Jainti Pty Ltd v Fraser Panorama Pty Ltd

Judgment

1. HER HONOUR: This proceeding involves a dispute as to the entitlement to the sum of $161,160 currently held in a solicitor's controlled moneys account, those moneys being part of the final distributions made by Fraser Panorama Pty Ltd (Fraser Panorama) (which was formerly the first defendant in the proceeding), in its capacity as trustee of the Fraser Panorama Trust (to which I will refer as the Fraser Unit Trust), in respect of an approximately $20 million property development in Hervey Bay, Queensland (the Fraser Panorama development).
2. The plaintiff, Jainti Pty Limited (Jainti), which has been in liquidation since 2011, contends that it is entitled to those moneys, in its capacity as trustee of a discretionary trust (the Zambito Trust); its contention being that all distributions out of the Fraser Unit Trust in respect of 34 units in the Fraser Unit Trust (the 34 Units) were payable to it as trustee of the Zambito Trust.
3. The claim as against the first defendant (Fraser Panorama) for, among other things, breach of trust in relation to the payment of distributions to persons or entities other than Jainti, was settled on 27 June 2019 (see orders made by Robb J on that date), subject to approval pursuant to ss 477(2A)-(2B) of the Corporations Act 2001 (Cth) (Corporations Act), which approval was granted on 4 November 2019 (see orders made by Rees J on that date). The liquidator of Jainti, Mr Reidy, has deposed that Jainti settled the matter with Fraser Panorama, under the terms of agreed orders, in respect of Fraser Unit Trust distributions for 4/5ths of the entitlements of the holder or holders of the 34 Units, which thus leaves only the claim by Jainti in respect of the 1/5th entitlement paid to the account of the second defendant (Mr Anthony Zamattia) (those being the moneys that have been placed in a controlled moneys account pending the outcome of this dispute).
4. I will refer to the second defendant, without intending any disrespect, by his first name, as I will also do with the other members of his family (except where necessary to distinguish between family members with the same first name).
5. By its amended statement of claim filed 26 July 2019, Jainti now seeks declaratory relief (declarations that Anthony holds the sum of $161,160 on constructive trust for it - prayer 4; and that Jainti has a proprietary interest in and/or an equitable charge over the whole of the amounts frozen by orders of this Court on 7 and 12 February 2019 - prayer 5) and an order that Anthony either account to it or pay equitable compensation (prayer 6), with consequential claims for damages, interest and costs. (Jainti has confirmed that, following the settlement with Fraser Panorama, it does not press for the relief claimed at prayers 2-3 of the amended statement of claim - see at T 322.39-T 323.9.) Prayer 1 of the amended statement of claim, which is still pressed, seeks a declaration as to the holding of the 34 Units (as to which relief, some criticism is made by Anthony to which I refer in due course).
6. Although issue was taken in Anthony's outline of opening submissions as to inconsistency between the relief sought in the amended statement of claim and that sought in the summons pursuant to which the proceeding was commenced, as far as I can see nothing here turns on this. I proceed on the basis that the substantive relief now sought is that claimed in prayers 1, 4-6 of the prayers for relief in the amended statement of claim.
7. In substance, what Jainti contends is that the sum held in the controlled moneys account is part of the distributions to which it was entitled in its capacity as trustee of the Zambito Trust; and that Anthony received that distribution knowing that it was made by Fraser Panorama (of which company he was a director) in breach of trust (i.e., a knowing receipt first limb Barnes v Addy (1874) LR 9 Ch App 244). To the extent that an issue was raised in oral submissions as to what relief might be granted if the knowing receipt claim were ultimately found not to be made good but it were nevertheless to be held that Jainti was the entity which was entitled to the sums that had been paid to Anthony - see the debate at T 321-T 323, I will address that in due course, if and when it arises. Suffice it to note that, in that event, Anthony ultimately accepted that Jainti would be entitled to an order for the money held in the controlled moneys account (see T 323).
8. What Anthony, on the other hand, contends is that he was entitled to be paid, and to receive, the distribution out of the Fraser Unit Trust in respect of 1/5th of the 34 Units, as the registered unit holder in the Fraser Unit Trust of that 1/5th share of the 34 Units or, alternatively, as the beneficial owner of that 1/5th share in the 34 Units (see [35] of the amended defence).
9. Relevantly, Anthony contends that the 34 Units in the Fraser Unit Trust were never held by Jainti as trustee for the Zambito Trust but, instead, were held from 12 May 2006 by Jainti as trustee of a separate trust (to which I will refer as the Family Trust) for five individual beneficiaries: Anthony (i.e., himself); his brother, David Zamattia; their father, Bruno Zamattia; and Anthony and David's uncles, Salvatore (known as Sam) Morabito and Sam's brother, Frank Morabito. There is no suggestion that there were five separate trusts created, one each in favour of each individual beneficiary - rather, it is said by Anthony that what was intended was that there be a single trust held for the five beneficiaries each as to a 20% share.
10. Pausing here, as to the family connections, Sam and Frank are Bruno's brothers-in-law (Bruno's wife, Carol, being their sister). Another Zamattia family member who features in the proceeding (but is not suggested to be a beneficiary of the alleged Family Trust) is Sam Zamattia, David and Anthony's brother, who gave evidence of a particular conversation with Anthony relating to the execution of documents by him (to which I will refer in due course). (For clarity, when I refer to Sam in these reasons, I am referring to Sam Morabito; where I refer to Sam Zamattia, I will use his surname in order to distinguish between the two.)
11. Anthony further contends that the Family Trust was terminated, insofar as it related to Anthony, David and Bruno only (i.e., the Zamattia family beneficiaries) in October 2008 but in any event by no later than in or around September 2016 (relying on Saunders v Vautier (1841) 41 ER 482 (Saunders v Vautier) and, for the later date, on a direction given by a document headed "Notification of Termination of Trust" bearing the date of 9 September 2016); with the effect, Anthony says, that Jainti does not have any right to the distributions of the Fraser Unit Trust insofar as those distributions relate to the three members of the Zamattia family.
12. The September 2016 "Notification of Termination of Trust" document (hereafter referred to as the Notice of Termination of Trust) bears the purported signatures of each of Anthony, David and Bruno. However, David denies having executed that document (see his first affidavit sworn 17 April 2019 at [10]); and he denies any knowledge of the Family Trust or that Jainti ever held the units in the Fraser Unit Trust in any capacity other than as trustee for the Zambito Trust. For Jainti, it is said that David's position is contrary to his own financial interest and is confirmed by evidence from Frank and Sam, as well as objective documentation (including that which was supplied by Anthony to Jainti's liquidator since his appointment, and by way of financial statements over many years). (For Anthony, criticism is made as to the submission that reliance can be placed on David's evidence being contrary to David's own financial interest, but I will come to that criticism in due course.)
13. As to the purported execution of the Notice of Termination of Trust by Bruno, the position is complicated by the fact that his affidavit in the proceeding was ultimately withdrawn by the liquidator (in the circumstances to which I refer below) and hence there was no direct evidence from Bruno in relation to the execution or otherwise of this document; and the liquidator accepts that a Jones v Dunkel inference (see Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298 (Jones v Dunkel)) is available in this regard (see T 334.12-20).
14. Ultimately, both parties accepted that the outcome of the present dispute turns largely, if not wholly, on what findings are made as to the 12 May 2006 meeting of the directors of Fraser Panorama (Anthony and John Derek Taylor (to whom I will refer as Derek Taylor)) in relation to the issue of units in the Fraser Unit Trust.
15. For his part, the liquidator accepts that, if there was a valid Family Trust and if it was validly terminated, then Jainti's claim fails. Conversely, the liquidator maintains that, if (as he contends is the case) there was no valid Family Trust (such that Jainti only ever held units in the Fraser Unit Trust as trustee for the Zambito Trust), or if there was a Family Trust but there was no valid termination of that trust, then Jainti's claim should succeed.
16. Anthony, for his part, says that if the 34 Units were held as contemplated by a unit holders' agreement entered into in 2006 (Unit Holders Agreement) (as to which, see below), then Jainti's claim must fail (and, conversely, that if he, Anthony, fails in establishing that the position is as was provided for in the Unit Holders Agreement, then he must fail) (see T 320.40-43). Anthony also maintains that the liquidator must not only establish that the 34 Units were held by Jainti as trustee for the Zambito Trust but also that the documents relied upon by Anthony were concocted (since it is said there is no other explanation for the competing versions of particular documents and the Unit Holders Agreement) and that such a serious allegation cannot be established.

Jainti

1. Jainti was incorporated on 15 June 1993. At all relevant times, each of Frank, Sam, Bruno, David and Anthony was a director of Jainti; and the company secretary was Frank. It appears that for some time the Zamattia and Morabito family members were together involved in property development.
2. Following its incorporation, Jainti invested in two property developments: one, in respect of a property in Burradoo, New South Wales (not relevant for the purposes of this proceeding) and the other, in respect of the Fraser Panorama development, which comprised some 163 lots of real property in Hervey Bay, Queensland. Anthony's evidence (corroborated by Derek Taylor) is that he sourced the Fraser Panorama development with Derek Taylor in or about 2005 and that he, Anthony, was the project manager of the development and received project management fees over a period of 14 years (see Anthony's affidavit sworn 20 September 2019 at [3.1]-[3.12]; affidavit of Derek Taylor sworn 7 October 2019 at [3.1]-[3.2]).

