Minister Administering National Parks & Wildlife Act 1974 v. Halloran & Ors [2004] NSWCA 118

LOWER COURT Land & Environment Court JURISDICTION : LOWER COURT 30282 of 1998 FILE NUMBER(S) : LOWER COURT Talbot J JUDICIAL OFFICER :

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL 40681/2003

SPIGELMAN CJ IPP JA BRYSON JA

WEDNESDAY 23 June 2004 MINISTER ADMINISTERING NATIONAL PARKS & WILDLIFE ACT 1974 v. WARREN HALLORAN AND ORS

Principals of companies which were registered proprietors of parcels of land about to be resumed entered into 770 transactions with the object of vesting numerous non-contiguous parcels in 283 different trusts without incurring Stamp Duty, on the view that value and resumption compensation would increase if land were not held in large contiguous parcels - scheme involved (shortly) (1) transmission of equitable ownership from registered proprietor to (for example) Sealark under Scheme of Arrangement approved by Federal Court (2) agreement by Sealark to transfer land to Pacinette as Trustee of Unit Trust in consideration of issue of units (3) formation of agreement by written offer by Pacinette and oral acceptance (4) further transactions for Pacinette in personal capacity to obtain units from Pacinette as Trustee (5) redemption by Pacinette as trustee of units of Sealark paid for by Bill of Exchange proffered by Pacinette in personal capacity to Pacinette as trustee as consideration for its units (6) Bill of Exchange deriving its value from acceptance by Sealark as accommodation party (7) with the object that beneficial ownership would pass to Pacinette in its personal capacity. However the necessary transactions including oral acceptances were not carried out in fact although records were created recording them. Held by Bryson JA, Spigelman CJ and Ipp JA agreeing, the scheme failed because (a) the underlying transactions did not occur in fact and also (b) because no value was given in substance for transfer of beneficial ownership. Consideration of effect of Chief Commissioner of Stamp Duties v. ISPT. Complex facts.

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL 40681/2003

SPIGELMAN CJ IPP JA BRYSON JA

WEDNESDAY 23 JUNE 2004 MINISTER ADMINISTERING NATIONAL PARKS & WILDLIFE ACT 1974 v. WARREN HALLORAN AND ORS Judgment 1 SPIGELMAN CJ: I agree with Bryson JA. 2 IPP JA: I agree with Bryson JA. 3 BRYSON JA: These proceedings involve several concepts not encountered in everyday conveyancing. One is that where the owner of real property applies to the trustee of a unit trust for the issue of units in exchange for beneficial ownership of real property, units are issued and there is no other holder of units, beneficial ownership of the real property is unchanged and remains where it originally was. The other is that where a purchaser offers to purchase real property and indicates in the offer that acceptance may be oral, there is an oral acceptance and the agreed consideration actually passes to the vendor, the purchaser is entitled to an order for specific performance compelling the vendor to give an assurance of the transfer of ownership, but is already the beneficial owner even though no proceedings for specific performance have yet been brought; entitlement to specific performance based on the doctrine of part performance or on constructive trust is not affected by there being no written declaration of trust or other document signed by the vendor conforming to s 23C or s54A of the Conveyancing Act 1919. It is hardly necessary to say that the context is not one of arm's-length transactions between independent parties, but of transactions between parties whose interests are related and who are concerned that their dealings should not generate liability to pay stamp duty. 4 The appellant, the Minister Administering National Parks & Wildlife Act 1974 (hereinafter the Minister), acquired many parcels of land for the purpose of the Jervis Bay National Park by two notices of compulsory acquisition of land; the first was published in the Government Gazette of 19 June 1998 (see p.5 of vol.1 of blue appeal book) and the second was published in the Government Gazette of 18 September 1998 (see pp.6-7 of vol.1 of blue appeal book). The resumed land is said to total about 2,639 hectares and includes land in many separate certificates of title and deposited plans and a large number, said to be several thousands, of parcels of land each being a separate lot in a deposited plan. We were told that a large tract of land was subdivided into parcels of suitable size for town development early in the 20th Century when it was thought that a port for the Federal Capital would be situated near Jervis Bay. Actual human settlement has not in any way followed the pattern suggested by the subdivisions; few if any of the lots of suitable size for development as dwellings have ever been so occupied, and nothing on most (if on any) of the land reflects its state of subdivision. 5 In resuming the land the Minister acted in conformity with orders made by the Land and Environment Court of New South Wales on 8 September 1997 obtained by then registered proprietors of the land, who were Mr Warren Halloran and individuals and companies associated with him, including Port Stephens Development Pty Ltd, St Vincent's City and Suburbs Pty Ltd and Pacific City Pty Ltd. These proprietors made a claim for compensation in the Land and Environment Court. In accordance with an order of that Court on 20 November 1998 an advance payment of $10,083,510 was made to these claimants; this was 90 percent of the compensation determined by the Valuer-General. Subsequently additional claims for compensation were initiated and the claim before the Land and Environment Court was amended to include some hundreds of persons nominated in a Schedule of Ownership, including Pacinette Pty Ltd and Actalian Pty Ltd, as persons claiming compensation. These persons claimed entitlement to compensation under s.37 of the Land Acquisition (Just Terms Compensation) Act 1991 (hereinafter Just Terms Act). The terms of s.37 are: 37 Right to compensation if land compulsorily acquired An owner of an interest in land which is divested, extinguished or diminished by an acquisition notice is entitled to be paid compensation in accordance with this Part by the authority of the State which acquired the land.

6 An order made on 19 March 1999 by Talbot J of the Land and Environment Court specifies three classes of claimants: (p.608 of vol.3 of blue appeal book) Class 1, being claimants who claimed to be bare trustees of some of the land; Class 2, being 283 claimants who claimed to be holders of equitable interests in some of the land; and Class 3, being six claimants who claimed to be registered proprietors of some of the land and also claimed to be beneficial owners.

In the present appeal the Minister appeals against two decisions of Talbot J relating to the claims in Class 2. 7 The parties agreed that the issues in the appeal were as follows: (para.1 of p.14 of orange appeal book) 1. The issues between the parties are: (a) whether each of Pacinette and Actalian was the owner of an interest in certain land which entitled it to maintain its claim for compensation under sec 37 of the Land Acquisition (Just Terms Compensation) Act 1991 (the " Just Terms Act"); and if so - (b) whether Pacinette and Actalian are precluded from relying on the transactions pursuant to which they acquired their interest as an owner of the land by reason of section 29(3), and the circumstance that the transactions were subject to Division 3A of Part 3, of the Stamp Duties Act 1920 ("Division 3A"). 8 The first position taken by the appellant under issue (a) was to the effect that the acts and documents shown to have occurred by The Agreed Statement of Facts and the evidence do not establish that the transactions actually occurred which, according to the respondents' case, make Pacinette, Actalian and others in corresponding positions owners of beneficial interests in the land: that the transactions which, on the respondents' view, would produce that result simply did not happen. 9 The second position taken by the appellant under issue (b) was to the effect that, if it is found contrary to the first submission that the transactions did happen, they did not produce the effect of passing beneficial interests in land to Pacinette, Actalian and others in similar positions; they did not do so because there was no written memorandum or other compliance with the successor provisions to the Statute of Frauds in ss 23C and 54A of the Conveyancing Act 1919. 10 The appellant's third position was that, if the first two positions do not prevail, stamp duty was payable in respect of the transfer of beneficial interest, and was not paid, and the transactions cannot be given legal effect having regard to s 29 of the Stamp Duties Act 1920. 11 The 283 Class 2 claimants claim to have equitable interests in many parcels of land, and claim that their interests arise from dealings in 770 trusts. The general effect of these transactions is that whereas earlier a small number of registered proprietors each held a large number of lots in deposited plans, now each of 283 different equitable owners owns a number of non-contiguous lots. Underlying these events is the view that if compensation is assessed on proper principles a larger sum in total would be payable to the many claimants who each hold non-contiguous lots than will have been payable to a small number of claimants who held the same lots agglomerated into large contiguous parcels. The issues in the appeal do not call for close examination of this assumption, or for a ruling on whether it is valid. 12 Talbot J gave two decisions relating to the Class 2 claimants, first in Reasons for Judgment published on 9 December 1999 and the second in Reasons for Judgment published on 17 July 2003. An Agreed Statement of Facts dated 12 March 2003 (see p.586 of vol.3 of blue appeal book) prepared for the second hearing sets out much of the facts relevant for both decisions. The first decision relates to three parcels of land the registered proprietor of which was Port Stephens Development; Pacinette Pty Ltd, a Class 2 claimant, claimed that it was the owner of an equitable interest in those three parcels of land and was entitled to maintain a claim under s 37 of the Just Terms Act in respect of those parcels. In his first decision Talbot J said: (para.9 and 10 of p.54 of red appeal book) 9. By consent on 27 October 1999, the parties requested the Court to make the following order: - Order that the following question be determined separately at the hearing of paragraph 1 of the Claimants' Amended Notice of Motion dated 11 March 1999: 1. Has the Claimant, Pacinette Pty Limited established on the admissible evidence tendered at the hearing of this question, that Pacinette Pty Limited is an owner of an interest in land the subject of the notice of acquisition and published in the Government Gazette dated 19 June 1998, ("Notice") entitled for the purposes of these proceedings to maintain its claim under section 37 of the Land Acquisition (Just Terms Compensation) Act 1991? Note that the respondent admits that the following parcels of land were wholly within the land the subject of the Notice, namely: (a) Lot 140 DP 11388 (part of Auto Consol 34090-116) being land contained within Lot 7 DP877899; (b) Lot 1629 DP 11386 (part of Auto Consol 3409-69) being land contained within Lot 7 DP877899; and (c) Lot 1063 DP11387 (part of Auto Consol 3409-65) being land contained within Lot 7 DP877899. 10. The answer to the Question of Law in so far as it relates to the land alleged to be held by Pacinette Pty Ltd will enable the parties to proceed to the final hearing with a proper understanding of the rights and interests held by those claimants who claim to be beneficiaries under the 770 trust deeds.

With respect, it was not correct, in my opinion, to refer to the separate question as a question of law. 13 The second decision relates to the claims of Actalian Pty Ltd, another Class 2 claimant. Although Talbot J reached a similar conclusion in his second decision on facts which are not different in principle to those on which the first decision was based, his Honour made an order that Actalian's notice of motion be dismissed. It is not possible to understand why Talbot J made this order, as it does not reflect the conclusion reached; hence there was a cross-appeal. 14 In the Agreed Statement of Facts the following passages appear: (paras.3-5 at pp.586-587 of vol.3 of blue appeal book) 3. The parties have selected for the purposes of the hearing of the amended notice of motion filed on 2 August 2002, the transactions as a result of which Actalian Pty Ltd ("Actalian") claims to be a Class 2 Claimant. 4. The parties have agreed that if Actalian is found to have become or failed to have become a Class 2 Claimant, then each of the remaining Class 2 Claimants is in the same position as Actalian for the purposes of the proceedings. 5. The parties have agreed that if Actalian is found to have become a Class 2 Claimant it, and each of all the remaining Class 2 Claimants, is entitled to maintain its separate claim for compensation under section 37 of the Land Acquisition (Just Terms Compensation) Act 1991 (the "Act").

