Grain Technology Australia Ltd v Rosewood Research Pty Ltd

Application under Civil Procedure Act, s 73

1. The plaintiffs' notice of motion was filed, in accordance with my direction, on 3 May. The plaintiffs contended that, notwithstanding the result of my March judgment, the Deed obliged the parties to "restructure" BRI. According to the plaintiffs, this obligation could be inferred or implied from the express terms of the Deed.
2. In their notice of motion, the plaintiffs sought declarations in the following terms: 1. Declare that under [the Deed] in the event of the Court having made the conclusions in [my March judgment] at [421], including that the property of [BRI] is not held upon the terms of a charitable trust cognisable in equity (a Charitable Trust), then: 1. The [BRI Companies] and each of them, and [the Receiver], and the [Attorney General] are obligated to do all things reasonably necessary to achieve a restructure with the same purpose as an order appointing a new trustee for a valid Charitable Trust over [BRI's] assets having trust purposes in or to the effect of schedule 1 to the [Deed] (the Purposes); 2. [the Shareholders] are obliged to do all things reasonably requested by the Companies, the Receiver, and the Attorney General, including transferring shares and resigning as directors or other officers of the Companies.
3. The plaintiffs then sought consequential orders to give effect to the "restructure". Those orders did not provide much detail about the particular restructure which the plaintiffs had in mind. All they provided was for BRI, the Receiver and the Attorney General to request the Shareholders to transfer their shares to a transferee described as the "new parent". The new parent was to be the first plaintiff, or The Australian Export Grains Innovation Centre Limited (not a party to the proceedings, but apparently a company involved in research for the benefit of the grains industry, to which I will refer as "AEGIC"), or "any other candidate or candidates that any of the parties to this notice of motion propose, appropriate to permanently procure [BRI] to carry out the Purposes".
4. The notice of motion named as the respondents: the BRI Companies; Dr McMaster, Mr Murphy, and Mr Michael Gullick, legal personal representative of the estate of the Mr Laurence Gullick (to whom I will refer collectively as "the Shareholders"); the Attorney General; the Receiver; and AEGIC.
5. Mr Michael Gullick and the Attorney General entered submitting appearances. AEGIC also did not seek to be heard. The plaintiffs were represented by Mr Cheshire SC and Mr Menzies of counsel. The BRI Companies and the Receiver were represented by Mr Taylor SC and Mr Barlin of counsel. Dr McMaster and Mr Murphy were represented by Mr Brian Gillard, solicitor.
6. The parties agreed to confine the hearing to the declaratory relief which was sought. The plaintiffs accepted that if I did not grant the declarations, no consequential relief would follow.
7. The parties treated the application as effectively raising a question of construction. There was some debate about what went into the matrix of facts and was therefore relevant to the construction question, but there was no contest about what the facts were. I will refer to the matrix of facts, to the extent relevant, in dealing with the parties' submissions. But before I turn to the submissions, I will set out in more detail the relevant provisions of the Deed.

Terms of the Deed

1. As I explain below, three clauses in the Deed were central to the plaintiffs' argument: clause 2.4(a), clause 2.5(c) and clause 4.1(c). Of these, the critical one was clause 2.4(a), and I begin with that.
2. Clause 2.4 was titled "Main Proceedings". The term "Main Proceedings" was defined earlier in the Deed (clause 1.1) as: proceedings in the Court, Equity Division, Proceedings Number: 2013/152562 by the Plaintiffs against the following parties as defendants: the [BRI] Companies as first to third defendants respectively, the Directors as the fourth to sixth defendants, and the Attorney General as the seventh defendant and which includes the First Cross Claim [the cross-claim by the BRI Companies for declaratory and consequential charitable trust relief concerning the Companies' assets: see [13] above].
3. Separate proceedings had been brought by the BRI Companies seeking judicial advice. These were defined in the Deed as "the Judicial Advice Proceedings". It is unnecessary to go into any more detail about those separate proceedings for the purposes of this judgment.