Zambito Trust

1. The Zambito Trust was established by a Trust Deed dated 21 December 2004, which was executed by Mr Phillip John Ashton as settlor, and Jainti, as trustee of the Zambito Trust.
2. Mr Ashton is an accountant, who himself was an investor in the Fraser Panorama development (through an investment vehicle - Ashmoor Pty Ltd), and who prepared the financial statements of the Fraser Unit Trust and Zambito Trust for the relevant years. The Trust Deed of the Zambito Trust was varied by a Deed of Variation executed by Jainti on 1 July 2011. For reasons that I will explore in due course, Mr Ashton was (as acknowledged by Counsel in the course of submissions) what might be referred to as the "missing pachyderm in the room", having not been called by either party (see T 287.45-50).
3. The liquidator has deposed that, so far as he is aware, Jainti did not undertake any business or activity other than in its capacity as trustee of the Zambito Trust (see Mr Reidy's affidavit sworn 7 February 2019 at [10]).
4. The beneficiaries of the Zambito Trust at all relevant times included: Anthony, David, Bruno, Sam and Frank, and parties related to those individuals. I have referred above to the family connection between the Zamattia and Morabito families. The liquidator (in the context of Anthony's submissions as to the Zamattia/Morabito families wishing in 2008 to separate their respective family interests) notes that the Zambito Trust remains in existence and that no steps have been taken to dissolve it.

Fraser Panorama - incorporation 14 February 2006

1. On 14 February 2006, Fraser Panorama was incorporated, with Anthony and Derek Taylor appointed as the directors of the company and Derek Taylor as its company secretary.

Fraser Unit Trust established

1. On the same day, the Fraser Unit Trust was established by Trust Deed dated 14 February 2006, executed by SMH Guardian Services Pty Ltd, as settlor, and Fraser Panorama, as trustee.
2. The Trust Deed establishing the Fraser Unit Trust provided that the trust fund was to be divided into the number and classes of units set out in the Schedule thereto and was to be held by the initial unit holders as set out in the Schedule. (While there was provision for differential classes of units, there was no reference in the Trust Deed to "A" Class or "B" Class units as such.)
3. The initial unit holders specified in the Trust Deed were Jainti as trustee for the "Zamabito [sic] Trust" (as to one ordinary unit) and an entity associated with Derek Taylor named Leading Edge (Pacific) Pty Ltd (Leading Edge) as trustee for the Raidell Trust (as to the second of the two ordinary units). It does not appear to be disputed that the reference in the Schedule to the "Zamabito Trust" is a typographical error and that it must have been intended to be a reference to the "Zambito Trust". Anthony and Derek Taylor executed the Trust Deed in their capacities as directors of Fraser Panorama.
4. The Fraser Unit Trust Deed conferred rights on unit holders in relation to the participation in income distributions (see as pleaded at [8] of the amended statement of claim). Those rights were not preferential as between unit holders.

16 February 2006 meeting of Fraser Panorama

1. There is in evidence a copy of minutes of a meeting held by directors of Fraser Panorama on 16 February 2006 (signed by Anthony as chair) in which it is recorded that a trust deed for the Fraser Unit Trust was tabled and it was resolved that the company accept appointment of that unit trust with Jainti "atf The Zambito Trust" and Tuta Products Pty Ltd (Tuta Products) each being issued with one unit (see Exhibit A at 258).
2. Pausing here, as noted above, the Trust Deed in fact named Leading Edge as the holder of the second ordinary unit. Hence, it would seem that there was an error in the minutes in the reference to Tuta Products. However, as I understand it, both Leading Edge and Tuta Products are entities associated with Derek Taylor (and Derek Taylor gave evidence to which I refer below which suggests that he may have seen Tuta Products as a substitute unit holder or else treated the two entities interchangeably - referring to his interest in the Fraser Unit Trust as holder of 20 units; i.e., an amalgamation of the initial unit issued to Leading Edge and the additional units issued to Tuta Products). (He also had an interest in some "A Class Units" in the name of Pepco, to which I refer below.)
3. The 16 February 2006 minutes of meeting recorded that a contract was tabled for the purchase of vacant land at "Harvey Bay" [sic], Queensland, for a price of $7.75 million and it was resolved to execute the contract "on the basis of obtaining bank finance and from loans to be raised from unitholders"; and that the land was to be developed as residential building blocks in accordance with already existing approved council plans.
4. Therefore, from the inception of the Fraser Unit Trust, it is clear from the Trust Deed that there were created two ordinary units in the trust (held, as noted above, one each by Jainti and Leading Edge; and each held by those entities in a trustee capacity - the dispute here being as to the beneficiary or beneficiaries for whom Jainti held these, and other subsequently issued, units in the trust).

Preparation of documents to record issue of additional units in Fraser Unit Trust

1. At this point it is relevant to put what follows in context and to note in general terms the way in which the Fraser Panorama development was to be structured or undertaken, namely that, after the Hervey Bay property was "sourced" (i.e., presumably, identified as a suitable development project site and acquired), it was proposed that funds for working capital to develop the land would be procured by way of loans from investors in the project to whom units would be issued in the Fraser Unit Trust. Derek Taylor's evidence was that he and Anthony came to an arrangement where Anthony would find the investors "to come in and fund the project" and that the difference in the classes of units that were ultimately issued was that he and Anthony would be allocated some "shares" that were "basically carried free" (because they had started the project) and that the balance of the investors would acquire a different class of "shares" (i.e., units in the trust) and those investors would provide loans to the trustee commensurate with their unit holdings (see T 129). Jainti, as trustee of the Zambito Trust, for example, is recorded in the accounts as having contributed some $700,000 by way of loan for the purposes of the development.
2. Further, it seems apparent from Derek Taylor's evidence (to which I will refer in due course) that there was what I might charitably describe as some informality in how the investors' interests in the project would be recorded (it being his evidence that there were some changes made to reflect the desire of one or more of the investors to bring in tax losses or the like). Therein, perhaps, lies an explanation for the fact that there are in evidence different versions of relevant documents recording the tabling of applications for, and issue of, units in the Fraser Unit Trust. However, whatever the cause of the competing versions of various of the documents, what that has ultimately led to is the present dispute as to the entity or persons for whom the plaintiff (Jainti) holds the 34 Units in the Fraser Unit Trust as trustee.
3. Anthony's evidence is that in the two months prior to the meeting ultimately held on 12 May 2006 (to which I refer below at which the issue of the additional units was approved), he prepared a bundle of documents for each unit holder including a copy of: the Fraser Panorama certificate of incorporation; the Fraser Unit Trust Deed; the Unit Holders Agreement, documents relating to project feasibility, forecast cash flow, funding proposals and other related documents; unit holder certificates relevant for each unit holder; survey and photos of the site; marketing proposals; and, the Fraser Unit Trust meeting minutes (see his affidavit sworn 30 October 2020 at [3.4]). His evidence is that these were prepared for distribution or collection by other family members at the "communal office". (Reference was made in cross-examination of various of the family members to documents being left on a snooker table; and it appears that the "communal office" was in fact the basement or pool room of Bruno and Carol's house.) Those documents (that Anthony maintains were only draft documents but some of which he accepts bore his electronic signature - apparently in anticipation of the 12 May 2006 meeting) referred to the relevant units as being held by Jainti as trustee for the Zambito Trust.

Alleged 11 May 2006 conversation

1. Anthony deposes that, on 11 May 2006 (i.e., the evening before the 12 May 2006 meeting), he had a conversation with Sam; and that Sam said that he did not want "this" project (the Fraser Panorama development) affecting the previous development (at Burradoo) or the Zambito Trust because it was too "risky".
2. Sam denies that at this stage he thought that the Fraser Panorama project was "too risky" (I refer to this evidence in due course). His affidavit evidence implicitly puts into dispute the suggestion by Anthony that Sam did not want the units held in the name of the Zambito Trust. In his affidavit sworn 23 May 2019, Sam deposed at [35] (which paragraph was read as to his understanding at the time) that he understood that the Zambito Trust would allow him and Frank to split income they received and that if that had not been the case, he would have wanted to raise this with Mr Ashton. For Anthony, it is said that Frank's subjective belief is irrelevant - see T 278. I accept that it is not relevant to the construction of the documents in question. Nevertheless, it does put in issue whether there was any conversation on or around 11 May 2006 (as Anthony has deposed there was) between Anthony and Sam of the kind which Anthony says led to the changes to the Zambito Version of the documents. I refer in due course to the credit submissions made for Anthony in relation to Sam's evidence in this regard.
3. Anthony says that the draft documents (resolution, certificates, Unit Holders Agreement and register) were changed to delete the reference to the Zambito Trust and to record that the 34 Units were to be held by Jainti "atf" the five individual family members (Anthony, David, Bruno, Sam and Frank), which Anthony says was a bare trust (see his affidavit sworn 20 September 2019 at [3.9]) and that in due course this trust was terminated by certain of the beneficiaries (see below).

12 May 2006 meeting - Fraser Panorama

1. What followed next was that, at a meeting on or about 12 May 2006, the directors of Fraser Panorama (Anthony and Derek Taylor) resolved that the company, in its capacity as trustee of the Fraser Unit Trust, accept applications for the issue of further units in the trust (and unit certificates were issued, bearing the date of 12 May 2006, in respect of those additional units and for the initial two units that had been created at the inception of the trust).
2. There are two versions of the minutes for this meeting (and two versions of the unit certificates purportedly issued on the date of that meeting).
3. On the version of the minutes that Jainti submits is the correct version (Exhibit A at 257), which is part of the bundle of documents to which I refer as the Zambito Version of the documents, it is recorded that the directors tabled applications by each of Jainti "atf The Zambito Trust" and by Tuta Products - in each case for 19 "B Class Units" (i.e., totalling 38 units) and by various entities for "A Class Units" (including 14 units in the name of Jainti "atf the Zambito Trust"), totalling 60 units. Thus, consistently with the fact that there were already 2 ordinary units that had been created at the inception of the trust, on the resolution as recorded in the Zambito Version of the minutes (relied upon by Jainti), there were then a total of 40 "B Class Units" (i.e., 19 new units plus the one original unit for each of Jainti "atf the Zambito trust" on the one hand and a combination of Leading Pacific/Tuta Products on the other). The liquidator places weight on the numerical consistency of this version of the documents (and the fact that the minutes record the tabling of applications for units not the substitution or cancellation of the two initial units).
4. On this version (the Zambito Version) of the minutes, 12 of the 60 "A Class Units" were recorded as being the subject of an application by T&L Walton Pty Ltd (atf Walton Family Trust).
5. This version of the minutes bears no handwritten annotations (and, on the evidence before me, is the only version that was provided to the liquidator prior to September 2016 (see T 254) - though I refer to Anthony's submissions on this in due course). The liquidator emphasises that this version is consistent with the financial statements prepared by Mr Ashton in relation to the respective trusts - the Fraser Unit Trust and the Zambito Trust.

