CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – FORMATION OF
CONTRACTUAL RELATION – where the first plaintiff had commenced
discussion
regarding the splitting of its’ business operations amongst family members
Source
Original judgment source is linked above.
Catchwords
CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – FORMATION OFCONTRACTUAL RELATION – where the first plaintiff had commenceddiscussionregarding the splitting of its’ business operations amongst family members– whether a concluded agreementwas madeCORPORATIONS – MANAGEMENT AND ADMINISTRATION – DUTIES ANDLIABILITIES OF OFFICERS OF CORPORATION – LOANS TO DIRECTORS– wherethe first defendant was a director of the first plaintiff – where thefirst defendant purchased a boat with fundsfrom the first plaintiff –whether the boat is an asset of the first plaintiff or an asset of the firstdefendant with the
purchase funds to be construed as a director loan
CORPORATIONS – MANAGEMENT AND ADMINISTRATION – DUTIES AND
LIABILITIES OF OFFICERS OF CORPORATION – FIDUCIARY AND
RELATED STATUTORY
DUTIES – REMEDIES AND PENALTIES FOR BREACH OF DUTY – COMPENSATION
– where the plaintiffs allege
that actions taken by the first defendant
constitute breaches of the first defendant’s fiduciary and statutory
duties –
where first defendant while acting as a director for the first
plaintiff issued a loan to the second defendant of which he was also
a director
– where the first defendant issued an invoice under the name of the second
defendant for work completed by the first
plaintiff – whether the
defendant improperly used his position to gain an advantage for himself
BAILMENT – IN GENERAL – where the first plaintiffs allege the
first defendant to have possession or to have sold various
assets alleged to be
owned by the plaintiffs – whether the first defendant had possession of
the various assets – whether
the plaintiffs or defendants have rights to
the assets
Evidence Act 1977 (Qld), s 84, s 102
Corporations Act 2001
(Cth), s 180(1), s 180(2), s 182(1), s1305, s 1317E, s 1317H
V-Flow Pty Limited v Holyoake Industries (Vic) Pty Ltd [2013]
FCAFC
Judgment (42 paragraphs)
[1]
[1] Reginald (Reg) and Faye Simpkin were married and had three children, Craig, Troy and Cindy. For approximately 38 years from 1981 until 2019 the Simpkin family worked hard as a family unit to accumulate significant assets in several businesses. The patriarch of the Simpkin family, Reg, was described as "old school". Reg was the main decision maker for all the family businesses. This case involves but one chapter in the sad demise of the Simpkin family as a functioning family unit.
[2] Prior to the Simpkin family "troubles", the Simpkin family had operated as a family unit, utilising and acting upon the advices of Mr Frank Shepherd, accountant of Shepherd and Dudley, to conduct their businesses in a tax efficient manner in order to create significant asset wealth. This appeared to work well when the Simpkin family were functioning as a family unit.
[3] The evidence shows that the tax efficiency extended to motor vehicles and their associated expenses, telephones and electronic devices being purchased through the company but being used by individual Simpkin family members as they saw fit. Assets such as several vintage tractors, trucks and motors were purchased through the first plaintiff with the result that the GST was refundable. There was therefore, for many years, a mixture of personal and business expenditure on both capital assets as well as ordinary expenses, placed through the accounts of the plaintiff company.
[4] The principal Simpkin family business was haulage conducted by the first plaintiff, Gunderlong Mackay Pty Ltd (Gunderlong) as trustee for the Simpkin Family Trust.
[5] Gunderlong was incorporated on 9 March 1981 with its equal shareholders being Reg and Faye Simpkin. Reg and Faye were also the only directors from 30 April 1981 until 14 June 2004. In the period from 14 June 2004 to 25 July 2019, Reg and Faye Simpkin's sons, Craig and Troy, were appointed directors.
[6] As a part of the Simpkin family "troubles", Craig and Troy ceased being directors of Gunderlong on 25 July 2019. At that point, from 25 July 2019 until Reg passed away on 16 May 2022, only Reg and Faye were the directors of Gunderlong.
[7] Since Reg passed away on 16 May 2022, Faye is the only director of Gunderlong. In the period when the Simpkin family troubles were well and truly advanced on 23 June 2022, Faye exercised her power of appointment as trustee of the Simpkin Family Trust removing Gunderlong as the trustee and appointing the second plaintiff, Mackay Capital Pty Ltd, as the trustee. Mackay Capital Pty Ltd has only one shareholder, Faye, and only one director, Faye.
[8] The first defendant, Craig Norman Simpkin, is the eldest son of Reg and Faye. He is an extremely hard-working and competent plant operator. Troy Simpkin, approximately two years younger than Craig, had the principal role of being accountant to the family businesses, but also performed hands on work.
[9] A central witness in the case is Craig Simpkin. I had opportunity to observe him for one and a half days in the witness box. Over the period of those several hours, Mr Simpkin appeared to change his demeanour. He was usually straightforward and direct in answering questions, at times he was quite emotional, at other times completely unemotional, and at other times evasive. What he made plain was that he did not have any part of putting together the financial reports for the company, that he did not understand them, could not understand them, yet when asked, he was happy to make concessions against his interests if something was said in the financial reports as being the true position, i.e. such as an asset of Gunderlong. It seems to me that Craig Simpkin was prepared to make incorrect admissions against his own interests. In my view, Craig Simpkin was, in the main, an honest and reliable witness and I accept most, but not all, of his testimony.
[10] What is plain is that Craig had a very close relationship with and very much admired his late father, Reg. Craig Simpkin described that when his parents commenced the business, he was a boy at school and that his father had one truck. Craig Simpkin described that he enjoyed being with his father and his truck and that when he left school in 1995, he then completed a four year apprenticeship with Cannon Earthmoving at his father's suggestion. After Craig Simpkin was trade qualified as a heavy earthmoving diesel fitter he moved directly back into the family business to work with his father.
[11] Whilst working as an apprentice diesel fitter, Craig Simpkin saved his money and purchased a property next door to his parents at 12 Pratts Road, Bakers Creek. Craig Simpkin had commenced his apprenticeship at age 16 or 17, was trade qualified and home owner by the age of 20.
[12] Importantly, Craig Simpkin did not disparage his younger brother Troy, and although commenting that he had never really go on with his mother (even before the troubles) he did not disparage his mother.
[13] At T3-72, Craig Simpkin described his normal work day during the crush, being that he would get up at 4 or 5 in the morning and then drive the ash truck until it was dark. That is, he was working in excess of 12 hours per day.
[14] As explained by Craig Simpkin, I accept that the start of the Simpkin family troubles was in 2016. Craig Simpkin's evidence at T3-72 was that:
[2]
"...Around 2016, 2017. Me and me wife at the time were having pretty big problems because I was working all the time and getting pretty cranky and wasn't giving the family any time because I just love working and that was --- my number one goal was just to work ... Marriage was on and off. I - I went back with mum and dad at one point in time for a few weeks or months and Ellie moved out then she moved back in to try again. The work continued because I would just wake up in the morning and go to work like I always did. The start of 2018, Troy summonsed the - meeting at mum and dad's place, so we all turned up, the six of us; Me, Dad, Troy, Janice, Ellie, Mum. And Troy said that he didn't want to keep doing what he was doing because we're - it was all just getting out of control. We were all working too much and we had a quarry case on and things like that. And my marriage was in a shambles and Troy said he just wanted to do the farms and take his kids to school and all that and probably keep doing a bit of Andrew's work. And that's when we started trying to come up with some plans to try to separate everything. We're - we're all - we have - there was a sort on the cards way back then, when we were sort of all breaking up, when me and Ellie were breaking up, and so that was really getting out of control in 2018 and there's meeting and proposals and ..."
[3]
[15] I accept Craig Simpkin's evidence in this regard.
[16] I accept that from in or about 2017, Craig Simpkin and his wife Ellie were having significant marital difficulties and had broken up. Troy Simpkin had realised the stress of the businesses upon his own family and wished to end the family business relationship.
[17] One of the major and important issues in the present case is whether there was a concluded agreement to break up the family business as suggested by Craig or merely a proposal to do so without any agreement being reached as suggested by Faye and Troy Simpkin.
[4]
[18] The first major issue in the trial is defined by reference to paragraph 6 of the fourth amended statement of claim ('FASC'), paragraph 6(b) of the second further amended ('SFAD') defence of the first and second defendants, and paragraph 1 of the further amended reply. By paragraph 6 of the FASC, the plaintiffs raise a case based on breach of officer's duties.
[19] Paragraph 6(b) of the SFAD of the first and second defendants denied that any such duties were owed after March 2019 "because the parties agreed that Craig would establish his own entity and commence operating after 31 March 2019 on his own account."
[20] The plaintiffs, by their further amended reply filed 13 June 2024, expressly deny paragraph 6(b) of the defence "no such agreement was ever struck, the matters set out were a proposal only and the matters were never agreed by Faye, Reginald or Troy."
[21] On this important issue, I conclude that there was a partly oral, partly written agreement. Of some importance in this finding of fact is the evidence of Mrs Faye Simpkin, which I accept, at T1-46, where Mrs Faye Simpkin gave evidence of her attendance together with her late husband, Reg, at the office of Craig's accountant, Dan Ross, where according to Mrs Simpkin in respect of a list of equipment to split the business between Craig and Troy, Reg said "Well, it's not what Craig and I agreed on..."
[22] According to Mrs Simpkin, that discussion occurred at the end of 2018. I find that an agreement had been reached between Reg and Craig as to the split up of the family business and plant and equipment, a matter which both Craig and Troy had desired for a period of approximately a year. The agreement was however not acted upon for a few months.
[23] The agreement is partly evidenced by Exhibit 65, the emails of Frank Shepherd, accountant, of 28 February 2019 and 1 March 2019. The email of Mr Shepherd of 28 February 2019, refers to the options that had been raised and Mr Shepherd had recommended that from 1 April 2019, the Simpkin haulage business cease and that it be split between both Craig and Troy or their nominated entities. The advice also refers to a driving feature in this case, that is a reference to division 7A tax issues. The critical email is the email of Mr Shepherd of 1 March 2019 which records "Please find below an email that has been authorised as a course of action by Reg and Faye. The hardest thing is making a decision is sticking to it. Everyone's assistance in implementing this would be appreciated. The company structure of Simpkin Haulage will not be wound up but the work currently undertaken by Simpkin Haulage itself will be ceasing as such ..."
[5]
"... when the gear --- they got transferred over, there was a contract getting done in the case, that once there was some money --- once the machinery was transferred, once there was some money in CLP, that the bank had --- was doing the paperwork to loan me back the $77,000 to pay back dad."
[6]
[32] Craig Simpkin's evidence at T3-90 was the terms of the agreement:
[7]
"... and it was already agreed in principle that Troy was going to do Andrew's work, I was going to do the little work in the ash, but there was dramas with the civil work and the quarry we had. So it was pretty well --- I was just taking dad's side of the machinery and the other machines there waiting for Troy to do in his company ... until he finalises all the little nitty gritties that we had to make a decision and move on."