It was not suggested that there is any difference in principle between the facts and conclusions relating to the Pacinette Property Trust and those relating to the Actalian Property Trust, and it is sufficient to address those relating to the Pacinette Property Trust. Talbot J's decisions established the entitlement of each Class 2 claimant, and all those entitlements are involved in the present appeal. 15 Before 12 December 1997 Port Stephens Development was the registered proprietor of the three parcels of land dealt with in the first decision. On 12 December 1997 the Federal Court of Australia (Beaumont J) approved, pursuant to s411(4) of the Corporations Law, a Scheme of Arrangement relating to Port Stephens Development and among other things ordered: (pp.112-113 of vol.1 of blue appeal book) 1. The Scheme of Arrangement in the form of Annexure "B" to the Affidavit of Warren Halloran sworn on 3rd day of November, 1997 in these proceedings, as approved at the meeting of members of the Claimant convened in accordance with the orders of the Court made on the 10th day of December, 1997, be approved, pursuant to Section 411(4) of the Corporations Law ("the Law"). 2. The whole of the undertaking, and the property and liabilities of the Claimant, be transferred to Sealark Pty. Limited ("the transferee company"), pursuant to Section 413(1) of the Law. 3. The transferee company shall issue and allot to Closer Settlement Pty Limited, fully paid shares, having no right to participate in the surplus assets of that company on the winding up of Sealark Pty Limited, to the face value of the net assets of the Claimant, as disclosed by the balance sheets which were the annexures "C" to the Affidavit of Warren Halloran of even date. 4. The Claimant be dissolved without winding up, pursuant to Section 413(1)(d) of the Corporations Law. 16 Also on 12 December 1997 Schemes of Arrangement were approved for several other companies which were registered proprietors of land, and their undertakings, property and liabilities were transferred to transferee companies; in one case the transferee company was Sealark Pty Ltd. It is not necessary to set out these orders in detail. The orders of the Federal Court were entered on 19 December 1997 and notice of the orders was lodged with the Australian Securities Commission on 23 December 1997. On or by 23 December 1997 Port Stephens Development was dissolved, and Sealark Pty Ltd became the owner of the whole of the undertaking and property of Port Stephens Development. For some time until after the events of May 1998, the registered proprietor of the land under the Real Property Act 1900 was still shown as Port Stephens Development; however Port Stephens Development had been dissolved and no action had been taken under s 46C of that Act to register Sealark as the registered proprietor. Later Sealark became the registered proprietor of the land, not by proceedings under s 46C but by markedly irregular steps which do not require close examination now; irregularly or otherwise, Sealark was entitled to become the registered proprietor. In May 1998 there was no registered proprietor under the Torrens System notwithstanding that the name of the dissolved company Port Stephens Development appeared on the Register. The legal owner appears to have been Sealark, not under the workings of the Torrens System but under a title conferred by the order of the federal Court. Legal ownership does not require close examination, as there is no room for doubt that Sealark became the equitable owner of the land under the Federal Court's order, and the issues in the appeal relate to equitable ownership. 17 On 27 February 1998 the Minister served, or purportedly served on the then registered proprietors two notices of intention to acquire land by compulsory process, as required by s 11 of the Just Terms Act. (However the registered proprietors had been dissolved.) The Minister also complied with s.17 by lodging with the Registrar-General a notification of proposed acquisition which was entered on the Register on or about 8 May 1998. These events did not effect any change in the ownership of the land. Acquisition notices published in the Government Gazette on 19 June 1998 and 18 September 1998 had the effect of vesting the land in the Minister freed and discharged from other interests as provided by ss.19 and 20 of the Just Terms Act. 18 The events which give rise to the interests claimed took place largely in accordance with advice given by Mr Seller of Messrs Gadens Lawyers. The leading personalities in the respondents' affairs were Mr Warren Halloren and Mr Philip Howell, who were directors of Sealark and of Pacinette, among many other companies. Messrs Gadens Lawyers wrote to Mr Philip Howell on 3 May 1998 in the following terms: Our Reference Gaibrielle Cleary 981531 Direct Line 9931 4799 Partner Responsible Ross Seller

Mr Philip Howell GPO Box 2678 SYDNEY NSW 2001

Dear Mr Howell vendor: Sealark Pty Limited purchaser: Pacinette Pty Limited

We refer to your instructions to transfer the property in the table below ("the Property") from Sealark Pty Limited to Pacinette Pty Limited. Lot DP Certificate of Title if no Folio Identifier 3109 12599 part of Vol 3433 Fol 244 140 11388 part of Auto Consol 3409-116 1720 11746 part of Auto Consol 15536-158 1629 11386 part of Auto Consol 3409-69 1063 11387 part of Auto Consol 3409-65

The consideration for the sale is $79,000. Please find enclosed the following documentation for execution: The Power of Attorney to be executed by Sealark Pty Limited to allow The Pacinette Property Trust to be executed in the Australian Capital Territory. We also enclose the Power of Attorney which was executed by the settlor of The Pacinette Property Trust. The Trust Deed and associated minutes to establish The Pacinette Property Trust. These will be executed under Power of Attorney in the Australian Capital Territory. The draft minutes of meetings required to transfer the properties. These documents should be signed where indicated at the time of the relevant meetings, after the establishment of The Pacinette Property Trust. The procedure for executing these documents and the cheques which are required to be paid for the acquisition are included in the procedure sheet in the documentation. The Power of Attorney to be executed by Sealark Pty Limited giving Pacinette Pty Limited the power to deal with the Property any way they see fit. This should be executed at the time of the transfers. Upon the holding of the meetings and the execution of these documents the transfer of the Property from Sealark Pty Limited to Pacinette Pty Limited will be complete. We note that there will not be a transfer to the name of Pacinette Pty Limited registered on the title to the Property. The title to the Property will remain in the name of Sealark Pty Limited. However, the rating authorities should be advised of the sale to ensure future rate notices are sent by the authorities to Pacinette Pty Limited. Should you wish to discuss any of the above, please do not hesitate to contact me on 9931 4738 or Gaibrielle Cleary on 9931 4799.

Yours faithfully Ross Seller for Gadens Enc 19 Enclosed with the letter was a procedure sheet in the following terms: PROCEDURE SHEET 1 PARTIES TRUSTEE A Sealark Pty Limited B The Pacinette Property Trust Pacinette Pty Limited C Pacinette Pty Limited

References to trusts in this procedure sheet will not include a reference to the trustees of those trusts for the sake of brevity.

2. TRANSFER FROM Sealark Pty Limited TO Pacinette Pty Limited

This involves the transfer of the land in the table below ("the Land")

Lot DP Certificate of Title if no Folio Identifier 3109 12599 part of Vol 3433 Fol 244 140 11388 part of Auto Consol 3409-116 1720 11746 part of Auto Consol 15536-158 1629 11386 part of Auto Consol 3409-69 1063 11387 part of Auto Consol 3409-65

Transaction Movement of Cash and Units Execute The Pacinette Property Trust 10 A Class Units allotted to Sealark Pty Limted Sell 100% of the land to The Pacinette Property Trust 79,000 A class units in The Pacinette Property Trust allotted to Sealark Pty Limited. Pacinette Pty Limited invests in The Pacinette Property Trust $79,010 paid by Pacinette Pty Limited to the Trust and Pacinette Pty Limited is allotted 79,010 ordinary units Redeem Sealark Pty Limited units in The Pacinette Property Trust $79,010 paid to Sealark Pty Limited to redeem all A class Units Sell 100% of the land to Pacinette Pty Limited Redeem 79,010 ordinary units

Drawer Payee Amount Endorsed/Banked A Pacinette Pty Limited The Pacinette Property Trust $10 Banked B Pacinette Pty Limited The Pacinette Property Trust $79,000 Endorsed to Sealark Pty Limited C The Pacinette Property Trust Sealark Pty Limited $10+ 79,000 Banked

20 The steps later taken did not accord in all respects with the letter and the procedure sheet. 21 The events which Talbot J found to have created equitable interests in each of the Class 2 claimants are indicated by paras 17-23 and 25 of the Agreed Statement of Facts: (pp.590-595 of vol.3 of blue appeal book) 17. On 6 May 1998 Howell executed a power of attorney in favour of Gerald Santucci authorising him to execute trust deeds on his behalf.

Prior to 9 May 1998 Ross Seller ("Seller"), a partner in the firm of Gadens, solicitors, caused 770 instruments of trust deed, each in the same form except for (a) the identification of the trustee named in the trust instrument and (b) the name allocated to the trust fund to be instituted by the instrument, to be sent to the office of Snedden, Hall and Gallop in Canberra.

Included in the 770 trust deeds were forms of deed in relation to (a) the Pacinette Property Trust, with Pacinette Pty Ltd ("Pacinette") as trustee; (b) the Pacinette Trust, with Pacinette as trustee; (c) the Actalian Property Trust with Actalian Pty Ltd ("Actalian") as trustee; (d) the Actalian Land Trust with Actalian as trustee; (e) the Actalian Trust with Actalian as trustee.

Prior to 9 May 1998 Seller caused to be prepared under his supervision the forms of document described in Table 5 below in respect of each of those lots which are now the subject of claims by Class 2 Claimants as identified in the Schedule of Ownership. Where the parties respectively listed in the schedule as "beneficial owner" and "legal owner" were common to more than one lot, a single set of documents in respect of those lots ("group of lots") was prepared. Table 5 Document Description Reference 5.1 Request by Howell to Trustee to accept office as trustee of the trust. 5.2 Minutes of a meeting of Directors (Halloran, Howell) of the Second Company resolving to accept units in the trust. 5.3 Instrument whereby the Second Company accepts units in the trust and agrees to be bound by the trust deed. 5.4 Minutes of a meeting of Directors (Halloran and Howell) of the trustee resolving to accept office as trustee of the trust. 5.5 Unit certificate for ten units in the trust allotted to the Second Company Minutes of a meeting of Directors (Howell and Halloran) of the trustee as trustee of the trust resolving to make a written offer to the Second Company 5.6 to acquire the land in which the trustee of that trust claims an interest as set out in the Schedule of Ownership ("the Subject Land") in consideration of the allotment of units in the trust. Form of "offer of purchase" from the trustee as trustee of the trust to the 5.7 Second Company to acquire the Subject Land in consideration of the allotment of units. Minutes of a meeting of Directors of the Second Company (Howell and 5.8 Halloran) resolving to accept the offer and authorising either Earleen Kenny ("Kenny") or Howell to notify the directors of the trustee company accordingly. 5.9 Form of Statutory Declaration whereby Kenny declares hearing Howell and Halloran hold a meeting and resolve to accept the offer referred to in 5.7. 5.10 Minutes of a meeting of Directors of the Trustee company (Howell and Halloran) resolving to allot units to the Second Company. Minutes of a meeting of Directors of the trustee company (Howell and 5.11 Halloran) resolving that the trustee company should apply for the allotment to itself of not less than the number of units offered to the Second Company as consideration for the sale of the Subject Land. 5.12 Form of application by the trustee company for units in the trust. 5.13 Form of application for redemption of units held by the Second Company in the trust. 5.14 Minutes of a meeting of directors (Howell and Halloran) of the Second Company resolving to request the redemption of its units in the trust. Minutes of a meeting of directors (Howell and Halloran) of the trustee 5.15 company as trustee of the trust resolving to redeem the units held by the Second Company and to allot an equal number of units to the trustee company at $1 each. 5.16 Unit certificate for units in the trust issued to the Second Company. 5.17 Unit certificate for units in the trust held by the trustee company. Minutes of a meeting of directors of the trustee company (Howell and 5.18 Halloran) resolving to make an offer to purchase the Subject Land in consideration of the redemption of its units in the trust. Form of "offer of purchase" by the trustee company to itself as trustee of the 5.19 trust to purchase the Subject Land in consideration of the redemption of all its units in the trust. Form of Statutory Declaration of Kenny reciting her hearing the directors of 5.20 the trustee company as trustee of the trust resolve to accept the offer to purchase made by the trustee company. Minutes of a meeting of the directors of the trustee company (Howell and 5.21 Halloran) as trustee of the trust resolving to accept the offer of the trustee company. Minutes of a meeting of the directors of the trustee company (Howell and 5.22 Halloran) noting that the trustee company as trustee of the trust had accepted the offer. 5.23 Form of Power of Attorney given by the Second Company to the trustee company to deal with the Subject Land. Form of bill of exchange drawn by the trustee company on the Second Company in favour of the trustee company as trustee of the trust in an 5.24 amount equal to the nominal value of the consideration units plus $10 (or some other amount as endorsed), endorsed by the trustee company as trustee of the trust in favour of the Second Company.

