Irwin v Pamplin & Ors

NSWSC 125 Muschinski v Dodds (1985) 160 CLR 583 Owies v JJE Nominees Pty Ltd (in its capacity atf Owies Family Trust) [2022] VSCA 142 Paul v Constance [1977] 1 WLR 527 Payne v Rowe (2012) 16 BPR 30,869; [2012] NSWSC 685 Plunkett v Bull (1915) 19 CLR 544; [1915] HCA 14 Public Trustee v Smith [2008] NSWSC 397; 1 ASTLR 488 Rambaldi v Mullins (No 2) [2016] FCA 977 Re Armstrong (dec'd) [1960] VR 202 Registrar, Accident Compensation Tribunal v Commissioner of Taxation (1993) 178 CLR 145; [1993] HCA 1 Scott (Trustee), in the matter of Stolyar (Bankrupt) v Stolyar [2022] FCA 691 Thacker v Key (1869) LR 8 Eq 408 Walker v Corboy (1990) 19 NSWLR 382 Warman International Ltd v Dwyer (1995) 182 CLR 544; [1995] HCA 18 Watson v Foxman (1995) 49 NSWLR 315 Texts Cited: L Tucker, N Le Poidevin and J Brightwell, Lewin on Trusts (20th ed, 2020, Sweet & Maxwell) JD Heydon, MJ Leeming and PG Turner, Meagher, Gummow & Lehane's Equity Doctrines & Remedies (5th ed, 2015, LexisNexis) Category: Principal judgment Parties: Ann Irwin (Plaintiff) Marie Pamplin (First Defendant) Lionel Pamplin (Second Defendant) Mircon Pty Ltd (Third Defendant) Dennis G. Pamplin Pty Ltd (Fourth Defendant) Halcrows Investments Pty Ltd (Fifth Defendant) N.MOS Pty Ltd (Sixth Defendant) The Peak on Andrew Pty Ltd (Seventh Defendant) Mircorp International Pty Ltd (Eighth Defendant) OSCO (Australia) Pty Ltd (Ninth Defendant) Representation: Counsel: M Condon SC and M Stevens (Plaintiff) G George and J Adamopoulos (Defendants)

Solicitors: Mersal & Associates Pty Ltd (Plaintiff) Hitch Advisory (Defendants) File Number(s): 2018/00179474 Publication restriction: Nil

Introduction

1. The plaintiff, Ann Irwin, was the de facto spouse of the late Adrian Dennis Pamplin (deceased), who died in August 2013 without a will. Ann's status as his de facto was established in this Court: Estate of Pamplin; Irwin v Pamplin [2017] NSWSC 1477 (Lindsay J judgment). Ann is sole administrator of the deceased's estate.
2. The first defendant, Marie Dawn Pamplin, is the deceased's mother. She is also the mother of the second defendant, Lionel Pamplin, who is the deceased's younger brother.
3. With no disrespect intended, I refer to the parties and other members of their family by the first names.
4. From around 1989, the deceased and Lionel were involved in various business endeavours together, including property development. They owned shares in companies they had established, and real property.
5. The deceased and Lionel were also members of the Nomads Motorcycle Club. In the mid to late 1990's, they were charged with drug related offences and involved in a NSW Crime Commission investigation.
6. From May 2002, the deceased and Lionel transferred legal ownership and control of the companies and assets they owned to Marie. New companies were set up and new assets acquired, all of which were (directly or indirectly) legally owned and controlled by Marie.
7. Ann says that the transactions from May 2002 happened pursuant to an agreement, understanding or an assumption held in common by the deceased, Lionel and Marie that Marie would hold the transferred business and property assets and any future assets generated by ongoing or new business ventures for the benefit of or on trust for the deceased and Lionel in equal shares, which Marie would hand over if asked to do so. She says that the agreement, understanding or common assumption also provided that the deceased and Lionel would act as shadow directors of the companies and keep de facto control of them and the assets, and that they did so.
8. Ann contends that the prime motivation for the arrangement was asset protection, namely, to shield them from vulnerability to confiscation under the Proceeds of Crime Act 2002 (Cth), and that the circumstances under which the assets were divested to Marie and future assets acquired either impressed them with a trust, or otherwise mean that Marie and the companies she controls are subject to an estoppel or contractual obligation which prevents them from dealing with the assets contrary to that arrangement.

These proceedings

1. Ann commenced these proceedings in June 2018 pursuant to directions given by Lindsay J after he delivered his judgment.
2. In her Second Further Amended Statement of Claim filed on 21 July 2021, (SFASC), Ann seeks a range of declarations and other orders to the effect that 50% of identified assets held by Marie and in companies Marie controls are held on trust for the benefit of the deceased's estate. As Ann is the sole beneficiary of the deceased's estate, in economic terms, Ann's claim is that the 50% share of the assets are held on trust for her.
3. Ann pleads an agreement or understanding and a common assumption on the same terms, which she says was acted on and gives rise to an express trust or, alternatively, constructive or resulting trusts in respect of the transferred assets and new assets that are legally owned by Marie and the corporate defendants. She claims that it is unconscionable for Marie to seek to depart from the terms of the arrangement or assumption and she is estopped in equity from doing so, and also pleads that the parties entered into a binding contract on the terms of the agreement. I refer to these as the Arrangement Claims.
4. Ann also makes a claim on her own behalf in respect of $451,000 of trust distributions that the Dennis G Pamplin Family Trust (DGP Trust) declared were payable to Ann in the financial years 30 June 2016 to 30 June 2012 which Ann says were never paid to her. I refer to this as the DGP Trust Distributions Claim.
5. The other defendants are companies that are directly or indirectly owned or controlled by Marie. Ann contends that the shares and assets of these companies are held on trust for her on the same terms, as are three properties located on Pitt Town Road, Kenthurst (Pitt Town properties), of which Marie is the registered proprietor.
6. The third defendant is Mircon Pty Ltd (Mircon), a company established by the deceased and Lionel in 1992 under the name A.L.T. Property Development Pty Ltd (ALT Property). It was renamed as Mircon in 1997. Marie has, since 2002, been Mircon's sole director and company secretary and owned all of its shares.
7. The fourth defendant is Dennis G Pamplin Pty Ltd (DGP), a company established in 2002. Marie is the sole director and owns all the shares. DGP is the trustee of the DGP Trust which was also established in 2002.

The hearing, evidence and witnesses

1. The hearing took 10 days. The Court received over 200 pages of written submissions and the Court Book runs for around 7500 pages.
2. I have had regard to all the evidence and facts contended for by the parties, as referred to in their written and oral submissions. Given the volume, it is not practicable or necessary, in my view, to refer to all the material. These reasons set out those facts and matters which I consider are salient to the issues and necessary to understand the parties' respective positions and why I have made my factual findings and reached my conclusions on the issues for determination.
3. Ann read affidavits that she swore and from Mr Peter Loccisano.
4. The Defendants read affidavits from Marie, Lionel and Mr Peter Burrows.
5. Each of the witnesses were cross-examined and submissions were made about the reliability and credibility of the parties' evidence and that of Mr Loccisano's evidence of the key witnesses. In assessing the evidence and making my findings, I have had regard to the following principles and those referred to at [49] and [51].
6. In view of the frailty of human memory and the parties' apparent self-interest, more weight should be placed on the contemporaneous documents (to the extent they are available), the objective surrounding facts and the inherent probabilities and improbabilities of events: Watson v Foxman (1995) 49 NSWLR 315 at 319; Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 at [30]-[31].
7. Ann bears the onus of proof. The standard of proof is the balance of probabilities but involves an actual persuasion of the occurrence of conversations: John Holland Pty Limited v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451 at [94].
8. As to the witnesses, I generally accept the evidence Ann gave. While acknowledging her self-interest, she impressed me as an honest witness relaying her best recollection of events, including what the deceased and others said in her presence about events in question. The deceased's statements to her about laws changing and needing to put things into Marie's name were inherently plausible and consistent with the objective evidence.
9. Ann answered questions in a direct and clear manner and made concessions when she did not recall matters. Her recollection was shown to be incorrect or limited on occasion, such as about the Commonwealth bank loan (which, to her credit, she accepted was in error) and the relief sought in the Buckingham property proceedings (see [55] below), but she otherwise displayed good recall of details, such as when asked about the deposits into her bank account. The matters raised in the Defendants' submissions, such as the discrepancies about the value of shares and life insurance in the estate inventory affidavits and her evidence regarding the 2014 Centrelink report that recorded her as having a poor memory and concentration, are not matters that, to my mind, undermined the credibility or reliability of her evidence more generally. Nor did the fact that Ann had made no attempt to revoke or ask for a re-assessment in respect of tax returns that she disclaims any involvement in preparing.

Facts

1. The following facts are based on the affidavit, oral and documentary evidence. Unless otherwise indicated, I am satisfied of the following matters.

Ann

1. Ann (born in 1969) and the deceased commenced their relationship in 1987 and started living together, in around 1999, in a property located at Buckingham Street, Pitt Town (Buckingham St property). They continued in their de facto relationship until the deceased's death in August 2013, at the age of 47.
2. From 1999, Ann was not in paid employment. She was financially dependent on the deceased until his death.
3. The Buckingham St property was owned by Ann, her father and her brother, Andrew. In 1996, the deceased bought Andrew's share of the property, but did not have that interest put into his name, telling Ann, at the time, "the mortgage will affect my borrowing power with the businesses". In 2008, the deceased brought proceedings against Ann and her father seeking orders appointing a trustee for sale of the Buckingham property. The proceedings were settled on terms which acknowledged that Ann and her father held the property upon trust for themselves and the deceased as tenants in common. Ann later became the sole registered proprietor.

The deceased

1. The deceased was in born in 1966. He left school in 1980 and did a fitting and machining apprenticeship.
2. The deceased was, from about 1989 and until his death, a member of the Nomads Motorcycle Club.
3. The deceased had a history of medical and mental health issues stemming from a motorcycle accident in 1987 on his way to work and trichlorethylene poisoning in 1991, which he sustained while he was working as a water proofer. The deceased ceased working as a water proofer following the poisoning. He received payouts in relation to the accidents and treatment for physical and psychological complaints from the accidents, which included severe headaches and migraines, back pain and tiredness.
4. Prior to 2002, the deceased and Lionel were involved in various business ventures together and with third parties (which are outlined below). The deceased also undertook some property developments on his own account, which are also described below.

Marie

1. Marie was born in 1946. She was married to Dennis Pamplin, the father of the deceased and Lionel, who died in 1996.
2. Marie, Dennis and their sons lived in the family home at Pellitt Lane, Dural (Pellitt Lane property), where Marie continues to live. Marie became the sole registered proprietor of the Pellitt Lane property following Dennis' death.
3. Marie entered the work force in the 1980's after Dennis suffered a work injury and started experiencing severe mental health issues. She worked at Fasco Electric Motors Australia from 1981 until April 2000, when she was made redundant and accepted a payout of around $50,000.
4. According to Lionel, in 1997, the deceased and Lionel gave Marie their share of Dennis' estate, which comprised approximately $150,000 from the sale proceeds of a unit in Woy Woy that Dennis had owned. Ann says that the deceased told her that he and Lionel were going to put the money from Dennis' estate "in the company" and did not mention giving the money to Marie.