[8]
[33] I accept Craig Simpkin's evidence in this regard, that is there was an agreement reached as and from 1 April 2019 that he was to receive 50% of the plant and equipment of Gunderlong to be utilised in the businesses he was going to undertake with CLP which related to the ash work and other work of Gunderlong (and Troy was going to take 50% of the plant and equipment to be used in doing the Andrews tramline work). The agreement had been reached and McKays Solicitors had been instructed to draw up a formal written contract, however, the formal written contract was never drawn. That does not mean that a contract was not entered into; it merely means unfortunately it was not placed entirely in writing.
[34] As there was no oral communication between Craig, Faye and Troy Simpkin, it seems from mid-2019 and because the formal written contract had not been signed, Gunderlong did not keep its obligations under the partly oral agreement and transfer to CLP or Craig one half of the plant and equipment of Gunderlong that could have been used by CLP or Craig in its own business.
[35] As Craig Simpkin explained at T4-74 to T4-75, in April 2019 he only had access to his new work truck and he could not do the ash contract which had been agreed that he would undertake because he needed not only a truck but also a trailer and a loader at a minimum and Gunderlong, by which it seems would be a reference to Faye and Troy, would not agree to transfer that equipment until the formal written contract was signed. Because Gunderlong would not transfer the necessary equipment to allow Craig or CLP to undertake the ash contract, it frustrated completely CLP and Craig's ability to perform work and earn an income. I accept that it was after this point where Gunderlong had not met its obligations under the partly oral, partly written agreement that Craig attempted to negotiate "a lease hire agreement something like that"[5] so he could access the equipment so he could undertake the ash work.
[9]
[36] By paragraphs 7 to 13 of the FASC, Gunderlong asserts that Craig Simpkin is indebted to Gunderlong in the sum of $130,859.26. A demand has been made for repayment of that loan by the pleading which has not been paid. The third amended statement of claim had the debt level at $149,099.13 before many items were deleted, reducing the sum down to $130,859.26. On the first day of trial, handwritten further amendments were made, deleting many further paragraphs relating to the alleged loans. There were numerous other deletions from the allegations made and the relief sought in the statement of claim.
[37] Importantly, by paragraphs 30 to 36 of the FASC, a claim for a constructive trust on Craig Simpkin's property at 678 Barry Lane was abandoned.
[38] After leave to make the amendments had been granted, Gunderlong by its counsel sought to have the caveat maintained over the property at 678 Barry Lane pending the outcome of the trial and indicated that they would seek leave not to make the amendments which had been made concerning 67 Barry Lane if the caveat were to be removed. That seemed to me to be an admission that the caveat upon 678 Barry Lane had been lodged for an ulterior purpose of preventing Craig Simpkin from selling the property as opposed to a genuine allegation being made that the shed at 678 Barry Lane and property was held in a constructive trust for Gunderlong.
[39] After indicating that I had accepted the amendments, that there was no constructive trust case in respect of the land, urgent applications were filed for a freezing order to prevent the sale of 678 Barry Lane, and a further application filed seeking a setting aside of the contract that Craig Simpkin had entered into for the sale of 678 Barry Lane. The first application was resolved on the basis by the giving of undertakings that the second application was adjourned to 31 July 2024.
[40] The result of the amendments made were that the most significant claim being brought in the statement of claim, being the constructive trust claim on the shed at Barry Lane, which the material in the application asserted had a value in the vicinity of $2 million, was removed from the claim to be decided. This is relevant to the way in which the claim upon the debt of loans from Gunderlong to Craig was conducted.
[41] As shown upon the pleadings, the "loan" claim consisted originally of 58 particularised items which were said to be the subject of loans to Craig for amounts varying as little as $17.62 up to $5,000 with a separate claim being made in paragraph 9 for a loan which Gunderlong alleges it made to Craig for $105,000 to purchase a sail fish boat on 29 March 2018.
[10]
(a) $105,000 for the purchase of a boat on 29 March 2018...
[11]
[50] As can be seen from paragraph 9 of the FASC, the allegation is that the accounting act of debiting $105,000 for the purchase of a boat on 29 March 2018 against Craig Simpkin's loan account caused a loan to come into existence between Gunderlong and Craig Simpkin. The contention is an accounting entry can in fact cause a loan to come into existence. I reject that contention. Whilst accounting entries and financial statements may be prima facie proof of the existence of a loan,[6] in certain circumstances, it cannot be accepted that they are for all purposes proof of the existence of a debt. The evidence from Craig Simpkin on this issue at T4-59 to T4-61 is rather curious.
[51] In an earlier affidavit in family law proceedings, Craig Simpkin had asserted that the boat was owned by Gunderlong in these rather confusing terms "In relation to Paragraph 9 of the statement of claim I say the $105,000 was used to purchase a boat which I believe is an asset of the first plaintiff rather than a loan owing."
[52] As pointed out by counsel for the plaintiff in other family law documents, he had asserted he owed $105,000. Craig Simpkin said he was confused by the circumstances and did not know who owned the boat, but said if he did own it, he owed the company $105,000 but accepted "If I don't own it, I don't owe $105,000."[7]
[53] At T4-63, Craig Simpkin said:
[12]
"... Well, usually, nothing is free in this life, so I don't know what you're trying to ask ... I've just explained in my affidavit what happened. I bought it in Gunderlong's money. It was supposed to be paid out of tax money because you can't claim a boat. It didn't happen. They went to the accountant. I talked to the accountant about it. That's what he said to do. And my brother didn't do it that way. He put the loan to my account. So I guess that's why we're here to work out."
[13]
[54] It is difficult to understand what a haulage and earthmoving company would want with a boat as a part of its assets. Surprisingly it was, until recently, a part of the plaintiff's case that the plaintiff company, Gunderlong, owned the sailfish boat (Paragraph 56, Item 13) and also a Haines Hunter boat (Paragraph 56, Item 95). These boats are also referred to in annexure A by the same numbers. Both claims were removed in the FASC.
[55] As may be seen at T2-17 to T2-18, there are in fact a number of boats, including a ski boat, and Gunderlong had asserted the boats were its boats, but then changed it's view and more lately asserted they were not its assets. That is, both Gunderlong and Craig Simpkin have changed their positions on who owned the Sailfish boat and whether there was a loan owing in respect of it. As the Sailfish boat was purchased on 29 March 2018, it was purchased, when Craig Simpkin was a director of Gunderlong and was paid for with Gunderlong funds and placed into the books of Gunderlong, which is prima facie evidence but by no means conclusive evidence of the ownership of the asset by Gunderlong.
[56] Troy Simpkin's evidence concerning the sailfish boat is at T2-71 and consisted of Craig Simpkin approaching him and asking him "You want to buy a boat?" and Troy Simpkin answering "No, I'm not interested in buying a boat." Troy Simpkin's evidence was that he then assumed that Craig was buying the boat out of his own money as Craig had a home loan with sufficient equity to purchase the boat. What is plain, however, is that the boat was not purchased out of the equity in Craig Simpkin's home loan, but rather purchased using funds of Gunderlong.
[57] Craig Simpkin's evidence concerning the purchase of the boat is at T3-82 to T3-83. Craig Simpkin's evidence at T3-82 lines 10-15 was:
[14]
"So we're all working hard and I was trying to do something a little different, sort of, like, you know, a bit more time off and challenge myself with something different. I talked to dad about it and I talked to Troy about it and I talked to the accountant about it, about trying to get --- buy a boat, do a bit of fishing. I thought I could buy a fishing licence or something to try to get through the business and save on tax."
[15]
[58] Mr Simpkin then explained that it was his intention to obtain a fishing licence to:
[16]
"sell a bit of fish, just try to do something different, like, then just doing what I was doing. And the accountant said, like, 'you're wasting your time, you can't do it, it's too hard.' He said, 'if you want to buy a boat, you're better off just paying tax on the money and buying a boat.' Because our company had the money and that's what I did. I talked to Troy about it a few times. Troy wasn't really onboard... He didn't really want to do it. I had to talk to dad and dad said 'It's fine. You can sort of - you've run the show and brought whatever you wanted before so you can sort of do it. Have we got the money?' I said yeah we've got the money. So I organised with the bank for a bank cheque and I bought a boat in Gunderlong's name."
[17]
[59] I accept Craig Simpkin's evidence that he, a director, and his father, who was very much the senior director in the company, approved of Gunderlong purchasing a boat using Gunderlong funds. I am conscious of Faye Simpkin's evidence to the contrary, but do not accept that evidence as it is vague. The boat was not placed into the financial statements of Gunderlong but nonetheless it seems to me that on the evidence of Craig Simpkin, that I accept, is the boat is in fact an asset of Gunderlong. This falsifies the existence of any loan concerning the boat, but, as Craig Simpkin conceded, although he is not indebted to Gunderlong in respect of the boat, the boat is not his, but rather is the asset of Gunderlong. Counsel's submissions revealed that subsequent to the trial, the boat was returned to Gunderlong and is on the basis that Gunderlong would not "press the claim on the loan". It is my conclusion therefore that Gunderlong's loans to Craig particularised in paragraphs 7 to 13 of the FASC do not exist.
[18]
[60] These two issues are closely related and both related to the agreement of the Simpkin family to split the businesses owned by the Simpkin family. Paragraphs 14 to 18 of the FASC and paragraphs 14 to 18 of the SFAD define these issues.
[61] The defendants admit that on 12 April 2019, Gunderlong in its own right advanced $77,000 as a loan to and for the benefit of CLP. Gunderlong alleges that loan is repayable upon demand, whereas the defendants contend that the loan was advanced on the condition that the money would only become repayable if and when "Craig's share of the plant and equipment owned by Gunderlong was transferred to him." The defendants' case is that as Craig has never received his share of the plant and equipment from Gunderlong, the condition of repayment has never arisen.
[62] Paragraphs 19 to 29 of the SFAD originally alleged that eleven invoices were issued from CLP to Gunderlong's clients Racecourse Projects Pty Ltd and JC & JR McGrath for work undertaken by Gunderlong. By the FASC, only the last two of the invoices remained in issue. The invoices were particularised to be invoice from CLP to JC & JR McGrath in the sum of $15,532.03 paid on 23 May 2019 and an invoice from CLP to JC & JR McGrath dated 9 July 2019 in the sum of $30,659.31.
[63] Paragraphs 19 to 29 of the SFAD admit that CLP issued the invoices but contends that CLP in fact performed the work and that:
[19]
"The work was done with CLP was done with the express knowledge and consent of Reg, who at the time was able to give such authority as a director of Gunderlong and ... the issuing of invoices to the clients by CLP was consistent with the separation of the assets between the various business involved between the family members as particularised in paragraphs 158 to 161 of the affidavit of Craig Norman Simpkin filed 29 November 2022."
[20]
[64] Both of the issues raised by the pleadings relate closely to the agreement which had been reached concerning the separation of the Simpkin family businesses. Mrs Faye Simpkin gave evidence at T1-46 of her late husband Reg admitting that Craig and Reg had made an agreement with respect to the separation of the equipment.