Unit Certificates dated 12 May 2006

1. Corresponding to the two versions of the minutes of the 12 May 2006 meeting, there are two competing versions of the unit certificates purportedly issued pursuant to the resolutions at that meeting (each signed by the directors of Fraser Panorama - Anthony and Derek Taylor).
2. Relevantly, on the version relied upon by the liquidator (part of the Zambito Version of documents), the description reads: "Jainti Pty Ltd (atf The Zambito Trust)" on the unit certificates for 14 "A Class Units" (Certificate Number 5), 19 "B Class Units" (Certificate Number 3) and one "B Class Unit" (Certificate Number 1). The competing version of the Unit Certificates (also dated 12 May 2006 and similarly numbered) (part of the Individual Beneficiaries Version of the documents) relevantly records Jainti as the holder of the units as trustee for the five individuals.

Unit Holders Register

1. Again there are competing versions of the Unit Holders Register which reflect the same differences (as between the Zambito Version and the Individual Beneficiaries Version of the documents) as to the manner in which the holding of Jainti's 34 Units was recorded in the register of the Fraser Unit Trust.
2. There is a copy of the Unit Holders Register that is consistent with the version of the unit applications and certificates contended for by Jainti (part of the Zambito Version of documents), which includes T&L Walton as the holder of 12 units. Anthony, however, relies on a competing version of the Unit Holders Register (part of the Individual Beneficiaries Version of documents).

12 May 2006 Unit Holders Agreement

1. I have referred above to a Unit Holders Agreement. Anthony places no little weight on this document, it being a Unit Holders Agreement dated 12 May 2006 between Fraser Panorama, Jainti "as trustee of the Zamabito Trust" [sic]; and Leading Edge as trustee of the Raidell Trust (Jainti and Leading Edge there being identified as the unit holders of the Fraser Unit Trust). It appears to bear a computer generated footer with the date "29.3.06". It also bears a number of handwritten annotations (against which there are initials of at least one of the signatories). It is perhaps not insignificant that it has the same typographical error in respect of Zambito (Zamabito) as does the Fraser Unit Trust Deed (which might suggest it was prepared around the same time). It is consistent in a number of respects with the Zambito Version of the documents but it bears handwritten amendments consistent with the Individual Beneficiaries Version of the documents.
2. The Unit Holders Agreement recites: at Recital A, that the Fraser Unit Trust was created by Deed dated (incorrectly and incompletely) "17th 2006"; at Recital B, that it is the intention of the unit holders (i.e., Jainti and Leading Edge in their (there acknowledged) trustee capacities) that Fraser Panorama "is acquiring" the Hervey Bay property for the purpose of subdivision into residential lots; at Recital C, that the Trust intends engaging Anthony and Derek Taylor to carry out the project management of the development; and, at Recital D, that the parties wished to record certain agreements and understandings that had been reached between them on the terms that were set out therein.
3. Relevantly, at cl 6, the parties, among other things: acknowledged, at (a), that there were 100 units to be issued in the Trust each having a $1 par value; provided, at (b), that 20 units in the Trust "shall be issued to Jainti and 20 units to Leading Edge (the "B Class Units"), with a handwritten annotation after "Jainti" to add the initials "ATF AZ, DZ, BZ, SM, FM" followed by the figure 20% and to cross out "Leading Edge" and add in handwriting "TUTA PRODUCT"; provided, at (c), that the balance of 60 Units be issued to the unit holders in the numbers there set out (see below); and, provided at (d), that each holder of an "A Class Unit" agreed to advance to the Trust the sum of $50,000 for each unit held by such unit holder on the terms there stated.

Allocation of units

1. Anthony's evidence is that his family members acquired 14 "A Class Units" upon a consideration of $700,000, initially in a trust of which Jainti was the trustee, and that he gave them a 1/5th share each in 20 "B Class Units" so that all five acquired a 1/5th share in the 34 Units (see his affidavit sworn 20 September 2019 at [3.1]).
2. Jainti, however, contends that the unit holding of the 34 Units was held by it as trustee for the Zambito Trust, as recorded in the Zambito Version of the documents (that Anthony acknowledges he prepared albeit, he says, in draft before the 12 May 2006 meeting) and as recorded in draft accounts prepared for Jainti in 2010, to which I refer below.
3. Derek Taylor's account of how the units were allocated in broad terms was that (see T 128.45-T 123.20): Q. That's what I'd like to ask you, were there 98 units issued in addition to the two or were there a hundred new units issued, do you remember? A. No, I don't remember. I mean, I would've thought that there would've been 98 more issued, but actually no, probably a hundred because they would've substituted for those, I would've thought. Because what happened was Anthony and I, having started the thing off, we were the directors, shareholders and we had half the project each basically at its conception which you can see is represented by that. And, and then we issued us, we came to this arrangement where Anthony would find the, the investors to come in and fund the project and we allocated ourselves 20 shares each into our various different entities which were basically carried free because they, we started the project. And the balance of the shares of which there, I mean presumably would've been 60, or whether it's 58 or 60, I'm not sure because I don't know what happened with those initial two units. But then there was therefore 60 shares, cause I think it was a hundred in total, were then used to sell down to investors to fund the project. So that's an overview of the thing. Where, how, how that worked technically I can't, I can't recall but‑‑ Q. You flagged a possible substitution. Do I take it that you're just guessing as you sit here now, you don't actually recall that occurring? A. I don't recall, I don't recall how, how that was structured. But I mean, that's an overview of, of what the intention was and what in fact happened. But whether it was, whether we formed another 98 units or whether we had, I think we probably substituted, I don't know how, how that worked but.

Taxation statement for Fraser Unit Trust year ended 30 June 2006

1. Also significant, in my opinion, is the taxation statement of the Fraser Unit Trust for the year ended 30 June 2006 (as to which there is no competing version in evidence) which recorded the Zambito Trust as the holder of 14 "A Class" and 20 "B Class Units" and recorded the Zambito Trust as having advanced $700,000 in loan funds (see Exhibit 1), that being the amount that Anthony says his family members invested (as I understand it through Jainti) in the project.

Family disputes

1. There was much focus during the hearing on the disputes between the various family members (both to set the context for the events that are said to have occurred in relation to the unit holdings in the Fraser Unit Trust and as to the credibility of evidence given by various of the witnesses).
2. Anthony has deposed (in his affidavit sworn 20 September 2019 at [4.1]) to a disagreement between Sam and Anthony's mother (Carol, Sam's sister) during 2007 and to his understanding that Sam did not want to work with any of the Zamattia family. In particular, he has deposed (in evidence admitted subject to relevance) to the taking out of an Apprehended Violence Order (AVO) by Carol against Sam during 2007. (The evidence suggested that there may have been similar AVOs taken out by one or both of Bruno and Anthony at the time - see T 293.) Anthony asserts that all parties made attempts up until September 2008 "to negotiate a reasonable outcome in respect of the Jainti Pty Ltd developments and for Jainti to achieve a winding up" (see at [4.3]).
3. There are varying accounts of when the dispute between the families occurred (Sam places this variously as being in 2007 and as late as 2009) but there is no doubt that there was a falling out between the Morabitos and the Zamattias (and indeed even between the members of the Zamattia family itself though that came later - see below). The significance of this from the point of view of this proceeding is that Anthony says that in 2008 there was an agreement for the family members to separate their interests in the trust. Sam and Frank deny this. However, Anthony maintains that both Sam and Frank accepted unequivocally that, after the family discontent came to a head, both wanted to end the relationship with the Zamattias.
4. At T 74.9-11, Frank's evidence was that "we tried to separate our business interests with them, with the Zamattias. We gave my other sister a letter to take over to the Zamattias, right? She took the letter there and they said to her, 'Mind your own business, get out of here'". For Anthony, it is said that this shows that the Morabitos were trying to separate and that the Zamattias did not co-operate but it is submitted that the Morabitos never changed their mind and that, on 7 October 2008, the Zamattias agreed to separate (in effect some kind of bilateral but separate decision to separate).

