Paul Ernest Simmons v NSW Trustee and Guardian

Supreme Court of NSW|2013-10-31|Before: Hammerschlag J, Emmett JA, Gleeson JA

Factual Background 1These proceedings were initiated by Summons filed on 11 March 2011. A Statement of Claim was filed on 29 July 2011. The plaintiff, Father Paul Ernest Simmons, claims an interest in a substantial grazing property near Brewarrina, New South Wales, known as Goonoo. The events which give rise to the plaintiff's claim go back to 1995 and earlier. 2On 7 May 2012 I dismissed the plaintiff's claim against the second defendant and the third defendant ("Dorothy"). One of the two bases on which I did so was that the second defendant and Dorothy are the registered proprietors of their respective interests in Goonoo and have the benefit of indefeasibility under s 42(1) of the Real Property Act 1900 (NSW) ("the Act") and the plaintiff had not alleged fraud, which he is required to establish to outflank it: see Paul Ernest Simmons v Protective Commissioner of NSW also known as NSW Trustee and Guardian [2012] NSWSC 455 ("the first judgment"). 3On 25 June 2013 the Court of Appeal, by majority, granted leave to appeal against the first judgment and allowed the appeal: Simmons v Henwood [2013] NSWCA 184. However, the Court agreed that the plaintiff had to allege, but had not alleged, fraud. The plaintiff had not before me sought leave to amend. 4At [97] Emmett JA (with whom Gleeson JA agreed) held that the matter should be remitted to me for consideration: of any application that Father Simmons wishes to make, either to file an amended statement of claim, or to file a reply to the defences filed on behalf of Mr Henwood and Dorothy Simmons, raising fraud within the meaning of the Real Property Act. The costs of the appeal should be the parties' costs of the proceeding. 5At [96] his Honour said: In the circumstances, I consider that it would be appropriate for Father Simmons to be given the opportunity of making an application to the primary judge for leave to amend, or to file a reply, to plead fraud within the meaning of s 42 of the Real Property Act. It would be entirely a matter for his Honour to determine whether any such indulgence should be granted. For example, whether such an application succeeded might depend upon a satisfactory explanation being advanced as to why the proposed pleading was not advanced earlier. Further, it may be that if leave were granted, it would be on appropriate terms as to the costs that have been thrown away, particularly in the light of the assertion made to the primary judge that fraud had been alleged in the statement of claim as particularised. They would be matters for the primary judge. 6Now before the Court is the plaintiff's motion for leave further to amend the Statement of Claim. No leave is sought to file a Reply. The motion also seeks an order for disclosure but that is not pressed at this time. 7This judgment should be read together with the first judgment and the judgment of the Court of Appeal, from which the general factual background to the proceedings appears. 8Additional facts are that on 5 April 1993 the plaintiff lodged a caveat against the title of Goonoo claiming an equitable estate and, in a judgment given on 1 February 1994, Windeyer J refused to make an order extending operation of the caveat because of his Honour's earlier finding the plaintiff had no interest in the subject property which his Honour considered "put an end to that matter unless it is reversed by the Court of Appeal": Simmons v Simmons (Supreme Court of New South Wales, Windeyer J, 28 September 1993, unreported, No 1661/92); Simmons v Simmons (Supreme Court of New South Wales, Windeyer J, 1 February 1994, unreported, No 1661/92).

This application 9Mr P E King of counsel appeared for the plaintiff. 10The proposed amended pleading is a fairly lengthy document. It appears as a schedule to this judgment, with the proposed amendments marked up. 11On 13 September 2013 I fixed this motion for hearing. At that time I directed that the second defendant and Dorothy serve any affidavits in opposition by 4 October 2013 and that the plaintiff reply by 18 October 2013. I directed that the plaintiff deliver a brief outline of argument to my associate by 23 October 2013 and that the defendants deliver one by 29 October 2013. 12Part 15 r 15.3 of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") provides: A pleading must give particulars of any fraud, misrepresentation, breach of trust, wilful default or undue influence on which the party relies. 13Part 15 r 15.4 of the UCPR provides: (1) A pleading that alleges any condition of mind must give particulars of the facts on which the party pleading relies. (2) In subrule (1), condition of mind includes any disorder or disability of mind, any malice and any fraudulent intention, but does not include knowledge. 14Both the second defendant, for whom Mr J M Ireland QC appeared, and Dorothy, for whom Mr S F Hughes of counsel appeared, oppose leave to amend being granted on the grounds that: (a)the proposed amendment is futile; (b)the proposed amendment does not give sufficient and appropriate particulars of fraud as required by UCPR Pt 15 r 15.3; (c)the second defendant and Dorothy will suffer prejudice if leave is granted; and (d)the plaintiff has failed to give any explanation for the delay in not advancing this application earlier. 15The first defendant ("the Commissioner") took no part in the contest. 16The plaintiff's evidence in chief consists of three affidavits of his solicitor, Mr Kingsley Liu, sworn 31 July 2013, 27 August 2013 and 30 October 2013 respectively. 17Mr Liu's first affidavit annexes a copy of a proposed Amended Statement of Claim, the Court of Appeal judgment and correspondence in which the plaintiff sought consent for the filing of the annexed proposed pleading. His second affidavit annexes a further version of the proposed pleading, the transcript of a directions hearing before me on 16 August 2013 and correspondence between the parties' solicitors including a request for consent to the filing of that version of the pleading. His third affidavit attaches yet a further version of the proposed pleading and further correspondence including a request for deponents of affidavits served by the defendants on this motion to be present for cross-examination. I declined leave to cross-examine on this application. 18The second defendant's evidence consists of his own affidavit sworn 8 October 2013 and an affidavit of his father Stanley Nelder Henwood sworn 3 October 2013. Dorothy's evidence consists of her affidavit sworn 9 October 2013. 19In reply, the plaintiff read an affidavit of a psychiatrist, Dr Michael Armstrong, sworn 28 September 2012, which annexes two reports, one dated 7 October 2007 and the other dated 27 September 2012. The reports principally concern the state of the plaintiff's mental health. The affidavit had been filed on 17 October 2012, presumably in relation to some earlier issue in the proceedings. It was put that the affidavit was being read "on the question of delay, if relevant". The second defendant and Dorothy initially objected to the affidavit being read because no notice of intention to rely upon it had been given and my directions required reply evidence to have been served by 18 October 2013. However, after further consideration they withdrew their objection to enable the matter to proceed. 20On 23 October 2013 the plaintiff provided a written outline. It is appropriate to set it out in full. 1. The Court should grant leave to amend pursuant to its powers under sections 62 and 64 Civil Procedure Act 2005 and Part 19 of the Uniform Civil Procedure Rules 2005. 2. In the proper exercise of the Court's discretion in such a case as the present the Court has regard to the dictates of justice and the considerations set out in Civil Procedure Act s58: Hans Pet Constructions Pty Limited v Casser [2009] NSWCA 230 (31 July 2009) at [43] per Allsop P. 3. The dictates of justice it is submitted in this case mandate the amendments sought in the proposed amended statement of claim. 4. The amendments are not opposed by the First Defendant. 5. The Amendments were provided to the Court of Appeal prior to the hearing in that Court. It was never submitted or suggested to that Court that the amendments were untenable or not available in law or in fact to be made by the Plaintiff. 6. The Plaintiff asks the Court to defer the issue of discovery pending receipt of the amended defences of the Defendants. 21A significantly expanded written outline was produced at the hearing. The explanation for this course was a submission that the plaintiff "has virtually an automatic right of amendment in the present case having regard to two decisions of the Court of Appeal. It is for the defendants to let us know why can't we amend the Statement of Claim and get the case we want to run before the Court". 22Despite objection by counsel for the second defendant and Dorothy to reliance being placed on the expanded outline, they addressed its contents and I have had regard to all of the submissions.

