreed'.

53 On 2 May 2014, the final distributions from the trust were made:

(1) $900,257 to the Lastrina Unitholders in respect of their combined 48% unitholding;

(2) $421,824 to Shey in respect of its 24.75% unitholding;

(3) $266,295 to Jengeorgia in respect of its 14.85% unitholding; and

(4) $212,138, representing the balance of Bullhead's final entitlement as a 12.4% unitholder, was deposited in a trust account of the respondents' solicitors, K & L Gates, pursuant to an undertaking given by it on behalf of the trustee to preserve it until the dispute was resolved ('K & L Gates Fund').

54 At a later date, the trustee (acting through Charlie) advised K & L Gates that it considered itself to be no longer bound by the undertaking, and K & L Gates subsequently applied $45,217.79 from Bullhead's final entitlement to pay the respondents' legal costs. The trial judge condemned this breach of the undertaking in strong terms.[35]

55 The trustee was placed into administration on 15 January 2015 and liquidation on 5 February 2015. The K & L Gates Fund was further depleted by the administrator's and liquidator's fees. The trial judge also criticised this conduct, describing the administration of the trustee as 'an extravagant, unnecessary, costly and wasteful exercise'.[36]

Judge's reasons for finding there was a concluded finalisation agreement

56 The trial judge set out the above facts, considered the probabilities arising from them and other evidence, and held that there was a concluded finalisation agreement. It is first necessary to set out some further evidence relied upon by the trial judge in his treatment of this issue.

57 First, the trial judge summarised Buckland's evidence in cross-examination as to his understanding of the offer which Charlie had made, as follows:

(a) '... my understanding of this is it was going to be a cash settlement. It would be clear, there would be cash money paid to people.';

(b) the benefit he would be obtaining was that there would be certainty as to the amount they would achieve out of the Trust;

(c) that by reason of the Lastrina brothers buying the apartments the distributable profit would end up with a number of $4.904 million;

(d) the proposal was to help the Unitholders short term with their liquidity position and to take advantage of not incurring further costs such as agent's commissions and legal fees which would be a cost to the Trust and there would be no further discounting of the price at which the apartments would be sold;

(e) that Bullhead would receive $588,524 in full settlement of its claims as a unitholder and that the majority would be paid before Christmas and the balance early the following year after finance could be arranged;

(f) that he would be paid quicker than what might otherwise be the case, noting that in 2013 he had repayment arrangements with the Australian Taxation Office and that communications with his accountant revealed he had been expecting payment from the Brickmakers development during late August 2013;

(g) the Lastrina brothers would fund all the winding up expenses of the Trust;

(h) that '... this was just a way to avoid ongoing issues';

(i) that Charlie was proceeding on the basis that if Buckland and the other Unitholders accepted the proposal that had been put to them he would '... set about ensuring that the distributions to be made to the Unitholders would be based on $4.904 million'.[37]

58 Second, the trial judge referred to evidence revealing that, while Buckland was considering the offer, he:

(a) was in frequent communication with Demarco about whether he should take the Offer and indeed Demarco was involved in settling some of his email communications;

(b) was receiving legal advice and accountancy advice and was clearly contemplating litigation;

(c) was contemplating an audit; and

(d) had discussions with other Unitholders including Paul and Elvis about whether they were going to accept the Offer. He only had such discussions with the non-Lastrina Unitholders as he knew the offer in the 2 December email was being made by the Lastrinas to the non-Lastrina Unitholders.[38]

59 Third, the trial judge referred to evidence of Buckland, Christofilopoulos and Jafer about conversations between them in the period after the 26 November 2013 meeting, in which Buckland expressed his disappointment at the outcome of the project, said he was 'seriously considering getting an audit done', and enquired as to whether Jafer and Simpson wanted to 'take the matter further'.[39]

60 The trial judge summarised his factual finding that there was a concluded finalisation agreement in the following terms:

For the reasons set out hereunder, I find that the Offer was accepted on 16 December 2013. I find that in context and effect the communication by Buckland to remove the sign, an otherwise cryptic, vague and ambiguous statement, was and constitutes a sufficient external manifestation (to the other party, Charlie) that he was accepting the Offer on behalf of Bullhead.[40]

61 The trial judge gave the following principal reasons as to why he accepted Charlie's version of what was said at the 13 December 2013 meeting as being more probable than Buckland's evidence about the meeting:

Buckland's assertion that in the 13 December 2013 meeting Charlie only requested Buckland's consent for the Lastrinas to purchase the unsold apartments, and agreed that such consent would not then constitute a finalisation of the Unit Trust on the terms that had been discussed in the 28 November telephone call and 2 December email, is improbable, unconvincing and unrealistic in the circumstances. It would have constituted a retreat by Charlie, with no obvious benefit to the Lastrina brothers. There was no reason why the Lastrina brothers would need Buckland's consent to purchase apartments that were, at the time, listed on the market for sale. Having obtained the consent or more particularly the acceptance of the Offer by all other parties, it is highly likely that this is what Charlie sought to achieve in the meeting, to the knowledge of Buckland.[41]

in response to Charlie's email of 11 December 2013 where Charlie questioned whether the lack of a response was because Buckland was not going to accept the Finalisation Agreement, Buckland replied your perception is wrong and requested Charlie to put his offer in writing so they can have a quick resolution. The language and demeanour of this message, wanting to achieve resolution, is at odds with Buckland's account of the 13 December 2013 meeting, in which he, rather than allowing Charlie an opportunity to restate the Offer, outlined a list of demands.[42]

(3) Third, the trial judge relied on the evidence of Demarco:

who was in close consultation with Buckland during this time, ... that his advice to Buckland was to settle with Charlie. Demarco said that at this time he was providing advice to Buckland and gave the following advice to Buckland '... try and resolve the issue. Sit down with Charlie and try because in litigation there's no winners' and '... so my instructions to Brett were "try and sit down with Charlie and try and work out what's happened in the project and try and come to some resolution" that was my advice to Brett'.[43]

(4) Fourth, when considering whether the offer had been accepted by Buckland, the trial judge made the following findings about Buckland's knowledge at the time of the 13 December 2013 meeting:

Buckland knew and understood the Offer. He knew that he was being asked to accept the Offer. He knew that the other Unitholders had accepted the Offer. He knew, as I have found, that Charlie repeated the Offer on 13 December 2013 and wanted acceptance to put the Unit Trust to bed. He also knew that his accountant Demarco wanted him to resolve the matter and avoid litigation. Finally, he knew that Charlie was proceeding on the basis that if he and the other Unitholders accepted the Offer that had been put to them he would '... set about ensuring that the distributions to be made to the Unitholders would be based on $4.904 million'.[44]

62 Based on his acceptance of Charlie's version of the 13 December 2013 meeting, the trial judge characterised the issue for determination as whether, judged objectively, Buckland communicated acceptance of the offer to Charlie. In that regard, the trial judge noted that the pleaded acceptance of the offer was by Buckland's 16 December 2013 email stating: 'Hi Charlie. You can remove the sign. Brett.' The trial judge accepted the pleaded case in the following terms:

'You can remove the sign' is meaningless without context. The context is that he was accepting much more than a narrow and more limited offer by the Lastrinas to buy the unsold apartments. The discussions prior to 16 December 2013 were all about the Offer and this was understood by Buckland and Charlie. To constrain the acceptance to a more limited aspect of the Offer is unreasonably and unnecessarily selective and unwarranted, there being no qualification or caveat in the communication. Although ambiguous and vague it can only sensibly be understood as embracing the Offer as a whole. This was after all the subject matter and basis of the discussions between the various parties, including Buckland's discussions with his advisors. Removing the sign was a critical and integral part of the Offer. It was the key to finalisation. Removing the sign meant and was in effect and in context code for the purchase by the Lastrina brothers with the logical expected and contemplated corollary of achieving finality. Achieving finality was not remote from removing the sign, it was entirely underpinned by it. In other words, in my opinion, and in the context referred to, it is not a stretch at all to regard removing the sign as conveying and embracing sale, distribution and finalisation, that is acceptance of the Offer.[45]

63 After delivery of his principal Reasons, the trial judge heard further argument as to the form of the orders and as to costs. As a result, he delivered Supplementary Reasons.[46] At the hearing leading to the Supplementary Reasons, Bullhead made the following principal contentions.

64 First, a primary submission that the finalisation agreement was either an accord executory or an accord and conditional satisfaction; and that the respondents had repudiated that accord by failing to ensure that the K & L Gates fund was preserved for Bullhead's benefit. Thus, Bullhead was entitled to revert to its original claims in the proceeding and was entitled to judgment for $737,218.72.[47] The trial judge rejected this contention,[48] and there is no appeal from it. However, in rejecting Bullhead's primary contention, the trial judge held that the finalisation agreement constituted 'an accord and satisfaction and compromises all of the original claims' made by Bullhead in the proceeding.[49] As appears below, that finding has continuing relevance for ground 1.

65 Second, an alternative contention that, if the finalisation agreement was an accord and satisfaction, the parties to the agreement were not all respondents, but only Bullhead, the Lastrina brothers and their related unitholding companies, and the trustee.[50] Thus, it was entitled to judgment against Shey and its directors, Jafer and Simpson. The trial judge did not make an express finding on this issue.

66 Third, if neither of those contentions was accepted, Bullhead contended that it was in any event entitled to judgment for $212,138, as the balance of its 12.4% unitholding entitlement. The trial judge accepted this contention.[51]

67 As to costs, the trial judge ordered that Bullhead pay the respondent's costs of the proceeding insofar as they relate to the finalisation agreement, and ordered that Bullhead's entitlement to the balance of its final trust distribution ($212,138) should be set off against its costs liability to the respondents.[52]

68 Bullhead seeks to challenge the trial judge's finding that the finalisation agreement had been entered into, the trial judge's finding as to who the parties to any such agreement were, and the trial judge's findings as to the terms and effect of the agreement. Its contentions are summarised below.

69 First, Bullhead contends that the trial judge's inferential reasoning in rejecting Buckland's version of the 13 December 2013 meeting was erroneous, as follows:

(1) The trial judge erroneously held that there was no contemporaneous record of the 13 December meeting.[53] Bullhead relies on the contents of the 17 December 2013 email from Buckland to Demarco, which records the outcome of the meeting ('he will be paying my capital back'), and Buckland's intentions to consider his position over the Christmas period, and then meet Demarco to decide what direction he would take.

(2) The trial judge erroneously considered that Charlie's 2 December 2013 email to Buckland contained an unambiguous offer.

(3) The trial judge erred in failing to find that any offer made by Charlie was withdrawn by Charlie's 12 December 2013 email - 'Forget what I might or might not be offering, let's just cut to the chase and tell me what you want?'. Bullhead contends that this was the context in which the 13 December 2013 meeting was held - Charlie had withdrawn any offer he had made and invited Buckland to tell him how he wanted to proceed. Thus, Charlie had already retreated from his previous offer and was inviting a counter-proposal from Buckland.

(4) The trial judge erred in finding that there was 'no reason why the Lastrina brothers would need Buckland's consent to purchase apartments',[54] as clause 16 of the unitholders agreement required the trustee to obtain the consent in writing of all unitholders before entering into any contract with a unitholder.

70 Second, in considering which version of the 13 December 2013 meeting to accept, Bullhead contends that the trial judge erred by failing to expressly take into account his earlier credit findings rejecting Charlie's evidence concerning the commercial reasons for issuing the discounted units, and his characterisation of Charlie's conduct in connection with the discounted units as immoral and fraudulent.

71 In support of this contention, Bullhead relies on the reasons of Campbell AJA in Divall v Mifsud,[55] to the effect that in such circumstances a trial judge is obliged to take into account the untruthful evidence of a witness on material issues in assessing the witness's credit on other issues.[56] This statement by Campbell AJA was made with reference to the statements of Handley JA in Malco Engineering Pty Ltd v Ferreira,[57] where the trial judge had expressly found that a worker's credibility was significantly damaged by 'deliberate lies'. Notwithstanding this finding of perjury, Handley JA stated:

This did not necessarily require the trial Judge to reject the whole of his evidence. Nor on the other hand was the trial judge entitled to simply accept the whole of his evidence except those parts that the respondents had established was false.

