Plaintiff by counterclaim v Defendants to counterclaim

53 Gorr has been a director of Oupan since 1980 and a director of Waigani since 1978.[104] Interests associated with him hold units in both trusts. Gorr gave evidence about his and the other HGR interests' business relationship with Wilson, the ending of that relationship, and the settlement agreement reached between them. Gorr was cross-examined and was, in my view, a helpful and truthful witness to the extent that matters were within his knowledge and, subject of course, to the issues already referred to with respect to the passage of time since critical events. In closing submissions, Wilson's senior counsel made criticism of Gorr's evidence with respect to a number of matters, particularly the state of accounts. However, these criticisms were not justified having regard to the fact that Gorr was not involved with or responsible for those accounts and, in my view, could not respond other than as he did to the questions put to him where his answers were subject to this criticism.

54 May has been a director of Waigani since 2007; though he participated in board meetings of that company prior to his appointment as a director. This was apparently in the belief that he had been so appointed - but due to an oversight, this was not the case.[105] Interests associated with him hold units in the Deer Park Trust. He was cross-examined and, in my view, was a truthful witness and responded, having regard to his involvement in the affairs of Waigani and Oupan, and given the passage of time since the occurrence of critical events, as best he could.

55 Taylor is a partner at McLean Delmo Bentleys (formerly McLean Delmo & Partners),[106] engaged by Oupan in 1997, and Waigani in 1999, to prepare their accounts. He was cross-examined and, in my view, was a truthful witness.

56 Ms Wang ("Wang") is a lawyer who was involved in documenting the settlement in 2007.[107] She was cross-examined briefly and was, in my view, a truthful witness.

57 Palermo has been the account manager dealing with the HGR interests' loans since 1980, and administered the HGR interests' loans to Oupan and Waigani.[108] She was cross-examined and, in my view, was a truthful and helpful witness. Again, to the extent that she was unable to assist or helpfully comment on questions put to her in relation to the state of accounts and various transactions this was, again in my view, due to both the passage of time since critical events and the state of the company and accounting records of Waigani and Oupan flowing from the period during which Wilson managed the businesses of those companies and their records, including the accounts.

58 Ms O'Doherty ("O'Doherty") was a junior solicitor at Maurice Blackburn Cashman working on the settlement in 2007 and gave evidence in response to a subpoena.[109] She was, in my view, a truthful witness.

59 Mr Dudakov ("Dudakov") is an expert valuer who gave evidence about the value of Oupan's and Waigani's land as at the settlement in 2007. Wilson agreed that, for the purposes of this trial, the parties use his valuations.

Questions for determination set out in the Schedule to the Orders of the Court of 22 December 2016

60 These questions are contained in the Schedule to the Orders of the Court, dated 22 December 2016, as follows:

SCHEDULE OF QUESTIONS FOR DETERMINATION

Adopting defined terms from the third further amended counterclaim (Counterclaim)

(1) Did Mr Gorr, on behalf of Waigani, make the 18 April representation?[110]

(2) Were:

(a) the 18 April representation (if made); and

(b) the 2006 accounts,

false, misleading and deceptive by reason that they showed no distributable profits for the Oupan trust and the Waigani trust, when the trusts would have been profitable but for the trustees' breaches in relation to the Oupan Interest Payments, the Waigani Interest Payments, and the Management Fees?[111]

(3) Did Mr Wilson rely upon the 18 April representation and the 2006 accounts in executing the May agreement and the July agreements?[112]

(4) On a proper construction of the July agreements, did Oupan and Waigani make the Trustee Warranties?[113]

(5) If Oupan and Waigani made the Trustee Warranties, were the Trustee Warranties false by reason that:[114]

(a) Waigani acted in breach of trust by making the Waigani Interest Payments as alleged in [31] of the Counterclaim?

(b) Waigani acted in breach of trust by paying the Management Fees as alleged in [34] of the Counterclaim?

(c) Waigani acted in breach of trust by making the Balanced Loan as alleged in [37] of the Counterclaim?

(d) Waigani acted in breach of trust by making the Superannuation Payments as alleged in [40] of the Counterclaim?

(e) Oupan acted in breach of trust by making the Oupan Interest Payments as alleged in [75] of the Counterclaim?

(f) Oupan acted in breach of trust by granting the Daydeb Accommodation as alleged in [78] of the Counterclaim?

(6) Has Mr Wilson suffered loss and damage by the misleading or deceptive conduct of Oupan or Waigani?[115]

(7) By providing the 2006 accounts, giving the Trustee Warranties, and entering the May agreement and the July agreements, did Oupan prefer the interests of the defendants to counterclaim and thereby act in breach of trust?[116]

(8) By making the 18 April representation, giving the Trustee Warranties, and entering the May agreement and the July agreements, did Waigani prefer the interests of the defendants to counterclaim and thereby act in breach of trust?[117]

(9) Is Mr Wilson:

(a) estopped from contending that the May agreement and the July agreements are invalid?[118]

(b) ready, willing and able to take all steps to put the parties back in the position they were in at the time of entry into the May agreement and the July agreements, and in any event is that possible?[119]

(c) entitled to a declaration that the May agreement and the July agreements are void pursuant to s 87 of the Trade Practices Act 1974 (Cth)?[120]

(d) entitled to rescind the May agreement and the July agreements?[121]

(10) If the answer to Question 9(c) or (d) is yes:

(a) did Oupan act in breach of trust by:

(i) making the Oupan Interest Payments as alleged in [75] of the Counterclaim?

(ii) providing the Daydeb Accommodation as alleged in [78] of the Counterclaim?

(iii) failing to keep and render accurate accounts as alleged in [79] and [80] of the Counterclaim?

(b) is relief for any act in breach of trust in (a) above statute barred or barred by virtue of Mr Wilson's laches and or acquiescence?[122]

(c) should Oupan be removed as trustee of the Oupan Trust pursuant to s 48 of the Trustee Act 1958 (Vic)?[123]

(d) did Waigani act in breach of trust by:

(i) making the Waigani Interest Payments as alleged in paragraph at [31] of the Counterclaim?

(ii) paying the Management Fees to Oupan as alleged in [34] of the Counterclaim?

(iii) making the Balanced Loan as alleged in [37] of the Counterclaim?

(iv) making the Superannuation Payments as alleged in [40] of the Counterclaim?

(v) failing to keep and render accurate accounts as alleged in [49] of the Counterclaim?

(e) is relief for any act in breach of trust in (d) above statute barred or barred by virtue of Mr Wilson's laches and or acquiescence?[124]

(f) should Waigani be removed as trustee of the Deer Park Trust pursuant to s 48 of the Trustee Act 1958 (Vic)?[125]

(11) Did Mr Geer and Mr Wilson agree that Mr Wilson would hold 25% or 50% of the units in the Deer Park Trust, as alleged in [22] and [23] of the Counterclaim?

(12) In relation to the Manning Land, is Mr Wilson entitled to the relief at [104] of the Counterclaim?

It will be observed that these questions for determination make reference to the Third Further Amended Counterclaim although, subsequently, there was filed a Fourth Further Amended Counterclaim (amended pursuant to orders made on 17 November 2017). It was, however, agreed in the course of the trial of this matter, particularly reaffirmed in closing submissions, that there was no material difference between the parts of the Third Further Amended Counterclaim referred to in these questions and the corresponding paragraphs of the Fourth Further Amended Counterclaim, though where such material differences do arise they are addressed in these reasons.

Did Mr Gorr, on behalf of Waigani, make the 18 April representation?[126]

61 The claim, as originally pleaded by Wilson, was that, on 18 April 2007, he attended a meeting with Gorr at which Gorr, on behalf of Waigani, told Wilson that the Deer Park Trust had been and continued to be unprofitable.[127] Wilson now alleges that Gorr also said that the Oupan Trust had been and continued to be unprofitable, and that the Manning Land, held in the Manning Trust, had a mortgagee in possession and had made no money.[128]

62 Wilson, in his witness statement, says:[129]

I cannot recall exactly what was said but, to the best of my recollection, Gorr said words to the effect that "the trusts have made no money" and they "never would". Gorr added something like they had to "bring in a lot of interest charges that aren't shown in the accounts".

In cross-examination, however, Wilson, who was given every opportunity to give evidence about what was said to him at this time, could not recall any representation being made to him at this meeting.[130] In view of the importance of this meeting and the allegations with respect to the fact of and what might flow from any representation made on 18 April 2007, it is helpful to set out Wilson's evidence in cross-examination with respect to this meeting:[131]

The day before the letter containing the accounts went out, you had a meeting with Mr Gorr, do you recall that?---When was that?

On 18 April 2007?---On 18th of?

April 2007?---Yes.

Do you recall that?---I recall that.

Would you tell his Honour, please, what Mr Gorr said to you and what you said to Mr Gorr at that meeting?---We discussed settling the issues.

Do you recall what was said in relation to settling the issues?---I can't be certain, that was nearly 10 years ago, what was said at which meeting.

Can his Honour take it that you don't recall what was said to you by Mr Gorr at the meeting on 18 April 2007?---Mr Gorr said to me at one of those meetings, "Here are the accounts, they are not final but I believe they are pretty accurate. However, there may be further interest charges to be added once calculated".

Do you recall Mr Gorr saying anything else to you at that meeting?---I'm sorry?

Do you recall Mr Gorr saying anything else to you at that meeting?---No, I don't but there were some notes taken by Mr Foale.

I see?---There were a couple of meetings that weren't too far apart and I can't tell you exactly what was said but certainly the main points of it, I can.

Have you told his Honour all of the main points as you recall them?---Have I told his Honour all the main points?

As you recall them for the meeting you had, which included Mr Gorr, in April 2007, around 18 April?---We discussed what could be done about the Waigani land.

Yes?---We discussed what was left, we discussed what it might be worth. They had a view, I had a view. It's still sitting there. Whether my view was right or theirs, we will find out one day, I suppose.

Do you recall anything else discussed at this meeting?---They agreed to give me some money.

Does that cover everything that you recall was said at the meeting around 18 April attended by you and Mr Gorr, amongst others? Is that all you recall that was discussed involving Mr Gorr?---We talked about maybe them selling me some of the property that Oupan still had. I made some suggestions, there was some land at the end of my street that I thought I might be able to buy. They weren't interested in selling that. We discussed the Manning land. They told me there was still a mortgage on the Manning land and that - they didn't say what the mortgage was but they said there was still a mortgage on it and I knew that some of the land had been developed and sold off. When we agreed on the arrangements for the money and eventually we got down to the fact that there might be three properties that I could buy.

I think we are getting ahead of ourselves. I just want to make it quite clear to you, Mr Wilson, the meeting that I've asked you to recount is a meeting that took place very shortly prior to the letter of 19 April being sent out to you?---Could you say that again, please?

I want you to be perfectly clear about this, the meeting that I have asked you some questions about occurred shortly prior to the 19 April letter which had all the attachments, including the accounts, being sent out to you?---Okay. As I said, there were two meetings that weren't too far apart. I'm not sure exactly what happened at which meeting.

The letter was sent to you by Mr Gorr the day after, or very soon after the meeting about which I've just asked you some questions?---All right.

Have we exhausted your memory as to what occurred at that meeting?---I told you what I thought occurred at that meeting.

In closing submissions it was submitted on behalf of Wilson by his senior counsel that his evidence-in-chief, as set out in his witness statement, should stand in spite of these answers by Wilson in cross-examination.[132] In my view, the position is quite clear that Wilson, having been given every opportunity to give evidence with respect to this meeting, has been unable to do so. Moreover, the evidence now that he has no relevant recollection with respect to the alleged 18 April 2007 representation must undercut any basis upon which his evidence-in-chief as set out in his witness statement could be given any weight at all.

63 Moreover, the evidence given by Gorr supports the view that Wilson's allegations with respect to any 18 April 2007 representation had no foundation whatsoever and, further, that nothing of the sort now alleged occurred at that meeting or at any other time - there being no evidence to suggest there was another occasion. In any event, Gorr does recall a meeting with Wilson on 18 April 2007,[133] but denies, however, saying: "the trusts have made no money and never would; we have to bring a lot of interest charges that aren't shown in the accounts; the Manning land is in the Manning trust which has made no money and there was a mortgagee in possession".[134] Geer does not recall being present at any meeting at this time[135] and, indeed, Wilson did not suggest that he was in the cross-examination just set out, though he is said to be present in Wilson's witness statement.[136]

64 Additionally, the alleged representation is at odds with the contemporaneous objective facts, namely, the stage of negotiations and the nature of negotiations between the parties, and contemporaneous documentation.

65 In relation to the alleged Deer Park Trust representation, the alleged representation that the Deer Park Trust "would never" make any money is inconsistent with what was occurring. The parties were negotiating part of the settlement sum based on the value of the landholding of that trust.[137]

66 In relation to the alleged Oupan Trust representation, it is inconsistent with Oupan's draft financial statement for the year ended 30 June 2006, which Gorr gave to Wilson and which showed that Oupan had an operating profit in the 2005 year and had net equity of almost $34m.[138] What had occurred earlier was that Geer had stated that Wilson's units in Oupan had no value, given Wilson's outstanding loan and Oupan's liability to pay interest to the HGR interests.[139]

67 In relation to the alleged Manning Land representation, this is not supported by Wilson's own witness statement; though he does mention the Manning Land in his witness statement and in cross examination.[140] The Manning Land is not held by a separate trust; the benefit of that land is held by Oupan.[141] Moreover, Gorr did not even know any details about the Manning Land.[142]

68 In conclusion, having regard to material changes in Wilson's claims relating to the 18 April 2007 representation and given his failure to recall any of the alleged representations under cross-examination, I am of the opinion that his evidence must be treated as a fabrication.

69 For these reasons, I find that no representation occurred on 18 April 2007 as alleged by Wilson. It follows that the answer to question (1) is "no".

false, misleading and deceptive by reason that:

(a) they showed no distributable profits for the Oupan trust and the Waigani trust, when the trusts would have been profitable but for the trustees' breaches in relation to the Oupan Interest Payments, the Waigani Interest Payments, and the Management Fees?

(b) the Manning Land had made profits, and was a valuable asset unencumbered by any debt from February 2004?[143]

70 First, I have found that the 18 April 2007 representation was not made. Secondly, in relation to the 2006 accounts, I observe that they did state that the Oupan Interest Payments - being the payment of interest to entities of which Geer, Gorr and May were directors or associates[144] - were $5,296,353.17 and that the Waigani Interest Payments - being the payment of interest at the rate of 18.75% per annum to certain entities of which Geer, Gorr and May were directors between 1988 and 30 June 2006[145] - were $3,637,714.13. The 2006 accounts did not, however, state the Management Fees; these being payments from Waigani to Oupan made from 1989 to 2006, totalling $3.166 million. Rather, the 2006 accounts stated that a payment of $128,000 was made in 2005 and a payment of $940,000 was made in 2006. In respect of Management Fees, the HGR parties contend that on this basis alone, this part of the claim must fail, but it is addressed further in their submissions and in the reasons which follow on the assumed basis that the 2006 accounts did state the Management Fees.

The Oupan Interest Payments [References to pleadings paragraphs are to the Fourth Further Amended Counterclaim]

71 The pleaded allegation at [107] of the Fourth Further Amended Counterclaim refers back to allegations at [71] to [75].

72 In 2005 and in 2006, Geer instructed Palermo that Oupan had funds of $5,296,353.17 to repay some interest owing to the HGR interests and asked her to calculate how that cash could be split. She did not recalculate the interest then owing, but referred to the unpaid interest burden that had totalled $18.2m as at 30 September 1993 and had continued to compound.[146] In 2005 and in 2006, Oupan paid that sum to the HGR interests for part of the outstanding interest.[147]

The allegation at [74] - the advances were not made

73 Palermo identified each advance made by the HGR interests to Oupan.[148] Between March 1980 and 30 June 2005, the unsecured loans from the HGR interests which are the subject of allegations in this proceeding totalled $24,901,952.60.[149] Hockley agreed that the HGR interests made the advances to Oupan on which related party interest has been incurred.[150] This was known to Wilson, who abandoned this part of the claim in the witness box.[151]

The allegation at [74] - the rate was not agreed

74 All parties, including Wilson, accepted that the HGR interests had agreed to lend to Oupan at the HGR lending rates.[152] In this respect it is necessary to examine the position in some detail, going back to the establishment of Oupan.

75 I begin with the establishment of Oupan. In or about 1979, Wilson came to see Geer at HGR's offices.[153] Wilson told Geer that he had been given Geer's name by a mortgage broker and he wanted to talk about borrowing money and an ongoing business relationship.[154]

76 As to borrowing money, Wilson said to Geer that he was not in a strong financial position and that he had entered into a Part X Agreement (being an Agreement under Part X of the Bankruptcy Act 1966 (Cth)). In 1976 Wilson had assigned his property to Cougle, as trustee of his property under the deed of assignment.[155] Geer's evidence was that Wilson said that he needed a loan of $65,000 to put his affairs in order, which included settling a debt to his brother, John.[156] Wilson's denial that he approached Geer to ask for a loan of $65,000 to put his personal affairs in order should be rejected[157] in light of the contrary evidence and also having regard to the position that Wilson later accepted that he did use some of that money to pay his trustee in bankruptcy.[158] Geer gave evidence that Wilson also said that as an incentive to the lender he would assign to the lender a half interest in land known as the Manning Land, which had vested in his trustee in bankruptcy and then had no value as it was subject to a mortgage held by Boston Financial Limited (later Boston Australia Ltd) ("Boston"), but may one day have value.[159] Wilson accepted that he had offered Geer a half interest in the Manning Land as part of getting the $65,000 loan.[160] Wilson's initial denial that the value of the Manning Land was less than the mortgage debt should also be rejected:[161] as upon being shown Cougle's evidence that Cougle believed the mortgage debt exceeded the value of the land,[162] Wilson did not dispute Cougle's view of the value of that land.[163]

77 As to the ongoing business relationship, Wilson said that he was knowledgeable about property development in the Bacchus Marsh area where his family had always lived. Wilson said if his know-how were combined with HGR's funding capacity, "we can do well together". He said that he and Geer should enter a joint venture whereby HGR interests funded, and he managed, a quarry in the Bacchus Marsh area, and the profits of the enterprise be split.[164]

78 Geer formed the view that Wilson was credible and that he had the ability to make money if he were able to borrow funds to buy land. Geer then approached Geer Senior and Gorr, each of whom agreed to be part of the enterprise, and Geer put together a commercial relationship with Wilson, Geer, Geer Senior and Gorr.[165]

79 Almost immediately after Oupan was established, Wilson began to identify new investment opportunities in and around the Bacchus Marsh area and proposed that they be funded by the Oupan Resources Trust.[166]

80 Geer, Geer Senior, Gorr and May confirmed their earlier blanket agreement that they would make funds available to Oupan on terms that:[167]

(a) principal would be repaid and interest would be paid when Oupan formed the view that it had the financial capacity to pay;

(b) the rate of interest payable by Oupan would equate with the rates of interest available through HG&R Nominees; and

(c) any unpaid interest would be compounded at quarterly rests.

81 Geer considered that this was an appropriate arrangement for financing Oupan's business activities because Oupan's quarries as well as the land to be developed for subdivision would generate a cash flow allowing for the HGR interests who provided the finance to receive some principal repayments and interest payments over time.[168]

82 The commercial context for these terms was that each of Geer, Geer Senior, Gorr and May could always deploy their funds (or those of entities associated with them) through the HGR lending business and obtain interest at the prevailing HG&R Nominees lending rates with the added security of a first mortgage. Thus, Wilson's investment proposals were only attractive to the extent that Wilson could make sufficient money to repay all principal and pay interest on all loans and in addition generate profit for unitholders.[169]

83 The agreement by Oupan to pay interest to the HGR interests for unsecured loans is recorded in the minutes of the Oupan board meeting dated 11 December 1981, which Geer and Wilson attended. The minutes states:[170]

It was CONFIRMED that all unsecured loans will bear interest at the prescribed rate from time to time pursuant to the Stamps Act Regulations as not attracting credit and rental duty.

Interest will be calculated on a daily balance payable quarterly in arrears.

If interest is not paid by the due dates, interest will be paid on such unpaid amounts as though it were a further advance of principal.