"Meeting invite" - September 2008

1. Against the background of the family tensions at the time, Anthony says that a "meeting invite" was sent to Sam and Frank in about September 2008, inviting them to attend a meeting of Jainti to discuss the winding up (presumably of the trust) (and that agenda item 6 of the agenda was to deal with "the units held by Jainti on behalf of the [Family Trust] beneficiaries") (see his affidavit sworn 20 September 2019 at [4.4]).
2. There is in evidence (Exhibit 1) a copy of a letter dated 18 September 2008 from Anthony (apparently signing on behalf of Jainti) to Sam and Frank giving notice of a meeting on 7 October 2008. Agenda item 6 reads simply "Update of Fraser Panorama Pty Ltd unit holdings and project by AZ [i.e., Anthony]". (Whether such a meeting in fact happened on 7 October 2008 has been doubted by the liquidator - see below.)
3. Anthony has deposed that he delivered the "meeting invite" for this meeting to Sam's home address, two houses up from Anthony's parents' house and (in oral evidence) he said that Sam and Frank were on the verandah at the time. This is at a time when, on Anthony's evidence, there was an AVO in place against Sam and he, Anthony, was fearful of Sam and Frank (to the extent that he said that they were going to kill him - see T 186.39). Hence, it is somewhat implausible that Anthony would have chosen to hand deliver a meeting invitation to them (even by putting it in the letterbox) (or that he would have wished for Sam to attend the meeting - and query how Sam could have attended in person without infringing the AVO - an issue which Sam emphasised in cross-examination).
4. However, Anthony says that he dropped the meeting invitation in the letterbox and was not expecting Sam and Frank to be on the verandah. Anthony says that he spoke to them from the street. Anthony says that Sam said that they were not coming to any more meetings with Anthony or his family (see his affidavit sworn 20 September 2019 at [4.5]). That sentiment is perhaps not surprising in the context of the family disputes - moreover, there was some force to the observation made in the witness box by Sam that they (the Morabitos) were always outvoted 3:2 in any event - Sam saying in relation to the 24 October 2008 minutes which recorded confirmation of the minutes of the earlier meeting, that "every meeting of Jainti was voted three to two, because they all hung together. So they were all three to two, so why would this be any different?" (T 87).

September 2008 advice as to "transfer"

1. Anthony has deposed that, in preparation for the "transfer" (by which he is referring, as I understand it, to the transfer of Jainti's beneficial holding in respect of the 34 Units to Anthony, David and Bruno directly), in or around September 2008 he contacted Fraser Panorama's solicitors (Day Dockrill) and sought advice as to how to put effect to the transfer from Jainti to the individuals directly "as agreed in the resolution".
2. There is an obvious timing difficulty with this (even leaving aside the doubts raised as to whether there was in fact a meeting on 7 October 2008 - see below) in that the relevant resolution is recorded as having been passed at the 7 October 2008 meeting, whereas Anthony places his request for advice as to how to effect the transfer "as agreed in the resolution" as occurring before the meeting (on or around September 2008). That may, however, simply be infelicitous wording in his affidavit evidence. More pertinently, there is no evidence of any such advice having been given by Day Dockrill (or as to what any such advice may have been). The mere assertion that Anthony sought advice as to this issue cannot corroborate anything. Moreover, what is not clear is that the "transfer" advice sought related to a transfer of the beneficial holding from the Zambito Trust or the Family Trust.

October 2008 events

1. As adverted to above, Anthony says that there was a meeting of Jainti held on 7 October 2008 in relation to the "updating" of the register of unit holders in the Fraser Unit Trust. He says that the meeting was held at the clubhouse at Abbotsford Cove, and that Sam and Frank did not attend (see at [4.5] of his affidavit sworn 20 September 2019). Anthony deposes that certain resolutions were passed at the 7 October 2008 meeting (in effect to separate the Zamattia family members' "beneficiary interests" in the 34 Units and the Morabito family members' "beneficiary interests" in the 34 Units) (and that these changes are set out in the amended documents that were then issued - see Exhibit 1). Anthony says that Bruno and David were at the meeting.
2. David's evidence was that he could not recall any meetings of Jainti in which the relationship or the issues with Fraser Panorama arose (see at T 52.34-6); and that he did not remember having seen any minutes of the Fraser Panorama and Jainti meetings (though his affidavit sworn 17 April 2019 recorded at [6] that he had been shown certain minutes). He did recall having previously given Anthony a proxy but was unclear as to when or why he did so.
3. Anthony has deposed (see at [4.6] of his affidavit sworn 20 September 2019) that the resolution of the board authorised him to transfer 1/5th of the 34 Units held in the Fraser Unit Trust to himself and 1/5th each to David and Bruno "individually and respectively". Anthony says that the minutes of this meeting were sent to Frank and Sam on or about 8 October 2008 and that he received no objection to those minutes. Further, Anthony says that, in July 2009, at the first following meeting of Jainti, the minutes of the October 2008 meeting and resolution to make these changes were confirmed (see below).
4. The minutes of the 7 October 2008 meeting of Jainti's directors (Exhibit 1) include the statement that "SM and FM have advised through Phillip Ashton they will not be attending" (which I pause to note is somewhat inconsistent with Anthony's evidence that this is what he himself was told when he delivered the "meeting invite" but I accept that that does not mean that there might not have been the same advice given through Mr Ashton as Anthony says was given to him at the time to the effect that they would not be attending the meeting). (Since Mr Ashton gave no evidence in the proceeding that issue could not be clarified with him.)

24 October 2008 meeting

1. Unit certificates dated 24 October 2008 were in evidence in respect of the 34 Units in the Fraser Unit Trust held by Jainti in which the certification states that "Anthony Zamattia, David Zamattia, Bruno Zamattia and Jainti Pty Ltd (atf, Frank Morabito, Sam Morabito) in proportion 20% each" is the registered holder of the respective units. There is also a copy of the amended unit register (see Exhibit 1).
2. In evidence is a copy of minutes of a meeting of directors of Fraser Panorama (Anthony and Derek Taylor) on 24 October 2008, which includes the following: Other New unit certificates issued for Jainti and unit register updated. Jainti minute tabled authorising transfer of units to beneficiaries Anthony Zamattia, David Zamattia, Bruno Zamattia. DT/AZ phone call with Day Dockrill to amend certificate with same number and note new percentage holding.
3. The minute includes two handwritten notes, the first of which is: - Unit Certificate for Samuel Zamattia & Samuel Morabito amended to reflect request to pay distributions separately (50/50 split). New Unit Holders register tabled.
4. Pausing here, I note that Anthony's evidence is that he paid tax of approximately $50,000 on distributions of income received from the Fraser Unit Trust during the 2006, 2007 and 2008 tax years (the funds for the distributions he says were not received but the distribution amounts were declared as income) (see his affidavit sworn 20 September 2019 at [4.11]).

18 June 2009 meeting

1. There was in evidence a copy of minutes of a meeting of Jainti on 18 June 2009, convened by a notice issued on 17 June 2009 (see Exhibit 2), to take place by teleconference. The minutes of meeting (apparently created on 24 June 2009 by reference to the metadata in evidence) record that it was attended by Anthony, David, Stephen Jenkins (a solicitor, as proxy for Sam) and Frank; and that Bruno had given a proxy to Anthony.
2. The minutes record that a vote was called to confirm the minutes of the previous meeting (i.e., the meeting in October 2008 - on whatever date that actually occurred), which was passed 3 to 2 (the dissenting votes being those of Sam and Frank). The minutes record that Sam and Frank claimed that they were not advised of the meeting; that Anthony advised that they had been advised of the meeting; and that Anthony advised that "discussions with Phillip Ashton confirmed FM and SM were advised of the meeting and Phillip was asked to act as their proxy but was unable to do so due to other commitments".
3. Sam was cross-examined as to this meeting. He accepted that on at least one occasion he had given Mr Jenkins a proxy but, as I understand his evidence, he did not recall seeing the minutes of the meeting and did not recall speaking to Mr Jenkins about them (see T 86.22-5; T 88.27-T 89.47; T 90.4-8; T 90.41-7): Q. Yes, of course. Read the minute. A. Right. I don't recall this meeting actually. I'm trying to work out - the only thing I could say, if this was accurate it would have been, it would have been the time of the AVOs. If it was accurate. I can't recall, Mr Luitingh. … Q. Is that, according to any recollection that you might have, correct; that you didn't attend that meeting? A. Just to get it all straight, Mr Luitingh, so what you're saying is that we were sent an invitation and we just sent apologies for being unable to attend, is that what you're saying? Q. That's what the minute says. A. Yes, so is this what your client is saying? Q. No, don't worry about my client. A. That's what the minute says. Q. I'm asking you if you have a recollection, is it correct that you did not attend that meeting? A. I can tell you exactly as to why we didn't attend this meeting. Q. No, I don't want to know that. I just want to know whether you attended it? A. No. Q. You didn't. You say you can't recall seeing this minute? A. No. Q. But you may have? A. Well I said I can't recall Q. I'd like you to have a look at - do you recall speaking to Mr Ashton about a meeting at that time, more or less October of 2008? A. We probably did speak to Mr Ashton regarding this, because with the AVOS that they had in place we were unable to speak to them directly, so we had to go to them through Mr Ashton. And at this particular time, three weeks before this, I think it was 26, I think it was 26 September, Anthony took out an AVO out against us, saying that he feared for his life because we are very, he's never seen us so angry and he's fearing for his life that we might kill him and his family. So that's why we didn't attend this. Q. Yes, and did you speak to Mr-- A. And I don't know anything about this meeting. He's saying in his affidavit he delivered it to my place. Q. Yes. A. Which that's not the case. If there was an AVO in place, he was scared, feared for his life, would he walk up to my place and deliver the invitation? Q. Mr Morabito, please try only to answer the question that I'm asking you. Did you speak to Mr Ashton about this meeting? A. I can't recall so, but we did speak to Mr Ashton about, regarding meetings, because we're not allowed to speak to any of the Zamattias. Q. You can't recall whether you spoke to Mr Ashton about this meeting? A. Well I can't, no. I can't say definite yes or no. Q. If you have a look at the subheading called, "Minutes," just have a look at the last sentence. If says "FM and SM have advised to Phillip Ashton that they will not be attending." A. Okay, so? Q. Is that correct? A. Well I've just told you I can't recall that. And if we did do this, it was caused due to the AVOs. Q. Yes, I'm not asking you why. A. Yes. Q. I'm just asking you whether you can recall? A. No. Q. So you can't recall whether or not you spoke to Ashton about this meeting, and you can't recall contacting Mr Ashton about this meeting, but you do recall that you didn't attend the meeting, is-- A. But I'm saying I would not have attended this meeting due to the AVOs in place. … A. I could not attend this meeting due to the fact that there were AVOs in place. Q. Okay. A. So whether I recall or don't recall, I could not attend. … Q. Yes, and that-- A. Mr, Mr Zamattia always confirmed them regardless of - we were always a minority, so no matter what we said, we could, nothing would be changed. He, he was Jesus Christ, he, he signed everything, he did what he wanted. Q. That's fine, Mr-- A. So that's what happened in these relations. Everything's three-two.