[65] Troy Simpkin's evidence was somewhat vague upon the issue, however Troy Simpkin had suffered from a type of breakdown in early 2019 and was not performing his usual duties for the family businesses. Mrs Faye Simpkin's evidence at T1-54 to T1-55 was that she did not know that Reg had agreed for Gunderlong to make a loan of $77,000 to Craig and she found out by a telephone call from an ANZ bank lady whilst the ANZ bank lady and Reg were on speakerphone. Mrs Simpkin heard Reg say that he was happy with the loan and that Mrs Simpkin got angry about the loan because "I didn't want it to be tied to the businesses. We got it down to zero. And I said --- that's why I got angry." This is consistent with Faye Simpkin's approval of the agreement to end the family business and separate the business between Craig and Troy. As Faye said at T1-46, that it was what she wanted.
[66] Mrs Simpkin then said after she got angry that Reg said "Well, don't worry, it's only going to be two weeks. He'll have his own loan and he'll be paying it back."
[67] Mrs Simpkin also said that she knew what Craig was going to do with the monies "He was going to buy a truck and fit it up and go out and work at the mines."[8] Mrs Simpkin knew that that work being performed by Craig was for his own business and not for Gunderlong and that Craig was buying a truck for setting up the CLP business.
[68] As is rightly conceded in paragraphs 13, 16 and 34 of the plaintiff's written submissions, Reg Simpkin was the main decision-maker for Gunderlong and Faye Simpkin had very little role at all from January 2002 when Troy Simpkin took over the bookkeeping role. Although in paragraph 16 of the plaintiff's written submissions, it is admitted that Troy Simpkin's role involved mainly being the bookkeeper and doing whatever was needed such as cleaning and driving trucks, I do not accept that that accurately sets out the role of Troy Simpkin. In particular, as Troy Simpkin explained at T2-48 to T2-49, in addition to doing the bookkeeping, Troy Simpkin's main job was in fact doing the Mackay Sugar work for the cane railways. This was consistently referred to as doing "Andrew's" work, being a reference to Andrew Watson.
[21]
"So dad afforded CLP $77,000 for a work truck... was already organised with the bank and Brian Industries to purchase the truck to use in CLP when the gear --- they got transferred over, there was a contract getting done in the case, that one there was some money --- once the machinery was transferred, once there was some money in CLP, that the bank had --- was doing the paperwork to loan me back the $77,000 to pay back dad."
[22]
[79] Craig Simpkin then said with reference to the email of Frank Shephard of 1 March 2019:[10]
[23]
"We had the email. We discussed months before that the way things were sort of going to happen that we had to go [indistinct] and it was already agreed in principle that Troy was going to do Andrew's work, I was going to do the little work in the Ash, but there were dramas with the civil work and the quarry work we had. So it was pretty well - I was just taken - Dad's [indistinct] dad's side of the machinery and the other machines were waiting for Troy to - do with his company until he finalises all the little nitty-gritties that we had to make a decision and move on."
[24]
"We were trying to split it down the centre. So the rough - the machinery we needed for each of our jobs and what I needed for what I was going to do and the jobs that Troy needed to do, there's no overlaps. It was sort of a split down the centre and it's roughly the same amount of value, so it's all fair."
[25]
[81] Craig Simpkin then later explained,[11] that the work his brother Troy was going to do was the Andrews work, that is the tram line work which required "the grader, the loader, the roller, the excavator and you did need gravel carted in and ballast, and water trucks at times."
[82] As Craig Simpkin explained, Troy was the main person doing the Andrews/tramline work and it was appropriate that he continued to do so.
"I was predominantly responsible for the truck side of the - and the heavy haulage side and - and - a bit of an overview of the whole job. Troy concentrated on doing the train line work. There's - he's the more niche area. He'd ring me or tell me if he needed gravel, how much gravel he wanted today, where he needed things shifted with the low loader ... and I done that."
[27]
[84] Craig Simpkin then explained he was doing the heavy haulage work and the ash work. Craig Simpkin explained,[13] "For the ash we use a truck and trailers. We use loaders, an excavator and for McGrath's work we use loaders and excavators, low loaders, screener plant, trucks and at times. Tipper trucks."
[85] It was pointed out there was a cross-over between the ash work and McGrath work in terms of machinery. Craig Simpkin replied that there was more than one excavator and more than one loader. Craig Simpkin then further explained at T3-97 it was discussed with his father:
[28]
"That I took the required equipment to do that type of work so we had I think at one stage maybe seven excavators - six excavators. So I was going to take --- I can't remember exactly what it was but I didn't need all them excavators, you know. Troy needed one 20-tonner for Andrew's work. I needed one 20-tonner for stockpile ash. We had two 20-tonners. I needed a little excavator and I worked at John McGrath's work. Troy needed a little excavator. I think we had three or four of them. So it wasn't really an issue as to how to --- there was enough gear to go around because we had that gear and that --- it didn't work all the time. Yeah. So there was enough to go around."
[29]
[86] Craig Simpkin then gave evidence at T3-98 about the split up of the work and confirmed again that "Troy was going to get Andrew's work. I was going to take on that ash, McGrath's work and Racecourse Projects work."
[87] Craig Simpkin then gave evidence about the issuing of the invoices that were in issue at T3-99. Craig Simpkin's work relates to exhibit 70 an invoice issued by his company, CLP, to JC & JR McGrath in the sum of $30,659.31. Exhibit 70 is not an original document but rather a copy of a screenshot obtained by Troy Simpkin of the invoice. The document is difficult to read but appears to be dated 9 July 2019. Craig Simpkin's evidence upon that invoice at T3-99 was:
[30]
"When we went to the bank for that loan --- when we were doing that, the bank said we needed some money in CLP to get the loan back. ... The agreement with dad to give the $77,000 back for the truck that was organised. So that was the work done for John McGrath when we were all splitting up - when we was split up and dad said, "You know how you done that little bit of work for John in the spare and not much was on?" I go "Yeah" and dad said "Well just bill that so we can get a bit of money in CLP so we can get that loan to get the money back."
[31]
[88] Craig Simpkin said that he did not have any conversations with Troy about that as he was not on speaking terms at that point. I accept the evidence of Craig Simpkin regarding the agreement for the $77,000 loan as it is consistent with the agreement reached concerning the splitting up of the business of Gunderlong.
[89] The acceptance of Craig Simpkin's evidence in relation to the agreement, means that in terms of the $77,000 that it was to be repaid in full from a bank loan to CLP which would be obtained after CLP had received the transfer of machinery from Gunderlong that had been agreed to enable CLP to perform the ash contract and other Gunderlong work including haulage, McGrath work and Racecourse Projects work but not the Andrews tramline work. However, Gunderlong did not fulfill its side of the agreement as it did not transfer the necessary 50% of machinery to CLP. The late Reg Simpkin through his conversations with Faye Simpkin as to the repayment of the $77,000 in the very short term of perhaps a few weeks, and the direction, which I accept, that Reg Simpkin gave to Craig Simpkin to have CLP bill the $30,659.31 for work the subject of Exhibit 70 on 9 July 2019 for the express purpose of getting the money back to Gunderlong is also consistent with the terms being agreed as to the time for repayment of the $77,000 loan. It seems to me therefore as the terms being agreed as to the repayment of the $77,000 have not been fulfilled, the $77,000 loan is not repayable. As Craig Simpkin said at T4-74, as he did not have the agreed equipment CLP could not operate so he had to go to the mines to obtain income.
[90] In early 2019 Troy Simpkin was either not working as he had a breakdown or doing very little, and only Craig was working for Gunderlong. Exhibit 70, the CLP invoice of 9 July 2019 is also the subject of Exhibit 62 the plaintiff's invoice of 15 May 2019. That invoice more clearly shows that the work performed between 30 August 2018 and 26 September 2018 at the dam, Mungburra and Swans. Whilst the work was in fact performed by Craig Simpkin, it was in fact performed by Craig Simpkin in his role as director and employee of Gunderlong. Whilst JC & JR McGrath Pty Ltd were indebted to Gunderlong for that work, Reg Simpkin as the director of Gunderlong authorised CLP to send an invoice in respect of that work and to receive the benefit of the payment for that debt. The purpose of that arrangement and the consideration in respect of that arrangement was that it was part of the agreement reached between Gunderlong through Reg Simpkin and Craig Simpkin relating to the split up of the Simpkin family businesses. It benefited Gunderlong as it helped CLP financially so it could repay the $77,000 loan in the short term. As a part of the agreement, CLP was entitled to receive the proceeds of that work performed in the August and September of 2018. That claim is dismissed.
[32]
[94] The particulars for the claims for detinue, conversion and bailment are the subject of paragraph 56 and the 12-page annexure to the FASC. The claim concerned 98 items before a further 86 items were added to make a total of 184 items and then at various times, 67 items were removed, leaving 117 items in dispute.
[95] The items varied considerably from a large item such as Item 53B, the Caterpillar D8R bulldozer said to be valued at $250,000 down to Item 53AF GEO Piping said to be valued at $150. These claims are the most unsatisfactory and cumbersome claims in this unfortunate action. The claims are unsatisfactory in terms of the plaintiff's allegations and evidence and unsatisfactory in terms of Craig Simpkin's evidence, which varied from being forthright and helpful to being evasive. The performance of Craig Simpkin in respect of his evidence on these issues is perhaps explicable by the sheer number of issues involved and the seemingly unimportant minute details concerning the items, some of which could be easily identified, and many of which could not.
[96] As to the ownership and location of the chattels, the timeline is also important. As discussed above, as a result of Gunderlong failing to transfer the machinery to Craig Simpkin and CLP as agreed on 1 April 2019, Craig Simpkin could not operate his new business CLP as planned. As set out above, he discussed this with his father who advised that he return the mines to find some work as he had no alternative. Between July 2019 and July 2021 Craig Simpkin then went and performed work out at the mines and during this period both Reg Simpkin and Troy Simpkin had the keys and unfettered access to the shed at 678 Barry Lane[15]. Further, as set out below, Reg was dealing with significant assets such as the Kubota excavator and D8R bulldozer. For a period exceeding two years, Craig Simpkin had no control over the location of the chattels that were in his shed at 678 Barry Lane, nor what was to become of them.
[97] Exhibit's 75 and 76 is a plant and equipment valuation form undertaken by Mr Kent on 30 April 2020 at several locations as identified in Exhibit 75 in the Mackay area. I accept Mr Kent's evidence of the assessment of the chattels at the shed as at 30 April 2020 and I infer that the location of "Homebush Hills" on page 1 and 2 of Exhibit 75 is Craig Simpkins shed at 678 Barrie Lane. That is the inspection occurred in the period when Craig Simpkin was working away at the mines. In respect of the issue of who owns a chattel and where it is located, I place some but not a great deal of weight upon the financial statements, as the Simpkin family appear to have a long-standing practice of mixing private and business expenditure and placing it through their company, Gunderlong. In addition, Craig Simpkin and other members of the Simpkin family have from time to time put money into Gunderlong in respect of assets and in my view it is the intention of the parties at the time of the transaction that is important in determining who has the true ownership of the asset.
