Grace v Grace - [2012] NSWSC 976 - NSWSC 2010 case summary — Zoe

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Grace v Grace

[2012] NSWSC 976

Supreme Court of NSW|2010-11-02|Before: Brereton J

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Court

Supreme Court of NSW

Decision date

2010-11-02

Before

Brereton J

Source

Original judgment source is linked above.

Judgment (51 paragraphs)

[1]

51(xxxix) (Cth) Family Law Act 1975, s 4, s 75(2), s 79A, s 79 (Cth) Family Law Rules 1984, O. 11A r.1, O. 11 r. 13, O. 14 r. 9 (NSW) Family Provision Act 1984, s 7, s 16(2) (NSW) Protected Estates Act 1983 (Cth) Corporations Act 2001, s 462(2)(b), s 233(1), s 464(4) (Cth) Judiciary Act 1903, s 78B (NSW) Property (Relationships) Act 1984, s 20 UCPR, r 12.1 Cases Cited: Allan & Allan (1987) FLC 91-824 Allcard v Skinner (1887) 36 Ch D 145 Allesch v Maunz [2000] HCA 40; (2000) 203 CLR 172 Bailey & Bailey (1990) FLC 92-117 Bank of New South Wales v Rogers [1941] HCA 9; (1941) 65 CLR 42 Berry & Berry (1990) FLC 92-118 Blomley v Ryan [1956] HCA 81; (1956) 99 CLR 362 Bourke & Bourke [1998] FamCA 69 Bridgewater v Leahy [1998] HCA 66; (1998) 194 CLR 457 Catombal Investments Pty Ltd [2012] NSWSC 775 Chemaisse & Commissioner of Taxation (No 3) (1990) 13 Fam LR 724; (1990) FLC 92-133 Clifton and Stuart (1990) 14 Fam LR 511 Commercial Bank of Australia v Amadio [1983] HCA 14; (1983) 151 CLR 447 Crawley v Short [2009] NSWCA 410 Deputy Commissioner of Taxation (WA) v Spanjich (1988) 12 Fam LR 541; (1988) FLC 91-974 Ebert v Ebert [2008] NSWSC 1206 Ebrahimi v Westbourne Galleries Ltd [1973] AC 360 Erlanger v The New Sombrero Phosphate Co (1878) 3 App Cas 1218 Ferraro & Ferraro (1993) FLC 92-335 Goldsworthy v Brickell [1987] Ch 378 Greta & Greta [2007] FamCA 1404 Hatton v Hatton (NSWSC, Powell J, 6 September 1977, unreported) Hickey & Hickey [2003] FamCA 395; (2003) FLC 93-143 Juul v Northey [2010] NSWCA 211 Kardos v Sarbutt [2006] NSWCA 11; (2006) 34 Fam LR 550 Lewis v Lewis [2001] NSWSC 321 Louth v Diprose [1992] HCA 61; (1992) 175 CLR 621 Mason v Hannaford; Mason-King (1993) FLC 92-398 Massie v Laundey (NSWSC, Young J, 7 February 1986, unreported) McLay & McLay (1996) FLC 92-667 Meehan v Glazier Holdings Pty Ltd [2002] NSWCA 22; (2002) 54 NSWLR 146 Menzies & Evans (1988) FLC 91-969 Miklic v Miklic [2010] FamCA 741 Morgan v 45 Fleurs Ave Pty Ltd (1986) 10 ACLR 692 National Westminster Bank plc v Morgan [1985] AC 686 North & North (1987) FLC 91-831 Official Trustee in Bankruptcy v Schultz [1990] HCA 45; (1990) 170 CLR 306 Omacini & Omacini [2005] FamCA 195; (2005) FLC 93-218 OSF & OJK (2004) FLC 93-191 Parrott v Public Trustee of NSW (1994) FLC 92-473 Public Trustee v Gilbert (1991) 14 Fam LR 573 Quek v Beggs (1990) 5 BPR 11,761 Randle & Randle (1987) FLC 91-828 Re Atkinson (deceased) [1971] VR 612 Re Gilbert and Estate of Gilbert (1989) 13 Fam LR 632 Re Guskett [1947] VLR 212 Re O'Toole, Taylor & O'Toole 15 Fam LR 265; (1992) FLC 92-285 Robinson & Willis (1982) 8 Fam LR 131 Savage v Lunn [1998] NSWCA 203 Savage v Lunn (No 2) [1998] NSWCA 204 Semmens v The Commonwealth (1990) FLC 92-116; (1989) 13 Fam LR 715 Rowell & Rowell (1989) FLC 92-026 Tasmanian Trustees Limited v Gleeson (1990) FLC 92-156 Tillett v Varnell Holdings Pty Ltd [2009] NSWSC 1040 Warren v McKnight (1996) 40 NSWLR 390 Whereat v Duff [1972] 2 NSWLR 147 Young v Lalic [2006] NSWSC 18; (2006) 197 FLR 27 Texts Cited: Cope, Duress Undue Influence and Unconscientious Bargains, Law Book Co 1985 Meagher Gummow & Lehane, Equity Doctrines & Remedies, LexisNexis Butterworths, 4th edition The Hon. PLG Brereton, "Where Death and Divorce Meet: The Intersection of Family Provision and Family Law", National Family Law Conference, October 2006 Category: Principal judgment Parties: David Alexander Grace (plaintiff) Deborah Sharon Grace (first defendant) Julienne Grace (second defendant) Nevilda Holdings Pty Ltd (prov liq'r appted) (third defendant) Nevilda Investments Pty Ltd (prov liq'r appted) (fourth defendant) Dutchie Pty Ltd (sixth defendant) Phoenix Rising Investments Pty Ltd (seventh defendant) Representation: Counsel: D Williams SC w S Goodman (plaintiff) A Moses SC w D Stewart (first, second & seventh defendants) Solicitors: James Tuite & Associates (plaintiff) Clinch Long Letherbarrow Pty Ltd (first, second & seventh defendants) File Number(s): 2006/259566

[2]

Judgment 1The late Dr Colin Grace died on 1 September 1992, survived by his son the plaintiff Mr David Alexander Grace, his daughter the first defendant Ms Deborah Sharon Grace, and his divorced former wife (the mother of the plaintiff and the first defendant) the second defendant Dr Julienne Grace. For convenience, and without intending any disrespect, I refer to the various members of the Grace family by their first names. 2At the time of his death, Colin held or was beneficially entitled to 2,003 cumulative preference (CUMP) shares, and 300 of 600 ordinary shares, in the third defendant Nevilda Holdings Pty Ltd; Grace Securities Pty Ltd, in which he and Julienne each held one of the two issued shares, held the other 300 ordinary shares. Colin also held 12 of 112 ordinary shares in the fourth defendant Nevilda Investments Pty Ltd, in which Nevilda Holdings held the other 100 ordinary shares. 3By his will, made on 25 May 1988, Colin left his share in Grace Securities - and his 200 (of 1,400) shares in Sharander Pty Ltd - to Deborah, and the rest and residue of his estate (which included the 2,003 CUMP shares in Nevilda Holdings, and a property at 272 Birrell Street, Bondi) to David. However, on 16 January 1995, contemporaneously with the transmission to him of 2,001 CUMP shares in Nevilda Holdings, David transferred 667 of them to each of Deborah and Julienne. Then, on 18 May 1995 in the Family Court of Australia, in proceedings that had been initiated by Julienne against Colin before his death, orders were made by consent of Julienne and Deborah (as Colin's legal personal representative), for the transfer to Julienne by way of property settlement of 667 CUMP shares in Nevilda Holdings, and of 272 Birrell Street. 4In these proceedings, David:

Seeks to have set aside the transfer to Deborah and Julienne of 667 each of the cumulative preference shares in Nevilda Holdings, and the transfer to Julienne of 272 Birrell Street, upon grounds that the transfers of 16 January 1995 were procured by fraud, unconscionable dealing or undue influence, and that the Family Court consent orders of 18 May 1995 were a miscarriage of justice and liable to be set aside under (CTH) Family Law Act 1975, s 79A ("the administration case");
Claims orders for repayment by Deborah and Julienne to Nevilda Investments of moneys received by them during the period between 1995 and 2006, and other relief, on the grounds that the affairs of the Nevilda companies have been conducted by Deborah and Julienne in a manner oppressive of him ("the oppression case"); and
Claims an account in respect of the Nevilda Investment Superannuation fund (NISF) on the wilful default basis, in particular by reason of payments out of the fund in 2007 after the appointment of a provisional liquidator to Nevilda Holdings, the trustee of that fund ("the NISF case"). 5Against the possibility that those claims or any of them might succeed, Deborah and Julienne have brought cross-claims, for adjustive property orders under (CTH) Family Law Act 1975, s 79(8), and alternatively for provision out of Colin's estate under (NSW) Family Provision Act 1984. They also contend that the Nevilda companies should be wound up on the just and equitable ground, as it is no longer realistic to expect the parties to co-operate in their management. 6David commenced the proceedings on 3 November 2006, as a result of investigations that he began in about April 2006. Following a contested interlocutory application heard on 21 and 22 December 2006, orders were made appointing a provisional liquidator to the Nevilda companies on 18 January 2007. Thereafter, the issues expanded, and the pleadings went through several iterations, with a Further Amended Statement of Claim ultimately filed on 10 September 2009, a Defence to it on 16 November 2009, and a Reply on 25 November 2009. The evidence was extensive: for example, Julienne's principal (but by no means only) affidavit comprised 1,348 paragraphs over 129 pages (without annexures); and Deborah's principal affidavit 760 paragraphs over 101 pages (without annexures). Almost four years after proceedings had been instituted, the trial commenced on 25 October 2010 and continued over 28 days until 2 December 2010. The parties then made written submissions, the plaintiff on 31 January 2011, the defendants on 11 April 2011, and the plaintiff in reply on 14 June 2011. The hearing resumed for oral submissions on 23 and 24 June 2011, when they were not completed. Following the exchange of supplementary written submissions, oral submissions resumed and were concluded on 22 July 2011, when judgment was reserved. In the course of preparation of the judgment since then, I have been particularly assisted by the comprehensive, detailed and well-referenced written submissions of Mr David Williams SC and Mr Goodman for the plaintiff, and Mr Moses SC and Mr Stewart for the defendants.

[3]

Background 7Colin was the son of Neville and Hilda Grace, who also had a daughter, Carolyn. 8Neville and Hilda incorporated N&H Grace (Holdings) Pty Ltd (now Dutchie Pty Ltd) on 14 March 1962, and were its original directors, each holding one of two issued shares. On 26 April 1962, it allotted additional shares, two to each of Neville and Hilda, and one to each of Colin and Carolyn. 9Grace & Barnett Pty Ltd was incorporated in 1966, when Colin was issued 3 of the 16 shares in it. 10Colin and Julienne commenced to cohabit in a de facto relationship in 1967. On 22 July 1969, a property at 241 Birrell Street Bondi was purchased in Colin's name, for $24,752. 11Colin and Julienne were married on 17 August 1969. On 9 December 1969, they incorporated Grace Securities, each of them holding one of two issued shares and being the original directors. 12On 8 June 1970, Neville and Colin incorporated Nevilda Investments, each becoming a director and holding one of two issued shares. On 16 June, Nevilda Investments allotted further shares: 24 to Neville, 24 to Colin, 25 to Hilda and 25 to Carolyn. 13On 15 November 1971, Neville and Hilda incorporated Nevilda Holdings, each becoming a director and holding one of two issued CUMP (voting) shares. On 1 December 1971, Nevilda Holdings allotted 300 ordinary (non-voting equity) shares to Carolyn, and 300 ordinary shares to Grace Securities (in which it will be recalled that Colin and Julienne were each 50% shareholders). Simultaneously, on 1 December 1971, Nevilda Holdings purchased all eight issued shares in N&H Grace Holdings, for $60,000 ($7,500 per share); and all 100 issued shares in Nevilda Investments, which at that time had no assets, for $100. Thus, Nevilda Holdings became the holding company of Nevilda Investments and of N&H Grace Holdings. 14In February 1972, Nevilda Investments acquired: from Neville, a property in Lamrock Avenue, Bondi Beach for $50,000; also from Neville, a property in Crown Street, Darlinghurst for $65,000; and from a third party, a property in Bondi Road, Bondi for $108,000. The Lamrock Ave and Bondi Rd properties remain assets of Nevilda Investments today. 15Deborah was born on 6 February 1972. 16In August 1973, Colin sold his three shares in Grace & Barnett to Grace Securities for $30,000; and Colin and Julienne, as joint tenants, acquired for $100,000, with a mortgage loan of $90,000, a property in Burrabirra Avenue, Vaucluse, which became their matrimonial home. In November 1973, Colin sold 241 Birrell Street to Grace Securities for $50,000. 17Nevilda Investments acquired properties in Wellington Street, Bondi from a third party on 25 March 1975 for $140,000, with a mortgage loan of $40,000; they too remain assets of Nevilda Investments today. 18David was born on 29 April 1975. 19On 5 December 1975, Grace Securities purchased a residential apartment block in Sir Thomas Mitchell Road, Bondi, from a third party for $93,000, with a mortgage loan of $46,000. 20On 10 May 1976, Colin was appointed a director of Nevilda Holdings; before then he had attended board meetings as a representative of Grace Securities. 21On 11 March 1977, Grace & Barnett purchased a property in Old South Head Road, Bellevue Hill from a third party for $145,000. 22On 8 June 1979, Grace Securities purchased property in Roscoe Street, Bondi Beach for $215,000, with a mortgage loan of $105,000. 23Nevilda Investments sold Crown Street on 30 August 1979 for $166,000 and purchased a property in Anzac Parade, Kingsford on 15 February 1980 from a third party for $226,000, with a mortgage loan of $116,000. 24Neville died on 23 July 1982. 25On 2 July 1984, Carolyn sold 250 of her ordinary shares in Nevilda Holdings to Colin for $250,000. Carolyn sold her remaining 50 shares nominally to Julienne for $50,000; however Colin and not Julienne paid for them, and Julienne later (on 20 October 1986) transferred them to Colin. 26Colin and Julienne separated in January 1985, and lived separately and apart, albeit under the one roof, at their former matrimonial home at Burrabirra Avenue until October 1987. 27On 1 February 1985, Colin caused N&H Grace Holdings to allot to himself 1000 shares, and Nevilda Investments to allot to himself 10 ordinary shares. The effect was slightly to increase Colin's and dilute (from 25% to 22.7%) Julienne's ultimate beneficial interest in Nevilda Investments; and significantly to increase Colin's and dilute (from 25% to 0.27%) Julienne's ultimate beneficial interest in N&H Grace Holdings. 28On 30 June 1986, Colin caused Nevilda Holdings to transfer all its eight shares in N&H Grace Holdings to Deborah and David, four each. 29On 21 November 1986, Julienne purchased a property in Alma Street, Paddington, for $150,000, with a mortgage loan of $80,000. In October 1987, Julienne and Deborah vacated Burrabirra Avenue and moved to Alma Street; David remained with Colin. 30On 10 November 1987 Colin executed a general power of attorney in favour of Hilda. 31At about this time, Colin and Julienne reached a loose arrangement that he would be primarily responsible for David, while she would be primarily responsible for Deborah. On 5 February 1988, Julienne made a will leaving $500,000 to David and the rest of her estate to Deborah; clause 4 recorded that she had given a greater share of her estate to her daughter than her son, as Colin was providing and had provided much more for David than for Deborah, and had advised that he would not make any provision for Deborah in his will. 32On 25 March 1988, Julienne commenced proceedings in the Family Court of Australia for access to David (as contact was then known), and dissolution of the marriage. On 29 March 1988, orders were made that she have access to David every fortnight. On 10 May 1988, the court on Julienne's application pronounced a decree nisi for dissolution of the marriage. 33On 25 May 1988, Colin made his last will, to which reference has been made, appointing his solicitor Cedric Symonds as executor. Shortly thereafter, Colin was hospitalised, and David went to live with Julienne. On 3 June 1988, Colin underwent neurosurgery for the removal of a brain tumour. The operation left him severely mentally incapacitated. He was thereafter unable to manage his own affairs, and continued to believe that he was still married to Julienne. The decree nisi for dissolution of the marriage became absolute on 11 June 1988. 34Despite this, and despite what appears to have been considerable tension amounting to hostility between them in the months leading up to his operation, Julienne thereafter visited Colin in hospital. There was a high level of friction between Hilda, who continued to hold Colin's power of attorney, and Julienne. Julienne removed Colin's gold bars from his safe deposit box, after his operation (and therefore after separation). She justified this by asserting that she believed that they were "communal property" and was concerned that Hilda might take them. This rather resonates with her later justification for the January 1995 share transfers - essentially, that it had the effect of putting past wrongs right. 35In or about September 1988, Julienne and David left Alma Street and returned to Burrabirra Avenue. Deborah remained in the Alma Street property. 36By 30 December 1988, Julienne was aware of the contents of Colin's will. Although Julienne denied knowledge of Colin's 1988 will prior to his death in 1992, there are powerful indications in correspondence emanating from her then solicitors Gillis Delaney Brown that she must have been aware of its contents by the end of 1988. Her explanation that she assumed that Mr Symonds was executor from an earlier will is falsified by the earlier will, which was in her possession. The specific references in Gillis Delaney Brown's correspondence to only those shareholdings that were listed in the will are compelling evidence that Julienne had access to the will. 37Colin was eventually discharged from hospital in March 1989, and thereafter lived with Hilda until his return to Burrabirra Avenue, referred to below. 38On 9 June 1989, Julienne filed an application in the Family Court for adjustive property orders, in which she sought the transfer to her of Colin's interest in Burrabirra Avenue and the shares held by Colin in Debid, Sharander and Grace Securities - the shares in Sharander and Grace Securities were left to Deborah under Colin's will. Hilda filed an application to be appointed Colin's next friend on 12 July 1989. On 29 August 1989, Julienne filed an affidavit opposing Hilda's application to be so appointed, and on 19 October 1989 a Registrar dismissed Hilda's application; she then applied to a judge for a review of that decision. 39During this period, with the assistance of Colin's sister Carolyn, Hilda managed the affairs of Nevilda Holdings, Nevilda Investments and N&H Grace Holdings. On 9 October 1989, Hilda caused each of the Nevilda companies to allot one ordinary share to herself upon trust for Colin, and one ordinary share to Carolyn also upon trust for Colin. On 22 November 1989, she caused N&H Grace Holdings to issue one ordinary share to herself upon trust for Colin, one ordinary share to Carolyn also upon trust for Colin, one ordinary share to David, and one to Deborah. Thus, from late 1989, Hilda and Carolyn each held a share in each of Nevilda Holdings, Nevilda Investments and N&H Grace Holdings, upon trust for Colin ("the trust shares"). Meanwhile, Julienne managed the affairs of Grace Securities, Sharander and Debid Pty Ltd. 40Deborah attained 18 years of age on 6 February 1990, whereupon she was appointed a director of Grace Securities, Sharander and Debid. On 30 July 1990, at Julienne's suggestion, she made application to be appointed Colin's next friend in the Family Court proceedings; Julienne's suggestion that this was some independent initiative of an 18 year old is not believable. On 3 August 1990, Ross-Jones J dismissed Hilda's application for a review of the Registrar's decision, gave leave to Deborah and Cedric Symonds to file applications to be appointed his next friend, and listed the proceedings for mention on 7 September 1990. Mr Symonds, as well as Deborah, made such an application, and on 7 September 1990, the applications were adjourned for hearing on 22 February 1991. 41As at November 1990, Colin's condition included that he had severe short term memory loss and frequently could not remember what time it was or where he was; he did not accept that he was divorced from Julienne; he was unable to instruct Cedric Symonds (or any other lawyer) to act on his behalf; he was often unaware of his surroundings; he could not be allowed to go out alone because he had no short term memory and would get lost; and he thought that David was only 11 or 12 years of age. Nonetheless, on 4 November 1990 he signed a deed, witnessed by Julienne and prepared by Julienne's solicitors on Julienne's instructions, which purported to revoke the power of attorney that he had granted to Hilda on 10 November 1987. 42On 25 November 1990, Julienne attended at Hilda's home and conveyed Colin back to Burrabirra Avenue where he thereafter lived until his death. The circumstances of this event - characterised by the plaintiff, in terms taken from Deborah's diary, as a 'kidnapping' - are the subject of controversy, but it is unnecessary to resolve that controversy. On or about 29 November 1990, solicitors acting for Julienne wrote to Mr Symonds asserting that Colin had returned to Burrabirra Avenue at his own wish, that the power of attorney had been revoked of his own volition, that he was able to give proper instructions in relation to his affairs, and that Julienne considered him "quite capable of managing his day-to-day affairs". These assertions are markedly inconsistent with evidence given elsewhere by Julienne and Deborah. 43By December 1990, Julienne had commenced preparations for an application to be appointed as Colin's guardian. Evidence to support this application was prepared by her solicitors in January 1991, and included assertions that "pursuant to the provisions of the Protected Estates Act and the Disabilities and Services Guardianship Act, our client is now 'the responsible person' for the day-to-day care and control of Dr Colin Grace". At this time, she was concurrently maintaining that Colin was quite capable of managing his day-to-day affairs (in the context of the revocation of the power of attorney), and also that he was quite incapable (in the context of her guardianship application). On 18 February 1991, Julienne's solicitors informed Mr Symonds (who was acting for Hilda) that their client required them to proceed with an application to the Guardianship Board for the appointment of a "trustee" (sic), and on 21 February that "our client [Julienne] for her part does not wish to proceed with any proceedings in family law at this stage". 44On 24 February 1991, the Family Court granted Julienne leave to withdraw her property settlement application, and removed it from the Active Pending Cases List; the legal effect of this is an important issue to which it will be necessary to return. On 27 February, Julienne's solicitors wrote to Mr Symonds: Further to our conversation following withdrawal of the application for property settlement on 22 February 1991 ... 45Julienne says that she was not certain in February 1991 whether she would pursue a family law property settlement, as there were "other alternatives", including an action as a disadvantaged minority shareholder - an oppression suit. She said that she was seeking to separate Colin's assets from her own. That sits ill with her ongoing attempts to be appointed Colin's guardian, and particularly with her claim, referred to below, to be Colin's de facto wife at this time. 46On 15 April 1991, Julienne commenced a proceeding in the Protective List of this Court under the (NSW) Protected Estates Act, 1983, seeking the appointment of the Office of the Protective Commissioner (OPC) to manage Colin's financial affairs, and to have herself appointed as Colin's guardian. The application was supported by affidavits of Julienne and two doctors. Julienne deposed that "the memory of Dr Colin Samuel Grace is extremely poor. He is unable to sustain any logical thought. He is disoriented in time and space. He is not capable of completing all simple daily acts necessary to care for himself. He is not aware of the dissolution of the marriage". The affidavit did not suggest that any family law property proceedings were on foot. On 18 May 1991, Powell J appointed the OPC to manage Colin's affairs and adjourned the balance of the summons to a date to be fixed, expressing the view that a guardian could not be appointed as Colin was not "mentally ill" for the purposes of the Protected Estates Act, nor of "unsound mind" for the purposes of the inherent jurisdiction. Because of what she perceived as this unsatisfactory outcome, Julienne terminated the retainer of her solicitors, Gillis Delaney, on 24 May 1991. 47On 15 July 1991, Hilda lodged an application with the Guardianship Board to be appointed as Colin's guardian. Julienne then made a like application - in which she described herself as Colin's "de facto wife" - on 9 October 1991. On 21 January 1992, the hearing before the Guardianship Board was adjourned by consent, and on 17 March was fixed for 7 May 1992, but again adjourned on Julienne's application on 23 April 1992. 48Colin died on 1 September 1992. Deborah was then 20, and David 17. Colin's estate included, relevantly: (a) 300 of 600 ordinary shares and 2,003 of 2,003 cumulative preference shares (two of which were held in trust for him by Hilda and Carolyn) in Nevilda Holdings; (b) 12 of 112 ordinary shares (two of which were held in trust for him by Hilda and Carolyn) in Nevilda Investments; (c) 1,002 of 1,010 ordinary shares (two of which were held in trust for him by Hilda and Carolyn) in N&H Grace Holdings; (d) cash in an ANZ deposit account; and (e) 272 Birrell Street, Bondi. 49As has been recorded, by his will, Colin made specific bequests to Deborah of his shares in Grace Securities and in Sharander, and left the residue to David, to be held in trust for him until he attained 21 years of age (which would be 29 April 1996). He made no provision for Julienne, who (as will appear below) had considerable assets in her own right; but by survivorship, she succeeded to his joint interest in Burrabirra Avenue. 50On 7 September 1992, Julienne sought advice from Kandy & Co as to the possibility of Mr Symonds being replaced as executor. Kandy & Co approached Mr Symonds and asked him to renounce, which he did on 11 September 1992. 51Also on 11 September 1992, Hilda's accountants foreshadowed that she would make a claim of $50,000 on Colin's estate. 52Deborah and Julienne then instituted steps for Deborah to obtain a grant of administration cta of Colin's estate. By 26 October 1992, Deborah and Julienne had reached a "settlement" in principle of Julienne's claim for property adjustment under the Family Law Act, but this was necessarily subject to Deborah obtaining a grant of administration. 53David completed his Higher School Certificate in November 1992. 54On 16 November 1992, Hilda's solicitors wrote to Julienne's solicitors, making an offer to settle various issues between them, and this was accepted on behalf of Julienne on 18 November. On 25 November, apparently to correct an error in the earlier documentation, Mr Symonds again renounced his entitlement to a grant of probate of Colin's will. On 27 November 1992, Deborah filed an application for administration of Colin's estate, supported by an affidavit of estate assets and liabilities which included a liability to Julienne described as "proceedings still on foot for property orders and child maintenance pursuant Family Law Act, 1975 -claim estimated at $746,000"; and an affidavit negativing the existence of any de facto relationship (notwithstanding Julienne's earlier claim to have become Colin's de facto wife following his return to Burrabirra Ave). 55On 8 January 1993, Deborah, Julienne, Hilda and Carolyn entered into a Deed of Settlement that provided inter alia for Hilda and Carolyn to transfer the trust shares to Deborah as administratrix; for Deborah and Julienne to replace Hilda and Carolyn as directors of Nevilda Holdings, Nevilda Investments and N&H Grace Holdings; and for releases of claims by all parties against the estate. (Although there was, at some times, a faint suggestion to the contrary, these could not have released claims by Julienne under the Family Law Act, or by either Julienne or Deborah under the Family Provision Act, as to do so would have required the approval of the appropriate Court under the relevant legislation). Consequently, and on the same day, Julienne and Deborah were appointed directors of Nevilda Investments, Nevilda Holdings and N&H Grace Holdings. 56Deborah, who attained 21 years of age on 6 February 1993, was granted Letters of Administration cta of the estate on 9 February 1993. David attained 18 years of age on 29 April 1993.