Lionel

1. Lionel was born in 1966. After school, he worked as a machine operator.
2. Lionel was, from the 1980's, a member of the Nomads Motorcycle Club and continues to be a life member.

Other relevant players and their relationships

1. As already noted, Mr Burrows and Mr Lower commenced as accountants for the deceased and Lionel in about 1994.
2. Prior to 2002, Mr Burrows prepared financial statements and tax returns for the companies established by the deceased and Lionel, met with them to do their tax returns and was aware of the property developments they carried out. Mr Burrows was involved in the development and implementation of the 2002 strategy and his involvement with the Pamplin's various businesses increased after 2002.
3. Mr Ron Winter (now deceased) was a partner of Reimer Winter & Williamson, a firm of solicitors. He acted as the solicitor for the deceased and Lionel from at least 1996 to at least 2013 and also for Marie after the deceased's death.
4. Mr Vincent Aboud is a chartered accountant and principal of Vincent Aboud & Associates. He provided accounting and tax services to the Pamplins and the various companies from 2012. Mr Aboud prepared and lodged tax returns for the deceased and Ann. Ann gives evidence, which I accept, that she never gave Mr Aboud instructions to prepare her tax return, never signed any documents in his presence and never met him.
5. Mr Stephen Marianne is a financial planner at DIB Financial who dealt with the deceased and Lionel in 2013 to broker life insurance for them. He is the author of various business records that refer to an asset protection strategy employed by the deceased and Lionel.

Pre May 2002: the deceased and Lionel's business ventures

1. It is common ground that prior to May 2002, the deceased and Lionel were involved in business ventures together, including property development and money lending. They established companies through which those activities were carried out and also undertook some of them with third parties and some on their own account. The following sets a summary of the ventures and describes the role played by Marie, as claimed by the Defendants.

A and L Pamplin Earthmoving and Contracting Pty Ltd

1. On about 13 November 1989, A and L Pamplin Earthmoving and Contracting Pty Ltd (ALPEC) was incorporated (with the "A" and "L" standing for Adrian and Lionel), with the deceased and Lionel as the only directors and equal shareholders.
2. ALPEC was established to carry out earthmoving and excavation activities.
3. According to Lionel, the deceased agreed to establish the business on terms that provided for Lionel to purchase an earthmoving machine called a "Drott" for $110,000, the deceased providing his Hebersham property as security for a loan to buy the Drott from the Commonwealth Bank (CBA), Lionel hiring and operating the machine and the deceased and Lionel sharing the venture's net income equally.
4. Lionel says that in late January or early February 1990, their agreement to share ALPEC's running costs, expenses and earnings terminated and between 1990 and 1996, he alone operated ALPEC's earthmoving business and the deceased was not involved. Lionel also says that his solo operation of ALPEC generated sufficient funds to repay the CBA loan so that the deceased's Hebersham property was no longer encumbered.
5. Lionel's evidence that he operated ALPEC alone for a period in the early 1990s has some support from statements made by the deceased to medical practitioners in 1994: see the report prepared by a Clinical Psychologist, Sam Borenstein, that records the deceased was a partner in an earthmoving business with his brother but gained no financial benefit and did not work within the company and a report prepared by Dr Florida that records that the deceased said he lost his ability to carry out the fledgling bulldozer business after developing an illness following exposure to toxic chemicals. However, according to an affidavit sworn by the deceased on 19 June 2008 in relation to the Buckingham property proceedings (2008 Affidavit) (Exhibit A), the deceased had established the earthmoving business with Lionel and had worked in it ever since. According to Lionel, it was also the deceased who signed the tax returns for ALPEC as a director between 1994 to 2000.
6. It is unclear on the evidence what work was carried out through ALPEC after late 1996 or 1997 (when Lionel says he sold the Drott) or what assets it owned as at 27 May 2002, when Marie was appointed sole director and company secretary of ALPEC.

Russell Island property

1. In about 1989, the deceased and Lionel purchased land on Russell Island, Queensland (Russell Island Property) from Tony Taylor, the deceased's employer at the time. According to Lionel, he and the deceased each paid $3,000 to Mr Taylor for the property. The deceased and Lionel remained the owners of the Russell Island Property until it was transferred to DGP on about 19 November 2007.

ALT Property Developments Pty Ltd / Mircon

1. On 4 November 1992, ALT Property was established as a property development vehicle by the deceased, Lionel and John Browne, the founder of the Nomads Sydney Chapter (referred to by the Defendants as "Metho Tom"), each of whom was a director and shareholder. On 1 February 1994, Mr Browne resigned as director and gave up his shareholding. Thereafter, until May 2002, the deceased and Lionel were the only directors and each held 50% of the issued shares.
2. On 8 November 1996, ALT Property was appointed trustee of the Pamplin Discretionary Trust which was established by deed made that day. Mr Winter was the settlor and the deceased and Lionel were the specified beneficiaries.
3. ALT Property changed its name to Mircon on about 11 August 1997. The deceased told Ann that the derivation of Mircon's name was "Nocrim".
4. Between 1996 and 2002, the deceased and Lionel carried out the following property developments.

Linde Road, Glendenning

1. In July 1997, ALT Property purchased land at Linde Road, Glendenning for $205,000 (Glendenning property) for a subdivision development. The purchase price was funded by a loan of $200,000 from Lanreilly Pty Ltd, secured by mortgage over the Glendenning property. A further loan of $105,000 from Lanreilly for capital works was secured against Marie's Pellitt Lane property. The deceased and Lionel, as directors of Mircon, gave personal guarantees to Lanreilly.
2. On 15 December 1997, the subdivision of the Glendenning property into four lots was registered (SP873219). The lots were sold by Mircon in 1998 and 1999 for a total of $346,000.

Paton Street, Woy Woy

1. On 23 December 1997, Mircon acquired land at Paton Street, Woy Woy for a subdivision and development into three villas for $172,000 (Woy Woy property).
2. The purchase price was funded by a loan from St George Bank of $137,500 secured by a mortgage on the Woy Woy property. Lionel says that Marie paid the balance of the purchase price.
3. On 1 March 2000, the subdivision of the Woy Woy property that created three lots was registered (SP62103). Mircon sold the three lots between 20 April and 28 November 2000 for a total sale price of $710,950.

South Street, Umina Beach

1. On 31 October 1997, Mircon acquired two properties on South Street, Umina Beach (South St properties) for a subdivision and development into six villas. The purchase price of $400,000 was funded by a loan from St George Bank of $159,900.
2. The South St properties were used as security for a construction facility that Mircon obtained on 21 April 1999 for $1,390,000 from St George Bank (St George loan), that was guaranteed by the deceased and Lionel as Mircon's directors. Mircon's St George loan was refinanced on 29 January 2001 by a loan from NAB in the amount of $1 million (NAB loan) that was secured by a mortgage over the South St properties, as well as a mortgage over the Woy Woy property.
3. On 19 October 2001, the subdivision of the South St properties that created six lots was registered (SP66658). The six lots were sold by Mircon between 24 December 2001 and 24 June 2002 for a total sale price of $1,722,500.
4. According to Marie, she provided the balance of the purchase price for the South St properties. Lionel says that the funds from the sale of South St properties project were insufficient to repay Marie the monies that she had advanced to him and the deceased.

First St, Kingsgrove development

1. On 6 June 1994, the deceased, Lionel and Mr Geoffrey Krahe purchased land at First Street, Kingsford (First St property) to subdivide and to build three town houses.
2. Development of the First St property stalled in 1995 due to the Crime Commission lodging a caveat against Lionel's interest in the property. According to Lionel, the freezing orders made also meant he could not access funds to contribute his share of the capital for First Street's development. He says that this annoyed the deceased who refused to contribute his share, with the impasse only broken when Marie provided $70,000 to enable work to continue.
3. On 29 March 1996, the subdivision of the First St property that created two lots was registered (SP858160). One lot was sold in May 1996 for $101,500.
4. The other lot was developed for townhouses with a loan for $153,000 from St George Bank that was secured by a mortgage over the property and in respect of which the deceased and Lionel gave personal guarantees. The subdivision of that land (creating three lots) was registered on 18 December 1997 (SP56138). These three lots were sold between April and July 1998 for a total of $456,500.

Superior Property Developments Pty Ltd / Broken Bay development

1. On about 21 May 1997, Superior Property Developments Pty Ltd (SPD) was established by the deceased and Lionel as a vehicle to carry out property developments with Frank Marino and his wife, Maria Marino.
2. The deceased, Lionel and Mr and Mrs Marino were appointed directors and shareholders, with the brothers' interests being equal. On or around 31 July 2001, the brothers' shares in SPD were transferred to Mircon. The deceased, Lionel and Mr Marino remained the directors of SPD until it was deregistered on 15 December 2002.
3. On 24 November 1999, the deceased, Lionel and Mrs Marino acquired land for development at Ettalong Beach, Broken Bay for $315,000 (Broken Bay property). The Broken Bay property was used as security for a loan of $752,000 from Cardinal Financial Securities Ltd that was later assigned to LKM Capital Limited.
4. On 27 August 2001, the Broken Bay property was subdivided into three lots, (SP66273). In October and December 2001, one lot was transferred to each of the deceased, Lionel and Mrs Marino for $1.00 as the stated consideration. The transferred lots were subject to mortgages from NAB (LKM Capital's mortgage having been discharged) that secured loans of $265,000 in respect of each of the deceased and Lionel's lots and a loan of $500,000 in respect of Mrs Marino's lot.
5. The deceased's lot was sold for $420,000 on 6 August 2002, Lionel's lot was sold for $400,000 on 2 December 2002 and Mrs Marino's lot was sold for $590,000 on 22 August 2002.

Other property transactions

1. Prior to 2002, the deceased undertook the following property developments on his own account: 1. land at Hebersham (Hebersham property) was acquired in November 1988 for $93,000 and sold in January 1995 for $104,000; 2. land at Kutmut St, Glenmore Park was acquired in January 1995 for $75,000, subdivided into two lots (using the proceeds of a $184,900 loan secured by a mortgage from St George Bank) and sold in 1995 for $329,500; and 3. land on the Great Western Highway in Kingswood was acquired in November 1997 for $108,000, subdivided into three lots (using the proceeds of a $280,000 loan secured by a mortgage from St George Bank) and sold in 1999 for $495,000.
2. On 18 July 1996, the deceased, Lionel and Marie purchased land in North Turramurra for $195,000 with a loan of $155,000 secured by a mortgage over the property and guarantees given by the deceased, Lionel and Mircon. It appears that this development did not progress and the property was sold on 28 September 1997 for $280,000.
3. On 10 April 1997, the deceased and Lionel each bought a block of land to develop in Glenmore Park. The land was bought in their own names.
4. The deceased's land (at Magpie Close) was acquired for $77,000, subdivided into two lots (using a $150,000 loan from St George Bank secured by a mortgage) that were later sold in February 2000 and in May 2001 for $415,000.
5. Lionel's land (at Woodlands Drive) was acquired for $80,000 using (Lionel says) the Drott's proceeds of sale. The Crime Commission lodged a caveat on that property on 28 April 1997, which was withdrawn in March 1998. The land was subdivided into two lots (using a $152,600 loan from St George Bank secured by a mortgage), which were later sold in August and October 1999 for $370,000.