In my opinion the perjury by the worker required the trial Judge to carefully assess the rest of his evidence in order to determine its honesty and reliability. Some of his evidence may have been acceptable because it was confirmed by other independent or objective evidence. However where the worker's evidence was not independently supported it clearly had to be assessed with great care to determine whether it could properly be accepted as proof of any matter that was in issue in the proceedings.[58]

72 Third, Bullhead contends that the trial judge erred in determining that Buckland's 16 December 2013 email ('You can remove the sign') was communication of Buckland's acceptance of the offer, notwithstanding that the trial judge himself described that email as 'cryptic, vague and ambiguous'.[59] Reliance is placed on the decision of Bathurst CJ in Ashton v Pratt,[60] in which he stated that it is a precondition to the existence of an agreement constituting an accord and satisfaction resolving a dispute between the parties (as here) that acceptance of the offer said to give rise to the agreement 'must be clear and unequivocal'.[61]

73 Fourth, even if the trial judge's finding that it accepted the offer is upheld, Bullhead contends that the general words of release - 'in full settlement' - were not intended to release its equitable claims for the trust breaches. Reliance was placed on the general principle stated in Grant v John Grant and Sons Pty Ltd,[62] that general words of release extend only to 'the true purpose' of the agreement containing the release, ascertained by a review of the nature of the agreement and the surrounding circumstances, including the knowledge of the parties as to the liability alleged to have been released.[63]

74 Fifth, even if the trial judge's finding that there was a finalisation agreement releasing all of its claims is upheld, Bullhead contends that the trial judge erred in finding that all respondents were parties to it. Although the trial judge did not expressly make that finding, it is a necessary consequence of his dismissal of Bullhead's claims based on the Breach Findings on the basis that: 'the parties agreed to settle all claims arising out of the affairs of the Unit Trust. This included settlement of all claims Bullhead may have had as a unitholder'.[64]

75 In its written case, Bullhead contended that, in proposing the offer, Charlie must have been acting in his capacity as a director (effectively, the managing director) of the trustee and, as the proposed finalisation agreement involved promises which could only be effected by the trustee (by making final distributions) any finalisation agreement operated only between Bullhead and the trustee. That contention is unsustainable and was not pursued at the hearing of the appeal. In oral submissions on appeal, Bullhead contended that the trial judge failed to give proper consideration to who the parties to the finalisation agreement were; leaving the position uncertain. Bullhead contends that its alternative contention, that Shey and its directors were not parties, was not considered by the trial judge.

76 The respondents contend that the trial judge's findings concerning the 13 December 2013 conversation must be considered in the context of factual findings made by a trial judge in a hard-swearing case involving heavy credit attacks on both Charlie and Buckland. In such circumstances, the trial judge had a considerable advantage over an appeal court, having heard the entirety of the evidence. Thus, although an appeal court is required to conduct a 'real review' of the evidence given at first instance and of the trial judge's reasons for judgment in determining factual questions, an appeal court should not interfere with a judge's findings of fact unless they are demonstrated to be wrong by 'incontrovertible facts or uncontested testimony', or they are 'glaringly improbable' or 'contrary to compelling inferences'.[65]

77 Moreover, the respondents contend that the trial judge's Reasons display a full account of the evidence concerning the 13 December 2013 conversation, with particular regard to the objective facts and circumstances that pointed in favour of acceptance of Charlie's version of the meeting, notwithstanding his Honour's earlier unfavourable credit findings against Charlie.

Analysis: was there a concluded finalisation agreement?

78 The respondents' submissions should be accepted. The trial judge's reasons for accepting Charlie's version of the 13 December 2013 conversation contain a careful review of the evidence, and an assessment of relevant surrounding objective factors as contended for by the respondents. There is nothing glaringly improbable, contrary to compelling inferences or against the inherent logic of events in the trial judge's findings in this regard.

79 As to the specific errors alleged by Bullhead, we are not persuaded that they have been established. At the outset, we reject the contention that the trial judge erred by failing to expressly take into account his earlier credit findings rejecting Charlie's evidence. It is not tenable to suggest that the experienced trial judge did not have those credit findings in mind when he came to consider whose evidence he should accept about the 13 December 2013 conversation. Further, Divall v Mifsud and Malco Engineering require only that, in circumstances such as the present, a trial judge is required to 'carefully assess' the evidence of a witness who has been disbelieved on one issue when considering that witness' evidence on other issues and determining his or her honesty and reliability.[66] As we have said, the trial judge in this case conducted the requisite careful assessment, in circumstances where he obviously had in mind his earlier adverse credit findings against Charlie.

80 As to the scope of the release in the finalisation agreement, we do not accept Bullhead's contention that the finalisation agreement did not have the true purpose of releasing Bullhead's claims based on the issue of the discounted units. That was the very issue which was troubling Buckland at the time, about which he sought further information from Charlie, and about which he sought advice from Demarco. It was his concerns in this regard that led to his initial rejection of the offer. In context, and read commercially, 'in full settlement' meant: (1) generally, that each of the unitholders was releasing the other unitholders from any claim to a greater share of the final distribution of the trust's assets on finalisation of the development project; and (2) specifically, that each unitholder released the others from any claims arising out of or connected with the breaches of trust constituted by the issue of the discounted units.

81 Nor do we accept that there are errors in the trial judge's inferential reasoning, as contended for by Bullhead.

82 First, we do not accept that the 17 December 2013 email from Buckland to Demarco contains a reliable contemporaneous record of the 13 December 2013 meeting. It purports to summarise the 'outcome' of the meeting in brief terms - 'he will be paying my capital back early next year' - but is clearly not a full account of the meeting, even on Buckland's version of what was said. The offer involved repayment of almost all of Bullhead's capital early in the following year, and is broadly consistent with the 17 December 2013 email. The references to Buckland needing time to think over Christmas and to decide in the following year what direction he would take are ambiguous. The repayment of Bullhead's capital, or almost all of it, would clearly give Buckland cause to think as to how he would use it or reinvest it on receipt.

83 Second, we do not accept that the offer, which the trial judge found was repeated by Charlie during the 13 December 2013 meeting, was ambiguous. The trial judge's findings as to how Buckland understood the offer, in light of both its oral form and Charlie's 2 December 2013 email, are not challenged and accord with the evidence.

84 Third, although we accept that Charlie's 12 December 2013 email constituted a withdrawal of the offer to Bullhead, and an invitation for Buckland to make a counter-offer on Bullhead's behalf, it is not improbable that Charlie repeated the offer during the 13 December 2013 meeting. Indeed, in the absence of Buckland proposing a final settlement, it is likely that Charlie would have done so.