Consideration 23The principled exercise of my discretion requires that the leave sought be refused. I exercise that discretion having regard to the overriding purpose specified in s 56 of the Civil Procedure Act 2005 (NSW) ("the Civil Procedure Act"), namely, the just, quick and cheap disposition of the true issues in the proceedings.

The proposed pleading 24The plaintiff abandoned the amendments proposed in paragraphs 23A and 30A of the proposed Statement of Claim. 25Argument was directed principally to the amendments to paragraphs 23, 23B and 27A to 27F (pleaded against the second defendant) and paragraphs 30, 30B and 31A (pleaded against Dorothy). 26Paragraph 23, as sought to be amended, was identified by counsel for the plaintiff as a claim under the first limb of Barnes v Addy (1874) LR 9 Ch App 244 at 251 - 252, namely, where a person who knowingly receives and retains trust property in a manner inconsistent with the rights of the beneficiary will hold that property on constructive trust. 27To prevail against the indefeasibility given by s 42 of the Act, a person claiming a first limb Barnes v Addy personal equity must establish fraud, meaning actual fraud, moral turpitude: Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 at [192] - [198]. 28Counsel for the plaintiff cited the decision of the Queensland Court of Appeal in Tara Shire Council v Garner [2003] 1 Qd R 556 in support of a submission that a first limb Barnes v Addy claim can prevail against indefeasibility given by s 42 without fraud being established. However, this notion was specifically disapproved of in Farah Constructions v Say-Dee at [194] - [196]. 29There is no fraud for the purposes of s 42 if a person does no more than acquire title and become the registered proprietor with notice of a prior unregistered interest and assert that his or her title is free of that interest. 30Paragraph 23 does not plead fraud. No allegation of dishonesty is made. The paragraph is an expansion of the claim originally made, but still does not plead fraud. The claim is thus bound to fail and the amendment must be refused. 31I turn to paragraph 23B. 32The earlier version of this paragraph, to which the second defendant's written submissions were directed, was in the following form: Further or alternatively the Second Defendant by himself or his solicitor acting as his agent engaged in a dishonest and fraudulent design in that he was morally reprehensible or engaged in moral turpitude in taking the land by way of sale under the contract dated 24 December 1993 knowing at the time that the Plaintiff had an interest in the land as found by the Supreme Court and that the Plaintiff had appealed from the decision of the Supreme Court prior to the date of the sale in order to obtain the legal title thereto which appeal was unresolved at the time of the contract. 33In his written outline, the second defendant put that this is an allegation of fraud unsupported by evidence or particulars and is factually wrong because there was no interest in the plaintiff as found by the Court at the critical times. 34The present paragraph omits the assertion of an interest "as found by the Supreme Court" but still alleges (somewhat unusually as a further or alternative to a claim not involving fraud) conduct described as dishonest, fraudulent, morally reprehensible and moral turpitude engaged in by "the second defendant by himself or his solicitor acting as his agent". 35Fraud, or participation in fraud, particularly where it is alleged against a legal practitioner is a serious allegation. In this case, there is the added consideration that the practitioner is deceased. 36Fraud must be pleaded specifically and with particularity. Particulars of the fraud must be exactly given: Banque Commerciale S.A., En liquidation v Akhil Holdings Ltd (1990) 169 CLR 279. Particulars of the facts on which a party relies in alleging fraudulent intention must be given: UCPR Pt 15 r 15.4. 37Paragraph 23B does not meet these requirements. 38Firstly, I consider that a pleading which alleges fraudulent and dishonest design by a person or his solicitor must, with particularity, specify with respect to each individual, the facts relied upon as founding the allegation of that individual's condition of mind. The proposed amendment does not do so. 39Secondly, whilst UCPR Pt 15 r 15.4(2) does not require to be pleaded the facts relied upon to allege a condition of mind where that condition is knowledge, where knowledge of facts is alleged as an element of an allegation of fraud and the knowledge alleged is said to be held by a person or his solicitor, I consider it to be incumbent upon the party alleging fraud to specify with particularity what facts are alleged to have been known by the person and what facts are alleged to have been known by the solicitor. The plaintiff does not do so. 40Thirdly, although the paragraph uses the descriptors dishonest, fraudulent, morally reprehensible and moral turpitude, I do not consider that it sufficiently pleads or properly particularises facts capable of constituting fraud on the part of the second defendant. 41The paragraph pleads knowledge of the plaintiff's lack of awareness of and consent to the sale and awareness of the plaintiff's interest and then states "the particulars of which awareness are the particulars to paragraph 23 hereof". 42No particulars of facts with respect to knowledge of the plaintiff's lack of awareness of, and consent to, the sale are provided. 43As to the asserted knowledge of the plaintiff's interest, the particulars given include knowledge of the factual findings made by Windeyer J, the terms of the draft contract for sale executed by the second defendant which "acknowledged and recognised the plaintiff's claimed interest in the land", and (by incorporation of the particulars given to paragraph 14B) knowledge of the caveat. Separately, it also pleads knowledge of the appeal and that it was unresolved at the time of the sale. 44These particulars negative knowledge of any interest in the plaintiff rather than establish it. They displace rather than support an allegation of fraud. 