Oupan Resources Pty Ltd as trustee of the Oupan Resources Trust will if so requested by the Lender, execute a Floating Charge over the assets of the Trust to secure the unsecured advances from time to time.

84 The "prescribed rate" described in the meeting minutes was an interest rate published from time to time in the Stamps (Prescribed Rate) Regulations. In accordance with s 131ADA of the Stamps Act 1958, lenders who provided loans at a rate not exceeding the prescribed rate were entitled to apply for a rebate of the stamp duty that would otherwise be payable on the loan instrument. Section 131ADA of the Stamps Act was repealed in November 1984.[171]

85 In December 1981, at the time of the Oupan board meeting, HG&R Nominees' interest rate was 17%, which was equal to the prescribed rate.[172] In the quarter between October and December of 1981, the HG&R Nominees interest rate fell beneath the prescribed rate and remained lower than the prescribed rate throughout 1983 and 1984 (until s 131ADA of the Stamps Act was repealed) by up to 3.75 percentage points. During that period the interest on the unsecured loans to Oupan was calculated at the HG&R Nominees rate rather than the higher prescribed rate.[173]

86 Wilson accepted that the 11 December 1981 minute recording the loan agreement was correct.[174]

87 The unsecured loans and the agreement that interest is payable on those loans is also recorded in Oupan's company accounts (as distinct from the trust accounts), as set out in the following table.

Value of unsecured loans recorded as non-current liabilities in accounts

Note in accounts as to interest payable on unsecured loans

"Pursuant to an agreement with lenders interest on unsecured loans, totalling $2,511,100 at balance date, is payable at their demand when they consider the trust is in a position to pay same. At balance date it was not practicable to calculate the amount of any interest payable nor had a demand for payments been made."

"Pursuant to an agreement with lenders interest on unsecured loans, totalling $3,302,950 at balance date, is payable at their demand when they consider the trust is in a position to pay same. At balance date it was not practicable to calculate the amount of any interest payable nor had a demand for payment been made."

88 In 1988, Wilson engaged Ken McDonald, an accountant, to provide financial advice to Oupan.[175] His report records that there was unsecured lending by the HGR interests, interest was payable on those sums and no accounting is done for the interest accruing on the unsecured loans.[176] At that date, little or no interest had been paid by Oupan.[177]

89 The financial statements for the Oupan Resources Trust for the year ended 30 June 1993,[178] records at note 14, under the heading contingent liabilities, that:

Pursuant to an agreement with lenders of unsecured loans totalling $7,113,634... interest is payable on demand when they consider that the trust is in a position to pay. To date no such demand for payment has been received by the trust.

90 This figure records only the loan principal amount, and not interest.[179]

91 Senior counsel for Wilson sought to make much of the line item in the accounts to which note 14 referred.[180] That line item refers to "unsecured loans - interest free 7,113,634". On a proper reading, it is only saying that the sum of $7,113,634 is the amount without interest, and that interest is to be calculated in accordance with note 14. Geer was clear that, if the accounts were intending to say that no interest was payable on the $7,113,634, the accounts were wrong.[181] Further, Geer and Gorr stated that these accounts were never signed off by the directors.[182]

92 Further, Michalski knew that the HGR interests were lending millions of dollars to Oupan for use in its business, and that these loans were interest bearing.[183] At that time, HGR's finance team periodically sent copies of Oupan's HGR trust ledgers to Oupan's internal accountants so that Oupan could account for the transactions HGR had undertaken on its behalf.[184]

93 Between March 1980 and 30 June 2005, the unsecured loans from the HGR interests which are the subject of allegations in this proceeding totalled $24,901,952.60.[185]

94 Wilson was asked in cross examination about the HGR interests' loans to Oupan and Waigani.

(a) Wilson agreed that the HGR interests put in more than $20 million over 17 years.[186]

(b) Wilson agreed that the money provided by the HGR interests was all provided by way of loans[187] and that it would be calculated on a daily balance payable quarterly[188] - in other words, compounding of quarterly rests.[189]

(c) Wilson agreed that interest was to be paid in relation to these loans.[190]

(d) Wilson recalled discussions with Geer about the rates of interest that were being charged on these loans.[191]

(e) Wilson agreed that Geer told him that he wanted a commercial return on these loans.[192]

(f) Wilson's evidence was that he did not know the precise interest rate, just that it would be a "fair rate of interest".[193]

(g) Wilson said he was happy for this interest to be paid at the rate of return applicable to Geer's own lending business.[194]

(h) Wilson accepted that the interest that Oupan and Waigani would eventually pay would be higher than was being paid to the bank lenders.[195]

(i) Wilson accepted that he understood that the HGR loans did not have to be repaid until there was money available to repay them.[196]

(j) Wilson accepted that it was "probably right" that all of the money loaned to Oupan and Waigani was recorded in the books of Oupan and Waigani.[197]

(k) Wilson knew that Mr Redden, an accountant he had engaged on behalf of Oupan, had looked into the amount that had been lent by the HGR interests to the period in or about 1994,[198] and reconciled it.[199]

(l) Wilson accepted that at all times he was aware that there were unsecured loans accruing interest and that the interest had not been brought to account and was not being recorded in the accounts.[200]

(m) Wilson knew that, as at 1993, the amount in principal then outstanding was over $7 million.[201]

(n) Wilson knew that, as at 1993, there was interest payable to the HGR interests (not recorded in Oupan's financial statements) and that it would be a considerable sum.[202]

95 In the course of this cross examination, Wilson expressly abandoned his case that there were no loans made to Oupan by the HGR interests.[203]

96 In my view, the matters to which reference has been made in some detail and in the context of the other matters with respect to the arrangements between Wilson and the HGR interests show very clearly the nature of the relationship between them - a potentially long-term commercial relationship. Moreover, it was a commercial relationship clearly intended to be advantageous to all involved. Certainly this included Wilson, who stood to gain much by way of income and capital in circumstances where he contributed all but an insignificant sum of money in the scheme of things and where the HGR interests supplied the capital as required by Wilson and undertook significant commercial risk.

97 Notwithstanding this position, Wilson now seeks to cast matters in a very different light with respect to alleged conflicts of interest with respect to lending:[204]

1. None of the conflicting versions put forward by the HGR interests of the legal arrangements governing their unsecured loans to Oupan supplies any foundation for a contention that Oupan, as borrower, waived the conflicts of interest to which the HGR interests were subject. The HGR interests do not even contend that there was any such waiver by Waigani. Accordingly, on each advance by the HGR interests to Oupan and Waigani, there was an inherent conflict of interest. The lender wanted to maximise its return from the advance; the borrower wanted to minimise its cost. The parties' objectives were irreconcilable.
2. The inherent conflict was exacerbated by the unusual - and conflicting - terms on which the HGR interests say interest was to be paid and principal repaid. The HGR interests allege that such payments depended on a determination by either the lender or the borrower (it remains unclear which) that the borrower could afford to make the payment. Such a provision - if applicable - would give rise to conflicts of interest every time a determination is made.
3. The muddle created by this thicket of conflicts was amply demonstrated by this passage from Mr Gorr's cross-examination:[205]

Can we go through to 0209, please. This is one of these notes and the notes appear in three or four sets of accounts in identical terms, except I think as to the number: "Pursuant to an agreement with lenders, interest on unsecured loans is payable at their demand"? --- Yes.

The reference there is to the demand of the lenders, isn't it? --- I would think so, yes.

It's when the lenders consider the trust is in a position to pay the interest? ---Yes.

But you understand that's inconsistent with the case which you make which was it was for Oupan to determine when it considered it was in a position to pay the interest, isn't it? --- I think --- I don't think that's inconsistent.

I can't hear, you Mr Gorr?---I don't know why that's inconsistent.

The case you make is that the agreement was that the HGR lenders would provide loans to Oupan and the interest on those loans would be payable when Oupan considered that it had the capacity to pay, that's the case you make, you understand that, don't you?---Yes, but Oupan and the lenders were, although at arm's length, were not at arm's length because Bill was on both sides.

Bill Wilson was on both sides?---Yes, he was an Oupan director as he was - sorry, he wasn't a lender. Sorry, he was an Oupan director and had input, and he was an Oupan borrower, so he borrowed from Oupan so he had - - -

He wasn't a lender to Oupan, was he?---No, he wasn't, I'm sorry, but he had an interest in Oupan repaying the loans because without the loans to Oupan he couldn't have drawn his money.

The way you thought about these transactions was that it was the same people on each side of the transaction?---No. We wouldn't have drawn the money if we thought that the entity, being Oupan, would be in trouble. We weren't there to make - - -

You are not answering my question, Mr Gorr. My question is that the way you thought about these transactions was on the basis that it was the same people on each side of the transaction as lender and borrower?---No.

That then does draw attention to the inconsistency between this note and the case you make then, doesn't it?---I can't explain - if you think there's an inconsistency, I can't explain the inconsistency but I understood the loans to be at call, unsecured - sorry, not at call, only to be repaid in the future when the borrower had the ability to make the payment.

Yes, but what I'm focusing on now, Mr Gorr, is who makes that decision about when the borrower has the ability to pay. Who do you say, under the agreement, made that decision?---I can't answer that question. I don't know how to answer that question.

Your case is - do I need to take you to your pleading - that Oupan made that decision; do you say that's wrong? ---No, I'm not saying it's wrong. I think that's how I've always believed it to be.

That Oupan made the decision?---Yes - sorry, the lender would make the decision when it had access to Oupan's financials.

So your case is that the decision about when interest was to be paid was a decision for the lender?---Yes

Inconsistent with the case that you've pleaded? --- That may be the case.

1. Both Mr Geer[206] and Mr May[207] gave equally unconvincing answers to questions about how they resolved their conflicts of interest in representing both lenders and borrowers. Neither seemed to have any proper appreciation of the conflict they faced. Such evidence, if given by any director of a trustee company, would be unsatisfactory. Coming from very experienced solicitors it is frankly shocking.
2. The HGR interests did not disclose that they gave any consideration to the best course for Oupan. The Court should infer they chose the path that best suited them in their capacities as lenders.
3. The effect of the lending conflicts is even more starkly apparent in the setting of the Waigani interest rate. Nothing about the lending arrangements for Waigani was recorded in writing.[208] Of the many different versions given by the HGR interests, Geer settled on a formulation in his oral evidence that departed from his pleaded case and his witness statement.[209]

98 In my view, these submissions and those which follow in a similar vein[210] completely mischaracterise the nature of the commercial relationship between Wilson and the HGR interests. It was clearly both a fluid and mutually beneficial relationship where the essential elements with respect to the supply of funds and arrangements with respect to interest were, in my view, settled. It was also a relationship for no fixed or agreed period of time, which meant that Wilson - or the HGR interests for that matter - could walk away if he thought it was no longer in his interests. This did, of course, eventually occur in 2007, but it continued until around that date without any perceived concern or difficulty. Moreover, Geer did suggest to Wilson that he should obtain legal advice early in the piece.[211] It should also be kept in mind that Wilson was a person with experience in commercial matters and business enterprises. To suggest, as it was on his behalf, that he was a mere "quarryman"[212] dealing with the likes of sophisticated city lawyers with respect to the HGR interests is quite ridiculous in the present circumstances. Moreover, there is no basis for the submission - a submission tantamount to an allegation of fraud against the HGR parties or interests - that:[213] "[t]he conclusion is irresistible that Waigani agreed in 2005/2006 to pay interest at 18.75% compounding quarterly back to 1993 as a means of diverting profits away from the minority unitholder (Wilson) who was not a lender to the trust. This is confirmed by what happened after Wilson ceased to be a unitholder..." is, in light of the evidence, gratuitous and without foundation. The position after Wilson ceased to be a unitholder is considered further, below.[214]

The allegations at [74] insofar as they relate to the Oupan Interest Payments

99 Palermo has calculated that, further to the Oupan Interest Payments, as at 30 June 2007, Oupan owed the HGR interests over $57 million in interest.[215] Putting aside the issue of quantum of interest for a moment, it is very clear, in my view, that in all the circumstances of the Waigani and Oupan businesses and the evidence relied upon by both Wilson and the HGR parties, it cannot seriously be put that the Oupan Interest Payments were not payable. It certainly cannot be put that no interest was payable; these businesses were, clearly, commercial ventures. It was suggested in closing submissions on behalf of Wilson that the payments by the HGR interests were in the nature of capital contributions, not loans. However, as put in response by the HGR parties, no such position is pleaded, the case has not been run on this basis and there is no evidence in support of such an assertion.

100 It is necessary now to turn to some further aspects of these allegations with respect to any agreement by Oupan to pay interest as they are also used to impugn the $57 million the HGR parties claim Oupan owed to the HGR interests.

The allegations at [74] insofar as they relate to the Oupan outstanding interest

The allegation in [74](a)(i) - Oupan should have paid off the loans by 1993

101 As contended by the HGR parties, the allegation that Oupan should have used the proceeds from the sale of various quarry assets, the last of which was in 1993,[216] to repay any interest bearing liability Oupan then had to the HGR interests - namely, $18 million - is, for the reasons which follow, without foundation.

102 First, the claim is statute barred and, as indicated in these reasons, no fraud exception could be engaged.[217] At the time of the asset sales, Wilson was a director of Oupan with day to day management of its businesses and control of its financial accounts. Oupan engaged external advisers to advise on the preparation of financial statements in relevant years in relation to these sales,[218] and Wilson was personally involved in finalising the accounts for the relevant years.

103 Secondly, and as Wilson accepted, he was the one who wanted to use the proceeds from the quarry sale to invest in Alice. He also wanted to use the proceeds for further loans to himself and to redeem 12 of his units. As a director of Oupan at the relevant time with day to day management of Oupan, any claim relating to the imprudent allocation of funds necessarily fails on the basis that Wilson cannot now take advantage of his own wrong.

104 Thirdly, there is no evidence that Oupan's directors, including Wilson, imprudently applied any of the proceeds. Proceeds from the sale of the quarry business were used to repay some of the outstanding loans to the HGR interests. Geer requested Palermo to calculate the outstanding loan amounts as at 30 September 1993, which she calculated at $26,271,242.75, being $8,025,222.33 in principal and $18,246,020.42 in interest.[219] Oupan made principal repayments totalling $7,311,600 in December 1993.[220] Oupan also made loans to Wilson,[221] and Oupan retained some proceeds for new investments.[222] As Geer said, whenever the HGR interests agreed that surplus funds be reinvested by Oupan, they were taking a risk that Oupan would continue to generate surpluses.[223] As things turned out, Wilson, with Oupan's approval, used some of the proceeds to expand Alice; an expansion which failed spectacularly in 1997.

105 Fourthly, the Oupan trust deed confers upon the trustees a broad discretion in relation to the management of the affairs of the trust,[224] such that the asserted test of "imprudence", even if proven, would not constitute a breach of trust.

The allegation in [74](a)(ii)-(iii)] - Oupan did not know if any advance was needed

106 The allegation that each advance to Oupan was imprudent because it did not know its financial position and, accordingly, was in breach of trust, is also a claim without foundation.

107 First, the matters pleaded in [79A], which are addressed in relation to question 10(a)(iii) below, do not speak to Oupan's financial position in relation to its cash holdings in its own bank account and hence its need to borrow.

108 Secondly, Wilson both oversaw the keeping of Oupan's books and asked Geer for funds each time he formed the view that Oupan needed to borrow. Geer was involved in assessing Oupan's need for loans. All but a handful of advances took place while Wilson was in charge.[225] If any of the advances then made were imprudent, they were imprudent by reason of Wilson's mismanagement of Oupan's accounts and his requests for unneeded loans and, it follows, that Wilson cannot now take advantage of his own wrong.[226] Any claim relating to an advance made in the immediate aftermath of Wilson's mismanagement of Oupan's accounts fails on the same basis. Only six advances made in 2001, totalling just over $225,000, fall outside these categories.[227]

109 Thirdly, the suggestion that the HGR interests were making unnecessary advances to Oupan from around 1996, when it became clear Oupan's liabilities to the HGR interests exceeded Oupan's assets, is, again, without foundation for the reasons indicated.

110 Fourthly, there is no evidence that any advance made by an HGR interest to Oupan, each identified in Palermo's witness statement,[228] was "imprudent".

111 Fifthly, the Oupan trust deed confers upon the trustees a broad discretion in relation to the management of the affairs of the trust such that the asserted test of "imprudence", even if proven, would not constitute a breach of trust.

112 Sixthly, the claims are statute barred and, as indicated in these reasons, no fraud exception could be engaged.[229]

The allegation in [74(b) & (c)] - Messrs Geer and Gorr were lending for their benefit

113 The allegation that Geer and Gorr were lending to Oupan for their own benefit, contrary to the interests of the unitholders, is without foundation for the reasons already set out with respect to the allegations in [74(a)].

The unpleaded allegation in Hockley's Second Report at questions 5 and 6

114 Hockley opined, assuming Oupan owed the HGR interests $57 million in interest, that a prudent director or trustee would have repaid the interest, rather than holding cash or lending to HGR entities.[230] For the reasons which follow, I accept the HGR parties' submissions that his opinion should be rejected.

115 First, this question and its answer, does not arise on the pleadings. There is no allegation that Oupan was not a "prudent trustee". Moreover, it is unclear what standard this test is intending to impose in the present circumstances. Additionally, there is no allegation that Oupan should have used its assets to repay its debts to the HGR interests, save in relation to the asset sales ending in 1994. That is, the only part of Hockley's answer that, theoretically, could be relevant to the pleaded case is in relation to the use of funds held in 1994, which produced an interest saving of around $400,000.[231]

116 Secondly, Hockley assumes that the "prudent trustee" would hold no cash.[232] There is, however, no basis in the law of trusts or otherwise for any such general standard. Clearly, it all depends upon the circumstances of the particular trust, and there is no indication what circumstances would lead to such a position, much less how such a position would arise in the present circumstances. Additionally, Hockley has no expertise which would enable him to express such an opinion. It is a matter for the Court.

117 Thirdly, and in conflict with his opinion, Hockley accepted that it was perfectly reasonable for cash to be retained in Oupan to put into new businesses, and that such a decision was a matter for the judgment of the directors.[233]

118 Fourthly, when it was put to Hockley that it was Wilson who wanted to use the cash from the quarry sales to invest in Alice, Hockley disavowed that he was saying Wilson was not a prudent director for wanting to do so.[234]

The Waigani Interest Payments [References to pleadings paragraphs are to the Fourth Further Amended Counterclaim]

119 The pleaded allegation at [107] refers back to the allegations at [29]-[31].

The allegation at [30] - the advances were not made

120 The allegations at [30] that the interest payments were not made in respect of the actual advances to Waigani is at odds with Palermo's evidence which established that the interest payments were referable to the actual advances;[235] a position with which Hockley agreed.[236] Moreover, Wilson accepted that the advances as recorded were made.[237]

The allegation at [30] - the rate was not agreed

121 The allegation at [30] that the interest rate was not agreed is not supported by the evidence. Geer, Gorr and May gave evidence that the terms of the HGR interests' lending to Waigani was different from its lending to Oupan insofar as the Waigani lending rate was to be fixed at the time of repayment at a commercial rate, reflecting Waigani's circumstances.[238] Wilson's evidence in cross-examination in relation to the HGR interests' lending to Oupan and Waigani is not inconsistent with this position.[239]

The allegation at [30(a)(i)] - charging 18.75% interest was uncommercial

122 The allegation that each advance was imprudent because alternative finance at less than 18.75% interest could have been obtained by Waigani if it had so chosen is not supported by the evidence. The evidence established that an interest rate of 18.75% was a reasonable or commercial rate, and there is no evidence that Waigani could have borrowed at a lower rate.[240] On this basis and for the reasons which follow, there is no basis for Wilson's contention that borrowing at this rate of interest was uncommercial or imprudent on the part of a trustee.[241]

Geer's opinion as to the reasonable rate should be accepted

123 It is clear, in my view, that Geer was, at all relevant times, an expert in determining interest rates based upon risk of lending, having been one of Melbourne's leading solicitor practice lenders for 35 years or so. His evidence is admissible, based on his specialised knowledge, for the purpose of supporting the reasonableness of this rate.[242]

124 Geer identified a variety of factors as being relevant to him forming the view that 18.75% was a reasonable rate of interest.[243] These factors are as follows:[244]

(a) Waigani was a "one trick pony" as it had one piece of land, which was undeveloped broad acres for long-term development with no capacity to pay interest for a long time, and indeed it took 20 years to break even;

(b) the loans had been outstanding for a long period without any interest payments, as Waigani had no capacity to pay interest;

(c) the funds were lent on an unsecured and no recourse basis, meaning repayment was completely dependent upon the success of one long-term project: there was no recourse to another suite of assets, or to directors' guarantees, and it didn't have to repay if there was no profit;

(d) Waigani was also borrowing from non-HGR interests with fixed interest and principal repayment obligations on a secured basis;

(e) Waigani gave guarantees for Oupan's investments, including Alice;

(f) the loans to Waigani were higher risk than the Oupan loans because Waigani only had a small industrial land holding, whereas Oupan had a much broader spectrum of assets to meet repayments, including substantial holdings of both residential and industrial zoned land;

(g) and further, the rates the HGR interests were charging Oupan were rates for secured borrowing on a first mortgage through HGR on a proper, regulated, registered first mortgage, such that Oupan was not even being charged a commercial rate reflecting its risk premium.