Loans to Mr Loccisano and X-Dist

1. In the late 1990's or 2000, the deceased and Lionel loaned money to Mr Loccisano to assist him with his clothing and footwear businesses, including X-Dist. The money was lent on the basis that each of the deceased and Lionel would put in half of the amount loaned and split the monies repaid and interest 50/50. The monies loaned to Mr Loccisano were paid in cash by Lionel and, prior to 2002, repaid in cash by Mr Loccisano.
2. There is a dispute as to how much was borrowed by Mr Loccisano and when. Lionel says the loans before the early 2000's were never more than $40,000 and funds of $120,000 were sought later. Mr Loccisano says it was closer to $150,000 in 2000.
3. I am unable to say how much money the deceased and Lionel lent to Mr Loccisano before 2002. There were further dealings between the deceased, Lionel and Mr Loccisano and his companies, post 2002, which I describe below.

Factual findings about Marie pre-2002

1. Lionel deposes that, as best as he can recall, Marie contributed $70,000 to the First St property, $90,000 to his legal fees in relation to the Crime Commission proceedings and $45,000 towards the deceased's legal expenses. He gave evidence that Marie funded other developments but could not recall how much Marie advanced in relation to the First St property and also said that the Woodlands Road, Glenmore Park development was the only development in respect of which Marie advanced money (T576, T552).
2. Marie also gave evidence that following 1995 she contributed significant funds to Mircon for the First St property and Glendenning property and to the brothers for their legal expenses. Marie said that, to her knowledge, in the years prior to 2002, she was the biggest funder of Mircon's developments and the deceased and Lionel did not make any contributions after 1995. Marie could not say how much money she gave the brothers for legal fees or the property developments, other than the amount of $50,000 (her retrenchment payment), which she says she paid to Mircon on 2 August 2000.
3. Ann deposes that the deceased never told her that Marie had contributed to his (or Lionel's) legal fees or funded the property developments.
4. I cannot exclude the possibility that Marie assisted the brothers with their legal expenses. However, in the absence of any document or other objective evidence referring to that occurring, I am not satisfied that Marie lent Lionel $90,000 and the deceased $45,000 to pay for their legal fees between 1995 and 1997 or that they owed her money in relation to legal fees as at early 2002.
5. I also do not accept Marie's and Lionel's evidence that Marie was substantially funding Mircon's property developments up to 2002, that she provided $70,000 for the First St property development and paid the balance of the purchase price for the Woy Woy property or that she was owed significant sums of money by the deceased and/or Lionel at the beginning of 2002.
6. Marie did put her Pellitt Lane property up as security for the $105,000 loan in respect of the Glendenning property development but there is no evidence to suggest that Marie discharged the mortgage from her own funds, rather than being paid from the sale proceeds of the property itself. As to Marie's evidence that she paid her $50,000 retrenchment payout to Mircon, the bank statements in evidence indicate that $50,000 was paid out of her account the day after $50,000 had been paid into Mircon, making it difficult to conclude that the $50,000 payment into Mircon's account was from Marie.

Criminal charges and NSW Crime Commission investigation

1. The deceased and Lionel were not unacquainted with the law enforcement authorities.
2. In the 1990s, the deceased was charged with and convicted of drug offences and spent some time in prison.
3. In August 1993, the deceased was arrested in connection with supplying a commercial quantity of a prohibited substance. In about 1994, he submitted to the "Seizure Department" of the police. In 1996, he was convicted of conspiracy to supply prohibited substances and sentenced to 12 months periodic detention, which he served.
4. In 1995, Lionel was investigated by the police and the NSW Crime Commission (Crime Commission) in connection with alleged drug trafficking and was arrested and charged in connection with supplying prohibited drugs. Those charges were subsequently withdrawn or dismissed.
5. In 1995, the Crime Commission commenced proceeds of crime proceedings against Lionel in the Supreme Court of NSW pursuant to the Drug Trafficking (Civil Proceedings) Act 1900 (now known as the Criminal Assets Recovery Act 1990 (NSW)). The Crime Commission obtained freezing orders against Lionel's assets and lodged caveats on property that he owned, which included property that was jointly owned with the deceased in First Street, Kingswood.
6. On 22 March 1995, the deceased was ordered to attend the Supreme Court for an examination in relation to the joint affairs of him and Lionel and any joint property they held as part of the Crime Commission's proceedings against Lionel.
7. On 5 March 1998, the Crime Commission discontinued the Supreme Court proceedings against Lionel.
8. In October 2002, the Proceeds of Crime Act 2002 (Cth) was enacted. The Bill to the Act was propounded in 2001.
9. At the hearing, the Defendants took issue with the proposition that the deceased was, in fact, investigated by the Crime Commission and submitted that it was implausible that the introduction of the Proceeds of Crime Act 2002 (Cth) was the motivating factor that led to concern about an investigation and confiscation of assets and the new way of doing things from May 2002. The Defendants' final written submissions devoted 13 pages to these matters, including a "primer" on the proceeds of crime legislation. I do not accept the Defendants' submissions on this issue.

13 May-30 July: the start of the new way of doing things

1. From mid-May 2002, the way in which the deceased and Lionel conducted their business affairs changed. They, together with Marie, obtained advice from Mr Lower, Mr Burrows and Mr Winter about those matters.
2. On 13 May 2002, the deceased and Lionel attended a meeting with Mr Lower and Mr Burrows at LWT's offices.
3. Marie deposed that she was also present at the meeting. I do not accept Marie's evidence and find she was not at the meeting. This is based on Mr Burrows' evidence, who said that he could not recall Marie being at the meeting, but that Mr Lower was there (which was contrary to Marie's and Lionel's evidence that they could not recall Mr Lower being at the meeting), and the letter that Mr Lower sent the next day, which was not addressed to Marie.
4. On 14 May 2002, Mr Lower wrote a letter, addressed to the deceased and Lionel, copied to Mr Winter that said: Dear Adrian & Lionel, Further to our conference, 13th May 2002, I thought it worth summarising the points raised. Asset Protection We discussed the following strategies. A & L Pamplin Earthmoving & Contracting Pty Ltd 1. A wind down of the company's operations 2. A transfer of the fixed assets to mum's trust. Mum's trust would then hire this equipment to Mircon Pty Ltd. You to discuss with Reimer Winter for a proper sale agreement from the company to mum's trust of the fixed assets. I believe stamp duty will be payable on this transfer. In addition, you should discuss with Ron, whether there is any external register that maintains a record of leased vehicles (something like REVS) etc. Mircon Pty Ltd 1. Mircon Pty Ltd would take over the previous function of "A & L Pamplin", providing earthmoving and contracting services. 2. Mircon will continue to acquire your personal vehicles. It was felt that the limited equity that was built up in these vehicles should not be of concern. 3. Both Adrian and Lionel to remain as directors and shareholders of this company. 4. Cash balances in Mircon's account would be maintained at a low level to avoid any creditor claims. The Pamplin Family Trust It was felt that we would wind down the Pamplin Family Trust. Mum's Affairs 1. It was felt that mum should set up her own separate company with a name to be chosen by you. 2. That a separate trust would be set up under the company for mum to operate through. This trust would own all projects undertaken by mum, however Mircon Pty Ltd would act as the manager of those projects and would receive a fee for the work done on those projects. 3. Any profits made in this trust over and above mum's $50,000 per year would be retained in the trustee company. 4. This company to be a sole shareholder and director company, with mum taking both positions. 5. Mum has recognised that she will have to provide personal guarantees for projects entered into by her trust. 6. It was agreed that Adrian and Lionel would be prepared to provide personal guarantees to any lenders in addition to mum, as they would earn income by way of Mircon's management of projects. Your Homes • We discussed the importance of the CGT exemption available on personal homes and the need to take advantage of this exemption. As you will both be exposed as directors in Mircon Pty Ltd, ii would be beneficial if these homes were held in your spouse's names. • Alternatively, you might buy properties in your own names, however have mum advance funds to you for the purchase of those properties by way of a second mortgage behind the bank. She would charge a high interest rate on these, so that no substantial equity built up in your names on these properties. You were to discuss these points with Reimer Winter, and if Ron was happy, he was to organise for a company and trust to be set up on mum's behalf. You should mention to Ron that it may be necessary to exclude both of you as beneficiaries of the trust to ensure that creditors have no access to the trust assets. Current Position 1. You currently hold Unit 1 and Unit 2 at Broken Bay Road as your personal residences and you expect these to be sold in the next three to four months. 2. Mum has already commenced her Castle Hill project. 3. Mum is about to acquire interest in an eight lot subdivision. You were to discuss with Ron, whether this should be undertaken under her new company. Tax Planning We discussed the current year tax position. You advised that Adrian has purchased shares in CCCX for approximately $180,000. That these shares have unfortunately "gone south". I suggested that you might like to realise your loss on shares by transferring these to a third party. It would be possible for mum to acquire these shares at the market value. If we are to crystallise your loss, you will need to do this on the public register prior to the 30th June. Obviously we need to discuss the above matters further. Look forward to hearing from you. Yours faithfully LOWER RUSSELL & FARR SH LOWER PARTNER Our Ref: SHL/RFA:P177 c.c. Messrs Reimer Winter & Williams

Post July 2002: dealings under the new regime

1. It is common ground that post July 2002, a range of business activities, including property developments and investments, were undertaken through DGP or new companies and new trusts were also established. Marie also acquired the Pitt Town properties. The following sets a summary of those activities and describes the role of Marie.

DGP property transactions

1. DGP was involved in six property transactions between 2002 and 2011.
2. The first of these was a development in Port Stephens (Lemon Tree Passage development) that was undertaken with Coolrush Pty Ltd, a company part owned by Mr Loccisano.
3. DGP and Coolrush bought adjoining lots of land as tenants in common on 7 August 2002 for $373,000 that was funded by a loan of $299,000 from NAB secured by a mortgage over the property. The plan of subdivision was registered on 22 August 2003 creating eight lots (SP105566), which were sold in 2003 and 2004. Marie's evidence does not disclose the sale price of the lots other than in respect of lot 8, which sold for $115,000 on 25 September 2003. The evidence does not refer to any involvement Marie had with the development and she gave evidence that she was unaware that Coolrush was part owned by Mr Loccisano, even though schedules she said she prepared (and sent to Mr Loccisano) in respect of loans made around that time referred to that company.
4. In mid-2003, DGP acquired land in Airlie Beach and built a two-unit residential apartment complex. Internal NAB documents refer to a land purchase price of $400,000, construction costs of $700,000, a loan of $690,000 granted in July 2004, construction completed in April 2005 and one unit sold (for an unspecified sum) in August 2005. Marie and Lionel gave limited evidence about this development and it is unclear what happened to the other unit. Ann's evidence is that this development was undertaken by the deceased with a Mr Paul Rostirolla.
5. On 13 April 2006, DGP acquired two parcels of land in Windsor (Windsor property) for $595,000 with a loan of $1,054,000 secured by a mortgage over the property. Two townhouses were built at the rear of each parcel of land. The land was subdivided on 18 March 2008 into four lots (SP270579). DGP continues to own the Windsor property and the four lots are leased.
6. In October 2007, DGP acquired 6 hectares of land in Tamworth as a tenant in common with a third party company, Stiks Land Pty Ltd, for $110,000. Approval to subdivide was granted in around 2014. In 2019, Ann consented to the dedication of a road to the local council. DGP continues to own this land. Marie says that DGP does not derive income from its interest in the Tamworth land, it has funded its share of the capital works to undertake the subdivision but does not say how much funding was provided or when the subdivision is expected to be completed.