Each of the minutes of meetings of directors recorded the meeting as being held at Level 6, 110 Bathurst Street, Sydney.

On 5 May 1998 a sum of $7680 and on 18 May 1998 a further sum of $20 was deposited to an account of Acta Holdings Pty Ltd with the Commonwealth Bank, St James branch.

On or about 9 May 1998 Gerald Santucci signed, as attorney for Howell, each of the 770 trust instruments.

25. For convenience of narrative, and not so as to bind either party as to the effect of that evidence, the course of events in May 1998 in relation to the land identified in the Schedule of Ownership may be summarised as follows:

(a) On 11 May 1998 Seller, Halloran, Howell, Kenny and Gabrielle Cleary (a solicitor employed by Seller) met at the offices of Gadens at 77 Castlereagh Street, Sydney.

(b) In the course of that meeting those present had the nature and purpose of all the steps involved explained by Seller in respect of one group of lots in the Subject Land as an example of all of the proposed steps for each of the 770 sets of transaction documents. Seller asked Halloran, Howell and Kenny to agree that as regards each of the other sets of transaction documents, apart from the one example, that those others occur in the same order and fashion. Halloran, Howell and Kenny signified that they understood.

(c) The transaction examined at the meeting on 11 May 1998 was not that involving Pacinette. It is not known which transaction was examined at the meeting. All of the steps were carried out at that meeting in the manner described by Seller.

(d) No further meetings were held. (e) Over a period following 11 May 1998 the documents in each folder relating to the lots or groups of lots were signed at the places indicated by the persons for whose signature provision had been made on the documents.

(f) Howell signed some of the documents before 11 May 1998. He left Australia on 16 May 1998. (g) Seller informed the persons present at the meeting of 11 May 1998 that the documents in each other folder were "essentially exactly the same" and that the transaction the subject of the meeting was the same as the other transactions. (h) Subsequently forms of accounting entries (comprising general journal entries and postings to general ledger accounts) were prepared indicating the entries to be made in the records of the companies and trusts referred to in the documents described in Table 5. 22 In para 27 of the Agreed Statement of Facts a number of findings made by Talbot J in the first reasons were accepted as agreed facts. These are as follows: (para.27 at pp.595-597 of vol.3 of blue appeal book) 27. Talbot J in Halloran and Sealark Pty Ltd and Ors v Minister Administering National Parks and Wildlife Act 1974 [1999] NSWLEC 268 dated 9 December 1999 (" Pacinette judgment ", a copy of which is in the Agreed Bundle of Documents) made, inter alia, the following findings: [18]… On 11 May 1998 there was a meeting in the office of Gadens Lawyers between Ross Edward Seller, the partner in charge of the revenue law division of the firm, Gabrielle Cleary, a solicitor assisting Mr Seller in revenue law and working under his direct supervision, Warren Halloran, Mr Howell and Earleen Kenny. At that meeting arrangements were made for transactions to be entered into by the execution of documents and resolutions at a series of company meetings. The intention of the procedures adopted was to bring about change in the beneficial ownership of land. [19] Mr Seller made the following statement to the meeting:- These are the documents which will bring about the change in beneficial ownership of the properties as we have discussed. There are an enormous number of meetings to be held. It just is not possible to hold each meeting and sign each document in the sequence we need to have them signed in one sitting. What I propose, and I think it is the only way to effectively deal with these matters so that they are valid, is for us to hold all the meetings and sign all the documents for one transaction, Gabrielle has one here, and then for you all to agree that, as regards each other transaction and transfer of land, that they occur in the same order and fashion. Do you understand this? It is important that you all agree and understand this. That is why we are going through one trust and transfer exercise in the specific order we require. All the transactions are exactly the same and by going through one transaction we are effectively going through all the transactions and then all that remains is the signing of the completed documents. [20] The evidence of Mr Seller is that each of the other persons at the meeting indicated that they understood. [23] The documentation prepared for each transaction in advance was signed or executed at the same time. [24] There is no direct evidence that the individual participants formally conducted meetings and made statements attributed to them by the documents. Nevertheless the documents record that meetings were held and the transactions described were entered into. It is not the respondent's case that the scheme was a sham. There was a relevantly at all times an intention to transfer the beneficial ownership of land from one party to another. [25] Mr Seller has provided an undertaking to the Court that, at his direction and under his supervision, the documents as executed in the transaction involving the Pacinette property trust were likewise executed in relation to some other 770 trusts, the names of which have been provided [26] Furthermore, [Ross Seller] confirms that he has checked his files and says, and the fact is, that substantially identical documents in respect of the 770 trusts were prepared by his firm and provided to Mr Howell at least seven days prior to the date upon which he purports to have convened meetings and signed documents. 23 In his oral evidence, Mr Seller stated: (p.671 of vol.3 of blue appeal book) … what we did was to have one meeting which we all understood was the same as the meetings that would occur for all of these transactions.

In another account of what occurred at the meeting Mr Seller said: (p.676 of vol.3 of blue appeal book) …Some of [these transactions] may have already been commenced to be signed by Mr. Howell, but the meeting on 11 May was to formalise if you like the transactions and to ensure as I said before that everyone involved understood what their role was and what the transactions were seeking to achieve. And to reinforce that I discussed the nature and effect of the transactions both in form and substance with the parties. In other words I explained to them in substance what was happening, that properties were moving beneficially from one owner to another and I explained in the form in which that was carried out, so that they understood not only what they doing, but why they were doing it and in that process I went through the bundle of documents for the one transaction with them, going through all the various meetings and I wouldn't say we role played but we certainly went through those meetings and we discussed the nature and effect of each step and transaction that was occurring. 24 First Mr Howell signed all the documents he was to sign; he completed this by 12 May 1998, and at that stage there had been no other signatures (other than on the Deeds of Trust). On 12 May 1998 Mr Howell met with Mr Halloran and Ms Kenny and in their presence said to this effect: "is everybody agreeable that we can take the meetings that are necessary as having taken place …?" and "I have completed all the signing of all the documents, do you confirm that we are pursuing to resolve all the resolutions and sign all the documents as was outlined by Mr Seller." After that documents were signed by Mr Halloran and by Ms Kenny; it is not established exactly when or in what order.

25 Talbot J in his first judgment gave the following account of the transaction: (paras.33-45 of pp.60-61 of red appeal book) 33. At all relevant times prior to 9 May 1998 and up to the date of acquisition, Sealark, although not actually, appears to have been entitled to be registered as proprietor of five parcels of land. The facts and circumstances giving rise to Sealark's entitlement to be registered as proprietor of the land are dealt with in [139] to [146] under the heading The interest held by Sealark. 34. On 14 May 1998 various steps were taken with the object of the Trustee acquiring the land from Sealark and subsequently for Pacinette, in its own right, to purchase the land from the Trustee. 35. The Trustee made a written offer to purchase all the land and to satisfy the purchase price by the allotment of 79,000 $1 A Class units in the Trust to Sealark.

Earleen Kenny confirmed by statutory declaration that she was present at a meeting of the directors of Sealark and heard Halloran and Howell hold a meeting which resolved to accept the written offer. The minutes of the meeting of the directors of Sealark show it was resolved that the company should accept the offer made by the Trustee on the basis that the consideration would comprise of the allotment of 79,000 $1 A Class units in the Trust.

The Trustee resolved to allot 79,000 A Class units to Sealark.

A Unit Certificate for 79,000 $1 A Class units was issued in the name of Sealark

Pacinette then applied for the allotment of 79,010 $1 ordinary class units in the Trust. At or about the same time the directors of Sealark resolved to request the redemption of all the A Class units held by the company in the Fund of the Trust.

The Trustee, at a meeting attended by Halloran and Howell, allotted 79,010 $1 ordinary class units to Pacinette. At the same meeting they resolved that the Trustee redeem all the $1 A Class units held by Sealark.

The consideration for the issue of 79,010 $1 Ordinary Class units to Pacinette was in the form of a bill of exchange drawn by Pacinette on Sealark in favour of the Trustee. Sealark accepted the bill of exchange. There is no explanation of the consideration passing between Pacinette and Sealark in respect of the drawing an acceptance of the bill of exchange. The respondent assumes it was a loan of some sort.

A Unit Certificate was issued in the name of Pacinette for 79,010 $1 Ordinary Class units.

The Trustee endorsed the bill of exchange in favour of Sealark.

At a further meeting of the Trustee, a written offer by Pacinette to purchase the subject land in consideration of the redemption of 79,010 $1 Ordinary units held by Pacinette in the Trust was accepted. 45. Finally, Sealark executed a Power of Attorney in favour of Pacinette authorising the latter to deal with the subject land in any way which it sees fit.

26 It must be understood from the reasons given by Talbot J and the conclusions which he reached that his Honour regarded it as established in fact that the transactions took place and had their purported effects. Talbot J's account of the transactions in paras 33-45, set out above, appears to show this. Throughout his judgment statements relating to the facts appear to reflect the same conclusion. His Honour's approach may have been produced by his understanding that the question for separate determination in the first reasons was a question of law. In my opinion the question called for decisions both of fact and of law upon whether Pacinette had established the matter referred to. 27 Talbot J said in his first reasons: (para.24 at p.57 of red appeal book) 24. There is no direct evidence that the individual participants formally conducted meetings and made statements attributed to them by the documents. Nevertheless the documents record that meetings were held and the transactions described were entered into. It is not the respondent's case that the scheme was a sham. There was relevantly at all times an intention to transfer the beneficial ownership of land from one party to another.