45Windeyer J's conclusion was that the plaintiff had no equitable interest. I was informed from the bar table (and there was no issue) that the contract for sale of 24 December 1983 referred to the existence of the caveat but contained an acknowledgment that the Commissioner would take steps to have it removed before settlement. The caveat lapsed when Windeyer J refused to extend its operation and settlement took place accordingly. 46As Emmett JA remarked at [87]: Acting on the basis of the final order of a superior Court is hardly fraud under the Real Property Act. 47This is so, I respectfully suggest, even where that final order is under appeal. 48In any event, it seems to me that the paragraph does not extend sufficiently beyond alleging that the second defendant took his interest with knowledge of one asserted by the plaintiff and with knowledge that registration of his interest would defeat that of the plaintiff's claimed interest, so as to amount to an allegation of fraud. 49I also observe that the paragraph pleads reliance "thereafter" by the second defendant upon the absolute nature of the title and "in doing so" acting "with the intention of acquiring the land free of the plaintiff's interest of which he was aware". This appears to be a pleading that it must follow (which I do not think it does) that because the second defendant afterwards relied on indefeasibility, he held some actual intention with respect to the plaintiff's interest beforehand. 50Paragraph 23B must be rejected. 51Paragraph 27A must be rejected on the same basis as paragraph 23, namely that it cannot succeed in the absence of an allegation of fraud, and none is made. 52I turn to paragraphs 27B to 27F. 53As a further or alternative claim, these paragraphs contain allegations of a deceit perpetrated by the second defendant "at a time to be particularised" by way of making knowingly false representations to Dorothy, that the Commissioner and the second defendant were lawfully ready, willing and able to sell part of the land to Dorothy free of any interest or claim of the plaintiff in the land when this was not the case because neither the Commissioner nor the second defendant were in a position to sell to Dorothy having regard to the plaintiff's interest. 54They plead that the second defendant knew that the representations were false or were made recklessly by him in that he "and his agent for that purpose" Mr Day, his solicitor in relation to the sale, had been informed by the Commissioner, was aware from his personal knowledge of the circumstances of Goonoo and Letona as a neighbour of the interests and claims of the plaintiff and that the plaintiff did not consent to the sale or transfer of Goonoo prior to entry into the contract with the Commissioner and also with the second defendant, by caveat no 1237393 lodged by the plaintiff on the title to the land and disclosed in clause 8 of the contract for sale dated 24 December 1993, and/or by knowledge of the judgment of Windeyer J of 28 September 1993 and the appeal of the plaintiff therefrom and/or by inquiry made to the Commissioner and Dorothy by himself and his agent Mr Day on or prior to settlement on 24 October 1994. 55They plead that, induced by and acting in reliance on the representation, Dorothy entered into the contract for sale with the second defendant to purchase the land "to the loss and damage of the plaintiff" with a view to defeating the equity and interest of the plaintiff in the land, and/or has refused to recognise or acknowledge his interest, and/or has set up the absolute character of the transaction as an answer to his claim and has repudiated his claims and interest with the object of destroying his unregistered interest notwithstanding the preservation of that interest was the foundation or assumption underlying the contracts for sale between the Commissioner and the second defendant and between the second defendant and Dorothy and the execution of the transfers. 56They plead that, as a result of the matters complained of, the plaintiff has lost the benefit and use of the land and that the second defendant holds that land on constructive trust for him. In addition, the plaintiff seeks equitable compensation or an account in respect of the second defendant's dealings and disbursements in the land. 57This proposed amendment must be refused firstly because it is bad in law. 58For fraud to be operative, it must operate on the mind of the person said to have been defrauded and said to have induced detrimental action by that person: Bank of South Australia Ltd v Ferguson (1998) 192 CLR 248 at 258. 59The alleged fraud here is not said to operate on the plaintiff's mind but on that of Dorothy. Far from being induced to act to her detriment Dorothy was induced to act for her benefit. 60Secondly, it must be refused because it fails properly to plead and adequately to particularise fraud. 61The paragraph refrains from identifying the time of the alleged fraudulent representations beyond stating the time as about mid 1993 until prior to 24 October 1994. It fails to particularise the manner in which the alleged representation was made. 62The only particulars given to paragraph 27B are by way of repeating paragraphs 25 and 25A which read as follows: 25. Prior to purchasing the land in or about June 1993 the second defendant entered into an informal arrangement or agreement with the third defendant to transfer by way of sale or reimbursement or remittance a portion of the land to the third defendant. 25A. The first defendant was aware of the agreement between the second and third defendants referred to in paragraph 25 as communicated in correspondence from the estate agent at Brewarrina Sam Lawler to the first defendant prior to 24 December 1993. 63The correspondence referred to is not identified. The circumstances of Goonoo and Letona referred to in paragraph 27D are not identified. The time, nature and form of the alleged inquiry made to the Commissioner and Dorothy by the second defendant and his agent are not specified. 64Knowledge of the caveat, the provision about it in the contract for sale, the judgment of Windeyer J of 28 September 1993 and the appeal are said, remarkably, to found knowledge of falsity. 65Additionally, no distinction is drawn and no particulars are provided distinguishing between the second defendant and his solicitor with respect to their respective conditions of mind. 66Paragraphs 30 and 31A suffer the same inadequacies as paragraph 23. Paragraph 30B suffers the same inadequacies as paragraph 23B.