[5]

David 58David was, unsurprisingly, cross-examined at considerable length and in considerable detail. While some minor inconsistencies and discrepancies were established, they were not such as to seriously affect his reliability: such discrepancies as emerged were minor and tangential. 59It was repeatedly suggested (1) that David's evidence and attitude was coloured by a belief that he was entitled to the whole of his father's estate, and (2) that - unlike his hardworking mother and sister - he had done little and was content to benefit from the endeavours of others. I did not find that his evidence was affected by any such sense of "entitlement" as mentioned in the first proposition, and even if the second were true it would be immaterial to the credibility of his evidence. Much was also sought to be made of his admitted use, over the period from about 1993 until about 2004, of cannabis. However, I do not accept that indulgence in cannabis use is inconsistent with being a truthful witness. It was not established that he was a heavy user, and his memory does not appear to have been adversely affected. In particular, it was not established that his ability to perceive or recall, generally or in respect of specific events, was affected by cannabis use. 60David agreed that, prior to 2006, he did not specifically ask to be involved in day-to-day management of the companies, although he offered to do particular tasks from time-to-time. He also accepted that prior to 2006, nothing he wanted the Nevilda companies to do was denied or overruled by his mother; but it does not appear that there was anything in particular that he proposed that the Nevilda companies do. 61David maintained that he did not become significantly involved in the day-to-day management of the companies. While it was established that he was involved in making various representations and submissions about unit 2, Lamrock Avenue, as he and his then fiancée Ms Katherine Harvey occupied it, it is hardly surprising that he would take an interest in its environment, and this does not tell against his evidence that, generally speaking, it was his mother who made decisions about the companies and properties, and that he acted on her instructions and at her request. Signatures on documents, which were also signed by his mother, where two signatures were required, do not establish that he was significantly involved in their administration. 62He agreed that he became aware that N&H Grace Holdings was his company at about the age of 25, when he spoke to his mother about registering a company for his own purposes, and was told that he already had a company, N&H Grace Holdings, the name of which he changed to Dutchie in about 2000. This is not materially inconsistent with his evidence generally that he was not informed of the properties owned, shareholdings in or rights attached to or value of each of the family companies. 63There is nothing surprising nor discreditable about his having signed corporate tax returns of Dutchie without question, they having been prepared by a professional accountant and reviewed and approved by his mother. He quite reasonably thought there would nothing wrong with them, because they had been professionally prepared and accepted by his mother. 64Perhaps most significantly, the attack on his version of the important events of January 1995, effectively on the basis that his attribution to Julienne of a representation to the effect that the transfers of the cumulative preference shares he then signed was part of resolving a dispute with Hilda was recent invention, failed; that very representation was referred to in the draft statement of claim that accompanied his very first affidavit, its absence from which was said to support the conclusion that it was recently invented.

[7]

Julienne 66Julienne is obviously a very capable, accomplished and intelligent and in many ways admirable woman, who has earned considerable professional esteem. She has been a diligent and capable steward of the family assets since 1995. In my assessment, she believes very firmly that she has done the right thing to the best of her considerable ability by both her children, and she is affronted by what she perceives as David's ingratitude, and desire now to criticise, and take the fruits of, her stewardship, when he has made little contribution himself. Such views are, at least to an extent, understandable. However, she is so convinced of the righteousness of her position that she is unwilling to admit any possibility of impropriety, overzealousness or error. 67A number of matters adverse to her credibility have already been mentioned above, in particular: (a) her denial, which I cannot accept in the face of contemporaneous documents, that she knew the contents of Colin's will by the end of 1988 or prior to his death; (b) the extraordinary circumstances in which she procured Colin's revocation of his power of attorney to Hilda, and had her own solicitor prepare a revocation, which Colin signed and she witnessed and her solicitors then supported on the basis that he was competent, while she was contemporaneously seeking to be appointed his guardian, on the basis that he was incompetent. At one point Julienne only reluctantly acknowledged that Colin had problems of cognition in 1990, which she limited to his not accepting that they were divorced, yet in the context of her applications to be appointed his guardian her description of his disabilities was much more extensive: she wrote a detailed document setting out his incapacities; and (c) her claim in her guardianship application of October 1991 to be Colin's de facto wife - especially in the context of Deborah's later affidavit negativing a de facto relationship. 68Other instances will appear from matters referred to later in these reasons, in particular: (a) her lack of frankness with the provisional liquidator in respect of the NISF, procuring the June 2006 Nevilda Holdings seal, backdating of the Deed of Variation, and subsequent denials of knowledge of those matters; (b) her evidence that Westpac and ANZ insisted on her giving guarantees of the Nevilda companies' indebtedness, which is contradicted by the Bank manager's notes indicating that any such requirement was waived; (c) her contention that David had day-to-day management of the companies while she was overseas between October 2004 and April 2006, which was largely disproved by the evidence of the very witnesses the defendants called to corroborate it. 69In chief, Julienne corrected a number of matters, of considerable minor detail, in her affidavit evidence. At first sight this gave the impression of close attention to detail; however, some of these corrections savoured of being derived from a recently refreshed recollection, arising from perusal of documents in the course of preparation of the proceedings, and cast doubt on the reliability of her unassisted recollection. 70She agreed that she was clear in her mind that David did not owe Nevilda Investments any money, and that she could not conceive how David could be indebted to Nevilda Investments; yet she had deposed to an understanding that he owed $110,000. She sought to explain this away as an understanding given her by Mr Ashton, but she conceded having no confidence in the original or revised form of the financial accounts of the companies. 71It is extraordinary that the pages from her 1990 diary for the periods 9 July to 2 September, and from 1 October to 11 November - which periods cover the grant of leave to Deborah to file a next friend application on 3 August, Deborah's resumption of contact with Colin on 19 August, and the revocation of the power of attorney on 4 November - have been torn out, for which she had no acceptable explanation. These were significant parts of the period in which it appears that Julienne was taking steps calculated to gain control of Colin and his assets. 72She was consistently evasive when confronted by inconsistencies - she would find some way of answering a question that failed to confront the inconsistency and sought to divert attention to another topic. 73Ultimately, I formed the view that she was unwilling to concede any adverse possibility - for, example, that no funds had been rolled-over into the NISF on her account from other superannuation funds, or that she had paid for the new NISF seal from Swift Rubber Stamps. Julienne was unwilling to concede even the obvious, for example that she thought that Deborah would be easier to negotiate with as Colin's next friend than Hilda in the family law property proceedings; or that her meeting with Mr Orr was on 17 January 1995 and not (as she had reconstructed) in December 1994, when both her diary and the fee note suggested that it was on 17 January 1995. She sought more than once to downplay the reliability of her diary - for example, when a minute recorded a meeting of Nevilda Investments on 31 March 1997 in Sydney, she was not prepared to concede that it could not have taken place then, although her diary entry for the same date recorded in some detail her activities that day in Switzerland. Similarly, in an affidavit sworn in the Family Court proceedings on 9 June 1989, consistently with her diary entry for 2 June 1988, Julienne said that Colin dropped David off at her home (Alma St) on 2 June 1988. David's evidence was to like effect. But in her 28 May 2010 affidavit she maintained, and David was cross-examined to the effect, that Hilda had dropped him off. Julienne would not accept that her diary entry and affidavit made much closer to the events were more likely to be accurate. 74Her evidence was also overly self-serving: for example, she suggested that David would have gained an understanding of the corporate structures and shareholdings from discussions at the age of 12 and 13; and she repeatedly resorted to assertions that David would have known of, and could have queried, the various transactions she undertook in respect of the NISF, through his access to the bank accounts - while apparently not recognising that even if he could view bank transactions, he would only see them after they had taken place. At one point, she was about to confirm that Mr Ashton had said to her "You are a trustee of the Superfund" until, in response to a somewhat incredulous question from the bench, she said that she did not recall it. 75Julienne was prone to interpret communications and events in a manner least unfavourable to her; and is disposed to explain away inconsistencies by asserting that her solicitors and advisors had acted mistakenly or without her instructions, as she frequently did.

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Deborah 76Deborah has been closely aligned with her mother from the time of separation in 1984, and in the defence of these proceedings. She holds a similar attitude as Julienne to David and his claim, with similar results. As with Julienne, some matters adverse to her credit have already been mentioned, and some are referred to later, in particular she is implicated at least equally with Julienne in the obfuscation of the provisional liquidator in respect of NISF, the procuring of the new seal, the backdating of the Deed of Variation, and the subsequent denials; and also the assertion that David had day-to-day management of the companies between October 2004 and April 2006. 77Deborah was prone to advance as evidence of facts matters that, on examination, appeared to be conclusions drawn by her retrospectively from limited evidence, and not firsthand knowledge. 78Deborah denied that Julienne was involved in the preparation of the Affidavit of Estate Assets and Liabilities; this was, at best, misleading, since Deborah had consulted Julienne in the course of ascertaining what values would be attributed to various of the assets; her protestation that the denial was not on that account false was untenable. However, her explanation for how the values in the Affidavit of Assets and Liabilities came to be attributed to the shares in Sharander and Grace Securities was reasonable and credible. 79Deborah insisted that she and Julienne attended meetings of the companies on 30 December 1994 at Vaucluse, despite evidence that she spent most of that day in Melbourne. This evidence is highly improbable; it reflects an unwillingness to concede anything potentially adverse, or even the possibility that she might be mistaken. Similarly, Deborah almost conceded, but with great reluctance, that she had written a letter to the SCG Trust, which she must have written. She was very reluctant to make any concession, even when it was obviously appropriate: another example is her evidence in respect of amendments to the company accounts, in the light of Mr Ashton's memorandum that he had completed or was reworking the accounts, and her provision to him of a schedule of loan accounts. 80Contrary to her denials in cross-examination, Deborah was shown to have provided input into the drafting of Julienne's affidavit evidence.

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The Nevilda Holdings CUMP shares 83On 9 January 1995, Deborah sent a facsimile to Dixon & Co accountants requesting the transfer from Colin's estate to David of the 2,001 CUMP shares, to be split 667 to Deborah, 667 Julienne, and 667 to David. On 12 January 1995, Dixon & Co sent to Deborah the share transmission forms, share transfer forms and minutes to give effect to that request, and also draft minutes approving the transfer of the trust shares in Nevilda Holdings and Nevilda Investments, from Hilda to Julienne, and from Carolyn to Deborah. On or about 16 January 1995, Deborah executed a form effecting the transmission of the 2,001 CUMP shares in Nevilda Holdings from her as administratrix to David. David thereupon executed transfers of 667 of those shares to each of Deborah and Julienne. The transfer forms record a price of $1 per share (notwithstanding that in her affidavit of estate assets and liabilities, Deborah had deposed that each of the shares was estimated to be worth $79.88), but no consideration was paid; the defendants suggested that it would have been adjusted on loan accounts but that was not established. As directors of Nevilda Holdings, Deborah and Julienne resolved, in accordance with the draft minutes that had been prepared, to approve the transmission of 2,001 CUMP shares to David, and the transfers of 667 of them from David to each of Deborah and Julienne. The practical effect of this was that David, for no consideration, transferred to each of Deborah and Julienne 667 CUMP shares which would otherwise have given him voting control of Nevilda Holdings, and through it Nevilda Investments. 84David contends that the transfers of the CUMP shares to Deborah and Julienne should be set aside on the bases (1) that they were procured by a fraudulent misrepresentation to the effect that they were a necessary part of the resolution of the dispute with Hilda (when that dispute had already been resolved by the Deed of Settlement), (2) by undue influence, (3) by unconscionable conduct, and (4) by breaches of fiduciary duty on the part of Deborah in which Julienne was allegedly knowingly involved.

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Undue influence 85I prefer to found my decision on undue influence. 86Equity avoids dispositions of property procured by the improper or unconscientious use of the influence of one person over another, that cannot be explained on the grounds of friendship, charity or other ordinary motives on which people ordinarily act [National Westminster Bank plc v Morgan [1985] AC 686, 708; Bank of New South Wales v Rogers [1941] HCA 9; (1941) 65 CLR 42, 54]. Undue influence may be established by proof that the disponor's assent was in fact procured by undue influence ("actual undue influence"), or by an unrebutted presumption arising from the existence of a relationship of influence between the parties where the quantum or improvidence of the transaction is such that it cannot be explained on grounds of friendship, relationship, charity, or other ordinary motives ("presumed undue influence") [Whereat v Duff [1972] 2 NSWLR 147, 168; Quek v Beggs (1990) 5 BPR 11,761; Allcard v Skinner (1887) 36 Ch D 145, 185; Goldsworthy v Brickell [1987] Ch 378, 400-1]. Some relationships - such as parent and child, guardian and ward, solicitor and client, doctor and patient, (probably) spiritual adviser and follower, and (arguably) fiancé and fiancée - are presumed to be relationships of influence. 87At the time of the transaction, David was in a presumed relationship of influence with his mother Julienne. The suggestion, advanced by the defendants, that he had become emancipated from such influence by the time of the share transfers in January 1995 is untenable: he was but 19 years of age; he was still living at home; his affairs were still being managed by Julienne, who selected and retained accountants and lawyers for him; and Julienne continued to manage his personal assets, at least to some extent, then and for some years thereafter. He was, unsurprisingly, not subservient in every way to his mother: he disobeyed her requests not to use cannabis, and he questioned her decision to terminate his father's life support in hospital. But that, perhaps like many teenagers, he engaged in occasional acts of defiance and rebellion does not mean that he was emancipated. His employment as a teller at Westpac was not at such a level as to demonstrate any commercial sophistication. The simple will he made on 31 August 1995 in favour of Deborah with a gift over to Julienne, he says at the request of Julienne, is in no way inconsistent with undue influence so as to tell in favour of rebuttal of the presumption. That he signed cheques, drawn by others, does not establish emancipation. Even now, he does not present as a very forceful or dominant personality. 88The defendants submit that there was no undue influence, which I take to be a submission to the effect that it was not established that the quantum or improvidence of the transaction was such that it could not be explained on grounds of friendship, relationship, charity, or other ordinary motives. In favour of that proposition are the circumstances that there was evidence from Mr Lonergan that the economic value of the CUMP shares was only about 97 cents each; that through Grace Securities, Deborah and Julienne would have an equitable interest in Nevilda Holdings and a legitimate interest in its management; and that there was a familial relationship between the three. In those circumstances, it might be said that a wish to share voting control was a rational explanation. 89On the other hand, while the CUMP shares may have had slight economic value, their significance was that they conferred voting control of the Nevilda companies, which held extensive and valuable real property assets. While David did not by any means divest the whole of his property, he gave away effective control of the properties and assets that underlie the Nevilda companies - which his father had always had, and intended that David should have. Critically, he had limited knowledge of the companies and of his father's estate, and he did not know that he was entitled to voting control of the companies under his father's will, nor that the effect of the transaction was that he was surrendering that control. In the context of the control that ownership of all the voting shares conferred, the stated consideration of $1 per share, even if paid, would not have dispelled the appearance that this transaction was seriously disadvantageous to David, and prima facie improvident. In my judgment, in its context, this transaction by David was of such apparent improvidence as not to be explicable by ordinary motives. The defendants also invoked events that took place subsequently - including contributions made by Julienne to the management of the Nevilda companies, and benefits derived as a result - in support of the proposition that the transaction was not an improvident one from David's perspective. But that judgment must be made at the time of the transaction, not by reference to later events. The circumstances of this case are such that the presumption rightly casts on Julienne the onus of rebutting it. 90The defendants argued that the "history of the companies", and in particular what they characterised as the "illegal" allotments made by Colin on 1 February 1985 and by Hilda in October 1989, justified the transaction. I cannot accept this. Even on their versions, this "history" was not adverted to in the discussions they claim to have had concerning the CUMP shares. While there was, on their version, some reference to Hilda's allotments in connection with discussion as to how the trust shares would be dealt with, this did not extend to Colin's allotments which were by far more significant, and even on their own versions, it could not be said that they agreed to waive any objection to those allotments in consideration of the transfers. Short of that, even if they thought the 16 January transactions somehow redressed past wrongs, in which David was not implicated, that is not a legal justification for them. 91David's lack of knowledge that his father's will gave him an entitlement to hold all the voting shares, and that he was surrendering that control, are also relevant to any suggestion that the presumption has been rebutted. The defendants contended that the transfers were made pursuant to an oral agreement whereby David agreed to transfer the CUMP shares, so as to enable them to share control between them, in circumstances where Julienne was unwilling to remain responsible for the management of the Nevilda companies with no voting rights. Deborah and Julienne say that this agreement was struck in a discussion between them and David in early January, in which they agreed that they should share equally between the three of them the voting shares in Nevilda Holdings. There is no contemporaneous evidence of any such agreement, beyond the share transfers themselves. The conversation could not have happened at the time the defendants allege, as David was in Byron Bay. For those reasons in addition to my general credit conclusions, I do not accept that any such agreement was made. But even if (which David, whose evidence I prefer, denies), there had been such an agreement, it would itself be vitiated by presumed undue influence. This is even more the case if Julienne said, or implied - as her evidence and that of Deborah suggests - that she was only prepared to continue to manage the companies and provide the personal guarantees that she claimed were required if she had some voting power; such a statement would accentuate rather than dissipate the pressure on David to accede to the transfers. With no consideration being actually provided for the transfers, and in the absence of any independent advice, I am entirely unpersuaded that the presumption of undue influence is rebutted. My conclusion would not differ had the nominal consideration of $1 per share been paid, because it does not reflect the practical value of these shares to David, at least if he held all of them. 92I am, therefore, quite unsatisfied that the transfers were the independent and well-understood act of David exercising his own free judgment. Subject to the defence of laches, considered below, the share transfers are voidable for undue influence.