85 Fourth, the trial judge's finding that there was 'no reason why the Lastrina brothers would need Buckland's consent to purchase apartments' should be seen in context. Even though we accept that such purchases would be contrary to clause 16 of the unitholders agreement, the commercial context was that Weda had advised the remaining six apartments were proving difficult to sell at 'list price' and the parties were endeavouring to resolve all outstanding matters so as to finalise the development project and receive their unitholders' entitlements. In this regard, we note that, after Buckland had received Demarco's 11 December 2013 email of advice, Buckland emailed Charlie that evening seeking formalisation of the structure of the verbal offer 'so we can have a quick resolution'. In these circumstances, it is unlikely that the parties had clause 16 in mind. Rather, they were engaged in commercial discussions directed to finalising the development project and their resulting entitlements as unitholders.

86 Fifth, although we accept that acceptance of an offer to resolve a dispute by an agreement constituting an accord and satisfaction 'must be clear and unequivocal',[67] the trial judge expressly acknowledged that, absent context, Buckland's email statement - 'You can remove the sign' - was ambiguous to the extent of being meaningless.[68] Considered in context, however, the trial judge concluded that this otherwise ambiguous statement constituted 'unequivocal acceptance' or 'unconditional assent to or acceptance' of the offer.[69] That factual finding was not glaringly improbable and meets the requirement of clear and unequivocal acceptance.

87 We conclude that no error has been shown in the trial judge's finding that there was a concluded finalisation agreement between the trustee, the Lastrina brothers and their unitholding companies and Bullhead. It is thus unnecessary to consider the respondents' notice of contention in answer to this ground. Paragraph 1 of the notice of contention seeks to adopt the trial judge's alternative finding that, although not pleaded or argued by the respondents, the finalisation agreement was established by the parties' conduct.[70] The trial judge said of this finding that it was 'clearly obiter'.[71] We agree. Not only had the trial judge decided that the finalisation agreement had been proved by offer and acceptance, but the respondents had neither pleaded nor argued that there was an agreement by conduct. The question remains, however, as to whether the Shey respondents were parties to that finalisation agreement.

Were the Shey respondents parties to any finalisation agreement?

88 In his Supplementary Reasons, the trial judge noted Bullhead's alternative submission that any accord and satisfaction arising from the finalisation agreement extended only to the Lastrina brothers, their related unitholding companies, and the trustee. On this basis, Bullhead had contended at the further hearing that it was entitled to judgment against the Shey respondents on the basis of the Breach Findings against them.

89 While it is true that the trial judge did not expressly deal with this alternative contention in his Supplementary Reasons, the issue had been considered in the principal Reasons and was, by necessary implication, considered in the Supplementary Reasons when the trial judge determined that the finalisation agreement was an accord and satisfaction which compromised 'all of the original claims', and that there was 'therefore no scope or ability to go back to any of the original causes of action'.[72] That conclusion accords with common sense. To be effective, the finalisation agreement needed to bind all of the unitholders and the trustee, so that the final distribution entitlements could be determined and paid in 'full settlement' of all of the claims by unitholders to share in the profit of the development project.

90 For the above reasons, although we would grant leave to appeal on ground 1, that ground has not been established. We next consider the proposed ground 5, as to whether the finalisation agreement was enforceable against Bullhead.

Ground 5: Is the finalisation agreement enforceable?

(1) The trial judge erred in law in finding that the effect of the finalisation agreement was to bar Bullhead's equitable claims against the trustee and the respondents, given the evidence as to Bullhead's knowledge at the time it accepted the offer on 16 December 2013.

(2) The trial judge should have found that the finalisation agreement was ineffective and would not operate as a bar to Bullhead's equitable claims, because of Bullhead's lack of knowledge of those equitable claims and/or the basis for those claims.

92 In summary, Bullhead contends that the releases in the finalisation agreement are unenforceable as a bar to its equitable claims because, at the time the finalisation agreement was entered into on 16 December 2013:

(1) Bullhead did not understand its equitable rights and claims against the respondents, arising out of the wrongful issue of the discounted units;

(2) Notwithstanding its inquiries of Charlie, Bullhead was not aware of all of the surrounding facts and circumstances, such that it could have constructive knowledge of its equitable rights; and

(3) Charlie (acting on behalf of the trustee and the respondents) deliberately misrepresented the facts, and thus frustrated Bullhead's attempts to acquire the necessary knowledge giving rise to its equitable rights.

93 In response to ground 5, the respondents contend that Bullhead possessed all the information necessary to appreciate the facts and circumstances of the breaches of trust and fiduciary duty arising from the issue of the discounted units, had independent accounting and legal advice at the time the finalisation agreement was entered into, and that it would thus be unconscionable for Bullhead to now seek to resile from the releases it freely granted, for consideration, in the finalisation agreement.

94 In order to understand the rival contentions, it is necessary to refer to the principles to be applied.

95 In Farrant v Blanchford,[73] Lord Westbury said that a defaulting trustee who wishes to rely upon a release of the breach of trust bears an onus in the following terms:

The duty of proving an effectual discharge lies on the trustee. Where a breach of trust has been committed, from which a trustee alleges that he has been released, it is incumbent on him to shew that such release was given by the cestui que trust deliberately and advisedly, with full knowledge of all the circumstances, and of his own rights and claims against the trustee; for it is impossible to allow a trustee who has incurred personal liability to deal with the cestui que trust for his own discharge upon any other ground than the obligation of giving the fullest information, and of shewing that the cestui que trust was well acquainted with his own legal rights and claims, and gave the release freely and without pressure or undue influence of any description.[74]

96 In summary, a defaulting trustee cannot rely on a release unless the trustee proves that, when the beneficiary gave the release, the beneficiary had full knowledge of the circumstances constituting the breach of trust and of the consequent rights and claims which the beneficiary has against the trustee arising from that breach. In our opinion, that onus applies with equal force to a fiduciary such as a partner, joint venturer or, as here, co-unitholder in a unit trust; and also applies to those who knowingly assist the relevant breach of trust or fiduciary duty, such as the directors of the unitholder respondents in this case. An extension of the onus in this way was impliedly accepted by the respondents in their submissions on ground 5.