28 Talbot J made no express finding establishing the facts. He treated the evidence and the documents before him as establishing that events happened in the terms recorded in the documents, and appears to have done so on the view that the question before him was a question of law. This was a profound misunderstanding of the process required for decision, which required his Honour to address whether the transactions on which the legal conclusions contended for by the respondents had taken place in fact. Talbot J's assuming that the ultimate facts had been established, and omitting the stage of deciding them, was in my respectful opinion, an error of law. The Court of Appeal should made the omitted findings. 29 The appellant did not, either before Talbot J or on appeal, at any point contend that the documents and the events constituted sham transactions. Part of the appellant's position was its contention that the transactions had not taken place, and were pretenced transactions. The word "sham" is not highly precise but its meaning in this context is sufficiently indicated by a passage from the judgment of Diplock LJ in Snook v. London & West Riding Investments Ltd (1967) 2 QB 786 at 802: "But one thing, I think, is clear in legal principle, morality and the authorities (see Yorkshire Railway Wagon Co. v. Maclure (1882) 21 ChD 309 and Stoneleigh Finance Ltd v. Phillips [1965] 2 QB 537), that for acts or documents to be a 'sham', with whatever legal consequences follow from this, all the parties thereto must have a common intention that the acts or documents are not to create the legal rights and obligations which they give the appearance of creating". The concept of a sham includes an intention to deceive by creating an appearance that transactions have occurred which the parties to the transactions do not intend to have legal effect. Many authorities in which the concept of a sham has been considered were referred to in Sharrment Pty Ltd & Ors v. Official Trustee in Bankruptcy (1988) 18 FCR 449 by Lockhart J at 453 to 458, but the appellant's position is sufficiently illustrated by what I have said. There is no doubt that the persons whose minds directed the events intended the documents to have legal effect; the appellant's position that the documents were not shams has no real impact on whether this outcome was achieved. The appellant always took the position that the respondents should fail because the transactions had not taken place. 30 The Deed of Trust for the Pacinette Property Trust (see pp.13-40 of vol.1 of blue appeal book) and the transaction documents relating to the dealings in that Trust (pp.41-82 of vol.1 of blue appeal book) illustrate in principle dealings of each of the 283 Class 2 claimants and each of the 770 trusts. They do not illustrate those dealings fully in detail; there are many complexities arising out of involvement of individuals and not of companies in some instances, the numbers of parcels of land involved in some of the trusts, and participation of some companies as trustees of a plurality of trusts. These sources of complexity do not affect the principles on which decision turns. 31 The Deed of Trust for Pacinette Property Trust relates to settlement of the sum of $10 which had been paid to an account of Acta Holdings Pty Ltd with the Commonwealth Bank at St James branch on 5 May 1998 as part of a deposit of $7,680. At the first hearing Mr Howell gave evidence that "Acta Holdings was acting as trustee to hold or to settle the fund for the company" and this matter was not explored in further detail (p.685 of vol.3 of blue appeal book). $7,680 was deposited on 5 May 1998, before the dates attributed to the events, including the date attributed to the Trust Deeds, and $20 was deposited on 18 May 1998, after the dates attributed to the events (p552 of vol.3 of blue appeal book). It is not disputed that Acta Holdings received $10 of those deposits on behalf of Pacinette and on account of the Pacinette Property Trust. The Deed of Trust contains provisions commonly found in a unit trust of an investment fund. Provisions in the Trust Deed established that the trustee is to hold the settled sum and all other money and property forming part of the Trust Fund on the trust declared in the Deed (cl 2). A key provision is cl 3.1: (p.18 of vol.1 of blue appeal book) 3.1 The Trustee will hold the capital and income of the Trust Fund on trust for the Registered Holders in proportion to the number of Units held by them, subject to the rights and restrictions specified in the Schedule for A Class units. 32 Clause 5 relates to units and is in these terms: (p.19 of vol.1 of blue appeal book) 5. UNITS 5.1 The beneficial interest in the Fund will be divided into Units. Initially there shall be two classes of Units, the Ordinary Class units, to which no special rights or restrictions attach the A Class units, to which the rights and restrictions specified in the First Schedule attach. 5.2 Every Unit will confer an interest in the Fund in accordance with the provisions of clause 3 but will not confer any interest in any particular part of the Fund or of any investment. 5.3 At any time all the Units will be of equal value. 5.4 The beneficial interest in the Fund as originally constituted by the payment to the Trustee of the Settled Sum will be divided into 10 A Class Units having an initial value of $1.00 each. Those Units will be held subject to this Deed by the person specified as the Registered Holder in Clause 7 in the Schedule for A Class units. 5.5 As and when any addition is made to the Fund under clause 2.2 additional Units will be created. The number of those additional Units will be determined by the Trustee having regard to the value of Units in existence immediately before that addition to the Fund. In the case of creation of any additional Units those additional Units will only be entitled to share in the income of the Trust Fund from the date of their creation. The Settlor, or any person (other than a Registered Holder) appointed as an additional or substituted trustee of this Trust will not be entitled to be beneficially interested in any Units. 33 Clause 9 relates to redemption of units and is in these terms: (p.21 of vol.1 of blue appeal book) 9. REDEMPTION OF UNITS 9.1 A Registered Holder may by notice in writing to the Trustee request redemption of specific Units or request the return of the capital or part of the capital paid on the Units specified in that request. 9.2 (a) The Trustee may in its discretion either refuse the request specified in clause 9.1, or may consent to that request on any terms and conditions as the Trustee may consider appropriate having regard to the interests of all Registered Holders. (b) When those terms and conditions (if any) are satisfied the Trustee may effect a reduction in the Trust Fund by the cancellation of the Units on a return of the capital or a part of the capital on the Units specified in the request and the distribution of an appropriate part of the Trust Fund to the relevant Registered Holder. (c) The Trustee on the request of the Registered Holder must notify the relevant Registered Holder before the Trustee effects the reduction of the Trust Fund of the value of the part of the Trust Fund that will be distributed to that Registered Holder on such a reduction and must allow the Registered Holder to withdraw his request after receiving such notice. 34 The Schedule (Blue 1/34) deals with A Class units and its provisions include, in cl 1 "If the Trustee does a lot A Class units then the cash or property received by the Trustee in consideration of that allotment shall form a separate fund (the 'A Funds"). 35 By cl 2 of the Schedule: 2. Entitlement A Class unitholders shall be entitled to a fractional interest in the corpus of the A Fund, the value of which shall be calculated by dividing the value of the A Fund by the number of units then on issue in the A Fund. A Class unitholders shall not be entitled to any interest in the assets of the Trust Fund and ordinary unitholders shall not be entitled to any interest in the assets of the A Fund. 36 Clause 5 of the Schedule provides for redemptions and includes the following: 5 Redemptions (a) The Trustee may on request of an A Class unitholder, without the consent of the ordinary unitholders, redeem units held by an A Class unitholder on payment of their full value, that is at a price of $1.00 per unit. (b) Upon redemptions of A Class units the assets which were previously part of the A Fund shall cease to be assets of the A Fund and shall from then on form part of the Trust Fund. 37 An effect of these provisions is that cash or property received on an allotment of A Class units forms the A Fund, a separate fund in which other unit holders have no interest, but that if all A Class units are redeemed, the cash or property in the A Fund then forms part of a trust fund in which ordinary unit holders have a beneficial interest. 38 After the issue of A Class units to Sealark the operation of the Deed would be that there was an A Fund of $79,000 represented by the interest in land which Sealark had agreed to transfer as subscriptions for its units, and an ordinary fund of $10 being the original settlement fund. At Blue 1/40 is a Unit Certificate by which Pacinette as trustee certifies that Sealark held 10 A Class units. 39 The appellant's counsel referred to the mechanism by which the beneficial interest of a holder of A Class units ceases when the units are redeemed, while the property formerly in the A Fund comes to be beneficially owned by ordinary unit holders as "… the trick or device which makes the scheme work." Involved in the device is the operation of Pt 3 Div 3A "Transactions otherwise than by dutiable instrument" of the Stamp Duties Act 1920. For a transaction which causes or results in a change in the beneficial ownership of an estate or interest in land, s 44A requires a party to a transaction which is not affected or evidenced by an instrument chargeable with ad valorem duty to lodge with the Chief Commissioner a statement in respect of the transaction, and provisions of s 44A(5) and s 44(1B) impose duty on such a statement. However exceptions are created by provisions of s 44 including subs 44(2)(d) by which a change in beneficial ownership occurring as a consequence of (d) "the issue or redemption of units in a unit trust scheme," is not, relevantly, included in the changes of beneficial ownership to which the Division applies. 40 Many other provisions in the Deed of Trust are not presently of much importance. There is a provision for the trust to exist for 80 years or to be terminated earlier by the trustee; there are provisions relating to special units, transfer and transmission of units, and there are provisions which confer on the trustee extensive powers relating to investment and to many other matters. 41 Paragraph 20 of the Agreed Statement of Facts (which is set out earlier) describes numerous documents which recorded events as having taken place in relation to the creation of the Pacinette Property Trust and the 770 trusts. The descriptions given in Table 5 to para.20 are sufficient for an understanding of the intended effect of the events and documents in most cases. However I will make particular observations on some of them. For the events to have had their intended effect it is necessary that they came into effect in the order of time indicated (in almost all cases) by their sequence in Table 5, which represents their order in a set of documents relating to the Pacinette Property Trust; and similarly for 770 sets of documents relating to each of 770 trusts. The exceptions are that document 5.20, the statutory declaration of Ms Kenny, is later in date than document 5.21 the minute of a meeting of the directors of Pacinette which immediately follows it. In truth there is no anomaly in their apparently being out of the intended order; the minute (see pp.70-77 of vol.1 of blue appeal book) is referred to in the statutory declaration (see p.76 of vol.1 of blue appeal book) as annexure A (though not in fact marked "A") and the statutory declaration was, according to its terms, declared on 22 May 1998, some days after the date attributed to the minute and the events in which all the other documents were signed.

42 Each of the Pacinette documents bears date 14 May 1998. No particular time on 14 May 1998 was attributed to the documents or to the events set out in them by their terms, or should be attributed to them by the Court, and the intervals of time between the events are notional only; there were no actual intervals of time (and as will later appear, it is my conclusion that there were no actual events). In my understanding the intention of the individuals who signed the documents was that the documents should take effect in the order in which they appear in the table, each immediately succeeding the preceding document. Although the Deed of Trust bears date 14 May 1998 it is altogether clear that it was executed under a power of attorney on or about 9 May 1998. Otherwise the Agreed Statement of Facts and the evidence do not show, and cannot show at what times and in what order the persons who signed the documents in fact signed them. It should be understood, as a matter of fact, that each person whose signature was required went through the file of documents relating to Pacinette Property Trust, and each other file relating to the 770 trusts, and signed at all the places where that person's signature was indicated; and then some other of those persons went through the file of documents and signed at each place indicated, until all had signed. 43 Some of the documents call for observations. In purport document 5.2 is the minute of a meeting of Mr Halloran and Mr Howell as directors of Sealark on 14 May 1998 at Level 6, 110 Bathurst Street, Sydney. The minute records that Mr Howell was appointed chairman, and records the following resolutions: (p.37 of vol.1 of blue appeal book)

ACCEPTANCE OF UNITS IN THE PACINETTE PROPERTY TRUST: The chairman tabled a deed to establish a trust to be known as The Pacinette Property Trust and stated that under the deed it was proposed that the initial units be issued to the Company. RESOLVED that: 1. the company accept the issue to it of 10 A Class units at $1.00 per unit in The Pacinette Property Trust; 2. a director and the secretary be instructed to execute an acceptance form under the common seal of the company. CLOSURE: There being no further business the meeting then terminated.