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Unconscionable dealing 93I would reach the same conclusion on the ground of unconscionable dealing. Equity intervenes to avoid a transaction which has been brought about by one party knowingly taking advantage of a special disadvantage to which the other party was subject which affected that party's ability to safeguard his or her own interests. In Commercial Bank of Australia v Amadio [1983] HCA 14; (1983) 151 CLR 447, Mason J, as he then was, emphasised the distinction between the doctrines of unconscionable dealing and undue influence, and in particular that for the purpose of attracting the former - unlike the latter - it was not necessary that the plaintiff's will have been overborne (at 461): Although unconscionable conduct in this narrow sense bears some resemblance to the doctrine of undue influence, there is a difference between the two. In the latter the will of the innocent party is not independent and voluntary because it is overborne. In the former the will of the innocent party, even if independent and voluntary, is the result of the disadvantageous position in which he is placed and of the other party unconscientiously taking advantage of that position. ... though not deprived of an independent and voluntary will, [he] is unable to make a worthwhile judgment as to what is in his best interest. 94The doctrine was summarised by Kitto J in Blomley v Ryan [1956] HCA 81; (1956) 99 CLR 362 (at 415) in the following terms (emphasis added): It applies whenever one party to a transaction is at a special disadvantage in dealing with the other party because illness, ignorance, inexperience, impaired faculties, financial need or other circumstances affect his ability to conserve his own interests, and the other party unconscientiously takes advantage of the opportunity thus placed in his hands. 95In Amadio Deane J, with whom Mason and Wilson JJ agreed, described the elements that would attract relief (at 474), as follows (emphasis added): The jurisdiction is long established as extending generally to circumstances in which (i) a party to a transaction was under a special disability in dealing with the other party with the consequence that there was an absence of any reasonable degree of equality between them and (ii) that disability was sufficiently evident to the stronger party to make it prima facie unfair or "unconscientious" that he procure, or accept, the weaker party's assent to the impugned transaction in the circumstances in which he procured or accepted it. Where such circumstances are shown to have existed, an onus is cast upon the stronger party to show that the transaction was fair, just and reasonable: "the burthen of shewing the fairness of the transaction is thrown on the person who seeks to obtain the benefit of the contract" (see per Lord Hatherley, O'Rorke v Bolingbroke [46]; Fry v Lane [47] , at p. 322; Blomley v Ryan [48] , at pp. 428-429). 96Thus, where a party impugns a transaction on the ground that it is an unconscionable dealing: (1) the plaintiff must establish that there was a relevant relationship of "special disadvantage"; (2) the plaintiff must establish that the defendant understood that the plaintiff was at a special disadvantage. In this respect, actual knowledge of any specific diagnosis or condition is not required, and it suffices that the defendant knew, or ought reasonably have known, that the plaintiff was not in a position to look after his own interests; and (3) the defendant then bears the onus of establishing that the transaction was "fair, just and reasonable" [Amadio, 474 (Deane J)], which involves showing either that the plaintiff received full value or was independently advised [Cope, Duress Undue Influence and Unconscientious Bargains, Law Book Co, 1985, [260]]. 97In this context "special disadvantage" is usually associated with conditions that make people vulnerable to exploitation and less able to conserve their own interests. Mason J, in Amadio, explained the concept in the following terms (at 461-462): It goes almost without saying that it is impossible to describe definitively all the situations in which relief will be granted on the ground of unconscionable conduct. As Fullagar J said in Blomley v Ryan, at p. 405: The circumstances adversely affecting a party, which may induce a court of equity either to refuse its aid or to set a transaction aside, are of great variety and can hardly be satisfactorily classified. Among them are poverty or need of any kind, sickness, age, sex, infirmity of body or mind, drunkenness, illiteracy or lack of education, lack of assistance or explanation where assistance or explanation is necessary. The common characteristic seems to be that they have the effect of placing one party at a serious disadvantage vis-a-vis the other. Likewise Kitto J. spoke of it as "a well-known head of equity" which- ... applies whenever one party to a transaction is at a special disadvantage in dealing with the other party because illness, ignorance, inexperience, impaired faculties, financial need or other circumstances affect his ability to conserve his own interests, and the other party unconscientiously takes advantage of the opportunity thus placed in his hands". It is not to be thought that relief will be granted only in the particular situations mentioned by their Honours. It is made plain enough, especially by Fullagar J., that the situations mentioned are no more than particular exemplifications of an underlying general principle which may be invoked whenever one party by reason of some condition of circumstance is placed at a special disadvantage vis-a-vis another and unfair or unconscientious advantage is then taken of the opportunity thereby created. I qualify the word "disadvantage" by the adjective "special" in order to disavow any suggestion that the principle applies whenever there is some difference in the bargaining power of the parties and in order to emphasize that the disabling condition or circumstance is one which seriously affects the ability of the innocent party to make a judgment as to his own best interests, when the other party knows or ought to know of the existence of that condition or circumstance and of its effect on the innocent party. 98At the heart of the doctrine is the prevention of unfair exploitation of a disadvantage or vulnerability. A relationship of emotional dependence that renders a party susceptible to improvidence in favour of the stronger party may attract the doctrine [Louth v Diprose [1992] HCA 61; (1992) 175 CLR 621; Bridgewater v Leahy [1998] HCA 66; (1998) 194 CLR 457], although not every case of illness, impairment or emotional dependence is a case of special disadvantage. The cases to which reference has so far been made show that it is insufficient to attract the doctrine merely that there be an inequality of bargaining power, or that the plaintiff be affected by one or more of the relevant conditions; it is critical that the condition be such as to impact on the plaintiff's ability to conserve his or her own interests and render him or her vulnerable to exploitation [see Tillett v Varnell Holdings Pty Ltd [2009] NSWSC 1040, [49]-[54]]. 99In this case, David's ability to conserve his own interests, relative to Julienne and Deborah, was compromised: he was in a position of special disadvantage by reason of the combination of his youth, inexperience, lack of knowledge, absence of explanation, reliance on Julienne to manage the Nevilda companies, and trust and confidence in Julienne. David was hardly in a position to make a judgment in his own interests about the actual or potential importance of control of the companies in 1995. At the time of these events, David was 19 years and 8 months of age. He trusted his mother, and was not unaccustomed to being asked to sign documents that she had prepared: over the period 1994 to 1997, Julienne occasionally asked David to sign documents, which he did without question as he trusted her. He was aware in general terms that the family owned companies and properties, but not of the detail. He was not a director of either Nevilda Holdings or Nevilda Investments. He had not seen a copy of his father's will. He had not attended any meetings in which the terms of the will or matters relating to the estate were explained in any detail. He had not discussed the terms of the will or his father's estate with any lawyer or other professional advisor. He did not know the extent of the assets and liabilities of the estate, nor the structure of or inter-relationships between the companies in the group. He did not know what a cumulative preference share was, or what rights it carried. He did not read the share transfer forms before signing them. He did not understand and had received no explanation from Deborah or Julienne or any independent advisor that cumulative preference shares conferred control of Nevilda Holdings, and through it of Nevilda Investments and the various properties owned by Nevilda Investments, and that the effect of the transfers was to give effective control over those assets, that formed the bulk of the residuary estate left to him in the will, to Deborah and Julienne. He received no professional advice about the transactions, and was unaware that Julienne had a pending Family Court property claim against the estate. 100Julienne and Deborah knew all this. The circumstance that the economic value of 97c per share does not reflect that the effect of the transaction was to cede control, and the absence of independent advice, means that the defendants do not discharge the onus of showing that the transaction was fair, just and reasonable. For reasons already advanced, I do not accept that the "history of the companies", and specifically the allegedly improper allotments by Colin and Hilda, provides some alternative basis for upholding the transfers.

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Fraudulent misrepresentation 101Had I not found for David on undue influence or unconscionable dealing, it would have been necessary to consider his case that he was entitled to the same outcome on the ground of fraudulent misrepresentation, namely the statement that I have accepted Julienne made: "This is more stuff that needs to be signed in relation to the estate. We are still sorting out the crap with Hilda", which was calculated to convey that the transfers were a necessary part of implementing the settlement with Hilda, when that settlement had already been completed, and concealed the true nature of the transaction, and materially induced David's assent. 102According to David, in his affidavit evidence, Julienne, at the time he signed the forms of transfer, said to him words to the effect: This is more stuff that needs to be signed in relation to the estate. We are still sorting out the crap with Hilda. It's just a family company, it doesn't own anything and so the shares are worth nothing. We can have a third each and use the company in the future. 103This conversation was disputed. Deborah's affidavit version is very detailed, but it bears significant discrepancies with the response she provided to Teece Hodgson 8 December 2006. Acceptance of David's version is supported by the general credit reasons already mentioned, and the fact that the major attack on his version - to the effect that it was not included in his first affidavit - miscarried when it became apparent that it was included in the draft statement of claim annexed to his first affidavit, which was in any event prepared in relative haste and in summary form in support of an interlocutory application. The other main attack - that it was inconsistent with his evidence that he had been told nothing about the effect of the transaction - was without substance: his claim to have received no explanation of the effect of the transaction is not inconsistent with the statement he attributes to Julienne, which is not an explanation of the effect of the transaction at all. It is inaccurate to characterise David's evidence as being to the effect that nothing at all was said on the subject. 104However, in cross-examination, David said that the third and fourth sentences attributed to Julienne - which had not appeared in his earlier affidavits - were spoken after he had signed the transfers. He also maintained that Deborah was not present at the time, which seems improbable. It was plausibly suggested, on behalf of the defendants, that he was confusing events relating to the 1993 settlement with Hilda, with the events of January 1995. 105I am ultimately not comfortably satisfied, to the standard requisite to find a fraudulent misrepresentation, that Julienne said the words attributed to her on the occasion of 16 January 1995.

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Laches 106In respect of the January 1995 transactions, the defendants invoked the defence of laches. The essential elements of this defence are (1) knowledge of the facts and the rights to justify commencement of proceedings, (2) delay, and (3) unconscionable prejudice to the opponent as a result [Crawley v Short [2009] NSWCA 410, [163]; Savage v Lunn [1998] NSWCA 203]. 107I accept that David had some knowledge of the existence of the companies and their underlying properties, but he had little comprehension of the shareholdings in them or their governance at the time of the transactions in 1995. He did not discover the practical effect of the transactions, and their adverse impact on his interests, until 2006. He did not until then understand that he had ceded voting control of the Nevilda companies. David did not have sufficient knowledge of the facts and his rights to justify the commencement of proceedings until at the earliest April 2006, when he discovered that the cumulative preference shares that he had transferred conferred voting control of Nevilda Holdings, and through it of Nevilda Investments and the underlying real property assets. From April 2006, he investigated the position, and commenced these proceedings in November 2006. 108The defendants submitted that means of knowledge were equivalent to knowledge, and that through his directorships David had means of knowledge long before 2006. However, references in the authorities to "means of knowledge" being as good as knowledge appear to be concerned with knowledge of one's rights, as distinct from knowledge of the facts from which those rights arise. In Savage v Lunn (No 2) [1998] NSWCA 204, the Court of Appeal maintained that "actual or inferred knowledge of the facts" is a necessary requirement of the defence. 109David did not have actual or inferred knowledge of the facts - that he had ceded the control of the Nevilda companies to which he was entitled under his father's will - until at least April 2006. His limited role in the companies was not such that he should be regarded as being on notice of his rights before April 2006 [cf Erlanger v The New Sombrero Phosphate Co (1878) 3 App Cas 1218, 1279]. Accordingly, I reject the defence of laches.

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The Trust Shares 111Upon their transfer to Deborah (pursuant to the Deed of Settlement with Hilda), the two trust shares in each of Nevilda Holdings, Nevilda Investments and N&H Grace Holdings, ought to have been held by her as administratrix, as part of the residuary estate. But the annual returns of Nevilda Holdings, Nevilda Investments and N&H Grace Holdings, for 1993 and 1994, authorised by Deborah and Julienne as directors and signed by Julienne, recorded that Julienne was the holder of 1 of the shares in each company (albeit non-beneficially), and that Deborah was the beneficial owner of a share in N&H Grace Holdings. On 16 January 1995, Deborah and Julienne as directors of Nevilda Holdings and Nevilda Investments resolved to approve the transfer of the trust shares in each of those companies from Hilda to Julienne, and from Carolyn to Deborah. While there does not appear to have been a similar resolution in connection with N&H Grace Holdings, annual returns of that company show that from 1993 Deborah was recorded as the beneficial owner of one of the trust shares, and from 1995 Julienne was recorded as the beneficial owner of such a share. 112The effect of this was that two shares in each of those companies, which had beneficially been property of Colin and ought to have been in his residuary estate and passed to David, were instead transferred to Julienne and Deborah, for no consideration. Each of those transfers amounted to a breach by Deborah of her obligations as administratrix, and Julienne received her shares knowing of that breach. 113For the reasons already set out, I am unable to accept Deborah and Julienne's allegations that they held these shares pursuant to an oral agreement with David made in or about January 1995. The reasons proffered for having such an agreement - to avoid the need to procure fresh transfers of the trust shares from Hilda and Carolyn, and because the shares had little value - do not sustain scrutiny: there is little reason to doubt that Carolyn and Hilda would have cooperated in ensuring that the trust shares were transferred to David rather than to Deborah and Julienne, and subsequent dividend streams in respect of Nevilda Investments, and its underlying real property assets, render improbable the assertion that the shares in it had little value. The submission that by accepting the trust shares Julienne and Deborah waived their rights to challenge the earlier allotments sits ill with the circumstance that they were transferred to Julienne in January 1993 pursuant to the Deed of Settlement as part of the settlement with Hilda. Even if the transfer of the trust shares was a mistake made by their accountants - and in the light of my conclusions in respect of credit I am unpersuaded that it was - that would not provide a reason why the mistake should not now be rectified. 114For reasons advanced in connection with the CUMP shares, the "history of the companies" and in particular the allegedly improper allotments by Colin in February 1985 and Hilda in October 1989 are not legal justification for the transaction. 115The defence of laches fails, for the reasons already explained. David is beneficially entitled to the trust shares.

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The Family Court Orders 117Reference has already been made to Julienne's application in the Family Court, and the grant of leave on 24 February 1991 to withdraw it. In her application filed on 9 June 1989, as has been observed, Julienne had sought transfer to her of Colin's interest in Burrabirra Avenue, and his shareholdings in Debid, Sharander and Grace Securities; but she had sought no orders with respect to Birrell Street or the CUMP shares in Nevilda Holdings. 118Julienne succeeded to Colin's interest as joint tenant in Burrabirra Avenue by survivorship. The estate also discharged Colin's share of the mortgage, so that she received his interest unencumbered. The Family Court consent orders, made by Registrar Hendry on 18 May 1995, provided for the transfer to Julienne from the estate of 272 Birrell Street, and the 667 CUMP shares that had already been transferred by David to Julienne on 16 January 1995. 119A consequence of the differences between the orders sought in Julienne's original application, and those made in the consent orders, was that the shares in Grace Securities and Sharander (which had originally been sought by Julienne, but were left under the will to Deborah) were not affected; all the property to be transferred to Julienne would now come from the residue (which had been left to David); and the balance in how the burden would be borne between Deborah and residue was significantly shifted. 120When the consent orders were made, the Family Court was not told of the 16 January 1995 transfer of the CUMP shares; nor of the way in which the consent orders departed from the original application filed by Julienne; nor that Julienne had received by survivorship Colin's interest as joint tenant in the matrimonial home. Most importantly, David was unaware and was not told of the Family Court orders or their effect, and remained ignorant of them until 2006. 121David applies for an order pursuant to Family Law Act, s 79A, setting aside the orders made on 18 May 1995. It is not in issue that this Court can exercise the cross-vested jurisdiction of the Family Court in that respect [see Young v Lalic (2006) 197 FLR 27; [2006] NSWSC 18, [37]-[49]]. It should be noted that if any appeal from this judgment raises for determination a matter arising under the Family Law Act, then the appeal lies not to the New South Wales Court of Appeal, but to the Full Court of the Family Court of Australia [(CTH) Jurisdiction of Courts (Cross-vesting) Act 1987, s 7(5), and Schedule].

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122In their submissions, the defendants objected that David's application under s 79A was not with respect to marriage or a matrimonial cause and thus not within the jurisdiction of the Family Court. However, that submission does not accurately express the issue. The real question is not whether the application is with respect to marriage or a matrimonial cause, but first, whether s 79A is within the power of the Commonwealth Parliament, and secondly, if so, whether it authorises the present application. 123Family Law Act, s 79A, relevantly provides as follows: (1) Where, on application by a person affected by an order made by a court under section 79 in property settlement proceedings, the court is satisfied that: (a) there has been a miscarriage of justice by reason of fraud, duress, suppression of evidence (including failure to disclose relevant information), the giving of false evidence or any other circumstance; ... the court may, in its discretion, vary the order or set the order aside and, if it considers appropriate, make another order under section 79 in substitution for the order so set aside. 124If it be asserted that s 79A is beyond the power of the Commonwealth Parliament, then no Judiciary Act s 78B notice was given; the point was not raised in the defence nor mentioned in opening, and arose only in final submissions. It is not appropriate to permit that issue now to be raised. 125In any event, s 79A is in my view plainly within the legislative power of the Commonwealth to make laws with respect to divorce and matrimonial causes, and "matters incidental to the execution of any power vested by this Constitution in the Parliament ... or in the Federal Judicature ..." [Commonwealth of Australia Constitution Act, s 51(xxxix)]. Proceedings under s 79A are within paragraph (f) of the definition of "matrimonial cause" in Family Law Act, s 4, namely "any other proceedings ... in relation to ... completed proceedings of a kind referred to in any of paragraphs (a) to (eb)", being proceedings in relation to completed proceedings of the kind referred to in (ca), namely proceedings between the parties to a marriage with respect to the property of the parties to the marriage or either of them [Re Gilbert and Estate of Gilbert (1989) 13 Fam LR 632, 644]. 126The death of a spouse following the making of a s 79 order does not affect the right of the surviving spouse, or other appropriate person, to institute proceedings under s 79A, and that the s 79 order in question is one made after death of a spouse, in proceedings continued pursuant to s 79(8), makes no difference; the application of s 79A(1) is not limited to orders made during the joint lives of the parties [Re Gilbert, 645-6]. 127The present application is one for the Court to set aside the orders made on 18 May 1995 - which were orders made by a court under s 79 in property settlement proceedings - on one or more bases authorised by s 79A. So long as David can satisfy the requirement of standing, that he be "a person affected by an order", his application is authorised by s 79A. 128Many cases in the Family Court have recognised that even an unsecured creditor of a spouse against whom a s 79 order is made can be a person affected by the order, if it has an adverse effect on the creditor's ability to recover the debt. Thus, orders made by consent that affect the ability of a third party to recover a claim against one of the spouses are liable to be set aside under s 79A on the application of the third party [Deputy Commissioner of Taxation (WA) v Spanjich (1988) 12 Fam LR 541, 545; (1988) FLC ¶91-974; Semmens v The Commonwealth (1990) FLC 92-116; (1989) 13 Fam LR 715, 723]. In Spanjich, the Full Family Court held that it was sufficient to be a person affected by an order that the effect of the order be to prevent a third party - there, the Deputy Federal Commissioner - from recovering tax due and owing, as the relevant "affect" may extend beyond strict legal rights to the practical effect of the order on the recovery of moneys due and owing (at 12 Fam LR 545): If the order has the effect of so reducing the property of the husband that the Deputy Commissioner is thereby unable to recover tax owing then it seems to us that he is a person affected by that order. 129As at 18 May 1995, although the estate had not been fully administered, David as the residuary beneficiary of an unadministered estate had a right to compel the legal personal representative to administer the estate correctly, and to obtain the assistance of a court of equity to that end. He was also entitled to seek recovery of estate assets if the legal personal representative did not do so, and had an equitable interest which he could leave by will or which on bankruptcy could vest in a bankruptcy trustee [Meagher Gummow & Lehane, Equity Doctrines & Remedies, LexisNexis Butterworths, 4th edition, [4-020]-[4-040]; Re Atkinson (deceased) [1971] VR 612, 616-8; Official Trustee in Bankruptcy v Schultz [1990] HCA 45; (1990) 170 CLR 306, 313-4]. 130The 18 May 1995 consent orders affected David's rights in that respect. They reduced the quantum of his equitable interest. David was therefore a person affected by the orders in the requisite sense, and has standing to make the application. The application is within s 79A.