Geer also made reference to 80 examples of loans made during the same period at comparable rates.[245] Geer was not cross-examined about any of these comparables. Gorr and May agreed to and verified Geer's rate, for similar reasons.[246]

125 Hockley opines that a fixed compounding rate of interest at 18.75% was not commercial for the entire period of the loans.[247] It is submitted by the HGR parties that this opinion should be rejected for a variety of reasons, a position which is, in my view, supported by the matters to which reference is made in the reasons which are advanced in support of this position. I turn now to particular matters which militate against accepting Hockley's opinion in this respect.

126 First, Hockley has no expertise in setting commercial interest rates, and he accepted that business bankers would be better placed to opine on such rates.[248]

127 Secondly, Hockley's report did not disclose his reasoning process. He stated that the RBA cash rate is the risk free rate[249] and then allowed a risk premium of 5% on top of that risk free rate to reach the reasonable or commercial rate, but without explaining why he chose that figure of 5% as a risk premium.[250]

128 Thirdly, when Hockley was asked why he chose 5% as a risk premium, he said that he took into account only two factors, namely that the loans were unsecured, and the then prevailing cash rate.[251] As to the first factor, that the loans were unsecured, Hockley was asked whether the factors that Geer had assessed in reaching his opinion that an interest rate of 18.75% was reasonable were relevant to setting a reasonable or commercial rate.[252] Hockley accepted that they were factors that a lender would take into account in pricing the risk premium for lending to Waigani.[253] However, he took none into account.

129 As to the second factor, the cash rates, Hockley used what can only be described as an unreliable source, namely, a website called www.loansense.com.au maintained by the blogger "Jeremy".[254] In answer to questions, Hockley conceded that he did not know "Jeremy" and, further, accepted that "there's probably better sources".[255] The website stated that its data was from the RBA website, but Hockley did not check that and could not now attest to the accuracy of his rates.[256] Quite properly, given what he had done, or not done, Hockley accepted that there were "some issues with the interest rate adopted".[257]

130 Fourthly, on Hockley's own approach, he should have concluded that 18.75% was a reasonable commercial rate. He said that the present cash rate is 1.5%.[258] Westpac's "Mortgage free business finance rate, base rate for temporary business overdraft" is 11.5%.[259] Hockley agreed that the risk premium is now 10%.[260] Between 1992 and 2007, the cash rate averaged 7 to 8%,[261] adding a risk premium at 10%, that would produce a commercial interest rate in the very near vicinity of 18.75%.

131 Hockley also opined on what Waigani should have been paying as a reasonable or commercial rate. In his first report, he calculated such a rate, but, without explanation, changed his opinion in his second report to adopt the rate the HGR parties charged Oupan.[262] Hockley's original rates were higher than the Oupan rates.[263] The HGR parties submitted that Hockley's opinion in this respect should be rejected on a number of bases. In my view, this is correct for the reasons to which I now turn.

132 First, Hockley was not expressing his own opinion. Rather, as he accepted, he was deferring to Geer's judgment on the reasonable or commercial interest rate for Oupan.[264]

133 Secondly, in relation to Waigani, Hockley accepted that Geer would know what rates were appropriate,[265] and that "based on his expertise in mortgage lending" Geer was better placed than him to decide the appropriate rate for Waigani.[266]

134 Thirdly, Hockley's reasons for not deferring to Geer's opinion in relation to Waigani were, I accept as submitted by the HGR parties, flawed. The first stated reason, that Geer adopted a fixed rate,[267] was quickly put aside. Fixed rates are an established part of the mortgage landscape. The second, and it is suggested, real, stated reason that Hockley thought Oupan and Waigani had the same risk profile,[268] was also flawed. First, it starts from the incorrect assumption that the HGR lenders were charging Oupan a reasonable or commercial rate. The HGR interests were not charging Oupan a commercial rate: the agreement was that they would lend money to Oupan at the same rate that the HGR mortgage lending business could lend out those same funds on a first mortgage with a set repayment date.[269] Secondly, it assumed that Oupan and Waigani had the same risk profile. However, Geer's evidence was that Oupan's diversification made it a lower repayment risk than Waigani's single development site - Geer saying, in this respect, that Waigani was a "one trick pony". Hockley did not address the matters in any way that dealt with these flaws.

135 Finally, Hockley opined that Waigani may have been able to obtain unsecured loans at the Oupan interest rates.[270] This opinion should, however, be rejected on the basis of his reasoning in this respect set out in his first report.[271]

The ability of Waigani to obtain alternative unsecured lending would be dependent upon a number of factors including the lending appetite of banks and other financial institutions to property developers at the time the funds were being sort [sic] and other documentation to be provided such as sale forecasts pre sales and development completion costs.

In cross-examination, Hockley accepted that his report did not address the risk profile for Waigani, the appetite of lenders for that risk profile, or the rate at which they would lend.[273] Hockley then accepted that he had no evidence as to the appetite of a bank or another financial institution to lend to an entity in Waigani's position.[274] Indeed, he accepted that he had not done the research to see who might have been available to lend.[275] Hockley further accepted that the development of the land had not progressed very far, and he was unaware of any sale forecasts or pre-sales.[276] Instead of undertaking this analysis, Hockley states:[277]

Given the significant difference between the rate which funding was provided to Waigani and the estimated unsecured loan rate after the early 1990's it is reasonable to expect funding would have been able to be obtained.

As indicated previously, Hockley's assessment of reasonable or commercial interest rates for lending to Waigani was fundamentally flawed. In cross-examination, Hockley accepted that his answer to this question should not have been that other lenders "may have been prepared to lend".[278] This does not, of course, take matters significantly further, if at all, with respect to this issue.

The allegation at [30(a)(ii)-(iii)] - Waigani did not know if any advance was needed

137 The allegation that each advance to Waigani was imprudent because it did not know its financial position and, accordingly, was in breach of trust is, in my view, not established for the following reasons.

138 First, the matters addressed in the particulars to [49A], which are addressed in Question 10(d)(v) below, do not speak of Waigani's financial position in relation to its cash holdings, and hence the need to borrow.

139 Secondly, Wilson both oversaw the keeping of Waigani's books and asked for funds as needed.[279] All but eight advances to Waigani took place while Wilson was running Waigani, or in the immediate aftermath of Wilson's management of Waigani's accounts.[280] If any of these advances were imprudent, they were imprudent by reason of Wilson's mismanagement of Waigani's accounts and his requests for unneeded loans. It is axiomatic that Wilson cannot now take advantage of his own wrong.

140 Thirdly, there is no evidence that any advance by an HGR interest to Waigani, each identified in Palermo's witness statement,[281] was "imprudent".

141 Fourthly, the Deer Park Trust deed confers upon the trustee a broad discretion in relation to the management of the affairs of the trust such that the asserted test of "imprudence", even if proven, would not constitute a breach of trust.[282]

142 Fifthly, the claims are now statute barred and, as indicated in these reasons, no fraud exception could be engaged.[283]

The allegation at [30(a)(iv)] - Waigani did not know the interest rate

143 The allegation that because Waigani did not know the rate of interest when borrowing, it failed to exercise its commercial judgment as to whether to take the advance or look for alternative funding is misconceived. If the allegation is that the rate had to be known or fixed at the lending date, that would exclude variable rate loans. If the allegation is that the loan agreement was imprudent (being that the rate was to be commercial, having regard to various circumstances[284]), self-evidently it was not. If the allegation is that failure to look for alternative funding was imprudent given the loan term offered, that has been addressed previously. Moreover, all this ignores the broad discretion conferred by the trust deed upon the trustee, which means that the alleged conduct, even if proven, would not constitute a breach of trust.

Management Fees [References to pleadings paragraphs are to the Fourth Further Amended Counterclaim]

144 The pleaded allegation at [107(b)] refers back to the allegations at [32]-[34]. The allegation made is that Waigani was under no legal obligation to pay the Management Fees, and in these circumstances doing so was a breach of trust. Although the representation was only in relation to part of the Management Fees, the allegation is discussed in the reasons which follow in relation to all of the Management Fees.

145 Senior counsel for Wilson opened this part of the case, submitting that these fees were "bogus transactions", "if not in fact shams", "just another technique for siphoning profits out of Waigani".[285] The evidence shows, that this is not the case and the allegation is completely without merit.[286]

146 The evidence is clear, in my view, that Oupan agreed to provide services to Waigani for a reasonable fee. Geer's evidence is of this agreement, and that Wilson agreed to that course.[287] Gorr recalled this agreement, and May recalled management fees being discussed at a very early stage.[288] In spite of his denial in his witness statement,[289] Wilson agreed under cross-examination that he spoke with Geer about Oupan providing services to Waigani, and that Oupan was to be paid fees for those services.[290] On this basis and for the reasons which follow, Wilson's allegations contained in his submissions that there was no basis for the charging of management fees, that they were "bogus" or an instance of conflicts of interest must be rejected.[291]

147 The work which Oupan undertook on Waigani's land was at a time when Wilson was in charge and Oupan had full responsibility for everything. Oupan staff were responsible for doing work on the subdivisions, such as the planning work, engineering and road making, and Oupan employed engineers and leased equipment to do these works.[292] Waigani's land was treated by Oupan no differently from Oupan's own land, and Waigani paid nothing for the provision of Oupan's staff and equipment.[293] Once Geer took over the management of Oupan from Wilson, Oupan staff still managed the development process, except that Oupan no longer had the people and equipment to undertake construction and so sub-contracted that work.[294] By 1 May 2007, approximately 60 hectares had been developed as individual lots for sale, in 21 separate stages,[295] and Waigani had subdivided and sold land for a total consideration of $21,124,945 (excluding GST).[296]

148 In determining what was considered to be a reasonable fee, Geer looked at the aggregate fee and formed the view that $3.166 million was reasonable for all services provided to Waigani over the 22 years from 1984 to 2006 in light of the costs being borne by Oupan in terms of staff and overheads for Waigani, and the fact that Oupan had to carry those costs for an indeterminate period. Moreover, Oupan was expert at land development, having managed the subdivision, development and sale of around 1,400 blocks of land.[297] Gorr also considered those sums reasonable over the life of the project,[298] and May agreed with that assessment.[299]

149 Geer, who was experienced in land development, both in working with Wilson for 15 years and then working alone for ten years, formed the view that $3.166 million was a reasonable sum in all the circumstances. Geer's opinion, given this experience and expertise, is admissible for that purpose.[300] Moreover, there is no contradicting evidence that this sum is not reasonable. Hockley, albeit having no expertise to opine on such fees, did not say that the fee was unreasonable.[301] And Wilson, who had a lifetime of experience developing land, and was involved in the development of Waigani's land from 1984 to 1997, did not give evidence that the sum charged was unreasonable - whether for the period 1984 to 1997 or for the whole of the period. It is significant to note that Wilson said nothing on this topic. Rather, the only basis upon which Wilson attacked these management fees was on the basis of seeking to match land sale activity in various financial documents at various times with the time at which management fees were charged. In light of the state of the evidence, as has been indicated in the preceding reasons, I am not persuaded that this provides any basis for rejecting the submissions of the HGR parties with respect to management fees. Moreover, a broad based temporal analysis of this kind is not any reliable indicator with respect to the reasonableness of these fees and it is mere speculation as to whether, temporally, the basis of the management fees was or was not performed in any sort of pattern or proximity to the times at which financial records indicate receipt of revenue from land sales, the fruit of subdivision, development and sale.

Did Mr Wilson rely upon the 18 April representation and the 2006 accounts in executing the May agreement and the July agreements?[302]

150 For the preceding reasons, I find that Wilson did not rely upon the 18 April representation (as it was not made) or the 2006 accounts.

151 In relation to Waigani, Wilson did not give any evidence that he relied upon representations with respect to either of the Waigani Interest Payments or the Management Fees. It is, in actual fact, apparent that he did not rely upon the 2006 accounts at all. The 2006 accounts showed the Management Fees as a loan owing to Oupan. But rather than discounting the value of Waigani's land by that sum - and crediting or discounting by reason of other such entries - Wilson settled on the basis that his units reflected the value of the trust's landholding; and, in addition, received valuable consideration of a release from his debt to Oupan of $5.9 million.[303] In relation to Oupan, Wilson did not give any evidence that he relied upon representations with respect to the Oupan Interest Payments. He did see the Oupan Interest Payments, but asked neither Geer, nor Gorr nor his lawyers about the basis of these payments.[304] Moreover, Wilson was told - correctly - that his units in Oupan had no value. He never says, however, that he relied upon that statement. Rather, he says that he thought Oupan was hiding money, and he settled on the basis his units were still worth $2.4 million.[305]

152 Wilson's lack of reliance on anything but his own views is clearly illustrated by the events around 24 April 2007. On that date, Wilson called his lawyer O'Doherty at Maurice Blackburn Cashman. She made a file note of that call as follows:[306]

Problems (with) what they have done (with) money and properties that appear to have disap(peared).

Properties don't appear on land tax register.

Properties in Bill's name but appear trust created. Bill does not know what they are doing with the land.

$12 mill[ion]

Bill believes loan scheme part of that is payment for properties or work done.

O'Doherty gave evidence that she thought her file notes to be accurate.[307] Foale confirmed that O'Doherty made accurate file notes.[308] Foale had no specific recollection of O'Doherty raising the 24 April 2007 file note with him.[309]

153 Wilson appeared to confirm the file note in that he said "there were some properties that I couldn't see on the land tax register and I just had a rough idea in my head that there should have been more money".[310] He continued "it just didn't seem to me for all the land that had been sold that there was enough money".[311] Wilson said that he had shortly after satisfied himself that there were no missing properties.[312] Wilson also said that he might have raised the missing money at the initial meeting with Geer. But he did not recall his solicitor raising the missing money with Geer or Gorr.[313] Both Geer and Gorr were clear that neither Wilson nor Foale raised either of these issues with them,[314] nor were Gorr, Geer, or Wang aware of them.[315]

154 By this stage, Wilson did not trust Geer, Gorr or the HGR parties more broadly, and formed and relied upon his own opinion.[316]

155 In my view, the truth of the matter is that Wilson settled because he needed the money,[317] and he did not rely upon anything he was told by Geer or Gorr or the 2006 accounts. For this and the preceding reasons, there is simply no basis for the allegations Wilson now makes with respect to conflicts of interest or breach of fiduciary duties in the settlement negotiations or that he was otherwise misled.[318]

156 There is a further issue with respect to Question 3, namely, the issue of reliance in relation to the claim that the Trustee Warranties were misleading and deceptive. Reliance is, however, neither pleaded nor the subject of evidence, and that claim must fail on this ground alone.

On a proper construction of the July agreements, did Oupan and Waigani make the Trustee Warranties?[319]

157 In relation to this question, it is instructive to make reference to the pleadings set out in the Fourth Further Amended Counterclaim, particularly [110] to [113], as follows:

1. Relying on and induced by the April 18 representation and the 2006 accounts, Wilson executed heads of agreement dated 2 May 2007 contained in a letter from Maurice Blackburn Cashman to Gorr (the May agreement).
2. Relying on and induced by the April 18 representation and the 2006 accounts, Wilson executed:

(a) a deed of separation and release, between Oupan, Waigani, Wilson, Applecross, Daydeb, HGR Custodian, Purus, Bradbelle, TS&G, Gorr, D Geer, C Geer and May (the Deed of Separation);

(b) a sale of units agreement between Wilson, Bradbelle and Waigani;

(c) a sale of units and share agreement between Wilson, Bradbelle and Oupan;

(d) an irrevocable power of attorney in favour of Bradbelle;

(e) an irrevocable direction to Waigani;

(f) a deed of indemnity between Wilson and Oupan;

(g) a deed of covenant and indemnity between Wilson, Waigani and Bradbelle;

(h) an option deed between Wilson, Bradbelle, Gorr and D Geer;

(i) a loan agreement between Waigani, Wilson and Bradbelle;

(j) an equitable mortgage of units between Wilson and Bradbelle; and

(k) three contracts for the purchase of land from Oupan

(the July agreements).

Particulars

The July agreements are in writing. Copies are in the possession of Wilson's solicitors and may be inspected by appointment.

112. There were terms of the Deed of Separation that:

(a) all parties acknowledged that the Deed of Separation and the transaction documents (as defined in the deed) were interrelated, and none of them would have been executed and entered into but for the agreement to execute and enter into and complete each of them (clause 4.2);

(b) Oupan and Waigani each represented and warranted that:

(i) it was not in breach of any obligation under the trust deed constituting the trust of which it acted as trustee (clause 9.1(a), (e));

(ii) no part of the trust fund of that trust had been set aside, transferred to any other person or mixed with any other property (clause 9.1(a), (g))

(the Trustee Warranties).

1. By reason of the matters set out in paragraphs 28-41 and 71-80 above, the Trustee Warranties given by Waigani and Oupan in entering into the Deed of Separation were false.

158 In the present context, the contents of what are pleaded as the "May agreement" and the "Trustee Warranties" as contained in the "Deed of Separation", these definitions being adopted in these reasons, are of particular importance.

159 As pleaded, the May agreement is contained in a letter dated 2 May 2007 from Maurice Blackburn Cashman on behalf of Wilson to Gorr. The letter is, according to its terms, heads of agreement or, referred to as "broad terms, the terms on which the parties have agreed to settle all outstanding issues between them". The letter states further that "[i]t is the intention of the parties that these terms will be immediately binding, but will nevertheless be set out more fully in documentation to be completed". Of critical importance in relation to this question are the contents of paragraph [11] of this 2 May 2007, letter, which are in the following terms:

1. The above terms are intended by the parties to be in full and final settlement of all of:
   1. Bill Wilson's interests and entitlements and those of any related party of Bill Wilson including without limitation the Wilson Family Trust in Waigani, Oupan, the Deer Park Trust, the Oupan Resources Trust and the Manning Trust, and the respective assets and income thereof; and
   2. all rights and liabilities arising out of, or in any way related to, the past business dealings or other transactions between all or any of Waigani, Oupan, the Deer Park Trust, the Oupan Resources Trust, the Manning Trust, David Geer, Keith Geer, Anthony May, Leon Gorr and Bill Wilson, and any related party of any of the above named persons, including without limitation any trusts of which any of the above named persons is a trustee, director of a trustee company or a beneficiary;

and the parties will grant to each other full releases (including a release in respect of the loan alleged to be owing by Bill Wilson to Oupan).

160 As appears from the pleadings and the Fourth Further Amended Counterclaim, the provisions of the Deed of Separation are obviously critical as they contain the so-called Trustee Warranties, but also for the other provisions contained in that Deed. In the present context, the critical provisions of that Deed are as follows:[320]

1. A number of issues arose between the parties touching and concerning the affairs of the Unit Trusts and the parties agreed to resolve the issues by the separation of their interests in the manner generally described in a letter dated 2 May 2007 ("Letter of Agreement") a copy of which is annexed hereto and marked "A" the terms of which were expanded, clarified and replaced with, the provisions of this Deed and by the Transaction Documents.

1. The parties are satisfied that this Deed and the Transaction Documents reflect the terms of their agreements and, subject to excluding such releases and obligations which the parties have under or in connection with this Deed and the Transaction Documents, the parties wish to otherwise release each other from further liability or claims in the manner set out in this Deed.