Delay and prejudice 67There are further reasons which themselves (even if the pleading was adequate) warrant such refusal. 68In his expanded written submissions the plaintiff put as considerations favouring the grant of leave that neither the filing of evidence nor disclosure by the second defendant had occurred, that there was no irreparable element in unnecessarily delaying proceedings, that the Court of Appeal had held that no abuse of process had occurred, and that the purpose of the amendments was to ensure that a complex matter in which the facts relate to events dating back to 1987 and the real issues in dispute are considered by the Court. 69The proposed amendment, if granted, would manifestly visit on the second defendant and Dorothy significant prejudice and inconvenience, matters which the plaintiff did not address. 70The second defendant and Dorothy acquired their legal interests in the land in 1994, nearly 20 years ago, and these proceedings were commenced almost 17 years after that with no allegation of dishonesty having previously been made against them. 71The second defendant's father is now 88 years of age. He says that in his recollection, in his dealings with respect to the purchase of Goonoo he relied on his manager, Mr McLennan and his then solicitor, Mr Colin Day, both of whom are deceased. Mr Day passed away in March 2001. 72Dorothy has throughout lived at Letona. She is now 86 years of age. She is under the care of doctors and takes medication, amongst others, for anxiety and panic attacks. She has a home carer. She says her memory is failing. She cannot travel to Sydney to instruct her solicitor and counsel without great difficulty given her health and her age. She says that she is worried about the legal costs incurred to date (over $87,000) and continuing to be incurred which she says, is part of her distress in relation to the proceedings. 73She says that the negotiations relating to the purchase of the land were conducted by her son Gary through Elders Real Estate, Brewarrina, and that he passed away in 2000. 74Now for the first time, after many years, and some two and a half years after these proceedings began, the plaintiff seeks to introduce allegations of dishonesty. To permit this, particularly at this late stage, would undoubtedly induce significant personal stress. It will entail significant inconvenience and expense. 75The ability of the second defendant and Dorothy to meet this claim has been impaired by the significant passage of time. 76Dorothy is of advanced years and her memory is failing. The second defendant's father, who is probably a witness, is also of advanced years. 77The proposed amendment directly implicates the late Mr Day in the alleged dishonesty (see paragraphs 14B, 23.b, 23B and 27D). Two other potential witnesses, Mr McLennan and Mr Gary Simmons have also passed away. 78The plaintiff seeks an indulgence. A not insignificant consideration in the exercise of my discretion is an explanation by the plaintiff for why the proposed pleading was not advanced earlier. 79The second defendant's and Dorothy's evidence clearly address matters going to prejudice arising from delay. Both their written and oral submissions emphasised the plaintiff's delay in not earlier seeking to plead fraud and the absence of any explanation for it. 80Despite this and the clear indication by Emmett JA as to the possible significance of an explanation, the plaintiff has provided none, let alone a satisfactory one. His initial outline made no reference to delay. 81In his expanded written outline he submits that the defendants' affidavits "have no present relevance as they relate to the issue of delay, which is relevant to the pleaded defence of laches, a matter for trial". This is consonant with his position that he has an almost automatic right to the amendment. 82The plaintiff's submissions did not include any reference to any part of the reports attached to the affidavit of Dr Armstrong. This is perhaps not surprising because the earlier report bears no apparent connection to any issue relevant to this motion and the later report establishes that the plaintiff was in a position of being able to bring his case, which rather negatives the suggestion (even if it had been made) that there is an explanation for his not bringing this amendment forward earlier. He has had every opportunity to bring a fraud claim. He has had every opportunity to explain his delay in not bringing it earlier. 83Taking all of these matters into account I consider that leave to amend should be refused. 84I note that I considered it appropriate at the conclusion of argument to seek confirmation from all counsel that each was satisfied that he had had a full opportunity of putting whatever it was that he wanted to put. That confirmation was given.

Conclusion 85The plaintiff's motion filed 2 August 2013 is dismissed. 86In so far as the decision of the Court of Appeal reinstated the plaintiff's claim against the second defendant and Dorothy, that claim is dismissed. 87I will hear the parties on costs, including the costs of the appeal which under the terms of the remitter are the parties' costs of the proceeding.

SCHEDULE 1 -+Form 3A (version 2) UCPR 6.2 1DRAFT AMENDED STATEMENT OF CLAIM Revised 30 October 2013 COURT DETAILS Court Supreme Court of NSW Division Equity List Registry Sydney Case number 2011/79920 TITLE OF PROCEEDINGS Plaintiff PAUL ERNEST SIMMONS

First defendant NSW TRUSTEE AND GUARDIAN Number of defendants 3 FILING DETAILS Filed for Plaintiff Legal representative Kingsley Liu The People's Solicitors 321 South Dowling Street Darlinghurst NSW 2010 Legal representative reference 2597 Contact name and telephone Kingsley Liu (02) 9356 3307 TYPE OF CLAIM Breach of trust

1DECLARATION that the first defendant at all material times held the land specified in the Schedule hereto and the funds received in respect thereof on trust for the plaintiff and Agnes Mary Simmons (deceased) until her death on 2 December 1995 as joint tenants and thereafter absolutely for the plaintiff. 2Alternatively DECLARATION that the first defendant at all material times held the land specified in the Schedule hereto and the funds received in respect thereof as the fiduciary of or upon an obligation in equity to the plaintiff and Agnes Mary Simmons (deceased) until her death on 2 December 1995 as joint tenants and thereafter absolutely for the plaintiff. 3DECLARATION that the first defendant held the funds it received from the sale of the land known as "Goonoo", Brewarrina, in 1994 upon trust for the plaintiff. 4DECLARATION that the first defendant paid moneys the subject of the sale to persons other than the plaintiff and Agnes Mary Simmons (deceased) in breach of trust or fiduciary duty or an obligation in equity. 5DECLARATION that the sale of the land by the first defendant in purported compliance with the orders of the Court made 28 September 1993 in or in relation to the protective estate of the late Agnes Mary Simmons was void or voidable and or should be set aside. 6DECLARATION that the second defendant holds the land upon constructive trust for the plaintiff. 6A ORDER that the second defendant transfer the land specified in the schedule to the plaintiff, failing which appoint the Registrar of the Court to make orders pursuant to Civil Procedure Act 2005 section 135 to give effect to such transfer as to the Court seems fit. 7DECLARATION that the third defendant holds the land upon constructive trust for the plaintiff. 7A ORDER for tracing the funds the subject of the sale of the land by the first defendant under contract for sale made in or about 24 December 1993. 7B ORDER that the third defendant transfer the land specified in the schedule to the plaintiff, failing which appoint the Registrar of the Court to make orders pursuant to Civil Procedure Act 2005 section 135 to give effect to such transfer as to the Court seems fit. 8THE SUM being the sum equivalent to one half of the net proceeds of sale of the land known as "Goonoo" together with interest thereon at Supreme Court rates. 9Further or alternatively DAMAGES for breach of duty as trustee or fiduciary in selling the land to the second and third Defendants in 1994 together with interest. 10Further or alternatively ORDER that an ACCOUNT be taken and/or compensation in equity be paid to the plaintiff by the first defendant, by the second defendant and by the third defendant in such sum as the Court shall determine. 11Aggravated and exemplary DAMAGES as against the first defendant. 11A. Interest 12FURTHER or other relief. 13 COSTS.