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131The first basis advanced by the plaintiff as a "miscarriage of justice" within s 79A(1)(a) is absence of jurisdiction. That the expression "miscarriage of justice ... by reason of any other circumstance" within s 79A(1)(a) includes an absence of jurisdiction has been adverted to in the Family Court by Fogarty J in Robinson & Willis (1982) 8 Fam LR 131, 144, cited with approval by the Full Court in Re Gilbert (at 646). 132David submits that the 18 May 1995 orders were made without jurisdiction because the jurisdiction to adjust property interests between spouses after death exists only where there is an incomplete proceeding with respect to property at the time of death, whereas the proceeding initiated by Julienne had been completed prior to Colin's death on 1 September 1992 by reason of its withdrawal on 22 February 1991. 133At all material times, Family Law Act, s 79(8), relevantly provided: (8) Where, before property settlement proceedings are completed, a party to the marriage dies: (a) the proceedings may be continued by or against, as the case may be, the legal personal representative of the deceased party and the applicable Rules of Court may make provision in relation to the substitution of the legal personal representative as a party to the proceedings; (b) if the court is of the opinion: (i) that it would have made an order with respect to property if the deceased party had not died; and (ii) that it is still appropriate to make an order with respect to property; the court may make such order as it considers appropriate with respect to: (iii) any of the property of the parties to the marriage or either of them; or (iv) any of the vested bankruptcy property in relation to a bankrupt party to the marriage; and (c) an order made by the court pursuant to paragraph (b) may be enforced on behalf of, or against, as the case may be, the estate of the deceased party. 134Accordingly, property settlement proceedings could be continued after the death of one spouse if they had not been completed at the time of death. For that purpose, proceedings are completed if there has been a final disposition at first instance [Re Gilbert, 644]. 135At the relevant time (24 February 1991), the Family Law Rules 1984 provided for a system of pleadings. The application initiating the property settlement proceedings was, for relevant purposes, a pleading [Family Law Rules 1984, O.1, r.4]. 136Family Law Rules 1984, Order 11 rule 13, relevantly provided as follows: 13. (1) A party by whom a pleading has been filed in proceedings may withdraw the pleading: (a) at any time before the expiry of the time for the filing of a pleading by filing a notice of withdrawal of pleading in accordance with Form 15; or (b) at any later time - with the leave of the court. (2) Where a party withdraws a pleading: (a) that party shall, as soon as practicable after the withdrawal, serve a copy of the notice of withdrawal on each other party to the proceedings; (b) the court may make any order that is appropriate in relation to the hearing or further hearing of the proceedings; and (c) the pleading shall remain on the court file. (3) The withdrawal of a pleading does not preclude any other party from using the pleading in evidence or in cross examination. 137Thus, O.11 r.13 provided two methods for the withdrawal of a pleading. The first method [sub-rule (1)(a)] was withdrawal without leave by filing a notice of withdrawal. This was available only prior to the expiry of the time for filing of a pleading. It is not necessary to explore further what that involves. The second method [sub-rule (1)(b)], required the leave of the court, but did not, at least in terms, require the filing of a notice. Although subrule 2(a) is of general application (to both methods of withdrawal), it requires service of notice of withdrawal after the withdrawal; the notice does not itself constitute or effect the withdrawal. 138The defendants relied on the judgment of Hannon J in Re O'Toole, Taylor & O'Toole (1991) 15 Fam LR 265; (1992) FLC ¶92-285, in which the wife sought leave to serve out of time an application for property settlement, the respondents being the deceased husband's legal personal representatives. The wife had filed an application for property settlement in October 1988, but had not been able to serve it. She then decided to defer further action, and in February 1989 instructed her solicitor not to proceed. The husband died in October 1990. His legal personal representatives were substituted as respondents in May 1991. They argued that the proceedings were complete before the husband's death, and that there were therefore no proceedings that could be continued against them. Hannon J held that although the wife had instructed her solicitor not to proceed with the property application, no notice of withdrawal had been filed, and it could not be said therefore that the proceedings had been completed. His Honour said (at 15 Fam LR 267-8): The solicitor did not act in accordance with those instructions by "cancelling all proceedings" or by "withdrawing the application altogether". If he had acted according to the instructions he would have filed a notice of withdrawal of the application but did not do so, and nor did he take any further steps in the proceedings. However, in those circumstances it could not be said that the proceedings initiated by the applicant had been completed. It was the intention of the wife that they be withdrawn but that intention, although conveyed to her solicitors, was not put into effect. Proceedings which are completed are those which have as a matter of fact and as a matter of law been brought to an end and this can only be done in accordance with the procedures contained in the Act and the Rules. ... In the case of proceedings for a property settlement they are not completed until the applicant has filed a notice of withdrawal of the initiating application or the court has made a final order and the time for an appeal has expired or any appeal from the order has been determined. In the present case none of those events had occurred. If counsel's submission that the proceedings were completed as at the date of the death of the husband is correct, it follows that they had been completed in February 1989 because the act relied upon is the wife's instructions to her solicitor. However, those instructions unless acted upon, could not complete the proceedings because in the absence of the filing of a notice of withdrawal there was nothing to preclude the service of the application if it was effected within the time provided by the Rules, or to preclude an application for an extension of time if it was not so served. The wife's reasons for not serving the application within time would have been relevant in considering whether in the exercise of its discretion leave should be granted but they are not relevant in determining whether the proceedings had been completed. 139O'Toole is distinguishable from the present case. No application was made in O'Toole for leave to withdraw the proceedings, let alone any order granting such leave obtained. The mere formulation by the wife of an intention to withdraw the application, and the giving of instructions to do so, did not effect a withdrawal. That is far removed from the circumstances of the present case. In my view, upon the proper construction of then O.11, r.13, a withdrawal of a pleading under subrule (1)(b) is effected upon the court acceding to an application for leave to withdraw. Where the matter falls within subrule (1)(b), the grant of leave incorporates the withdrawal in this respect. 140However, there is a distinction between withdrawal of a pleading, and discontinuance of proceedings. At the relevant time, Family Law Rules 1984, O.11A (Discontinuance), r.1, relevantly provided as follows: (1) Subject to subrule (2), an applicant or cross-applicant who is a party to proceedings may: (a) at any time before the day fixed for the final hearing of the application or cross-application-without the leave of the court; or (b) at any later time-with the leave of the court; discontinue the application or cross-application wholly or in part by filing a notice of discontinuance in accordance with Form 15A. (2) Where: (a) proceedings have been instituted with respect to the property of the parties to a marriage or either of them; and (b) one of those parties dies before the proceedings are determined; the proceedings shall not be discontinued under this rule except with the leave of the court. (3) As soon as practicable after filing a notice of discontinuance, the party filing the notice shall serve a copy of the notice on each other party to the proceedings. (4) Discontinuance of an application or cross-application by a party to proceedings shall not be taken to preclude any other party to the proceedings from using the application or cross-application in cross-examination or in evidence. (5) An application or cross-application that is discontinued shall be marked by the Registrar accordingly and shall, unless the court otherwise orders, remain on the court file. It will be observed that, while bearing a number of similarities to O.11 r.13, O.11A r.1 differs in that first, it provides for discontinuance of an application or proceedings, as distinct from withdrawal of a pleading; and secondly, the discontinuance is effected by filing a notice of discontinuance in Form 15A, whether or not the leave of the Court is required. This rule is analogous to UCPR r 12.1, which provides that the plaintiff "may by filing a Notice of Discontinuance, discontinue the proceedings ..." with the consent of each other active party, or with the leave of the court. Under a rule in that form, it is the filing of the notice that effects the discontinuance. Order 11A was inserted in the Family Law Rules 1984 in 1988, but does not appear to have been referred to in O'Toole. 141In my view, the only explanation for there being two different rules is that they deal with different concepts. Withdrawal of a pleading is a different concept from discontinuance of proceedings. Withdrawal of a pleading does not terminate the proceedings; rather, like upon striking out of a defective pleading, the proceedings remain on foot and it remains open to file a replacement pleading. Discontinuance of proceedings, on the other hand, brings the proceedings to an end. This type of distinction - analogous to that between "striking out" and "dismissal" - was adverted to by Cronin J in the Family Court in an earlier application for summary dismissal of David's s 79A application [Greta & Greta [2007] FamCA 1404; (2007) 40 Fam LR 575, [41]-[57]] 142It may well be that when Julienne's solicitor sought and obtained leave to withdraw the application on 24 February 1991, the intention was to discontinue it. But that was not the leave actually sought, or obtained. More importantly, no notice of discontinuance was filed, and as O.11A r.1 explicitly required filing of a notice to effect discontinuance, nothing less would suffice. Although the pleading was withdrawn and the matter removed from the Active Pending Cases List, the proceedings were not discontinued but remained on foot. 143Accordingly, Julienne's property settlement proceedings had not been completed when Colin died. They remained on foot, and could be continued after Colin's death against his estate under s 79(8). There was no absence of jurisdiction to make the consent orders that were made on 18 May 1995. The contention that the making of those orders constituted a miscarriage of justice by reason of absence of jurisdiction, and that on that basis the orders ought to be set aside pursuant to Family Law Act s 79A(1)(a), fails.

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Denial of Procedural Fairness 144It is clear from the foregoing that the proposed orders were likely adversely to affect David's interests. Then Family Law Rules, Order 14 rule 9, empowered the court to make orders for the conduct of proceedings following the death of a party, including orders for notice to be given to any person and in such manner as the court saw fit, and granting leave to intervene to any person upon such conditions as the court saw fit. 145The Family Court has consistently acted on the basis that third party creditors have a sufficient interest in property proceedings the outcome of which will affect their rights in a practical way, to vitiate proceedings of which they have not been given notice. Thus, in aid of the interests of third party creditors, it has set aside (pursuant to s 79A) property orders made by consent [Semmens v The Commonwealth], and after a hearing - albeit unopposed - in which the interest of the creditor was disclosed but the creditor was not notified [Rowell and Rowell (1989) FLC ¶92-026]; revoked approval of a maintenance agreement [Chemaisse & Commissioner of Taxation (No 3) (1990) 13 Fam LR 724; (1990) FLC ¶92-133]; and stayed a wife's application for property adjustment until the determination of claims for damages in tort by third parties against her deceased husband's estate [Bailey & Bailey (1989) 13 Fam LR 652; (1990) FLC ¶92-117]. 146In Rowell, the wife had applied pursuant to s 79 for an order that the husband transfer to her his interest in a piece of land. The husband, who was in prison, had a judgment debt against him of $450,000 and insufficient assets to meet it. During the hearing, counsel for the husband informed the trial judge that the Deputy Commissioner had obtained a Mareva injunction in the Supreme Court restraining him from disposing of any of his assets and in particular the land the subject of the application. The trial judge nonetheless made the orders sought by the wife. The Commissioner, who was not represented at first instance, appealed to the Full Court. McCall J, with whom Baker J agreed, said (at FLC 77,392): The first step accordingly, in any property proceeding, is to ascertain the property of the parties and to ascribe that property a value. In doing so, the Family Court has, in my view, quite properly in the past, taken into account liabilities of the parties and made orders which operated on the net value of the property so found. Family law does not operate in a vacuum. By that I mean the legitimate rights of third parties are not ignored when determining the rights to property between husband and wife inter se. This has been said on a number of occasions in the past and in particular by, as he then was, Gibbs J in Ascot Investments Pty Ltd v Harper & Harper (1987) FLC ¶91-000. 147His Honour concluded that the trial judge's discretion has miscarried by failure to take into account the Commissioner's judgment debt, but added (at 77,393): With respect to the second ground, the natural justice ground, I would make this comment: that in the circumstances which presented themselves before her Honour the trial judge, in my view it was necessary for notice to have been given to the creditor who I believe was in a special position by virtue of the matters I have referred to above, so that he had an opportunity of being heard before she proceeded to deal and dispose of the s 79 application. In my view the appeal should succeed on that ground also. 148Barblett DCJ, with whom Baker J also agreed, considered that the natural justice ground was a threshold question, and that the primary judge should not have proceeded to a final order without prior notice to the Commissioner. 149In Semmens, consent orders had been made distributing the total assets of $212,000 as to about $171,000 to the wife and as to $41,000 to the husband, at a time when the husband, as a result of convictions under the Customs Act, had been ordered to pay $88,000 to the Commonwealth. Upon becoming aware of the consent orders, the Commonwealth applied pursuant to s 79A to have them set aside, and succeeded both at first instance and on appeal. The Full Court (Fogarty, McCall and Bulley JJ) held that while it would not be appropriate to require parties to such proceedings to give notice in every case to all third parties who are or may be creditors of one or both of the parties, nevertheless in particular cases the failure by the parties to do so (or the court to direct such a course) may prejudice the rights of third parties. Their Honours said (at 13 Fam LR 723): While we think it inappropriate, in the absence of Rules of Court to this effect, to require notices to be given to third parties in all such circumstances, it must be recognised that the failure to do so in particular cases can severely impinge upon the "legitimate interests of third parties" and may almost inevitably in many cases constitute a "miscarriage of justice" within s 79A. Consequently, in our view, where in a proceeding under ss 79, 86 or 87 it appears to either of the parties that there are interests of third parties which might be adversely affected by the orders which are being sought or the terms of the agreement, justice and common sense dictate that those third parties be given notice. Similarly, where the court becomes appraised of that circumstance in the course of hearing such a proceeding, that procedure would also commend itself. Failure to do so in a particular case may adversely affect the interests of a third party and, in the long run, may open up the orders which have been made or the agreement which has been approved or registered to challenge ss 79A and 87(8) or otherwise. 150Accordingly, where it appears that the interest of third parties might be adversely affected by proposed orders, "justice and commonsense dictate that those third parties be given notice" and failure to give such notice may render the orders susceptible to being set aside under s 79A on the basis that there has been a miscarriage of justice. In my view, this is plainly applicable in the circumstances of the present case. The orders sought and made operated to the benefit of Julienne and Deborah, and to the detriment of David: to the benefit of Julienne because she would receive, under them, significant assets from the assets of the estate, in addition to the home that she had acquired by survivorship; to the benefit of Deborah, because her share of the estate was protected from Julienne's claim by satisfying it out of residue; and to the detriment of David, because the orders affected only the residuary estate, to which he was entitled. It is not possible to reconcile this outcome with a proper performance by Deborah of her duties as administratrix. Even if Julienne had a valid claim against the estate, the negotiation of a settlement on the basis that it would be satisfied out of the residuary beneficiary's interest to the exclusion of Deborah's interests bespeaks a conflict of interest and duty. It may be that Deborah believed that she was doing what was best in the interests of the estate, including David. However, she was in a position of hopeless conflict of personal interest, loyalty to her mother, and duty to her father and brother. Even Julienne acknowledged that it was possible that Deborah could now be seen to be conflicted. 151The defendants submitted that the s 79A application was misconceived because Julienne was entitled to receive more than she received under the consent orders. However, the notion of a "miscarriage of justice" is concerned with the judicial process that leads to the order, rather than the substance of the order [Public Trustee v Gilbert (1991) 14 Fam LR 573, 576; Clifton & Stuart (1990) 14 Fam LR 511]. It is neither a necessary nor sufficient condition for the satisfaction of s 79A(1)(a) that the order made be substantively unjust, in the sense that it be outside the range of a reasonable adjustive property order in the circumstances. It is true that in Allesch v Maunz [2000] HCA 40; (2000) 203 CLR 172, the High Court (Gaudron, McHugh, Gummow and Hayne JJ) said (at 182-3): A court will ordinarily be satisfied that there has been a miscarriage of justice if a person has suffered an adverse order in circumstances where his or her failure to appear is adequately explained unless it also appears that no different result would be reached on a rehearing or that a rehearing would work an irremediable injustice to the other side. 152This means that there may be circumstances in which an ex parte order that produces a result no less favourable to the absent party than could possibly have been made after a contested hearing will not amount to a miscarriage of justice. However, an order that happens to be objectively reasonable may nonetheless involve a miscarriage of justice, if the process by which it was procured was an unjust one. This is particularly so where notions of procedural fairness are involved. 153In this case, even if Julienne obtained a result no more favourable to her than would have been the case after a contested hearing, there was a miscarriage of justice. That is because of the combination of the denial of procedural fairness to David, coupled with the impossible conflict of interest, loyalty and duty that affected Deborah, who ought to have been defending the estate (and thus his interest). Moreover, regardless of the quantum of the order in favour of Julienne, there was an argument to be had as to how it should be borne by the estate, and in particular whether out of Deborah's share or out of David's residuary share - or both, and if so in what proportions. It could not possibly be said that the only possible outcome was that it be satisfied exclusively by assets from David's residuary share. Moreover, for reasons that will appear below in connection with consideration of Julienne's s 79 cross-claim, a rehearing would not produce so favourable a result for Julienne as obtained under the consent orders. 154David is therefore entitled to an order under s 79A setting aside the Family Court consent orders made on 18 May 1995. The defendants then submit that the Court ought to make another order under s 79 in substitution for the order set aside; and alternatively that it ought to make orders in favour of Julienne and/or Deborah under (NSW) Family Provision Act 1984. These matters arise on the cross claims, which are addressed later. Depending on the outcome of the cross-claims, David may be entitled to consequential orders that 272 Birrell Street be transferred to him, and that Julienne account to him for rents derived from it. Further, Julienne has utilised 272 Birrell Street as security for a borrowing for the purchase of a property at Etham Avenue, which she acquired for a price of $765,000, of which $220,000 was sourced in her superannuation, and the balance of $545,000 was sourced in a loan of $610,000 that was secured by a mortgage over 272 Birrell Street, the balance of which borrowing was used to make capital improvements to 272 Birrell Street. Depending on the outcome of the cross-claims (and also on whether the loan was primarily secured on Etham Avenue, with 272 Birrell Street merely as collateral, or according to the relative contribution each property made to the security), David may be entitled to an inquiry as to the extent to which Julienne's equity in Etham Avenue represents benefits derived by her from the use of 272 Birrell Street.