2010 Financial statements

1. The liquidator places weight on the 30 June 2010 financial statements prepared by Mr Ashton in respect of the Zambito Trust (copies of which were provided to the liquidator's office after his appointment as liquidator - see Exhibit A). The financial statements are unsigned and Anthony says that they are draft and unaudited accounts. Relevantly, the profit and loss statement records distributions from trusts for each of the 2009 and 2010 year. The liquidator points out that, arithmetically, the amount of those distributions represents 34% of the distributions made out of the Fraser Unit Trust (see the Fraser Unit Trust financial statements referred to below), which is inconsistent with Anthony's assertion that Jainti held its units on trust for the individual family members.
2. Mr Ashton also prepared financial statements for the Fraser Unit Trust for that financial year, which recorded the beneficiaries' profit distribution for 2009 in the amount of $722,493 (34% of which is $245,647) and for 2010 in the amount of $196,213 (30% of which is $66,713) (see the Zambito Trust figures in those amounts). It is noted that the Fraser Unit Trust income tax return, also prepared by Mr Ashton, recorded a distribution to the Zambito Trust of $66,713 in the 2010 financial year.

Fraser Panorama development

1. The sales of the Fraser Panorama development were apparently delayed by the 2008 global financial crisis (and there is reference in some of the minutes as to the project going slow). When all sales were finalised, the net sales proceeds (after the operating expenses of the funds) were available to be distributed to "close" the Fraser Unit Trust. Final distributions were not, however, made at that stage in respect of the 34 Units (due, Anthony says, to dispute between the family members, which included a dispute in relation to alleged misappropriation of funds in relation to a separate trust account - see Anthony's affidavit sworn 20 September 2019 at [2.6], [4.1]-[4.11], [6.1]-[6.6]).
2. Anthony says that the funds representing the distribution out of the Fraser Panorama development were "quarantined" by Fraser Panorama in the Fraser Unit Trust bank account before agreement was reached whereby distributions were made in 2018 of the entitlements in respect of 1/5th of the 34 Units to each of the beneficiaries entitled to the 1/5th share in the 34 Units. Due to the existing dispute, payment in respect of what Anthony contends is his 1/5th share of the unit holding was placed in the controlled moneys account referred to above (see Anthony's affidavit sworn 13 February 2019 at [2.3]).

Appointment of administrator (and then liquidator) to Jainti - May 2011

1. Meanwhile, on 27 May 2011, a voluntary administrator (Mr Geoffrey Reidy of Rodgers Reidy) was appointed to Jainti pursuant to s 436A of the Corporations Act. On 5 September 2011, Mr Reidy was appointed as liquidator of the company by resolution of Jainti's creditors.
2. The beneficiary loans schedule sent to the liquidator by Mr Ashton on 2 October 2014, when information was sought as to the break up of the loan to the Fraser Unit Trust of $1,186,474 (as recorded in the financial statements), records the Zambito Trust as having a balance as at 30 June 2009 of $1,119,761.01 and that income of $66,712.50 was credited to the Zambito Trust. (See also the loan schedule at Exhibit A which records the share of trust income for Jainti as trustee for the Zambito Trust over the period from 2006 (the initial loan of $700,000) and recording the balance at 30 June 2011 of $1,229,622.71.)
3. Also in evidence are financial statements for the Fraser Unit Trust for the year ended 30 June 2014; as well as unsigned "draft" financials and a tax return for the financial year ending 30 June 2015 (which Anthony's lawyers confirmed to the liquidator were the same as the documents ultimately filed).
4. A report as to the affairs of the company was provided by Anthony (see Exhibit L).

August 2016 Financial statements - Fraser Unit Trust

1. The financial statements for the year ended 30 June 2016 for the Fraser Unit Trust were prepared by Phillip Ashton in or about August 2016. Those accounts include a schedule of Beneficiary Loans (2016), which records an amount of $1,159,622.71 as a loan from "Zambito Trust" (consistently with the earlier years' statements) and contains a declaration dated 15 August 2016 and signed by each of Anthony and Derek Taylor declaring, in standard form, that the financial statements and notes fairly presented the trust's financial position as at 30 June 2016 and its performance for the year ended on that date, in accordance with the accounting policies described in Note 1 to the financial statements. (A similar schedule of Beneficiary Loans in the 2017 accounts recorded the Zambito Trust as a beneficiary.)

Complaints by Sam and Frank Morabito as to distributions

1. By August 2016, it appears that Sam and Frank, through their solicitors, James Beatty & Associates, were raising complaints with the liquidator as to the receipt by Jainti of its "proper distribution" out of the Fraser Unit Trust (see letter dated 16 August 2016), the assertion being made that there was some $750,000 that was then available for distribution.
2. That was followed by a letter dated 26 August 2016 from the solicitors acting for the liquidator (William James) to Polczynski Lawyers (acting, among others, for Anthony), in which complaint was made that distributions had been made to unit holders but not to Jainti; and asserting that this was a "flagrant breach" of the Trust Deed and the trustee's fiduciary duties. Demand was made for certain undertakings to be provided by Fraser Panorama and each of Anthony and Derek Taylor (not to deal or cause Fraser Panorama to deal with any property held by it pursuant to the Fraser Unit Trust without the prior written consent of the liquidator and for a full accounting of the sale of properties made by Fraser Panorama and all payments made by it to unit holders of the Fraser Unit Trust within the previous six years). There was no response to that letter until 19 September 2016 (see below).

Notice of termination of trust

1. Not long after the making of the above (26 August 2016) complaint by the liquidator, notification was given by notice dated 9 September 2016 addressed to the directors of Fraser Panorama and purportedly signed by each of Anthony, David and Bruno, as to the termination of the Family Trust in the following terms: Anthony Zamattia, David Zamattia, Bruno Zamattia having previously being beneficiaries indefeasibly and absolutely entitled to 3/5ths of the aliquot share of the above trust hereby give notice to Fraser Panorama Pty Limited that they have terminated the trust insofar as it related to all of their rights and entitlements. Please see attached a copy of the notice of termination. Anthony Zamattia, David Zamattia, Bruno Zamattia require Fraser Panorama Pty Limited to immediately account to them in relation to their entitlements presently under the control of Fraser Panorama Pty Limited.
2. Anthony has deposed that the termination of trust was discussed in the offices of a solicitor (Mr Edney from Polczynski Lawyers) during or about June 2016. Anthony asserts that Bruno and Carol agreed to the termination of the Zambito Trust (the advice being that they do so "for the avoidance of doubt" in order that there could be no claim by the Zambito Trust against the Fraser Panorama Trust assets) (see his affidavit sworn 20 September 2019 at [11.3]). The temporal proximity between the issue of the notice of termination and the complaint raised by the liquidator as to distributions out of the Fraser Unit Trust is therefore perhaps not a coincidence. (There is no copy of any such advice or contemporaneous record of that advice in evidence.)
3. Anthony has deposed that the solicitor prepared the termination notice and that he, Anthony, gave it to Carol and Bruno on or about 9 September 2016 and asked that they get David to sign it and return it to him (see his affidavit sworn 20 September 2019 at [11.5]). He says that they return the signed notice to him on or about 19 September 2016 (at [11.6]). For Anthony, it is emphasised that he predated the notice of termination and received it back signed, and that he did not ever allege that he saw the parties' signatures being appended on the documents - just that he got the notice back; that it had David's signature on it; and that he sent it off. Further, it is noted that neither Carol nor Bruno gave evidence to dispute that the document which was returned to Anthony was signed.

Commencement of present proceeding

1. Jainti commenced the present proceeding by way of summons in 2019, seeking an injunction to prevent distributions by Fraser Panorama directly to the beneficial or legal owners of the 1/5th entitlements in the 34 Units. Freezing orders were made (as referred to earlier) in 2019 and, ultimately, the matter proceeded by way of pleadings.

Pleaded case

1. As noted at the outset, the only extant claim made in the proceeding is the claim in respect of the transfer to Anthony in December 2018 of the sum of $161,160 as a distribution out of the Fraser Unit Trust (see at [34] of the amended statement of claim).
2. Pausing here, it should be observed that it is wholly disproportionate for there to be a four day hearing in this Court over such a relatively small amount. I understand that the case as initially commenced was for a much larger amount (and I do not suggest that it was not properly commenced in this Court). However, it is an unfortunate state of affairs that the sum in issue is likely to be largely, if not wholly, subsumed by the legal costs of the proceeding.
3. The claim pleaded against Anthony is one of knowing receipt of the distribution of that amount in breach of trust by Fraser Panorama (see at [43] of the amended statement of claim). The allegation is that, by reason of the matters pleaded at [7], [11], [18], [22]-[24] and [35] of the amended statement of claim (and presumably the liquidator here also intends to refer to the new [35A]), Anthony knew at the time of receiving that distribution from Fraser Panorama that it had been made in breach of cl 10.1(f) [sic] of the Fraser Unit Trust Deed. It appears that the relevant clause to which reference was intended to be made at [43] of the amended statement of claim is cl 10.9(f), to which reference was made at [35A] and which provides as follows: 10.9 Distribution of Net Income The Income arising in each Financial Year shall be dealt with no later than the end of the Financial Year as follows: … (f) the net Income less the sums retained, applied or set aside ('income available for distribution') shall be distributed or applied by the Trustee, firstly, in accordance with any special rights as to sharing Income attached to any Units and then to or for such persons who at midnight on the last day of each Financial Year are Unit Holders in proportion to the Units registered in their respective names. The Unit Holders shall be presently entitled to their respective proportions of the net Income.
4. "Income" is defined in cl 1.1 of the Trust Deed and it is not necessary here to set that definition out. Clause 3.1 provides that "[s]ubject to the rights of holders of Units of a class, the beneficial interest in the Trust Fund as originally constituted and existing from time to time shall be vested in the Unit Holders for the time being in proportion to the Units held by them".