97 The degree of knowledge which a defaulting trustee or fiduciary must prove is assessed by reference to the whole of the circumstances applying at the time the release was given, and notions of fairness. In Re Pauling's Settlement Trust,[75] Wilberforce J (as he then was) reviewed the authorities and texts on the subject and said:

The result of these authorities appears to me to be that the court has to consider all the circumstances in which the concurrence of the cestui que trust was given with a view to seeing whether it is fair and equitable that, having given his concurrence, he should afterwards turn round and sue the trustees: that, subject to this, it is not necessary that he should know that what he is concurring in is a breach of trust, provided that he fully understands what he is concurring in, and that it is not necessary that he should himself have directly benefited by the breach of trust.[76]

98 This statement has since been accepted in both England and Australia. In Holder v Holder,[77] the court considered whether a beneficiary had acquiesced in a breach of trust and, in particular, whether the plea of acquiescence would be defeated if the plaintiff beneficiary, although he knew certain facts, did not appreciate their legal effect. In that context, Cross J referred to conflicting authority and applied the statement of Wilberforce J in Re Pauling's Settlement Trust quoted above. After quoting the above statement, Cross J said:

Equally, in my judgment, in cases of alleged acquiescence one cannot lay down a hard and fast rule to the effect that knowledge of the legal consequences of known facts is or is not essential to the success of the plea. It all depends on the circumstances.[78]

99 This approach was confirmed on appeal. Harman LJ also quoted the above statement from in Re Pauling's Settlement Trust, and continued:

There is therefore no hard and fast rule that ignorance of a legal right is a bar, but the whole of the circumstances must be looked at to see whether it is just that the complaining beneficiary should succeed against the trustee.[79]

100 In Spellson v George,[80] the New South Wales Court of Appeal took a similar approach. In a case concerning consent by a beneficiary to a breach of trust, Handley JA stated that '[a] beneficiary cannot be held to have consented to a breach of trust unless he or she had full knowledge of all the material facts';[81] and even where consent with full knowledge is proved:

that consent is only a prima facie defence and ... the Court must consider in detail 'all the circumstances' in order to determine whether it would be 'fair and equitable' for that beneficiary to be permitted to complain of that breach.[82]

101 Hope AJA agreed. He described the defence of consent by a beneficiary to a breach of trust as being 'two-pronged' in nature, in the following terms:

It is clear that consent (or concurrence) by a beneficiary to a breach of trust can be an important element in the defence of the trustee to proceedings brought against him by the beneficiary on the basis of that breach. However, as it seems to me, it is only part of the defence. Consent having been established, the beneficiary does not automatically fail. The court must consider all the circumstances of the case and decide whether it is fair and equitable that the beneficiary should sue the trustee.[83]

102 Young AJA also applied this approach, by reference to the judgment of Wilberforce J in Re Pauling's Settlement Trust.[84]

103 The respondents contend that it would not be fair and equitable to allow Bullhead to now complain of the Breach Findings, because at the time of the finalisation agreement Bullhead knew that the discounted units had been issued contrary to the trust deed and unitholders agreement, was thus put on enquiry as to the circumstances in which they had been issued, and, as a result, had constructive notice that the discounted units had been improperly issued in breach of trust and that it had a right to set aside the issue of those discounted units. They contend that such knowledge should be imputed to Bullhead in circumstances where it had not just been put on enquiry, but had made enquiries about the reasons why the discounted units were issued for the purpose of deciding whether to undertake litigation against the respondents. Further, they rely on the fact that Bullhead had both legal and accounting advice in the period leading up to Bullhead's acceptance of the offer.

104 The respondents rely upon the following statement in Meagher, Gummow & Lehane's Equity: Doctrines & Remedies:

A defendant who is put on enquiry is affected by notice of what would have been discovered if enquiry had been made. If a plaintiff knew that the validity of the transaction sought to be impeached was dubious, he or she is in the same position as if it were known that the transaction would be held invalid.[85]

105 The learned authors cite no authority for those propositions, but we accept them on general principles. However, they cannot have application to this case. This case involves a plaintiff (Bullhead) who was admittedly put on enquiry and made enquiries through Buckland. When Buckland did so, he was lied to in an endeavour to deflect him from further enquiry to discover the truth. That is clear from Charlie's 3 December 2013 email. In that regard, we reject the respondent's contention that this email was so obviously false that Buckland must have appreciated that was so and thus known that there was something dubious about the issue of the discounted units which Charlie was trying to hide; and that in such circumstances Buckland knew all that he needed to know in order to make an election as to whether or not to accept the offer or commence legal proceedings to challenge the issue of the discounted units. That submission ignores the long-standing friendship between Charlie and Buckland, and Buckland's express statement in his 11 December 2013 email that 'without question' he expected that all documentation relating to the issue of the discounted units was 'in order'.

106 Further, this contention is at odds with the two-pronged approach to considering whether a defaulting trustee or fiduciary can rely upon a release obtained from a beneficiary. A defaulting trustee or fiduciary who has lied to a beneficiary in response to enquiries made about the relevant breach of duty, will be hard pressed to say that it is not 'fair and equitable' that the beneficiary be permitted to complain of the breach. This is especially so in this case, where, at the time of the finalisation agreement, Charlie knew that Buckland was under financial pressure to make a tax payment in the near future.

107 We conclude that, by virtue of Charlie's dishonest response to Buckland's request for full information, Bullhead lacked actual or constructive knowledge as to the true circumstances in which the discounted units were issued. Combined with Charlie's deception of Buckland, that makes it fair and equitable that Bullhead should be able to sue the trustee and the respondents for the trust breaches which justify each of the Breach Findings. The fact that Buckland and his advisers had prior information indicating that the discounted units had been issued in breach of the unit trust deed and unitholders agreement is not, in all the circumstances, sufficient to deprive Bullhead of its equitable rights. The respondents are not entitled to rely on the release contained in the finalisation agreement, insofar as it extends to Bullhead's equitable claims. Although the release remains for the misleading and deceptive conduct claims, it was not suggested in argument that this has any practical consequence.