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Disproportionate Benefits from Nevilda Investments 156The main thrust of David's oppression case is that, during the period between 1995 and 2006, Julienne and Deborah so conducted the affairs of Nevilda Investments that they benefited disproportionately from it, to David's disadvantage. This case was founded on, and conducted on the basis of, a document that became PX103 Tab 33 ("Tab33"), which was a summary schedule of payments made by Nevilda Investments, prepared by David from the cheque books that Deborah and Julienne delivered to the provisional liquidator. 157At face value, Tab33 appears to show that during the period in question:

Nevilda Investments paid "personal expenses" of Deborah in an amount of $101,725 and of Julienne in an amount of $801,391, but of David only of $8,317;
Nevilda Investments made "loans" to Deborah of $113,268, to Julienne of $408,710, to Grace Securities of $605,310 and to Sharander of $240,181;
Nevilda Investments paid $317,415 for management services provided by Robert Dow to Grace Securities, Sharander and Julienne, and $82,360 for management services provided by Mr Talarico or Lisa Steele Real Estate to Grace Securities, Sharander and Julienne;
Nevilda Investments paid $131,547 for office space for Grace Securities and Sharander; and
Nevilda Investments paid dividends to Deborah of $55,597 and Julienne of $34,564 (when at best each held a 1/112th share, being the Nevilda Investments trust shares), but to David of only $47,802 (in respect of his 10/112 shares). 158Tab33 was therefore secondary evidence, and was dependent on the accuracy of the process undertaken by those who prepared it - chiefly, David. What David did was to compile from the primary records a schedule of payments made, and to record as personal expenses those that appeared to him to be personal, as best he could consistently for himself, Deborah and Julienne. However, the exercise was imperfect. David acknowledged in cross-examination that he had not recorded repayments made by Deborah, Julienne, Grace Securities or Sharander, loans from Grace Securities to Nevilda Investments or from Nevilda Investments to Dutchie or to him, or directors fees paid to him. While these answers were in response to questions that contained the hidden assumption that there were such repayments or loans, which was not established, they also left open the distinct possibility that only expenditure, and not repayments, had been scrutinised. Further, cross-examination of David established a number of inconsistencies - for example, he acknowledged that he had, in Tab33, treated an expense of $20,000 on Julienne's Amex card to purchase a kitchen renovation for Lamrock Avenue when he was living there as a personal expense of Julienne's, rather than as a proper expense of Nevilda Investments which owned Lamrock Avenue - or as a personal expense attributable to himself, consistent with the treatment in Tab33 of many expenses relating to Boston Avenue (owned by Nevilda Investments, but occupied by Deborah), which were treated as personal expenditure attributable to Deborah; similarly, David did not treat as personal expenditure attributable to himself outgoings in respect of the properties of Nevilda Investments that he occupied at Bondi Rd and Lamrock Ave. Indeed, all expenditure in respect of Julienne's Amex card was treated as attributable to her personally, without consideration of whether any part of it was for the benefit of the company, or even of David who, like Deborah, was a supplementary cardholder on the account. Many of the payments recorded in Tab33 as personal expenditure of Deborah and Julienne are explicable as proper expenses of Nevilda Investments in respect of its properties. Mr Dow and Mr Talarico were employed to render services to several of the family companies and individuals. 159While I do not accept that Tab33 was prepared deliberately to mislead, its accuracy as an analysis of Nevilda Investments' expenditure was seriously undermined. While it is true that Deborah admitted to having undertaken her own analysis, which was not tendered, in circumstances where sufficient shortcomings in Tab33 were otherwise established to undermine its reliability, the absence of an alternative analysis does not rescue it. 160But, assuming that Tab33 evidences payment of funds for the benefit of the three individuals in the approximate proportions and amounts that it prima facie suggests, that would still not of itself make a case of oppression. Whether or not it would do so depends upon how those payments have been treated in the company's accounts. In the context of a private family company such as Nevilda Investments, one would normally expect payments made for the benefit of a shareholder, other than distributions of dividend, to be debited to a loan account in that shareholder's name. If, to the extent that the payments were not proper company expenditure but for the personal benefit of one or other of the individuals, they were debited to a loan account, then there might well not be relevant oppression. 161An issue developed, which became the focus of much attention in the course of submissions, as to (1) whether such loan accounts existed, (2) whether documents evidencing them were in evidence, and (3) whether David had tendered that evidence. 162For relevant purposes, a loan account is a balance sheet item, which records the amount of indebtedness between the entity and persons - often associates - from whom it has borrowed or to whom it has lent money, usually on a running account. For each loan account there will typically be a ledger, recording (for each year) the opening balance, the advances and repayments made, and the closing balance. There is no doubt that the Nevilda companies operated intercompany and shareholder loan accounts. Their balance sheets reveal inter-company indebtedness, and indebtedness between the relevant individuals and the companies. Insofar as it is necessary to resolve the remaining issues, David did not tender the accounts in question. The defendants' submission that they were, was founded on the fact that they were included in two volumes of the plaintiff's tender bundle, namely folders 4 and 6, which became PX165 and PX167 respectively. However, David tendered only those documents within folders 4 and 6 that were identified in the tender bundle index as "P", and these did not include the "loan accounts" and "ledgers" referred to by the defendants. However, as it is apparent from their submissions that the defendants wish to rely on them, and as the plaintiff (in a submission dated 18 July 2011) indicated that he did not oppose their tender, I have treated them as being in evidence. 163What is missing are loan account ledgers in respect of each relevant loan account, showing opening balances, closing balances, and the intervening entries that would reveal how the balances have moved and what payments and repayments that movement reflects. Moreover, the accuracy of the amounts recorded in the balance sheets as the account balances is very dubious. After the parties fell into dispute, David drew attention to a number of discrepancies in the accounts up to FY2005 (which were the last prepared before the dispute) - mainly, but by no means only, as to apparently irreconcilable balance sheet items shown for one financial year, when compared to the "previous year" column shown in the following financial year's accounts. Deborah and Julienne thereupon instructed the accountant Mr Ashton to review and revise the financial statements, and provided him with annotated bank statements for Nevilda Investments, allocating payments between dividends, management fees, interest and loans - which annotations were made after the dispute arose. Pursuant to these instructions, Mr Ashton produced amended financial statements in February 2007. 164This revision of the accounts operated substantially to the detriment of David and to the benefit of Deborah and Julienne. Indeed, Deborah was unable to identify any aspect of the revision that operated to David's benefit. In the accounts for FY2005, the variations to the various loan accounts amounted to a detriment to David (and corresponding benefit to Julienne and Deborah) of more than $800,000. However, Julienne gave evidence that she has no confidence in either the original accounts since 2002, or in the revised accounts. In particular, she thought the reversal of David's loan position with Nevilda Investments (the original accounts showed the company being indebted to David for $350,852, whereas the revised accounts showed the company being owed $29,375 by him) was "utterly incorrect"; it was her belief that David did not owe Nevilda Investments any money, but that the company owed money to him. 165There is, therefore, great doubt as to the current balances of the loan accounts, as the rewriting exercise demonstrates and as Julienne concedes. To the extent that there is evidence of the loan accounts, that evidence does not establish that the impugned payments have been appropriately allocated, so as to exclude oppression. But contrary to the plaintiff's submissions, proof that the impugned payments were correctly accounted for through loan accounts was not a matter of affirmative defence, such that the absence of such proof enables an inference adverse to the defendants to be drawn. Rather, the plaintiff bore the onus of proving that the company's affairs were being conducted oppressively. 166Tab33, even if reliably accurate, could not of itself make a case of oppression, without demonstration that the payments it records were not appropriately treated in the accounts. There is no reason to presume that, to the extent that they included personal expenditure, they were not treated as advances (or repayments) on loan accounts, as they ought to have been. The contrary has not been established.

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Failure to Provide Information 167The plaintiff's complaint in respect of "failure to provide information" is that between April 2006 (when David commenced making enquiries about the conduct of the affairs of the Nevilda companies) and January 2007 (when the provisional liquidator was appointed), Deborah and Julienne failed to provide information to him about "a purported loan from Nevilda Investments to Deborah" - in fact it was a loan from Deborah to Nevilda Investments - and about discrepancies in the accounts of the companies. 168On 11 July 2006, Deborah dispatched notices of proposed meetings of the directors of the various companies to be held on 25 July. The notice of meeting in respect of Nevilda Investments included as an agenda item consideration of a resolution that the house Deborah occupied at Boston Avenue, East Malvern be sold to her and her husband, for a price that was to be satisfied in large part by her releasing a loan due to her from Nevilda Investments of $748,000 and interest. (Although the plaintiff queries whether Nevilda Investments was indebted to Deborah in this respect, both the original and revised accounts include a debt of that order, and it apparently reflects her entitlement to the proceeds of the winding up of Debid Pty Limited.) In a letter to Deborah and Julienne on 24 July 2006, David's solicitors set out his objections to the proposal, which was not pursued. 169In their 24 July 2006 letter to Deborah and Julienne, David's solicitors also proposed the addition to the agenda for the meetings of the companies proposed to be held on 25 July of a number of further items of business. Some of them referred to attached papers, and some of the attached papers contained "Questions to be answered by Julienne Grace and Deborah Grace", or drew attention to discrepancies in the accounts up to FY2005 - mainly, but by no means only, as to apparently irreconcilable balance sheet items shown for one financial year, when compared to the "previous year" column shown in the following financial year's accounts. However, the letter did not directly seek or demand the provision of information. 170On 1 November 2006, David's solicitors wrote to Deborah and Julienne's solicitors making a number of observations arising from David's inspection of company documents, particularly in respect of the treatment of a dividend paid by Nevilda Investments, and then Nevilda Holdings, in FY2001; and payment of dividend by Nevilda Investments in FY2004 to Deborah but not to David. Again, however, while it demanded undertakings not to proceed with proposed meetings, it did not directly seek or demand the provision of information. 171The essence of the plaintiff's complaint in this respect is that, in respect of Deborah's loan account, when the proceedings commenced on 3 November 2006, Deborah and Julienne's solicitors had advised David's solicitors that there were no loan documents for the directors' loans, and David had not been provided with the interest rates for them, or their duration or terms; and that there was no substantive response to the letters of 24 July and 1 November 2006; instead, Deborah and Julienne thereupon instructed Mr Ashton to embark on the review and revision of the financial statements already mentioned. 172However, the letters on which this complaint is founded did not contain direct demands for information. Moreover, David was informed, in a letter from Curwoods on 3 October 2006, that "a full review of all accounts is currently being undertaken to determine the precise amounts of all inter-company and personal loans". After 1 April 2006, he made many demands for information, which were generally answered. He was also permitted access to and inspection of corporate records - at the companies' offices at Gould Street, at Mr Ashton's offices, and at the offices of Curwoods and of Gordon & Johnstone - which provided the basis for the concerns expressed in the letters to which reference has been made. 173I am not satisfied that there was any such failure to provide information to David during the period in question as would amount to, or warrant relief for, oppression. This conclusion is fortified by the absence of any identified claim for relief relevant to this complaint.

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Management between October 2004 and April 2006 174It is common ground that Julienne managed the affairs of the companies between 1993 and October 2004. However, there is controversy as to who had day-to-day management of their affairs during Julienne's absence overseas between October 2004 and April 2006. Deborah and Julienne maintain that David did so. 175This issue is illuminated by the evidence of several witnesses who were called by the defendants but whose evidence under cross-examination served more to confirm the opposite. 176Thus, while Mr Bennison made some attempts in his affidavit evidence to promote David's role, involvement and understanding in respect of the family companies prior to 2006, it became clear enough in his cross-examination that Julienne was the driving force in their management of the family companies, and that David's role was very minor: he may have been present when she gave instructions, but whether he comprehended their detail and significance was not established. Mr Bennison explained to him, in a sense, his personal income tax returns, but this does not import any significant role in administration of the companies. His interim audit report, insofar as it attributed involvement to David, was essentially based on information provided to him by Julienne. (The reliability of his evidence was also affected by his claim to have recalled seeing the Deeds of Variation of the Nevilda Investments Superannuation Trust signed, which must have been false, given his concession that he had no such recollection.) 177Mr and Mrs Dow, in cross-examination, both tended to corroborate David's limited involvement in management. They communicated frequently with Julienne while she was overseas about business matters - at the time when on her case David was managing the companies. Mr Talarico confirmed that he received instructions from Julienne, not David: while he saw David, that was in order to get cheques signed, rather than to receive instructions. He continued to receive instructions from Julienne when she was overseas, every few days. 178The evidence of Mr Thompson - a close friend of Julienne - tended to confirm that Julienne made proposals in respect of property dealings, to which Deborah or David would simply accede, and that even when she was in London, Julienne would return every second or third month for a couple of weeks to attend to the larger tasks in respect of the running of the properties. Mr Calleja also tended to confirm Julienne's ongoing and dominant management role: he said that she was "hands on", supervising, inspecting and confirming the works. 179The oral evidence of Mr Ashton - the accountant, retained by Julienne and Deborah to attend to accounting matters in respect of the Grace family companies - tended to confirm that Julienne was by far the predominant influence in the management of the family companies. 180This evidence demonstrates that, even during her absence overseas, Julienne nonetheless retained management and direction of the affairs of the companies. David signed cheques when requested to do so. Contemporaneous documents also illustrate Julienne retaining detailed control of the affairs of the company. David's involvement in giving instructions in connection with a few properties - properties that he occupied - does not tell against this; it is entirely understandable that he would give instructions for minor repairs and renovations in connection with the properties in which from time to time he lived, but that is far from showing that he had assumed day-to-day management of the companies as a whole.

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The Nevilda Investments Superannuation Fund (NISF) Case 183Prior to the appointment of the provisional liquidator to Nevilda Holdings by the Court on 18 January 2007, Julienne essentially managed and directed the affairs of Nevilda Holdings, including in its capacity as trustee of the NISF. Its assets were shares listed on the ASX, and funds on deposit with Westpac ("the old term deposit"), and it had a bank account with Westpac ("the old Westpac account"). However, following the appointment of the provisional liquidator, Deborah and Julienne continued to deal with the assets of the NISF as if they were directors of Nevilda Holdings. It is not in issue that they were subject to fiduciary and equitable obligations to act consistently with David's best interests, not to prefer their own interests to David's, to ensure the protection of the assets of the trust, and to keep David informed of their dealings. The plaintiff claims an order that they account to him in respect of the Fund; the defendants concede that he is entitled to an account but not, as he seeks, on a "wilful default" basis. Accordingly, the essential issue is whether accounts should be taken on a wilful default basis. The NISF Trust 184Nevilda Holdings became the trustee on inception of the NISF, the beneficiaries of which NISF were Deborah, Julienne and David, on 30 June 1995, under a superannuation trust deed of that date, which provided that Nevilda Holdings was the trustee. On 15 December 1999, Mr Bennison requested the incoming accountant to ask Julienne to sign a Deed of Variation of the NISF, in order to make it compliant with SIS requirements. The Deed of Variation had not then been executed. 185In September 2006, David inspected documents relating to the NISF at the office of the accountant Mr Ashton. In the course of this inspection, he observed the Deed of Variation, which was undated and unsigned, and took a photograph of it. 186Prior to 18 January 2007, when the provisional liquidator was appointed to Nevilda Holdings, Nevilda Holdings acted as (sole) trustee, as many documents evidence - these include its taxation returns for 2002, 2003, 2004 and 2005; minutes of the Directors' meetings of 23 October 2006, in which Deborah recorded that Nevilda Holdings was the trustee of the fund; and a letter from Julienne to Mr Ashton of 2 November 2006, in which she wrote that Nevilda Holdings was the trustee of the fund. Deborah and Julienne knew this to be so. There is nothing to indicate that Deborah, Julienne or David were individual trustees or acted as if they were. NISF after the provisional liquidator 187Following the appointment of the provisional liquidator to Nevilda Holdings on 18 January 2007, Deborah and Julienne maintain that NISF continued to operate on the basis that they and David were individual trustees, as Nevilda Holdings was precluded from doing so once a provisional liquidator was appointed. However, no document records that there are four trustees. No document records the appointment of individual trustees. Although Deborah claims that she was so advised by Mr Ashton, Mr Ashton denies it. 188Deborah and Julienne did not deliver the books and records of Nevilda Holdings relating to the NISF to the provisional liquidator. Indeed, they did not disclose the existence of the NISF to the provisional liquidator, notwithstanding legal advice that they should do so, and that the opportunity to roll funds out of the NISF had been lost with the appointment of the provisional liquidator, which meant that Nevilda Holdings could no longer act as trustee. Even when pressed by the provisional liquidator, they initially refused to discuss the NISF. 189Simultaneously (on or about 25 January 2007), Deborah and Julienne caused the incorporation of Phoenix Rising Pty Ltd (Phoenix Rising), with its registered office at Mr Ashton's office and Deborah and Julienne as its only directors and shareholders, for the purpose of acting as trustee of a new superannuation fund - the Phoenix Rising Investment Superannuation Fund (PRSF). 190On or about 30 January 2007, Deborah and/or Julienne delivered the original Nevilda Holdings seal to the provisional liquidator, responded to the provisional liquidator's questionnaire, and delivered to him Nevilda Holding's documents - but did not disclose that Nevilda Holdings was trustee of the NISF, nor deliver documents of NISF. 191In late February 2007, Deborah and Julienne established a new term deposit and a new bank account with Westpac in the name of Nevilda Holdings. They also to continued to operate the old Westpac account, without the knowledge of the provisional liquidator, nor of David. By 19 March, the old term deposit had been realised and the proceeds invested in the new term deposit, and the proceeds of the old Westpac account had been transferred to the new account. On 27 March, ABN Amro on Julienne's instructions sold shares held by NISF, and the proceeds of $164,386 were credited to the new account, and on 27 March $160,000 was paid from that account to Julienne. 192On or about 10 April 2007, Deborah spoke with and then wrote to "Swift Rubber Stamps", ordering common seals for "Phoenix Rising Investments Pty Limited, ACN 123 623 754", and "Nevilda Investments Pty Limited Superannuation Fund, ABN 68 158 602 413". Swift delivered such seals on or about 12 April 2007 and sent invoices for them, which were paid by a cheque made out and signed by Julienne on 24 April 2007. 193On 1 June 2007, Deborah and Julienne wrote to "the Trustees of Nevilda Investments Superannuation Fund, PO Box 8, Vaucluse, NSW, 2030", stating their wish to rollover "all remaining money" in the NISF to the PRSF. 194Following enquiries by the liquidator (whom Deborah and Julienne referred to their lawyers), Julienne on 5 June 2007 provided Mr Ashton with a copy of the Deed of Variation, unsigned and undated, which he forwarded to the provisional liquidator the same day. 195Also on 5 June, the brokers ABN Amro sold NISF's remaining shares for $66,335, and sent two "confirmation of phone submitted orders" to Nevilda Holdings Pty Limited Superfund Account at PO Box 488, Vaucluse. The provisional liquidator, who had had a redirection placed on that PO Box, received these. 196On 8 June, the provisional liquidator wrote to Julienne, observing that the Deed of Variation that had been provided on 5 June was undated and unexecuted, and requesting that she provide a copy of the deed establishing the NISF, an executed copy of the Deed of Variation, fund statements for each beneficiary, and books and records of the fund. No such documents were provided. Deborah explained that this was because she had received advice from Mr Amirbeaggi, solicitor, that Nevilda Holdings could not continue to act as trustee, and "if we gave these over to Rodgers Reidy and they acted then they could be fined". This is an improbable explanation, and does not sit comfortably with the contemporaneous correspondence. Deborah communicated with Mr Ashton about this request, observing that she had no idea what the Deed of Variation actually was. Mr Ashton replied that he had the complete NISF file and proposed to give it to Hunts Lawyers, who were then acting for the defendants. Deborah replied that Julienne would want to see it first. She says that Julienne told her that she wanted to flip through the file to see what it said. Mr Ashton says he provided the file to Deborah on about 10 June. Julienne denies that she had such a conversation with Deborah, or that she received the file, but I am unable to believe her. 197On 15 June, Deborah and Julienne notified ABN Amro that the address of the super fund, formerly PO Box 488, was now PO Box 8, Vaucluse (which was not the subject of a redirection). This had the effect that, unlike the confirmation of orders previously mentioned, future correspondence from ABN Amro would be received by Deborah and Julienne, and not by the provisional liquidator. 198On 18 June 2007, a payment was made from the NISF to Phoenix Rising of $64,000, from the proceeds of the share sales on 5 June. 199On 21 June, Julienne sent a handwritten facsimile to Swift, requesting provision of a common seal "Nevilda Holdings Pty Ltd, ACN 000 956 459", to be sent to her at PO Box 21, Vaucluse. PO Box 21 was a PO Box used by Julienne, Grace Securities and Sharander, to which Deborah and Julienne but not David had access, and which was not the subject of a redirection request by the provisional liquidator. Julienne claims that this order was a mistake, that she intended to order a stamp for the NISF, and that she cancelled the order upon realising the mistake, but there is no contemporaneous record or other evidence to corroborate the alleged cancellation. To the contrary, on 27 June, Swift sent an invoice to Julienne at PO Box 21, including an imprint of a new Nevilda Holdings seal ("the June 2007 Nevilda Holdings seal"), noting that it had been ordered by Julienne. The invoice was paid, and Julienne's denial of receipt of it cannot be accepted. All this tells strongly also against her evidence that the order was cancelled. 200On 27 June 2007, the provisional liquidator continued to press for information about the NISF. He referred to having received documents from ABN Amro indicating that two parcels of shares to a total value of $66,000 had been sold on 5 June. There was no response. On 6 July 2007, at a meeting between Deborah, Julienne and their solicitor Mr Hunt and the provisional liquidator, Mr Hunt on their instructions told the provisional liquidator that Nevilda Holdings was not the trustee of the NISF, because the trust deed provided that its trusteeship terminated upon appointment of a provisional liquidator. 201On 28 June 2007, further payments were made from the NISF to Phoenix Rising of $17,000 and $38,000. 202David's solicitor wrote to Hunts Lawyers on 13 July 2007, asking a number of questions concerning the NISF. There was no response. 203A final payment was made from the NISF to Phoenix Rising on 17 July 2007 of $5,000. 204By 17 July 2007, when Hunts Lawyers sent a letter to the solicitors for the provisional liquidator, it appears to have become the position of Julienne and Deborah that they were individual trustees of the fund. The suggestion that they and David were individual trustees was first conveyed to him on 3 August 2007, in a letter from Deborah, which enclosed a letter from each of Deborah and Julienne to the trustee of the NISF stating that all money in the NISF owed to her had been rolled over and that she believed she was no longer a member of the fund and therefore tendered her resignation as a trustee effective immediately. 205On 27 August 2007, consequent on their purported resignation as trustees, Deborah and Julienne caused the NISF files to be delivered to David. Those files contained a copy of the Deed of Variation, dated 30 November 1999, and signed by Deborah and Julienne. The evidence that this was backdated is compelling. It is known that the Deed of Variation was unexecuted as at 15 December 1999, when Mr Bennison requested the incoming accountant to ask Julienne to sign it. It is known that it remained unexecuted as at 11 September 2006, when David inspected and took a photograph of it at the office of Mr Ashton. The executed version is, but for execution, identical to that version; this is particularly manifest from the correspondence of pencil markings on both versions. And the seal with which it was executed was the June 2007 seal, which did not exist before that date. 206By 28 August, the provisional liquidator was asserting that, contrary to assertions by Deborah and Julienne that a new trustee had been appointed, it appeared that none had been appointed, and that they had acted on behalf of Nevilda Holdings without authority. On 31 August, Hunts gave advice to Deborah and Julienne to the effect that unless documents formally appointing them as trustees could be located, then Nevilda Holdings was the only trustee and, notwithstanding the appointment of the provisional liquidator, continued as such until a new trustee was appointed. 207On or about 18 September 2007, David attended the offices of the provisional liquidator and inspected the NISF files, and became aware for the first time of transactions in relation to NISF by Julienne and Deborah prior to and after the appointment of the provisional liquidator. In the course of his inspection, he observed the executed Deed of Variation. On a close comparison of this document with the document that he had seen, unsigned and undated, in September 2006, it appeared to be the same document. 208On 18 March 2008, Hunts Lawyers informed the provisional liquidator that they had sent all company seals of Nevilda Holdings and Nevilda Investments to the provisional liquidator in or about late January or early February 2007, and that no other company seals had been ordered or received by them. This was false, as Julienne acknowledged - at least to the extent that no other seals had been ordered. Her explanation that this was a mistake by Hunts cannot be accepted, in the light of a contemporaneous file note made by Hunts that Julienne told them "we have no information about any seals for Nevilda Holdings or Nevilda Investments in April 2007". When pressed by the provisional liquidator in a further letter of 19 March 2008, Deborah gave instructions for a response to the effect that "we can shed no light" on the order placed with Swift Rubber in April 2007. 209In a letter of 25 September 2008, the provisional liquidator pressed still further about the order for the June 2007 seal. On instructions, the response was that no common seal for Nevilda Holdings had been received since provisional liquidation, and that any mail sent to PO Box 21 would have been redirected. Neither of these statements was true. 210After some changes of solicitors, on 2 December 2008 the explanation first emerged that the June 2007 Nevilda Holdings seal was "incorrectly ordered by Julienne Grace in June 2007", allegedly in error while ordering seals for a company not related to these proceedings, and never received as the order was cancelled via telephone. However, the contemporaneous documents provide nothing to support the view that there were any other orders made at the same time - only the one seal was ordered in the fax of 21 June - nor that the order was cancelled. 211The inference that the defendants procured the June 2007 Nevilda Holdings seal for the purpose of retrospectively authenticating the Deed of Variation, is inescapable; as is the conclusion that their various denials of knowledge of the acquisition of that seal, and of the circumstances of execution of the Deed of Variation, were false. Deborah's protestations that she was unable to shed light, as requested by the provisional liquidator, on the ordering of seals for Nevilda Investments from Swift Rubber Stamps in April 2007, and of not remembering the circumstances in which the Deed of Variation was sealed with the "new" seal, defy credulity. The answers provided to the provisional liquidator in respect of the order placed for the Nevilda Holdings seal were incomplete and deceptive. Deborah's determination to find non-existent differences between the markings on the executed and unexecuted versions bespoke a desire to avoid being confronted with what she must have known to be the truth. Julienne made and authorised false statements to the provisional liquidator, denying that she had ordered or received any seals since January or February 2007. She too sought to draw spurious distinctions between copies of the disputed seal; her begrudging concessions of the similarity - falling short of acknowledging the identity - of markings on the documents bespeaks a reluctance to make admissions against interest, even when inescapable. Her denial that control of the NISF was a matter of importance to her in early 2007 defies credulity in the light of her correspondence with her then solicitors, Yates Beaggi. Her hypothesis that the seal may have been intercepted as a result of redirection was equally spurious: Rodgers Reidy did not have an executed copy of the Variation Deed in June 2007 and were seeking one. Together, the documents and the chronology of events present a compelling case as to the provenance of the sealed version, contrary to her denials. 212Deborah maintained that she had understood, from about 2006, that there were four trustees of the Superfund - Nevilda Holdings, her mother, David and herself. She claimed to have been told, apparently by the accountant Mr Ashton, that as a result of changes to the superannuation law she, Dr Grace and David were individual trustees, along with Nevilda Holdings, of the Nevilda Investments Pty Ltd Superannuation Fund. It may well be that she was told that changes to the law required that all members of a self-managed fund be trustees. Although it seems most unlikely that she would be told that they were in fact trustees - when there is not a single document in existence appointing them or recording their appointment as such - it must be acknowledged that Mr Ashton's evidence confirmed that he had held the view (due to his understanding of the legal requirements) that the corporate trustee and the three individuals were the trustees of the fund. However, this was a view he held without any detailed consideration, and which he derived from something Julienne had told him. He denies having told Julienne or Deborah that all the directors were individual trustees, or that all beneficiaries of a SMSF had to be trustees. Moreover, their acts independent of David in this respect are inconsistent with their claim to have believed that all three individuals were trustees. But more significant than whether they were ever so advised is the fact that, if they genuinely claimed to be trustees in their individual capacity, they told David who, on their own hypothesis, was their co-trustee, nothing of it. Deborah's response, that he must have thought he was a trustee because he spoke to Julienne about the fund, is illustrative. Even more strikingly, they dealt with the fund's assets without informing or consulting David. Julienne's evidence that she was misled into believing that David acquiesced in what she was doing in liquidating the superfund assets cannot be accepted: even if he had access to the bank accounts, it is manifest that he could only have discovered transactions after they had occurred. 213Thus, following the appointment to the trustee Nevilda Holdings of a provisional liquidator, Deborah and Julienne, without David's knowledge or concurrence, procured the realisation of the assets of the NISF, and the transfer of a substantial proportion of them (some $284,000) to Julienne personally, or to the PRSF of which they alone were members. The defendants say that when they "rolled-over" their entitlements to the PRSF in this way, they left in the NISF sufficient funds to satisfy David's entitlement. They say that, as at August 2007, David's membership benefit was approximately $39,618, and that the assets then left in the fund (after withdrawal of their entitlements) was in the order of $76,275, so as to more than satisfy his benefit, even if an extra $30,000 were owed to him. However, the accounts of NISF over the period 2004 to 2007 show a substantial increase in assets available to pay benefits (from $214,390 to $351,121), and corresponding increases in the beneficiary accounts of Julienne and Deborah, but none in David's account. Julienne was unable to explain this discrepancy. Some of the explanations initially offered - that she had benefits transferred in - do not upon scrutiny satisfactorily explain the movements in the accounts. However Mr Ashton, who received instructions to rollover Julienne and Deborah's superannuation into the PRSF in 2007, said that the attribution of the whole of the increase in value of the NISF investments in 2004/05 to Julienne and Deborah to the exclusion of David, was a mistake on his part. 214The state of accounts of the NISF is confusing and unclear. It is not clear whether Julienne was making contributions in late 2006 (as some bank statements suggest). The NISF financial statements for FY2007 are inconsistent as to benefits paid, attributing different amounts in different places. On one version, Julienne is significantly overdrawn. In those circumstances, and as David's entitlement does not appear to have enjoyed the increments that were applied to Deborah's and Julienne's, it is not self-evident that sufficient has been left in the NISF to fund his proper entitlement.