1.1 Definitions

In this Deed:

...

Claim means all claims, debts, allegations, suits, actions, demands, causes of action, claims for account and proceedings of whatsoever kind or nature and howsoever and whensoever arising and whether or not in respect of damages, expenses or losses or in respect of a breach of trust or of a fiduciary or other duty or obligation, whether or not arising under any statute and whether or not actual or contingent and whether or not of a direct or indirect or derivative nature

...

Excluded Claim means any Claim arising under this Deed and/or any of the Transaction Documents

...

Release Date means the date of execution of this Deed

...

Transaction Documents means each of:

(a) the Sale of Units and Share Agreement;

(b) this Deed of Separation and Release;

(c) the Option Deed;

(d) the Loan Agreement;

(e) the Deed of Equitable Mortgage;

(f) the Contracts of Sale of Land

5.1 As from the Release Date Wilson:

(a) hereby absolutely and irrevocably releases and discharges each and all of:

(i) Oupan;

(ii) Waigani;

(iii) Gorr,

(iv) D. Geer,

(v) C. Geer,

(vi) May; and

(vii) each of the Geer, Gorr and May Entities,

from each and every Claim howsoever arising which Wilson in any capacity whether in his own right or as trustee for the Wilson Family Trust:

(viii) now has; or

(ix) but for the execution of this Deed may have had,

arising from, or connected, or related to, any event or events that occurred prior to the Release Date and irrespective of when that Claim may arise {whether before, on or after the Release Date) save and except a Claim which is an Excluded Claim; and

(b) agrees not to bring or commence to seek or enforce any Claim described in paragraph (a) in any court, tribunal or body against any of the persons or entities referred to in sub-paragraphs (a)(i) to (vii) inclusive save and except a Claim which is an Excluded Claim; and

(c) indemnifies and agrees to keep indemnified each of the persons and entities referred to in sub-paragraphs (a)(i) to (vii) inclusive from and against:

(i) any and all Claims made by any Associate of Wilson arising from, or connected, or related to, any event or events that occurred prior to the Release Date and irrespective of when that Claim may arise (whether before, on or after the Release Date);

(ii) any Loss incurred by any of such persons or entities in any manner related to any such Claim;

(iii) any Loss incurred by any such persons as a result of or in any way connected with Wilson:

(A) not having full power and authority to enter into and perform any or all of the Transaction Documents; or

(B) not being capable of doing any or all of the things required to be done by him under any or all of the Transaction Documents; or

(C) not performing and observing any or all of his obligations under the Transaction Documents in the manner and to the extent contemplated by any or all of the Transaction Documents.

5.2 From the Release Date each of Oupan, Waigani, Gorr, D. Geer, C. Geer, May and each of the Geer, Gorr and May Entities:

(a) hereby absolutely and irrevocably releases and discharges Wilson from each and every Claim howsoever arising which they or any of them (whether jointly or severally howsoever):

(i) now have; or

(ii) but for the execution of this Deed may have had,

arising from, or connected, or related to, any event or events that occurred prior to the Release Date and irrespective of when that Claim may arise (whether before, on or after the Release Date) save and except a Claim which is an Excluded Claim; and

(b) agrees not to bring or commence to seek or enforce any Claim described in paragraph (a) in any court, tribunal or body against Wilson save and except a Claim which is an Excluded Claim.

...

8.1 Each party warrants that it:

(a) has the authority and has obtained all necessary consents to enter into this Deed and each of the Transaction Documents and to perform its obligations as set out above; and

(b) has been afforded the opportunity to seek and has sought and obtained independent legal advice in relation to the matters set out in this Deed;

and each party agrees to indemnify and keep indemnified each other party for any claim made against or cost incurred by the other party as a result of any of the above warranties being untrue.

1. REPRESENTATIONS, WARRANTIES AND INDEMNITIES

9.1 Trustee Representations and Warranties

Each party (which, for the avoidance of doubt, includes Wilson) that enters into this Deed in its capacity as trustee of a trust ("Trust") represents and warrants to the other parties that:

(a) (trust power) it has full legal capacity and power under the trust deed constituting the Trust ("Trust Deed"):

(i) to own the Trust Fund of the Trust ("Trust Fund") and to carry on the business of the Trust as it is now being conducted; and

(ii) to enter into, exercise its rights and perform and observe all of its obligations under this Deed,

as trustee of the Trust;

(b) (trust authorisation) all conditions and things required by the Trust Deed to be fulfilled or done (including the obtaining of any necessary approval, authorisation, consent, exemption, licence, or waiver or like permission of any sort) in order:

(i) to enable it lawfully to enter into, and exercise its rights and perform and observe all of its obligations under this Deed;

(ii) to ensure that this Deed constitutes its legally binding obligations, enforceable against it in accordance with its terms.

(iii) to make this Deed admissible in evidence in the courts specified in Clause 13,

have been fulfilled or done;

(c) (sole trustee) it is the sole trustee of the Trust;

(d) (no removal) it has not been removed as trustee of the Trust, and no step has been taken to remove it, and it has not ceased for any other reason to act as trustee of the Trust and will not do so at any time prior to Completion except with the prior written consent of Bradbelle which is not to be unreasonably withheld;

(e) (no breach) it is not in breach of any of its obligations under the Trust Deed or otherwise as trustee of the Trust;

(f) (no revocation) its powers under the Trust Deed have not been revoked;

(g) (no resettlement) no part of the Trust Fund has been resettled, set aside or transferred to any other person, as trustee or otherwise, or mixed with any other property;

(h) (no termination) the Trust has not terminated, nor has the date for the vesting of the Trust Fund or any other event for the vesting of the Trust Fund occurred;

(i) (rights of indemnity):

(i) it has the right to be fully indemnified out of the Trust Fund of the Trust in respect of its obligations under this Deed;

(ii) the Trust Fund of the Trust is sufficient to satisfy all of its rights of indemnity concerning its obligations; and

(iii) its rights of indemnity out of the Trust Fund of the Trust and against the beneficiaries of the Trust, has not been modified, released or diminished in any way;

(j) (benefit of beneficiaries) it is entering into this Deed to which it is a party as part of the proper administration of the Trust Fund of the Trust, for the commercial benefit of the Trust and for the benefit of the beneficiaries of the Trust;

(k) (copy of Trust Deed) the copy of the Trust Deed (if any) which it provided to the other parties on or about the date of this document is a true, complete and up-to-date copy.

161 In construing the effect of these provisions in terms of the so-called Trustee Warranties, the following matters are, in my view, critical and matters which militate against the construction put upon these provisions by Wilson.[321]

162 First, any claims for breach of trust were settled by the May agreement, as is made clear in the provisions of that agreement which have been set out. Moreover, that settlement is reaffirmed in effect prior to the execution of the Deed of Separation as a result of the provisions of the May agreement which make it clear that it was presently enforceable but subject to more formal documentation, provided in the present circumstances by the Deed of Separation. Additionally, recitals C and D of the Deed of Separation make it clear that this is the position. It could not be supposed, as the submissions of Wilson would, implicitly, have it, that the May agreement having released any breaches of the various trusts would, on its terms being formalised by the Deed of Separation, have its release of any claims of breach of trust effectively undone by the provisions of the Deed of Separation so that the latter would operate afresh, particularly in terms of clauses 8 and 9, as though there were, as at the date of its execution, unreleased breaches of trust which would or could be picked up in terms of an "Excluded Claim" as defined in the Deed of Separation or survive by way of the warranty provisions of clauses 8 and 9.

163 For these reasons, on a proper construction, the Trustee Warranties were not a representation that the trustees had not breached the various trusts - indeed, the purpose of the settlement was to release the trustees if they had breached any of the trusts. In any event, the proper construction of clauses 8 and 9 is that the trustees were warranting that they had power to enter into the Deed of Separation.

(a) Wilson negotiated the settlement agreements on the basis that he would litigate against the trusts if no settlement could be reached;[322]

(b) by the terms of the May settlement agreement, Wilson released any claims he may have had against the trustees for breach of trust;

(c) the Deed of Separation agreement documented the May agreement, and confirmed that Wilson had released any claims he may have had against the trustees for breach of trust; and

(d) the Trustee Warranties in the Deed of Separation concerned the powers and abilities of all trustees - including Wilson - to enter into those agreements, not warranties that the trustees had committed no past breaches of trust.[323]

If Oupan and Waigani made the Trustee Warranties, were the Trustee Warranties false by reason that:[324] Waigani acted in breach of trust by incurring the obligation to pay, and by making, the Waigani Interest Payments as alleged in [31] of the Counterclaim?

165 For the preceding reasons, this allegation is not made out.[325]

If Oupan and Waigani made the Trustee Warranties, were the Trustee Warranties false by reason that Waigani acted in breach of trust by paying the Management Fees as alleged in [34] of the Counterclaim?

166 For the preceding reasons, this allegation is not made out.[326]

If Oupan and Waigani made the Trustee Warranties, were the Trustee Warranties false by reason that Waigani acted in breach of trust by making the Balanced Loan as alleged in [37] of the Counterclaim?

167 The allegation pleaded by Wilson is that Waigani lent $1.2 million at an interest rate of 6.5% to an associated entity of the HGR parties, Balanced Securities Limited ("Balanced Securities"), in circumstances where Waigani had outstanding the Waigani Interest Payments accruing interest at the rate of 18.75%. This allegation is, however, misconceived for the following reasons. The same applies with respect to analogous allegations with respect to Waigani's credit balances with Perpetual Trustees and Sandhurst Trustees.[327]

168 First, the factual premise is wrong.[328] Waigani paid the final Waigani Interest Payments on 14 June 2006 and, as a result, had no outstanding loan or interest liabilities to the HGR interests.[329] On 30 June 2006, Waigani invested $1.2 million with Balanced Securities, earning an interest rate of 6.5%. On 1 September 2006, Balanced Securities repaid the sum of $1.2 million, plus interest, to Waigani.[330] Consequently, there was no period when the HGR interests were charging 18.75% interest to Waigani for outstanding loans or interest, and Waigani was investing spare cash in Balanced Securities at 6.5%.

169 Secondly, in any event, the trust deed gave Waigani a broad discretion to invest. Waigani parked the funds in Balanced Securities for a short time - although neither Geer, Gorr nor May could now recall the circumstances for this short term investment[331] - and obtained the rate of 6.5% when the five largest retail banks were offering a rate between 3.55% to 5.05%.[332] Even if, for a three month period, there were to be an overlap between Waigani owing funds to the HGR interests at 18.75% and Waigani parking those funds in an at call account at 6.5% until needed - as they plainly were on 1 September 2006 - that, alone, would not constitute a breach of Waigani's duties. There was no such overlap in any event, so these considerations do not arise.

170 Thirdly, there was a suggestion made in opening that Waigani putting surplus cash into Balanced Securities or the like was "a pattern that follows through for many years",[333] and Geer and Gorr were asked about various loans made by Waigani and Oupan. None of this was pleaded nor, in my view, established on the evidence and is, as the HGR parties submit, properly to be disregarded.

If Oupan and Waigani made the Trustee Warranties, were the Trustee Warranties false by reason that Waigani acted in breach of trust by making the Superannuation Payments as alleged in [40] of the Counterclaim?

171 The allegations that Waigani acted in breach of trust by making superannuation payments to Geer, Gorr and May[334] is, in my view, misconceived for the following reasons.

172 First, the payments were made only after Wilson entered the May settlement agreement. It was only on 28 June 2007 that the directors of Waigani, being Gorr, May and Geer, approved payments to each of their superannuation funds in the amount of $105,113.[335] For this reason alone, Wilson's allegations - particularly of conflicts of interest and unequal treatment of unitholders, is misconceived.[336]

173 Secondly, and in any event, the payments were entirely proper and appropriate. A trustee, even a defaulting trustee, is entitled to fair and reasonable remuneration, including for "time and energy and skill employed, taking on personal risks and bank security, and entrepreneurial efforts".[337] At all times, the directors of Waigani were Geer and Gorr. May participated in meetings of directors of Waigani and management decisions relating to Waigani from the time it purchased the Deer Park land,[338] though he was only formally appointed a director on 20 June 2007. Geer became aware that May was not a director at the time of the settlement with Wilson, and that oversight was corrected by his appointment as a director.[339] Payments were made in recompense for services that each provided to Waigani since 1982, which included acting as directors and providing or procuring funding.[340] Consequently, the submission made by Wilson's senior counsel in opening that the payments "were not properly made because there was no agreement for an employment relationship",[341] is without any foundation. Clearly, a director may take payment for services rendered by directing that payment into his or her superannuation fund.

If Oupan and Waigani made the Trustee Warranties, were the Trustee Warranties false by reason that Oupan acted in breach of trust by making the Oupan Interest Payments as alleged in [75] of the Counterclaim?

174 This allegation has already been addressed in the preceding reasons.[342]

If Oupan and Waigani made the Trustee Warranties, were the Trustee Warranties false by reason that Oupan acted in breach of trust by granting the Daydeb Accommodation as alleged in [78] of the Counterclaim?

175 Wilson alleges at [76] to [78] that distributions made by Daydeb, a trust associated with Geer, to Oupan in each of 2000, 2001 and 2002 totalling $5,915,188[343] gave rise to a breach of trust because Oupan did not call for those funds immediately, which was to the detriment of Oupan's unitholders as doing so and using those funds to repay outstanding interest would have reduced Oupan's interest liability to the HGR interests.

176 There was, however, no breach and, in any event, those distributions, if made, would not have made any material difference to Wilson's position. The context in which the distributions were made was that Oupan's liabilities far exceeded its assets, and the unsecured creditors were the HGR interests.[344] Thus, as at the date of the May settlement agreement, the unitholders of Oupan had no net equity, as its liabilities far exceeded its assets. The financial accounts for the Oupan Resources Trust for the year ended 30 June 2007 record unit holder equity as $33,912,466 excluding Oupan's liability to pay interest to the HGR interests.[345] The financial accounts from 1997 record under non-current assets the following unrecoverable assets (which amounts remained unrecoverable in 2007):[346]

(a) Loan - Alice Roof Tiles Aust Pty Ltd $5,439,018;

(b) Units - Alice Roof Tiles Aust Pty Ltd $1,400,000;

The 2007 financial accounts record Oupan's land holdings under "Land for Re-sale" at $3,316,554 and "Land and buildings" at $6,132,502.[347] Dudakov has valued this land, as at 13 July 2007, at $24,607,500.[348] Making just these adjustments to the financial accounts as at 30 June 2007 would put Oupan's assets at approximately $36m. Palermo has calculated that, as at 30 June 2007, the HGR interests were owed by Oupan at least $57 million in principal and interest.[349] Consequently, even if it were accepted that Wilson's alleged breaches were all proven, Hockley accepted (assuming the HGR interests were owed by Oupan at least $57 million in principal and interest) that the unitholders of Oupan still had no net equity.[350] Moreover, given that Wilson holds 9 of 78 units, and those units secure his loan of $5,873,518, the net assets of the Oupan Resources Trust would need to be greater than $50m in order for Wilson to have had any entitlement. Notably, as at 2007, Oupan had never made a distribution to unitholders. The only unitholder to receive any benefit from the trust was Wilson who, in 1993, redeemed 12 units for consideration of $3.171m, and as at 1997, had borrowed almost $6m.

177 Geer, who made the distributions with Geer Senior's and Gorr's agreement,[351] was increasing Oupan's assets by $5,915,188, when the parties to be benefited by that increase were only the HGR interests who would be able to recoup a larger part of their outstanding interest.

178 Consequently, the suggestion that Oupan's failure to call for the distributions was to the detriment of the unitholders is wrong. As Hockley has calculated, if Oupan had called for the distributions immediately, Oupan would have saved just $2,797,495 by 30 June 2007.[352] Oupan's assets - including the Daydeb Accommodation of $5.9m - less its liabilities then totalled approximately negative $13m.[353]

Has Mr Wilson suffered loss and damage by the misleading or deceptive conduct of Oupan or Waigani?[354]

179 It is, in my view, clear on the evidence that even if Wilson establishes each element of his claims for misleading and deceptive conduct - which he does not - he has suffered no loss or damage. In the settlement, Wilson was paid $3.375 million for his units in Waigani, he was sold land owned by Oupan worth $3.9 million for $1.5 million, and he was released from his loan from Oupan totalling around $5.8 million.[355]

180 In the course of commercial discussions at a meeting on 1 May 2007 between Geer, Gorr, Wilson and Foale, the value of the remaining Waigani land, totalling about 20 hectares, was discussed. Wilson said it was worth $100 per square metre and Geer said $50 per square metre. The figure of $3.375 million was agreed and reflected the value of one quarter of Waigani's land.[356] Geer considered that the figure was high, but agreed to it because he looked at Waigani as a long term investment and thought that if the other unitholders overpaid Wilson, they might recoup the overpayment in time.[357] This sum valued Waigani's land at $13.5m. As at 12 July 2007, Dudakov valued Waigani's land at $11,305,000.[358] Wilson sought to be paid part of this settlement sum immediately, totalling $750,000.[359] This was in fact paid as requested.

181 Further, Wilson wanted to buy four properties owned by Oupan, on the basis that he "would pay $1.5 million for the three parcels of land and [he] would nominate the value of each of the parcels in the contracts of sale".[360] Geer agreed to these purchases knowing that Wilson would be able to sell them for an immediate profit.[361] Dudakov has valued this land, as at 12 July 2007, at $3,900,000.[362] Wilson thereby obtained a benefit of $2.4m, which he immediately realised by selling the four properties.[363] In addition, Wilson received valuable consideration of a release from his alleged debt to Oupan of $5.9m.

182 In total, Wilson received benefits of almost $12m for giving up his interest in 30 units (of 90) in Waigani and 9 units (of 78) in Oupan and releasing the HGR parties from any claims.

183 In the course of his cross-examination, Hockley was asked to calculate the value of Wilson's units in the Deer Park Trust as at 30 June 2007 assuming Wilson established each alleged breach. Hockley was shown a table that applied the methodology he had adopted to calculate the current value assuming Wilson established each alleged breach[364] to 30 June 2007, and agreed that doing so was appropriate.[365] Hockley confirmed as a result of his calculation that even if each of the alleged breaches were established, the value of Wilson's unitholding in the Deer Park Trust as at 30 June 2007 would have been $3,183,082.[366]

184 Hockley was also asked in cross-examination to apply this methodology to calculate the value of Wilson's units in the Oupan Resources Trust as at 30 June 2007 assuming Wilson established each of the breaches he alleged. Hockley was shown a table that applied the methodology he had adopted to calculate the current value assuming Wilson established each alleged breach[367] to 30 June 2007, and agreed that doing so was appropriate.[368] Subject to Hockley assuming that Oupan owed the HGR interests $57 million in interest, Hockley accepted that, even if each of the alleged breaches were established, the value of Wilson's unitholding in the Oupan Resources Trust as at 30 June 2007 would have been nil.[369]

185 As to the evidence that Oupan owed the HGR interests $57 million in interest, Palermo provided detailed evidence establishing that, as at 1993, Oupan owed the HGR interests around $26 million.[370] That sum was not repaid in full,[371] and was known to be due and owing by Oupan's directors. Palermo then calculated, using the HGR lending rate and afterwards the Balanced Securities lending rate, that Oupan owed the HGR interests at least $57 million as at 30 June 2007.[372] Significantly, Hockley does not suggest that the sum of $18 million due and owing in 1993 was ever repaid in full.[373] Moreover, he agrees that the interest rate charged by Oupan at all times was reasonable. In cross-examination, Hockley confirmed that he was not suggesting that there was no sum owing of principal or interest.[374] He also agreed that the loan information provided to him supports the basis upon which the interest rates have been charged by the HGR interests to Oupan.[375]

186 Additionally, the valuation of Wilson's unitholding in the Oupan Resources Trust as at 30 June 2007 at nil is separately supported by Wilson's loan balance of $5.8 million, which was to be off-set against any benefits associated with his nine units (of 78 in total) in that Trust.[376]

By providing the 2006 accounts, giving the Trustee Warranties, and entering the May agreement and the July agreements, did Oupan prefer the interests of the defendants to counterclaim and thereby act in breach of trust?[377]

187 For the preceding reasons, this claim fails because the 2006 accounts were not misleading; the Trustee Warranties was not a representation that there were no breaches of trust, but in any event there were no breaches as alleged; and by the May settlement agreement,[378] and the July settlement agreements,[379] Wilson gave a full release to any claims he may have had against Oupan, Wilson's units had no value and yet by the settlement Wilson obtained from Oupan land worth $3.9 million for consideration of $1.5 million and a release from his loan of $5.8 million.[380] Additionally, this claim is statute barred[381] as, for the preceding reasons, there is no fraud exception enlivened and is further barred as a result of Wilson' laches and acquiescence, for the reasons which follow.[382]

By making the 18 April representation, giving the Trustee Warranties, and entering the May agreement and the July agreements, did Waigani prefer the interests of the defendants to counterclaim and thereby act in breach of trust?[383]

188 This claims fails for the preceding reasons because: the 18 April representation was not made; the Trustee Warranties was not a representation that there were no breaches of trust, but in any event there were no breaches as alleged; by the May settlement agreement,[384] and by the July settlement agreements,[385] Wilson gave a full release to any claims he may have had against Waigani; and Wilson obtained considerably more for his units than they were worth.[386] Moreover, this claim is statute barred, and for the preceding reasons there is no basis on which the fraud exception could be relied upon and is further barred by Wilson's laches and acquiescence, as discussed in the reasons which follow.[387]

Is Mr Wilson estopped from contending that the May agreement and the July agreements are invalid?[388]

189 Having regard to the events which followed the May agreement and the July agreements and the reliance placed upon the validity of those agreements, Wilson is now estopped from contending that those agreements are invalid. More particularly, Geer and Gorr relied upon Wilson's relinquishment of his interest in Oupan in determining how to run Oupan after 2007. Gorr was clear in his evidence that once Wilson was gone, the remaining unitholders conducted the trust to reflect the commonality of unitholders and lenders. From 2010 to 2015, Oupan distributed around $30 million to unitholders, rather than paying that sum as interest repayments.[389] Further, Geer and Gorr started to use Oupan as a money lender - as opposed to using others of their lending entities - it borrows at a modest rate of interest and lends that money out at that rate, plus a margin, and makes a profit in so doing.[390] If Wilson were now permitted to set aside the settlement, the May agreement and the July agreements, this would be to the detriment of the HGR parties.