DGP investment in Coastal Waters Seafood

1. From about 2001, the deceased and Lionel had business dealings with Peter Hunt in relation to a seafood business in Tasmania, which was operated by Coastal Waters Seafood Pty Ltd (CWS) and CWS's holding company, Fishinthenet Investments Pty Ltd (FITN).
2. In about 2005, DGP made a loan to CWS of $243,334 and acquired 40 shares in FITN. In November 2009, DGP acquired 50% of the shares in FITN. According to Marie's evidence, in December 2012, FITN was sold to a third party and DGP received approximately $1,062,500 for its 50% shareholding and the loan was repaid. FITN was deregistered in 2015.
3. Ann says that the deceased told her that he and Lionel had lent money to the Hunt family. Marie gives evidence of a discussion with the deceased and Lionel about the seafood business in 2002 but she was otherwise not involved in any meetings or discussions about it.

DGP investment in landfill business in Bulla, Victoria

1. In 2007, DGP made an investment in a landfill operation in Bulla, Victoria by acquiring a majority stake in the two companies that owned and operated the site, Bulla Quarry Developments P/L (Bulla) and BTQ Group P/L Ltd (BTQ).
2. The deceased and Lionel negotiated the purchase. Ann describes the deceased telling her that he and Lionel had just bought the site at Bulla and "we are the proud owners of a landfill facility". An internal NAB memorandum refers to the Pamplin family's ownership stake in the business.
3. Lionel played a greater role in managing the landfill business. He travelled there regularly. Marie was a director of both companies until 2013, when Lionel took on the role.
4. The landfill business investment was lucrative and provided cash income. According to the deceased's 2008 Affidavit, the business turned over about $75,000 -$80,000 per week. Ann says that she regularly witnessed Lionel bring cash from the landfill business and divide it between himself and the deceased. According to Lionel and Marie, Lionel brought the cash to Marie who then distributed it to herself, the deceased and Lionel and there was no split just between Lionel and the deceased.
5. DGP sold its stakes in Bulla and BTQ in 2017 for undisclosed sums.

Peak on Andrew

1. Peak on Andrew was established on 14 March 2008 in relation to a potential mixed use development in Andrew Street, Adelaide (Andrew St property) by Mr Gregory Chin (an architect who had lodged a DA and was looking for a partner to invest) who was the sole director and shareholder. Peak on Andrew is the trustee of the Peak Unit Trust, which was established on 17 March 2008 by Mr Chin.
2. On 19 August 2008, Marie became the sole director and shareholder of Peak on Andrew, having been appointed a director on 1 August 2008.
3. On 4 September 2008, Peak on Andrew acquired the Andrew St property for $1,200,000, funded by a loan secured by a mortgage in favour of NAB. On 21 August 2008, the deceased, Lionel, Marie and Mircon provided personal guarantees to NAB for $840,000 for Peak on Andrew's debts.
4. In 2008, the deceased told Ann that he had just bought a development site in Adelaide.
5. Development consent was granted on 7 August 2008 but the development did not eventuate.
6. On about 9 October 2018, Marie transferred her shares in Peak on Andrew to DGP. The units in the Peak Unit Trust were owned by Marie and now by DGP.
7. According to Marie, the Andrew Street property has been rented since 2008. .

Halcrows

1. In about 2013, the deceased identified a property to purchase in Broadwater, Glenorie. On 8 February 2013, Halcrows was incorporated as the vehicle to acquire the property, which it did on 22 April 2013 for $140,000. The settlement funds on purchase, of $130,567.11, were paid from DGP's NAB account. Halcrows continues to own the Glenorie property.
2. Marie is the sole director and shareholder of Halcrows, which is the trustee of the Halcrows Road Trust, a discretionary trust established on 1 February 213 by deed made that day. The deceased, Lionel and Marie are the specified beneficiaries of the Halcrows Road Trust. Marie says she was advised to purchase the property in a trust to minimise land tax and avoid a concentration of investments.

Mircorp

1. Mircorp was incorporated on 21 November 2013. Marie was appointed sole director and company secretary and DGP is the sole shareholder.
2. Mircorp was established to conduct overseas trade. There was no evidence of any trading activity by Mircorp at the hearing.

Further dealings with Mr Loccisano: X-Dist and Corell Holdings Pty Ltd

1. From 2002, Mr Loccisano continued to borrow money for the X-Dist business.
2. In late 2002, the deceased asked Mr Loccisano to transfer shares in X-Dist to secure payment of moneys that had been lent to him and directed that the shares be transferred to "Marie's name". The evidence is unclear, but it suggests that DGP may have received some shares in X-Dist around this time.
3. In late 2003, X-Dist went into administration. According to the Report as to Affairs dated 16 December 2003, X-Dist had unsecured creditors of $2,619,979, of which Marie was listed for $444,446. A Deed of Company Arrangement was later executed, which Marie signed as a creditor.
4. Mr Loccisano then established Corell Holdings Pty Ltd (Corell), which operated another footwear business.
5. Mr Loccisano continued to borrow money from the deceased and Lionel and his evidence refers to asking the deceased for a loan of $3 million, which the deceased agreed to and directed be repaid to DGP by electronic transfer. From November 2004, payments were made to DGP by Footwear Trading and Corell, with some payments made to Mircon in 2011. A schedule of electronic transfers attached to Ann's submissions (which was not disputed by the Defendants) identifies payments totalling $3,982,722.85 from Footwear Trading and Corell during the period 12 November 2004 to 6 May 2011.
6. On or around 31 January 2011, DPG became the sole shareholder of Corell. According to Mr Loccisano, the deceased asked him to transfer his shares in Corell to DGP. Ann says that at this time, the deceased said to her, "we are now the proud owners of a shoe importing business".
7. On 13 July 2011, Corell was wound up in insolvency. The Report of Affairs of the company records that DGP had made loan advances to Corell in the amount of $5.6 million.
8. Lionel and Marie say that the money lent to Mr Loccisano's businesses was from DGP and not from the deceased and Lionel, and Marie was involved in approving them. I consider it likely that many were cash loans lent to Mr Loccisano and his companies but not all money came from DPG and the loan were not all approved by Marie (DGP's sole director and shareholder). This is based on a document Marie says she prepared, which refers to a loan of $90,000 in February 2002 (before DGP was established) and a loan of $125,000 on 2 July 2002 (before DGP's bank account was established) and Marie's evidence in cross-examination that she could not recall who made the loans (T484, T482).

OSCO and NMOS

1. On 2 March 2010, Mr Loccisano established a new company, OSCO (the ninth defendant), which also ran a shoe wear business.
2. According to Mr Loccisano, in about 2012, the deceased directed that OSCO take over the businesses of the Corell group of companies (which had by then been deregistered) and it became the lessee of factory units in Dural. Ann says that about this time, the deceased told her that "[OSCO] is a company that me and Lionel just opened".
3. Money was lent to OSCO and it seems that funds were misappropriated by Mr Loccisano.
4. On 2 July 2013, Mr Loccisano made a statutory declaration (witnessed by Mr Winter) that he had incurred debts in OSCO's name without authority, transferred Footwear Trading's debts to OSCO and forged documents intending that employees and creditors would believe that Footwear Trading had transferred its business to OSCO. OSCO's 30 June 2014 financial statement records that OSCO owed the DGP Trust $3,374,373 in loans.
5. After the deceased's death, of the 26 issued shares in OSCO, 20 were registered in DGP's name and two each were registered in the names of the deceased, Lionel and Marie. Since 2 August 2019, Marie has been the sole director and company secretary of OSCO.
6. NMOS was acquired on 15 July 2010 to purchase a shoe manufacturing factory in China. NMOS owned 2 shares in OSCO before they were transferred to DGP. Marie is NMOS's sole director and shareholder.
7. NMOS is the registered owner of a BMW motor car that the deceased drove before his death.
8. It is common ground that Lionel travelled to China and Vietnam in relation to the footwear business.

Pitt Town properties

1. Marie is the registered proprietor of the Pitt Town properties, which were purchased on: 14 November 2005 for $1,000,000 (funded by a loan of $650,000 from NAB) (XX5 Pitt Town); 12 February 2007 for $775,000 (funded by a loan from NAB and used as security for a multi property facility) (XX2 Pitt Town); and 12 July 2010 for $1,060,000 (funded by a loan from NAB and secured by a mortgage for a $3,200,000 facility) (XX7 Pit Town).
2. Marie continues to own the Pitt Town properties.
3. Lionel and his de facto spouse, Jackie, lived in XX5 Pitt Town before Marie purchased it. Ann says that in about 2005, Lionel approached the deceased and asked if they could buy XX5 Pitt Town because it had development potential.
4. The deposit for XX5 Pitt Town of $100,000 appears to have been paid by DGP and Ann says that the deceased told her that he was responsible for obtaining the NAB loan (of $650,000). The NAB loan assessment states that: "the original plan was to purchase the property in the name of [DGP] as trust (sic: trustee) for the [DGP Trust] with Adrian and Lionel to improve the land, using their excavating expertise and to sell or develop… however, they have now decided on the advice of their accountant to purchase the property in Mrs Pamplin's own name and hold the block for up to 5 years…".
5. Around the time XX5 Pitt Town was acquired, the deceased said to Ann, "You, me, Lionel, and Jackie are now the proud owners of 25 acres at Kenthurst". She gives evidence that after it was bought, the deceased and Lionel renovated XX5 Pitt Town. Lionel continues to reside at XX5 Pitt Town.
6. As to XX2 Pitt Town, the deposit and stamp duty were paid from the DGP's bank account with the balance of the purchase price coming from the NAB loan facility. On 26 November 2007, NAB recorded that "The group also owns an unencumbered property at XX2 Pitt Town Kenthurst. Construction of a new dwelling is presently underway on this property and is being funded by the members of the group", with the key persons identified as the deceased and Lionel.
7. Around the time XX2 Pitt Town was acquired, the deceased said to Ann that he was buying the property for them to live in, it was on two titles so he could do a boundary adjustment and subdivide, eventually they would sell and "It'll be half Lionel's just like XX5 is half mine." She also says that Lionel referred to XX2 and XX5 Pitt Town, as his and the deceased's properties in a discussion in 2010. Lionel did not deny that discussion but says that he and the deceased never owned XX5 Pitt Town. Ann gives evidence that in relation to XX2 Pitt Town, there were utilities in her name that were paid for by the deceased or Mircon, renovations were undertaken by the deceased, she and the deceased used the property to run livestock and horses, and they also purchased furniture, white goods and other inclusions without Marie's involvement.