4. I set out clause 2.4 in full, for context (emphasis added): After the Companies make the payment referred to in Clause 2.1 [the $600,000 to be paid to the plaintiffs by way of costs: see [19] above], the Companies and each of them, [the Receiver] and the Attorney General: (a) agree to do all things reasonably necessary to facilitate the just, quick and cheap hearing of all claims for relief in the First Cross Claim, including by applying, at the same time as applying for the declarations in the Short Minutes of Order and any cy-près application as may be necessary, for directions for the procedures to be followed for identifying a new trustee or other restructure as determined by the Court either in accordance with the relief claimed in paragraph 11 of the First Cross Claim or with the same purpose, and to do all things reasonably necessary to comply with, and give effect to, such relief as may be obtained; (b) note that the Plaintiffs wish to continue to be a party to the Main Proceedings, and that the Plaintiffs agree that any future participation they have in the Main Proceedings, other than in relation to the appointment of a new trustee or any application by [the Receiver] for directions or orders other than sought by the First Cross Claim, will be entirely at the Plaintiffs' own cost; (c) contend that the Plaintiffs' future participation in the Main Proceedings, other than in relation to the appointment of a new trustee, will involve no material benefit to the determination of the Main Proceedings, likely unnecessarily increase the costs incurred by the Companies, [the Receiver] and the Attorney General; (d) by entering into this Deed and noting the Plaintiffs' wish to continue as a party to the Main Proceedings, do not consent to the Plaintiffs' future participation in the Main Proceedings (other than in relation to the appointment of a new trustee to any of the Charitable Trusts) and foreshadow an application for indemnity costs against the Plaintiffs in the event that, and to the extent that, the Plaintiff's future participation in any other aspect of the Main Proceedings results in any of the Companies, [the Receiver] and the Attorney General incurring additional costs in the conduct of the Main Proceedings.
5. The "Short Minutes of Order" referred to in sub-clause (a) were set out in Schedule 1 to the Deed. Its terms were: 1. Declare that the first defendant holds and at all times held all of its assets upon a charitable trust for the purposes provided in the Schedule below. 2. Declares that the second defendant holds and at all times held all of its assets upon a charitable trust for the purposes provided in the Schedule below. 3. Declares that the third defendant holds and at all times held all of its assets upon a charitable trust for the purposes provided in the Schedule below.
6. The Schedule was headed "trust purposes" and contained the following list: 1. Carry out and/or fund scientific research and experimental, development and testing work in connection with manufacturing of bread and related products; 2. Carry out and/or fund scientific research and experimental, development and testing work in connection with wheat and other grains and cereals and grain foods and products made from wheat and other grains and cereals and grain foods; 3. Carry out and/or fund scientific research and experimental, development and testing work in connection with the treatment and use of residuals and by-products of wheat and other grains and cereals and grain foods and products made from wheat and other grains and cereals and grain foods; 4. To establish and/or fund the establishment of laboratories or like research facilities for any or all of the aforesaid purposes; 5. To publish information and promote activities relating to any or all of the aforesaid purposes and to arrange lectures and demonstrations for furtherance of the aforesaid purposes.
7. The above trust purposes may be compared with those ultimately advanced at the hearing before me, which are set out at J3 [385].
8. The expression "Charitable Trusts" (which appeared in sub-clause (d)) was defined as: the charitable trusts over the assets of each of the Companies proposed to be declared in the Short Minutes of Order, or otherwise as the Court may declare to exist over the assets of each of the Companies.
9. For the purposes of clause 2.4, clause 2.5 then made some specific provisions about the future conduct of the Main Proceedings: The Parties specifically agree that the obligations set out in clause 2.4(a) will not to any extent preclude the Companies and each of them and the Attorney General from: (a) Drawing attention to the varied references to "grains" in the historically stated objects of Rosewood, and the activities of Rosewood relating to "non-cereal grains" … so that the Court will be sufficiently informed to give proper consideration to determine whether the trust objects of the Charitable Trusts should include a more specific description than the mere reference to "other grains"; (b) Considering and informing the Court any alternative procedures and structures for the proper administration of the Charitable Trusts that may arise in the course of giving effect to the procedural directions referred to in clause 2.4(a); (c) Informing the Court of the taxation liabilities associated with the appointment of a new trustee to the Charitable Trusts, with any alteration, restatement or declaration of the trust terms, and with any alternative procedures and structures of the kind referred to in clause 2.5(b) above; (d) Informing the Court of any transactions or structures that are likely to reduce or not incur taxation liabilities that might otherwise arise in connection with the appointment of a new trustee to the Charitable Trusts, and with any alteration, restatement or declaration of the trust terms; (e) Actively proposing to the Court the adoption or implementation of any transactions or structures that they consider: (i) are likely to materially reduce or not incur material taxation liabilities that might otherwise arise in connection with the appointment of a new trustee to the Charitable Trusts; (ii) are not likely to materially impair the pursuit of the trust objects of the Charitable Trusts; and (iii) would better achieve the trust objects of the Charitable Trusts.