[33]
"Well, the facts are dad showed me some paperwork how he worked out through unpaid wages and unpaid dividends that the dozer could be transferred to me. I said, "Could we do it now?" He said, "No, not until you sort out with Ellie." He said, "Just let's do it this way, until I can sort this mess out for us"."
[34]
[114] Craig Simpkin's evidence then was that in 2021, Reg organised for the dozer to be taken to some rural property and then it was taken to the rural property of Mr Knobbs. Mr Simpkin's evidence was that just before his father died, he let him know that the bulldozer was at Knobbs' property and, on the third day of trial, Craig Simpkin telephoned Mr Knobbs to check if the bulldozer was at the Knobbs' property and Mr Knobbs informed Mr Simpkin that the bulldozer was at the Knobbs' property. Craig Simpkin then gave the telephone number of Mr Knobbs to the plaintiff's legal representatives. Because of the seemingly deep level of hostility in the Simpkin family, this simple explanation as to the whereabouts of the bulldozer had not previously been offered.
[115] The saga relating to the bulldozer and its associate parts is indicative of the deep hostility within the Simpkin family which permeates the trial of the issues in this case. When the plaintiffs filed their claim on 22 August 2022, the bulldozer was not, in fact, upon Craig Simpkin's property, nor in his possession, nor was he the owner of the bulldozer. Inexplicably, until the fourth day of trial, Craig Simpkin's defence in paragraph 48(ccc) was simply that "Item 53B is at the land, Craig is the true owner."
[116] On the fourth day of trial,[23] paragraph 48(ccc) was amended to state "Item 53B is not at the land but Michael Knobbs has it, Craig is the true owner and if found to be Gunderlong's it can be returned."
[117] Although I accept the evidence of Craig Simpkin on this issue, the bulldozer was not the property of Craig Simpkin but remains the property of Gunderlong. As discussed above, Reg, Faye, Troy and Craig Simpkin had agreed and therefore caused Gunderlong to agree to an equal division of assets between Craig and Troy Simpkin with Troy being allocated the assets relating to the Andrews work and Craig being allocated the assets for the Ash work, haulage and the civil earth works part of Gunderlong Haulage. As Craig Simpkin had admitted, although there was an agreement in respect to many of the assets, there was not agreement with respect to the other assets, that is the "nitty gritty".
[118] Though I accept that it was Reg Simpkin's intention as a part of the final separation of assets to cause the bulldozer to be transferred to Craig Simpkin, that had not occurred prior to Reg passing. The asset, which has always been part of Gunderlong's depreciation schedules and its financial statement therefore remained Gunderlong's asset. At the time the action commenced, the bulldozer had in fact left the possession of Craig Simpkin, despite his original pleading that the bulldozer was at the land and Craig Simpkin's original pleading, paragraph 48(ccc) misled the plaintiffs as to the location of the bulldozer. Nonetheless, with respect to the causes of action which have been pled by the plaintiffs against Craig Simpkin, I conclude not only that Gunderlong is the true owner of the bulldozer, but that Craig Simpkin did not have it in his possession when the action commenced, was not the bailee of the asset when the action commenced and accordingly the plaintiff's causes of action in respect of the bulldozer against the defendants must be dismissed.
[35]
"...I was a little kid when he bought that loader. I remember it turning up, and I just assumed it was dad's, dad wanted me to keep it. He sort of loved that loader and --- and I just assumed it was dad's. ... Well, before he died he wanted me to keep the loader and look after it for him but now I don't know how that works. But yeah."
[36]
[146] I accept Craig Simpkin's evidence in this regard that his father had a sentimental attachment to the loader which he bought years ago when Craig Simpkin was very young and that it is not an asset of Gunderlong but rather an asset of Reg's. Gunderlong has had numerous pieces of machinery, at one stage 6 or 7 excavators, but Reg's attachment to the 950 wheel loaded supports the finding of Reg's ownership.
[147] Item 57. By Paragraphs 48 and 50 of the FASC, Items 57 to 98 are set out in Annexure C to the statement of claim are alleged to be chattels owned by Mrs Faye Simpkin with the plaintiffs alleging Item 59 the Super Dexter V8 petrol powered tractor was owned by Gunderlong. Item 57 is said to be a traction engine with one carriage.
[148] By its defence and also by Craig Simpkin's evidence at T4-40, Craig Simpkin says that he does not know what is being referred to and he does not have any traction engine with one carriage at his property. I accept his evidence in this regard. The plaintiffs' submissions refer to exhibit 58, pages 134 which is a cheque butt dated 5 November 2011 to R Bourke being a deposit on a traction engine of $1,000 and page 135 is a further cheque butt number 121 dated 31 December 2011 to Royden and Rosemary Bourke for a traction engine in the sum of $16,800. The owner of the cheque book enclosing those stubs has not been identified. I would infer that the writing on cheque stub 118 is that of the late Reg Simpkin. It is also consistent with Reg's interest in engines for him to purchase a traction engine. It has not been identified what the traction engine is, however, it is likely the subject of the photographs in exhibit 58 page 136 as there is one single carriage attached to an engine. The photograph is said to be taken at 10 Pratts Road, Bakers Creek, namely the address of Reg and Faye Simpkin. On the balance of probabilities I find that the traction engine with one carriage was owned by Reg Simpkin and that it is not at the property of Craig Simpkin.
[149] Item 59 is a Super Dexter V8 petrol powered tractor. By the defendant's pleading, it is located on Craig's land and is owned by Craig personally. Craig Simpkin's evidence is at T4-40. Craig's evidence is as follows:
[37]
"I didn't really keep a record of any of them things. Dad was loving buying tractors and I love tractors as well, especially the track machine and dad asked me for some money at times to help buy some and if I liked one I would give him some money to get them ... because he was spending his super money and he didn't want to keep spending it all."
[38]
[150] Craig Simpkin explained that the tractors never got used, they would just sit in the shed, that they were his father's hobby and he would take tractors away for "tractor treks". Craig Simpkin said that his brother Troy was also part of it, but he wasn't as interested in tractors. Craig Simpkin said, and I accept that he gave his father money to buy that tractor, that is the Super Dexter V8 petrol powered tractor. According to Craig Simpkin's evidence, and I accept his evidence, he put in roughly $100,000 to tractors over the years, pulling money off his home loan and giving cash to his father to buy the tractors and his father bought many tractors. I accept Craig Simpkin's evidence that "And one time dad had a road train and went away and picked up a big heap of tractors and yeah, I helped him bring it back."
[151] Exhibit 71, the video evidence at the trial showed at least 14 antique tractors in Craig Simpkin's shed. I accept that the purchase of the Super Dexter V8 petrol powered tractor and the tractors the subject of Items 60 the Ferguson grey and gold tractor, Item 72 the McCormack F12 black tractor, Item 73 the Twin City tractor, Item 74 the Fordson Major Half Track tractor, Item 75 the Fordson Major County Full Track crawler tractor, Item 77 the McCormack W12 tractor, Item 78 the Fordson Diesel steel wheel tractor, Item 79 the McCormack Deering 1020 dark blue tractor, Item 80 the Chamberlain 40 KA tractor, Item 81 the Landz Bulldog blue tractor, Item 82 the Hart Parr 18-28 Oliver tractor, Item 83 the Field Marshall green tractor cartridge start, Item 84 the John Deere 60 tractor, Item 85 the McCormack Deering red W30 tractor, Item 86 the Case Steel Wheels, Item 87 the little Fordson N ACCO tractor, Item 88 the Little Green cork (back ACCO) tractor, Item 92 the 1920s Hart Parr 18-36 tractor, Item 93 the red tractor McCormack Farmall (Sid painted) and Item 94 the Fowler Dozer DK green tractor all fall into the same category. I similarly find that Items 89 the Big Lister stationary antique engine, Item 90 the Ronaldson and Tippet stationary antique engine and Item 91 the Imperial stationary engine also fall into the same category. That is, the tractors and machines were owned by Reg and Craig Simpkin.
[152] As to the remaining items in Annexure C, item 66 is a Honda Z50J motorbike. That small motorbike is not in the financial statements but is the subject of photographs at pages 144-145 of exhibit 58. The photographs show some young children riding a little 50 horsepower motorbike. The photograph at page 145 is said to be a photograph of the Honda located at 10 Pratts Road, Bakers Creek. That is photographed in the shed of Reg and Faye Simpkin at Baker's Creek. Craig Simpkin's evidence at T4-42 is that his father Reg bought a little motorbike like that when Craig Simpkin was a child but in any event the Honda Z50 was not on his property. I accept Craig Simpkin's evidence in this regard. I find by inference that the motorbike was purchased by Reg Simpkin some time in the 1980s but it is not at Craig Simpkin's land.
[39]
[160] In respect of the plaintiffs' claims framed as a debt loaned to Craig Simpkin, I conclude on the basis of the findings at paragraphs 91-93 above that the second defendant is indebted to the first plaintiff in the sum of $15,352.03 and I give judgment for the first plaintiff against the second defendant in the sum of $15,352.03. I dismiss the claim by the first plaintiff against the first defendant, Mr Craig Simpkin, in respect of $15,352.03 as no damages has been incurred from breach of duty as a director, as the loan monies are to be repaid.
[161] In respect of the detinue conversion bailment claim, the first plaintiff succeeds in respect of Item 53D, the tipping body, on the admissions made in the defence that the tipping body is owned by Gunderlong and is located at the land.
[162] The first plaintiff also succeed is on Item 53K, 53M, 53O, 53P, 53Q, 53R, 53S, 53W, 53Y, 53AB, 53AV, a half a roll of Geo piping the subject of Item 53AF, one groover the subject of Item 53AI and the cutting bar, Item 53E.
[163] In respect of Item 67 the Kedron caravan, the third plaintiff's claim to ownership of one-half of the caravan has succeeded.
[164] I will hear from the parties as to costs and the form of the orders to be made in consequence of these reasons.
[24] Exhibit 75 Page 1, Item 11 shows the D8R Dozer, 4BBL Single Tyne Ripper as at Bells Road Quarry on 30 April 2020.
Parties
Applicant/Plaintiff:
Gunderlong Mackay Pty Ltd & Ors
Respondent/Defendant:
Simpkin & Ors [2024] QSC 194
[24] In my view, that email evidences that Reg and Faye Simpkin had accepted the advice of Mr Frank Shepherd, authorised him to send that email to Craig Simpkin and to Troy Simpkin. It was also sent to Mrs Faye Simpkin and so everyone knew that the course of action recommended by Frank Shepherd was authorised. The agreement was accepted and acted upon by Craig and acted upon by Troy in setting up his own business.
[25] The second defendant, CLP Group Australia Pty Ltd (CLP) was incorporated on 8 April 2019 with its sole director and shareholder being Craig Simpkin. Craig Simpkin then began to conduct his own business, I find, with the knowledge, approval and consent of Reg and Faye Simpkin and without any objection being raised by Troy Simpkin as per a partly oral, partly written contract.
[26] In paragraph 34 of the plaintiff's written submissions it is conceded that "Reg was the main decision maker for Gunderlong." As Faye Simpkin conceded at T1-45, lines 5 to 15, when asked how a decision would be made with respect to decisions the business was making about buying or selling something or entering into a contract that "Generally it wouldn't be my decision. It wouldn't --- I never got much say...". Faye Simpkin conceded that Reg made business decisions for Gunderlong.