Evidence

1. As noted above, Jainti's case was primarily put as a documentary case (based on records obtained by the liquidator) but Jainti also adduced evidence from each of Sam, Frank, David, Sam Zamattia, and the liquidator himself (Geoffrey Reidy).
2. For Anthony, reliance was placed on a number of affidavits sworn by him and an affidavit of Derek Taylor sworn 7 October 2019, the co-director of Fraser Panorama and project manager for the Fraser Panorama development. Broadly speaking, Derek Taylor supports Anthony's account of events (although in cross-examination, as I have already observed, it became evident that his recollection was largely based on what was contained in the documents by which he had refreshed his memory).
3. I set out later in these reasons my observations as to the credibility of the witnesses.

Jones v Dunkel

1. Anthony invokes the principles articulated in Jones v Dunkel, arguing that, where Jainti's case is based upon indirect evidence, assertion or inference, and a relevant witness has not been called to provide evidence, the documentary evidence submitted by Anthony should be preferred, particularly where the challenge raised by Jainti is many years after the relevant events. In particular, an adverse Jones v Dunkel inference is said to be raised as to the lack of evidence from the following persons.
2. First, Carol (Bruno's wife), in relation to communications about the Jainti meeting in October 2008 concerning the change in unit holding and the signatures on the notice of termination of trust dated 9 September 2016.
3. Second, Mr Thyge Trafford-Jones (an employee in the liquidator's office, who assisted in the liquidation of Jainti and who had carried out investigations or made enquiries on the liquidator's instructions). Counsel for Anthony suggests that Mr Trafford-Jones compiled a report. However, at T 29.24-T 30.12, while the liquidator accepts that he instructed Mr Trafford-Jones to have a meeting with Mr Ashton, there is nothing said which clearly indicates that a written report was prepared by Mr Trafford-Jones (as opposed to there being merely a conversation with Mr Reidy following the meeting or some notes taken at the meeting). Anthony says, nevertheless, that an adverse inference should be drawn from the fact that Mr Trafford-Jones was not called as a witness and from the fact that his notes of investigations during the liquidation (and any conference with Mr Ashton) have not been produced.
4. Third, Bruno, on the basis that an affidavit of Bruno was filed and served by the liquidator but ultimately withdrawn (he not being made available for cross-examination even though approval had been given for that to be by audio-visual link). In particular, it is noted that, after an affidavit of David sworn 20 November 2020 (testifying that Bruno was immobile) was read, and there had been some cross-examination of David as to Bruno's alleged immobility; but (over Anthony's objection) I had indicated that I would permit Bruno's evidence to be given by audio-visual link, Jainti then made a formal application to withdraw the affidavit evidence of Bruno.
5. Anthony submits that an adverse inference should be drawn that Bruno's evidence would not have supported Jainti's case, in particular: in relation to the "Jainti meeting" held on 7 October 2008; in relation to the "Jainti meeting" held on 9 July 2009; as to the communications leading up to the meeting in May 2006; as to the terms of Bruno's affidavit filed in the proceedings; and as to the terms of the affidavit of David sworn 20 November 2020 (attesting to Bruno's immobility). It is submitted that it should be inferred that Bruno would not have contradicted the Notice of Termination of Trust in 2006 either in relation to the notice of termination or his signature. (Pausing here, Jainti accepts that it would be open to draw an adverse inference to some extent from Bruno's failure to give evidence but submits that this is not determinative.)

Ruling as to Jones v Dunkel inferences

1. In RHG Mortgage Ltd v Rosario Ianni [2015] NSWCA 56 at [75], the Court of Appeal observed that reference to the "rule" in Jones v Dunkel (that the unexplained failure by a party to call witnesses may in appropriate circumstances lead to an inference that the uncalled evidence would not have assisted that party's case) was inapt in that it implied a consequence where the rule was breached. Rather, the so-called "rule" is one that enables the Court more confidently to draw an inference that is available from facts proved by direct evidence, and the question is whether it should be drawn, in circumstances where the party disputing it might have proved the contrary, had it chosen to give evidence (see Davies AJA in Ho v Powell (2001) 51 NSWLR 572; [2001] NSWCA 168 at [16]; [76]; HML v R (2008) 235 CLR 334; [2008] HCA 16 at [302]-[303]; Brandi v Mingot (1976) 12 ALR 551 at 559-60; Jones v Dunkel at 312, 320-321; Katsilis v Broken Hill Pty Co Ltd (1977) 18 ALR 181 at 197). In order for a Jones v Dunkel inference to arise it is necessary that the witness be one that would be expected to have been called - i.e., as has been described by Glass JA in Payne v Parker [1976] 1 NSWLR 191, that the witness be someone in that party's "camp" and that the failure to call that witness be unexplained. A Jones v Dunkel inference, if one does arise, does no more than permit the inference that the uncalled evidence or missing material would not have assisted the relevant party's case; it would not permit an inference that the uncalled evidence was in fact damaging to that party's case.
2. As to the various Jones v Dunkel inferences that have been sought, there can be little doubt that Mr Ashton was the "missing elephant in the room". He was the accountant who had prepared the financial statements and tax returns on which the liquidator was relying; he had forwarded that material (or at least some of that material) to the liquidator; and, intriguingly, it had been foreshadowed (in the context of an application by Anthony for security for costs) that he would be called as a witness in Anthony's case. In the security for costs application, Anthony had deposed to the belief that "[s]ubject to any new matters that plaintiffs' proposed new third defendant Derek Taylor may raise", Mr Ashton would be called at trial (and he estimated a length of some 7 or 8 days). Although Anthony suggested otherwise in the witness box at the present hearing, this cannot sensibly have been a reference to the length of time of the costs application (cf., T 290).

Credibility of witnesses

1. Before turning to the submissions made by the respective parties as to the issues in dispute in the present case, it is convenient at this point to consider the credibility of the various witnesses. For the liquidator, it was accepted that serious credibility findings were sought as against Anthony; whereas for Anthony, while any suggestion that the Morabito witnesses were dishonest was expressly disavowed (T 277.21-5), it was submitted that their evidence was implausible and that Anthony's evidence should be preferred. Turning to the respective witnesses, I note as follows.

Mr Reidy

1. The liquidator gave evidence and was cross-examined as to his investigation of the company's affairs. It was not suggested that his evidence was dishonest but, as noted above, there was a submission put for Anthony to the effect that an inference could be drawn that the liquidator's evidence was selective. At T 287, Anthony says that the liquidator's submission to the effect that the liquidator had produced all of the (relevant) documents in his possession was not correct; the liquidator having not produced Mr Trafford-Jones' report. I do not accept this; not least because it is not clear that there was a "report" as such.
2. I considered that Mr Reidy gave his evidence in a considered and professional manner; and I consider that there is no basis on which to suggest that he did not attempt to put forward a complete picture of the relevant material in his possession as liquidator. Insofar as complaint is made by Anthony that he drew the Family Trust to the liquidator's attention at an earlier time but that the liquidator did not appear to understand this, I note that he called no evidence from Polczynski Lawyers to corroborate that assertion.

Morabito and Zamattia family members

1. As to the evidence of the respective family members, the liquidator says that Anthony's account of events is implausible; that each of Sam and Frank was a forthright and honest witness; and that the evidence of David, Frank and Sam, against their own financial interests, should be accepted as the more plausible. Anthony, for his part, says that the evidence of the witnesses called by the liquidator should not be accepted. I address each of those witnesses in turn.

Sam Morabito

1. I accept that Sam gave his evidence in a forthright manner (as can be seen from some of the transcript that I have extracted above) (indeed he did so with feeling). Sam did not mince words and was argumentative at times with the cross-examiner (such as his emphatic evidence as to why it was that he could not have attended the October 2008 meeting by reason of the AVOs). The liquidator emphasises Sam's evidence as to the events in September and October 2008 as casting doubts on Anthony's evidence of the "verandah" conversation. There is no doubt that Sam was intent on making clear his side of the story, so to speak. He was less focussed on the questions put to him than on his recollection of the overall context of the events in question (at least in relation to the October 2008 meeting and the meeting at which the minutes were confirmed).
2. Anthony challenges Sam's evidence as to the 90% pre-sales at a time when the DA was not approved (T 277.5-16). As noted above, Anthony does not contend that Sam is a dishonest witness as such but he did submit that Sam's evidence was "disingenuous" in this regard (which amounts to the same thing) and Anthony says that the suggestion that there were 90% pre-sales as at the time of the alleged May 2006 conversation cannot be true, which Anthony says undermines Sam's overall credibility. It is noted that the project started in July 2006 and that the level of sales did not reach $15.483 million until some two and a half years after the payment started (i.e., in October 2008). Reference is also made to Derek Taylor's evidence as to it being a difficult project (see T 305).
3. Anthony says that Sam was an angry man, discontent with the history of the development; and that his evidence was glib. I would not characterise his evidence as glib; though I did form the impression that, to some extent, Sam became frustrated with the questioning and retreated into answers that he simply did not recall things.
4. I accept that it is unlikely that there would have been 90% pre-sales as at May 2006 (and there is certainly nothing to support that in the evidence) yet I consider that Sam's rejection of the prospect that he saw the project as risky at that stage because he thought (and he said Anthony had told them - see T 95.31-6) that he would double his money rang true; as did various other parts of his evidence in which his feelings as to Anthony were revealed (the comment, for example, that Anthony was "Jesus Christ…he signed everything, he did what he wanted" (at T 90.42-4)). Sam did not hide the fact that there was dispute within the family. Ultimately, I considered him to be a credible witness though I treat with caution (as I do all the family members, including Anthony) evidence that may consciously or otherwise be a product of a reconstructed recollection of events.