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Basis of accounting 215It is not in dispute that Deborah and Julienne are in an accounting relationship with David in respect of the NISF from 18 January 2007, although the precise nature of that relationship might be: Deborah and Julienne presumably say that they owed relevant fiduciary and equitable obligations to David as individual trustees of NISF, whereas David contends that though they were not appointed as trustees, they owed such obligations, if not as directors of a trustee company, then as trustees de son tort, or as recipients of trust property. As has been noted, the defendants did not resist the proposition that David was entitled to an account of the NISF - they have consented to an account in common form since 10 September 2009. The issue was whether that accounting should be on the common basis, or on the basis of wilful default. 216An account of the NISF would involve Deborah and Julienne accounting for their receipts and expenditure as trustees or quasi-trustees of the NISF. On the taking of accounts in common form, the accounting party accounts only for what has actually been received and disposed of; the other parties can challenge the accounting party's account by asserting that more was received (surcharges) or that less was disposed of (falsifications) [Meehan v Glazier Holdings Pty Ltd [2002] NSWCA 22; (2002) 54 NSWLR 146, 149]. Where accounts are taken on the footing of wilful default, the accounting party must account not only for what has actually been received, but also for what should have been received, or what would have been received if the relevant duties of the accounting party had been properly discharged [Meehan v Glazier Holdings, 150]. 217To justify an order for taking accounts on the basis of wilful default, at least one instance of wilful default must be established, and there must be some evidence founding a reasonable suspicion that there may have been other such defaults [Meeham v Glazier Holdings, 150]. Wilful default is not coextensive with breach of trust: there may be a breach of trust without wilful default [Meeham v Glazier Holdings, 163]. Parties seeking an order for the taking of accounts on a wilful default basis must establish at least one allegation of wilful default - namely, failure by the executors to get in an asset which but for their wilful neglect or default might have been received [Juul v Northey [2010] NSWCA 211, [190], [192]]; and such allegations must be pleaded and particularised [Juul v Northey, [191], [204]-[206]]. Sale at an undervalue is an instance of wilful default, because more might have been received than was actually realised by the sale, and the defaulting trustee will have to account for what should have been received rather than for what was actually received upon the sale. But the significance and distinction of an account on a wilful default basis is on the receipts, rather than on the expenditure, side of the ledger: it potentially increases the receipts, by bringing to account not only what was actually received, but also what should have been received. 218The evidence establishes that Deborah and Julienne have abstracted from the trust fund, and that Julienne and Phoenix Rising have received, moneys - when they were not authorised to do so, because they were not the trustees. Even on their case that there were three individual trustees, these payments were made without consultation with their supposed co-trustee, David. At the heart of the plaintiff's case of wilful default lie five transactions, namely the payment from fund assets on 23 March 2007 to Julienne of $160,000, on 18 June 2007 to Phoenix Rising of $64,000, on 28 June 2007 to Phoenix Rising of $17,000 and $38,000, and on 17 July 2007 to Phoenix Rising of $5,000. The plaintiff submits that these payments fall within the concept of wilful default as being a fortiori sale of an asset at an undervalue. However, these were transactions on the expenditure, not on the receipts, side. They are not akin to a sale at an undervalue, but to a distribution. The amount distributed is known. Those payments could justify a suspicion that there may have been more such payments, though as the evidence seems to include a total picture of the assets of the NISF as at 18 January 2007 and their subsequent realisation and application, that seems unlikely. But that could be examined in any event in the course of an account on a common basis. 219I cannot see any basis in the evidence for supposing that there has been an occasion on which through lack of diligence the receipts of the fund have been less than would have resulted from the proper exercise of diligence. For example, there is no suggestion that the sale of the shares by ABN Amro was at an undervalue, or an inopportune time. The complaint is about unauthorised payments out of, rather than inadequacy of receipts into, the fund. 220Accordingly, there is no basis for supposing that an account on a wilful default basis will benefit David, because no instance has been shown of the defendants in their management of NISF failing to obtain for the trust fund all that should have been obtained by diligent performance of their duties. There is no instance pleaded or established that assets might have been received but for the default of the defendants [cf Juul v Northey, [189] and the cases there cited]. Given the way in which the case was conducted, and that it was clear from the outset that "wilful default" was in issue, I would not decline to consider the claim for an account on that basis simply because it was not explicitly pleaded. But quite apart from pleading, a failure to get in an asset, which but for their wilful neglect or default might have been received, has not been established. Given the nature of the defaults alleged and proved, there is no reason to suppose that an account on the wilful default basis would result in any different an outcome from one on the common basis.

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Standing 225To the extent that Deborah and Julienne presently have standing as contributories of the Nevilda companies, that is only because they hold shares which on my above conclusions they ought not hold, and must be treated as beneficially the property of David. In those circumstances it would not be appropriate to regard them as having standing as contributories to apply for a winding up order. Their beneficial interest in the Nevilda companies is held through Grace Securities, which is not a party to the proceedings. 226Assuming that Deborah has standing as a creditor of Nevilda Investments, her appropriate remedy - in the context of a plainly solvent company - would be an action to recover the debt, and not a winding up. 227Deborah and Julienne also claim to have given personal guarantees of the indebtedness of Nevilda Investments - in the case of both of them, to Westpac, and in the case of Julienne, also to ANZ. If this were established, they would have standing as contingent creditors of Nevilda Investments to apply for a winding up on the just and equitable ground [Corporations Act, s 462(2)(b)], at least subject to giving such security for costs as the Court thinks reasonable, and establishing a prima facie case for winding up [Corporations Act, s 464(4)]. However, it was not proved that such guarantees were ever given: her affidavit evidence that Westpac and ANZ insisted on her giving guarantees of the Nevilda companies' indebtedness is contradicted by the Bank manager's notes, which show that any such requirement was waived, and Julienne at one point conceded that they were not required; her evidence in cross-examination on this on this subject was quite unsatisfactory. In submissions, the defendants pointed to personal guarantees that she had given, but these were earlier (in 1993) to Perpetual Trustee Company and are no longer on foot, the debt to Perpetual Trustee Company having been refinanced. Accordingly, standing on this basis is not established. 228Moreover, even if standing were established as a creditor or contingent creditor of Nevilda Investments, that would not be standing in respect of Nevilda Holdings. Apart from discharging the alleged but unproven personal guarantees, there would be little utility in winding up Nevilda Investments, unless its holding company could also be wound up.

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Grounds 229The Court is not entitled to assume that David will exercise his legal control of the Nevilda companies in a manner oppressive of, or unfairly discriminatory towards, Deborah and Julienne. I do not accept the defendants' submission that David's evidence, that he has not decided what he will do if he gains control of the Nevilda companies, should not be believed. While he will likely restructure the board in a manner that gives him control, that would not of itself be oppressive. Nor do I accept that orders under the oppression power should be made on the footing merely that there is potential for him to do so. 230I accept that mutual trust and confidence between the current family members and ultimate stakeholders has broken down. However, it does not follow that it is just and equitable that the Nevilda companies or either of them be wound up. 231First, although the Nevilda companies are closely held family companies, they were not founded upon mutual arrangements or understandings between the current shareholders, such as might give rise to personal equitable obligations between them. Rather, they were founded by Colin's parents, albeit as vehicles for the collective management of the wealth of the members of the family. Julienne in her personal capacity was a stranger until the impugned 16 January 1995 transactions. Grace Securities, of which she held 50%, became a 50% equity shareholder in Nevilda Holdings as a result of the benevolence of Colin's parents (although at a time when the company had no assets of significance). Deborah acquired her 50% interest under Colin's will. Colin intended, by his will, that control pass to David. In those circumstances there is no reason to impose personal equitable obligations of the kind referred to in Ebrahimi v Westbourne Galleries Ltd [1973] AC 360: see Morgan v 45 Fleurs Ave Pty Ltd (1986) 10 ACLR 692, 707 (Young J). 232Secondly, the Nevilda companies are not a quasi-trading partnership: Nevilda Investments is a real property investment company, which does not require that the three protagonists work together on a daily or similar basis. There will be no deadlock, and the companies will be able to continue to function under David's practical control. There is no question of the companies not being able to continue to pursue their objects. 233Thirdly, I accept that in closely held family companies, even in circumstances where the shareholdings have passed from the original corporators to later generations who were not party to the original arrangement, the just and equitable ground may still have a role where the rationale for its existence is no longer attainable. Thus in Catombal Investments Pty Ltd [2012] NSWSC 775, I said: 23 This company is in the nature of a quasi-partnership; a family company formed to hold the rural properties on which, through various entities, the family was to conduct their farming business. Its shareholding reflects the shared and equal role and responsibility of the three brothers. For years all three were working directors and shareholders engaged in the family farming business. However, now Royce is the only family member, and the only shareholder, who wishes to continue the business in its current form. Graham has retired, and Brian wishes to retire, and both wish to realise their equity. Thus, the majority of shareholders wish to be no longer involved in the business under current arrangements. 24 Although the substratum may not have failed in the strict sense, the concept of the company holding land for use by the family business in which the three brothers work together is no longer attainable. Although none of the three have been excluded from management, the idea of a tripartite management, and benefit, structure is no longer feasible. Although the plaintiffs could form a majority and exercise control, they no longer wish to be engaged in the company, but instead desire to realize their equity, and to be released from the company. However, in the context of a proprietary company with only three shareholders, they cannot carry a special resolution to that effect. 25 The purpose of the company as a vehicle for holding land for the joint use, enjoyment and exploitation by the brothers is at an end. In the context of a proprietary company, the plaintiffs cannot practically realise their equity by selling their shares on the open market, and attempts to achieve a sale internally have failed. In those circumstances, it is not just or equitable that their substantial assets should remain unavailable to them and that they remain locked into a company where the majority no longer wishes to carry on the business under these arrangements, but to go their separate ways. 26 That conclusion is fortified by the circumstance that, all other options having failed, the shareholders agreed in December 2011 that the company should be wound up, and that course has been deferred while alternatives were pursued, but nothing has come of them. It is further fortified by the circumstance that the majority resolved that winding up proceedings be instituted, and that Royce merely abstained from that resolution, and that even since the proceedings were instituted, Royce has twice indicated that he consents to the company being wound up, although very belatedly he has resiled from that position. 27 Accordingly, in my judgment the ground is established: it is just and equitable the company be wound up. 234However, it is to be noted that in Catombal, the current shareholders, though not the corporators, had effectively adopted for themselves the concept of a tri-partite quasi-partnership in which all three had been working directors and shareholders; that it was the majority who no longer wished to continue the business but desired to realise their equity; and that all other attempts to find an alternative resolution had failed. Those factors are absent in this case. 235Fourthly, an applicant for a winding-up on the just and equitable ground must come with clean hands, and if the breakdown in confidence is attributable to his or her own misconduct, cannot insist on the company being wound up if the other parties wish it to continue [Westbourne Galleries, 387]. In this case, the breakdown in trust and confidence occurred in 2006, by reason of David's discovery of the transactions of 16 January 1995 and the Family Court consent orders of 18 May 1995, for which Deborah and Julienne must bear substantial responsibility. 236Fifthly, while any potential ongoing exposure of Deborah or Julienne as a guarantor of the Nevilda companies would have been a material consideration, such guarantees have not been proven. In any event, David has proffered to procure their release from any such guarantee, in the event that he succeeds. 237Sixthly, the Constitution of Nevilda Holdings provides, in Articles 12 to 16, a mechanism by which Grace Securities can, if it wishes, extract itself by sale of its shareholding to David, or failing that to a third party. However, the defendants have expressed no interest in a sale of Grace Securities' shareholding. To the contrary, Deborah and Julienne say that they have offered to purchase David's entire interests in the Nevilda companies, and that he has never been prepared to sell. But is not apparent why, as the majority and controlling interest in those companies, he should be expected to do so. 238In Westbourne Galleries, Lord Wilberforce said (at 379): It would be impossible, and wholly undesirable, to define the circumstances in which these considerations may arise. Certainly the fact that a company is a small one, or a private company is not enough. There are very many of these where the association is a purely commercial one, of which it can safely be said that the basis of the association is adequately and exhaustively laid down in the articles. The superimposition of equitable considerations requires something more, which typically may include one, or probably more, of the following elements: an association formed or continued on the basis of a personal relationship, involving mutual confidence - this element will often be found where a pre-existing partnership has been converted into a limited company; an agreement, or understanding, that all, or some (for there may be "sleeping" members), of the shareholders shall participate in the conduct of the business; restriction upon the transfer of the members' interest in the company - so that if confidence is lost, or one member is removed from management, he cannot take out his stake and go elsewhere. 239In this case, the participation of the current shareholders does not derive from any relationship between them involving mutual confidence; nor was there an understanding between them that all would be involved in management. Absent those considerations, the rationale for imposing equitable obligations in addition to the rights and obligations imposed by the Articles is also absent. Ultimately, of the three factors identified by Lord Wilberforce, only the last - restrictions on transfer - is present, and in the absence of either of the first two, that is of itself insufficient, particularly where the Constitution provides a mechanism for a shareholder to extract itself, which has not yet been attempted.