Russell Island property

1. In 2007, the Russell Island property was sold and transferred by the deceased and Lionel to DGP.
2. On 11 September 2018, DGP sold the Russell Island property for $20,000.

Deceased's work habits and health

1. Ann gives evidence that to her observation, the deceased continued to conduct himself in business as though nothing had changed after May 2002. She observed him, on an almost daily basis, talking business on the phone to Lionel and third parties, directing Marie to do things in relation to business affairs, and drafting and sending email instructions to Marie.
2. Marie gives evidence that Lionel and the deceased's work on property developments and for the other businesses was part of their management role, which included sourcing new business ventures, for which they were paid fees (or a salary) as contractors for DGP or employees of Mircon. The Defendants also contend that the deceased failed to work productively for any substantial period for Mircon or otherwise, and the Court should find that he slept for 14 to 16 hours per day based on the medical issues he suffered. I reject that submission, do not make that finding and accept Ann's evidence at [209] above.
3. Ann's evidence is supported by: emails which record the deceased (and Lionel) giving instructions to Marie about business related affairs; Marie's oral evidence, when she accepted that it was going to be "business as usual with the deceased and Lionel doing the normal things [they had done for the company but now she had the shares]" (T398.25-49, T399.34-44); and Lionel's evidence in chief, that there was no practical difference in the way the deceased and he conducted themselves in their day-to-day activities and their dealings with Marie leading up to and following 2002 (Lionel at [153]).
4. While acknowledging that the deceased's physical and mental health issues (such as migraines) may have impacted his ability to work on occasion and that he did not travel due to a fear of flying, overall, the evidence satisfies me that the deceased worked productively throughout the period from at least 1995 until his death. The evidence of the property and other business transactions set out above, which the deceased was involved in, together with contemporaneous records (see for example, the emails in Exhibits M and N) reveal that the deceased had an ongoing capacity to conduct complex business affairs, including expressing opinions about a range of town planning and other legal matters and was actively involved in the affairs of the various companies including according to Marie's evidence, directing where DGP Trust distributions were to be paid, including to Ann. I place little weight on the medical reports relied on by the Defendants as they were prepared in the mid-1990s, predating the date of the alleged agreement by around seven years. There was no independent evidence that the health conditions reported on continued to afflict the deceased to the extent that he was unable to work productively, as the Defendants alleged.

2013: the deceased considers estate planning and seeks life insurance through Mr Marianne

1. In 2013, the deceased turned his mind to estate planning, including obtaining life insurance. Ann's evidence suggests that this may have coincided with a time when the deceased's relationship with Lionel changed as she observed them arguing more.
2. Ann gives evidence of a conversation recounted to her in 2013 by the deceased between he and Lionel about splitting up the assets and going their separate ways. She says the deceased said to her, "I told them if you two don't like it, we can split everything and you and mum can fuck off and fend for yourselves." Ann also gives evidence that she heard the deceased talking to Lionel about business matters and said that "it's my way or it's not happening", and the deceased often said to her: "I'll shut everything down and take all my stuff out and we can go our separate ways"; "I'll split it all up. You can take your half, I'll take my mine and you can paddle your own canoe"; or "You want to carry on like a fuckwit, I'll split everything. I'll make money but how will you go?"
3. Lionel agreed that he and the deceased argued about business matters, the deceased told him to "fuck off" on occasion but could not recall the conversations deposed to by Ann.
4. During 2013, the deceased discussed his affairs with his advisors, including Mr Winter, with Ann and with Mr Marianne as part of brokering life insurance.
5. On 11 April 2013, Mr Winter sent an email to the deceased (to the Mircon email address that the deceased used) that attached an amended will (which is not in evidence) and sought instructions.
6. The next day, the deceased sent an email to Mr Winter, which states: "As far as the "Pamplin family tree" so to speak. Mum obviously sits at the top along with the various companies. Then myself and Lionel sit equally under her and the companies. In the event of mums death, I believe the family assets are split 50/50 between my brother Lionel and myself. The only real provision I insist on from my side is that should mum outlive me, Ann moves up into my beneficial position thus rendering at mums death a 50/50 split between Ann and Lionel. What Lionel decides to do in his similar situation is entirely up to him and should be attended to by him…"
7. The following month, the deceased gave Ann a handwritten document with a diagram showing Marie at the top, the deceased and Lionel below and Ann and Jackie underneath them. Underneath the diagram, the documents states: "Should Adrian die before Mum, then Ann automatically moves up the "tree" to where Adrian sits."

Other financial matters

1. Ann deposes that in 2006, the deceased received an insurance payout of $75,000 and told her he was putting it into Mircon, "to give us more borrowing power". She also says that Lionel received a payout of $150,000 in 2010 and deposes to an argument between the deceased and Lionel about Lionel not using the money for the businesses.
2. Lionel says he was not aware of the deceased putting any money into Mircon after 1995 and the deceased did not transfer any part of his compensation payout to Mircon or DGP. Marie says that, to her knowledge, the amount the deceased received from his payout (after expenses and legal fees) was about $5,000-$6,000 and he did not put $75,000 into Mircon in 2006, this last statement being supported by the company bank statements for that year.
3. In the absence of documents referring to these payments to Mircon or other objective evidence, I am not satisfied that Ann has established that the deceased and Lionel paid those amounts or any part of their payouts to Mircon or DGP after 2002.

Mircon financials

1. Mircon continued to trade after Marie acquired legal ownership and control of the company. According to Marie, Mircon engaged the deceased and Lionel as contractors and its principal income streams were earthmoving and distributions from DGP.
2. Mircon's assets and liabilities as at 30 June 2012 and 2013 were: 1. unappropriated profits of $1,970,183 (2013) and $1,831,441 (2012); 2. current assets of $2,091,777 (2013) and $2,129,020 (2012) of which $1,772,696 (2013) and $1,952,687 (2012) respectively were distributions from the DGP Trust; and 3. current liabilities of $716,876 (2013) and $728,870 (2012) of which $692,404 (2013) and $607,493 (2012) were loans from Marie.

DGP financials

1. DGP's Trust financial statements for 2014 and 2013 record: 1. there was a deficiency in trust funds of $111,293 in each year; 2. current assets of $1,224,468 (2014) and $828,431 (2013), and non-current assets comprising, in the main, inter company or business loans, such as from Corell, CWS, NMOS and OSCO ($3,374,373 in 2014 and $23,690 in 2013); 3. properties valued at $2,538,893 (2014) and $2,566,517 (2013) and investments valued at $1,349,575 (2014) and $1,005,775 (2013) including in relation to Bulla Quarry and Peak on Andrew; and 4. total liabilities of $11,123,586 (2014) and $9,091,784 (2013), which includes unpaid distributions to Marie of $2,984,273 (2014) and $2,997,093 (2013) and non-current loans for Marie of $2,903,990 (2014) and $354,046 (2013) and of over $3 million each year.

Bank guarantees

1. The deceased and Lionel provided numerous guarantees to the NAB after 2002. Other than the guarantee provided on 21 August 2008 in relation to the Peak on Andrew, they were all provided in support of the loan facilities advanced to DGP and Marie was a co-guarantor. The guarantees that the deceased and Lionel gave to NAB during the period 2003 to 2010 are as follows: 11 March 2003 for $456,000; 11 March 2003 for $84,000; 12 July 2004 for $970,000; 23 March 2006 for $970,000; 23 May 2006 for $1,730,000 27 January 2007 for $1,450,000; 7 December 2007 for $2,000,000; 15 February 2008 for $3,464,183; and 21 August 2008, 10 May 2010 and 3 February 2011 for $840,000.
2. Marie (but not the deceased and Lionel) also provided personal guarantees to secure CWS's loan facilities with NAB in 2004 and gave a guarantee to NAB on 10 March 2010 in relation to DGP loan facilities for up to $5,534,723.
3. The NAB records in evidence include credit memoranda in relation to the Pamplin family business.
4. A NAB short form credit memorandum dated 17 July 2008 states: "Valuable clients of nab originally introduced by regular introduction source. Adrian and Lionel Pamplin were primarily involved in earthmoving, although are now more residential developers, investors and consultants. A basic family tree is attached to eBI and a brief outline of the entities and income streams appears below: Adrian Pamplin Key person and contact. Major driving force and decisionmaker. Lionel Pamplin Key person. Operator of earthmoving machinery, superior skills in this trade by external accounts. Marie Pamplin Mother of the above gents and sole director of Mircon Pty Ltd and Denis G Pamplin Pty Ltd. Owner of properties at Kenthurst and Dural."
5. A NAB document, titled "Business Memorandum of Increase", dated 3 May 2010 refers to similar matters to that in the 17 July Memorandum and also refers to Marie as "the group matriarch and controls most of the financing and the administrative facets for the group", the "asset holder and director of the company entities", and the person who earns rental income from the Pitt Town properties and trust distribution from the family trust, and to the deceased and Lionel as being paid contractor fees from the Mircon entity.
6. Another NAB document, "Credit Memorandum Personal", created on or prior to 2010, states: "Marie Dawn Pamplin is the sole director of the company with her two sons Adrian & Lionel doing the work and putting the developments together."

Arrangement Claims

1. In the SFASC, Ann alleges that in about 2002, the deceased and Lionel on the one hand, and Marie on the other, entered into an oral agreement or understanding that continued until the deceased's death or that they held a common assumption until that time. The agreement or understanding and what the common assumption provided are said to be in the same terms, which included that: 1. the existing businesses and assets owned by the deceased or Lionel, including their property developments, would be sold and the proceeds used to buy land or otherwise be invested in the name of Marie or entities which Marie nominally owned and/or controlled; 2. the deceased and Lionel's shares in ALPEC and Mircon would be transferred to Marie and the real property at Russell Island would be transferred to a corporation that Marie would nominally own and control, and those assets would be held on trust for them, for their several benefit; 3. the deceased and Lionel would resign as directors of Mircon and ALPEC, and cause Marie to be appointed as director; 4. Marie would acquire assets in the future (defined to be "the Further Venture Assets and Activities") on behalf of the deceased and Lionel and hold them on trust for them, for their several benefit; 5. Marie would act as a nominee director of corporations (including Mircon and ALPEC) to be run by the deceased and Lionel for their several benefit; 6. Marie would permit the deceased and Lionel to act as shadow or de facto directors of the corporations; 7. Marie would re-convey to the deceased and Lionel the assets and any rights in her name or which she controlled on request by either of them, or upon their death, to their respective estates; and 8. the deceased and Lionel would continue to share equally in the benefits and expenses of the Further Venture Assets and Activities.
2. Ann pleads that the agreement or understanding or common assumption was oral (comprising conversations in about the early 2000s until mid-2002 between the deceased, Lionel and Marie, and occasionally accountants from Lower Russell & Farr and solicitors from Reimer Winter) and/or was partly express and partly implied from the facts and circumstances, referring to, amongst other things, the context of a possible Crime Commission investigation, advice that everything should be in Marie's name and the establishment of trusts.
3. Ann asserts that the parties proceeded on the basis of the agreement or understanding and in reliance on the common assumption to the deceased's detriment, which gave rise to: 1. express trusts, or alternatively, constructive or resulting trusts in relation to 50% of the shares held by Marie in Mircon and ALPEC, and such assets and financial benefits of Mircon and ALPEC as passed to Marie or to her benefit; 2. express trusts, or alternatively, constructive trusts in relation to 50% of the shares held by Marie in DGP, and such assets and financial benefits of DGP as passed to Marie or to her benefit; 3. express trusts, or alternatively constructive trusts, in relation to 50% of the shares held by Marie in Halcrows and NMOS and 50% of the units in the Peak on Andrew Trust and such assets and financial benefits of Halcrows, NMOS and Peak on Andrew Trust as passed to Marie or to her benefit; 4. express trusts or alternatively, constructive or resulting trusts, or a proprietary estoppel in relation to 50% the Pitt Town properties; 5. an express trust or, alternatively, constructive trust in relation to 50% of the assets of the DGP Trust together with the assets and financial benefits derived and an estoppel in relation to the DGP Trust that operates to estop DGP (as trustee) from exercising its discretion to distribute trust income and capital other than equally between the deceased and Lionel; 6. an estoppel in relation to Marie and "other companies" in relation to the venture assets; and 7. a contract, which Ann claims has been breached.