[27] Mrs Simpkin's repeated evidence was that there was no concluded or final agreements reached.[1] As Mrs Simpkin said at T1-46, lines 1-2, it was not only Craig that wanted the business split between Craig and Troy, it was also "... Well it was me in the end."
[28] One of the difficulties with Faye Simpkin's evidence whilst she asserted that no concluded agreement had been reached, she did not provide evidence as to what was actually said to indicate whether there was in fact an agreement reached or whether there were merely proposals put. Faye Simpkin had not been doing accounting work for the business for several years by 2018 and I accept her evidence at T1-45, lines 5-10 that in respect of business decisions she did not have much say, they were not her decisions, and I infer the decisions were made by Reg on behalf of Faye and Reg. I accept Craig Simpkin's evidence that an agreement was in fact reached[2] but "It never ended up coming up signed properly... No, there was an agreement. There was an agreement between my father and myself."[3] It was put to Craig Simpkin that no agreement was actually reached with reference to paragraph 163 of a an earlier affidavit of his in which he said "Unfortunately an agreement was never reached in relation to this as to what was to happen."[4]
[29] Craig Simpkin did accept that that statement still stands as correct. On behalf of the plaintiffs it is argued that the evidence of Craig Simpkin at T4-77, lines 5-10 makes it clear that an agreement had not been reached. I do not accept that submission as I accept the evidence of Craig Simpkin as set out at T4-76 that in fact there was an agreement, however it was not placed in a formal written contract. I also consider that Reg Simpkin, as had always been his practice, entered into that agreement on behalf of Gunderlong and with Faye Simpkin's consent and in accordance with the long standing practice of Reg being the decision maker for Gunderlong.
[30] The email of Mr Shepherd of 1 March 2019 which partly evidences the agreement was expressly authorised by not only Reg but also Faye Simpkin.
[31] The timeline for negotiations leading to proposals and the agreement is also important. I accept that there has been various proposals and negotiations made throughout 2017 and 2018 leading to an oral agreement between Reg and Craig in late 2018. The email of Frank Shepherd of 1 March 2019 is critical as it shows that all members of the Simpkin family were in contact with their accountant Mr Shepherd concerning the arrangements that were to be entered into. The email of Frank Shepherd of 1 March 2019 is critical as it evidences both Reg and Faye's approval for the agreement being entered into. The timeline is also important insofar as Craig's company, CLP, was incorporated on 8 April 2019 and the $77,000 loan from Gunderlong to CLP was entered into on 12 April 2019. The loaning of monies to both Craig and Troy had been discussed to enable them to establish their own businesses. Craig and Troy Simpkin resigned as directors of Gunderlong on 25 July 2019. Craig Simpkin's evidence at T3-89 was that it was agreed that Gunderlong would loan CLP money to purchase the work truck for $77,000 and that the money was repayable by CLP to Gunderlong:
[42] As to the allegations in respect of the items remaining from the original 58 item list, the individual items claimed may be placed in four groups. The first group is items 14 to 20, which relate to small amounts for fuel and spare parts relating to a trip that Craig Simpkin undertook with his son to Cape York in the November of 2018. Factually there was no suggestion that Gunderlong had loaned Craig any money in respect of these or any of the other items the subject of paragraph 8. What had occurred, rather, was that for many, many years, Gunderlong had paid for not only a motor vehicle (ordinarily a Toyota Landcruiser) for Reg, Craig and Troy, but also additional vehicles for Faye, Ellie and Troy's wife Janice.
[43] In addition to the provision of the vehicles, the company paid all of the expenses for the vehicles. What occurred subsequent to November 2018 is that Troy considered that although the company had paid for the items, they were in fact private expenditure of Craig and accordingly in the books of the company they ought to be accounted for as loans made by Gunderlong to Craig. The change in longstanding policy came, it seems, as a direct result of the "troubles" in the Simpkin family. The changes in the accounting policy were made without the knowledge, consent or understanding of Craig Simpkin.
[44] In respect of the seven items, being five fuel bills and two spare parts bills, Craig Simpkin explained that he did have a trip to Cape York with his son which was partly for pleasure but also partly to assess business opportunities, and that he simply did what he had been doing for the past 20-odd years, that is, booking the fuel up upon his company credit card.
[45] In my view, the Simpkin family troubles and their consequent change in accounting policy did not cause what would otherwise be company expenses to then be properly considered to be as a matter of fact, a debt owed by Craig Simpkin to Gunderlong. I accept Craig Simpkin's evidence that there was a business aspect to this trip, but more importantly, Craig Simpkin had been working excessive hours for more than 20 years for Gunderlong and it had always paid these types of expenses.
[46] The next group is a singular item, Item 27, relating to a purchase by Craig using the Gunderlong credit card, of two iPads from JB Hi-Fi on 13 December 2018 for the sum of $1,357.90. Craig Simpkin's evidence was, and I accept, that he purchased the two iPads for the purpose of use in the business, one being retained by himself and one being provided to his brother Troy. Craig Simpkin's evidence is that he required the iPads so that he could read the electronic communications from the mill concerning the work he was performing for Gunderlong. In my view, that is a wholly business-related expense and the accounting treatment of deeming it to be a loan does not in fact create a loan.
[47] The third group are items 31 and 34, which relate to camping gear being purchased from BCF. Item 31 is not the subject of any evidence. A finding cannot be made as to what it is and why it could possibly cause a loan to come into existence between Gunderlong and Craig Simpkin. Item 34 is the subject of Exhibit 668 which evidences that a 75L combi Engel fridge was purchased for $1,849 on 22 December 2018. The receipt indicates that the fridge was purchased by Club member Craig Simpkin. Craig Simpkin admits that he purchased the Engel fridge and his evidence was that he purchased the fridge to place upon his 4WD to keep his food supplies and drinks cool when he was working in remote areas performing work for Gunderlong. Craig Simpkin pointed out that the other 4WD utes provided to family members also had similar fridges. It appears to me that the evidence of Craig Simpkin ought to be accepted and the purchase was made for the Engel fridge as an asset of Gunderlong to be used for Gunderlong purposes. Again, the accounting treatment of Troy Simpkin deeming it to be private expenditure and deeming it to be a loan does not in fact create a loan.
[48] The remaining group of items 48 to 57 are not the subject of any evidence and therefore cannot be considered to represent a loan from Gunderlong to Craig Simpkin.
[49] Paragraph 9 of the FASC alleges that between 29 March 2018 and 28 June 2019 Craig caused Gunderlong to make the following payments were subsequently debited against the loan account:
[69] As explained by Troy Simpkin, Andrew's work was undertaken during the slack, that is the off-season, from January to June, however, during the crush, that is generally from about June through to December, Troy Simpkin would help out with the mud mill contracts and the general duties for Simpkin Haulage. It appears that for many years, Reg Simpkin was the dominating force and decision maker in the business and had a great deal of assistance in operation from both Craig and Troy Simpkin. The businesses were profitable and the manner in which Reg Simpkin organised the family business was to have an important and profitable part of the business, the Andrew's tramline work, being principally undertaken by Troy Simpkin, and the other activities of Simpkin Haulage to be undertaken by Craig Simpkin.
[70] I find that Reg Simpkin did not involve Faye Simpkin in the running of any significant part of the Simpkin Haulage business and he did not keep her fully apprised of importantly decisions, nor his plans on how to separate the business between Craig Simpkin and Troy Simpkin.
[71] As discussed below, I accept the evidence of Craig Simpkin concerning the method by which Reg Simpkin and Craig Simpkin acquired dozens of pieces of antique tractors and machines. That is, Reg Simpkin was keeping his purchases for his hobbies and interest confidential from Faye, at least, it seems, until the large pieces of plant arrived at Craig's shed.
[72] It is perhaps indicative of Mrs Faye Simpkin's knowledge of what was occurring, not only within the Simpkin Haulage business, but also for Reg Simpkin's plans to split the business between Craig and Troy, that although Mrs Simpkin knew that Craig was going to get a truck fitted up and go out to the mines and perform work, she did not know what Gunderlong had lent $77,000 to CLP for that purpose. In my view, this is consistent with Reg and Craig Simpkin having a firm agreement as to the split up of the Simpkin Haulage business. That is, with Andrew's tramline work and associated plant and equipment going to Troy, as he had for several years managed that profitable contract and could continue to do so, and with Craig doing the balance of the Simpkin Haulage work.
[73] As Reg Simpkin had started the business and was the most knowledgeable person in respect of the business, Reg Simpkin knew which pieces of plant and equipment each of his sons would require in their own separate business, and he also knew that Craig Simpkin's business would be conducted by CLP and that business (and also Troy Simpkins Business) would be profitable in the very short term in their own right. That, of course, all depended upon the plant and equipment being transferred or at least made available to the new businesses of Craig Simpkin and Troy Simpkin so that the profits could be generated by the new entities. In this regard, I accept Mrs Simpkin's evidence that she got angry at Reg Simpkin and that Reg Simpkin had not told Faye Simpkin of the $77,000 loan, but that Reg Simpkin attempted to assuage his wife's anger by telling her that the loan would be repaid quickly within two weeks. Whilst I accept that Reg Simpkin said that to Faye Simpkin, I do not accept that there was any agreement between Reg and Craig Simpkin to have the loan repayments made within two weeks. Rather, again consistent with the way in which Reg Simpkin and Craig Simpkin conducted their business, it would be repaid as soon as possible from the profits of CLP once it was operational. CLP could not be operational until it was in possession and had use of the plant and equipment that had been agreed to be transferred to Craig Simpkin. Reg Simpkin knew that when CLP had its share of the equipment it would be profitable in the very short term, as was the case with the Simpkin Haulage business, and could repay the loan in the short term.
[74] Mrs Faye Simpkin's evidence in this regard of a conversation with Reg Simpkin concerning the $77,000 loan, in my view, supports the conclusion that an agreement had been reached for the Andrew's tramline work contracts, plant and equipment, to be transferred to Troy Simpkin to conduct his own business and the balance of the plant and equipment, which would include the transfer of the Caterpillar D8R bulldozer to Craig Simpkin for his business.
[75] As discussed above at Paragraph 31, the email of Mr Shepherd of 1 March 2019 setting the date of commencement of the new businesses from 1 April 2019, the fact that Craig had incorporated CLP on 8 April 2019 and the fact that the loan of 12 April 2019 all pointed to an agreement being reached for the cessation of Gunderlong conducting Simpkin Haulage, and for Craig Simpkin and Troy Simpkin to commence their new businesses.
[76] I accept Faye Simpkin's evidence at T1-54, lines 10-15 that she overheard Reg Simpkin's conversation with the ANZ bank lady whilst "We were driving off on a holiday." That also is consistent with Reg Simpkin's cessation of the business of Simpkin Haulage as previously conducted by Gunderlong as the agreement had been reached for Gunderlong's business to be split between Craig Simpkin and Troy Simpkin and with a 50/50 sharing of the plant and equipment, which Reg Simpkin, Craig Simpkin and Troy Simpkin could easily identify as which pieces of equipment being necessary for that part of the business that would be conducted by Craig Simpkin and Troy Simpkin.