108 This conclusion leaves the trial judge's alternative estoppel findings for consideration.

109 The trial judge held that Bullhead was estopped from denying that the finalisation agreement is enforceable.[86] In summary, the trial judge accepted that:

(1) by sending the 'You can take down the sign' email on 16 December 2013, Buckland represented that the offer was acceptable and that a binding agreement had been reached;[87]

(2) the representation caused the Lastrina brothers to assume that a binding finalisation agreement had been reached;[88]

(3) the Lastrina interests acted in reliance on that assumption by purchasing, or causing others to purchase, the six unsold apartments in the development 'at above market price'; and by ensuring that the trustee was provided with sufficient funds to enable the other unitholders to receive the amounts guaranteed by the finalisation agreement as their final distributions in respect of the development project;[89]

(4) by making the representation, Buckland 'intended the Lastrinas to so act';[90] and

(5) Bullhead's conduct in seeking to resile from the finalisation agreement was unconscionable and occasioned detriment to the Lastrina interests.[91]

110 The trial judge expressed his conclusions on the estoppel issue in the following terms:

It is clear that Charlie assumed that by agreeing to remove the sign, Buckland was, in the circumstances and context and for the reasons given, embracing the Finalisation Agreement. This assumption, which Charlie was entitled to make and which was entirely reasonable, was specifically brought about, as indicated by the conduct of Buckland. By his statement and the broader conduct referred to he represented that the Offer was acceptable. The steps taken by Charlie, based on the assumption were entirely reasonable. In this case it is clear that Buckland intended Charlie so to act. The detriment is obvious...[92]

111 We first consider Bullhead's contention that the respondents were not entitled to succeed on the alternative ground of equitable estoppel found by the trial judge, because they do not have clean hands.

112 As appears above, the respondents relied on statutory limitation of action defences, but the trial judge dismissed those defences on the ground that the discounted units had been issued in fraudulent breach of trust.[93] At trial, the respondents applied for leave to rely also on Bullhead's delay in bringing the proceeding. The trial judge refused the application on the ground that it would fail, because the trustee and the respondents 'do not have "clean hands" as I have found, and cannot rely on the proposed equitable defence'.[94] That was clearly a reference to the trial judge's Breach Findings and his strong condemnation of the immoral conduct on which those findings are based.

113 For similar reasons, grounds 2 and 3 should succeed. Before setting out our reasons for this conclusion, it is necessary to note at the outset that lack of clean hands was not pleaded in Bullhead's reply to the estoppel defence. Indeed, there was no reply to the estoppel defence. Nor was unclean hands relied upon before the trial judge as an answer to the estoppel. Rather, Bullhead relied at trial on only one answer to the estoppel case, namely, that it should fail because the Lastrina respondents were unable to establish sufficient detriment 'because the contracts of sale the subject of the finalisation agreement all predate the Finalisation Agreement'.[95] The trial judge held that this was not an answer to the estoppel, for the following reasons:

It is obvious that the contracts of sale were backdated, although the relevant witnesses declined to answer questions relating to the backdating of the contracts of sale, relying - as was their right - on the privilege against self-incrimination. However, from the evidence as a whole there can be no doubt that at the relevant time the apartments were and remained unsold.

Accordingly, I am satisfied that all of the elements of the estoppel defence have, as was submitted, been made out.[96]

114 In these circumstances, the respondents contended that it was not now open for Bullhead to contend on appeal that the trial judge's estoppel finding should not have been made on the ground of unclean hands by the respondents. In our view, leave should be given to rely on that argument on appeal. Given the issues for determination and the evidentiary enquiry at trial, including as to credit issues of the respondents, we are satisfied that no further evidence could have been given by or on behalf of the respondents in answer to an allegation that they lacked clean hands. The propriety of their conduct in relation to the issue of the discounted units, and the making of the finalisation agreement, was squarely in issue throughout. The trial judge found that the respondents lacked clean hands in connection with the issue of the discounted units. Further, the respondents did not contend that there was further evidence they would have called. In these circumstances, it is in the interests of justice that Bullhead should be allowed to raise the unclean hands contention in answer to the estoppel found by the trial judge.[97]

115 We now set out our reasons for holding that the equitable estoppel is defeated by the respondents' unclean hands. As we have noted, the trial judge expressly found that the trustee and the respondents acted with unclean hands in connection with the issue and receipt of the discounted units. To that finding, we would add that Charlie, on behalf of the initial unitholders, acted with unclean hands when he gave false information and otherwise refused to answer Buckland's request for information concerning the circumstances justifying the issue of the discounted units. That immoral conduct was in the context of negotiating the finalisation agreement, which contains the release relied upon by the respondents.

116 The respondents contend that the subject of the equity they rely upon is 'the unconscionability of [Bullhead] resiling from the Finalisation Agreement', and that their unclean hands are not sufficiently connected to that equity. In that regard, we note that the contentions of the respondents focused solely on the trial judge's finding of unclean hands in connection with the issue of the discounted units, but paid no regard to their later immoral conduct in relation to the making of the finalisation agreement.

117 The equitable principle that a party seeking an equitable remedy may be deprived of that remedy because of unclean hands may be traced back to the statements of Lord Chief Baron Eyre in Dering v Earl of Winchelsea,[98] where it was stated:

It is not laying down any principle to say that [the plaintiff's] ill conduct disables him from having any relief in this Court. If this can be founded on any principle, it must be, that a man must come into a Court of Equity with clean hands; but when this is said, it does not mean a general depravity; it must have an immediate and necessary relation to the equity sued for; it must be a depravity in a legal as well as in a moral sense.[99]

118 As the emphasised words in the above-quoted statement show, two things must be established: (1) 'an immediate and necessary relation to the equity sued for'; and (2) 'a depravity in a legal as well as in a moral sense'.

120 First, the relevant conduct was both unlawful and immoral:

(1) The issue and receipt of the discounted units were legal wrongs, constituted by breaches of the trust deed and the unitholders agreement. The trial judge found that they were immoral breaches.

(2) Charlie's dishonest refusal to provide Bullhead with full information about the circumstances surrounding the issue of the discounted units was a breach by the trustee (who Charlie effectively represented throughout the development project) of its duty to fully inform Bullhead of the breaches of trust for which it was seeking a release by the terms of the finalisation agreement.

(3) The respondents' failure to inform Bullhead of their breaches of fiduciary duty and of the unitholders' agreement, before the finalisation agreement was entered into, breached their fiduciary obligations to Bullhead.

121 Second, viewed as a whole, there was clearly an immediate and necessary relation between the unlawful and immoral conduct of the respondents and the finalisation agreement, including the release of Bullhead's claims by the terms of that agreement. It is that very agreement which the respondents contend Bullhead unconscionably resiled from by commencing this proceeding.