Pleading issue

1. In their final written submissions, the Defendants submit that Ann had departed from her pleaded case that the agreement was oral and partly express and partly implied because, in closing submissions, Ann asked the Court to infer the existence of the agreement or understanding from conduct alone. They submit that Ann is not entitled to depart from her pleaded case, which requires some 'oral agreement' and about which there is no evidence.
2. Despite some pleading inadequacies in the SFASC, I am not persuaded by that submission.
3. First, the elements of, and motivation behind, the entering into of the alleged agreement or understanding are pleaded, as are the facts and circumstances which give rise to them, which includes conduct. In my view, it is not an improper departure from the pleading for Ann to establish, or seek to establish, an agreement or understanding by relying on conduct alone, even if that is less than all of the facts and circumstances Ann pleaded in support of the existence of that agreement, understanding or assumption.
4. Second, in my view, the basis on which Ann's case was run, including all the conduct ultimately relied upon by Ann, was clear to the Defendants, who were able to and did seek to meet them at trial and in submissions.
5. Third, to the extent it is necessary to establish an oral agreement, I consider that it may readily be inferred that there were discussions if an agreement or common assumption arose from the conduct relied on.

Was there an agreement, understanding or common assumption as alleged by Ann?

Submissions

1. Ann contends that the agreement, understanding or common assumption arose in mid-2002, when the deceased and Lionel determined to divest themselves of their assets and business undertakings by selling property that they and Mircon held and establishing everything in Marie's name as a form of asset protection regime, also described as a 'warehousing' arrangement.
2. She submits that the Court would find the agreement was made or the common assumption was held based on the conduct of the parties, the terms of the contemporaneous documents, referring in particular to Mr Lower's 14 May 2002 letter and Mr Marianne's Fact Find in 2013, her own evidence and that of Mr Loccisano about what the deceased told them, and the evidence from Mr Burrows. She submits that the Court may also draw inferences from the evidence adduced (or not adduced) by the Defendants, referring to the practical difficulties she had confronted in obtaining information and the Defendants' failure to adduce evidence on matters critical to the determination of the principal issues in dispute.
3. Ann submits that the case theory propounded by the Defendants is implausible as it fails to acknowledge the desire for asset protection and the brothers' concern about a renewed investigation by the Crime Commission and, to the extent the theory suggests that Marie was substantially funding all developments, it is not supported by Marie's oral evidence, where she was unable to identify the source of her supposed funds or how much she had allegedly advanced.
4. Ann submits that the evidence also supports a finding that the arrangement and common understanding continued after 2002, referring to contemporaneous documents such as the NAB memoranda and the communications with Mr Marianne, Mr Burrows' evidence that, in many respects, he acted upon the instructions of the deceased and Lionel, Marie's inability to say how the various funds, companies and assets in her name were managed post-2002, and the fact that the deceased and Lionel occupied properties and used possessions (such as their BMW cars) that were owned by Marie or companies she controlled as if they were their own.
5. Ann submits that the evidence necessary to establish the arrangement need not have the sort of precision required for a contract, the scope of the joint understanding can change over time and the Court could have regard to conduct occurring both prior to and subsequent to the making of the agreements: Makaritis v Makaritis (No 2) [2022] NSWSC 1690 at [164] (Parker J); Irwin v Pamplin [2021] NSWSC 208 at [37] (Parker J).

Consideration and determination

1. Having considered the parties' submissions and the totality of the evidence, I am satisfied and find that there was an understanding reached between the deceased and Lionel, on the one hand, and Marie on the other and that they held a common assumption from around May 2002, which they proceeded upon in the terms as asserted by Ann which arose expressly and from conduct and conversations between the deceased, Lionel and Marie. This is for two reasons.
2. First, I find the Defendants' evidence and explanation as to why they say the new regime occurred to be implausible having regard to the objective evidence and the issues with Marie and Lionel's evidence, and I reject it.
3. Consistent with my findings, I reject the underlying factual premise of the Defendants' contentions that the deceased and Lionel remained indebted to Marie and she was Mircon's largest unsecured creditor, the deceased had health issues that adversely impacted his capacity to work in any significant way, and the deceased and Lionel were not concerned about the Crime Commission and the risk to their assets.
4. As to the other matters raised by the Defendants as supporting their rationale, the evidence is unclear as to precisely what wealth the deceased and Lionel had obtained by mid-2002. There is evidence that the deceased lost money on shares and had borrowed money from Ann's mother, Margaret Irwin, however, he must have had access to significant funds to buy $180,000 of shares. As to the loan from Margaret, she deposed that she loaned the deceased $70,000 in the early 1990s for three years and a further $65,000 in 2011, each of which was repaid. The deceased and Lionel were also able to lend significant sums of money (of around $40,000-$90,000) to Mr Loccisano prior to mid-2002 and they had properties they could sell (which they did in 2002). Those matters do not support a finding that their financial position was sufficiently dire or uncertain that they needed the security of income from companies legally owned by Marie to pay living expenses, rather than funding themselves as they had before through property developments and the businesses they legally owned and controlled.
5. There was also no certainty of better income or access to funding from the new regime, compared to the pre-May 2002 way of doing things. To the contrary, the objective evidence is that the deceased's taxable income fell after the new regime was put in place in 2002. I consider it likely that the deceased (and Lionel) received cash payments in excess of the income that was declared but I am unable to say by how much and in respect of what years. As to funding, the objective evidence shows that the deceased, Lionel and their companies could and did obtain large loans from prudent financial institutions (such as NAB) and there was nothing to suggest that Marie had some source of money that would enable her to fund developments and invest in property, such as the Pitt Town properties, without borrowing money which, at least until 2010, the brothers had to provide personal guarantees for.

Does the understanding or common assumption give rise to a trust, estoppels or a contract in respect of the venture assets?

1. Ann's primary case, as advanced during closing submissions, is based on an express trust or common intention constructive trust.

Express trust: Mircon, ALPEC, DGP, Halcrows, NMOS, Peak Unit Trust and Pitt St properties

1. Ann submits that it may be inferred that the relevant intention to create a trust existed in circumstances where the deceased was well-versed in placing assets in the name of others whilst manifestly preserving his own interest in them, and where he referred more than once to the nominal or "on paper position". She submits that the Court can draw the inference that the family members also formed the intention to create the trust relationship, noting that under the new regime, the brothers intended to continue to control the existing assets and undertakings, which she says is evident from the fact that they were the named recipients of Mr Lower's and Mr Burrows' 2002 advices and were the parties who initiated the transfer of assets. She submits that it may be inferred that Marie also formed the intention to create a state of affairs which required the imposition of the trust obligation referring to, by way of example, to her acquiring XX5 Pitt Town, rather than DGP as trustee acquiring it and the source of the funds likely being from Mircon's activities (as recorded in the NAB documentation).
2. As to the terms of the trust, Ann submits that the factual position is that the deceased and Lionel made equal contributions. She points to them being equal shareholders in Mircon, SPD and ALPEC, sharing in the benefits of property developments and equal amounts in relation to Mr Loccisano's loans prior to the regime change in 2002, which continued after May 2002, with the sharing of cash from the landfill operation, the providing of guarantees and their respective partners securing the benefit of the same model BMW cars on the same day. She submits that such matters indicate a common intention that the deceased and Lionel would each beneficially own half of the trust assets.
3. She submits that the recognition of a trust involves no difficulty in relation to the assets directly owned by Marie or the defendant corporations associated with her and there is no reason why a trust cannot be declared over, for example, her shares in DGP.
4. The Defendants deny that the requisite common intention to establish an express trust exists.
5. The Defendants take issue with the factual matters relied on by Ann as the foundation for the express trust claims. They submit that there is no evidence that the deceased and Lionel made direct contributions to the acquisition of assets by Marie or the DGP Trust; as the brothers' involvement was in "sponsoring" business and property opportunities; and Marie was the ultimate decision maker about whether assets would be acquired, how they would be purchased and what loans would be advanced and the wealth that was presumably generated was achieved because of Marie's prudent financial management.

Constructive trust: Mircon, ALPEC, DGP, Halcrows, NMOS, Peak on Andrew and the Pitt Town properties

1. In relation to a constructive trust, Ann contends that Marie holds a half interest in the shares in the corporate entities and the assets and financial benefits she derived from them, as well as the Pitt Town properties on a constructive trust. She referred to the principle articulated by Deane J in Muschinski v Dodds (1985) 160 CLR 583 at 613, namely, that a legal owner is not permitted to use their common law rights as owner to abuse or subvert the intention which underlay their acquisition and possession of those rights, although Ann's case proceeded on the basis of a common intention constructive trust.
2. There was no dispute that the applicable legal principles relating to a common intention constructive trust were outlined by Griffiths JA in Koprivnjak v Koprivnjak [2023] NSWCA 2 at [24], approving a summary of the primary judge, Peden J, who in turn adopted a statement of the legal principles by Ward JA (as her Honour then was) in Bassett v Cameron [2021] NSWSC 207, as follows: "(1) equity may intervene to prevent the unconscientious denial by the legal owner of another party's rights where the parties agreed, or it was their common intention, that the claimant should have an interest in the property owned by the other, and the claimant acted to his or her detriment on the basis of that agreement or common intention; (2) it is sufficient that the parties intend that the claimant should have a beneficial interest or some form of proprietary interest (as opposed to there being a common intention that the parties have a specific share of the property); (3) a less stringent test applies to the requirement of detriment once the common intention has been established, citing Green v Green (1989) 17 NSWLR 343 at 357 per Gleeson CJ (with whom Priestley JA agreed); and (4) a common intention constructive trust may arise after the acquisition of the relevant property if the evidence establishes that the relevant common intention was formed at some later time."
3. Ann relies on her submissions in relation to the express trust claim. She emphasises that the deceased and Lionel transferred their shares in Mircon and ALPEC to Marie for no consideration, giving rise to a presumption that she held the property on trust for the transfers, that they did not change this modus operandi after May 2002 and they dealt with each equally, contending that although their precise roles varied, in general they continued to work and operate in the same way as they had before until the deceased's death. She says that the court can assume that the parties continued to operate on the basis of their common arrangement without material change until the deceased's death.