10. Clause 4.1 dealt with the releases to be given by the plaintiffs and the Directors upon entry into the Deed and provided (emphasis added): Upon all the Parties entering into this Deed: (a) [release by plaintiffs]; (b) the Directors and each of them release the Plaintiffs and each of them from any claim for past or future costs in connection with the Main Proceedings or the Judicial Advice Proceedings; (c) the Directors and each of them to agree to do all things reasonably requested by the Companies, [the Receiver] and the Attorney [General] in carrying out the directions and procedures under clause 2.4(a) of this Deed, including transferring shares and resigning as directors or other officers of the Companies.
11. Counsel for the plaintiffs also referred to the provisions of the Deed which dealt with settlement of the monetary claims against the Directors. Counsel's main point turned on the form of the releases given by the Directors once the settlement sum was paid, the conditions precedent (including the payment of the settlement sum by them) were satisfied, and they received releases from the BRI Companies. At that point clause 2.12 provided (emphasis added): Upon the satisfaction of [the conditions precedent], [Mr Murphy] and [Mr Gullick] and each of them release and forever discharge the Companies and each of them (in their own capacity and as trustee of any trust or any Charitable Trust) and [the Receiver] from all debts (presently owing or not yet fallen due), and any Claim existing or arising later for past or future costs in connection with the Main Proceedings or the Judicial Advice Proceedings or their employment entitlements or fees due to them in connection with their being a director or employee of any of the Companies. Clause 2.13 contained a release in relevantly the same terms by Dr McMaster.

Submissions

1. None of the argument on the application involved any distinction being drawn between the Receiver personally and the BRI Companies, or between BRI and its subsidiaries. For simplicity I will not, in what follows, refer separately to the subsidiaries or to the Receiver unless it is necessary to do so.
2. As I have mentioned, counsel for the plaintiffs contended that a restructure obligation could be inferred or implied from the express terms of the Deed. Counsel made clear that they were not seeking an implication based on "business efficacy" according to the principles in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266.
3. Counsel explained the dual reference to inferred or implied as an effort to account for the recent High Court decision of Realestate.com.au Pty Ltd v Hardingham (2022) 97 ALJR 40. Counsel referred to the discussion of inferences and implications by Kiefel CJ & Gageler J at [21], and by Edelman & Steward JJ at [102]-[106]. Counsel otherwise referred to authorities on drawing implications from express terms. Counsel pointed to the first category of implied terms, among those articulated by Hodgson J in Carlton & United Breweries Ltd v Tooth & Co Ltd (1985) 6 IPR 319), making additional reference to various decisions including: Brambles Holdings Ltd v Bathurst City Council (2001) NSWLR 153 at [28]-[31]; Kabbara v Australian National Sports Club Inc [2020] NSWSC 497 at [24]-[32]; Rankin Investments (Qld) Pty Ltd v CMC Property Pty Ltd [2021] QCA 156 at [77]-[80].
4. Nonetheless, counsel for the plaintiffs submitted that it was not necessary to label what they contended for as implied or inferred. It was, according to counsel, enough to say that the obligation came out of the express terms of the contract. By this, I understood counsel to mean that it was sufficient for the obligation to be either implied or inferred from the express terms, but that nothing turned upon whether what was contended for was characterised as an implication or inference.
5. In those circumstances, I do not propose to say anything more about whether the process contended for by the plaintiffs is best described as implication or inference. For simplicity, I will refer to it as implication. The significant point to observe is that on either characterisation, the asserted restructure obligation had to arise from the express terms of the Deed.
6. During an exchange towards the end of their oral submissions, counsel for the plaintiffs appeared to identify particular clauses of the Deed that gave rise to the implication sought. I had asked counsel what language in the Deed I should use to frame the declaration sought. I referred to clauses 2.4(a) and 4.1(c), the wording of which was reflected, in part, in the form of the declaration sought in the plaintiffs' notice of motion (see [33] above). Counsel also referred to sub-clause 2.5(e). A discussion then ensued about the mechanics of the implication being sought. At the end of that discussion, I understood counsel to have acknowledged that it was the above clauses which they submitted gave rise to the implication sought.
7. Counsel went on, however, to submit that it would be legitimate for the Court to arrive at the implication sought by consideration of the Deed as a whole, and various surrounding circumstances. Counsel structured their written submissions around what they contended was the "commercial purpose to be secured by the Settlement Deed" - "a restructure appropriate to permanently procure [BRI] to carry out its objects to the effect of benefitting the grain foods industries and the community". According to counsel, the restructure was designed to address the features of BRI's corporate governance which had been exposed in the proceedings to that point, most importantly the Directors' control over BRI through their shareholdings. There was also the fact that, as a proprietary company, BRI had no reporting obligations.