122 By grounds 2 and 3, Bullhead also seeks to challenge the estoppel finding on the basis that the trial judge erred in his findings as to the sufficiency of the detrimental reliance by the respondents on Bullhead's conduct. Given our conclusion on the unclean hands issue, it is unnecessary to consider this aspect of grounds 2 and 3. We will, however, state our views briefly.

123 As appears above, the trial judge held that the Lastrina brothers' reliance on Bullhead's representation was 'obvious' detriment, and thus sufficiently substantial to justify the estoppel.

124 The trial judge's finding that the detriment to the Lastrina interests was 'obvious', was based on his view that the Lastrina interests met the difference between the list prices and the 'market value' of the six unsold apartments from their own funds, and otherwise provided the trustee with 'sufficient funds so as to enable the guaranteed sums to be distributed to the non-Lastrina unitholders'.[100] In considering the sufficiency of this detriment as a basis for the estoppel, rather than some lesser form of relief, the trial judge applied[101] the following statement of Meagher JA in Walsh v Walsh:

There is no governing principle that requires that the relief granted be that which is the minimum necessary to do justice: Giumelli v Giumelli [(1999) [1999] HCA 10; 196 CLR 101] at [40]- [48]; Donis v Donis [(2007) 19 VR 577] at [18]-[19]; Delaforce v Simpson-Cook [(2010) [2010] NSWCA 84; 78 NSWLR 483] at [3], [59]. To the extent that there is a prima facie entitlement to relief on the basis that the adopted expectation is to be made good, that entitlement must be weighed against any injustice to the estopped party in doing so and the detriment suffered by the party who has acted upon the induced expectation. Consideration should also be given to whether the proposed relief has any adverse effects on the interests of third parties.[102]

125 Although the trial judge quoted this statement, he did not weigh the detriment to the Lastrina interests against any injustice to Bullhead if the estoppel was imposed, rather than some lesser form of relief. Bullhead complains about the trial judge's failure to conduct this weighing exercise.

126 Bullhead contends that there was no evidence before the Court as to the amount contributed by the Lastrina interests to the trustee to enable the guaranteed distributions to be made under the finalisation agreement. As to the obligation to purchase the unsold apartments at their list value, there was no evidence of their market value, other than for one apartment which was sold to a third party for $20,000 less than its 'list price'. In these circumstances, Bullhead contends that the trial judge erred in failing to consider the value of the release from Bullhead's claim to set aside the issue of the discounted units. On the basis that the discounted units are set aside, as the trial judge found they should have been,[103] the Lastrina unitholders would have received only $1,133,000 as a final distribution from the trust, rather than the $2,354,000 (or $1,221,000 more) that they received on the basis of their discounted units being entitled to full participation in the final distribution. In comparison, by allowing all the discounted units to fully participate, Bullhead was to receive only $608,000 under the finalisation agreement, rather than the $1,133,000 (or $515,000 more) it would have received if the discounted units had not been counted.

127 Bullhead contends that there is no evidence of any detriment suffered by the Shey respondents. Having received discounted units in breach of trust, they obtained a release from liability for the Breach Findings against them without contributing anything further to the trust. Yet they received $1,213,000 under the finalisation agreement when, if the discounted units were set aside, they would have received only $608,000 (or $515,000 less) as a final distribution.

128 On this basis, Bullhead contends that the weighing exercise referred to in Walsh overwhelmingly dictates that any prima facie entitlement of the respondents to the estoppel found by the trial judge should have been displaced by a lesser remedy, limited to any amounts proved to have been directly or indirectly contributed by the Lastrina interests to the trust in order to enable the final distributions which were in fact made from the trust.

129 In response, the respondents rely on their prima facie entitlement to relief on the basis of their justified assumption that the finalisation agreement was binding. They have proceeded to arrange their financial and taxation affairs on the basis that the finalisation agreement was binding. Further to the above-quoted statement by Meagher JA in Walsh, they placed particular reliance on the decision of the New South Wales Court of Appeal in Delaforce v Simpson-Cook,[104] where Handley AJA said that, where the elements for a promissory estoppel are made out, the Court 'should, prima facie, enforce a reasonable expectation which the party bound created or encouraged'.[105]

130 Bullhead's contentions should be accepted. While we accept that there is a prima facie entitlement to an estoppel where the elements of a promissory estoppel are established (as here), the remedy would be inequitably harsh in this case and, if the estoppel is not completely barred by the respondents' unclean hands, some lesser form of relief should be awarded. This is the necessary result of the weighing exercise referred to in Walsh, which is consistent with the joint judgment of the High Court in Giumelli v Giumelli,[106] where the prima facie entitlement was displaced by the circumstances of the case. In the course of the joint judgment,[107] the Court referred with approval to the statement by Deane J in Commonwealth v Verwayen that:

Prima facie, the operation of an estoppel by conduct is to preclude departure from the assumed state of affairs. It is only where relief framed on the basis of that assumed state of affairs would be inequitably harsh, that some lesser form of relief should be awarded.[108]

131 To similar effect are the statements in Delaforce. For example, Allsop P described the weighing exercise as requiring a court of equity to:

look at all the relevant circumstances that touch upon the conscionability (or not) of resiling from the encouragement or representation previously made, including the nature and character of the detriment, how it can be cured, its proportionality to the terms and character of the encouragement or representation and the conformity with good conscience of keeping a party to any relevant representation or promise made, even if not contractual in character. ...

Proportionality of the claimed interest or remedy to the prejudice or detriment is undeniably a relevant consideration...[109]

132 Finally, if we had been of the opinion that the detrimental reliance by the Lastrina interests was sufficient to justify the estoppel, we would not have deprived the Shey respondents of the benefit of that estoppel. Bullhead was either entitled to contend that the finalisation agreement was not enforceable, or it was not. If it was not entitled to so contend, that would have been an end to the matter. As a party to the finalisation agreement, which involved mutual releases by all parties, Shey would have been the fortunate beneficiary of the estoppel.

133 We finally consider paragraph 2 of the respondents' notice of contention; which is to the effect that, even if the Shey respondents have not established an estoppel in their favour, Bullhead is nevertheless barred from obtaining judgment against them. This contention is based on 'the equitable rule against double satisfaction', and the corresponding 'common law rule that a plaintiff who has fully recoupled his loss is prevented from obtaining a further award of damages'. No written submissions were made on this issue in the respondents' written case. In oral submissions by the respondents' counsel, it emerged that the basis of this notice of contention is to cater for the possibility that the Lastrina respondents are entitled to the benefit of an estoppel but the Shey respondents are not. For the reasons given above, that is not the case and it is thus unnecessary to consider this issue further. However, if the postulated circumstances had arisen for decision, we incline to the view that the notice of contention is not sustainable. If the Shey respondents do not have the benefit of an estoppel, then, for the reasons given above, they cannot enforce the finalisation agreement against Bullhead, and Bullhead would be entitled to pursue its claims for breach of fiduciary duty and knowing receipt of trust property against them.