Is Mr Wilson ready, willing and able to take all steps to put the parties back in the position they were in at the time of entry into the May agreement and the July agreements, and in any event is that possible?[391]

190 As submitted by Wilson, a principal aspect of the relief which he seeks is equitable rescission of the May settlement agreement and the July settlement agreements. In relation to equitable rescission, reference is made to the judgment of the High Court in Alati v Kruger,[392] where the Court said:[393]

If the case had to be decided according to the principles of the common law, it might have been argued that at the date when the respondent issued his writ he was not entitled to rescind the purchase, because he was not then in a position to return to the appellant in specie that which he had received under the contract, in the same plight as that in which he had received it: Clarke v Dickson [1858] EngR 605; (1858) EB & E 148 (120 ER 463). But it is necessary here to apply the doctrines of equity, and equity has always regarded as valid the disaffirmance of a contract induced by fraud even though precise restitutio in integrum is not possible, if the situation is such that, by the exercise of its powers, including the power to take accounts of profits and to direct inquiries as to allowances proper to be made for deterioration, it can do what is practically just between the parties, and by so doing restore them substantially to the status quo: Erlanger v New Sombrero Phosphate Co (1878) 3 App Cas 1218, at pp 1278, 1279; Brown v Smitt [1924] HCA 11; (1924) 34 CLR 160, at pp 165, 169; Spence v Crawford (1939) 3 All ER 271, at pp 279, 280. It is not that equity asserts a power by its decree to avoid a contract which the defrauded party himself has no right to disaffirm, and to revest property the title to which the party cannot effect. Rescission for misrepresentation is always the act of the party himself: Reese River Silver Mining Co v Smith (1869) LR 4 HL 64, at p 73. The function of a court in which proceedings for rescission are taken is to adjudicate upon the validity of a purported disaffirmance as an act avoiding the transaction ab initio, and, if it is valid, to give effect to it and make appropriate consequential orders: see Abram Steamship Co Ltd v Westville Shipping Co Ltd (1923) AC 773. The difference between the legal and the equitable rules on the subject simply was that equity, having means which the common law lacked to ascertain and provide for the adjustments necessary to be made between the parties in cases where a simple handing back of property or repayment of money would not put them in as good a position as before they entered into their transaction, was able to see the possibility of restitutio in integrum, and therefore to concede the right of a defrauded party to rescind, in a much wider variety of cases than those which the common law could recognize as admitting of rescission. Of course, a rescission which the common law courts would not accept as valid cannot of its own force revest the legal title to property which had passed, but if a court of equity would treat it as effectual the equitable title to such property revests upon the rescission.

This case and this classic statement of the law have since been considered and referred to many times, including more recently in Indian Farmers Fertiliser Cooperative Ltd v Gutnick.[394]

191 As the High Court made clear in Alati v Kruger,[395] equity approached the question of restitutio in integrum more flexibly and, according to the usual technique of equity, would seek to accommodate the circumstances in which the rescission was sought to be achieved, even though this would not be possible at common law because restitutio in integrum was not possible. The more flexible approach to remedy inequity and the possibility of combining equitable compensation as an alternative remedy was considered by Austin J in Aequitas v AEFC:[396]

1. There is a question whether equitable compensation is available, as an alternative remedy, in a case where rescission might be sought. Tracy v Mandalay is authority for the proposition that, if the property on which the profit was made was acquired by the promoter before he or she became a promoter, there can be no claim for recovery of the profit, nor, it seems, for equitable compensation. By extension of that reasoning, if rescission is unavailable in such a case, neither is an account of profits or equitable compensation: cf Ladywell Mining Co v Brookes (1887) 35 Ch D 400. The reasoning appears to be that if the company elects to affirm the purchase, it would be unjust for the Court to intervene to 're-write the bargain between the parties'. Although it has an established pedigree (Re Kape Breton Co (1885) 29 ChD 795; Jacobus Marler Estates v Marler (1913) 85 LJPC 167n; Cook v Deeks [1916] UKPC 10; [1916] 1 AC 554), I respectfully suggest that the reasoning underlying these cases is unsatisfactory, especially where rescission has become impossible. In such a case refusal of an account or compensation would work serious injustice: see Gower's Principles of Modern Company Law 6th ed by P L Davies, (1997) p137-138. In such a case an order for an account of profits or equitable compensation is not directed to re-writing the contract, but to addressing the consequences of conduct of the defendant that was collateral to the contract.
2. Moreover the reasoning is inconsistent with the modern approach to remedies, articulated in Maguire v Makaronis (at 467) and other cases, that 'the nature of the case will determine the appropriate remedy available for selection by the plaintiff'. In any case, the older cases acknowledge that the position is different if the promoter acquires property after he or she has become a promoter, and sells it to the fledgling company. That was the case here, since AEFC and AEFC Leasing had become promoters before 25 November 1985.

192 As indicated in these reasons there is, in my view, no basis upon which Wilson was entitled to rescind either the May settlement agreement or the July settlement agreements and, consequently, issues of restitutio in integrum - whether on a strict or more flexible approach in this respect - do not arise. Nevertheless, were they to do so, rescission in equity would involve, at the very least, the taking of accounts between the parties which would, on the evidence, require that Wilson also bring to account the fruits of the May settlement and the July settlements which he seeks to set aside. Thus, on the more flexible approach of equity with respect to the putting of the parties back in the position they were in as at 2007, Wilson must repay to Waigani $3.375 million and Oupan $2.4 million, plus interest.[397] Wilson led no evidence - not even by way of an unfounded assertion - that he has the ability to repay such a sum. The contrary was the position in that Wilson said that he has no intention of repaying the settlement payment,[398] he wants to keep the money he was paid in the settlement,[399] he is not offering to repay the settlement benefits taken at settlement, and indeed he no longer has those funds in the bank.[400] As the HGR parties contend, Wilson appears to be acting on the misapprehension that if the May agreement and the July agreements are set aside, his present interests will be greater than the value of his interests as at 2007 plus interest. As indicated in these reasons, this is not the position.

193 Reference should also be made in this context to submissions made by Wilson that in the circumstances of this proceeding and having regard to the alleged conflicts of interest and other matters raised by way of breaches of trust and fiduciary obligations and the like, restitutio in integrum would not be insisted upon by a court of equity in setting aside these settlement agreements. As indicated in these reasons and, particularly, in those which follow,[401] the matters alleged in this respect do not enliven an equity to set aside the settlement agreements, whether on the basis that he was misled in terms of the 18 April representation, the 2006 accounts or otherwise, or that there were conflicts of interest or other breaches of trust. Neither, as indicated in these reasons and, particularly, in those which follow, is there any basis for application of the authorities with respect to rescission in equity where restitutio in integrum has not been insisted upon.

Is Mr Wilson entitled to a declaration that the May agreement and the July agreements are void pursuant to s 87 of the Trade Practices Act 1974 (Cth)?[402]

194 As contended by the HGR parties, no order declaring void the May settlement agreement and the July settlement agreements can be made now, as none of the parties can be returned to their position as at May 2007.[403] For the preceding reasons, in response to Question 9(b), Wilson cannot repay Oupan and Waigani the sums necessary to restore the trusts. Additionally, for the reasons given in response to Question 9(a), Geer and Gorr have run Oupan since 2007 on the basis that Wilson is not a unitholder - thus, as submitted against Wilson, the "egg" cannot be unscrambled.[404]

Is Mr Wilson entitled to rescind the May agreement and the July agreements?[405]

195 Wilson alleges that he entered into the May agreement and the July agreements in circumstances where he had not been informed of all the circumstances of the conduct of the Oupan Resources Trust and the Deer Park Trust, or of the Manning Land and that he is, therefore, entitled to rescind those agreements now and elects to do so. For the reasons which follow, this claim is not sustainable.

196 The equity to rescind a settlement like the present arises only when a trustee fails to disclose circumstances material to the decision.[406] It is a question of fact in each particular set of circumstances. In the present case, as indicated in these reasons, the evidence does not establish that, on any view, anything material was withheld from Wilson.

197 More particularly, in relation to the material circumstances, Wilson was not misled in that:

(a) Prior to 1997, Wilson had complete knowledge of the affairs of Oupan and Waigani, given his day to day control.

(b) Thereafter, Wilson could see what Oupan and Waigani were doing with their landholdings.[407]

(c) In negotiating and concluding the May agreement and July agreements, Wilson had professional advisers and was given any information he sought about the trusts.[408]

(d) During the negotiations, Wilson was told, correctly, that his units in Oupan were still worthless. It was only his units in the Deer Park Trust that had any value.[409]

(e) Wilson was aware, by reason of (a) above and the provision of Oupan's and Waigani's draft financial accounts for the year ended 30 June 2006, of the non-payment of distributions, the payment of interest and management fees, the loans made to and used by the trusts, the identity of the lenders, and the financial position of each trust.

(f) He negotiated the settlement terms not by reference to the 2006 accounts or anything he was told, but by reference to a view that Oupan had missing money and to the value of Waigani's land.[410]

(g) Wilson threatened to litigate if a settlement could not be reached.[411]

(h) Wilson settled on the basis that he released any claims against the trustees.[412]

(i) On any view, Wilson reached a settlement worth far in excess of the value of his units in the Deer Park Trust.[413] He suffered no loss.

198 Additionally, Wilson's own evidence confirms that he was told the circumstances material to his decision to settle in 2007. Thus he said:[414]

I would not have agreed to those terms of settlement if I had understood what the value of the remaining land was, and understood Oupan and Waigani's true financial position. As I understood the deal, I was getting about my fair share of the remaining assets, based on my unit holding.

Wilson was told what his units in Oupan were worth, and about the land held by Waigani. He was then paid far more than his units were actually worth, as indicated in the preceding reasons. Moreover, even if the Court's jurisdiction with respect to rescission is enlivened, I am of the view that the Court should not exercise its discretion in favour of rescission because none of the parties can be returned to their position as at May 2007, as indicated in the preceding reasons with respect to Question 9(c).[415]

199 Additionally, this claim is statute barred, and, as these reasons indicate, there is no basis upon which the fraud exception is enlivened;[416] and is also barred as a result of Wilson's laches and acquiescence,[417] as discussed in the reasons which follow.

If the May agreement and the July agreements are void or rescinded, did Oupan act in breach of trust by:

(i) making the Oupan Interest Payments as alleged in [75] of the Counterclaim?

(ii) providing the Daydeb Accommodation as alleged in [78] of the Counterclaim?

(iii) failing to keep and render accurate accounts as alleged in [79] to [80] of the Counterclaim?

200 The allegations in Question 10(a)(i) are addressed in Question 2[418] and the allegations in Question 10(a)(ii) are addressed in Question 5(f).[419]

201 This claim only arises if Wilson succeeds in setting aside the May agreement and the July agreements. As indicated in these reasons, there is no basis for the setting aside of these agreements. Wilson alleges that Oupan has acted in breach of trust by failing to maintain accurate financial records in various respects. More particularly, in this respect Wilson submits:[420]

1. The trustee's duty to account to beneficiaries incorporates three separate obligations. The trustee must keep proper records, must report to the beneficiaries concerning the administration of the trust, and must pay any amount the trustee is obliged to pay the beneficiaries.[421] In breach of those obligations, Oupan and Waigani failed to make proper disclosure of trust records, delayed and obfuscated even in the context of their discovery obligations in this proceeding, and have still manifestly failed to provide all relevant records. Wilson was given no report of the affairs of either trust in the decade prior to approaching Geer in 2006. The HGR interests admit that until compelled by subpoena in this proceeding, Oupan did not provide Wilson with financial accounts for the period 1988 to 2004.[422]
2. The trustees' record keeping was compromised by their failure to keep conventional business records and their preference instead to record transactions in solicitors' trust accounts. Many of the difficulties in which the trustees now find themselves might have been avoided if they had kept conventional business records.

Those allegations, found in the particulars to [79A][423] and more generally,[424] are, as indicated in these reasons, without foundation. Moreover, it is, in my view, clear that much of the difficulty now experienced in explaining various aspects of the accounts is due to the failures on the part of Wilson in proper financial and accounting record keeping whilst he was responsible for the management of the businesses.

Discovering financial statements for year ending 30 June 1993 and 30 June 1995

202 First, it is alleged that Oupan did not discover financial statements for Oupan for the financial years ending 30 June 1993 and 30 June 1995. At those dates, Wilson was a director of Oupan with day to day management of its businesses and control of its financial accounts. When McLean Delmo took over Oupan's accounts and sought these records, nobody was able to provide them. If Oupan is in breach, Wilson is the cause and cannot now take advantage of his own wrong. Further, any claim premised upon Oupan not holding those financial accounts has been statute barred for decades.[425]

203 Secondly, it is alleged that the proceeds from the sale of quarry assets, the last of which was in 1993, were not recorded in the ledgers or financial statements of Oupan.[426] At the time of the asset sales, Wilson was a director of Oupan with day to day management of its businesses and control of its financial accounts (and the same applies with respect to Waigani insofar as relevant to these and analogous allegations by Wilson). Oupan's internal and external accountants retained and instructed by Wilson and staff under his control reviewed the accounts, and signed off on them. Wilson was closely involved in this process and necessarily knew, and still knows, where those proceeds went.[427] Indeed, the records show where those proceeds went.[428] Further, this claim is statute barred and there is, as indicated in these reasons, no basis upon which the fraud exception is enlivened.[429]

Recording Oupan's liability for interest in the financial accounts

204 Thirdly, it is alleged that Oupan's principal and interest owing to the HGR interests was not recorded in Oupan's financial statements. This allegation is incorrect. The unsecured loan amounts and the agreement that interest was payable on those loans is recorded in Oupan's early financial accounts, which were prepared under Wilson's supervision.[430] The financial accounts for the Oupan Resources Trust for the year ended 30 June 1993 records at note 14, under the heading contingent liabilities, that:[431]

Pursuant to an agreement with lenders of unsecured loans totalling $7,113,634... interest is payable on demand when they consider that the trust is in a position to pay. To date no such demand for payment has been received by the trust.

This figure is the principal loan amount, excluding any interest payable.[432] The principal was then repaid in December 1993.[433] And the outstanding interest of $18,246,020.42 as at 30 September 1993[434] was not recalculated or recorded in Oupan's financial accounts. Wilson knew a considerable sum was then unpaid and payable.[435] In circumstances where that interest liability was always so much greater than Oupan's assets, and that was known to be so,[436] Wilson's complaint fails. Further, the claim is statute barred and there is, as indicated in these reasons, no basis upon which the fraud exception is enlivened.[437]

205 Fourthly, it is alleged that Oupan's cost of goods sold was wrongly inflated in at least the financial years ended 30 June 2005 and 30 June 2006 to give the appearance that Oupan had generated lower than expected profits. Wilson's senior counsel opened by saying that Taylor's adoption of 60% cost of goods sold after he took over the books was "an arbitrary number that's been cooked up".[438] This allegation is devoid of merit, and goes nowhere.

206 I accept the submission of the HGR parties that it is devoid of merit for the following reasons:

(a) Taylor, exercising his professional judgment (and not Waigani's directors[439]), determined the cost of goods sold;[440]

(b) as Taylor explains, Wilson failed to hand over (and perhaps keep) records from which he could calculate cost of goods sold;

(c) the approach Taylor adopted was to follow what had been done in Oupan's internal papers provided to him on taking over;[441]

(d) when Michalski was shown the work paper given to Taylor and referred to in the immediately preceding paragraph, it showing cost of goods being recorded in Oupan's and Waigani's accounts at 80%, he supposed it likely that the costs of goods sold being recorded at 80% was derived from the accounting records, but could not otherwise recall how that figure was arrived at.[442]

207 It also goes nowhere because, as Taylor explains, even if cost of goods sold were understated or overstated, that would affect the carrying value of the land on the balance sheet but not the value of the units: that is so because the value of the units is based on market value of the land, not the carrying value in the accounts.[443]

Is relief for any act in breach of trust in (a) above statute barred or barred by virtue of Mr Wilson's laches and or acquiescence?[444]

208 Wilson's claims are statute barred by ss 5(2) and 21(2) of the Limitation of Actions Act 1958, having accrued more than six years prior to their commencement. Wilson was aware of the pleaded interest payments and the Daydeb Accommodation from the draft 2006 accounts received in April 2007. His claims were made on 3 February 2015 in the Second Further Amended Counterclaim. As indicated in these reasons, neither the fraud exception,[445] nor the concealment exception,[446] is engaged.

209 As indicated in these reasons, Wilson's claims are also barred by virtue of Wilson's laches and acquiescence. To establish laches, there must be both delay and prejudice sufficient to make it unjust in all the circumstances to allow the matter to proceed,[447] as is the case here. As to prejudice, see the answer to Question 9(a).[448]

If the May agreement and the July agreements are void or rescinded, should Oupan be removed as trustee of the Oupan Trust pursuant to s 48 of the Trustee Act 1958 (Vic)?[449]

210 If the May agreement and the July agreements are void or rescinded, Oupan should not be removed as trustee of the Oupan trust. Section 48(1) of the Trustee Act 1958 confers upon the Court the power whenever it is "expedient to appoint a new trustee". That phrase has been the subject of judicial consideration.[450] As indicated in the preceding reasons, this issue does not, however, arise as there is no basis upon which any finding can be made either that these agreements are void or rescinded.

211 The critical matter is that Wilson has no economic interest in Oupan because Oupan's liabilities to the HGR interests far outstrip the value of the units. It could never, in these circumstances, be "expedient" to replace the trustee because the trustee will be acting only to repay the HGR interests to the extent possible from Oupan's remaining assets. Further to this consideration, Oupan is a trading trust, which can most efficiently be managed by the current trustee. Oupan's business is the development and sale of land, and since 2007 it has became a money lender to generate further income. Geer is best placed to remain trustee to maximize the value of Oupan's assets.

212 This issue is the subject of submissions by Wilson; submissions which are premised on the proposition that Wilson is entitled to be restored as a unitholder and has, consequently, the standing to seek the removal of the trustees.[451] Although Wilson properly observes that the Court has very broad inherent power to remove a trustee,[452] the bases relied upon depend upon his establishing the allegations made in these proceedings, particularly alleged breach of trustees' duties and conflicts of interest. As indicated in these reasons, these matters - the bases of such an application - have not been established and Wilson's application for removal of the trustees must fail.