8. In addition, counsel pointed out that all of the Directors were approaching, or beyond, the end of their working lives. Counsel suggested that it was unlikely that they would have been contemplated as, going forward, being in control, and having beneficial ownership, of a corporation with very significant assets. Counsel submitted that this was reinforced by Mr Murphy having been an undischarged bankrupt at the time.
9. Counsel's position, at least initially, was that the restructure was to involve BRI's assets continuing to be held on trust. As counsel explained matters, what the parties agreed had been in place in the past - a charitable trust - would exist going forwards. This might be subject to "tinkering around the edges", whether by way of administrative or cy-près scheme. There was also a difference between the parties about whether the new trustee was to be the first plaintiff or was to be chosen following a "beauty parade". But none of that, counsel submitted, affected the parties' fundamental understanding that the "commercial purpose" to which counsel had referred would be achieved. The one thing that was agreed was that BRI would not continue under the Directors' control, as before.
10. Counsel submitted that there had been an understanding between the parties about the "restructure" to the following effect: We don't know exactly what it'll look like going forward. There may be some issues with getting the Court to put its imprimatur on that, but whatever it's going to be going forward will be a charitable trust with the company not as the trustee, and that's the basis on which we enter into this agreement."
11. In oral argument, counsel accepted that the parties to the Deed must have contemplated the possibility that the agreed declaratory relief would not be granted. The Court's decision to refuse that relief therefore could not be said to have frustrated the parties' agreement. But, counsel submitted, for BRI to have unfettered beneficial ownership of its assets was too stark a departure from what the parties had intended. If that was what the parties thought would be the result of the agreed declarations not being made, there would have been an express provision to that effect in the Deed. All the more was this so, counsel submitted, because of the complexity of the charitable trust issue, evident from my March judgment.
12. The next step in counsel's argument was that the "commercial purpose" of the parties, as counsel had defined it, was, in turn, reflected by the contents of the Deed. As I outlined above at [55], by the end of oral argument, I understood the key clauses relied on by counsel to be 2.4(a), 2.5 (especially sub-clause (e)) and 4.1(c) (all extracted above).
13. Clause 2.4(a) was the most important provision. Counsel emphasised the words "or with the same purpose" and "or other restructure as determined by the Court" in the clause. In counsel's submission, those words were intended to ensure the future use of the BRI Companies' assets for the purposes specified in the schedule to the Short Minutes of Order.
14. As already noted, counsel had initially suggested that following the restructure BRI's assets would be subject to a charitable trust. But counsel later appeared to resile from that position, noting the breadth of the words in clause 2.4(a), "or other restructure". Counsel had earlier submitted that the parties had not attached significance to the distinction between a trust and a "trust-like" structure.
15. It was at this point that clause 2.5(e) assumed significance in the plaintiffs' argument. Counsel noted that the clause contemplated structures "likely to materially reduce or not incur material taxation liabilities". Counsel submitted that this showed how broad the "restructuring" might be. In particular, if, as occurred, the charitable trust declarations were not made, the parties would not be prevented from suggesting what would "going forward better achieve the trust objects of the charitable trusts".
16. Counsel eventually submitted that the appointment of a new trustee might be the most obvious way of achieving the parties' "commercial purpose". But counsel acknowledged that other structures (for example, a corporation with exclusively charitable objects and perhaps different membership, possibly involving the plaintiffs) might better achieve what was sought, in particular the wish to avoid tax liabilities, as mentioned in clause 2.5(e). Counsel submitted however that these issues were secondary to ensuring that BRI could not, under the regime contemplated by the Deed, retain the assets beneficially.
17. Towards the end of counsel's submissions, a discussion occurred about the form of restructure required on their contention. Counsel clarified that specific performance was sought of an obligation which the plaintiffs contended the parties had to achieve a restructure. Counsel envisaged that the parties might agree on some of the consequential procedures to be followed. Otherwise, it would be for the Court in due course to decide what form of restructure would give effect to the parties' intention.
18. Counsel submitted that any deficiencies in the wording of the declaratory prayers for relief in the notice of motion could be addressed later, whether under further or other order, or as a matter of construction. Counsel acknowledged that such matters might only be resolved in the context of the consequential procedures contemplated by the other orders in the Notice of Motion. But Counsel submitted that the declarations sought were sufficiently consistent with the express words of the Deed and achieved what was sought.
19. Counsel for the plaintiffs also submitted that clause 4.1(c) reinforced their submissions based on clause 2.4(a). Counsel re-summarised their construction of clause 2.4(a) as BRI having agreed to do what was required by them to achieve whatever restructure occurred going forwards, whether that restructure was a trust or something else with the same purpose. Against that backdrop, counsel submitted that clause 4.1(c) was an agreement by the Directors to cooperate with that restructure.