The minute concludes with the word "confirmed" and a signature of Mr Howell as chairman. 44 My observation is that as a matter of fact there was no such meeting; Mr Halloran and Mr Howell did not meet on 14 May 1998 at the location given, did not constitute themselves as a meeting of the directors of Sealark, and did not decide to appoint Mr Howell as chairman; the Deed of Trust was not tabled, no resolution to execute units or to accept an acceptance form was resolved by them. No such meeting took place at all, in the realm of fact. All these events were entirely notional, and the only sense in which they ever occurred was that at some earlier time which has not been established, Mr Howell signed the minute confirming that they had occurred; and someone later put the date 14 May 1998 on the minute. 45 I make observations to the same effect of documents 5.4 (see p.39 of vol.1 of blue appeal book) and 5.6 (see p.47 of vol.1 of blue appeal book). There never were meetings of the directors of Pacinette such as the documents record; no draft written offer was ever produced at a meeting, no resolution that the Pacinette Property Trust should acquire land on the basis that the consideration would comprise the allotment of 79,000 one dollar A Class units was ever passed, and Mr Howell was never authorised to execute the written offer on behalf of the trustee of the Pacinette Property Trust and deliver it to Sealark; the only event was that Mr Howell signed minutes saying that those events had happened. I make similar observations relating to document 5.8 (p.56 of vol.1 of blue appeal book). There never was a meeting between Mr Halloran and Mr Howell as directors of Sealark, attended by Ms Kenny, such as it records; the written offer made by Pacinette was never produced to such a meeting and no resolution that Sealark would accept an offer or that Mr Howell was authorised to inform a meeting of the trustee of the Pacinette Property Trust of that fact was ever passed; again the only event that happened was that Mr Howell signed a purported confirmation of a minute saying that the events had happened. 46 Document 5.7 (p.49 of vol.1 of blue appeal book) is according to its terms an offer in writing from Pacinette as trustee to Sealark to purchase the land and to satisfy the price by issuing the A Class units, and provides "(d) The Offeree may accept this Offer by informing the Trustee of The Pacinette Property Trust (being the 'Offeror') of its acceptance." The purported response is recorded in document 5.8 (p.56 of vol.1 of blue appeal book) which as well as resolving that Sealark should accept the offer states "Accordingly Philip Howell was authorised to inform a meeting of the Trustee of The Pacinette Property Trust." Document 5.10 (p.58 of vol.1 of blue appeal book), purportedly records the minute of a meeting of the directors of Pacinette as trustee, and includes the statement "Philip Howell confirmed that Sealark Pty Limited had accepted the offer made by the Trustee of The Pacinette Property Trust of 79,000 one dollar A Class Units in The Pacinette Property Trust for the purchase of the land …" It was essential to the contemplated scheme that the acceptance there spoken of should be oral; that there should not be a written acceptance. There is nothing that could be considered as a possible acceptance apart from Mr Howell stating to the meeting of Pacinette as trustee that Sealark had accepted the offer; and in fact no such event ever took place. There was no such meeting of Mr Halloran and Mr Howell, Ms Kenny was not at such a meeting, Mr Howell did not state or confirm that Sealark had accepted the offer and the directors of Pacinette did not resolve to allot 79,000 A Class units to Sealark. Again the only event that happened was that Mr Howell signed a confirmation of the minute.

47 Document 5.9, the statutory declaration made by Ms Kenny on 22 May 1998, says: (p.57 of vol.1 of blue appeal book) 1. On 14th May 1998 I was present at meeting of the Directors of Sealark Pty Limited and heard Warren Halloran and Philip Howell hold a meeting which resolved to accept a written offer (the "Offer") by The Pacinette Property Trust to sell the property comprising all those premises lands detailed in the table below (the "Property") for the consideration of the allotment of Seventy Nine Thousand One Dollar ($1.00) A class Units in The Pacinette Property Trust. … [And the table is set out] 2. A true copy of the Resolution signed by the Chairman of that meeting is annexed and Marked "A". 3. The Offeror stated to the Offeree that possession of the property had been delivered to the Offeree.

Paragraphs 1 and 3 of the statutory declaration are quite untrue; there was in fact no such meeting; Ms Kenny was not present at any meeting, she did not hear Mr Halloran and Mr Howell hold a meeting or make a resolution and there was no statement that possession of the property had been delivered to the offeree, Sealark. The event in para 3 of the statutory declaration, if true, would have had no discernible place in the scheme being followed. 48 I make observations to the same effect of each of the succeeding purported minutes of meetings and statutory declarations: of document 5.11 (p.60 of vol.1 of blue appeal book) which purportedly records the minute of a meeting of directors of Pacinette in which the directors resolved that Pacinette would apply to the trustee (that is, to itself) for an allotment of 79,010 one dollar ordinary units in the Pacinette Property Trust and to authorise Mr Howell to pay $79,010 on behalf of Pacinette in payment of the allotment; and similarly of document 5.14 (p.62 of vol.1 of blue appeal book) which purportedly records the minute of a meeting of Mr Halloran and Mr Howell as directors of Sealark resolving to request redemption of all the A-class units held by itself in the fund of the Pacinette Property Trust for the price of one dollar each, and authorising Mr Howell to execute the request for redemption and deliver it to the trustee of Pacinette Property Trust. 49 I make similar observations for document 5.15 (p.64 of vol.1 of blue appeal book). In purport the document is the minute of a meeting of Mr Halloran and Mr Howell as directors of Pacinette, as trustee, recording production of an application by Pacinette (it should be understood, intended to be in its own interest and not as trustee) for the allotment of 79,010 one dollar ordinary units, a resolution to allot them at the price of one dollar each, production of the unit certificates issued to Sealark relating to the units allotted, a request for redemption, and a resolution to redeem the A-class units at a price of one dollar each and to cancel the unit certificates. Again the only event that took place is that Mr Howell signed a purported confirmation that these events had happened. There is no record in the evidence that such unit certificates were ever in fact issued. 50 I make similar observations relating to document 5.18 (p.67 of vol.1 of blue appeal book). Purportedly it is the minute of a meeting of Mr Halloran and Mr Howell as directors of Pacinette at which they resolved that Pacinette would acquire land, including the three parcels under immediate consideration, on the basis that the consideration would comprise redemption of the 79,010 one dollar ordinary units in the Pacinette Property Trust, and authorised the directors of Pacinette to execute the written offer and deliver it to the Trust. In purport document 5.19 (pp.68-75 of vol.1 of blue appeal book) is an offer by Pacinette to itself as trustee offering to purchase land including the same three parcels, the offer was to be accepted by informing the directors of the offeror of its acceptance, and the purchase price was to be satisfied by redemption of 79,010 one dollar ordinary units. Document 5.21 (p.77 of vol.1 of blue appeal book) purports to be the minute of a meeting of Mr Halloran and Mr Howell as directors of Pacinette as trustee of the Pacinette Property Trust, with Ms Kenny in attendance. The minute records that the written offer of Pacinette to the Pacinette Property Trust was produced and that Pacinette resolved to accept the offer on the basis of the consideration comprised of the redemption of the 79,010 one dollar ordinary units; Mr Howell was authorised to inform the directors of Pacinette of the acceptance. Document 5.20 (p.76 of vol.1 of blue appeal book) is a statutory declaration by Ms Kenny made on 22 May 1998 declaring that she was present at the meeting, and that Mr Howell and Mr Halloran resolved to accept the written offer; again it is completely clear that no such events happened and that the statutory declaration is quite untrue. The statutory declaration says "3. The Offeror stated to the Offeree that possession of the property had been delivered to the Offeree." There is some profound confusion here as the offeror was Pacinette not in its trustee capacity, and the offeree was the same company in its trustee capacity; there was no statement to the effect given and if there had been it would have been incomprehensible. 51 Remarkably enough, neither statutory declaration deals with actual acceptance of an offer. The statutory declarations and the falsehoods in them do not appear to me to be overall of much importance, but it does seem worth noting how curious it is that the critical events, the acceptances of the offers, were not referred to in them. 52 In relation to the offer by Pacinette in its own interest to itself as trustee, document 5.21 (p.77 of vol.1 of blue appeal book) purportedly records a decision of the directors of Pacinette as trustee to accept Pacinette's offer. Document 5.22 (p.78 of vol.1 of blue appeal book) contains a statement "Philip Howell confirmed that The Pacinette Property Trust had accepted the offer …" Again it is altogether clear that there was no such meeting and that Mr Howell made no such statement.

53 Document 5.23 (pp.79-80 of vol.1 of blue appeal book) is a power of attorney executed by Sealark conferring authority on Pacinette to deal with the purchased land. This power of attorney was not supported by any purported resolution authorising its execution, nor was it purportedly acted on in any way, and in my opinion it has no significance. 54 Transactions in which Pacinette in its own interest dealt with the Pacinette Property Trust, or with itself in the capacity of the trustee of the Pacinette Property Trust, involve conceptual difficulties which cannot be resolved. The documents relating to these transactions speak as if there were dealings between two persons, Pacinette in its own interest and Pacinette as trustee of the Pacinette Property Trust; there can be no contractual relationship in that form, whether for the issue of ordinary units or for their redemption in consideration of the purchase of real property. A trustee cannot contractually deal with itself so as to sell trust property to itself in some capacity other than as trustee; the closest approximation to such a transaction which conceptually can take place is that a trustee can discharge itself from a trust obligation in respect of a property, but only if it has authority under the constitution of the trust or in some other way to do so. Such events are commonly referred to as self-dealing but this use of language is not entirely accurate. On the false assumption that a trustee in its personal capacity and in its trustee capacity are different persons see Suncorp Insurance and Finance v. Commissioner of Stamp Duties [1998] 2 Qd R 285 at 305-306 (Davies JA). 55 On the authorisation of Pacinette as trustee to deal with itself in its personal capacity counsel for the respondents referred to the following provisions of the trust deed. Clause 7.4 excludes any alienation of units in such a manner that an additional substituted trustee becomes beneficially entitled to units, but does not exclude the original trustee from becoming beneficially interested in units. Clause 11.1(q) empowers the trustee to exercise powers conferred on it notwithstanding that the trustee has a direct or personal interest in the mode or result of exercising that power. Clause 14.3 protects the trustee from disqualification for interest, clause 14.4(b) extends this protection and cl 22 which excludes the settlor and any new trustee from any benefit under the trust fund but does not exclude the original trustee. In my opinion these provisions do not overcome the impossibility of there being any contractual relationship between Pacinette in its personal capacity and Pacinette in its capacity as trustee which flows from their being the same legal person. They do not authorise self-dealing: they do not authorise the trustee to enter into arrangements for disposing of trust property to its own advantage.

56 Document 5.24 (pp.81-82 of vol.1 of blue appeal book) is a bill of exchange for $79,010 drawn by Pacinette on Sealark and accepted by Sealark. The bill of exchange is in these terms: "On demand pay to Pacinette Pty Limited as trustee for the Pacinette Property Trust the sum of $79,010.00". An indorsement signed on behalf of Pacinette as trustee states "Please pay Sealark Pty Limited the sum of $79,010.00." The functions intended for the bill of exchange as explained by counsel were that (in this order) Pacinette drew the bill on Sealark, and Sealark accepted the bill as an accommodation party; the acceptance of the bill was an act which Sealark had no obligation to do and for which it received no value other than the obligation of Pacinette to indemnify it. Pacinette used the bill to pay to Pacinette as trustee $79,010 being money subscribed for the issue of the 79,010 ordinary units of the Pacinette Property Trust; Pacinette as trustee then endorsed the bill and used it to pay $79,010 to Sealark on redemption of the A-class units. If these events had happened in fact, Sealark would have been paid with a bill which it had accepted as an accommodation party, in respect of which it remained entitled to be paid $79,010 by the payer Pacinette. On the entitlement of an accommodation party to indemnity counsel referred to Coles Myer Finance Ltd v. Commissioner of Taxation (1993) 176 CLR 640 at 656-659.