If the May agreement and the July agreements are void or rescinded, did Waigani act in breach of trust by:

(i) incurring the obligation to pay, and by making the Waigani Interest Payments as alleged in paragraph at [31] of the Counterclaim?

(ii) paying the Management Fees to Oupan as alleged in [34] of the Counterclaim?

(iii) making the Balanced Loan as alleged in [37] of the Counterclaim?

(iv) making the Superannuation Payments as alleged in [40] of the Counterclaim?

(v) failing to keep and render accurate accounts as alleged in [49] and [49A] of the Counterclaim?

213 The allegations in Question 10(d)(i) and (ii) are addressed at Question 2,[453] the allegations in Question 10(d)(iii) are addressed at Question 5(c),[454] and the allegations in Question 10(d)(iv) are addressed at Question 5(d).[455]

214 This claim only arises if Wilson succeeds in setting aside the May agreement and the July agreements. Wilson alleges that Waigani has acted in breach of trust by failing to maintain accurate financial records in various respects. Those allegations, found in the particulars to [49A],[456] are, as indicated in these reasons, without foundation.

215 First, it is alleged that not all land sold by Waigani was recorded, or correctly recorded, in HGR's trust account ledger maintained in respect of Waigani, leaving $4,483,833.80 of land sales unrecorded.[457] The relevance of this allegation is entirely unclear. Taylor explains that McLean Delmo's ledgers incorporate adjustments to the information drawn from the HGR ledgers, and it is from the information in McLean Delmo's ledgers (and not HGR's trust account ledger) that Waigani's financial statements are prepared.[458]

216 Secondly, it is alleged that for the period 1989 to 2009, there is a minor discrepancy between actual land sales and Waigani's financial statements in the amount of $102,061.[459] Taylor has undertaken a reconciliation, and identified that the sole difference between actual sales and Waigani's financial statements relates to an omission of one sale from the financial statements in the financial year ending 30 June 1997.[460] This sale occurred while Wilson was still running Waigani and keeping its accounts.

217 Thirdly, it is alleged that Waigani's financial statements are inconsistent with HGR's trust account ledgers from the financial year ended 30 June 1996 in six respects. Again, the relevance of this allegation is unclear. Taylor gives evidence, referred to above, that McLean Delmo's ledgers incorporate adjustments to the information drawn from the HGR ledgers, and it is from the information in McLean Delmo's ledgers that Waigani's financial statements are prepared.[461] And relevantly, there are no discrepancies between Waigani's financial statements and McLean Delmo's ledgers in relation to the six discrepancies.[462]

218 Fourthly, it is alleged that Waigani overstated cost of goods sold in its financial statements to artificially reduce Waigani's reported profits, by "expensing" the cost of goods sold at 60% of the sale price of land between 30 June 1997 to 30 June 2003, and in all cases not by reference to actual costs. This allegation is baseless and goes nowhere. It is baseless because (a) Taylor, exercising his professional judgment (and not Waigani's directors[463]), determined the cost of goods sold at 60%,[464] and (b) as Taylor explains, Wilson failed to hand over (and perhaps kept) records from which he could calculate cost of goods sold so he followed the approach Wilson had adopted in Waigani's internal papers (albeit reducing cost of goods sold from 80% to 60%).[465] It also goes nowhere because, as Taylor explains, even if cost of goods sold were understated or overstated, that would affect the carrying value of the land on the balance sheet but not the value of units: that is so because the value of the units is based on market value of the land, not the carrying value in the accounts.[466]

219 Fifthly, it is alleged that Waigani's financial statements did not record principal and interest owing to the HGR interests. The gravamen of this complaint is that, on a rolling basis Waigani's financial statements did not record the principal and interest owing to the HGR interests. Waigani's financial statements did, however, record all loan principal balances, the repayment of all principal and the payment of all interest, the last of which occurred in the financial year ending 30 June 2006.[467]

Is relief for any act in breach of trust in (d) above statute barred or barred by virtue of Mr Wilson's laches and or acquiescence?

220 Each of Wilson's claims are statute barred by ss 5(2) and 21(2) of the Limitation of Actions Act 1958, having accrued more than six years prior to its commencement, and are barred by virtue of Wilson's laches and acquiescence.[468] Wilson was aware of the Waigani Interest Payments, Management Fees, and the Balanced Securities loan from the draft 2006 accounts, received in April 2007. His claims were made in the Second Further Amended Counterclaim, filed 3 February 2015, or the Fourth Further Amended Counterclaim, filed 22 November 2017. As indicated in these reasons, neither the fraud exception,[469] nor the concealment exception,[470] is engaged.

If the May agreement and the July agreements are void or rescinded, should Waigani be removed as trustee of the Deer Park Trust pursuant to s 48 of the Trustee Act 1958?[471]

221 Save to recognize that, if the May agreement and the July agreements are void and rescinded, and Wilson makes restitution to the Deer Park Trust, Wilson will have an economic interest in the Deer Park Trust, the same reasoning applies with respect to this question as that with respect to Question 10(d).[472]

Did Mr Geer and Mr Wilson agree that Mr Wilson would hold 25% or 50% of the units in the Deer Park Trust, as alleged in [22] and [23] of the Counterclaim?

222 This claim only arises if Wilson succeeds in setting aside the May agreement and the July agreements. For the preceding reasons, Wilson has failed in this respect. In any event, these allegations go nowhere, for the reasons which follow.

223 Wilson pleads that in 1982, Wilson and Geer agreed that, in relation to the proposed Deer Park Trust, each of Wilson and Geer would hold 50% of the units.[473] Inconsistently, Wilson's witness statement says that Geer said that he would mention the deal to May and let him know what May's response was, and that Geer then proposed that it would be a 50/50 split between Wilson on the one hand and Geer and May on the other.[474] Wilson continues: "I subsequently found out many years later that I ended up with 30 of the 120 units when the Deer Park Trust was established. I didn't see any documents regarding my interests in the Deer Park Trust until 2007, and always believed I owned half of it."[475] In cross examination, Wilson reverted to the pleaded allegation, stating that "my understanding of it was David Geer and myself and it was 50/50".[476] He then said that he first learnt that the HGR interests had a majority of the units in the Deer Park Trust "during this proceeding",[477] and that he never saw any documentation about the Deer Park Trust.[478] It is a reasonable inference, as contended by the HGR parties, that Wilson's evidence was false. Moreover, Wilson was shown an original deed amending the Deer Park Trust Deed to change the name of the trust to the Deer Park Trust,[479] which was signed by each of the unitholders, and he confirmed that the signature on it was his.[480] Wilson accepted that the deed showed that he knew from the outset he was one of five unitholders.[481]

(a) The HGR file entitled "Waigani Pty Ltd ATF Deer Park Trust" contains a copy of a letter to Wilson dated 25 January 1983,[482] which states it encloses his unit certificate.[483] The unit certificate is numbered "6", suggesting that there were then at least 5 other unit holders.

(b) The unit holders of, and number of units each held in, the Deer Park Trust are recorded in the Deer Park Trust's Income Tax Returns for the financial years ended 30 June 1985 and 30 June 1986.[484]

(c) A document dated 30 June 1994,[485] which Wilson discovered in this proceeding and was unknown to Geer,[486] states that there were four unitholders in the Deer Park Trust, and that Wilson held 25% of the units.

225 Wilson's account is also inconsistent with Geer's sworn evidence, which is as follows.[487] Wilson said he wanted the Deer Park Trust to be 50/50, and Geer said to Wilson that he refused to do the deal on that basis.[488] Geer told Wilson that he had obligations to other HGR partners and the transaction did not fit within Oupan because it was a longer term transaction.[489] Indeed, Geer's evidence is that, had Wilson not agreed to take an interest of 25% in the Deer Park Trust and instead sought a greater percentage, he would not have agreed to the venture.[490] In any event, it is, as the HGR parties contend, inherently improbable that Geer would have agreed to give Wilson a half interest in the Deer Park Trust, when that possibility is viewed in light of Wilson's unitholding in the Oupan Resources Trust. There was no rational basis for Wilson to get a greater interest in one than the other. And indeed, Wilson's interest in both was proportionately rather similar: he originally held 30 of 90 units in the Oupan Resources Trust (transferring 9 units to certain of the HGR interests in May 1982 in consideration for a loan),[491] and 30 of 120 units in the Deer Park Trust.

226 On the basis of this evidence, the position may be summarised as follows. First, Wilson's evidence about the original agreement was shown to be false. Contrary to his witness statement that he never saw any documentation about the trust,[492] he signed an original deed to amend the name of the trust to the Deer Park Trust that showed he was one of 4 unit holders.[493] Geer's evidence was that Geer said to Wilson that, in relation to the proposed Deer Park Trust, each of Wilson and Geer would have equal holdings (being 25%) and there would be other unitholders from the HGR partnership.[494] The contemporaneous documents support Geer's evidence.[495] Secondly, this claim has been statute barred for almost 30 years, and there is no basis for the fraud exception or any suggestion of concealment.[496]

In relation to the Manning Land, is Mr Wilson entitled to the relief at [104] of the Counterclaim?

227 This claim only arises if Wilson succeeds in setting aside the May agreement and the July agreements. For the preceding reasons Wilson has failed in this respect. In this claim, Wilson seeks possession of the Manning Land, on the basis that he is a joint registered proprietor and he does not hold his interest on trust for Oupan. This claim is without foundation.

228 Wilson's senior counsel opened this claim by saying Wilson had been "cheated out of a half interest of this land and possibly an entitlement of about $5 million".[497] Once again, this was unfortunate. Wilson's senior counsel did not take the Court to the critical part of the document creating the trust in opening,[498] despite telling the Court that the transactions the HGR parties rely upon do not establish a declaration of trust and that he will take the Court through the relevant transactions.[499] The significance of the critical document was identified in the HGR parties' opening written submissions.[500]

229 By an agreement signed by Wilson around 11 November 1985,[501] Wilson agreed that he would hold his half interest in the Manning Land for the benefit of Oupan. This agreement was part of a commercial transaction, the relevant circumstance being that the Manning Land was going to be sold by mortgagee auction at a shortfall of about $500,000 to the mortgaged sum and Wilson had personally covenanted to repay that shortfall.[502] Oupan had agreed to step in to buy the Manning Land at above market value to protect Wilson, and he agreed that he would thereafter hold his interest for Oupan.[503] By this agreement Wilson was protected, and he could still benefit from Oupan taking the beneficial interest through his unitholding.

230 Against this background and in the circumstances Wilson found himself in in relation to the Manning Land where he stood to lose all of his interest in the land at the hands of a selling mortgagee and be left with personal liability for the shortfall on sale, Wilson now says there were conflict of interest issues arising. This is put by Wilson on the following basis:[504]

1. In 1991, the Manning Land was mortgaged to Sandhurst Nominees as third party security for a debt owed by Oupan. In that transaction, Greg Basser (of Herbert Geer & Rundle) acted for Sandhurst Trustees.[505] Geer (of Herbert Geer & Rundle) acted for Oupan as borrower.[506] When Sandhurst required Wilson and HGR Nominees to obtain separate representation, they took advice from Roger Donazzan (of Herbert Geer & Rundle), who was also secretary of HGR Securities.[507]
2. According to Geer, he saw no problem with Herbert Geer & Rundle acting for every party to the transaction, because he saw no difference between the interests of Wilson and Oupan at the time.[508] Again, this demonstrated Geer's complete failure to understand his duty to avoid conflicts of interest, rendering him fundamentally unfit to control a trustee company.
3. This conflict is not merely theoretical. It will be recalled that it was a requirement of the lender (Sandhurst, represented by Herbert Geer & Rundle) that the guarantors/mortgagors (Wilson and HGR Nominees, represented by Herbert Geer & Rundle) give an acknowledgment that the mortgaged land was beneficially owned by the borrower (Oupan, represented by Herbert Geer & Rundle). That acknowledgment was given by Wilson on the advice of Roger Donnazon, a partner of Herbert Geer & Rundle.[509] It is now relied on by the HGR interests as evidence that Wilson holds his interest as registered proprietor of the Manning Land on trust for Oupan.
4. Later, after the mortgage to Sandhurst was assigned to HGR Management and HGR Management enforced the mortgage and sold the Manning Land, Herbert, Geer & Rundle again acted in every transaction (see below).

Again, submissions of this nature both ignore or mischaracterise the nature of the commercial relationship between Wilson and the HGR interests, and have no regard to the actual circumstances of the transaction and the benefit that flowed to Wilson from it.

231 I endorse the HGR parties' submission that this is a textbook example of an express trust; a submission to which Wilson fails to respond in any substantive way.[510] No formal or technical words constituting an expression of intention are necessary to create an express trust. Any apt expression of intention will suffice.[511] What is critical is a manifest intention on the part of the putative creator to divest himself or herself of the beneficial interest, and to become a trustee of the property for another party.[512] The nature of the transaction and the whole of the circumstances attending the relationship between the parties is relevant.[513]

232 Wilson's only explanation for denying that this agreement meant what it said was that he subjectively intended it to be a joint venture agreement.[514] That explanation must be rejected: Wilson had Oupan record the whole of the Manning Land as an asset of Oupan in its records;[515] in 1991 he personally signed a document addressed to Sandhurst Trustee that confirmed he held the benefit of the land for Oupan; [516] and in 2007 he swore a statutory declaration, voluntarily,[517] stating that Oupan was the beneficial owner of the Manning Land.[518] But even if Wilson's explanation as to his intention in 1985 were to be accepted, the authorities are clear: subjective intention is irrelevant.[519] Wilson's subsequent conduct is also entirely consistent with him earlier declaring his beneficial interest in the Manning Land to be held on trust for Oupan.

233 In any event, Wilson is now estopped from denying the 1985 representation that he held the Manning Land for the benefit of Oupan: in reliance upon that representation Oupan paid between $200,000 and $300,000 above market value for the land.[520] Finally, the relief sought is statute barred[521] and barred by virtue of Wilson's laches and acquiescence.[522]

234 On the second-last day of the hearing of evidence in the trial, Wilson made an application that I recuse myself from hearing this matter on the basis of alleged apparent bias. I heard the application immediately and, having done so, rejected it. Brief reasons for so doing were given at the time on the basis that I would provide more comprehensive reasons now. This, I now do.

235 The test for apprehended bias is set out in Ebner v Official Trustee in Bankruptcy.[523] The question is whether or not a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question that the judge is required to decide.[524]

236 The two-stage test for apprehended bias is enunciated by the High Court thus:[525]

The apprehension of bias principle admits the possibility of human frailty. Its application is as diverse as human frailty. Its application requires two steps. First, it requires the identification of what it is said might lead a judge (or juror) to decide a case other than on its legal and factual merits. The second step is no less important. There must be an articulation of the logical connection between the matter and the feared deviation from the course of deciding the case on its merits.

These principles are now well-settled.[526]

237 Wilson's submissions failed to articulate "the logical connection between the matter and the feared deviation from the course of deciding the case on its merits."[527] The entirety of Wilson's submissions on the legal test he was required to fulfil in this application is extracted here:[528]

Your Honour, the test for apprehended bias is well-known, it doesn't need much elaboration. It was authoritatively stated by the High Court in Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337 and the test is really this, whether a reasonable and disinterested person sitting in the back of the court would form the impression that the judge was biased in favour of one party or against another party.

HIS HONOUR: Yes.

MR PEARCE: Your Honour, we say that test is satisfied in the present case for these reasons...

238 This proved to be a fatal flaw in Wilson's submissions in this application. A superabundance of examples were adduced to substantiate the application. But a successful submission would have demonstrated how, given those examples, it could be reasonably apprehended that I would not decide the case impartially or without prejudice.

239 It is useful to expand upon what is required for a successful application for apprehended bias. It is a relatively undemanding "double might" test,[529] which does not involve prediction, but, rather, a consideration of whether a real and not a remote possibility of apprehended bias exists.[530] However, a real likelihood of bias need not be demonstrated; a reasonable apprehension of bias in the mind of the fair-minded lay observer is sufficient.[531] It is not a test of probability,[532] nor is the test narrow or technical.[533] The fair-minded lay observer is presumed to be informed as to the relevant facts of the case and the issues in it. That includes having a basic understanding of the duties and responsibilities of counsel and the judge and a sufficiently knowledgeable mind to bring a rational and reasonable assessment to bear on the question.[534] Determinative is not the court's own view, but instead the court's view of the public's view of the administration of justice.[535]

240 The judicial convention is that where there is a real possibility of an application for bias being made prior to the hearing of the proceeding, then judges often transfer the case to another judge.[536] This application was made on the eleventh day of trial, the day before evidence concluded.

241 Of the four recognised categories of apprehended bias,[537] the second category, conduct in the course of proceedings, was submitted by Wilson to give rise to the apprehension of bias in this case. Wilson, referring to the cumulative effect of the conduct,[538] submitted:[539]

[Y]our Honour has made inconsistent rulings on evidence favouring the defendants throughout; your Honour has made frequent and hostile interjections in Mr Wilson's cross-examination, invariably to drive home a point of cross-examination or to suggest to Mr Wilson he was not telling the truth.

Your Honour's conduct towards the defendants' witnesses has been in stark contrast to that. The interjections have been to protect them from legitimate cross-examination, to excuse their failure to provide responsive answers, and even on occasion, to supply the witness with an answer the witness seemed incapable of giving. Your Honour also, in my respectful submission, has impermissibly limited legitimate cross-examination of the defendants' witnesses and displayed, at times, a hostile and aggressive demeanour towards both Mr Wilson and me.

242 Wilson was the first witness called. His cross-examination lasted two long days, documented in more than 200 pages of transcript.[540] It is true that throughout the cross-examination of Wilson, I reminded him to focus on and answer the question.[541] Wilson's evidence was characterised by a propensity not to answer the questions that were put to him and to make speeches or submissions in support of his case. This kind of exchange was typical:[542]

MR BICK: You did not at this meeting deny that you had a loan account, did you? --- In my mind, sir, I did not have a loan account.

That's not what I put to you. What I put to you was, you did not at this meeting deny you had a loan account? --- It wouldn't matter what I said at that meeting - - -

HIS HONOUR: Mr Wilson, please answer the question? --- I don't accept that I had a loan account, sir.

MR BICK: You didn't dispute your loan account at this meeting is what I'm putting to you? --- I didn't.

In Wilson's submission, my requests that he focus on the questions asked and confine his answers to them, were hostile interventions.[543]

243 On one occasion, it appears from the transcript that I did ask Wilson to answer a question apparently at the same time a question was finally answered.[544] The pages preceding that exchange show the question being asked, broken down, and asked again, with prolonged failure to answer by Wilson before I spoke up.[545] In my view, on this occasion as well as other instances where I made the same request, I neither prevented a party from putting their case, nor did I lead the fair minded lay observer to reasonably apprehend that I might not take the answer given into account.

244 At one point, I asked Wilson whether he understood the effect of making a false statutory declaration.[546] I did this, as I later explained, to determine whether I should offer him a certificate under s 128 of the Evidence Act 2008,[547] though it should be noted that this may well have been far from obvious to a reasonable lay observer, and thus of no relevance to the disposition of the application for recusal. Nevertheless, Wilson insisted that this exchange supported the apprehended bias application, on a cumulative basis, as an intervention hostile to him.[548] On another occasion, when Wilson appeared to have contradicted himself, I asked him: "is that a serious answer given what's been put to you?"[549] This, too, was later characterised as hostility.[550]

245 On the other hand, when I asked clarifying questions of the HGR parties' witnesses, Wilson submitted that I was assisting or protecting those witnesses. It is true that I did make interventions involving obvious clarifications, the recapping of evidence already given and asking the next logical question. Apropos of this, although perhaps not by design, Wilson said in an intervention of this kind I had dropped my judicial mantle and descended into the fray, citing Denning LJ in Jones v National Coal Board.[551] The trial judge in that case was found to have done just that by preventing both parties from putting their cases including via his taking over from counsel in the examination of witnesses. This is in contrast to the present facts. Indeed, to extract more fully his Lordship's words:[552]

The judge's part in all this is to hearken to the evidence, only himself asking questions of witnesses when it is necessary to clear up any point that has been overlooked or left obscure; to see that the advocates behave themselves seemly and keep to the rules laid down by law; to exclude irrelevancies and discourage repetition; to make sure by wise intervention that he follows the points that the advocates are making and can assess their worth; and at the end to make up his mind where the truth lies. If he goes beyond this, he drops the mantle of a judge and assumes the role of an advocate; and the change does not become him well.