Ground 4: Did the trial judge give adequate reasons?

134 It is apparent from what we have said above that the trial judge's Reasons adequately disclosed a path of reasoning to his conclusions. We consider that ground 4 had no prospect of success and, accordingly, leave to appeal in respect of that ground will be refused.

135 For the reasons given above, we would grant leave to appeal on grounds 1, 2, 3 and 5, but refuse leave on ground 4. The appeal should be allowed on grounds 2, 3 and 5. In summary, although the trial judge's findings as to the existence of the finalisation agreement should stand, that agreement is unenforceable by the respondents. This is because Bullhead did not have full knowledge of all the circumstances concerning the issue of the discounted units, and of its own rights and claims in that regard, when it entered into the agreement. In addition, for the reasons given, Bullhead was not estopped from denying the enforceability of the finalisation agreement.

136 We note that ground 5 raised issues which were not pleaded or precisely articulated in argument before the trial judge. However, as counsel for the respondents rightfully acknowledged by not opposing the addition of ground 5, there was no prejudice to the respondents because the relevant facts were fully explored at trial.

137 In these circumstances, we will hear from the parties as to the appropriate orders to be made, and as to costs.

BRICKMAKERS PLACE PTY LTD (ACN 128 994 749) (IN LIQUIDATION)

[2] Relying on Limitation of Actions Act 1958 s 21(2).

[3] Relying on Instruments Act 1958 s 126 and/or Property Law Act 1958 s 53.

[4] Bullhead Pty Ltd v Brickmakers Place Pty Ltd [2017] VSC 206 [2] ('Reasons').

[9] Paragraph 1 of the notice of contention relates to this ground.

[10] Paragraph 2 of the notice of contention relates to these grounds.

[29] The trial judge did not accept that this advice was correct. He held that the existence of the discounted units and the price paid for them had been disclosed in the financial statements for the year ended 30 June 2009, which were made available to Buckland on 17 August 2009: Reasons [255].

[33] Reasons [134]-[139] (emphasis added).

[37] Reasons [126]; see also [146].

[46] Bullhead Pty Ltd v Brickmakers Place Pty Ltd [No 2] [2017] VSC 323 ('Supplementary Reasons').

[52] Supplementary Reasons [23]-[24].

[55] [2005] NSWCA 447.

[57] (1994) 10 NSWCCR 117 ('Malco Engineering').

[60] [2015] NSWCA 12; (2015) 88 NSWLR 281 ('Ashton').

[61] Ibid 311 [173], citing Ballas v Theophilos [No 2] [1957] HCA 90; (1957) 98 CLR 193, 196.

[62] [1954] HCA 23; (1954) 91 CLR 112.

[64] Reasons [115] (emphasis added). See also Supplementary Reasons [13].

[65] Robinson Helicopter Company Inc v McDermott [2016] HCA 22; (2016) 331 ALR 550, 558-9 [43] (citations omitted).

[66] Malco Engineering (1994) 10 NSWCCR 117, 118.

[67] Ashton [2015] NSWCA 12; (2015) 88 NSWLR 281, 311 [173].

[70] Reasons [197]-[202]: referring to, among other authorities, Empirnall Holdings Pty Ltd v Machon Paull Partners (1988) 14 NSWLR 523; PRA Electrical Pty Ltd v Perseverance Exploration [2007] VSCA 310; (2007) 20 VR 487; Vroon BV v Foster's Brewing Group Ltd [1984] 2 VR 32, 79.

[73] [1863] EngR 168; (1863) 1 De G J & S 107; 46 ER 42 ('Farrant').

[74] Farrant (1863) 1 De G J & S 107, 119-20; [1863] EngR 168; 46 ER 42, 46-7 (emphasis added). See also Corporate Systems Publishing Pty Ltd v Lingard [2009] WASCA 158 [94]; Spellson v George (1992) 22 NSWLR 666, 670; Edmunds v Pickering [No 3] (1999) 75 SASR 407, 571-2 [1426]-[1427]; Deutsch v Deutsch [2012] VSC 227 [107].

[75] [1961] 3 All ER 713.

[79] Ibid 394 (emphasis added); see also 399 (Danckwerts LJ), 406 (Sachs LJ).

[80] (1992) 26 NSWLR 666.

[81] Ibid 670, citing, among other authorities, Re Pauling's Settlement Trust [1961] 3 All ER 713; Farrant (1863) 1 De G J & S 107; [1863] EngR 168; 46 ER 42.

[85] J D Heydon, M J Leeming and P G Turner, Meagher, Gummow & Lehane's Equity: Doctrines & Remedies (5th ed, 2014, LexisNexis Butterworths) 1083 [37-035].

[94] Reasons [112] (citations omitted).

[97] Coulton v Holcombe [1986] HCA 33; (1986) 162 CLR 1, 7-8; Whisprun Pty Ltd v Dixon [2003] HCA 48; (2003) 200 ALR 447, 461 [51]; Devon v Capital Finance Australia Ltd [2014] VSCA 73 [75].

[98] (1787) 1 Cox 318; 29 ER 1184 ('Dering').

[99] Dering (1787) 1 Cox 318, 319-20; 29 ER 1184, 1185 (emphasis added) (citations omitted).

[102] [2012] NSWCA 57 [31] (Macfarlan and Barrett JJA agreeing) (emphasis added) (citations in original) ('Walsh').

[104] [2010] NSWCA 84; (2010) 78 NSWLR 483 ('Delaforce').

[105] Ibid 494 [63] (emphasis in original). See also [65], citing Giumelli v Giumelli [1999] HCA 10; (1999) 196 CLR 101, 123.

[106] [1999] HCA 10; (1999) 196 CLR 101.

[108] Commonwealth v Verwayen (1990) 170 CLR 394, 443 (emphasis added).

[109] [2010] NSWCA 84; (2010) 78 NSWLR 483, 485 [3]-[4] (emphasis added).