Resulting trust: Mircon and ALPEC

1. Ann's closing submissions do not refer to her resulting trust claim and the Defendants' closing submissions treated them as abandoned. In reply submissions, Ann confirmed that her resulting trust claim was pressed. The claim relates to Mircon and ALPEC only as Ann did not press the claim in relation to the Pitt Town properties during oral closing submissions (T799).
2. Ann relies on the same factual matters as supported its common intention constructive trust claim, save to note that Marie received the shares in Mircon and ALPEC as a volunteer.
3. In my view, the evidence establishes that the deceased (and Lionel) transferred his shares in Mircon and ALPEC to Marie for no value, such as to give rise to a resulting trust over those shares in the deceased's favour. Where a person transfers personal property to a third party for no consideration, it will be presumed that the third party holds the property on (resulting) trust for the transferor: Galati v Deans at [51] (White JA).

Estoppel

1. Ann pleads three types of estoppel claims.
2. First, a proprietary estoppel in respect of the Pitt Town properties, where she claims that Marie is estopped from denying that half of those properties are beneficially owned by her. In light of my findings that the Pitt Town properties are subject to an express trust or a constructive trust in favour of Ann, and as this was presented as a further alternative, I have not dealt with this claim.
3. Second, she pleads an equitable estoppel against DGP, in its capacity as the trustee of the DGP Trust. She claims that in reliance on the common assumption (which is alleged to constitute a representation) and a further representation made at the time DGP became the trustee of the DGP Trust (comprising aspects of the common assumption referred to above), DGP became estopped from exercising its discretion to distribute trust income and capital (pursuant to the DGP Trust Deed) other than to cause the said income and capital to be distributed, ultimately, to the deceased and Lionel evenly, or as they may direct (DGP Trust Estoppel Claim).
4. Third, she pleads an estoppel claim that alleges that by reason of the deceased and Lionel acting on the assumption, Marie came to hold shares in Mircon, ALPEC, DGP, Peak on Andrew, NMOS, Halcrows, X-Dist and OSCO, units in the Peak Unit Trust and became the owner of the Pitt Town Properties, and that she and the companies are estopped from denying that Ann (on behalf of the deceased) holds a half interest in the "Further Venture Assets and Activities" (Venture Assets Estoppel Claim). She also claims that Marie (and the companies) are obliged to convey to Ann a half interest together with such profits and other financial benefits Marie and the companies have derived therefrom.

Legal principles

1. The applicable legal principles were set out in Ann and the Defendants' submissions and were not in dispute.
2. Both parties referred to Gill v Garrett [2020] NSWSC 795 at [415]-[417], where Slattery J summarised the principles as follows: "First it is necessary to examine the legal principles behind this claim. The most recent statement of High Court authority in relation to the doctrine of equitable estoppel is in Sidhu v Van Dyke (2014) 251 CLR 505; 308 ALR 232; [2014] HCA 19 at [1]: 'In Commonwealth v Verwayen [(1990) 170 CLR 394 at 409] Mason CJ described estoppel as "a label which covers a complex array of rules spanning various categories." His Honour went on to say of "titles such as promissory estoppel, proprietary estoppel and estoppel by acquiescence" that they are all "intended to serve the same fundamental purpose [Giumelli v Giumelli (1999) 196 CLR 101 at 112-113 [7]], namely "protection against the detriment which would flow from a party's change of position if the assumption (or expectation) that led to it were deserted". [Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7 at 419 and 404; Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641 at 674-675]' The formulation of these doctrines in Waltons Stores requires four principal elements to be established to make out an equitable estoppel. These elements are sometimes formulated differently into a larger number of less comprehensive requirements. The requirements are explained in Waltons Stores at 428-429 per Brennan J, Austotel Pty Ltd v Franklins Selfserve Pty Ltd (1989) 16 NSWLR 582; [1989] ANZ ConvR 621 at 601 per Priestley JA, and in Giumelli v Giumelli (1999) 196 CLR 101; [1999] HCA 10 as follows: (1) one party ("the first party") creates or encourages another party ("the second party") to adopt a particular assumption or expectation that a particular legal relationship existed or would exist between them; (2) the second party relies upon that assumption or expectation; (3) the second party's reliance is known or expected by the first party; and (4) the second party would suffer detriment if the assumption or expectation was not fulfilled by the first party. If the first party then fails to act to avoid the detriment then equity may intervene."

Consideration and determination

1. Ann contends that, in the event the Court determines that there is no legally enforceable agreement or promise of the kind for which she contends, the expectation that has been created by the facts for which she contends is broadly that Marie would hold for the deceased and Lionel, severally and equally, their various interests in her name or in the name of the various corporations. She says that expectation was not withdrawn at any time by Marie.
2. She submits that Marie took steps to encourage the brothers to rely on the assumption that she would protect their assets generally (in accordance with the recommendations contained in Mr Lower's 14 May letter and the regime in Mr Burrows' 1 July fax) and says that the steps taken by the deceased, Lionel and Marie from May 2002 (broadly those steps outlined at [277], [288] and [289] above), encouraged the brothers to assume she would hold the assets for them, for asset protection reasons, and that she would hold them and future assets for their several but equal benefit. Ann contends that the assumption or expectation that they would share equally following May 2002 continued as they shared equally in business matters, such as in lending money, their business expenses and their financial liabilities under the guarantees.
3. Ann says that Marie knew that the brothers had relied upon the assumption or expectation, again referring, in broad terms to the matters relied on in support of an express and constructive trust and they acted to their detriment, referring to the matters I have outlined already when considering her constructive trust claim.
4. She submits that Marie's denial of the deceased's and Lionel's interests in the properties and the assets held by Marie would clearly be detrimental to them and it would, in the circumstances, be unconscionable for Marie to be permitted to withdraw from the assumption or expectation.
5. The Defendants raised four matters in response to the estoppel claims.
6. First, they contend the estoppel fails because there is no assumption.
7. I do not accept that submission. For the reasons set out above in relation to the existence of the understanding and common intention, I am also satisfied that there was an assumption and the pleaded representations were made (which broadly align with aspects of the understanding/common assumption referred to earlier), including at around the time the DGP was appointed trustee of the DGP Trust.

Claims against DGP as trustee for DGP Trust

1. Ann claims that an express trust arose over half of the DGP Trust assets (and the financial benefits derived therefrom), with DGP as trustee (not Marie) or alternatively, that DGP holds half of the assets (and financial benefits) on constructive trust for the deceased.
2. Ann claims that the express trust or constructive trust arose in the same way as her other trust claims, relying on the agreement and common assumption. She submits there is no reason why DGP as trustee is not also bound by the common intention to create a trust for the benefit of the deceased and Lionel as it was brought into existence as an integral part of the arrangement that was formulated in mid-2002, as part of the asset protection strategy. She submits that the Court can infer that DGP became bound by the principals' agreement and, as a court of equity, can restrain DGP from exercising its discretion qua trustee in a way which would defeat that agreement if it were to distribute its assets inconsistently with the agreed 50-50 split.
3. As already noted, Ann also advances a claim against DGP of equitable estoppel, which I refer to as the DGP Trust Estoppel Claim. Like the restraint that Ann seeks in relation to her express trust claim, Ann claims that DGP became estopped from exercising its discretion to distribute trust income and capital (pursuant to the DGP Trust Deed) other than to cause the said income and capital to be distributed in accordance with their common assumption, in circumstances where the deceased relied on the common assumption (which is said to constitute the representations made) in agreeing to permit assets to be transferred to DGP as trustee of the DGP Trust (such as Russell Island in 2007) and DGP to acquire, retain and deal with assets, to carry on business and earn income therefrom. Ann claims that the deceased acted to his detriment as he would not have permitted DGP as trustee to take such steps other than in the belief that he would be entitled to take a half-share of the assets under its control, that DGP as trustee of the DGP Trust knew of those matters (including that the controllers of DGP were the deceased and Lionel and that DGP was their alter ego) and it would be unconscionable for DGP as trustee to resile from the common assumption/representation.
4. The Defendants deny these claims on a similar bases as their denial of the other claims, namely that, there was no arrangement or common assumption, no intention to create a trust and no detrimental reliance by the deceased. For the reasons set out above, I am not persuaded by those submissions. As I have said, I also do not consider that establishing the DGP Trust as a discretionary trust with the benefit of advice is as significant as it might be in other cases given DGP and the DGP Trust were established as key planks of the new asset protection regime. In my view, it may also be inferred that DGP actually knew of and was bound by the terms of the understanding or common assumption based on the knowledge of its director, Marie, and those who were in fact managing and controlling its operations, namely the deceased and Lionel, being imputed to it.

Contract

1. Ann claims that the agreement or understanding gave rise to a contract which included an implied term that Marie, Mircon, DGP, Halcrows, NMOS, Peak on Andrew, Mircorp and OSCO (and BTQ, Bulla, FI and CWS, who are not parties to these proceedings) would convey to the deceased and Lionel, severally, the "Further Venture Assets and Activities" on the request of the deceased or at the time of his passing, whichever was the first to occur, which Marie and Lionel have breached.
2. The Defendants deny the existence of a contract or that it has been breached.
3. The principles relating to the formation of an oral contract were summarised by Sackar J in King v Adams [2016] NSWSC 1798 at [65]-[69] and are well known. They recognise that a contract may be inferred from the acts and conduct of parties as well as or in the absence of their words, with the question in that class of case being whether the conduct of the parties, viewed in the light of the surrounding circumstances, shows a tacit understanding or agreement. In such a case, the conduct of the parties must be capable of proving all the essential elements of an express contract.
4. In order for a contract to arise, the parties must intend to create legal relations. Whether the parties intended to do so requires an objective assessment of the state of affairs between them: Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95; [2002] HCA 8 at [24].
5. In this case, I do not consider that the terms of the understanding or the common assumption are too uncertain to be a contract or that there is an absence of consideration on the part of Marie (as the Defendants contend). However, I am not persuaded that the parties intended to the arrangement to give rise to legal obligations in the nature of a contract. Considered objectively, the family relationships, the history of the deceased's and Lionel's business dealings which were built on some level of trust, the relatively informal nature of the new regime post-May 2002 and the asset protection purpose, satisfy me that the parties are unlikely to have intended to create legal relations, such as to give rise to a legally binding contract.
6. Accordingly, Ann's claim based on contract fails.