Frank Morabito

1. Again, Anthony says that he does not contend that Frank was dishonest. Anthony says that no doubt Frank had the belief to which he has deposed as to the documents but again that that subjective belief does not assist.
2. I considered Frank to be a direct witness. He did not engage in debate with the cross-examiner; and his position in relation to his recollection of events was plausible.

David Zamattia

1. In David's affidavit sworn 17 April 2019, he denies attending any meeting of directors of Jainti which dealt with any of the matters set out in the alleged 7 October 2008 minutes of the Jainti board meeting (see at [6]-[7]). He denies signing the Notice of Termination of Trust (at [10]).
2. The liquidator says that this evidence was not challenged; and therefore, the Notice of Termination of Trust cannot be a valid document. (I consider this, and the submission that there cannot be a valid notice of termination of trust if one of the persons purportedly entitled jointly to the benefits under the trust did not consent to the termination (see at T 243), in due course.)
3. Anthony makes an adverse credit submission in relation to the evidence given by David as to his father's immobility (noting that in circumstances where, after it was put to David in cross-examination that there might be evidence on which he would be disbelieved or accused of perjury, an application was later made for Bruno's affidavit to be withdrawn). I accept that an adverse Jones v Dunkel inference may be able to be drawn in relation to the failure of Bruno to give evidence in the case (see above). However, any Jones v Dunkel inference would not extend beyond an adverse inference that Bruno would not have been able to assist Jainti's case in relation to the execution (by Bruno) of the Notice of Termination of Trust (and the circumstances of the October 2008 meeting, which he is recorded as having attended). In particular, I am not persuaded that David's evidence as to his father's immobility (based as he said it was on what others had told him about his father and his own observation), even accepting that it was not wholly satisfactory, casts doubt on his overall credibility. As to whether David's evidence is contrary to his financial interests, a submission relied on by the liquidator to support his credibility, ultimately it is not necessary to delve into the debate on this because I do not rely, for the conclusion I have reached, on whether or not the interests of the other so-called individual beneficiaries were affected by their acceptance of the proposition that the shares were held as trustee for the Zambito Trust.

Sam Zamattia

1. Sam Zamattia's evidence (see his affidavit sworn 8 September 2020) went to a conversation in which he deposes (at [2]) that Anthony said to him in or about 2016 words to the following effect: "I've got a letter I need to get Dad and Dave to sign to dissolve the Jainti Trust. I reckon I can get Dad to sign it but I bet Dave won't. Fuck it I'll just sign it for him anyway". The liquidator says that Sam Zamattia was an honest witness and was resolute in his recollection of this conversation.
2. The liquidator says that Sam Zamattia's evidence, together with that of David, casts unassailable doubt on the veracity of the purported notices of termination (and argues that notice of termination would not be required if everything had been dealt with at the October 2008 meeting). (Of course, the answer to the last submission could well be, as was suggested had been the advice conveyed by Polczynski Lawyers (see T 179) and said to have been accepted by Bruno and Carol, that this could simply have been done for the avoidance of doubt.)
3. More significant, in my view, is the fact that there was no reference to a separate trust (the Family Trust) in any documents passing between the parties and the liquidator until September 2016 and that the solicitor's correspondence in September 2016 (sent on Anthony's instructions - see at T 178.14-18) refers to the termination of the separate trust as "only recently" having occurred; not that the trust had been terminated quite some time before (i.e., in October 2008). The liquidator submits that the 7 October 2008 minutes of meeting first appeared in a September 2019 affidavit (see T 272).
4. In any event, I accept that Sam Zamattia's evidence as to the conversation with Anthony was credible (not least because of the anomalies surrounding the evidence as to the execution of the Notice of Termination of Trust - such as the admitted dating of the document in advance of it being signed by Bruno and David, and the account given by Anthony's then lawyers as to when it was signed by David (i.e., over the weekend), which I accept cannot have been correct if David was out of Sydney at the time (see T 182)). That said, ultimately nothing turns on this for the reasons I set out in due course.

Derek Taylor

1. The liquidator says that the affidavit evidence as to Derek Taylor's purported recollection of events should not be accepted since his oral evidence makes clear that he did not have an actual memory of events but that he was simply basing his evidence on his reading of the documents in the witness box. Further, it is said that Derek Taylor's evidence was infected by the fact that he had spoken to Anthony about the dispute (or about the issues in the dispute) and because he was an advocate for Anthony's cause in that it was his view that Anthony deserved the money.
2. I do not accept that Derek Taylor presented as an advocate for Anthony's cause, although I accept that he candidly accepted that he considered (and no doubt with good cause having regard to Anthony's involvement in the development) that Anthony deserved to be recompensed for his efforts in relation to the Fraser Panorama development. Nor am I persuaded that there is cause for concern as to collusion between the witnesses (of the kind referred to in, say, Rosebanner Pty Ltd v Energy Australia (2009) 223 FLR 406; [2009] NSWSC 43) since a discussion with Anthony as to the dispute itself would be explicable if for no other reason than that there were issues as to how the distributions could be effected (in order to wind up the Fraser Unit Trust after the development was complete) in light of the question or dispute that had emerged as to the parties' entitlements. I do not understand Derek Taylor's evidence to have been that he was speaking to Anthony as to his affidavit evidence. (In that regard I see a distinction between the kind of "cutting and pasting" exercise considered in Macquarie Developments Pty Ltd v Forrester [2005] NSWSC 674 by Palmer J or the discussion between experts considered by Lindgren J in Lucent Technologies Inc v Krone Aktiengesellschaft (No 3) [2000] FCA 100.
3. That said, I accept the force of the observation that Derek Taylor's recollection was largely limited to his reading of the documents to which he was taken and assumptions as to the veracity of what was there recorded. Therefore, I treat his evidence with some caution and I do not accept that his confirmation as to the chronology of events is necessarily reliable.

Anthony

1. The liquidator says that Anthony's evidence was false (accepting that this is a serious allegation to make) and implausible in the extreme. It is submitted that, other than concessions extracted from him against his interest, his evidence should not be accepted. For Anthony, on the other hand, it is said that his evidence was credible and that the allegations of dishonesty should be rejected.
2. For Anthony, it is noted that the cross-examination included direct propositions put to Anthony that, in relation to critical documents, meetings and conversations, Anthony was lying or that the documents were not the correct documents; and that in each case, Anthony denied that was the case. Anthony submits that: there is no case pleaded by Jainti on any such basis; in relation to the conversation with Sam, that Sam has not provided affidavit or oral evidence challenging the conversation alleged (though I interpose to note that implicitly he seems to have done so - see at [35] of his affidavit sworn 23 May 2019); and that there is no factual basis in the evidence for the propositions put to him in cross-examination. It is submitted that, in relation to relevant communications following the conversation between Anthony and Sam, there is a Jones v Dunkel issue arising from the fact that the affidavit evidence of Bruno was formally withdrawn and Bruno has not been called as a witness.
3. Anthony points to the recognised challenges in the evaluation of oral evidence, particularly where it conflicts with documentary records and the evidence of independent witnesses, pointing to what was said in Northampton Borough Council v Cardoza [2019] EWHC 26 at [36]-[39] per Barker J.
4. Further, for Anthony, a Browne v Dunn (1893) 6 R 67 (HL) point is raised as to any submission that Derek Taylor and Anthony were involved in forging or concocting documents. Reference is made to Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361; [2011] HCA 11. It is noted that the allegation that documents were "concocted" in 2016 is tantamount to an allegation of dishonesty and fraud.
5. I considered that Anthony presented in the witness box as an honest witness albeit that some of his evidence (such as in relation to the security for costs application to which I referred above) cannot be reconciled with what appears in the contemporaneous documents. I consider that Anthony has genuinely formed the view that he espouses as to the manner in which the units were to be held but I do not accept that that necessarily accords with what actually happened in relation to the Zambito Trust and I am troubled by the fact that Anthony seems to have been content to proceed on the basis that the unit holding was held by Jainti on trust for the Zambito Trust until such time as the present dispute erupted.

Jainti's submissions

1. As adverted to above, the liquidator says that the present dispute (as to whether the withheld distribution of $161,160 is payable to Jainti, in its capacity as trustee of the Zambito Trust, or, rather, is payable directly to Anthony) turns on two key issues, namely the 12 May 2006 meeting and the later termination of the alleged Family Trust.
2. The liquidator invokes s 1305 of the Corporations Act in relation to the financial records or financial material produced by Fraser Panorama, or persons connected to Fraser Panorama, or Jainti, which has been provided over the years to him (including material provided by Jainti's external accountant, Mr Ashton, and by Anthony himself). Emphasis is placed on the fact that Anthony was a director of Fraser Panorama during the periods to which this financial material relates.
3. The liquidator refers to what was said by Austin J in Australian Securities and Investments Commission v Rich (2005) 53 ACSR 752; [2005] NSWSC 417 (ASIC v Rich) at [148] and by Markovic J in Stone v Melrose Cranes & Rigging Pty Ltd (2018) 125 ACSR 406; [2018] FCA 530 at [181] in that regard. It is submitted that the documentary evidence available to and relied on by the liquidator (including profit and loss statements of the trusts and the like, as well as taxation documents lodged with the ATO) establishes its claim and has not been rebutted. In contrast, the liquidator says that insofar as Anthony relies on documentary evidence of that kind, the prima facie evidence has been rebutted (see at T 239).
4. The liquidator relies on the Zambito Version of the relevant documents (including the 12 May 2006 unit holder certificates signed by Anthony which record Jainti as unit holder as trustee for the Zambito Trust, the unit holder register provided to the liquidator's office by the solicitor acting for the Morabito family members) and the taxation statements signed by Anthony, financial statements and income tax returns for the Zambito Trust and the Fraser Unit Trust, beneficiary loan schedules for the Fraser Unit Trust provided by the accountant of both the Fraser Unit Trust and Jainti, and financial accounts accepted by Anthony as to their authenticity (see Exhibit A).
5. As to the documentary evidence, the liquidator says the following.
6. First, as to the minutes of the 12 May 2006 meeting (the version for which the liquidator contends is at Exhibit A at 257), it is noted that the minutes record the tabling of applications for units (not a table or register of unit holders per se) (see T 250), the liquidator emphasising that there were already the two initial unit holders on the inception of the trust as per the Fraser Unit Trust Deed. The liquidator says that greater weight should be given to this document than the competing version (at Exhibit 1) because it is consistent with the number of units ultimately issued (i.e., 100 not 102).