SCHEDULE Property Certificate of Title Western Lands Lease Goonoo 2688/764769 470 Goonoo 6133/768981 470 Goonoo 6490/760647 1598 Letona 2163/764276 4368 Letona 3989/766462 8311

1The first defendant: a.Is a statutory corporation established by and having such functions as are conferred or imposed on it by the NSW Trustee and Guardian Act (2009); b.Is, by operation of clause 5(1)(a) of Schedule 1 to that Act, taken to have done or omitted to have done any act matter or thing done or omitted by, to or in relation to the Protective Commissioner before 1 July 2009. 2The plaintiff is the son of Agnes Mary Simmons ("Mrs Simmons"), who died on 2 December 1995. 3At all material times Mrs Simmons was the registered proprietor of a grazing property in the Brewarrina district known as "Goonoo" ("the land"), which: a.collectively consisted of two separate areas of land known individually as "Goonoo" and "Letona" which were separated by a distance of approximately 40km; b.had a total land area of approximately 17,823 acres. 4At all material times the title to the land comprised five Certificates of Title in respect of four Western Lands leases granted pursuant to the Western Lands Act (1901) ("the WL leases") as follows: Property Certificate of Title Western Lands Lease Goonoo 2688/764769 470 Goonoo 6133/768981 470 Goonoo 6490/760647 1598 Letona 2163/764276 4368 Letona 3989/766462 8311