[77] The evidence of Craig Simpkin on these issues was imprecise, however, that is not meant to be any criticism of Craig Simpkin. It seems to me that the manner in which Reg Simpkin and Craig Simpkin who were the principle driving forces in the Simpkin family businesses was that they conducted themselves in a rather imprecise manner.
[78] Craig Simpkin's evidence on these issues included:[9]
[91] The invoice from CLP to JC & JR McGrath in the sum of $15,532.03 paid on 23 May 2019, however, fits into a different category. That sum is the subject of Exhibit 61, the tax invoice of the plaintiff of 15 May 2019, directed to JC & JR McGrath Pty Ltd. It is also the subject of Exhibit 69, Craig Simpkin's handwritten document provided to Troy Simpkin concerning the work performed, it would seem, between November 2017 and January 2018 by Gunderlong.
[92] As Craig Simpkin said at T3-99 Lines 35 to 40, that was not the work that he had discussions with his father about. As no authority had been provided by Reg Simpkin to Craig Simpkin or CLP in respect of the invoice of $15,352.03 and that work having been undertaken by Gunderlong, it is a debt properly owed to Gunderlong. It seems to me it is plain that the $15,352.03 is monies had and received by CLP that is properly owing to Gunderlong and, Craig Simpkin not having the authority of his father on behalf of Gunderlong to effectively transfer the debt from Gunderlong to CLP, I conclude that Craig Simpkin is in breach of his duty as director, pursuant to s 180(1), 180(2) and s 182(1) of the Corporations Act2001.[14]
[93] The plaintiffs seek a compensation order under s 1317H of the Corporations Act2001 (Cth) in respect of that breach of director's duty by Craig Simpkin which is a civil penalty provision as defined by s 1317E of the Corporations Act2001 and in respect of which a compensation order may be made under s 1317H. I decline, however, to make a compensation order under s 1317H as I conclude that damage has not resulted from the contravention as CLP is indebted to and is ordered to repay to the plaintiff Gunderlong the sum of $15,352.03.
[98] In terms of the location of the chattel, as Reg died on 16 May 2022, the evidence can really only come from Troy Simpkin and Craig Simpkin. I accept Troy Simpkin's evidence as to the status of the assets when he visited the shed at 678 Barry Lane between July 2019 and July 2021. There is no evidence contradicting Craig Simpkin of what assets were located on that property after July 2021, as Troy Simpkin has not had access to the shed. The late Reg Simpkin, on the evidence, had access to the shed to a time proximate to his passing away on 16 May 2022. In the period it seems from July 2019, Craig Simpkin has been largely working away at the mines, but at times at the shed, and I accept that he has the best evidence of what is located at the shed. Each asset the subject of dispute, however, needs to be considered.
[99] Item 1 is a 2007 custom built box flat top trailer. I accept Craig Simpkin's evidence that he does not know what trailer is being referred to and he there are no trailers at his property.[16] That claim is dismissed.
[100] Item 3 relates to a 1998 grey Toyota Landcruiser utility. I accept Craig Simpkin's evidence that he purchased that with his father in 2000 and it was his ute because he put money into the ute. Whilst accepting that the ute, as were many vehicles, were listed as an asset of Gunderlong, it was not an asset of Gunderlong. That claim is dismissed.
[101] Item 5 is a 2016 Kubota excavator and was the subject of most unhelpful and evasive evidence from Craig Simpkin at T3-100 to T3-102. The evidence, eventually prised from Mr Simpkin, was that prior to his father passing on 16 May 2022, Reg had organised for that excavator to be working on a property near Rockhampton owned by Terry Francis. The excavator was therefore on Terry Francis' property on the authority and direction of the late Reg Simpkin and some time in 2022. Terry Francis telephoned Craig Simpkin and asked him to have the excavator removed. Craig Simpkin organised for a transport operator, Luedtke's at Yeppoon, to collect the excavator and transport it to Luedtke's yard at Yeppoon, where it is. Craig Simpkin has not used it and it has not been sold. The plaintiff's claim with respect to the excavator is dismissed, as, although it is Gunderlong's asset, Craig Simpkin is not the possessor nor bailee of the asset.
[102] Item 6 is a Husqvarna zero turn mower. I accept Craig Simpkins evidence that he put money into it and owns it.[17] This claim is dismissed.
[103] Item 7 is a 2015 motor vehicle trailer built by Ben's Customs. Craig Simpkin asserts that it is his trailer as he bought it off his father in April 2022.[18] I accept Craig Simpkin's evidence in this regard. The claim in respect of Item 7 is dismissed.
[104] Items 8, 9 and 10 are respectively a Honda EU22 petrol generator, a Milwaukee cordless set, and an Alloy ESAB welder pulse MIG. Craig Simpkin's evidence at T3-103 is that there were two generators, however none of them are located on his land. Similarly, Craig Simpkin says that the Milwaukee cordless set is not on his land and nor is Item 10 the Alloy ESAB welder pulse MIG. I accept Craig Simpkin's evidence in this regard and accordingly the claims in respect of Items 8, 9 and 10 are dismissed.
[105] Item 11 is a Sigweld Mig 400 welder. Craig Simpkin's evidence is that he purchased the welder after he finished his apprenticeship some time in early 2000 and he owned the welder. I accept Craig Simpkin's evidence. The claim in respect to Item 11 is dismissed.
[106] Item 12 is said to be the contents of a work trailer, a compressor, toolboxes and other miscellaneous tools. Craig Simpkin's evidence is that the contents of the work trailer would possibly be in one of the work trailers that "We had". They are no longer located at his property.[19] That claim is dismissed.
[107] Item 13 is the sailfish platinum twin hull 7200 boat with trailer which is the subject of my findings at paragraph 59 above. The boat is has been in Luedtke's yard at Yeppoon for some time. It is Gunderlong's asset and subsequent to the trial, has been retrieved by Gunderlong. The claim in respect of Item 13 is dismissed.
[108] Items 14 through to 49 (or at least those items not omitted) are the subject of Craig Simpkin's evidence from T3-104 to T3-106. With minor irrelevant variations with respect to each chattel, Mr Simpkin's evidence was that each chattel was not at his property and he did not know where it was. I accept Craig Simpkin's evidence in this regard. I find it unremarkable that Mr Simpkin would not know, for example, where Item 39 a box of spare keys for the machinery is, nor where Item 35 a Honda Stihl petrol blower was. The claims for Items 14 to 49 are dismissed.
[109] Item 50 is a little unusual. It is claimed to be a fuel tank and toolboxes from a red ute. Craig Simpkin was able to identify at T3-106 to T3-107 that the red ute was "dad's" and that in respect of the red ute "I put it out the front for Troy or Faye to collect... some time in 2022, I think, when I got told by the lawyers to put it out the front [indistinct] agreement." Craig Simpkin did accept that at the time the red ute was put out the front, the fuel tank and toolboxes were not on the vehicle. Craig Simpkin's evidence was that those items were not on his property and he did not know where they were[20]. I accept his evidence and the claim in respect of Item 50 is dismissed.
[110] Similarly, Item 51 is said to be a fuel tank from RV ute. Craig Simpkin explained that "That was the ute that dad bought to go out and screen gravel."[21] And that "... dad sold it". Craig Simpkin did not know where Item 51 the fuel tank from the RV ute was located. I accept his evidence in this regard and dismiss the claim on Item 51.
[111] Item 53 is a Windsor caravan and Item 53A is a Viscount superior deluxe caravan. According to his second further amended defence, Craig is the true owner of both of these items. Craig Simpkin's evidence at T3-107 with respect to both caravans is that the caravans were lived in by himself and his ex-wife Ellie when they first moved to Homebush, which appears to be prior to construction of the shed. Craig described the caravans as two old caravans and "I don't know where they come from or --- we just lived in them when we moved out to Homebush... I don't know who paid for them back in the --- originally."
[112] Exhibit 1, Gunderlong's 2017 financial statements includes a small business pool schedule which lists at Item 87 a caravan purchased 31 October 2001 for $4,455 with a written down value of zero, and at Item 107 a Windsor caravan purchased 28 April 2005 for $5,500, also with a written down value of zero. Curiously in exhibit 86, Gunderlong's 2012 financial statements, Item 107 the Windsor caravan is included then in 2012 with a written down value of $1,089, however, Item 87 simply called "Caravan", presumably the Viscount superior caravan is omitted. I accept that the inclusion of the caravans in the depreciation of small pool asset schedules attached to the taxation returns is capable of constituting evidence that the company paid for and therefore owned the two caravans. The difficulty with the acceptance of that is in respect of the Simpkin family, that they had a practice of including personal expenditure or the purchase of personal capital items through Gunderlong in order to get the benefit of the GST refund and tax depreciation on the asset. Thus the inclusion of what would ordinarily be private assets in the financial statements of Gunderlong are not persuasive. The caravans themselves appear to have remained at Craig Simpkin's property and were used as Craig Simpkin described for purely personal and non-business reasons, being a place of residence for himself and his ex wife when they were much younger. Whilst I accept it is possible that Gunderlong did pay for the assets, there is no proof that is the case and the material in the financial statements, it is my view, unconvincing, even as a matter of proof on the balance of probabilities. The plaintiff has not proved its claim in respect of Items 53 and 53A.
[113] Item 53B the Caterpillar D8R Bulldozer. Craig Simpkin's evidence in respect of the bulldozer was:[22]
[119] At paragraph 94 of the plaintiffs written submission, an order is sought declaring that Gunderlong has title to the bulldozer and requiring it to be made available for collection by Gunderlong. However, as Craig Simpkin concedes he is not the owner of the bulldozer, it is not necessary to declare that Gunderlong is the owner of Item 53B, the Caterpillar D8R bulldozer. As discussed at [74] the bulldozer was an asset that Gunderlong agreed to transfer to Craig Simpkin or CLP but it has failed to do so.
[120] Item 53D tipping body. This is located on the land owned by Gunderlong and admittedly owned by Gunderlong.
[121] Item 53E is a cutting bar for the D8R dozer and Item 53F is said to be "cutting bar dozer, spare cutting edges and dozer tow lug." Although this was the product of some confusion at T3-108, it seems to me that Item 53E is a cutting bar for the D8 dozer which is sometimes referred to as a ripper,[24] that is, a heavy metal device attached to the rear of the bulldozer which can be lowered into the ground which would have the effect of ripping up the ground. In any event, Craig Simpkin's evidence at T3-108, line 10, is that the cutting bar is at his shed at 678 Barry Lane. It is not disputed that it is Gunderlong's property and must be returned to Gunderlong. Item 53F I read as being the spare cutting edges for the dozer cutting bar together with the dozer tow lug. It is the subject of Exhibit 56 and was purchased in May 2018. Plainly, it is an asset of Gunderlong as it consists of a dozer tow lug and spare parts necessary parts for the use of the cutting bar for the dozer. The nature of the spare cutting edges is that they are wearable parts and are replaced through the use of the dozer. Craig Simpkin's evidence is that he did not know where the spare cutting edges for the cutting bar was.[25] I accept that there is no evidence as to the whereabouts of the cutting edges nor the dozer tow lug in 2022. The plaintiff's case in respect of Item 53F ought to therefore be dismissed, but the claim for Item 53E succeeds.