Anthony's submissions

1. At the outset, Anthony emphasises that, although he was at all material times a co-director of Fraser Panorama, he did not control Fraser Panorama; that the relevant meeting (the 12 May 2006 meeting) was attended by the two directors of the corporate trustee of the Fraser Unit Trust (he and Derek Taylor); and that the decisions of the board of directors of Fraser Panorama were by unanimous resolution. It is submitted that, on an "economic or practical commercial view", Anthony was a director with special responsibility (or nomination) for the original unit holders (holding 34% of the units in the Fraser Unit Trust) and had introduced other family member investors but that both directors (i.e., Derek Taylor as well as Anthony) were responsible jointly as directors of Fraser Panorama for the allocation of units to all the original unit holders of the Fraser Unit Trust.
2. Anthony points out that the 46 other "A Class" unit holders (leaving aside the 14 "A Class Units" the subject of dispute in this proceeding) included investors introduced to the project by both Anthony and Derek Taylor. It is noted that, as directors, both Anthony and Derek Taylor had unit holdings (through their respective entities) and it is submitted that they were acutely aware that they needed to be very careful to ensure that the interests of all unit holders were considered in all decisions by the corporate trustee. Anthony submits that there is no basis for a finding of undue influence or control by Anthony over the board of Fraser Panorama.
3. Pausing here, apart from the fact that no such finding appears to be sought, there is also little to establish the assertion as to the acute awareness of either director as to his responsibilities to other unit holders. In any event, this issue is not raised on the pleadings. The point of the above submission appears to be the proposition that, where there is reference to actions of Fraser Panorama (the corporate trustee), there is no proper basis to attribute those actions to Anthony in his personal capacity as an individual defendant; and that Jainti must establish by admissible evidence (other than the acts of Fraser Panorama) that actions for Fraser Panorama to pay out the final distributions were something other than payments in the orderly closure of the trust following completion of the development (including sales) or were not in accordance with the original constitution of the unit holding for the 34 Units in dispute when the unit holding was established in 2006 (and that there is no prejudice preventing the making of a declaration that any business records to the contrary are incorrect).

Anthony's supplementary submissions

1. By leave, Anthony filed supplementary submissions predicated on the assumption that the Individual Beneficiaries Version of the documents (i.e., the minutes with hand-marked and initialled amendments that align with the same unit holder amendments in the Unit Holders Agreement) is the correct minute or record of the 12 May 2006 meeting (i.e., his version of the 12 May 2006 meeting) - an assumption that the liquidator in his supplementary submissions in response says is not made good.
2. On that basis, Anthony puts forward what he says is a third construction of the events of 12 May 2006 to the effect that the two classes of units ("A" and "B" Class) and the original ordinary units should be dealt with discretely. Anthony invokes the principle of the "minimum equity" in this regard, suggesting that minimum equity may be achieved by addressing the two classes of units and the original ordinary units separately.
3. It is noted that Jainti has adduced evidence (and Anthony accepts this fact) that the Zamattia and Morabito families provided an equity investment loan of $700,000 to meet the subscription obligations in respect of the 14 "A Class Units" but it is said that Jainti has not provided any evidence of the basis of the claim that the 20 "B Class Units" were subscribed by Jainti (as trustee for the Zambito Trust) or were otherwise issued to Jainti (as trustee for the Zambito Trust). Thus, it is submitted that any intervention by equity should be limited to a declaration in respect of the 14 "A Class Units".
4. Anthony submits that, should equity intervene to declare that title in the 14 "A Class Units" is held by Jainti (as trustee for the Zambito Trust) (or that Anthony is estopped or prevented by the admissions in secondary documents signed by him from denying that this is so), the relief should be limited to such a declaration on the grounds that: first, such declaration is in accordance with the principle of minimum equity; second, such a declaration is in accordance with the intention of the parties when the Fraser Unit Trust Deed was settled and Jainti (as trustee for the Zambito Trust) was named as the holder of one "ordinary" unit; third, equity follows the law and the documents relied upon by Anthony in respect of the 12 May 2006 meeting (including the Unit Holders Agreement) do not include a document executed by the holders of the two ordinary units when the Fraser Unit Trust was settled.

Jainti's Supplementary Written Submissions

1. Jainti says that Anthony's supplementary submissions are expressly predicated on an assumption (see [1] of Anthony's supplementary submissions) that is wrong in fact and cannot be made out. Jainti says that the two documents on which Anthony relies for that submission (the Individual Beneficiaries Version of the 12 May 2006 minutes and the Unit Holders Agreement) do not align; rather that they are materially different in the following respects.
2. First, it is noted that the Zambito Version of the minutes notes nine persons as having applied for units (in addition to the existing two units on issue at the time) whereas the Unit Holders Agreement notes eight persons as having applied for units. Second, the Individual Beneficiaries Version of the 12 May 2006 minutes records that a John Allan Wright is a person whose application for units was tabled at the 12 May 2006 meeting. However, the Unit Holders Agreement makes no reference to this person. Third, the Individual Beneficiaries Version of the document makes reference to a company, T&I Walton Pty Ltd (atf Walton Family Trust) as having applied for 10 "A Class Units" (and has hand-marked amendments next to it) whereas the Unit Holders Agreement refers to an individual by the name of Terry Walton with no reference to any Walton Family Trust. Fourth, the Individual Beneficiaries Version of the 12 May 2016 minutes ascribes 14 "A Class Units" to Jainti and 20 "B Class Units" whereas the Unit Holders Agreement ascribes 20 "A Class Units" (at paragraph 6(c)) and 20 "B Class Units" (at paragraph 6(b)). Finally, that the Unit Holders Agreement defined "Jainti" as Jainti Pty Ltd as trustee for the Zambito Trust.
3. As to Anthony's supplementary submissions concerning a gift, the liquidator says that this argument is new; that it is not pleaded, nor was it the subject of any written or oral submissions; and that Anthony should not be permitted to raise it now. Further, it is noted that none of the plaintiff's witnesses was cross-examined in relation to the purported gift (and it is said that the submission should not be made on that basis alone). The liquidator says that the raising of this contention at such a late stage invites an application to ameliorate any prejudice by adducing further evidence. It is submitted that this would be undesirable having regard to the disproportionate quantum of costs already incurred by the respective parties.

Determination

1. I have set out in some detail above the chronology of events because this is a case where the two competing versions of the relevant documents are capable of different constructions. As I have indicated above, the February 2006 documents (the Fraser Unit Trust Deed, which is unamended; and the Unit Holders Agreement, which bears handwritten annotations) are consistent with the Zambito Version of the documents (if, in respect of the Unit Holders Agreement, one puts aside the handwritten annotations); and there seems to be no dispute that what was originally in contemplation was that Jainti would hold a number of units in the trust as trustee for the Zambito Trust (see T 292.38-47).
2. Anthony says that there is no logical regime in which there could have been a change back to the Zambito Trust as beneficiary from the five individual beneficiaries but that seems to me to presuppose when it was that the relevant decision was made as to the issue of units in the trust (because, once issued, the unit holders could not simply be amended by handwritten amendments to minutes and the like).
3. In a dispute such as this, where there are two competing versions of documents which purport to effect the issue of units in a trust to particular unit holders, it is a question of fact as to the order in which those documents were signed, and whether any communications occurred which might constitute consent to subsequent amendments to those documents. It is a question of law, however, as to whether particular documents validly give effect to the issue of units to unit holders (including by satisfying the requisite formalities for the issue of units in the particular trust) and whether any subsequent amendments constitute a valid transfer of units. The Fraser Unit Trust Deed provides that "upon becoming registered as the holder of a Unit", the initial unit holders and each other person shall be deemed to have become a party to this Deed and entitled to benefit from and be bound by the terms and conditions of this Deed (cl 4.3); further, "[e]xcept to the extent provided in this Deed, the person from time to time entered in the register as the holder of a Unit shall be the only person recognised by the Trustee as entitled to such Unit or to exercise or enjoy the rights and privileges attaching thereto" (cl 5.3); and see also cl 8 relating to the transfer of units. Insofar as the register of units is the record of what units were issued (and noting that both versions of the register are unsigned) the question is which came first. Almost certainly, the Zambito Version was prepared first, taking effect in accordance with the Zambito Version of the Unit Holders Agreement.

Orders

1. I make the following orders: 1. Order that the sum of $161,160 (plus interest) held in the controlled moneys account of Bird & Bird be paid to Jainti Pty Ltd as trustee for the Zambito Trust. 2. Reserve the question of costs to be dealt with on the papers if possible. 3. Direct the parties to file brief written submissions on costs within 14 days, with a view to dealing with the question of costs on the papers if possible, and any submissions on any interest claimed by Jainti for the period from payment of the distribution to Anthony Zamattia and the placement of the moneys in the controlled moneys account.

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DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 25 June 2021