5In about July 1987 Mrs Simmons agreed for consideration to transfer the land to herself and the plaintiff as joint tenants ("the 1987 agreement"). Particulars a.In an oral conversation that took place during a visit to Nyngan Mrs Simmons offered to transfer a half ownership of the land to the plaintiff in consideration of the plaintiff: i.Entering into a partnership with Mrs Simmons arrangement for the purposes of carrying on the farming and grazing business on the land, and ii.Continuing to live with and care for Mrs Simmons on the land; b.In the same oral conversation the plaintiff accepted Mrs Simmons' offer. 6On 6 April 1988 in furtherance of the 1987 agreement the plaintiff and Mrs Simmons entered into a partnership to be known as AM and PE Simmons for the purposes of carrying on the farming and grazing business on the land as equal partners ("the partnership agreement"). Particulars a.Written partnership agreement executed on 6 April 1988 7Clause 7 of the partnership agreement provided that each partner shall punctually pay and discharge his or her present and future separate debts and engagements and shall at all times keep indemnified the other partner and his representatives and the property of the partnership against the same and all actions proceedings costs claims and demands in respect thereof. 8At the time the partnership agreement was entered into Mrs Simmons was indebted to the State Bank of New South Wales in respect of the outstanding balance of account number 820335-00. 9At all material times the outstanding balance of account number 820335-00 was a discreet and separate debt of Mrs Simmons which, pursuant to the partnership agreement, the plaintiff was entitled to be kept indemnified against by Mrs Simmons. 10In furtherance of the 1987 agreement Mrs Simmons did the following things: a.Executed an Application for Consent to Transfer the WL leases to herself and the plaintiff as joint tenants on 15 June 1989; b.Obtained a valuation of the land as evidence of value for stamp duty on 29 August 1989; c.Executed a transfer of the titles from herself to herself and the plaintiff as joint tenants on 29 August 1989; d.Obtained consent to the transfer from the Western Lands Commissioner on 27 September 1989; e.Obtained consent to the transfer from the mortgagee bank on 24 October 1989; f.Again requested the consent of the Western Lands Commissioner to the transfer of the WL leases on 11 November 1991, due to the consent previously granted having since lapsed; g.Registered the Transfer recording the plaintiff's intended registered interest in the land on 17 December 1991; h.Requested that the Western Lands Commissioner expedite her 11 November 1991 request for consent to the transfer on 4 February 1992. 10A. By October 1989 in accordance with the 1987 agreement and the partnership agreement, and the common intention of the parties thereto being herself and the plaintiff which endured until her death on 2 December 1995 that the land was owned by them as joint tenants in equity, Mrs Simmons did and had done everything in her power and which she was able to do to transfer the land to herself and the plaintiff as joint tenants. 10B. At about the time of the 1987 and/or the partnership agreement, the third defendant became aware of the matters in paragraph 10A and thereafter the third defendant sought to obstruct and frustrate the intention of the parties to the said agreements including by lodging several different caveats to prevent registration of the transfer of the plaintiff's interest at law and then allowing the caveats to lapse, and/or in communicating objections to the same effect to the Western Lands Commissioner, the Registrar General and the Protective Commissioner and/or in commencing legal proceedings against Mrs Simmons and the plaintiff. 10C. As from the 1987 agreement and latest by 29 August 1989 Mrs Simmons was in a fiduciary relationship with the plaintiff and held the land on trust for them both as joint tenants in equity. 11The Registrar-General subsequently deregistered the transfer on 18 February 1992 consequent upon registration having been effected more than six months from the date upon which the Western Lands Commissioner granted consent to the transfer. 12Since the execution of the Transfer on 29 August 1989 the plaintiff had been entitled to have the registration of that Transfer carried through in accordance with the Real Property Act (1900) subject to any Ministerial consent necessary in accordance with the Western Lands Act (1901). Particulars a.Declaration of Court of Appeal on 14 November 1994 in proceedings numbered CA40570/93. 13On 21 July 1992 the management of Mrs Simmons' affairs was committed to the Protective Commissioner pursuant to the Protected Estates Act NSW 1983 by an order of the Guardianship Board made on that date as a result of which the management of the land of Mrs Simmons and the plaintiff as joint tenants in equity was committed to the first defendant on or shortly after 21 July 1992 pursuant to Protected Estates Act NSW 1983 Part 3 Division 3 with power to sell and execute documents for the sale and transfer of the land. 14Upon the management of Mrs Simmons' affairs being committed to the first defendant the first defendant thereafter held the property on trust OR IN THE ALTERNATIVE as the fiduciary or upon an obligation in equity for the plaintiff and Mrs Simmons as joint tenants. 14A. On 5 April 1993 the plaintiff lodged a caveat on the titles to the land giving public notice of an equitable interest in the land. 14B. At and from 5 April 1993 the defendants and each of them were aware of the plaintiff's equitable interest as joint tenant of the land with Mrs Simmons. Particulars a. Each defendant personally and by their respective solicitors at the time was aware of the plaintiff's equitable interest in the land as stated in and notified by the plaintiff's caveat lodged 5 April 1993; b. As from 21 July 1992 the first defendant was aware that the land was trust property and had the knowledge of Mrs Simmons with respect to and for the land as referred to in paragraph 10A; c. The first and third defendants challenged the plaintiff's interest in the land in Equity Division proceedings in the Court No 1661 of 1992 brought by the third defendant upon the ground of the absolute nature of the transaction and want of writing under Conveyancing Act 1919 section 54A in order to defeat the plaintiff's equitable interest with full knowledge of that interest; d. The second defendant personally and by his solicitors at the time was aware of the said Equity Division proceedings No 1661 of 1992 and of the appointment of the first defendant in or about July 1993, and was personally aware of the facts and matters set out in paragraphs 10A and 10B herein. 15On 24 December 1993 each with knowledge that the land was trust property the first defendant exchanged contracts with the second defendant for the sale of the land. 16The contract referred to in the preceding paragraph provided for a purchase price of $390,000, which price was at an undervalue to the then prevailing market for river front land with significant potential for water licences. Particulars a. The first defendant did not advertise properly or at all or make the property available for sale on the open market; b. The first defendant did not seek any expressions of interest in the property from persons other than the second and third defendants. 17The sale of the land to the second defendant was completed on about 28 June 1994. 18On 31 January 1991 Mrs Simmons executed a Will leaving the whole of her estate both real and personal solely to the plaintiff. Cause of Action against the First Defendant 19The entry into the contract as alleged in paragraph 15 and the sale of the land to the second defendant was made in breach of trust OR IN THE ALTERNATIVE in breach of the first defendant's fiduciary duty or obligation in equity to the plaintiff. Particulars a.At the time of the sale of the land to the second defendant the first defendant had notice and was aware of the plaintiff's unregistered equitable interest in the land. b.FURTHER OR IN THE ALTERNATIVE by operation of the Partnership Act (1892) the first defendant was a partner and a fiduciary of the plaintiff in respect of the partnership property. c.At all material times after assuming the office of Protective Commissioner in 1992 the first defendant was constructive trustee of the land for the plaintiff and Mrs Simmons as joint tenants in equity or alternatively was in a fiduciary relationship to both Mrs Simmons and the plaintiff in respect of their interests as joint tenants of the land in equity. d.The sale documents failed to make any sufficient provision for protection and sufficient recognition of the equitable interest of the plaintiff in the land and the partnership and /or for the equitable joint tenancy of Mrs Simmons and the plaintiff notwithstanding that the First Defendant had knowledge of the Plaintiff's interest in the land and in the partnership between herself and the Plaintiff in respect of the land. e.After entry into the contract for sale the first defendant agreed to agist the second defendant's cattle on the land prior to settlement without seeking or obtaining the consent of the plaintiff. 