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Family Law Act, s 79(8) 241As I have concluded, above, that there was an extant proceeding under s 79 on foot at the date of Colin's death - which therefore could be continued after his death pursuant to s 79(8) - but that the Family Court consent order should be set aside on the basis of a miscarriage of justice by reason of procedural unfairness, it is open to the Court now to make "another order under s 79 in substitution for the order so set aside" pursuant to s 79A(1). Once again, in doing so, the Court is exercising the cross-vested jurisdiction of the Family Court of Australia, which has potential consequences for the destination of any appeal. 242Under Family Law Act, s 79(8), there are two necessary conditions for a court to make a property order after the death of a party: first, that the court be of opinion that it would have made an order with respect to property if the deceased party (relevantly Colin) had not died (s 79(8)(b)(i)); and secondly, that it be of opinion that it is still appropriate to make such an order (s 79(8)(b)(ii)). As to the first of those conditions, the court is required to consider and decide whether, if the deceased spouse had not died, the court would have made an order in the proceedings, and in considering that question the court has regard to the substantive circumstances relevant to the exercise of the jurisdiction invoked by the initiating application which existed immediately before the death of the deceased spouse. In short, the court must be satisfied that at the time of the death one or other party had a good cause of action for an order under s 79 in respect of which the court's jurisdiction had been regularly invoked [Bourke v Bourke [1998] FamCA 69, [4.8]-[4.10]]. The court is not required to work out the precise order it would have made had the deceased not died [Allan & Allan (1987) FLC ¶91-824; Randle & Randle (1987) FLC ¶91-828; North & North (1987) FLC ¶91-831]. 243As to the second condition, relevant factors include the consequences of the death of the deceased spouse on the financial position of the surviving spouse. For example, the surviving spouse may benefit from the deceased's estate in such a way that any further property adjustment is unnecessary. Another common consideration is that the deceased spouse has no continuing maintenance needs: this will often have a marked impact on the balance of the s 75(2) factors. Otherwise, the court takes into account the considerations relevant on an application under s 79, including in particular the contribution based factors specified in s 79(4)(a), (b) and (c), and the means and needs factors referred to in s 75(2) and incorporated by s 79(4)(e). The court does not take into account the claims or financial circumstances of the beneficiaries of the deceased spouse's estate [Menzies & Evans (1988) FLC ¶91-969, 77,010; Re Berry & Berry (1990) FLC ¶92-118, 77,779; Mason v Hannaford; Mason-King (1993) FLC ¶92-398, 80,055, 80,056, 80,057]. This means that the claim of or against the surviving spouse is to be considered essentially as between husband and wife before the claims of other beneficiaries are taken into account. 244Ordinarily in proceedings for adjustment of property interests under Family Law Act, s 79, the court adopts a three-stage approach. The first is the identification and valuation of the property of the parties, so as to identify the nett divisible pool of property. The second is to consider and evaluate the contributions of the parties within s 79(4)(a), (b) and (c). The third is to consider the impact of the factors referred to in s 75(2) [see, for example, Ferraro & Ferraro (1993) FLC ¶92-335, 79,560; McLay & McLay (1996) FLC ¶92-667; Omacini & Omacini [2005] FamCA 195; (2005) FLC ¶93-218, 79,619]. It is sometimes said that a fourth step is to consider whether the order proposed is just and equitable, within s 79(2) [see, for example, Hickey & Hickey [2003] FamCA 395; (2003) FLC ¶93-143; Omacini & Omacini (2005) FLC ¶93-218, 79,619], but as it is the factors referred to in s 79(4) (including those in s 75(2)) that inform whether the order is just and equitable, this is surplusage [cf OSF & OJK (2004) FLC ¶93-191, [16]]. 245Ordinarily, the court undertakes the first step - that is, identification and valuation of the property available for division - at the date of the hearing, but this is not invariably so. Although usually the preferable approach is to value property as at the date of trial, giving where appropriate separate and special consideration to contributions made between separation and trial, the ultimate task of evaluating the respective contributions of the parties is sometimes facilitated by adopting another date - such as the date of separation - for identifying and valuing the property. In Omacini & Omacini, the Full Court of the Family Court said that although ordinarily the parties' property is to be valued at the date of trial, in a particular case there may be reasons to justify another date, which might be the date of separation. [See also, in the context of analogous proceedings under the (NSW) Property (Relationships) Act, s 20, Kardos v Sarbutt [2006] NSWCA 11; (2006) 34 Fam LR 550, [30]-[31]]. 246In the present case, the plaintiff contended for the date of the present hearing, whereas the defendants contended for the date of the original Family Court consent orders of 18 May 1995, in substitution for which any new order would be made. 247The date of the present trial does not in this case provide an appropriate or convenient date for identifying, valuing and dividing the property of the parties. First, a decade has passed since Colin's death, and there have been many extraneous events and contributions affecting the property that was in his estate and the property that was held by Julienne, such as to make the present a most awkward time to evaluate their property and their respective contributions to it. Secondly, any order that might be made would be made in substitution for one that was made in 1995, and it is appropriate to consider the circumstances at or about that date. Thirdly, because under s 79(8)(b)(i) the court must in any event consider whether it would have made an order but for Colin's death, attention to the position as it was immediately prior to his death is necessarily required. 248The defendants submitted that the date of the consent orders of 18 May 1995 was the appropriate date. While that may have been an appropriate date, had the evidence facilitated it, the defendants' evidence did not do so, and their submissions did not rigorously apply it. Julienne did not make a full and frank disclosure of her financial circumstances as at that date, but sought to compile a financial picture by inference from disparate material which predated 1995 by as much as six years. In addition, the defendants "added back" notionally to Colin's estate assets which had been distributed from it prior to 1995. While I accept that the distributed assets must be brought to account to identify the pool of property that was available for distribution at about the time of Colin's death, that of itself points to an earlier date being preferable. 249In my view, particularly having regard to s 79(8)(b)(i), it is necessary to consider the position as it was immediately before Colin's death, at least in the first instance, although regard for the consequences of death must then be had under s 79(8)(b)(ii). This best enables the court to take account of the property of the parties and their respective contributions during and up to the end of the marriage. It is reasonably approximate to the date of the orders in substitution for which any new order would be made, so as to enable a fair comparison between what was done under the consent orders, and what ought to have been done. It is closer in time to the disparate evidence of value that Julienne relies on than May 1995. Further, the exercise is facilitated by the availability of Deborah's affidavit of assets and liabilities of Colin's estate (as at date of death) made in her application for administration of the estate. 250The evidence does not permit the exercise to be undertaken with precision, largely because there is no clear picture at any single date of Julienne's position, a matter for which she must bear responsibility. Nonetheless, the property of the parties as at or about the date of Colin's death may be summarised as in the following table. Notes explaining the various entries follow the table. As will become apparent, in respect of the shareholdings in the private companies, I have adopted the methodology used in the defendants' submissions, but as at an earlier date. This has usually involved substituting different revaluations of real property into financial statements for different years from those used in the submissions. To avoid excessively cluttering these reasons I have not set out the calculations in detail; but if the parties desire supplementary reasons in that respect they are at liberty to seek them, preferably before final orders are made. Husband's Assets Title Value Note ANZ Deposit H 531,632 1 Other cash H 4,966 2 Super H 61,058 3 3 Burrabirra Ave (1/2 interest as joint tenant) Jt 750,000 4 272 Birrell St H 640,000 5 Shares in public companies H 132,222 8 Shares in Nevilda Investments H 437,323 10 Ordinary shares in Nevilda Holdings H 1,792,012 11 CUMPs in Nevilda Holdings H 1,943 11 Share in Grace Securities H 1,724,978 12 Shares in Sharander H 163,604 13 Shares in N&H Grace H 244,119 14 Shares in Debid H 99 15 Other H 34,500 16 Total Assets 6,518,456

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251Note 1: ANZ deposit fund. As per the inventory of property in Deborah's affidavit of estate assets and liabilities. The plaintiff submitted that there should be deducted the amounts paid in reduction of the Burrabirra Avenue and Birrell Street mortgages, but these mortgages are taken into account as liabilities (see Notes 4 and 5). 252Note 2: Cash. The amount of Colin's cash-at-bank was not in dispute. Assuming a balance date of May 1995, the plaintiff submitted that an amount of $61,878 should notionally be attributed to Julienne, representing 10% of her income over the period 1990 to 1995. The same approach, as at 1992, would produce less than half that figure. However, there is some evidence that Julienne was financially strained in 1991. I am not prepared to find that she had substantial cash resources in September 1992. 253Note 3: Superannuation. The amount of Colin's superannuation interest with the State Superannuation Investment and Management Corporation was not in dispute. Julienne contended that she had $39,533 in the State Authority Superannuation Scheme. The evidence of that was an annual statement as at 30 September 1989. An ANZ diary note made in April 1998 [PX294, p39] records that Julienne had approximately $500,000 in superannuation due in September 1998. Julienne gave evidence that she qualified to take a lump sum superannuation benefit in September 1998, the proceeds of which she used to purchase the Etham Avenue property. However, a prospective superannuation benefit was not, in 1992 or 1995, regarded as property, but as a financial resource to be taken into account under s 75(2). It is likely that the sum of $39,533 was a withdrawal value as at September 1989. It is likely to have increased between September 1989 and September 1992, but Julienne has not adduced evidence that enables this to be worked out with precision. Assuming growth of 10% per annum I conclude that the withdrawal value was not less than $50,000 in 1992. I will separately take into account the prospective benefit of $500,000 as a s 75(2) factor. 254Note 4: Burrabirra Avenue, Vaucluse. This property was ascribed a value of $1.25 million by the defendants, being the mid-point of the range to which their valuer Mr Cviker agreed for a valuation date of 1995. Mr Cviker prepared two valuations of Burrabirra Avenue, one as at 2 September 1992 at $950,000 ($880,000 if run down, $1 million if in good condition), and the other at 18 May 1995, at $1,150,000 ($1,050,000 if run down, and $1.2 million if in good condition). Curiously, Mr Cviker did not have regard to sales of other properties in Burrabirra Avenue in 1991 and 1992. He was unable to explain his failure to refer to other sales in Burrabirra Ave, in both 1991 and 1995. He acknowledged - but did not know - that there probably were such sales. He said that he would have used the most appropriate comparable sales, and that he thought those listed in his report were the best comparables. However, he could not say and did not know whether his comparables had harbour views. It transpired that only one of his four 1995 comparables had harbour views. His report did not reveal how he had analysed the various comparables to which he did refer. He acknowledged that this was a significant deficiency in his report. His demeanour was quite unimpressive: he did not evince confidence in his process or opinion. After his attention was drawn in cross examination to a number of comparables and after his treatment of some comparables that he used was examined, he conceded that he would probably change his valuation, but was very reluctant to commit to by how much. He was ultimately prepared to accept a range somewhere between $1.2 and $1.3 million (in 1995). He at least implicitly agreed that the 1992 valuation also should be increased by in the order of $100,000. Mr Cviker was a real property valuer called by the defendants to value, relevantly Burrabirra Ave. Other evidence that bears on this issue is that Burrabirra Avenue had been valued at $1.5 million as at 30 November 1987, $1.8 million in 1989, was included in Julienne's 9 June 1989 Statement of Financial Circumstances at $1.8 million, and in Deborah's affidavit of assets and liabilities of the estate on 27 November 1992 at $1.5 million (a half share was shown at $750,000). The ANZ Bank valued it at $1.5 million as at 26 May 1995. All other properties that had been valued at 30 November 1987 were also valued by the defendants' valuers as at 18 May 1995, and all except for Burrabirra Avenue increased in value by between 112% and 159%. The decline in value of Burrabirra Avenue implicit in Mr Cviker's valuation is an aberration that he was unable to explain. Taking into account all this evidence, I can be comfortably satisfied that as at September 1992 Burrabirra Avenue was worth at least $1.5 million. It was subject to a mortgage (taken into account as a liability) of $165,000. 255Note 5: 272 Birrell Street. 272 Birrell Street was valued for the defendants as at September 1992 at $640,000. There was no other valuation evidence. It was subject to a mortgage securing $127,800. 256Note 6: Alma Street. The only valuation evidence was as at 18 May 1995, at $460,000. The other valuation evidence in the case indicates a general increase in values over the period 1992 to 1995 of approximately 20 percent. This implies a value of $385,000 for Alma Street as at September 1992. There was a mortgage balance as at 22 March 1991 of $260,000. While it would have reduced somewhat over the following 18 months, it would not have been by a great amount; I assume $250,000. 257Note 7: New Beach Road. The only relevant evidence of value is $360,000 as at 18 May 1995. By the same process described in the preceding paragraph, I attribute to it a value of $300,000 as at September 1992. It was subject to a mortgage of $120,000 as at 19 June 1992. 258Note 8: Colin's shares in public companies. Colin had shares in public companies which, at his date of death - according to Deborah's affidavit of estate assets and liabilities - were worth $132,222. 259Note 9: Julienne's shares in public companies. Julienne disclosed shares worth $334 in her financial statement of 9 June 1989 in the Family Court proceedings. She has not adduced evidence of the state of her shareholdings subsequent to that date, including as at September 1992 or 18 May 1995. There is some evidence that she received dividend income in 1995, but it appears that this was from private as opposed to public companies. I am unable to find that her shareholding in public companies exceeded the $334 disclosed. 260Note 10: Nevilda Investments. Prior to his death, Colin held 10 of the 112 shares in Nevilda Investments, and was beneficially entitled to another two (held in trust for him by Hilda and Carolyn). The defendants attribute to each share in Nevilda Investments a value of $43,959 as at 18 May 1995, deduced by substituting into the Nevilda Investments accounts for the 1995 year revaluations of real property as at that date. Valuations were obtained of relevant properties as at January 1993 as well as May 1995, and proximity of the January 1993 valuations to September 1992 enables them to be adopted for present purposes. Using the same methodology as the defendants, those 1993 valuations have been substituted into the 1993 accounts (ascertainable from the previous year column in the 1994 accounts in DX314, and noting that 2/754 New South Head Rd was acquired after 30 June 1993, and Boston Ave, East Malvern after 30 June 1994). This process results in Nevilda Investments having net assets of $4,081,678 as a 30 June 1993, so that one ordinary share would be worth $36,444, and Colin's twelve ordinary shares $437,323. This compares with the value of $233,843 attributed to them by Deborah in her affidavit of assets and liabilities of the estate. In this case - and in the case of other companies referred to below - I prefer the former figure as more accurate, having regard to the revaluations of real property it incorporates. 261Note 11: Nevilda Holdings. As at the date of his death, Colin held 300 ordinary shares in Nevilda Holdings (which were later transmitted to David) and he beneficially held all 2,003 cumulative preference shares (two of them were held on trust for him). The value of the ordinary (equity) shares is derived from the same process as applied by the defendants as at May 1995, but substituting the value of the underlying Nevilda Investments shares as deduced in the previous paragraph, and using the 1993 instead of the 1995 accounts. This results in a value for Colin's 300 ordinary shares of $1,792,012. This compares to $814,346 in Deborah's affidavit of estate assets and liabilities. Mr Lonergan valued the preference shares at 97 cents each, and his evidence was not adversely affected by cross-examination; this implies a total value for them of $1,943 (compared to $160,000 attributed to them by Deborah in her affidavit of estate assets and liabilities.) 262Note 12: Grace Securities. As at the date of his death, each of Colin and Julienne held one of two shares in Grace Securities. Again, the defendants have ascribed to each share a value of $2,286,150, by substituting 1995 valuations, this time into the 1993 financial statement - presumably because the 1995 financial statements were not included in DX314. In any event, on my preference for the September 1992 date, the 1993 statements are more proximate. However, 1993 and not 1995 valuations should be used for that purpose. In the case of this company's properties, however, only 1995 valuations were obtained. As described above, I have assumed a general increase in values of about 20% over the relevant period. This involves a discount of about 15% from the 1995 value. It is also necessary to substitute the revaluations of the 300 shares in Nevilda Holdings (as per note 11) and the 200 shares in Sharander (as per note 13). This produces a value per share of $1,724,978. (In the affidavit of estate assets and liabilities, Deborah estimated Colin's share in Grace Securities to be worth $1,124,673.) 263Note 13: Sharander. Using a similar process, the defendants attribute 200 shares held by Colin in Sharander a value of $183,326 as at April 1995, and a corresponding value to the equivalent number of shares held by Julienne. Sharander's property at Curlewis St was valued only at 1995, and accordingly I have applied the 15% discount and substituted that valuation in the 1993 instead of the 1995 accounts; this results in each parcel of 200 shares being worth $163,604. (Deborah's affidavit of estate assets and liabilities attributed to Colin's shareholding a value of $100,000 as at the date of death.) 264Note 14: N&H Grace Holdings. The defendants attributed to Colin's shareholding in N&H Grace Holdings a value of $263,646, by substituting the revaluation of the Sharander shares into the 1998 balance sheet obtained from the 1999 financial statements - presumably because none after 1990 were in evidence. Applying the above revaluation of Sharander to the same balance sheet results in a value for Colin's 1002 shares of $244,119. (In the affidavit of estate assets and liabilities, however, his shareholding was valued at only $27,239.) 265Note 15: Debid Pty Limited. The defendants ascribe a value of $99 to Colin's 99 preference shares in Debid and $100 to Julienne's 100 preference shares. In the affidavit of estate assets and liabilities, no value was attributed to them. 266Note 16: Other assets. The defendants ascribe to Colin other assets totalling $34,500 in value, with which the plaintiff did not take issue. Julienne admitted that she had other assets of $44,859 in May 1995. The plaintiff observes that these were largely amounts derived from values in 1989, 1992 and 1993 but, given my preference for the September 1992 date, this criticism is not as weighty as it would have been had 1995 been the relevant date. However, Colin's "other liabilities" include debts to Julienne, totalling $4,122, which ought to be recorded as a corresponding asset of Julienne and which I have added to her "other assets", to produce the total of $48,981. 267Note 17: Other liabilities. The defendants admit that Colin had liabilities essentially as specified in the affidavit of estate assets and liabilities. Julienne claims to have had liabilities, which apparently correspond with the 1995 financial statements of Nevilda Investments and Sharander. The 1993 statements of those companies do not enable any separate debt to Julienne to be identified; but the 1994 statements do and show her indebtedness as only $22,811 to Sharander and $728 to Nevilda Investments; as this is the most proximate evidence to the balance date I have substituted these figures for 1995, so that Julienne's "other liabilities" amount to $23,539. 268Accordingly, the nett divisible property as at September 1992 was in the order of $9,132,630, of which Julienne was entitled to $2,946,958, or 32%.