20. Counsel emphasised what, on their submission, the clause contemplated the Directors could be required do - to transfer their shares and resign as directors or other officers of the BRI Companies. Counsel submitted that the fact that these steps had been contemplated, showed that the parties had also contemplated that the Directors would have no continuing involvement in the companies. Counsel also submitted that the steps only made sense outside of a trust structure - they would not have been necessary if the Court had declared a trust and appointed a new trustee, or even if there had been a cy-près or an administrative scheme.
21. Counsel for the plaintiffs also referred to the releases and indemnities between the Directors and the BRI Companies, in clauses 2.8 and 2.11 to 2.13. Counsel for the plaintiffs focused on the future dimension to these clauses and submitted that this supported the plaintiffs' overall argument.
22. Counsel placed particular emphasis on the releases in clauses 2.12 and 2.13. Counsel pointed to the language of "release and forever discharge" from "any Claim existing or arising later" for "employment entitlements or fees due to them in connection with their being a director or employee of any of the Companies". This language, counsel submitted, was inconsistent with the Directors going on as employees or directors. Counsel also noted that the releases and discharges were not made conditional on the agreed declarations having been made.
23. Counsel for BRI submitted that the releases were confined to "accrued" entitlements. Counsel for the plaintiffs submitted that the text did not justify such a restriction.
24. In this context, counsel for the plaintiffs referred to clause 3, which outlined matters that the settlement was conditional upon. Counsel submitted that if the parties had intended for any aspect of the settlement to not operate if the charitable trust claim was dismissed, then this would have been specified in that clause. Counsel made a similar submission based on the $600,000 costs settlement in clause 2.1 - that the making of the charitable trust declarations was not a condition precedent to the payment in that clause.
25. Counsel submitted that the position of BRI (and the Attorney General), expressed in clause 2.4(c), on the plaintiffs' future involvement in the Main Proceedings, was consistent with the plaintiffs' overall submission. Counsel submitted that the clause indicated that the parties contemplated that although there might need to be a new trustee, everything going forward had otherwise been agreed. Counsel also appeared to submit that it was understandable that the plaintiffs would participate to contend for something else, where the charitable trust declarations were not made.
26. Counsel for BRI relied on the entire agreement clause in the Deed (clause 8.1, which was in conventional form and need not be set out) to resist the implication sought by the plaintiffs. But counsel for the plaintiffs submitted that the clause was no barrier to their argument. In their submission, the clause prevented the parties from relying on any alleged separate or preliminary agreement but did not limit the Court's ability to interpret the Deed, including by the implication of terms. Counsel submitted that this distinction was supported by the decision of Leeming JA in In the matter of Jimmy's Recipe Pty Ltd (No 2) [2020] NSWSC 632.

Conclusions

1. The parties approached the present application as a question of construction. The applicable principles were not in dispute. The task was an objective one. It was affected by the Deed being a commercial agreement. The Court had to decide what "a reasonable businessperson would have understood [the Deed's] terms to mean": see Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 at [47].
2. It was common ground that the Deed, and sub-clause 2.4(a) in particular, contemplated the possibility that the Court would refuse to make the agreed declaratory orders. What was in dispute was what, if anything, the parties had agreed would happen in that contingency. To succeed, the plaintiffs had to satisfy the Court that, as a matter of implication from the terms of the Deed, the parties had agreed in such an event to affect some specified "restructure" of BRI.
3. Following the argument on 15 May, I concluded that this fundamental requirement had not been satisfied. The Deed, to my reading, simply did not address, expressly or by implication, what was to happen if the Court were to conclude (as it has) that BRI's assets were not held on charitable trust. In these circumstances, the application had to fail.
4. When on 17 May I announced my decision to dismiss the application, I noted that the application faced other hurdles, which I would consider when I delivered reasons for judgment in due course. Preparation of these reasons has only reinforced me in my original conclusion. I will now explain why.
5. It is convenient first to examine the language of the clauses central to the plaintiffs' contention. Clause 2.4(a) was at the heart of the plaintiffs' contention. For ease of reference, I re-extract it, emphasising the words stressed by the plaintiffs and dividing the clause into three parts: … the Companies and each of them, [the Receiver] and the Attorney General … (1) agree to do all things reasonably necessary to facilitate the just, quick and cheap hearing of all claims for relief in the First Cross Claim, (2) including by applying, at the same time as applying for the declarations in the Short Minutes of Order and any cy-près application as may be necessary, for directions for the procedures to be followed for identifying a new trustee or other restructure as determined by the Court either in accordance with the relief claimed in paragraph 11 of the First Cross Claim or with the same purpose, (3) and to do all things reasonably necessary to comply with, and give effect to, such relief as may be obtained
6. As counsel for BRI submitted, as a matter of language the clause provided for: 1. an obligation on BRI and the Attorney General to facilitate the hearing of the claims for relief in the First Cross Claim; 2. a non-exhaustive specification of what the obligation in part (1) entailed; 3. a further obligation to do all things reasonably necessary to comply with, and give effect to, "such relief as may be obtained". In passing, it is worth noting that the reference to "such relief as may be obtained" expressly underlined the possibility that no such relief would be obtained.