246 Inconsistent rulings were alleged by Wilson. There was an instance in each of Wilson and Geer's cross-examinations where a question of law seemed to be being put to the witness.[553] In both instances, opposing counsel objected and I ruled. Wilson was being asked what effect he thought a particular agreement[554] - by which he avoided personal liability for a significant loan in respect of which he was in default and thereafter held his interest in the Manning Land for the benefit of Oupan - had when he entered into it. This was significant, as Wilson gave evidence that his understanding of the effect of the agreement was not the same as what was written in the agreement.[555] The way in which that question could be put appropriately was settled on in discussions involving the bench and both counsel, following the objection. By contrast, the question Geer was being asked was very broad, and did not become any narrower through similar discussions:[556]

Is it your case here, Mr Geer, that through the entirety of the period when those trusts were constituted in the early 1980s until 2007 that both Oupan and Waigani complied with all their trustee duties which they owed to Mr Wilson?

I allowed the former but ruled against the latter. In my view, the question relating to each objection was different and was rightly considered on its own merits. The nuances in each question and the place in which each question occurred were different. I was obliged to rule on those objections and did so.

247 In another alleged inconsistency, Wilson submitted that I had signalled that I was already contemplating an adverse costs order against him:[557]

MR BICK: Mr Wilson, you are being evasive. Who is ultimately paying the legal bills in this case?

MR PEARCE: Your Honour, could I just query the relevance of this? It may be relevant on a question of payment of costs in the trial ultimately.

HIS HONOUR: That would make it relevant now, it may as well be asked now.

MR PEARCE: If your Honour pleases.

In the course of Wilson's opening submissions and the open settlement offer made by Wilson, I commented on the costs he anticipated seeking against the HGR parties:[558]

HIS HONOUR: I presume you say, in accordance with obligations under the Civil Procedure Act and I assume on the basis of this correspondence, in the event that you are successful - - -

MR PEARCE: We will certainly be relying on this letter, don't worry about that.

HIS HONOUR: - - - you will be seeking indemnity costs and compensation under the Civil Procedure Act.

MR PEARCE: Since May last year.

HIS HONOUR: Against parties and others involved, I assume.

MR PEARCE: Yes, all of the above, your Honour.

Comments directed to costs but "on the other side of the ledger" were not complained of by Wilson.[559] On no view, on either occasion, could it be said that I had formed a view of who should ultimately be paying costs of the proceedings at either point. Moreover, as would have been apparent to a reasonable observer, on both occasions I merely identified a possibility, as raised in the submissions put to me. In this matter I was, indeed, consistent.

248 Another instance where I made a ruling on relevance which I explained and Wilson disagreed with at the time[560] was also raised as a so-called inconsistent ruling and reasonable basis for the apprehension of bias.[561]

249 On one occasion, on an objection raised by senior counsel for the HGR parties I ruled in Wilson's favour but did then comment that:[562]

[I]n general terms, it's not very helpful to encourage speculation but I will allow you to continue. Submissions can be made on what the realities are. It is fairly clear the witness hasn't got much recollection of these accounts, so I don't know what weight a lot of the answers will bear.

The question I ruled against was: "[y]ou don't know in respect of which assets generated that interest for Oupan".[563] This was answered in degrees of conditionality by Gorr: "I think that...", "...as I understand it...", "...that would have been...".[564] It is unclear why a ruling on objection in favour of Wilson would be later complained of.[565] The caution with which the evidence would be treated was a general comment, as I stated at the time, having regard to the distant memories of all lay witnesses which were called on by both parties to support their submissions.

250 On another occasion, Wilson was cross-examined on an allegation he made against Gorr, who Wilson said had once physically threatened him. Senior counsel for the HGR parties asked if Gorr was in the courtroom and requested that he stand up. He did so, and I asked him "[h]ave you got a black belt?".[566] The line of cross-examination at this point did go to the improbability of Gorr inciting fear in Wilson, being as senior counsel for the HGR parties put it, "half [Wilson's] size."[567] This exchange is rightly characterised as a moment of levity.[568] It was not mentioned in the subsequent cross-examination of Gorr, as senior counsel for the HGR parties duly observed.[569] It was, however, complained of in this application.[570]

251 When Geer, in the course of his cross-examination, commented that unused land still incurred significant holding costs, I commented that I come across similar issues in the course of hearing primary production claims in the taxation list.[571] In my view, there was nothing inappropriate or which could be perceived by a reasonable lay observer as demonstrating any lack of impartiality in that comment. Nor was there in my mentioning my expertise in mortgagees' notices to pay, when Geer was cross-examined on this question.[572]

252 Aspects of the cross-examination of Geer and the other HGR witnesses were unusual.[573] It was highly repetitive, the same topic was gone over on a number of occasions, and at times I asked senior counsel for Wilson to get on with his questions.[574] This is an accurate description of the cross-examination of Geer:[575]

MR BICK: Your Honour, I object to this cross-examination continuing. It's been a couple of hours now, we have covered very little ground. It seems to me to be the result of cross-examination on semantics and expression in documents rather than the facts. One would have expected the cross-examination to focus on the facts and go to documents if they are inconsistent. Instead, we have started the other way around and we are going round and round in circles. It's unfair for the witness for him to have to endure more than two hours of cross-examination with very, very little progress being made because the cross-examiner is focusing on semantics and expression.

MR PEARCE: I agree with my learned friend that we are making little progress and the reason for that is that this witness continually gives unresponsive answers.

HIS HONOUR: It may assist you to know that I accept what Mr Bick says. I think that's a very good summary of what's happened in the last two hours.

MR PEARCE: Very well, your Honour. ...

This objection followed eight pages of transcript where the same question had been asked over and over again.[576] In the course of this I expressed my own inability to understand what was meant by the repetition,[577] and clarified with the witness that I had understood what was meant by the answers given.[578] Finally, I expressed a view in relation to the objection that senior counsel for the HGR parties had raised, which I am required to do.

253 Instances where I commented on repetitive questions were raised in the recusal application.[579] On these occasions, it might be fair to say that my tone might have indicated a degree of exasperation, as in this example,[580] to which Wilson also objected:[581]

HIS HONOUR: Mr Pearce, I think you've asked this question about six times.

MR PEARCE: I'm not getting a direct answer.

HIS HONOUR: You've got an answer, you might have to live with it. If Mr Geer's provided an explanation, whether you like the answer or not, that's - - -

MR PEARCE: In my respectful submission, I'm entitled to keep asking the question.

HIS HONOUR: Ask it again.

MR PEARCE: I won't, your Honour. I can see your Honour is not assisted, so I won't.

On another occasion, where senior counsel for Wilson felt that he was getting non-responsive answers, I did not agree:[582]

HIS HONOUR: Mr Pearce, you've asked that question umpteen times.

MR PEARCE: But he's giving different answers now, your Honour. He's now giving a different answer.

HIS HONOUR: I thought the state of the evidence was that three documents were known of, there might be other documents and nobody really quite knows, but if you want to ask the question, ask the question.

MR BICK: Your Honour, I object, not only for reasons articulated by your Honour which I would, with respect, adopt, but because it requires the witness to express a legal conclusion. It's a matter for your Honour.

MR PEARCE: My learned friend put these documents to Mr Wilson, a quarryman, and put propositions to him based on legal conclusions from the documents. I'm entitled to do the same with this man who is a solicitor.

HIS HONOUR: How will a question like that assist the court? The court draws legal conclusions on documents. Mr Geer probably is, I'm sure, a very experienced solicitor and probably could give opinion evidence in this respect but how does this actually help the court?

MR PEARCE: Because it's an issue in the case who the beneficial owner of this land is.

HIS HONOUR: Put the question and may that be the last question on this cycle of umpteen repeating questions.

MR PEARCE: I can see your Honour is not being assisted.

HIS HONOUR: No, his Honour is not being assisted one little bit.

254 The long-winded and repetitive form that the cross-examinations took led me to ask questions that at times re-capped evidence to confirm my understanding,[583] and sometimes asking the next logical question in a series.[584] In my view, there is a difference between a question from the bench to clarify understanding and the bench's supplying an answer to a witness. An example of the former is:[585]

MR PEARCE: You did turn your mind to the conflict of interest? ---Yes.

I think you said before the break that you didn't raise the conflict of interest with Mr Wilson?---I may not have raised it with him other than to say that I thought it was important that he went off and got independent legal advice, I think that was an acknowledgment.

HIS HONOUR: Which he did? --- Which he did.

MR PEARCE: After the agreement was made on day one? --- No, before it was made.

So before day one he got this independent legal advice? --- Before the documents were executed he got independent legal advice.

In Wilson's submission this exchange was an "interjection, plainly designed ... to assist the witness".[586]

255 At times, comments to Wilson's senior counsel did more than express some exasperation, they indicated that the Court was not being assisted.[587] This led me to comment that there was a serious question to be tried, and to remind him that we were in the midst of a major commercial trial in a superior court.[588] This was referred to as grounds for my recusal, characterised for that purpose as a "gratuitous comment to counsel".[589] In fact, in my view it was unfortunately entirely necessary to remind Wilson that nothing that occurs in a trial in the Commercial Division of the Supreme Court is gratuitous. This example typifies a theme of the examples supplied by Wilson in this application. That theme can be summed up in this exchange:[590]

HIS HONOUR: How is this relevant to any issue in the case?

MR PEARCE: I've given my reasons for that before and I accept it's covered by your Honour's earlier ruling but I wanted to at least ask the question.

HIS HONOUR: See if I'd changed my mind?

MR PEARCE: No, because it's important that I try to present my client's case.

HIS HONOUR: And assist the court.

MR PEARCE: I'm under a duty to present my client's case.

HIS HONOUR: Under a duty to assist the court.

MR PEARCE: Very well. That's all I have, your Honour.

256 The exchanges excerpted from the transcript here and in the course of the application reveal the robust nature of Commercial Court trials. It is incorrect to say that any of these exchanges, either individually or cumulatively, might give rise to a reasonable apprehension in the mind of a reasonable lay observer that I might decide the case other than on its legal and factual merits. Moreover, no logical connection between this conduct and the feared bias was articulated in Wilson's submissions. Having had regard to the applicable law and all the examples raised by Wilson, these are the reasons for which I rejected the application for my recusal on the basis of apprehended bias.

257 For the preceding reasons, the questions posed in this trial are answered as follows:

(4) - Yes, but the Trustee Warranties do not have the effect contended for by Wilson.

(10(b)) - If any or all acts referred to in 10(a) were in breach of trust, which they are not, yes for any or all of those acts.

(10(e)) - If any or all acts referred to in 10(d) were in breach of trust, which they are not, yes for any or all of those acts.

(11) - No, the original agreement was that Wilson would have a 25% unit holding in the Deer Park Trust.

258 The parties are to bring in orders to give effect to these reasons. I otherwise reserve the question of costs and will hear the parties further on this issue.

WILLIAM ROBERT WILSON (ON HIS OWN BEHALF AND AS TRUSTEE OF THE WILSON FAMILY TRUST)

APPLECROSS SECRETARIAL SERVICES PTY LTD (ACN 005 127 524)

DAVID MORTON GEER (IN HIS OWN RIGHT AND AS EXECUTOR OF THE WILL AND ESTATE OF CHARLES KEITH GEER)

DEBORAH MARGARET KENNEDY (AS EXECUTRIX OF THE WILL AND ESTATE OF CHARLES KEITH GEER)

[1] Outline of Closing Submissions of the Plaintiff by Counterclaim (26 April 2018), [3].

[2] Outline of Closing Submissions of the Plaintiff by Counterclaim (26 April 2018), [7].

[8] Closing Submissions of the Defendants to Counterclaim (HGR parties) (24 April 2018), [8].

[9] Closing Submissions of the Defendants to Counterclaim (HGR parties) (24 April 2018), [20].

[10] Fourth Further Amended Counterclaim (17 November 2017), [79A].

[11] Expert Report of Darryn Hockley (9 May 2017) ("the Second Hockley Report"), [15], [94]-[108]; Expert Report of Darryn Hockley (22 December 2017) ("the Third Hockley Report"), [15], [79]-[103]; Third Hockley Report, [20]-[22], [126]-[128].

[12] Amended Witness Statement of David Morton Geer (2 February 2018) ("the Geer Statement"), [94T]-[94AAD]; Amended Witness Statement of Angela Palermo (2 February 2018) ("the Palermo Statement"), [171]-[241]; Further Amended Witness Statement of David Stewart Taylor (7 March 2018) ("the Taylor Statement"), [142]-[144].

[16] Transcript, 122-3; Letter from Darryn Hockley to Andrew Brown (20 February 2018) ("Fourth Hockley Report").

[30] Fourth Further Amended Counterclaim (17 November 2017), [79A, Particulars, (b)]; cf Outline of Closing Submissions of the Plaintiff by Counterclaim (28 April 2018), [77]-[83].

[35] Loan Agreement between HGR Nominees and Wilson (7 March 1980).

[36] Geer Statement, [44]; Transcript, 268.

[37] Geer Statement, [45]; Transcript, 266, 289.

[38] Assignment of Interest from Wilson to HGR Nominees (7 March 1980).

[39] Unit Trust Deed for Oupan Resources Trust (31 January 1980).

[40] ASIC: Current & Historical Extract for Oupan Resources Pty Ltd (10 June 2014).

[41] Unit Trust Deed for Oupan Resources Trust (31 January 1980), First Schedule.

[42] Joint Venture Agreement between Wilson and Sixth Oupan Pty Ltd (7 March 1980).

[47] Geer Statement, [74]. As is clear from its terms, the Labour Agreement did not entitle Wilson personally to be paid a reasonable remuneration himself: see Witness Statement of William Robert Wilson (2 March 2017) ("the Wilson Statement"), [25].

[50] Transcript, 676, 678, 682-4, 676 (confirming that [67] recorded the original agreement), 729, 742, 768.

[51] Gorr was unclear in his evidence whether he thought the HGR interests' loans were repayable when the lender, or when the borrower, formed the view the borrower had the capacity to repay the loan: Transcript, 993, 994, 995.

[55] Unit Trust Deed for Oupan Resources Trust (31 January 1980).

[56] Unit Trust Deed for Oupan Resources Trust (31 January 1980).

[58] Contract for Sale of 40.35ha (23 April 1982); Contract for Sale of 44.46ha (23 April 1982).

[62] Geer Statement, [195]-[196]; Amended Witness Statement of Leon Gorr (2 February 2018) ("the Gorr Statement"), [59]-[61].

[64] See Southern Cross Trust No. 4 Trust Deed; Deed of Name Change: "Southern Cross" to "Deer Park" Trust (19 April 1982).

[67] Southern Cross Trust No. 4 Trust Deed, as amended by the Deed of Name Change: "Southern Cross" to "Deer Park" Trust (19 April 1982).

[68] Southern Cross Trust No. 4 Trust Deed, as amended by the Deed of Name Change: "Southern Cross" to "Deer Park" Trust (19 April 1982).

[69] See Heydon, Leeming and Turner, Meagher, Gummow and Lehane's Equity Doctrines and Remedies (LexisNexis, 5th ed, 2015) at [5-050].

[70] Re Burton; Wily v Burton [1994] FCA 1146; (1994) 126 ALR 557 at 559-60 citing Duke of Portland v Topham (1864) 11 HLC 31 and Re Skeats' Settlement (1889) 42 Ch D 522.

[71] Geraint Thomas, Thomas on Powers (Oxford University Press, 2nd ed, 2012), 676-7 [12.26].

[72] See Food Co UK LLP (t/a Muffin Break) v Henry Boot Developments Ltd [2010] EWHC 358 (Ch), [4] (Lewison J as his Lordship then was):

Although some of the representations on which the tenants rely were made in writing, in all cases they allege that these representations were confirmed, expanded, or supplemented by oral representations. These oral representations were made in conversations and at meetings of which there is scant record. In approaching the evidence I have tended to place weight on contemporaneous documents and documents which came into existence before the problems emerged. In assessing the recollections of witnesses, it is also important to avoid the benefit of hindsight. I must try to assess what people did, said and thought at the time. In that connection I have borne in mind the words of Lord Pearce in his dissenting speech in Onassis v Vergottis [1968] 2 Lloyd's Rep 403, 431:

"Credibility involves wider problems than mere 'demeanour' which is mostly concerned with whether the witness appears to be telling the truth as he now believes it to be. Credibility covers the following problems. First, is the witness a truthful or untruthful person? Secondly, is he, though a truthful person, telling something less than the truth on this issue, or, though an untruthful person, telling the truth on this issue? Thirdly, though he is a truthful person telling the truth as he sees it, did he register the intentions of the conversation correctly and, if so, has his memory correctly retained them? Also, has his recollection been subsequently altered by unconscious bias or wishful thinking or by overmuch discussion of it with others? Witnesses, especially those who are emotional, who think that they are morally in the right, tend very easily and unconsciously to conjure up a legal right that did not exist. It is a truism, often used in accident cases, that with every day that passes the memory becomes fainter and the imagination becomes more active. For that reason a witness, however honest, rarely persuades a judge that his present recollection is preferable to that which was taken down in writing immediately after the accident occurred. Therefore, contemporary documents are always of the utmost importance. And lastly, although the honest witness believes he heard or saw this or that, is it so improbable that it is on balance more likely that he was mistaken? On this point it is essential that the balance of probability is put correctly into the scales in weighing the credibility of a witness, and motive is one aspect of probability. All these problems compendiously are entailed when a judge assesses the credibility of a witness; they are all part of one judicial process and in the process contemporary documents and admitted or incontrovertible facts and probabilities must play their proper part".

[74] Closing Submissions of the Defendants to Counterclaim (HGR parties) (24 April 2018), [24]; and see the Schedule to these submissions ("Schedule"), [348]-[427].

[75] Transcript, 431-470; Closing Submissions of the Defendants to Counterclaim (HGR parties) (24 April 2018), [24]; and see Schedule, [180]-[187].

[77] Closing Submissions of the Defendants to Counterclaim (HGR parties) (24 April 2018), [25]; and see Schedule, [65]-[82]; cf Outline of Closing Submissions of the Plaintiff by Counterclaim (28 April 2018), [77]-[83]; and see above, [20].

[78] Transcript, 263, 269, 270, 407, 458.

[79] Witness Statement of Jill Wilson (20 February 2017), [2], [6].

[80] Witness Statement of Jill Wilson (20 February 2017), [6], [7].

[82] Witness Statement of Frederick Michalski (20 February 2017), [1].

[83] Witness Statement of Steven Foale (10 March 2017), [4].

[85] Witness Statement of Dennis John Cougle (20 February 2017), [3].

[86] Closing Submissions of the Defendants by Counterclaim (HGR Parties) (24 April 2018), [33]-[35].

[87] First Hockley Report at [2], [43]-[51].

[88] First Hockley Report at [3], [52]-[56]; Second Hockley Report at [4(a)], [6], [20(a)], [21].

[89] First Hockley Report at [4], [57]-[59]; Second Hockley Report at [4(b)], [6], [20(b)], [22].

[90] First Hockley Report at [14], [129]-[132].

[91] First Hockley Report at [15], [133]; Second Hockley Report at [4(a)], [6], [20(f)], [37].

[92] First Hockley Report at [16], [134]; Second Hockley Report at [4(b)], [6], [20(g)], [38].

[93] First Hockley Report at [5]-[10], [60]-[95]; Third Hockley Report at [5]-[6], [37]-[43].

[94] Second Hockley Report at [10], [76]-[78].

[95] Second Hockley Report at [11], [79]-[80].

[96] Defendants to Counterclaim's objections to Mr Hockley's Reports (26 February 2018).

[97] Second Hockley Report at [10], [76]-[78].

[98] Second Hockley Report at [11], [79]-[80].

[99] Defendants to Counterclaim's objections to Mr Hockley's Reports (26 February 2018).

[100] Ford Kinter & Associates Pty Ltd v Reliance Franchise Partners Pty Ltd [2018] VCC 9, [40]; and L&H New Developments Pty Ltd v Myr Investments Pty Ltd [2015] VSC 89, [71].