Conveyancing Act

1. The Defendants invoke s 23C and/or s 54A of the Conveyancing Act as a substantive defence to Ann's claims based on an express trust and contract. In their final written submissions, they submitted that Ann's claim asks the Court to ignore the statute, which it would not do.
2. In response to the Defendants reliance on 23C of the Conveyancing Act (which Ann accepts applies), Ann submits that the arrangement pursuant to which the trust was created was partly performed by the deceased and Lionel, such that it does not preclude the trust, referring to the law of part performance in JD Heydon, MJ Leeming and PG Turner, Meagher, Gummow & Lehane's Equity Doctrines & Remedies (5th ed, 2015, LexisNexis) at [20-185].
3. Ann also says that it would be unconscionable for the Defendants to rely upon ss 23C or 54A of the Conveyancing Act to deny or defeat her asserted interest, in the knowledge of the agreement and continuation of the assumption and the deceased's reliance on the assumption.
4. The doctrine of part performance has generally been applied in the context of the enforcement of contracts: Heydon, Leeming and Turner, Meagher, Gummow & Lehane's Equity Doctrines & Remedies at [20-180].
5. The question of whether equity applies part performance to the creation of an oral express trust was considered by Robb J in Meshumar v Otmy (2018) 97 NSWLR 615; [2018] NSWSC 125. His Honour concluded that part performance could apply in such circumstances, notwithstanding the absence of any contract to be performed, referring to the comments of Bryson JA in Khoury v Khouri (2006) 66 NSWLR 241; [2006] NSWCA 184 at [90]. His Honour stated at [427] and [443] as follows: "427. The immediate point of these observations is that, as the doctrine of part performance in its application to contracts that are unenforceable for want of writing requires only that the acts be permitted by the contract, there is scope when applying the doctrine to assurances that have failed to find that the assurance has been part performed by the doing of acts that are permitted by the intended, but failed, assurance. 428. There may be difficulty, in the case of particular failed assurances, to identify acts capable of being part performance. If the assurance involved a declaration of trust over land for a payment by the beneficiary, there may be cases where the only act of performance by the beneficiary is the payment. That problem does not appear to arise in the present case, because even though Mr Meshumar did not plead a contract, he did in effect plead that the trust was to be on agreed terms, which in practical terms could work in an equivalent way to a contract by Mr Sadra to sell a one-third interest in Unit 11 to Mr Meshumar on terms that he would be entitled to receive one-third of the net rent pending transfer of his share of the property to him, or the sale of the property and the payment of his share of the net price."…. … 443. Applying these principles to the present case, and assuming that the doctrine of part performance can justify the enforcement of an oral declaration of trust of land made unenforceable by s 23C of the Conveyancing Act, I have concluded that the acts relied upon by Mr Meshumar are not valid acts of part performance"

Limitation Act

1. The Defendants also plead that the Arrangement Claims are statute barred.
2. They submit that any cause of action to recover land commenced in 2002, the limitation period expired in 2014 (referring to the Limitation Act, ss 26, 27 and 65), and as the proceedings were commenced in 2018, Ann's claims against land are statute-barred. Section 27 of the Limitation Act provides that an action on a cause of action to recover land is not maintainable if brought after the expiration of a limitation period of 12 years running from the date on which the cause of action first accrues to the plaintiff or to a person through whom the plaintiff claims.
3. Section 65 of the Limitation Act provides that rights to recover land, or to enforce an equitable estate or interest in land after the expiration of the limitation period, are extinguished.
4. Ann submits that the Limitation Act does not apply as it does not extend to any purely equitable claim not the subject of the Limitation Act and, in any event, the Defendants' submissions do not acknowledge the operation of s 38 of the Limitation Act which operates to postpone the limitation period provided the land is not in adverse possession and there is no suggestion on the evidence that this was the case.
5. I accept Ann's submission that the limitation defence raised by the Defendants does not apply in this case. This is for three reasons.
6. First, the limitation defence only applies to claims to recover land or an equitable interest in land and, as such, does not apply to Ann's express trust claim in respect of, for example, the shares in DGP or Mircon.
7. Second, the limitation defence does not preclude a claim founded on an estoppel, as a purely equitable claim: Bryant v Bryant (2014) 17 BPR 33,511; [2014] NSWSC 374 at [27].
8. Third, the pleaded defences assume that time runs from the creation of the trust in 2002. As Ann submits, this is not supported by authority or s 38 of the Limitation Act.
9. The cause of action accrues once the defendant acts inconsistently with the trust, such that it would be unconscionable for one party to retain the other's contributions: Payne v Rowe (2012) 16 BPR 30,869; [2012] NSWSC 685 at [99]. Further, and in relation to the cause of action under s 38 of the Limitation Act, this only begins from when the plaintiff seeking to recover the land first discovers or may with reasonable diligence have discovered the facts giving rise to the cause of action: Scott (Trustee), in the matter of Stolyar (Bankrupt) v Stolyar [2022] FCA 691 at [575].

DGP Trust Distributions Claim

1. Since it was established, DGP, as trustee of the DGP Trust, made determinations that distributions of income be made to beneficiaries, which included Marie, Ann, Chantelle Pamplin (Lionel's daughter) and Mircon. The distributions are referred to in resolutions recorded in the DGP Minutes of Meetings and in the financial statements of the DGP Trust.
2. It is common ground that between 2006 and 2012, DGP determined that distributions of income be made to Ann totalling $451,000.00 (Trust Distributions), as follows: $20,000 in the financial year ending 30 June 2006 $60,000 declared 26 June 2007; $65,000 declared 26 June 2008; $66,000 in the financial year ending 30 June 2009 $80,000 declared 29 June 2010; $80,000 declared 29 June 2011; and $80,000 declared 29 June 2012.
3. Ann says that despite the determinations, no part of the Trust Distributions have been paid to her or applied for her maintenance, education, benefit or advancement of life.
4. In the SFASC, Ann advances a claim in her as a right (and not as administrator of the deceased's estate) for payment of those monies from DGP. She says that upon making the determinations, each of the Trust Distribution amounts immediately and absolutely vested to her benefit and, in breach of trust, DGP failed or omitted to pay any part of them despite demand being made on 13 April 2018. She seeks an order that the amount of $451,000 plus interest to be paid to her or alternatively, relief on the basis of monies had and received.
5. Although Marie's defence denies that Ann was ever a beneficiary within the meaning of "General Beneficiary" (as that term is defined in the DGP Trust Deed), in the Defendants' final written submissions, they did not dispute that Ann was a "General Beneficiary" for the purposes of this proceedings and her claim.
6. However, the Defendants deny that Ann is entitled to payment of the Trust Distributions and say that the claim should be dismissed for three reasons.
7. First, the Defendants say that the Trust Distributions were in fact paid.
8. Second, they say that: the Trust Distributions were made to Ann with the knowledge of the deceased, without protest; the deceased thereby encouraged an assumption on the part of DGP that the Trust was valid and effective; DGP acted on the basis of that assumption to its detriment by continuing to make distributions to Ann and others and by conducting the business on the basis that it was entitled to do so in accordance with the terms of the DGP Trust Deed.

Consideration and determination

1. The factual issue raised by this claim is whether the Trust Distributions were, in fact, paid to Ann, to someone else or not at all.
2. Ann's position on this is straightforward. She says the Court would not be satisfied that the Trust Distributions have been paid to her, noting that DGP contends they were paid in cash and the lack of records from DGP. She also says that the Court would reject Marie's defences.
3. The Defendants ask the Court to find that the Trust Distributions were, in fact, paid to Ann based on the following matters which are, I accept, established on the evidence: 1. Ann's tax returns for the financial years ended 30 June 2006 to 30 June 2012 record that she received income which equates with the Trust Distributions; 2. the deceased gave money to Ann for living expenses and she relied on him financially; and 3. from 2006, Ann received cash payments from the deceased from time to time that were deposited into her bank account, (noting that it was possible that not all amounts giving to Ann by the deceased were all deposited into the bank).
4. The Trust Distributions made to Ann are referred to in Ann's tax returns for the financial years ending 30 June 2006 to 30 June 2012. It also appears that tax was paid on the Trust Distributions.
5. Ann gave evidence that it was not until the proceedings before Lindsay J that she had seen all other tax returns and became aware they contained statements about income she had received. She says that the only tax return she was aware of (but had not seen) was in relation to the 2012 financial year, when the deceased handed her a refund cheque drawn by the ATO made payable to her (which had a post-it note on it setting out the banking details of Mircon) and told her that she was drawing "wages from the company". Ann says that until then, she was not aware that she was being paid on paper by one of the Pamplin companies and also says that did not retain the ATO funds as she banked the cheque into Mircon's account as directed by the deceased.
6. Ann's tax returns for the financial years 2006 to 2011 were prepared by Mr Burrows and include Marie's address on them. The tax return for the financial year 2012 shows Ann's address, with Mr Aboud's address for service. None of them are signed by Ann.
7. Mr Burrows says that he prepared Ann's tax returns following meetings with the deceased, Lionel and Marie before the end of each financial year and he met her on one or two occasions prior to 2012. Ann's evidence, which I accept, is that she has never met Mr Aboud. I also accept her evidence that she did not provide instructions in relation to the tax returns and did not know that they recorded the amounts of Trust Distribution made to her or that she was the intended recipient of the Trust Distributions during those years.

Conclusion: costs and orders

1. In conclusion, I have found that Ann has established that there was an understanding or common assumption between the deceased and Lionel on the one hand and Marie on the other in the terms alleged by Ann and that from May 2002 until the deceased's death, in furtherance of the understanding and on the faith of the common assumption, they engaged in various transactions, including but not limited to, the deceased and Lionel transferring assets to Marie for no value, establishing DGP and the DGP Trust and acquiring new assts and making investments into and with third parties. I have also found that the arrangement and common understanding was motivated by the need to create an asset protection regime which involved Marie taking ownership and control of transferred and new assets on paper only, with the shared intention that the deceased and Lionel retain a beneficial interest in the assets transferred and subsequently acquired on an equal basis.
2. I have concluded that Ann succeeds on her express trust claims in relation to the shares in Mircon and ALPEC that were transferred to Marie (and the financial benefits derived from them), the shares and units in DGP, Halcrows, NMOS, OSCO, Peak on Andrew, X-Dist, Corell and the Peak Unit Trust (together with the financial benefits Marie derived from them), as well as to the Pitt Town properties that Marie acquired in her name and, in the alternative, her constructive trust and resulting trust claims, noting that the resulting trust claims were only pressed in relation to Mircon and ALPEC.
3. I have also found that Ann succeeds on her claim in relation to DGP in its capacity as the trustee of the DGP Trust and consider it is appropriate to grant relief in this case of the nature sought by Ann, the effect of which will not be to compel DGP to exercise its power in a particular way in the future but to restrain it from doing so in respect of 50% of its assets.
4. I find that Ann fails on her contract claim and aspects of her further estoppel claim in respect of the "Further Venture Assets".
5. I have also found that Ann succeeds on her claim to recover the Trust Distributions made to her during the financial years ending 30 June 2006 to 30 June 2012 in the amount of $451,000.
6. Based on my findings, I consider that Ann is entitled to declaratory relief in relation to the express trust that I have found exist (in the terms of Order 1 of the SFASC), an injunction restraining DGP from dealing with the income and capital of the DGP Trust other than in a manner that would cause less than 50% of the income and capital to be distributed to the estate of the deceased and an order that DGP pay to Ann $451,000 plus interest.

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