19A. Further or alternatively, the first defendant at all material times had a conflict of interest between the fiduciary duty to Mrs Simmons's estate and the interest in selling or disposing of the land in satisfaction of the debts assumed by the Protective Commissioner and the duty and interest as manager of the estate of Mrs Simmons and the land. 19B. In breach of the fiduciary relationship and duty referred to in paragraph 19A the first defendant on 24 December 1993 entered into a contract to sell the land to the second defendant knowing that the Plaintiff did not consent to the said sale with a view to him selling part to the third defendant without making any or any sufficient provision for the equitable interest of the plaintiff and/or refused to acknowledge the interest of the plaintiff, and/or relied on the absolute nature of the title to the land held in the name of Mrs Simmons to defeat the plaintiff's interest in the land. 20 As a result of the first defendant's breach of trust OR IN THE ALTERNATIVE breach of fiduciary duty or obligation in equity to the plaintiff the plaintiff has suffered and continues to suffer loss and damage. 21Upon the first defendant's receipt of the proceeds of sale of the land the first defendant held such proceeds on trust OR IN THE ALTERNATIVE as the fiduciary or upon an obligation in equity for the plaintiff and Mrs Simmons as joint tenants until her death on 2 December 1995 and thereafter absolutely for the plaintiff. 22The first defendant disbursed and/or dealt with the proceeds of sale of the land in breach of trust OR IN THE ALTERNATIVE in breach of its fiduciary duty or obligation in equity to the plaintiff. Particulars a.The plaintiff will provide particulars after discovery and interrogatories herein. 22A. The plaintiff seeks equitable compensation or an order for account in respect of the First Defendant's dealings and disbursements in relation to the land. Cause of action as against second defendant 22B. The Plaintiff repeats paragraphs 1 to 22A. 23At the time of the sale of the land to the second defendant the second defendant had notice and was aware of the plaintiff's unregistered equitable interest in the land and purchased the land knowing there was a risk that the plaintiff had a subsisting interest in the land to which his interest if any was subject and that the land was trust property held jointly for Mrs Simmons and the plaintiff and that the plaintiff did not consent to the said sale and was unaware of the contract dated 24 December 1993 at the date thereof. Particulars a.The plaintiff repeats paragraphs 14B particulars (a) and (d); b.The second defendant or his solicitor as his agent by reason of the conduct of searches of the title to the land was aware of the plaintiff's equitable estate, his possession of the land, and of the partnership of the farming business conducted by Mrs Simmons and the plaintiff on the land; c.The second defendant was aware of the factual findings in proceedings No 1661 of 1992 as to the equitable interest of each of the joint tenants ie Mrs Simmons and the plaintiff, subject to the operation of Conveyancing Act 1919 NSW section 54A; d.The drafts of the contract for sale prepared by or with the consent of his solicitor and the final form thereof executed by him referred to and acknowledged or recognised the plaintiff's claimed interest in the land in clause 8(c) and (d); e.The second defendant agreed with the plaintiff on or about 15 June 1994 to take the land "with you in it" and without requiring "vacant possession" of the land, whereas on or shortly after settlement he evicted the plaintiff and transferred part of the land to the third defendant. f.In the premises aforesaid the second defendant entered into the contract for sale dated 24 December 1993 and thereafter assumed or received title to 'Goonoo' knowing of the facts which gave rise to the First Defendant's breach of trust and duty alleged in paragraphs 19, 19A and 19B herein particulars of which knowledge of second defendant is set out in a - e above. 23A. Further or alternatively the second defendant received the land sold to him under the contract for sale with the first defendant dated 24 December 1993 with knowledge of the trust and/or fiduciary relationship of the first defendant and/or Mrs Simmons to the plaintiff with respect to the equitable joint tenancy in the land. 23B. Further or alternatively the second defendant by himself or his solicitor acting as his agent engaged in a dishonest and fraudulent design constituted by the sale dated 24 12 1993 and the assumption or receipt thereafter of title to Goonoo by the Second Defendant derived therefrom in that he was morally reprehensible or engaged in moral turpitude in taking the land by way of sale under the contract dated 24 December 1993 knowing at the time that the plaintiff being unaware of the said sale and not consenting thereto had an interest in the land or facts which gave rise to an interest in the land the particulars of which awareness are the particulars to paragraph 23 hereof, and that the plaintiff had appealed from the decision of the Supreme Court prior to the date of the sale in order to obtain the legal title thereto which appeal was unresolved at the time of the contract and the settlement thereof and thereafter relying upon the absolute nature of the title to defeat the plaintiff's interest under Conveyancing Act 1919 section 54A and Real Property Act 1900 section 42 and in doing so acted with the intention of acquiring the land free of the plaintiff's interest of which he was aware. 24 In the premises the sale of the land to the second defendant was and is void or voidable and should be set aside. 25Prior to purchasing the land in or about June 1993 the second defendant entered into an informal arrangement or agreement with the third defendant to transfer by way of sale or reimbursement or remittance a portion of the land to the third defendant. 25A. The first defendant was aware of the agreement between the second and third defendants referred to in paragraph 25 as communicated in correspondence from the estate agent at Brewarrina Sam Lawler to the first defendant prior to 24 December 1993. 26Within weeks of the sale of the land to the second defendant having been completed the second defendant took steps to transfer that part of the land concerning an area of land in the order of 485.6 hectares having Certificate of Title 6490/760647 and subject to WL 1598 to the third defendant including: a.Requesting the consent of the Western Lands Commissioner to the transfer of the WL lease on 18 August 1994; b.Obtaining the Minister's consent to the transfer on 7 September 1994; c.Executing a transfer in appropriate form under the Real Property Act 1900 on 24 October 1994; d.Registering the said transfer subsequently. 27The consideration for the transfer was: a.$28,608; and b.Was substantially less than the market value of that part of the land at the time the transfer occurred. 27A. By reason of the matters alleged herein the second defendant wrongfully and in breach of trust took and received the land without regard to the plaintiff's unregistered interest in it and thereafter knowing of the plaintiff's unregistered interest transferred part of the land to the third defendant. Particulars of Breach of Trust and Duty by First Defendant: The Plaintiff repeats paragraphs 19, 19A and 19B; Particulars of Knowledge of the Plaintiff's Interest: The Plaintiff repeats paragraphs 23 and 25. 27B. Further or alternatively, in order to induce the Third Defendant to purchase a part of the land and to participate in the sale the Second Defendant represented to the Third Defendant between about mid- 1993 at a time to be particularised after discovery until prior to 24 October 1994 with the knowledge of the First Defendant that the First and Second Defendants were lawfully ready willing and able to sell part of the land to the Third Defendant free of any interest or claim of the Plaintiff in the land and the partnership with the late Agnes Simmons his mother. Particulars The Plaintiff repeats paragraphs 25 and 25A. 27C. In fact the representation was false as neither the First nor the Second Defendant were in a position to lawfully sell or to sell with the consent of the owners of the land in equity including the Plaintiff of whose equity in the land they were by reason of the matters alleged in paragraphs 19B, 23 and 27A each aware, and further the first and/or second defendants was each only ready willing and able to sell the land or that portion which the Third Defendant desired to purchase free of the interest of the Plaintiff in the land and in the partnership . 