7. The key words in clause 2.4(a) upon which the plaintiffs relied for their argument were contained in part (2) of the clause. Structurally part (2) was an outgrowth of part (1). It is essential in interpreting the language of part (2) to begin by identifying what the parties' obligations were under part (1).
8. The claims for relief in BRI's First Cross Claim which were the subject of the obligation in part (1) of the clause may be summarised as follows. BRI claimed: declarations that the assets of the BRI Companies were held on a trust, or trusts, for objects (as specified in the pleading) which were charitable purposes (prayers 1-4); a declaration that those purposes had failed, or had ceased to provide a suitable and effective means for administering those assets, with orders for cy-près or administrative schemes (prayers 5-9); and an order that new trustee(s) be appointed to the trust(s) (prayer 10). Prayer 11, specifically referred to in part (2) of the clause, claimed: For the purpose of implementing Order 10 above, make directions as to the procedures to be followed in identifying an appropriate new trustee and securing their approval and appointment as follows: (a) To obtain the consent of the cross-defendant as to the terms of an advertisement and placement to be put out that: (i) Within 7 days from the date of the declaration made the cross claimants to submit the form of advertisement and placement to the Attorney General for approval and the Attorney General to respond with any proposed variation within 14 days of submission by the cross-claimants; (ii) Within 7 days of notice by the Attorney General of any amendments the cross-claimants to attempt to reach agreement as to the form of advertisement and placement and if no agreement is reached then the cross-claimants to file and serve a motion seeking orders from the court as to the terms of the proposed form of advertisement and placement. Prayer 12 claimed: In the alternative to Orders 10 and 11 above, an order approving an administrative scheme which includes authority for the receiver or trustee to transfer the trust property of Rosewood Trust to a not-for-profit corporate entity with a constitution whose objects are substantially similar to the objects stated in paragraph 59A of the 2FASOC.
9. There were amendments made to the First Cross Claim prior to the hearing that resulted in my March judgment. But I did not understand it to be in dispute that, in substance, the obligation in part (1) of the clause was complied with - that is, the claims for relief in the First Cross Claim were properly and effectively put before the Court for determination. I further note that the First Cross Claim has now been dismissed, and this occurred with the plaintiffs' consent. The obligation in part (3) of the clause to "do all things reasonably necessary to comply with, and give effect to, such relief as may be obtained" does not, of course, arise.
10. All of the prayers for relief in the First Cross Claim were premised on the Court concluding that the assets of BRI were held on charitable trust. In particular, prayer 10, seeking the appointment of a new trustee, sought to invoke the Court's jurisdiction over the administration of charitable trusts and would have required a finding that BRI held its assets as a trustee. Prayer 11, dealing with the "beauty parade", was consequential on prayer 10. Prayer 12, if granted, would have resulted in the assets of BRI being transferred to a corporation. Even so, it depended upon the Court first having power to approve an administrative scheme for assets held on charitable trust. Furthermore, all of the prayers for relief involved the exercise of supervisory powers by the Court, which could not be controlled by the parties. The same applies to the agreed orders recorded in the Short Minutes of Order.
11. The syntax of part (2) was somewhat hazy. But on its face the "other restructure as determined by the Court" was an alternative to appointing a new trustee and the reference to the "same purpose" was to the purpose of the consequential "beauty parade" directions claimed in prayer 11 of the First Cross Claim. Furthermore, the entitlement conferred was an entitlement to seek "directions" from the Court as to "procedures to be followed". In the context of the obligation in part (1) of the clause to seek the relief claimed in the First Cross Claim, none of the language of part (2) suggested some sort of free-standing power for the parties themselves to determine a new, and possibly non-trust, "structure" for BRI's assets. Likewise, the reference in clause 2.4(d) was to the appointment of a new trustee to existing charitable trust(s).
12. Turning to clause 2.5, the clause was purely permissive; it did not cast any affirmative obligations on BRI or the Attorney General. In any event, the same comments apply as for clause 2.4(a). The defined term "Charitable Trusts", which was repeatedly used in clause 2.5, likewise pre-supposed the exercise of the Court's administrative jurisdiction over BRI's assets on the basis that those assets were held on charitable trust. I do not read sub-clause 2.5(e) as being any different from the other sub-clauses in this regard.