57 Dealings in respect of the bill of exchange are dealt with in the affidavit of Mr Howell of 4 June 1999. Mr Howell said: (para.19 at p.86 of vol.1 of blue appeal book) 19. Pacinette Pty Limited executed a Bill of Exchange in favour of Pacinette Pty Limited as trustee of the Pacinette Property Trust for Seventy Nine Thousand and Ten Dollars in consideration for the issue of the ordinary units. Pacinette Pty Limited as trustee of the Pacinette Property Trust endorsed the Bill of Exchange in favour of Sealark Pty Limited in consideration for the redemption of its A Class Units… 58 This passage is one of the series of paragraphs in which Mr Howell spoke of events recorded in the minutes and other documents as if they had in fact occurred; as it is plain that those events existed only in the sense that they were recorded in documents, his statements relating to the bill of exchange must be understood in the same sense. He did not deal with the acceptance of the bill of exchange by Sealark and did not deal with any arrangement to meet the indemnity liability arising from that acceptance. 59 The minutes, statutory declarations and other documents in evidence do not record these or any intended functions of the bill of exchange. Nothing in the evidence shows that any of the persons involved authorised its use to meet obligations. In the Agreed Statement of Facts the only reference to the bill of exchange is its description in Table 5 following para.20. There is no statement in the Agreed Statement of Facts about the use made or intended to be made of the bill of exchange to meet or discharge any obligation. The procedure sheet (pp.45-46 of vol.1 of blue appeal book) refers, in the briefest outline, to the steps which were to be taken in relation to the transaction between Sealark and Pacinette as trustee, and provides for a different procedure in which cheques were to be drawn: a cheque to be drawn by Pacinette in favour of Pacinette Property Trust for $10 was to be banked, a cheque was to be drawn by Pacinette in favour of the Pacinette Property Trust for $79,000 and was to be endorsed to Sealark, and a cheque was to be drawn by the Pacinette Property Trust in favour of Sealark; it is not clear what the amount of this cheque was to be, either $10 or $79,010; this cheque was to be banked. I do not see what effects that procedure would have produced, but it was not followed. 60 The findings at paragraphs 41 and 43 of Talbot J's first decision relating to the bill of exchange appear to be based solely on inferences from the form of the bill. Talbot J did not refer to any evidence explaining or dealing with the part taken by the bill of exchange and its relevant dealings, and apart from Mr Howell's assertion, which must be understood in the limited way I have mentioned, there is no such evidence.

61 The dealings with and the functions of the bill of exchange do not represent anything which could conceivably have taken place between parties dealing with each other at arm's length and for value; or between closely related parties dealing with each other for value. It is clear that Sealark accepted the bill of exchange as an accommodation party without receiving either the amount of $79,010, or any valuable consideration. At the end of the supposed transactions Sealark was paid by Pacinette with the bill without there being any satisfaction of Sealark's entitlement to receive $79,010 from Pacinette; there was no provision in the whole scheme by which Pacinette's obligation could be met, and unless and until it has been met, the substance of Sealark's dealings with Pacinette as trustee is that Sealark has not been paid any valuable consideration for the surrender of the A-class units. 62 It is not practically possible that the immediate parties to the transactions might test their entitlements by litigation. In the difficult exercise of attempting to visualise how they would stand in any such litigation, and what effect the purported minutes and documents bearing their common seals would have, it is necessary to consider what might be the operation of any estoppel. There is no possibility that any of the immediate parties could show reliance on any statements in the documents: it was clear to all individuals concerned that the events recorded did not happen. Any question of estoppel would direct attention to whether a party relying on an estoppel had acted to its detriment in reliance on some position purportedly supported by documents, and then lead on to an examination of the reality of any consideration given or any detriment incurred. 63 As it is clear that the events which are said to have constituted the transactions have never taken place, except in the sense that records were made of such events, reasoning based on inferences from the form of the bill of exchange, or of other documents, seems to be of no real value. Reasoning based on how it is probable that people behaved and what it is probable that they intended if they employed a particular form of document has no force when it is related to events which were known not to have occurred, except in the sense that records were made as if they had occurred. 64 Intention alone cannot confer efficacy on an intended transaction. See Commissioner of Taxation v. P. Iori & Sons Pty Ltd (1987) 15 FCR 363 at 379-380 per Beaumont J citing Lord Buckmaster in J & R O'Kane & Co. v. Commissioners of Inland Revenue (1922) 12 TC 307 at 347: "the intention of a man cannot be considered as determining what it is that his acts amount to". Commissioner of Taxation v. P. Iori & Sons Pty Ltd is itself an illustration of Lord Buckmaster's observation in that some book-keeping entries which were consistent with an intention to set apart a fund for superannuation were found not to have satisfied the relevant statutory test (of which, indeed, there were also other elements). Federal Commissioner of Taxation v. Northern Timber and Hardware Co. Pty Ltd (1960) 103 CLR 650 to which Beaumont J referred at 379 is also an instance where book entries consistent with an underlying transaction required by a statutory test were not treated as equivalent to formation of the underlying transaction. After referring to these authorities the appellant's senior counsel said to the effect (t36) that like book entries, minutes are record of acts, they are not an act in themselves. In the present context, this submission was correct and is applicable to the minutes under consideration. 65 Senior counsel for the respondents submitted to the following effect. Talbot J accepted Seller's evidence (Red 56-57 [19]-[20]). There were evidence and findings that Mr Seller told Messrs Halloran and Howell and Miss Kenny that by going through one set of documents "We are effectively going through all the transactions and then all that remains is the signing of the completed documents." It was submitted that there was a clear plan that the legal consequences which the parties intended to result would be effectual, and would be treated by them as effectual. It was submitted that the effect of the facts and findings was that all present on 11 May agreed, before the transactions and the steps in the first sample transaction were embarked on, that those transactions and steps were in effect being undertaken simultaneously for each of the 770 trusts. It was submitted that in all and each of those transactions and steps the same human beings were to act in an identical way on behalf of which ever entity or entities was or were involved in the transaction or step and in whatever capacity. It is submitted that once these events happened and the sample transaction had been performed on 11 May, signing and dating the relevant documents was an evidentiary or ministerial-type activity. 66 In this connection counsel referred for comparison to Joseph v. Campbell (1933) 50 CLR 317 at 325-326 (Rich Dixon & McTiernan JJ). However in my opinion that case and the passage to which counsel referred, in which the High Court decided that a transaction with crossed cheques had discharged an actual liability, does not furnish a useful comparison with the present circumstances. 67 In oral submissions the respondents' senior counsel contended that the Courts are not destroyers of people's bargains and usually try to uphold them. The persons who signed the documents were carrying out in a ministerial way or in a machinery way the 770 transactions that they had all agreed they were carrying out on 11 May in the meeting of Mr Seller. 68 It was contended that the transactions were real and were not pretended, and that the parties to the transactions and the individuals who represented them were not engaged in mere paper-shuffling or trying to disguise a naked position but that they intended to bring about the very result which the set of documents recorded. Senior counsel referred to its having been established at first instance by concession that the scheme and the documents and the events did not constitute a sham. Counsel contended that the submissions on behalf of the appellant had departed from this concession in an inconsistent way by conceding that there was not a sham yet submitting "the documents were however a pretence:" the pretence being that all that occurred was signing pieces of paper which purported to record events which did not in fact occur. It was contended that the earlier concession and the conduct of the proceedings precluded the appellant from contending that the documents were a pretence. 69 Senior counsel for the respondents particularly relied upon the following passage in the oral evidence of Mr Sellers (Blue 3/677 V-X) … "The understanding that I and everyone else there came away with at that meeting was that all of the meetings referred to in that visit had then taken place, that what was required now was to execute all of the documents that reflected those meetings. As the documents were executed and they were completed then they were dated, hence the different dates marching through the week." (The second sentence in the words so quoted appears to mean that dates were written into each set of transactions after signature and when the documents relating to each particular transaction were completed). In my understanding, the belief which Mr Seller's evidence shows that he held, and which, somewhat ambitiously, he attributed to all others at the meeting, accords with what Mr Sellers had earlier advised. Senior counsel submitted that the approach pursued at Mr Sellers' instance was both factually and legally efficacious. 70 Counsel referred to authorities in which courts have expressed their acceptance of commercial reality in contract formation in spite of anomalies with the received legal analysis of processes of contract formation. Counsel referred to observations in New Zealand Shipping Co. Ltd. v. A.M. Satterthwaite & Co. Ltd [1975] AC 154 of 167, Port Jackson Stevedoring Pty Ltd v. Salmond & Spraggon (Aust.) Pty Ltd (1980) 144 CLR 300 at 304.4-305.7 and Integrated Computer Services Pty Ltd v. Digital Equipment Corp (Aust.) Pty Ltd [1988] 5BPR 11110 at 11111.5 (McHugh JA). As New Zealand Shipping Co. Ltd. v. A.M. Satterthwaite & Co. Ltd and Integrated Computer Services Pty Ltd v. Digital Equipment Corp (Aust.) Pty Ltd show, arrangements and behaviour of little formality can, when viewed with commercial reality, show that contracts has been formed. There is nothing in the passages to which counsel referred which supports the view that a complex course of events including not only the formation of a number of contracts but also some oral communications which took place only fictitiously can be promoted into facts by an appeal to commercial reality. 71 It was submitted that in transactions which (as these did) dealt only with "property cognisable in Equity" which I understood to refer to equitable interests, no particular requirements are necessary for a valid assignment except for a clear expression of an intention to make an immediate disposition; but this is subject to any relevant statute. This submission, in the sense I understand it, was plainly correct. 72 An appeal to commercial reality does not have any relation to the facts of the present case. There was nothing of commerce and little of reality in the transactions which the documents and events purportedly effected among the companies involved. The acceptances, and the orality of the acceptances, are fiction and nothing else. The lack of commercial reality is particularly strongly exemplified by the dealings with the bill of exchange in each transaction. Sealark accepted the bill of exchange drawn by Pacinette without any prior arrangement, without any assurance of payment, without any existing obligation to Pacinette against which to set off the liability it incurred as an acceptor, and without there being any series or flow of transactions which could possibly have given rise to any expectation that the liability incurred, when it came home to Sealark (as it did) could be set off against some other obligation. At the end of the transactions Sealark was paid with the bill of exchange, but there was no arrangement for the liability to indemnify Sealark which Pacinette had incurred to Sealark as an accommodation party to be paid off. Senior counsel for the respondents observed that there may yet be some arrangement for Sealark to be indemnified and that its right to indemnity still exists. Whatever the situation illustrates, it does not illustrate commercial reality. 73 Respondents' counsel contended that there was an agreement among the persons present on 11 May and that they adopted a convention to act in accordance with what Mr Seller had said; and that in later signing the documents their actions reflected what they were actually setting out to do; it was contended that the substance should prevail over the form. Counsel referred to Ermogenous v. Greek Orthodox Community (2002) 209 CLR 95 and to the passage in the judgment of Gaudron, McHugh, Hayne & Callinan JJ at 105-106 [24-26] which relates to intention to create contractual relations. He contended that it is clear that the persons involved were setting out to give effect to what the documents show and that the Court should not say that because they took a practical and sensible way of carrying that out, the way they chose cannot work and that in order to achieve something like this people have to go through an enormous series of laborious meetings. 74 The oral stages of the transactions are essential to the effectiveness of the overall scheme and to the respondents' view of the events in which equitable ownership passed, but except in the case of one transaction which was gone through as an example on 11 May the evidence does not show and there is no basis for finding (nor was it found) that it was any of the transactions particularly examined in the first and second reasons. It seems that the participants do not know which particular transaction was gone through orally. Pacinette was not involved in the sample transaction. On this evidence the only conclusion reasonably available is that the meetings did not occur, the written offers which were purportedly authorised were not delivered and the oral acceptances on which the scheme depends were never made. That parties intended or understood that transactions should occur, or should be treated as having occurred, when it was altogether clear to their knowledge that the transactions did not occur, does not and cannot produce the result which the transactions would have produced had they ever taken place. The Court of Appeal should find that the purported transactions did not occur, and the appeal should be allowed for that reason.