[122] Item 53K is the 4-tonne car hoist located at Craig's shed. At T3-108 Craig said he did not know who paid for it. The 4-tonne car hoist is listed in the small business pool schedule at Item 150 in the 2017 financial statements, Exhibit 1. Craig Simpkin confirmed at T4-110, line 20, that he did not know who owned the hoist, but if it's in the financials, he guessed it was Gunderlong's. The plaintiffs succeed in respect of Item 53K.
[123] Items 53L, the little lathe and Item 53M, the big lathe, were the subject of somewhat confused evidence at T4-120 to T4-123. I find, accepting Craig Simpkin's evidence, that there is only one big lathe at the shed and only one little lathe at the shed. I accept Craig Simpkin's evidence in respect of the little lathe that he purchased that soon after he completed his apprenticeship and that it is his lathe. Although Craig Simpkin asserted ownership of the big lathe, suggesting he and/or Troy had paid cash for the big lathe in order to avoid paying GST, I reject that evidence. Exhibit 57 is an invoice for Northside Pty Ltd concerning the big lathe (and the Halfcone Milling Machine and the Sigweld Trans Mig 400 SC and the Lincoln 250/250 variable welding unit and the Thermal Dynamic Plasma Cut Master 38) showing the invoice to Simpkin Earthmoving for a sum of $22,000. Exhibit 58 (page 90) also shows payment of that $22,000 invoice on 7 April 2007 as being paid by cheque from Gunderlong. Item 53M is therefore Gunderlong's asset.
[124] For the same reasons, Item 53O, the Halfcone 1999 Milling Machine, Item 11 the Sigweld Mig 400 welder is also the property of Gunderlong. Item 53R the Lincoln welder is also Gunderlong's asset. However, the Thermal Dynamics Plasma Cut Master 38 cannot be identified in the schedule and the claim in respect of it is dismissed.
[125] There are numerous items that are admitted to be owned by Gunderlong and are located on Craig's land. These include items 53P, 53Q, 53R, 53S, 53W, 53Y, 53AB, 53AV. As these items are not in issue, a declaration of ownership can be made in respect of each items and an order made for the return of these items. Additionally, amendments were made to the second further amended defence during the trial to paragraph 48(www) making the admission that half a roll of Geo Piping was located on the land owned by Gunderlong (with respect to Item 53AF) and amendment made to paragraph 58(xxx) to admit that one groover was located on the property and was the property of Gunderlong (Item 53AI). Similar orders are to be made in respect of those items.
[126] Item 53X is said to be an old Value Liner motor/gearbox. Paragraph 48(rrr) admits that item is located on the land and asserts that "despite having made reasonable enquiries, its true owner is unknown." Gunderlong asserts that it owns the asset and makes reference to Item 744005, in each of the small asset schedules, including the 2012 asset schedule which is part of Exhibit 86. However, item 744005 is said to be "New Cat C12 engine for Mac Value Liner purchased for $36,900 on 22 June 2009". That New Cat C12 engine may or may not have been used for the vehicle named as Item 61 in the same asset schedule, being a Mac Prime Mover purchased 28 April 2000 for $195,820 or possibly Item 105 in the small asset schedule being a Mac Superliner purchased 23 January 2004 for $45,455. There are other prime movers referred to in the asset schedule, but it seems impossible it would relate to those items. Whilst Craig Simpkin at T4-109 line 40-45 said that he would agree to give it back so that the judge did not have to make a decision on it and he did not asset that he owned it, he did assert that his father owned it. Craig Simpkin's evidence at T4-109 was that the motor/gearbox from the Mac E6 old Value Liner "Come out of the old truck" which was owned by his father Reg. I accept Craig Simpkin's evidence in this regard as it seems to me that asset 744005 is making reference to a different and new Cat C12 engine, not the old value liner motor and gear box which was removed from Reg Simpkin's old truck. The claim in respect of Item 53X is dismissed.
[127] There are some peculiar items that are the subject of claims. One is item 53AA said to be four new RX super oil and four new HDH 7000 oil. This is not the subject of evidence and nor in the financial statements but only in the pleadings with the plaintiff claiming that Craig Simpkin possessed it at his shed and Craig Simpkin's defence at paragraph 44(uuu) which simply states that Item 53AA is possessed by Troy. It is owned by Gunderlong. The claim is dismissed as there is no evidence to support the claim.
[128] Items 53AC to 53AF are the subject of paragraph 48(www) of the second further amended defence. They refer to half the roll of Geo Piping the subject of Item 53AF. The defendant's case is that such items are not located on the land and cannot be identified. The items are not on the financial statements. Item 53AC is said to be a toolbox. The plaintiff's written submissions identify the evidence supporting the allegation as trial exhibit 58 page 93 being a tax invoice from Ashley Roe to Gunderlong dated 20 February 2015.
[129] Exhibit 58 page 93 is a vehicle registration and insurance notice in respect of a Kedron Caravan owned by Reginald and Raye Simpkin. There is no evidence supporting Item 53AC and this claim must be dismissed.
[130] Item 53AE is said to be a 5,000 litre polytank for molasses. It is also not in the financial statements. The evidential reference is Exhibit 58 page 94. Exhibit 58 page 94 is a tax invoice from Tanks Direct to Simpkin Haulage Co dated 18 October 2006 which includes 1,400gallon molasses tank purchased for the sum of $1,915. The delivery address upon the tax invoice is 10 Pratts Road, Bakers Creek via Mackay, the address of Reginald and Faye Simpkin. The claim in respect of Item 53AE is dismissed as there is no evidence to support a finding that it is on Craig Simpkins land.
[131] In respect of Items 53AG a five-tonne excavator bucket and items, 53AJ to 53AL, those items are no longer the subject of a claim by the plaintiff. As stated above, Item 53AI the groover is the property of Gunderlong. That is admitted by Craig Simpkin.
[132] Item 53AO is a Tanks Direct water tank, Item 53AR is a 2,200 gallon water, Item 53AS is five 10,200 gallon water tanks and Item 53AT is two 26,000L water tanks (house). The defence case as pled at paragraph 48(aaa) is that those items are located on the land and Craig is the true owner. In its submissions, the plaintiff did not press for orders in respect of Items 53AO, 53AS and 53AT which were plumbed into or attached to the house or shed at Craig Simpkin's property.
[133] The plaintiff did press for orders in respect of Item 53AR, the 2,200 gallon water tank. The ownership by the plaintiff company is said to be proved by reference to Exhibit 60 which is a tax invoice from New Tank dated 13 November 2009 which does make reference to a 2,200 gallon water tank purchased on that date for $1,450 with the tank being delivered to 10 Pratts Road, Bakers Creek and the invoice in the name of Simpkin Haulage Company. There is also a reference to that tank in Item 158 of the small business pool schedule in each of the tax returns including Exhibit 1.
[134] In respect of the eight water tanks, Craig Simpkin's evidence at T4-26 to T4-27 is that Item 53AS is the five 10,200 gallon water tanks which are attached and plumbed into the shed. Item 53AT is the two 26,000 litre water tanks plumbed into the house and Item 53AR was the much smaller 2,200 gallon water tank which is plumbed into the water tanks from the shed and is a separate water tank connected by polypipe to a cattle trough for the watering of the cattle. Not only does the smaller 2,200 gallon polytank provide water to the cattle, it would appear to be a fixture. Craig Simpkin asserts, and I accept, that he paid for it when he put money into the shed and that was included as part of the build. I accept this evidence as it seems to me that in terms of the provision of water to the various tanks, it is a capital project and as Craig was the owner of the property and the shed, it is likely that he would have put his own funds into the payment for the tanks. Furthermore, exhibit 60 is the invoice from New Tank in respect of item 53AS the five 10,200 gallon polytanks as well as the 2,200 gallon water tank the subject of Item 53AR. The tanks were purchased at the same time and included in the shed development project. The fact that the invoice was billed to Simpkin Haulage Company and bears the "Paid" stamp being paid by VISA also suggests that the project was undertaken in the usual method in which the Simpkin family conducted their business. That is by putting personal expenditure through the business in order to gain the benefit of the GST refund as well as the taxable depreciation of expensing the relevant items. That does not mean that Craig did not pay for the tanks. I accept his evidence that he did and accordingly the claims in respect of Item 53AS, 53AT and 53AR are dismissed.
[135] Item 53AU is an Anapack Porter Power. Paragraph 48(bbbb) of the defence pleads that there are no Anapack Porter Power devices located on the land and it was unknown whether it was ever so located or who was the owner of the porter pack. It is said to be subject to the invoice in Exhibit 58 Page 106 which is an invoice from Cooper Fluid Systems dated 17 July 2008 for a total price of $2,923.15. There are three items listed in the invoice and they are "ENR Cylinder S/A 20T 155mm and ENR Hose Thermoplastic 3m and ER Pump Air/Hyd S/A Turbo." Although it is far from clear, the item probably is a porter power and is owned by Gunderlong, however, I accept Craig Simpkin's evidence, at T4-27, line 20, that a porter power being the hydraulic power to the press was not located at his property. The claim in respect of Item 53AU is dismissed.
[136] The next item in dispute is Item 53BB, two large corrugated pipes. The plaintiff's point to Exhibit 58 pages 107 and 108 as proof of their claim. Pages 107 and 108 are invoices from Vella Haulage for transporting pipe from Norwich Park Mine to Barry's Lane. These invoices prove Simpkin Haulage paid for the transport of the pipes, but does not evidence ownership of the pipes. Paragraph 48(eeee) of the defence pleads that those items are on the land but Craig Simpkin is the true owner of those items. The evidence is at T4-27 to T4-28. Craig Simpkin's evidence is that the two pipes were previously owned by a company HMP that they were doing civil works for, and HMP did not want them and so HMP approached Craig Simpkin and asked him to take the pipes away. I accept Craig Simpkin's evidence in this regard and accept that he owns these two pipes.
[137] The next item in dispute is Item 53BG said to be portable yards. Paragraph 48(gggg) of the defence pleads that the item is located on the land and Craig is the true owner of those items. The plaintiff's submissions refer to the evidence at Exhibit 58 pages 109 to 110. Exhibit 58 page 109 is a tax invoice from Green Steel addressed to Craig Simpkin on a date some time in 2010 for the sale of 20 porta-panels, two gates and a race bow. It was said to be a cash sale to Craig Simpkin. Exhibit 58 page 110 shows however that on 15 April 2010, Reg Simpkin paid Green Streel $2,520.05. Reg Simpkin's credit card printout also shows that he expended $211.03 at Choice Petroleum Rockhampton on 15 April 2010 which is a service station situated in close proximity to Green Steel. The documents make it plain that Reg paid for the porta-panel set by payment on his credit card. By the nature of the entries on the credit card, it is a fair inference that Gunderlong paid the credit card. The portable yards are not on the financial statements. Craig Simpkin's evidence at T4-30 is that he did not know if he had any portable yards or panels at the property. Craig Simpkin thought that some part of the porta-panels may have remained after the dissolution of the trust and after the agreement to finish up the farming side of the enterprise. Craig's evidence is that he bought some in 2008 and 2009 and over the ensuing years, that some were bought by the partnership and some by Simpkin Haulage. In summary the evidence about the portable yards is extremely vague on both the plaintiff and defence sides of the case. I conclude that no claim has been proved in respect of any portable yards.