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Contributions 269Evaluation of the contributions under s 79(4) of the parties to a marriage is not an accounting exercise, but involves an holistic broad evaluation of their relative contributions to their property and the welfare of the family. Ordinarily this involves identification of the initial contributions of each party at the commencement of the marriage (or, where cohabitation has preceded marriage, cohabitation), and their ongoing contributions during the marriage and after separation until the date of effective adjustment. Contributions may be financial or non-financial. Financial contributions typically comprise the property introduced as initial contributions, income earned during the marriage, and property acquired by gift or inheritance, during the marriage. Likewise, contributions to the welfare of the family may be financial (the provision of financial support for the family) and non-financial (as a homemaker and parent). 270Usually in proceedings under s 79, the court will have the benefit of evidence of each of the spouses as to their initial contributions, and their respective ongoing contributions. In this case, Colin's death deprives the court of his evidence of those matters, and although David's evidence covers some aspects of them, that coverage is far from complete. On the other hand, despite extensive evidence on the part of Julienne as to some aspects of the history of the marriage, it too is less than comprehensive, and, for reasons already explained, her evidence must be viewed with caution. 271When the parties commenced to cohabit in 1967, Julienne, according to her own evidence, had no significant assets of value. She was earning an income of about $3,000 per annum. 272At the same time, Colin's annual salary was about $5,800. Colin had shares in public companies that generated dividends of $194 - which, assuming a 5% return, implies a value of about $4,000. He had a loan to Graceben of $25,000, which was generating interest at 10% per annum. He held a one-eighth shareholding in N&H Grace (Holdings), which generated a dividend of $1,619, and which he ultimately sold to Nevilda Holdings in 1971 for $7,500. Colin owned a block of land in Queensland, which had been purchased in September 1963 for 900 pounds, and was sold in 1981 for $17,000. He also held three of the sixteen shares in Grace and Barnett Pty Limited, which he transferred to Grace Securities in August 1973 for $30,000, contemporaneously with the purchase of Burrabirra Avenue for $100,000. The importance of this is that Colin's initial capital contributions - which on the conservative approach I have adopted approached $67,500 in value - equated to two-thirds of the purchase price of their matrimonial home in 1973. These initial contributions were therefore, in the values of that day, substantial. In the context of a lengthy marriage, however, their significance is "eroded" by the ongoing and offsetting contributions of the parties during the marriage. The initial contributions must ultimately be viewed alongside and in the context of the ongoing contributions of both parties, as part of the totality of the contributions. The practical effect of this is that in a marriage of 20 or so years their significance is considerably diminished, but not entirely extinguished. 273In 1970, Colin received a gift from his father Neville in an amount of $10,000. However, the evidence does not otherwise reveal that Colin (or Julienne) received benefactions from Colin's parents. Upon his father Neville's death, Colin inherited only one share in Grace and Barnett Pty Limited, and the cumulative preference shares in Nevilda Holdings. The cumulative preference shares, although they carried control, were of no more than par economic value. The share in Grace and Barnett does not appear to have then been of significant value. 274Colin and Julienne each held one of the two ordinary shares in Grace Securities from its incorporation after their marriage on 9 December 1969. Colin was allotted 25 of 100 ordinary shares in Nevilda Investments on 16 June 1970 following its incorporation; the remainder were held as to 25 each by Neville, Hilda and Colin's sister Carolyn. From 1 December 1971, Grace Securities held 300 of 600 ordinary shares in Nevilda Holdings (from shortly after its incorporation), the other 50% being held by Carolyn. Although there is no suggestion that Grace Securities was required to pay for that shareholding, Nevilda Holdings then had no assets. Also on 1 December 1971, Colin (along with Neville, Hilda and Carolyn) transferred their parcels of 25 shares each in Nevilda Investments to Nevilda Holdings, so that Nevilda Holdings became the holding company of Nevilda Investments. At this stage, Nevilda Investments had no assets of significance, but shortly thereafter it acquired, from Neville and from third parties, a number of properties. Those acquisitions were made for value, and some of them remain assets of Nevilda Investments today. The evidence does not reveal the source of funds for the acquisition of properties by Nevilda Investments. The plaintiff's submissions argued that it should be inferred that Neville and Hilda provided the funds. While the evidence suggests that they were well off, there is nothing to indicate that either of them parted with property on less than commercial terms. If they were the source of funds, then that is likely to have been reflected in loan accounts of the relevant companies. When Neville died in July 1982, he was owed $56,549 by Nevilda Investments, $3,419 by Nevilda Holdings and $65,434 by N&H Grace Holdings, which lends support to the view that he financed the Nevilda companies, although it does not demonstrate that he did so on less than commercial terms. I am not able to conclude, as the plaintiff's submissions urge, that contributions were made on behalf of Colin by his parents by advancing funds (at least on less than commercial terms) to fund the purchases by Nevilda Investments. 275However, Nevilda Investments had acquired all of its properties by 1980. Neville died in 1982. Indeed, save for the sale of Crown Street in August 1979 and the purchase of Anzac Parade, Kingsford in January 1980, Nevilda Investments had acquired its properties by March 1974, when it acquired Wellington Street, Bondi. Thus its property portfolio was acquired during the lifetime of Neville - and largely before 1978, until at least which date the Nevilda companies were managed by Neville and Hilda from their home. The existence of valuable property in the Nevilda companies as at the date of Colin's death was attributable in no small part to the acumen and stewardship of Colin's parents, which counts as a contribution on Colin's behalf. 276Similarly, the creation of value in Sharander and in Grace Securities, through the purchase of real property, was, to some extent, attributable to Colin's property investment energies and acumen. While Julienne assisted in the management of the companies owned and controlled by Colin and her, she was not involved in the management of the Nevilda companies; in this respect I prefer the evidence of Carolyn and Philip Foreman that she was not involved. In respect of the companies in which she and Colin were interested (Grace Securities and Sharander in particular), Colin until his illness played the predominant role. 277During the marriage, Colin retained and increased his share portfolio, such that by the date of his death he had shares in public companies worth about $104,000. Some of that would have reflected his initial public share portfolio, and some was attributable to contributions made during the marriage. To the extent that those contributions were financial, they came from income generated during the marriage. But there is no suggestion that Julienne was involved in the share trading activities, and to some extent this asset was the result of contributions reflecting his acumen and stewardship. However, in the scope of the size of the matrimonial estate in this case, it is of but slight moment. 278I accept that both parties contributed to the renovation of 241 Birrell Street, and then of Burrabirra Avenue. They both also undertook renovations to some of the properties owned by their companies (as distinct from the Nevilda companies). Julienne assisted with the renovation of Nevilda Investments' Lamrock Avenue property. 279The evidence does not provide a complete view of the income generated by each of the parties in each year during the marriage. There is evidence of Colin's income up to 1975, and of Julienne's in 1968 and then from 1973 onwards to 1989. However, so far as the evidence goes, it indicates that Colin's income is likely to have exceeded Julienne's by a substantial proportion. Indeed, in those years for which direct comparison is possible, in 1974 hers was $5,296 and his $24,830, and in 1975 hers was $11,670 while his was $42,802. 280On the other hand, her contributions as homemaker and parent are likely to have exceeded his, although to some extent their significance is reduced by the circumstance that a housekeeper and infant nurse were retained. For the purpose of assessing relative contributions, it makes no difference from whose income these employees were paid: the contributions comprise the income, and the homemaker and parent contributions, not the expenditure. 281After they separated in October 1987, David lived with Colin and Deborah lived with Julienne, in accordance with the respective wishes of the children. Each parent supported the child who lived with that parent. Colin managed Grace Securities, Sharander and Debid. However, from the time of Colin's operation in June 1988, Julienne assumed the management of Grace Securities, Sharander and Debid. Julienne also assumed the care of David, as well as Deborah. Colin lived with Hilda from when he left hospital in 1988 until the removal in 1990. Following the removal of Colin from Hilda's home to Burrabirra in 1990, Julienne assisted with his care, but Colin had a full-time carer who looked after him during the day, and a nurse who gave him injections and put him to bed at 8.00 pm, where he remained until 8.00 am. However Colin did not entirely cease to make contributions during this period. The Office of the Protective Commissioner, as manager of his estate, paid for many of his expenses, including mortgage payments and nursing fees and weekly boarding expenses of $120 to Julienne. 282Accordingly, in an overall evaluation of the respective contributions of the parties up to the date of notional adjustment being the date of Colin's death, the following matters require recognition: (a)Colin's significant initial contributions in 1967, albeit that their significance is considerably reduced by the ongoing and off-setting contributions of both parties during the marriage; (b)Colin's significantly greater income contributions up to 1988; (c)Julienne's greater homemaker and parent contribution, the significance of which is somewhat reduced by the retention of a housekeeper and infant nurse; (d)The greater responsibility of Colin and his family through their acumen and stewardship for the generation of wealth through property investment in the Nevilda companies, albeit that this is not shown to have involved benefactions; (e)The greater responsibility of Colin for the management and direction of the family companies until 1988; (f)The greater (albeit not exclusive) contributions of Julienne for the period of four years following Colin's operation in 1988 until his death. 283The defendants contended that as at the date of Colin's death the contributions favoured Julienne by 60:40 (increasing following Colin's death to 75:25), apparently by reason of the absence of s 75(2) factors favouring Colin after his death; whereas the plaintiff contended that they should be apportioned 70:30 in favour of Colin. In my view, the matters summarised in the preceding paragraph compel the conclusion that, overall, the contributions of Colin up to the notional date of adjustment exceeded those of Julienne, in my assessment by 57.5% to 42.5%.

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Section 75(2) Factors 284The s 75(2) factors, referred to in s 79(4)(e), are concerned essentially with the present and future means and needs of the parties, whereas the "contribution" factors in s 79(4)(a), (b) and (c) are concerned with their past contributions. The impact of the s 75(2) factors varies, depending upon the size of the pool of assets and the contribution-based entitlement. Where the pool of property is small, the means and needs factors will often predominate and overwhelm consideration of contribution-based entitlement. On the other hand, in cases where a party's entitlement having regard to the contributions alone is ample to provide for his or her future needs, the s 75(2) factors are of slight if any significance. 285In this case, the relevant factors may be summarised as follows. Colin was incapacitated. He had no ongoing capacity to generate income from personal exertion, although he had an ongoing capacity to generate interest income from investments. Colin would have (foreseeably) significant ongoing costs of care. He had an ongoing financial responsibility to support David, who would attain 18 years of age in April 1993, whereas Deborah had already attained 18 years of age. 286Julienne was 52 years of age, apparently in good health, and in employment as a medical specialist with a substantial earning capacity. She would have, to some extent, the ongoing responsibility for the care of David for another six months until he attained 18 years of age. She also had a prospective entitlement to a substantial superannuation benefit, which would mature in 1998 generating $500,000 approximately. (Although a much lesser value has been taken into account in the assets table that is presumably the withdrawal benefit as distinct from the maturity benefit.) Although the marriage had been a long one, it had not had an adverse impact on Julienne's earning capacity. 287The combination of Julienne's prospective superannuation benefit, with Colin's incapacity and prospective needs, and the relatively slight significance of responsibility for care and support respectively of a seventeen and a half year old child, means that on balance the s 75(2) factors weighed in favour of Colin. However, given the size of the pool of assets, the proportionate impact would have been relatively slight. A further adjustment in his favour of 2.5% would have been appropriate, resulting in an overall apportionment 60:40 in favour of Colin as at the notional adjustment date.

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Determination under s 79(8)(b) 288As at the notional adjustment date the actual distribution of assets was 68:32 in favour of Colin, and as I have concluded that an appropriate apportionment was 60:40, it can be concluded, for the purposes of s 79(8)(b)(i), that had Colin not died the court would have made an order adjusting the interests of the parties in favour of Julienne, so as to produce a distribution was 60:40 in favour of Colin. 289The next question is whether it is "still appropriate" to make an order, for the purposes of s 79(8)(b)(ii). This directs attention to the situation having regard to the deceased's death. Like s 79(8)(b)(i), it is concerned more with the conceptual than the temporal impact of the death [cf Bourke & Bourke [1998] FamCA 69, [4.9]]. It means "still" notwithstanding the death, rather than still today, and does not necessarily require that attention be given to the circumstances at the date of hearing, if the court concludes, as I have, that an earlier adjustment date is for other reasons appropriate. 290The impact of death on the appropriateness of making an order may arise in several ways. First, the effect of the deceased's will may be to discharge the moral obligations that would otherwise have underpinned an adjustive property order. Secondly, a deceased spouse has no future needs, and thus no s 75(2) factors operating in her or his favour [Tasmanian Trustees Limited v Gleeson (1990) FLC ¶92-156]; thus the death of a party can have a profound effect on the balance of the s 75(2) factors [Parrott v Public Trustee of NSW (1994) FLC ¶92-473], although that will depend on the means and needs of the surviving spouse and the adequacy of his or her contribution-based entitlement to provide for them. 291In this case, the following matters need to be taken into account, as at the notional date of adjustment. First, there were no longer any s 75(2) factors operating in favour of Colin. The occasion for an adjustment in his favour on that account was therefore removed. That is not to say, however, that there was any occasion for an adjustment in Julienne's favour. The defendants invoked cases in which significant s 75(2) adjustments had been made in favour of a surviving spouse, as indicating that there should be a 15% adjustment on that account in Julienne's favour, but this is misconceived. They were cases in which the surviving spouse had a strong needs-based claim. Here, Julienne retained her earning capacity, and her prospective superannuation entitlement, and her income and resources were such that her contribution-based entitlement was ample to satisfy her needs. As Watts J observed In Miklic v Miklic [2010] FamCA 741 (at [127]): Past cases have considered how the death of a party should be taken into account when assessing the availability of an adjustment under s 79(4) in relation to future needs. Clearly, the husband has no future needs of the kind referred to in parts of s 75(2). On the other hand, some care should be taken not to nullify the deceased party's contributions due to the lack of future needs (see T & D & Anor (2006) FamCA 1248). 292Accordingly, one impact of Colin's death would be to restore the appropriate distribution to the contribution-based 57.5:42.5, in favour of Colin. 293The second impact of Colin's death is that, by survivorship, Julienne succeeded to Colin's share in Burrabirra Avenue, unencumbered. The practical effect of this was an adjustment in her favour of $750,000, increasing her net position to $3,696,958, or 40% of the pool of property. Only a further $228,000 approximately would have been required to produce the notional 57.5:42.5 distribution, based on the original pool. 294Thirdly, however, under Colin's will, Deborah also obtained significant benefits. Through the shares in Grace Securities, Deborah received property to the value of $1,724,978, and through the shares in Sharander, a further $163,604. In all, this amounted to 20% of the divisible pool of property. This is of importance because, having regard to (1) the alignment of Deborah with Julienne and David with Colin following separation, (2) the arrangement between Colin and Julienne following their separation that he would provide for David while she would provide for Deborah, (3) the fact that Julienne made a will on February 1988 leaving the bulk of her estate to Deborah, and explaining in the body of her will that she did so because Colin was proposing by his will to leave his estate to David, and (4) the alignment of the parties in these proceedings, so that it may be considered improbable that David would inherit significantly if at all from Julienne, it is necessary to consider whether - at least to the relatively small extent of about $228,000, which corresponds to about 12% of Deborah's inheritance from Colin - it should be borne by Julienne's share of the matrimonial pool. 295In my judgment it should, first because the provision made by Colin for Deborah significantly reduced Julienne's obligation to provide for her; secondly because the remaining 40% share was ample to provide for Julienne's needs; and thirdly because treating the distribution to Deborah in that way would result in Julienne receiving 40% of the matrimonial pool, David 40% (being Colin's residuary estate) and Deborah 20%, but with the likelihood that in due course Deborah and not David would inherit from Julienne. 296Accordingly, once the s 75(2) adjustment in favour of Colin is disregarded by reason of his death, the appropriate apportionment returns to 57.5:42.5. As a result of the will, the distribution in favour of Julienne increased from 32% to 40%, by reason of her succession to Colin's interest in Burrabirra Ave. Although this implies that there ought to have been an adjustment in favour of Julienne to increase her interest to 42.5%, Deborah received 20% of the pool pursuant to Colin's will, and given the sufficiency of 40% amply to provide for Julienne's needs, and the alignments of the parties and the arrangements they agreed in respect of provision for the two children, it is just and equitable that the distribution to Deborah be treated, at least to the extent of 2.5% of the pool, as being for the benefit of Julienne. 297Accordingly, I conclude that it is not, in light of the changes wrought by Colin's death, still appropriate to make an order under s 79 adjusting the interests of his estate and Julienne in their property.

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Julienne's application 303Julienne is in a somewhat different position. To my mind, belief that a valid application under s 79(8) of the Family Law Act remained on foot, and thereafter that orders had been made on it, amply explains why Julienne would not have made a Family Provision Act application, at least until those orders were impugned. Were I of the view that such an application by her under the Family Provision Act had prospects of success, I would extend time for it to be brought. 304In support of her substantive application Julienne has invoked some extra-judicial observations in a paper [The Hon. PLG Brereton, "Where Death and Divorce Meet: The Intersection of Family Provision and Family Law", National Family Law Conference, October 2006, p23], to the effect that the proper measure nowadays of the community's expectation as the basic minimum which testators should provide for their spouses, even in an unhappy marriage, is such provision as the surviving spouse would have received under Family Law Act, Part VIII, had the parties separated and instituted such proceedings. As a general proposition, the plaintiff does not take issue with that position. For the reasons set out above, proper provision for Julienne under Part VIII would not have differed markedly from what she received from Colin's estate under his will. 305Moreover, the general proposition must yield to accommodate the requirement of Family Provision Act, s 7, that the Court exercise its power under that section "having regard to the circumstances at the time the order is made". This directs the court to have regard to the situation today, and in particular as to whether it can be said today that Julienne has been left with inadequate provision for her proper maintenance and advancement in life. In her affidavit of 22 October 2010, in which Julienne gives evidence of her current financial circumstances, she discloses a nett asset position of $11 million. Moreover, this undervalues her interest in Grace Securities, and when allowance is made for that her net asset position appears to be in the order of $14 million to $15 million. 306Accordingly, as her application would not succeed, I would not extend time to allow Julienne to bring an application under the Family Provision Act.

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Conclusion 307My conclusions may be summarised as follows. 308David is entitled to orders avoiding the January 1995 share transfers for presumed undue influence and alternatively for unconscionable dealing, and for the retransfer to him of the 667 CUMP shares held by each of Deborah and Julienne, and to an account in respect of any benefits derived from them by Deborah and Julienne whilst in their hands. 309David is also beneficially entitled to each of the six trust shares and to orders that Deborah and Julienne transfer them to him, and account to him for any benefits derived from them in the meantime. 310Julienne's property settlement proceedings had not been completed when Colin died. They remained on foot, and could be continued after Colin's death against his estate under s 79(8). There was no absence of jurisdiction to make the consent orders that were made on 18 May 1995. However, the consent orders of 18 May 1995 involved a miscarriage of justice, by reason of the denial of procedural fairness to David, and the impossible conflict of interest, loyalty and duty that affected Deborah, who ought to have been defending the estate (and thus his interest). Regardless of the quantum of the order in favour of Julienne, there was an argument to be had as to how it should be borne by the estate, and it could not be said that the only possible outcome was that it be borne exclusively by David's residuary share. In any event, on a rehearing it was not inevitable that Julienne would obtain no less favourable an outcome. The orders should be set aside pursuant to (CTH) Family Law Act, s 79A. 311Tab33 is not a sufficiently reliable analysis of expenditure of Nevilda Investments to be accepted as proof of the relative benefits each party derived from it. Even if it were, it is not established that such expenditure was not appropriately allocated in the accounts. It has therefore not been proved that during the period 1995 to 2006, Deborah and Julienne benefited disproportionately from Nevilda Investments, so as to disadvantage David. The instances of failure to provide information in respect of Nevilda Investments about which complaint is made were not such as to amount to, or warrant relief for, oppression. As the defendants submit, there is no evidence of oppressive conduct of the affairs of Nevilda Holdings. The plaintiff has not established a case for relief for oppression. 312It is not in dispute that the plaintiff is entitled to have the defendants account in respect of the NISF for the period from 18 January 2007. However, a case for an account on a wilful default basis has not been established. 313Given that they ought not be contributories, as the 16 January 1995 transactions under which they acquired a shareholding are to be set aside, Deborah and Julienne should not be regarded as having standing to apply for a winding up of the Nevilda companies on the just and equitable ground. Although Deborah may have standing in respect of Nevilda Investments as a creditor, winding up would not be an appropriate remedy. If they were guarantors, they would have standing in respect of Nevilda Investments as contingent creditors, but it is not established that they have given such guarantees. It cannot be assumed that David will conduct the affairs of the Nevilda companies in a manner oppressive of Deborah and Julienne in the future, and I am not satisfied that it is just and equitable that they be wound up. 314As there was an extant proceeding under s 79 on foot at the date of Colin's death, which could be continued after his death pursuant to s 79(8), it is open to the Court, on setting aside the Family Court consent orders, to make "another order under s 79 in substitution for the order so set aside" pursuant to s 79A(1). 315The net divisible property of Colin and Julienne as at September 1992 was in the order of $9,132,630, of which Julienne was then entitled to $2,946,958, or 32%. Overall, the contributions of Colin up to that notional date of adjustment exceeded those of Julienne, in my assessment by 57.5% to 42.5%. On balance, the s 75(2) factors weighed in favour of Colin, albeit that given the size of the pool of assets, their relative impact would have been slight, justifying a further adjustment in his favour of 2.5%, resulting in an overall apportionment 60:40 in favour of Colin as at the notional adjustment date. As, at the notional adjustment date, the actual distribution of assets was 68:32 in favour of Colin, and an appropriate apportionment was 60:40, had Colin not died the court would have made an order adjusting the interests of the parties in favour of Julienne, so as to produce a distribution was 60:40 in favour of Colin. 316Once the s 75(2) adjustment in favour of Colin is disregarded by reason of his death, the appropriate apportionment returns to 57.5:42.5. As a result of the will, the distribution in favour of Julienne increased from 32% to 40%, by reason of her succession to Colin's interest in Burrabirra Ave. Although this implies that there ought to be an adjustment in favour of Julienne to increase her interest to 42.5%, Deborah received 20% of the pool pursuant to Colin's will, and given the sufficiency of 40% amply to provide for Julienne's needs, and the alignments of the parties and the arrangements they agreed in respect of provision for their two children, it is just and equitable that the distribution to Deborah be treated, at least to the extent of 2.5% of the pool, as being for the benefit of Julienne. It is therefore not still appropriate to make an adjustive property order. Accordingly, I would not make an order under s 79 in substitution for the order set aside. 317I would not extend time to permit Deborah to make an application under the Family Provision Act, because there is no sufficient explanation for her failure to make a timely claim, and because a claim if allowed would not succeed. 318Although Julienne has an acceptable explanation for not making a timely application, I would not extend time to allow Julienne to bring an application under the Family Provision Act, because it could not be said that she has been left with inadequate provision for her proper maintenance and advancement in life, having regard to the circumstances at the time when any such order would be made. 319I direct that the plaintiff bring in short minutes to give effect to this judgment.