75 According to the respondents' view, when the A Class units were issued Sealark, being the sole unit owner, remained the beneficial owner of the land, although its ownership became subject to the powers conferred on Pacinette as trustee by the Deed. Those powers included a power of defeasance of Sealark's ownership in that Pacinette as trustee was empowered to redeem the A Class units; but the power of defeasance is illusory as by cl 5(a) of the Schedule the Trustee's power to redeem A Class units arose on request by the A Class unit holder. During the notional interval between the transaction in which the A Class units were issued in consideration of the land, and the redemption of the A Class units, it is not possible to see any equitable remedy in the nature of specific performance or other remedy which was available to Pacinette under which Pacinette could have compelled Sealark to convey the land or give any further assurance of the land to Pacinette. During that notional interval, Sealark, there being no other unit holder, was in a position to bring the trust to an end by calling on Pacinette as trustee to redeem the units and to convey the property to Sealark; it is difficult to see what form such a conveyance could have taken. Unless and until Sealark took some such action, the land remained subject to the powers of Pacinette as trustee over the land. 76 The transaction in which A Class units were issued to Sealark was not intended, by the minds which directed the events, or by any intention which should be imputed to the corporations from the documents, to bring about any change in the beneficial ownership of the land. Unless and until the A Class units were redeemed at the request of Sealark, no beneficial interest in the land would be altered by the supposed sale. For this reason it cannot with accuracy be referred to as a sale at all. Making and settling the supposed sale agreement and agreeing to issue the A Class units were dealt with by the documents and were events which all happened with the same acts, without time intervals. The transactions were not in substance transactions for value; they might on their face had been said to be transactions for consideration but the considerations were illusory and lacking in substance, and for that reason, if no other, equitable remedies for enforcement of the transactions would not have been available.

77 I turn to consider the second position taken by the appellant under issue (b). I have already stated the ground on which the appeal should in my opinion be allowed. As there is no relevant writing which would establish the existence of an equitable interest of Pacinette (in any capacity) in the land, consideration turns to whether Pacinette had an entitlement to an equitable remedy to compel transfer of the land, under the doctrine of part performance or under a constructive trust. 78 Senior counsel for the appellant contended that s 23C of the Conveyancing Act 1919 prevented any beneficial interest from passing from Sealark. An address to this part of the case requires it to be assumed, contrary to my conclusions overall that the purported transactions actually took place and that valuable consideration passed to Sealark. In this part of the discussion I treat as real many events which as my earlier reasons show did not exist in reality. 79 Section 23C is one of the successor provisions to requirements of writing in the Statute of Frauds and is in these terms:

(1) Subject to the provisions of this Act with respect to the creation of interests in land by parol: (a) no interest in land can be created or disposed of except by writing signed by the person creating or conveying the same, or by the person's agent thereunto lawfully authorised in writing, or by will, or by operation of law, (b) a declaration of trust respecting any land or any interest therein must be manifested and proved by some writing signed by some person who is able to declare such trust or by the person's will, (c) a disposition of an equitable interest or trust subsisting at the time of the disposition, must be in writing signed by the person disposing of the same or by the person's will, or by the person's agent thereunto lawfully authorised in writing. (2) This section does not affect the creation or operation of resulting, implied, or constructive trusts. 80 The creation of interests without writing is further dealt with by subs.23D(1): 23D Creation of interests in land by parol

(1) All interests in land created by parol and not put in writing and signed by the person so creating the same, or by the person's agent thereunto lawfully authorised in writing, shall have, notwithstanding any consideration having been given for the same, the force and effect of interests at will only. Section 23E provides: 23E Savings in regard to secs 23B, 23C, 23D Nothing in section 23B, 23C, or 23D shall:

(d) affect the operation of the law relating to part performance. 81 Of course there is no writing of any of the kinds indicated in s.23C(1); that is the whole scheme. As the arrangement between Sealark and Pacinette as trustee was an oral agreement to sell, attention is first directed to the law relating to part performance. However submissions also required consideration of whether Sealark became subject to a constructive trust. 82 It was submitted that in the design of the scheme there was no act of part performance on the part of the purchaser which bound the conscience of Sealark as vendor so as to create an equity which Sealark could not resist. Appellant's counsel contended that the issue of a unit certificate to Sealark was not a sufficient act of part performance. The allotment of units in the Pacinette Property Trust was the very consideration for which the written offer and oral acceptance provided, and (assuming the reality of the events) the issue of the units was, at least in form, plainly an act of part performance of the agreement for sale, and when considered in the context of the minutes of the vendor and the purchaser and the written offer, unequivocally referable to some such transaction as a sale of the land. 83 Appellant's counsel contended that the issue of the units was not a sufficient act of part performance because, having regard to cl 5.5 of the Trust Deed, additional units are created as and when an addition is made to the fund; counsel said that no units were or could be created unless property was vested in the trustee. The power to issue the units and the effectual issue of the units depended on the effectuality of the sale, without which no property to support the issue of the units would be transferred to the trustee as an addition of the trust fund (cl 2.2) or would support the creation and allotment of units (cl 5.5). The reasoning in which, as in Chief Commissioner of Stamp Duties v. ISPT Pty Ltd (1998) 45 NSWLR 639, the beneficial interest remains with the vendor who was the only owner of the units supports, in logic, the conclusion that no property passed into the trust fund to support the issue of units. The argument is one of circularity; there must be units if the beneficial interest is to remain with Sealark but if it does there can be no units. This circularity must be broken, as a piece of legal reasoning, by submission to experience rather than to logic, and the argument should not be accepted. 84 A similar argument was directed at attacking the issue or purported issue of units to Pacinette in its personal capacity. It was argued to the effect that no property came into the trust fund in association with the issue of these units; the bill of exchange was (at least notionally) delivered by Pacinette in its personal capacity to itself as trustee, but nothing took place which could be seen as an addition to the fund, as the bill of exchange was then endorsed on to Sealark. I do not find it possible to make the same forgiving exercise with the transaction relating to issue of units to Pacinette in its personal capacity as I have made for the Sealark units, because there is nothing of substance on this side of the exercise to correspond with the beneficial interest in the land notionally exchanged for the Sealark units. 85 Overall adherence to the substance of the transaction makes it impossible to act on an analysis which is limited to the vendor and purchaser agreement between Sealark and Pacinette as trustee. The whole series of events was preconcerted and happened in what was notionally a series of immediately succeeding events with no intervals. Analysis in terms of part performance of a vendor and purchaser contract does not, in reality and in substance, address what the events were or the question whether Pacinette in its personal capacity is entitled to compel further assurance of the equitable interest in the land from Sealark to Pacinette. 86 In the course of argument I asked respondents' counsel, several times, to sketch out the conjectural Equity suit in which performance of the obligation of Sealark to give a effectual assurance would be compelled. 87 Counsel replied (t54-55) in a way which I understand as follows. If Sealark resisted Pacinette's claim and claimed to own the land, or did not respond to Pacinette's claim, Pacinette would say: having subscribed for the units and drawn the bill of exchange and endorsed it back to Sealark, Sealark has been paid out whatever interest Sealark had in the trust, and that interest was the whole beneficial interest in the land, that interest had been given up for the redemption of the units with the endorsement back to Sealark of the bill of exchange. There had been a round of oral agreements relating to the redemption of the Sealark units and Pacinette had caused the money payable on redemption to be paid to Sealark. Although Sealark was paid with the bill of exchange to which it was an accommodation party, it is entitled to sue Sealark at the end of the day for indemnity in respect of the Bill of Exchange. 88 It appears to me that the burden would lie on Pacinette in its personal capacity to allege and show that it had an effectual and enforceable agreement with Pacinette in its capacity as a trustee, for which value had been given, for the grant to it of units, and that Pacinette in its capacity as trustee had an effectual and enforceable agreement with Sealark, for which value had been given, for the redemption of Sealark's units; and, the burden would be on Pacinette as conjectural plaintiff to show the effectuality of all dealings. In litigation decided according to the substance of the parties' rights I am of opinion that payment of Sealark with the bill of exchange which had no value except that conferred on it by Sealark's acceptance as an accommodation party, in respect of which Pacinette's indemnity obligation to Sealark had not been satisfied, was not a transaction for value between Pacinette and Sealark: no matter that in the concept to those managing the transactions the bill was drawn by Pacinette in its personal capacity but through immediate transactions came to be used as a means of payment by Pacinette in its capacity as trustee; they are not different legal persons. The fact that value was not in substance given for the redemption of Sealark's units (and giving value at that stage is necessary to produce the consequential effect of transferring beneficial ownership of the land away from Sealark) might exert itself in disposition of the conjectural Equity suit in one of several ways. The proceedings might fail on the ground that value had not been given; or they might lead to an order for specific performance conditioned upon meeting the indemnity obligation relating to the accommodation acceptance; the order would not be enforceable unless and until the indemnity obligation was met which has not yet happened; that is to say, it is not yet enforceable. What form the outcome would take might well depend to some degree on the way in which the positions of the parties in the conjectural Equity suit were managed, and on the view taken by the Court; but it is not possible, on any reasonable view, to see the obligation as presently enforceable.