[138] The next item in dispute is Item 53BL said to be "Sloping head walls". Exhibit 58 pages 111-112 show that these items were purchased by Simpkin Haulage. Page 111 of Exhibit 58 shows that six sloping head walls were purchased on 30 September 2008 and page 112 shows that a further 12 sloping head walls were purchased on 5 October 2012. These items are not included in the financial statements as assets. Craig Simpkin at T4-30 to T4-31 explained that the function of sloping head walls was to improve access to his property. Craig Simpkin explained that when he was forming up roads to his shed, in areas where there was water he would lay a concrete pipe then place the sloping head walls at the end of the pipes to stop the gravel falling into the pipe. He would then cement everything in and construct the road over it in order to drive to his shed without driving through watered areas. Craig Simpkin's evidence at T4-30 Line 40 is that he put money into those capital projects for the improvement of his land. I accept his evidence and accept that the sloping head walls are part of the property and are owned by Craig Simpkin.
[139] The next item in dispute is Item 53BV said to be fence posts (semi-load of strainers) that is, part of the subject of paragraph 48(gggg) of the defence which admits the items are located on the land and that Craig is the true owner of the items. Item 157 on the small business asset pool does list fence posts, but there is no indication of where they are or what that relates to. Craig Simpkin's evidence at T4-30 line 46 is that the fence posts are part of the fence, that the fence posts on his property were "bored into the ground and got knocked in and made tight and put a --- barbed wire all through it. So it's part of the property, a structure of the property." I accept that evidence as this claim is dismissed.
[140] The next part of the claim that is in issue is Item 53BW through to Item 53CF, all of which relate to product manufactured from quarrying operations. The items are large flood rocks, screenings, blue gabion, tramline ballast, screen gabion, 20-40 drainage rock, crusher dust, 2.4 road base, 2.2 road base and farmer's mix road base. Craig Simpkin's evidence at T4-37 to T4-38 is that all of the piles had come from quarries which the family had owned and when they sold the quarries they bought the leftover materials to Craig Simpkin's property at 678 Barry Lane. As Craig Simpkin also explained, the family originally had a quarry, then they sold that quarry and then he had a quarry at 678 Barry Lane and then they bought another quarry in 2016.
[141] In respect of the materials quarried from Craig Simpkin's property at 678 Barry Lane, Gunderlong quarried that material and then sold it. Craig Simpkin was able to identify Item 53CA the screened gabion, Item 53CB the 20-40 drainage rock, and Item 53CF the farmer's mix road base, however "the road base was mixed up a bit".[26] Importantly, Craig Simpkin's evidence at T4-37 lines 30-35 was that in respect of the old quarry the quarry was owned and the quarrying undertaken by a different company to Simpkin Earthmoving. The quarry materials are not contained in any of the financial statements and there is no other evidence to suggest that they are assets of Gunderlong. I conclude that it has not been shown on the balance of probability that any of the quarry materials are the assets of Gunderlong and I dismiss the claims in respect of Items 53BW to 53CF inclusive.
[142] Item 54, is a Holden FJ utility. The FJ utility is not in the asset schedule of Exhibit 86 the 2012 financial statements, nor is it in exhibit 59, the 2013 financial statements for Gunderlong. In the plaintiff's written submissions, it is submitted that the Holden FJ utility is included in the 2022 financial statements for the Simpkin Family Trust, however, in the 2022 financial statements of Gunderlong which are contained at pages 1866-1885 of Exhibit 59, I cannot locate the FJ utility. Given the pre-disposition of the Simpkin family to include private assets within the company accounts, even if the FJ utility were included in a financial statement, I would accept that as only the slightest evidence that the company owned that asset.
[143] Craig Simpkin's evidence concerning the Holden FJ utility is contained at T4-39 and is that the old Holden FJ utility was his dad's ute as long as he could remember from when he was a "little kid". Although the precise date is not in the evidence, it seems Craig Simpkin was born in 1979 or 1980,[27] that is prior to Gunderlong coming into existence on 9 March 1981. The FJ vehicle has the old style registration plate Q 663-392 as shown in Exhibit 58 pages 132-133. The style of the numberplate suggests that the vehicle was registered decades ago. The FJ utility is a collector's item and is in keeping with Reg Simpkin's deep interest in mechanical engines and vehicles as shown in the many photographs and Reg's numerous antique tractors that the FJ ute is Reg's old ute. I accept Craig Simpkin's evidence that the FJ utility is Reg's vehicle and not an asset of the plaintiff.
[144] Item 56 is a Caterpillar 950 wheel loader. This piece of machinery is not in the 2012 financial statements, exhibit 86. Nor is it included as an asset in the 2013 financial statements, exhibit 59 pages 631-654. Curiously, however, repairs and maintenance for the 950 wheel-loader are claimed as expenses both in the 2012 and 2013 financial years. As the wheel loader is not included in the depreciation schedule for the company, it seems to me that this is another example of private expenditure being included as an expense of the company to calculate the company's taxable profit. That practice appears to have continued over the years. For example, in 2021 repairs and maintenance were claimed on the 950 wheel loader in Gunderlong's financial statement in Exhibit 59 pages 1565-1870. While the plaintiff's submission refers to the Cat 950 loader being included in the 2022 financial statements of the Simpkin Family Trust, it is not included in the depreciation schedules to that return (see Exhibit 59, pages 1875-1881).
[145] Craig Simpkin's evidence concerning the 950 wheel loader at T4-39 is that Reg bought the 950 wheel loader years ago:
[153] Item 67 is the Kedron caravan. The Kedron caravan is not in any of the financial statements. The purchase of the Kedron caravan is the subject of exhibit 85 pages 462-466. These documents show that the caravan was purchased by Reg and Faye Simpkin on or about 7 June 2009. A $2,000 deposit was paid by credit card for the caravan which cost $105,000. Page 463 suggests that the caravan was manufactured by Kedron caravans and delivered in December 2009. The balance of $103,000 was paid on 18 November 2009 again with the receipt being made out to Reg and Faye Simpkin. Page 465 shows that the caravan was registered and insured in the names of Reg and Faye Simpkin. Page 466 shows that the caravan was paid for out of the joint account of Reg and Faye Simpkin with the transfer of $103,000 occurring on 13 November 2009 with deposit entries being made into that same account on that same date. It appears that Simpkin Haulage paid to Reg and Faye Simpkin $142,050 in the period between October 2009 and December 2009. The documents therefore establish that the caravan was owned by Reg and Faye Simpkin. Mrs Faye Simpkin did not give any evidence about the ownership of the caravan, however Craig Simpkin at T4-42 to T4-43 asserted his father Reg owned the caravan and explained, "Dad said that mum was moving out and she didn't want the van and dad had to pay her some money and he was living in the van at the shed and it just stayed there."
[154] Craig Simpkin's evidence was that after his mother and father had separated, Reg Simpkin was not allowed at the family home and so he moved into the Kedron caravan which was taken to Craig's property for 4-6 weeks in the August of 2021. Craig Simpkin further explained at T4-95 that after his mother and father had separated and after Faye had purchased another house, "police let dad back into the house --- dad rang two police so he could get access to the house."[28]
[155] Craig Simpkin explained that after being let back into the house and as his father needed care, he moved from his shed to his parents' property at Pratts Road where he lived with his father for 6 months before his father passed. The documents I have referred to clearly establish that the asset was owned equally by Reg and Faye Simpkin and whilst I accept Craig's evidence that his father said that his mother did not want the van and had to pay her some money and that Reg lived in the van at the shed, that evidence is too vague to establish that there was some type of contract between Reg and Faye whereby Reg purchased Faye's interest in the caravan. I conclude therefore that the caravan is owned equally by Faye Simpkin and the Estate of Reg Simpkin. The Kedron caravan was clearly purchased for the use and enjoyed of both Reg and Faye Simpkin.
[156] The next item in dispute is Item 69 a red Acco 1810B truck. Exhibit 58 page 151 is a cheque stub from the joint account of Reg and Faye Simpkin showing that the International Acco truck was purchased for $12,000 on 24 May 2013. The truck was not placed in the financial statements of Gunderlong. As the red Acco 1810B truck is not included in the financial statements and was purchased out of the joint account, I infer that it was purchased by Reg and owned by Reg and represented another purchase made by Reg for his own pleasure and deep interest in machines such as trucks, engines and particularly tractors.
[157] Item 71 is the green Acco 170 truck. It is not in the financial statements. Exhibit 58 pages 152-153 are submitted by the plaintiff to relate to the purchase of this item. Page 153 appears to be an ANZ Visa card printout referring to the cardholders Reg Simpkin, Troy Simpkin and Craig Simpkin showing that on 19 February 2011 Reg Simpkin paid Elders Real Estate Toowoomba $16,800 but then paid into his own Visa account two days later on 21 February 2011 some $17,000. If that is to be accepted, that shows that although it was purchased on Gunderlong's Visa account, Reg transferred $17,000 back into the Visa account to pay for it, so the asset on that document belongs to Reg. Page 152 is an even more intriguing document as it is a cheque stub dated 14 March 2011 to cheque number 109, however, it is not said who paid the cheque. However, the cheque is paid to Simpkin Haulage Co with the following entry "Repay Visa for Cat 22 and intel truck - $16,800". There is then different black ink with the entry "Reg's collection Acco 1544 chassis rego 2 June 2011 S15626 ... equipment mainly vintage being acquired for Reg's enjoyment and later sell for R & F to live in and travel" I accept these documents show that Reg paid for Item 71 the green Acco 170 truck.
[158] Item 76 is the Cat 22 described as "machinery" however it is a tractor. It is the subject of Craig Simpkin's evidence at T4-45 lines 15-45. I accept Craig Simpkin's evidence that the Cat 22 tractor was purchased by his father and himself when there were floods in the Toowoomba area and both the Cat 22 and an Acco truck were brought back to Mackay, by Mackay Haulage. The asset therefore is owned by Reg and Craig Simpkin.
[159] Item 97 is the go-kart trailer and contents. It is not in Gunderlong's financial records. It is said to be shown in the photograph on page 174 of Exhibit 58, however, I cannot see the trailer in that photograph. The trailer is also said to be the subject of Exhibit 58 page 173, the cheque butt showing that on 20 June 2000, Ace Kart Racing was paid $4,760.90 out of the joint account of Reg and Faye Simpkin. It is therefore equally owned by the Estate of Reg Simpkin and Faye Simpkin. Craig Simpkin's evidence at T4-49 is that there are no go-kart trailers at his property. I accept his evidence and the claim in respect of that item is dismissed.