13. Nor, I think, does the language of clause 4.1(c) help the plaintiffs. The obligation of the Directors was to carry out "directions and procedures under clause 2.4(a) of this Deed". That picked up the limitations to which I have already referred.
14. This leaves the appeal by counsel for the plaintiffs to the parties' "commercial purpose" as a basis for the implication sought. But I do not think that helps the plaintiffs either. The plaintiffs, BRI and the Attorney General may all have thought the governance of BRI by the Directors unsatisfactory. They may all have hoped, or even expected, that the Court would be persuaded to make their agreed orders. But they must be taken to have known that they could not oblige the Court to find that BRI's assets were held on charitable trust and that the Court might find to the contrary.
15. In my view, the commercial purpose of the Deed was nothing more than the final settlement of the monetary claims, to be followed by the presentation to the Court of the case for making the agreed declaratory and consequential orders. That says nothing about what was to happen if the Court found that there was no basis for making such orders.
16. Even if I had held a different view on the parties' commercial purpose, there would have been barriers to making the implication. Three in particular stand out.
17. First, the Deed was prepared following protracted negotiations in which the parties were represented by lawyers, who presumably considered and debated its language carefully. In such a case it is reasonable to assume that, had the parties considered and agreed on what was to happen if the Court found BRI's assets were not held on charitable trust, that would have found its way into the formal record of the parties' agreement. This point does not depend upon the existence of the entire agreement clause, and I do not find it necessary to consider the effect, if any, of that clause.
18. Second, the implication sought (whether by way of implication or inference) relied on the express terms of the Deed. One would expect an implication of that kind to be closely tied to the express words used. But the plaintiffs' case was largely argued at a very high level of contractual generality. In particular the argument for the plaintiffs was at best unclear about exactly what new "structure" the plaintiffs were saying that BRI and the Attorney General were obliged to achieve for BRI's assets.
19. This deficiency was reflected in the plaintiffs' notice of motion, which conspicuously failed to identify what the new structure was to be, or when and how the Shareholders' obligations to resign as directors (it appears that in fact this only applied to Dr McMaster) and transfer their shares were to be complied with. I did not think the response by counsel for the plaintiffs, which effectively asked me to put the precise structure off to be determined by the Court at some later point, was a satisfactory one. The plaintiffs were seeking relief in the nature of specific performance. They had to be able to say exactly what the Court was to order the other parties to do.
20. One thing which had however emerged by the end of the argument was that the new structure was not limited to a charitable trust for the achievement of defined objects from BRI's constitution (indeed it could not be, as I had found those objects were not charitable). In these circumstances I find it difficult to imagine how the Court could decide whether the "purpose" of a given non-trust structure was the "same" as the "purpose" of appointing a new trustee to a charitable trust. But the point goes beyond justiciability. Implications are supposed to be based on necessity. Why would the Court adopt one which would only impose a further obligation of such open-ended uncertainty on the parties?
21. The third point is that the implication sought is said to arise specifically from part (2) of clause 4.2(a). But that part of the clause began with the word "including" and referred back to the obligation in part (1) which was limited to relief based on a charitable trust. An implication which gave a wider meaning to part (2) would contradict the express language rather than complement it.
22. Implication or inference is a process which always depends upon the nature of the contract and the circumstances of the case (cf Edelman & Steward JJ at [116]). I agree with counsel for BRI that the Realestate.com.au case upon which the plaintiffs relied was a very different one from the present. The agreement in that case was informal, and the gap in it would clearly have defeated the commercial objectives of the participants in the relevant market.
23. I turn now to the submissions by counsel for the plaintiffs concerning the releases given by the Directors in clauses 2.12 and 2.13 of the Deed. It is true that the releases covered "past or future costs" of the Main Proceedings and the Judicial Advice Proceedings, and that, to that extent, they covered future as well as past liabilities. But the Main Proceedings and the Judicial Advice Proceedings related to past events. It is another thing to say that the release of entitlements and fees as employees or directors extended to future services which might be rendered by the Directors.
24. I am also inclined to agree with a further point made by counsel for BRI in oral submissions. To construe the releases as meaning that the Directors agreed never to have any further role as directors of BRI would be inconsistent with clause 4.1(c) which contemplated the transfer of shares or resignation by the Directors as contingent on a reasonable request, itself contingent on the grant of relief contemplated by clause 2.4(a).