89 The principal basis on which respondents' counsel proceeded was that Sealark as a paid vendor is a constructive trustee of what Sealark promised to sell. This is not a view which it is easy to take as, in the conceptual framework of the scheme, the agreement of Sealark to sell the land to Pacinette as trustee took place at an earlier stage than the arrangements involving Pacinette in its personal capacity; and those earlier arrangements were completed without producing any effectual passing of beneficial ownership. 90 In the concept of the scheme, beneficial ownership passed from Sealark at a later stage on the redemption of Sealark's units; it did not pass from Sealark under part performance of a contract to sell the land, or under an obligation to complete an agreement to sell the land; the steps taken under the agreement to sell had been perfected earlier with the beneficial ownership still with Sealark. The facts giving rise to a constructive trust cannot be isolated; the whole course of events must be regarded. When they are regarded, the passage of value from Pacinette as trustee to Sealark upon the redemption of units appears to me to be essential for any judgment or decision to impose a constructive trust upon Sealark. The constructive trust claim is ejusdem generis and does not conform to any well known classification. To my mind it is an impossible conclusion that Sealark incurred liability as a constructive trustee or that a constructive trust should be imposed on Sealark in a transaction in which it was paid with the bill of exchange which had no value except for its own acceptance in respect of which it did not receive indemnity; the substance is that it received nothing. If another view were taken and a constructive trust were imposed, it could not, in accordance with principle, be imposed except on terms that Sealark's entitlement to indemnity was to be satisfied as a condition of the imposition and enforcement of the constructive trust. 91 In the conjectural Equity suit by which Pacinette would hypothetically seek to enforce against Sealark a claim for an effectual assurance, presumably a registrable transfer, of Sealark's equitable interest in the land, the burden would be upon Pacinette to establish the enforceability in Equity not only of the final stage in which it dealt with itself as trustee and in the capacity of trustee dealt with Sealark, but of each intermediate stage in which the equitable interest had been dealt with, passed or repassed. This would involve Pacinette in its own right enforcing its transaction with Pacinette as trustee. As this was a self-dealing with the Deed of Trust did not authorise it is not likely that a Court of Equity would enforce it. 92 What is the constructive trust and what are the equities which the whole course of events gives rise to? The substance is that Pacinette in its personal capacity claims to enforce for its own benefit an agreement made by Sealark with Pacinette as trustee, and does so in circumstances where the only value which Pacinette in its personal capacity can claim to have given is a bill of exchange of value only because accepted by Sealark, and the only thing of value which Sealark can be said to have received is the same bill of exchange, without receiving the indemnity in respect of its acceptance which would be the only thing which would accord value in substance to the piece of paper. I do not see any equity in this. In my opinion no constructive trust in favour of Pacinette in its personal capacity should be imposed upon Sealark by the insubstantial course of events and the insubstantial passage of value to Sealark. There is no constructive trust and there is no obligation to assure the equitable interest to Pacinette. Equity would do nothing for Pacinette, there is no assignment and Sealark remains the owner of the equitable interest. 93 In Suncorp Insurance and Finance v. Commissioner of Stamp Duties [1998] 2 Qd R 285 Fitzgerald P (as his Honour then was) after an extensive review of authorities dealing with the nature of the interest of a beneficiary in an incompletely administered estate, and in funds held on trust, and in relation to the interest of a majority unit holder in a unit trust with a provision (see reference at p291 to cl 4) which divided the beneficial interest in the trust funds into units and conferred an equal interest in the trust on the holder of each unit, concluded in these terms at 301-302: Principle and authority seem to me to indicate that a majority unitholder which has the right to have the trust deeds performed according to their terms, including the "Trust Funds" dealt with as each deed requires, and cause the realisation of each "Trust Fund" and distribution of the proceeds, has an equitable "estate or interest" in the Trust Fund and each of the "Trust Fund" "Investments". Further, since the appellant's "estate or interest" obviously falls short of full ownership, the minority unitholder, which also has the right to participate in the distributions, likewise has an equitable "estate or interest" in each "Investment" held on trust by the appellant for the unitholders. 94 This passage may have been the parent of the scheme followed in Chief Commissioner v. ISPT where the matter under consideration was the interest not of a majority unit holder but of a sole unit holder; even more clearly, the owner and the only owner of an equitable estate or interest in the trust fund and each investment in it. The decision in Chief Commissioner v. ISPT establishes that an effectual mechanism for transferring a beneficial interest in land can be devised which does not bring into existence either a written assurance or any memorandum which could satisfy ss 23C or 54A of the Conveyancing Act 1919. However it is an assumption of that mechanism that the arrangements so made are enforceable in Equity; that is that they can be perfected by obtaining an order of Court of Equity compelling the assignor to give a perfect assurance of the interest transferred, necessarily an assurance in writing and in the case of the Torrens land a registrable transfer. The availability of an equitable remedy which would compel giving such an assurance, even in the face of opposition by the assignor, is a real requirement, cannot be treated as fiction or formality, and must be capable of being tested by conjecturing what would happen in a hypothetical Equity suit brought by the assignee to compel performance. Equity does not assist a volunteer, and value given for the assignment, not merely in form but in substance, is an essential requirement for enforcement. 95 The contest in Chief Commissioner v. ISPT took a markedly different form to the present contest. The Chief Commissioner of Stamp Duties sought to maintain that, in an arrangement with a general similarity to the first part of the present transactions in which Sealark was to exchange its beneficial interest in land for units, the beneficial interest passed to the trustee (or passed to the trustee even though only for an instant). In the argument which prevailed, the beneficial interest remained with the original owner of the land, ISPT did not become the beneficial owner, there was no change in the beneficial ownership of an interest in land and ISPT was not required by s 44A(1) of the Stamp Duties Act 1920 to lodge a statement in the approved form, which by subs 44A(5) would be deemed to be an instrument chargeable with duty. Later dealings involving other unit holders divested the original land owner of the beneficial interest and vested it in those unit holders; but never in ISPT. Although it is easy to see in Chief Commissioner v. ISPT a precursor of measures taken in the present case, they are not exactly replicated. 96 Chief Commissioner v. ISPT was decided on facts which resembled the facts of the present case in a number of ways, but there are significant differences. ISPT paid the full purchase price to Coles Myer Property Investments (Meagher JA at 654-A-B) and the manner in which that occurred was that ISPT endorsed two cheques, each drawn in favour of ISPT by one of the superannuation fund trustees to which title was ultimately transferred; the cheques were endorsed to Coles Myer Property Investments, and there was no doubt that the cheques were met. There is no element in the facts in Chief Commissioner v. ISPT resembling the use made in the present case of a bill of exchange, and nothing analogous to the outstanding and unsatisfied entitlement of Sealark to indemnity for accepting the bill of exchange. 97 In his address to the facts Meagher JA at 653G to 654C said that the crucial facts were those at steps 5 and 6 of Mason P's judgment, that is (644B-D) the steps in which ISPT's written offer to purchase the property from Coles Myer Property Investments was accepted orally and paid for by endorsing back to Coles Myer Property Investments the cheque with which Coles Myer Property Investments had paid for its purchase of the units which (at a later stage) were redeemed. Meagher JA said: The legal estate resided in Coles Myer Property Investments both before and after steps (5) and (6). Either s 23C and s 54A of the Conveyancing Act 1919 , applied to nullify the ordinary effect of those two steps, or they did not. If they did, the beneficial interest remained with Coles Myer Property Investments. If they did not, the beneficial interest also remained in Coles Myer Property Investments, in its capacity as sole unit holder in ISPT. In neither event is there any change of beneficial interest. 98 It will be seen that Meagher JA did not fully endorse either alternative but was of the view that if ss 23C and 54A of the Conveyancing Act 1919 did not relevantly operate, the beneficial interest remain in Coles Myer Property Investments in its capacity as sole unit holder. Meagher JA's conclusions are valid whether or not either transaction took place for value. As Coles Myer Property Investments paid and was repaid with its own cheque it was in no position to assert that the transactions did not take place for value. 99 In my opinion it is an unexpressed but unmistakable basis of the majority opinions in Chief Commissioner v. ISPT that all the relevant transactions, including the redemption of Coles Myer Property Investments units, took place for value. In this respect, and in others also, the reasoning cannot be readily applied to the present facts. 100 Another important difference is that title was transferred by Coles Myer Property Investments, by a transfer which undoubtedly took place for value to the transferor, to ISPT Nominees (a nominee of ISPT and not, curiously, of the superannuation fund trustees which paid for the land). The Court's consideration took place in the context of a transaction which had been perfected by transfer of registered proprietorship. 101 Another significant difference was that the curious element of the ultimate purchaser and the trustee of the unit trust being the same person, said to be acting in different capacities, has no place in the facts of ISPT. There was such an element in the facts of Suncorp Insurance and Finance v. Commissioner of Stamp Duties (1998) 2 Qd R 285, where its difficulties were remarked on by Davies JA at 305 and by Fitzgerald P at 289, text at note 6; his Honour said: Further, although a trust is not a separate legal entity and a trustee is not a separate legal person in his, her or its representative capacity from his, her or its personal capacity and the appellant is both the trustee and the majority unitholder, it was accepted that the transactions were authorised by the trust deeds and were permissible and effective to achieve their purposes. 102 An even more fundamental distinction is that in Chief Commissioner v. ISPT the Chief Commissioner of Stamp Duties maintained, unsuccessfully, that the effect of the transactions was that ISPT as trustee of the unit trust became the beneficial owner of the property, or alternatively was its beneficial owner momentarily; and hence was required by s 44A(1) of the Stamp Duties Act 1920 to lodge a statement which would be chargeable with duty. The subject for judicial decision was whether ISPT ever became beneficial owner; the views of the majority establish that, in the parts of the transaction by which Chief Commissioner of Stamp Duties contended ISPT became the beneficial owner, Coles Myer Property Investments remained the beneficial owner. The parts of the events which caused the superannuation trustees to become beneficial owners were not the primary subject of judicial attention as they did so as a consequence of the redemption of units in a unit trust scheme, and there was an exemption from duty under Stamp Duties Act s 44(1)(a); see 660E. 103 There is no suggestion in the report of Chief Commissioner v. ISPT that the payment of $17,973,996.00 paid to Coles Myer Property Investment by two cheques each for $8,986,998 drawn by ISPT Propriety Ltd, Trustee of the Industry Superannuation Property Trust and ISPT Custodians Pty Ltd, trustee of the ISPT Coles Myer (Forster Property Trust No. 2) were not worth the sums for which they were drawn, or that the proceeds of the cheques were not duly collected by Coles Myer Property Investments.

104 Fitzgerald AJA, after setting out in broad terms steps in the transaction (655G to 656F) said: "In summary, the effect of the transaction was to transfer the legal title to the Forster Shopping Village to ISPT Nominees, and the beneficial ownership of the property to a party other than Coles Myer Property Investments, which no longer has any estate or interest, legal or equitable (beneficial) in the property." To my mind his Honour would not have seen the steps as producing this effect unless Coles Myer Property Investments had actually received the two cheques, and the value of the two cheques, endorsed to it on the redemption of its units. The underlying economic motivation of the transactions, so far as they can be discerned, appears to have been passage of beneficial ownership of the Forster Shopping Village from Coles Myer Property Investments to Superannuation Trusts, and it was necessary for the transaction that Coles Myer Property Trust should realise in money the value of the Forster Shopping Village, not that it should receive cheques but not collect their value, and in effect make a donation to the Superannuation Trusts. 105 In my opinion the decision in Chief Commissioner v. ISPT does not establish authoritatively that the events now under consideration produced an effectual transfer of beneficial ownership to Pacinette in its personal capacity. 106 If it were necessary to act on the appellant's second position under issue (b), the appeal should be allowed on that ground also. It is not necessary to dispose of the appellant's third position. Evidence shows that the Chief Commissioner of Stamp Duties has come to the view that no duty is payable, so the issue is academic. 107 A Draft Order disposing of the appeals is now set out. Parties should make written submissions, within 14 days, dealing with the Draft Order and should show what other order they contend should be made. On having the written submissions I should settle the orders or if there is a dispute, appoint a hearing for settlement of the orders. 108 In my opinion the Court of Appeal should allow the appeal. The Draft order is:

(2) Set aside the First Decision, that is, Order 1 of the Order of 8 December 1999; and in lieu thereof: Declare that the applicant Pacinette Pty Ltd is not the owner of an interest in land the subject of the Notice of Acquisition published in the Government Gazette dated 19 June 1998 and is not entitled for the purposes of these proceedings to maintain its claim under s.37 of the Land Acquisition (Just Terms) Act 1991 in respect of nominated lots 140, 1629 and 1063.

(3) Set aside the Second Decision, that is Order 1 of the Order of 17 July 2003; and in lieu thereof: Declare that the Beneficial Ownership Claimants in Class 2 referred to in the Amended Points of Claim dated 28 December 2000 are not entitled to maintain claims under s.37 of the Land Acquisition (Just Terms) Act 1991 in respect of land resumed by Notices of Acquisition published in the Government Gazette on 19 June 1998 and on 18 September 1998.

(4) Cross Appeal dismissed with costs. **********

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