27D. The Second Defendant knew that the representation or representations in paragraph 27B were false or were made recklessly by him in that the Second Defendant and his agent for that purpose Mr Day, his solicitor in relation to the sale, had been informed by the First Defendant was aware from his personal knowledge of the circumstances of 'Goonoo' and 'Letona' as a neighbour of the interests and claims of the plaintiff and that the plaintiff did not consent to the sale or transfer of 'Goonoo' prior to entry into the contract with the First Defendant and also with the Second Defendant, by caveat no 1237393 lodged by the Plaintiff on the title to the land and disclosed in clause 8 of the contract for sale dated 24 December 1993, and/or by knowledge of the judgment of Windeyer J of 28 September 1993 and the appeal of the Plaintiff therefrom and/or by inquiry made to the First and Third Defendants by himself and his agent Mr Day on or prior to settlement on 24 October 1994. 27E. Induced by and acting in reliance on the representation by the Second Defendant the Third Defendant entered into the contract for sale with the Second Defendant to purchase the land to the loss and damage of the Plaintiff with a view to defeating the equity and interest of the Plaintiff in the land and the partnership, and/or has refused to recognise or acknowledge any interest of the land prior to settlement even though in consideration of settlement the Second Defendant agreed to allow the Plaintiff possession of the land and to occupy same, and/or has set up the absolute character of the transaction as an answer to the claim and interest of the Plaintiff and has repudiated the claims and interest of the Plaintiff with the object of destroying the unregistered interest of the Plaintiff notwithstanding the preservation of that interest was the foundation or assumption underlying the contracts for sale between the First and Second Defendants and between the Second and Third Defendants and the execution of the transfers. 27F. As a result of the matters complained of the Plaintiff has lost the benefit and use of the land and the partnership in the land with his mother and has been placed in penury and disadvantage since, which has further caused the Plaintiff anguish, and disappointment and loss. 28In the premises the second defendant holds the land upon constructive trust for the plaintiff. 28A. The plaintiff seeks equitable compensation or an order for account in respect of the Second Defendant's dealings and disbursements in relation to the land. Cause of action as against third defendant 29The plaintiff repeats paragraphs 1 23 to 28 herein as against the third defendant. 30At the time of the transfer of that part of the land from the second defendant to the third defendant the third defendant had notice and was aware of the plaintiff's unregistered interest in the land and received that part of the land knowing that there was a risk that the plaintiff had a subsisting interest in that part of the land to which her interest was subject and that the land was trust property held jointly for Mrs Simmons and the plaintiff and that the Plaintiff did not consent to the said sale and was unaware of the contract dated 24 12 1993 at the date thereof. Particulars a.The plaintiff repeats paragraphs 10A, 10B, and 14B particulars (a) and (c); b.The third defendant or her solicitors as her agent by reason of the conduct of searches of the title to the land was aware of the plaintiff's equitable estate, his possession of the land, and of the partnership of the farming business conducted by Mrs Simmons and the plaintiff on the land; c.The third defendant as a party thereto was aware of the factual findings in proceedings No 1661 of 1992 as to the equitable interest of each of the joint tenants ie Mrs Simmons and the plaintiff, subject to the operation of Conveyancing Act 1919 [NSW] section 54A; d.The third defendant did not seek to intervene or become a party to the appeal proceedings from the decision of Windeyer J but was aware of those proceedings; e.The plaintiff repeats the allegations in paragraph 25; f.In order to defeat the interest of the plaintiff in the land the third defendant has relied on and still relies on the absolute nature of the transaction as to the title of Mrs Simmons and of herself to the land whereby the statutes designed to prevent fraud have been abused for that purpose namely Conveyancing Act 1919 section 54A and Real Property Act 1900 section 42. g.In the premises aforesaid the third defendant entered into the arrangement alleged in paragraphs 25 and 25A and accepted the transfer from the Second Defendant of 'Letona' being part of 'Goonoo' following the contract for sale dated 24 12 1993 and therafter assumed or received title thereto knowing of the facts which gave rise to the First Defendant's breach of trust in selling the land to the Second Defendant alleged in paragraphs 19, 19A and 19B and the on-sale by him to her in further breach of trust by him as allege in paragraphs 23, 23B and 27A and in particular that as at 24 December 1993 the Plaintiff had an equity in the land and the facts which gave rise to that equity being the matters alleged in (a) to (f ) above and that the Plaintiff did not consent to the said sale of his equity to the Second or Third Defendants. 30A. Further or alternatively the third defendant received the land sold to her under the agreement alleged in paragraph 25 with the second defendant with knowledge of the trust and/or of the fiduciary relationship of the first defendant and/or Mrs Simmons to the plaintiff with respect to the equitable joint tenancy in the land. 30B. Further or alternatively the Third Defendant by herself or her solicitor acting as her agent engaged in a dishonest and fraudulent design constituted by the sale dated 24 December 1993 and the later assumption or receipt of title to Goonoo by the Second and Third Defendants derived therefrom in that the Third Defendant was morally reprehensible or engaged in moral turpitude in taking the land by way of the subsequent sub-sale to her knowing at the time that the plaintiff being unaware of the said sale and not consenting thereto had an interest in the land as found by the Supreme Court and that the plaintiff had appealed from the decision of the Supreme Court prior to the date of the sale in order to obtain the legal title thereto which appeal was unresolved at the time of the contract and the settlement thereof and thereafter relying upon the absolute nature of the title to defeat the plaintiff's interest under Conveyancing Act 1919 section 54A and Real Property Act 1900 section 42 and in doing so acted with the intention of acquiring the land free of the plaintiff's interest of which she was aware. 31In the premises the subsequent transfer of that part of the land to the third defendant was and is void or voidable and should be set aside. 31A. By reason of the matters pleaded herein the third defendant wrongfully and in breach of trust took and acquired part of the land without regard to the plaintiff's equitable interest in it and thereafter knowing of the plaintiff's interest took part thereof for herself and denied the plaintiff's interest. 32In the premises the third defendant holds that part of the land upon constructive trust for the plaintiff. 32A. The plaintiff seeks equitable compensation or an order for account in respect of the Third Defendant's dealings and disbursements in relation to the land. Claim for aggravated & exemplary damages against first defendant 33In the premises the plaintiff claims aggravated and exemplary damages against the first defendant. Particulars of aggravated damages 34Dispossession of and from the family farm, which was the plaintiff's home and to which the plaintiff had a personal and long standing attachment of which the first defendant was aware or should have been aware. a.Being rendered homeless as a result of the plaintiff having been dispossessed of his home. b.Being rendered impecunious and dependant upon welfare as a result of the way in which the first defendant dealt with the proceeds of the sale of the land. c.Causing the plaintiff to suffer significant emotional distress, anxiety and depression as a result of the way in the first defendant dealt with the land. Particulars of exemplary damages d.Proceeding to dispose of the property in circumstances where the first defendant was aware of the prospect that the plaintiff's rights in the land would be recognised by the Court of Appeal in proceedings numbered CA40570/93. e.Proceeding to dispose of the land with high handed disregard for the plaintiff's rights and feelings. SIGNATURE OF LEGAL REPRESENTATIVE

I certify under section 347 of the Legal Profession Act 2004 that there are reasonable grounds for believing on the basis of provable facts and a reasonably arguable view of the law that the claim for damages in these proceedings has reasonable prospects of success. I have advised the plaintiff that court fees may be payable during these proceedings. These fees may include a hearing allocation fee. Signature Capacity Solicitor for the plaintiff Date of signature

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 15 November 2013

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Judgment (14 paragraphs)

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