25. But even if there was a future dimension to the release of employment entitlements or fees arising from being an employee or director, this would, looking forward from the date of the Deed, have been of limited practical significance. The employment the Directors appears to have come to an end (see J3 [7]) and was hardly likely to be reinstated. Their powers as directors had been superseded by the appointment of the Receiver. The Directors were all elderly - indeed, one of them has since died - and one of them was bankrupt. The theoretical possibility of charges being made by the Directors for acting as directors of BRI in the future was not likely to be an issue of any importance in the scheme of things.
26. In these circumstances, I do not need to deal finally with the question of how the releases in clauses 2.12 and 2.13 should be construed. Even if they had the effect for which counsel for the plaintiffs contended, that would be too slender a basis for overcoming the limitations in the language of the principal terms of the Deed and making the implication which the plaintiffs sought.
27. In the end, I consider that the implication sought simply does not arise from the terms of the Deed. In my view, the "restructure" to which clause 2.4(a) referred was a restructure which took as its starting point the existence of a valid charitable trust or trusts. Even if I am wrong in this view, the restructure was to be one whose terms were to be determined, or at least sanctioned, by the Court. To read the Deed as imposing on BRI and the Attorney General an obligation to conduct an extra-curial restructure would be strained and, in my view, unwarranted.
28. Finally, I note a procedural question. If orders in the nature of specific performance of sub-clause 2.4(a) were granted, and those orders required BRI or the Attorney General to seek orders from the Court, one would expect such relief to be sought in BRI's cross-claim. Would that be permissible given the dismissal of the cross-claim, following a substantive hearing, and against which none of the parties to the cross-claim seeks to appeal? The plaintiffs of course were not parties to the cross-claim but they eschewed any objection to its dismissal. Arguably, they would have had standing to keep it alive pending final resolution of the proceedings (cf James Hardie & Co Pty Ltd v Seltsam Pty Ltd (1998) 196 CLR 53 at [20]). This question was not however raised in argument (or at least squarely so) and I do not need to determine it.

Orders

1. The orders made by the Court on 19 May 2023 in accordance with the minute submitted by the parties were: 1. Order the Plaintiffs' Notice of Motion filed 3 May 2023 (Motion) be dismissed. 2. Order the Plaintiffs to pay the costs of: (a) the first to third defendants and Jamieson Louttit, respondent, receiver and manager to the first to third defendants; (b) the Shareholders of the first to third defendants being (i) Dr Graham John McMaster. Respondent, former fourth defendant, (ii) Allan Murphy, respondent, former fifth defendant, and (iii) Michael Gullick, respondent, legal personal representative of the Estate of Laurence Disdale Gullick, former sixth defendant, on the Motion as agreed or assessed. 3. Order the fourth defendant (Attorney General of New South Wales) and Australian Export Grains Innovation Centre Limited, respondent, pay their own costs of the Motion. 4. Order that the claims for relief in paragraph 4 of the Third Further Amended Statement of Claim filed on 21 September 2020 (i.e., the trust declaration claims and further or other relief that were listed for separate determination pursuant to paragraph 7(b)) of the directions made on 19 August 2021 be dismissed. 5. Order that the undertaking to the Court made by: (a) The First to the Third Defendants; (b) The directors of the First to Third Defendants; and (c) Jamieson Louttit, the Receiver and Manager appointed by the Court to the First to Third Defendants; (restraining the use of the assets of any of the First to Third defendants) be released. 6. Order that all orders made against: (a) The First to Third Defendants; (b) The directors of the First to Third Defendants; and (c) Jamieson Louttit, the Reciever and Manager appointed by the Court to the First and Third Defendants; restraining the use of the assets of any of the First to Third Defendants are released. 7. Order that the appointment of Jamieson Louttit as Receiver and Manager of all of the property and undertakings of each of First to Third Defendants pursuant to section 67 of the Supreme Court Act 1970 (NSW) made on 26 September 2014 (Appointment Orders), is terminated without prejudice to any further remuneration applications to be made by him pursuant to order 12 of the Appointment Orders. 8. Order that any other orders for costs between the parties are reserved. 9. Reserve leave for any party to make any application for costs after 24 July 2023. 10. Upon the plaintiffs giving the usual undertaking as to damages, stay orders 5, 6 and 7 for 28 days and if within that period the plaintiffs commence any proceeding by way of an appeal or application for leave to appeal from orders consequential upon the judgment dated 17 March 2023 or today's dismissal of the Motion, or both, the stay shall extend until the determination of those proceedings, or further order of the Court of Appeal. 11. Note the continuation of the usual undertakings as to damages given by the plaintiffs to the Court on 24 May 2013.

Amendments 13 July 2023 - Amended representation details DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 13 July 2023