[101] L&H New Developments Pty Ltd v Myr Investments Pty Ltd [2015] VSC 89, [71].

[102] Geer Statement, [5], [7]-[8].

[103] Referring to Transcript, 624, 699, 715, 728, 786, 790, 791, 939. By way of one example, there was a wide-ranging cross-examination apparently directed to the proposition that the present proceeding was commenced by Geer and Gorr for an improper purpose (Transcript, 630-1, 632, 633), which, it is said, was dispelled later when Gorr was asked, and stated, that the claim was commenced on advice from counsel (Transcript, 1039).

[105] Further Amended Witness Statement of Anthony Henry May (27 February 2018) ("the May Statement"), [37]; and see Geer Statement, [202].

[107] Witness Statement of Yan Li Wang (24 March 2017), [4].

[108] Palermo Statement, [2]-[3], [11]-[14].

[110] Third Further Amended Counterclaim (19 April 2017), [105].

[111] Third Further Amended Counterclaim (19 April 2017), [107].

[112] Third Further Amended Counterclaim (19 April 2017), [110]-[111].

[113] Third Further Amended Counterclaim (19 April 2017), [112].

[114] Third Further Amended Counterclaim (19 April 2017), [113].

[115] Third Further Amended Counterclaim (19 April 2017), [115].

[116] Third Further Amended Counterclaim (19 April 2017), [116C].

[117] Third Further Amended Counterclaim (19 April 2017), [116A].

[118] Defence to Second Further Amended Counterclaim (16 March 2015), [131], [132].

[119] Defence to Second Further Amended Counterclaim (16 March 2015), [133].

[120] Third Further Amended Counterclaim (19 April 2017), [116(c)]. The generality of this question is not affected by questions (1), (2), (3), (4), (5), (6), (7) and (8).

[121] Third Further Amended Counterclaim (19 April 2017), [116E]. The generality of this question is not affected by questions (1), (2), (3), (4), (5), (6), (7) and (8).

[122] Defence to Second Further Amended Counterclaim (16 March 2015), [83A], [83B].

[123] Third Further Amended Counterclaim (19 April 2017), [81].

[124] Defence to Second Further Amended Counterclaim (16 March 2015), [52A], [52B].

[125] Third Further Amended Counterclaim (19 April 2017), [50].

[126] Fourth Further Amended Counterclaim (17 November 2017), [105].

[127] Second Further Amended Counterclaim (3 February 2015), [105].

[128] Fourth Further Amended Counterclaim (17 November 2017), [105]; and the HGR parties address the change in the pleaded case more particularly in the Closing Submissions of the Defendants to Counterclaim (HGR Parties) (24 April 2018), Schedule, [263]-[274].

[136] Wilson Statement, [41]-[42].

[137] Geer Statement, [325]-[326]; Wilson Statement, [46].

[138] Letter from Herbert Geer & Rundle Lawyers to Bill Wilson (19 April 2007) (cc Steven Foale of Maurice Blackburn Cashman Lawyers), attaching Financial Report for year ended 30 June 2006.

[139] Geer Statement, [300]-[301]; Gorr Statement, [88].

[140] Cf. Wilson Statement, [46]; and see above, [62].

[141] Geer Statement, [325A]-[325B].

[142] Transcript, 1027, 1030, 1042, 1043.

[143] Fourth Further Amended Counterclaim (17 November 2017), [107]; see also the answer to Question 12 below, [227]-[232].

[144] As to the particular entities, see Fourth Further Amended Counterclaim (17 November 2017), [71(a)-(f)].

[145] As to the precise entities, see Fourth Further Amended Counterclaim (17 November 2017), [28(a)-(h)].

[146] Palermo Statement, [102]-[103].

[147] Palermo Statement, [102]-[103].

[148] Palermo Statement, tables 3 to 25.

[150] First Hockley Report at [13], [123]-[128]; Transcript, 555.

[152] Closing Submissions of the Defendants to Counterclaim (HGR parties) (24 April 2018), Schedule, [12]-[15], [43]-[59]; and see [80]-[94].

[155] Deed of Assignment pursuant to Part X of the Bankruptcy Act 1966 between Wilson and Cougle (21 December 1976).

[162] Witness Statement of Dennis John Cougle (20 February 2017), [5], [10].

[165] Geer Statement, [42]; and see above, [22]-[37].

[167] Geer Statement, [67]; and see above, [22]-[37].

[169] Geer Statement, [66]; Gorr Statement, [30].

[170] Oupan Resources Pty Ltd Minute of Board Meeting (11 December 1981); and see Transcript, 301.

[171] Stamps (Amendment) Act 1984.

[176] Proposed Organization Structure for Oupan (4 November 1988).

[178] Oupan Resources Trust Trustee - Oupan Resources Pty Ltd - Financial Statements Year Ended 30th June 1993.

[180] Oupan Resources Trust Trustee - Oupan Resources Pty Ltd - Financial Statements Year Ended 30th June 1993, [11].

[185] Palermo Statement, [50]. Importantly, Palermo used one side of the ledgers only in preparing her report. She also compiled the other side of the ledgers to provide to Wilson to verify her work, and those documents were discovered. From all loans, there was one loan of $16,000 in April 1985 where neither the lender nor borrower side of the ledger was available, and a period in the mid-1980s where only one side of the ledger was available: Transcript, 1150.

[188] Transcript, 301; with reference to the minutes of 11 December 1981 (see above, [83]).

[189] See above, [80].

[204] Outline of Closing Submissions of the Plaintiff by Counterclaim (28 April 2018), [16]-[21].

[210] See above, [1]-[6].

[211] Outline of Closing Submissions of the Defendants to Counterclaim (HGR Parties) (24 April 2018), Schedule, [16]-[17].

[213] Outline of Closing Submissions of the Plaintiff by Counterclaim (28 April 2018), [27].

[214] See below, [189].

[215] Palermo Statement, [9], [105]; Summary of Oupan Loans as at 30 June 2007.

[216] See Fourth Further Amended Counterclaim (17 November 2017), [79A] particular (b).

[217] See ss 5(1) and 27(b) of the Limitation of Actions Act 1958. Section 27(b) of the Limitation of Actions Act 1958 requires the essential elements of the cause of action to be concealed by conduct that is unconscionable: Levy v Watt (2014) 308 ALR 748 at 771-2 [83], [85]; Skrijel v Mengler [1998] VSC 71, [47]-[61]. The burden of proof rests upon Wilson. Section 21(1)(a) of the Limitation of Actions Act 1958 requires consciousness of wrongdoing: Seymour v Seymour (1996) 40 NSWLR 358 at 372; Honey v McLennan (1997) 18 WAR 384 at 392; Di Sante v Camando Nominees Pty Ltd [2000] VSC 211, [49]-[53], [58]; Wright Prospecting Pty Limited v Hancock Prospecting Pty Limited [2007] WASC 118, [54]-[56].

[218] Closing Submissions of the Defendants to Counterclaim (HGR parties) (24 April 2018), Schedule, [146]-[151].

[221] Loan Agreement between Oupan Resources Pty Ltd and Wilson (10 March 1994).

[222] Palermo Statement, [71], [90]; Geer Statement, [94R].

[224] Unit Trust Deed for Oupan Resources Trust (31 January 1980) (see in particular Recital E, and cll 23(b), 24(b), 26(a), 26(c), 26(h), 26(r), 29(a), 29(b), 35 and 40).

[225] Palermo Statement, tables 3 to 25.

[226] Palermo Statement, table 17, items 32 to 57.

[227] Palermo Statement, table 17, items 59-63 and table 21, item 310.

[228] Palermo Statement, tables 3 to 25.

[229] See ss 5(1) and 27(b) of the Limitation of Actions Act 1958. Section 27(b) of the Limitation of Actions Act 1958 requires the essential elements of the cause of action to be concealed by conduct that is unconscionable: Levy v Watt (2014) 308 ALR 748 at 771-2 [83], [85]; Skrijel v Mengler [1998] VSC 71, [47]-[61]. The burden of proof rests upon Wilson. Section 21(1)(a) of the Limitation of Actions Act 1958 requires consciousness of wrongdoing: Seymour v Seymour (1996) 40 NSWLR 358 at 372; Honey v McLennan (1997) 18 WAR 384 at 392; Di Sante v Camando Nominees Pty Ltd [2000] VSC 211, [49]-[53], [58]; Wright Prospecting Pty Limited v Hancock Prospecting Pty Limited [2007] WASC 118, [54]-[56].

[230] Second Hockley Report, [11], [79]-[80].

[235] Palermo Statement, [112]-[134], [Table 34]-[Table 38].

[236] First Hockley Report, [3(1)], [39]-[42].

[238] Geer Statement, [250]-[251]; Gorr Statement, [61]-[62]; Transcript, 769, 770, 771, 961, 962, 963.

[239] See Closing Submissions of the Defendants to Counterclaim (HGR Parties) (24 April 2018), Schedule, [58]-[59]; cf Outline of Closing Submissions of the Plaintiff by Counterclaim (28 April 2018), [32], [33]; and see above, [74]-[112].

[240] See Closing Submissions of the Defendants to Counterclaim (HGR Parties) (24 April 2018), Schedule, [58]-[59]; cf Outline of Closing Submissions of the Plaintiff by Counterclaim (28 April 2018), [32], [33]; and see above, [74]-[112].

[241] Outline of Closing Submissions of the Plaintiff by Counterclaim (28 April 2018), [32], [33].

[242] Matthews v SPI Electricity Pty Ltd (Ruling No 9) [2012] VSC 340, [35]-[44]; CDPV Pty Ltd v Commissioner of State Revenue (2016) 103 ATR 385 at 407-8 [59].

[243] Geer Statement, [255]; Transcript, 766-7, 773, 774, 793, 794, 795, 798; and see above, [74]-[112].

[244] Closing Submissions of the Defendants to Counterclaim (HGR parties) (24 April 2018), [85].

[245] Transcript, 773-4; Reply Witness Statement of Angela Palermo (27 February 2018), [61].

[246] Gorr Statement, [76]; Transcript, 794, 1006, 1007; Geer Statement, [256]; Transcript, 962, 963, 964, 968.

[247] First Hockley Report, [3(2)], [43]-[51]. That answer qualified his answer to question 2, that 18.75% was not commercial for every day but it was commercial for some days: Transcript, 532.

[250] Transcript, 535; see also Transcript, 536-7.

[251] Transcript, 535, 537. There was some suggestion in Wilson's oral closing submissions that these loans were, in reality, secured as the HGR parties held the relevant certificates of title - a submission that goes nowhere as there was no evidence in this respect and it exhibited a confusion between the very different bases on which a title may be held by a solicitor for safe keeping and a holding by way of equitable mortgage (See Transcript, 1400, 1459-60).

[262] First Hockley Report, [3(3)], table 3, [52]-[56], table 56; Second Hockley Report, [4(a)], [20(a)], [21].

[263] See the comparative tables at Palermo Statement, Tables 26, 28.

[269] See Closing Submissions of the Defendants to Counterclaim (HGR Parties), Schedule, [43]-[57] (and see above, [74]-[112]; Transcript, 798.

[270] First Hockley Report, [3(4)], table 3, [57]-[59]; Second Hockley Report, [4(b)], [20(a)-(b)], [21]-[22].

[271] See First Hockley Report, [57], [58].

[279] See Closing Submissions of the Defendants to Counterclaim (HGR Parties) (24 April 2018), Schedule, [26]-[32].

[280] See Palermo Statement, table 34, items 4 to 9, and table 35, items 8 and 9.

[281] Palermo Statement, [115]-[118] and table 30-table 38.

[282] See Southern Cross Trust No. 4 Trust Deed. See in particular Recital E, and cll 22(b), 23(b), 25(a), 25(c), 25(k), 25(n), 25(u), 25(w), 28(a), 28(b), 34, 36 and 39.

[283] See ss 5(1) and 27(b) of the Limitation of Actions Act 1958. Section 27(b) of the Limitation of Actions Act 1958 requires the essential elements of the cause of action to be concealed by conduct that is unconscionable: Levy v Watt (2014) 308 ALR 748 at 771-2 [83], [85]; Skrijel v Mengler [1998] VSC 71, [47]-[61]. The burden of proof rests upon Wilson. Section 21(1)(a) of the Limitation of Actions Act 1958 requires consciousness of wrongdoing: Seymour v Seymour (1996) 40 NSWLR 358 at 372; Honey v McLennan (1997) 18 WAR 384 at 392; Di Sante v Camando Nominees Pty Ltd [2000] VSC 211, [49]-[53], [58]; Wright Prospecting Pty Limited v Hancock Prospecting Pty Limited [2007] WASC 118, [54]-[56].

[284] Geer Statement, [250]-[251]; Gorr Statement, [61]-[62].

[286] See Closing Submissions of the Defendants to Counterclaim (HGR parties) (24 April 2018), Schedule, [194]-[216].

[287] Geer Statement, [216], [234].

[288] Transcript, 952-3; Gorr Statement, [64]-[65]; Transcript, 1009.

[291] Cf Outline of Closing Submissions of the Plaintiff by Counterclaim (28 April 2018), [41]-[46].

[292] Witness Statement of Frederick Michalski (20 February 2017), [5].

[297] Geer Statement, [238], [242]-[245].

[300] Matthews v SPI Electricity Pty Ltd (Ruling No 9) [2012] VSC 340, [35]-[44]; CDPV Pty Ltd v Commissioner of State Revenue (2016) 103 ATR 385 at 407-8 [59].

[301] First Hockley Report, [3(5)], [60]-[83]; Third Hockley Report, [5]-[6], [37]-[43]; Transcript, 553, 554.

[302] Fourth Further Amended Counterclaim (17 November 2017), [110]-[111].

[303] See Closing Submissions of the Defendants to Counterclaim (24 April 2018), Schedule, [310].

[305] See Closing Submissions of the Defendants to Counterclaim (24 April 2018), Schedule, [286], [294], [310]; Wilson Statement, [47].

[306] File Note of Elizabeth O'Doherty (24 April 2007); Transcript, 1131.

[314] Geer Statement, [319]; Transcript, 1034.

[315] Witness Statement of Yan Li Wang (24 March 2017), [55].

[316] See Closing Submissions of the Defendants to Counterclaim (24 April 2018), Schedule, [283]-[287].

[317] See Closing Submissions of the Defendants to Counterclaim (24 April 2018), Schedule, [244]-[247].

[318] Outline of Closing Submissions of the Plaintiff by Counterclaim (28 April 2018), [48]-[55].

[319] Fourth Further Amended Counterclaim (17 November 2017), [112].

[320] Deed of Separation and Release (13 July 2007) ("Deed of Separation").

[321] See also Outline of Closing Submissions of the Plaintiff by Counterclaim (28 April 2018), [90].

[323] See, particularly, Deed of Separation and Release (13 July 2007), Recital D, cll 5, 8 and 9.

[324] Fourth Further Amended Counterclaim (17 November 2017), [113].

[325] See above, Question 2 (above, [70]-[149]).

[326] See above, [144]-[149].

[327] Cf Outline of Closing Submissions of the Plaintiff by Counterclaim (28 April 2018), [34]-[40].

[329] Palermo Statement, [133]-[134].

[330] Geer Statement, [260]-[263].

[331] Geer Statement, [264]; Gorr Statement, [81]; Transcript, 969, 971.

[332] Geer Statement, [260]-[263].

[334] See Outline of Closing Submissions of the Plaintiff by Counterclaim (28 April 2018), [47].

[335] Geer Statement, [336]; and see regarding the formal approval process completed in 2014, Minutes of Meeting of Directors of Waigani Pty Ltd ATF the Deer Park Trust (13 May 2014); Gorr Statement, [111].

[336] See Outline of Closing Submissions of the Plaintiff by Counterclaim (28 April 2018), [47].

[337] Ying Mui v Frank Hoh (No 6) [2017] VSC 730, [302]-[316].

[338] Geer Statement, [338]; Gorr Statement, [64], [113].

[339] Geer Statement, [202], [338]; ASIC: Current & Historical Extract for Waigani Pty Ltd (14 October 2013).

[340] Geer Statement, [337]; Transcript, 1014.

[342] See above, [71]-[118].

[343] Geer Statement, [345]-[351]; Gorr Statement, [123]-[124].

[344] As at 2007, see Closing Submissions of the Defendants to Counterclaim (HGR Parties) (24 April 2018), Schedule, [161]-[169].

[345] Oupan Resources Pty Ltd ATF Oupan Resources Unit Trust Financial Report for Year Ended 30 June 2007.

[346] Geer Statement, [269]-[270], [273].

[347] Oupan Resources Pty Ltd ATF Oupan Resources Unit Trust Financial Report for Year Ended 30 June 2007, Notes, [5]-[6].

[348] Dudakov includes 50% of "Closter JV" Land in Expert Report of Brian Dudakov (15 February 2017), 39 to reflect Oupan's 50% interest in profits from Closter JV land (see Geer Statement, [117]-[120]).

[349] Palermo Statement, [105]; Summary of Oupan Loans as at 30 June 2007. Ms Palermo applied the HG&R Nominees rates from October 1993 to March 2000, and then from April 2000 to June 2007 the interest rates that Balanced Securities paid on debentures with a term of 1 year and interest payable on maturity: Palermo Statement, [107].

[350] See Value of Mr Wilson's Units as at 30 June 2007 Applying Mr Hockley's Methodology; Transcript, 558, 560.

[351] Geer Statement, [345]-[351]; Gorr Statement, [123]-[124].

[352] Second Hockley Report, [38], Tables 38(1)-(3); Value of Mr Wilson's Units as at 30 June 2007 Applying Mr Hockley's Methodology; Transcript, 558, 562.

[353] See Value of Mr Wilson's Units as at 30 June 2007 Applying Mr Hockley's Methodology; Transcript, 558, 562.

[354] Fourth Further Amended Counterclaim (17 November 2017), [115].

[355] See Closing Submissions of the Defendants to Counterclaim (HGR Parties) (24 April 2018), Schedule, [307]-[312].

[356] Geer Statement, [325]-[326]; Wilson Statement, [46].

[358] Expert Report of Brian Dudakov (15 February 2017).

[359] Letter from Steven Foale to Leon Gorr (2 May 2007), [2(a)-(b)].

[362] Expert Report of Brian Dudakov (15 February 2017).

[363] By November 2007, Wilson sold two of the properties, bought for $330,000, for consideration of $1.75m, resulting in a profit of $1.42m, and by November 2008 he had sold the other two properties, bought for $1.2m, for consideration of over $2.035m, resulting in a profit of over $835,000. In all, Wilson paid $1.53m for land sold for over $3.785m, at a profit of over $2.255m. Geer Statement, [334]-[335].

[364] First Hockley Report, table 122.

[367] Second Hockley Report, table 43.

[371] See above, [72].

[373] See above, [72].

[375] Second Hockley Report, [12], [81]-[85].

[376] As to Wilson's loan, see Closing Submissions of the Defendants to Counterclaim (HGR Parties) (24 April 2018), Schedule, [38]-[41].

[377] Fourth Further Amended Counterclaim (17 November 2017), [116C].

[378] Letter from Steven Foale to Leon Gorr (2 May 2007).

[379] See Deed of Separation and Release (13 July 2007), Recital D, cll 5, 9.

[380] See Closing Submissions of the Defendants to Counterclaim (HGR Parties) (24 April 2018), Schedule, [161]-[169], [310]-[311]; and see above, [179]-[186].

[381] Defence to Fourth Further Amended Counterclaim (22 November 2017), [116G]; and see ss 5(1) and 27(b) of the Limitation of Actions Act 1958. Section 27(b) of the Limitation of Actions Act 1958 requires the essential elements of the cause of action to be concealed by conduct that is unconscionable: Levy v Watt (2014) 308 ALR 748 at 771-2 [83], [85]; Skrijel v Mengler [1998] VSC 71, [47]-[61]. The burden of proof rests upon Wilson. Section 21(1)(a) of the Limitation of Actions Act 1958 requires consciousness of wrongdoing: Seymour v Seymour (1996) 40 NSWLR 358 at 372; Honey v McLennan (1997) 18 WAR 384 at 392; Di Sante v Camando Nominees Pty Ltd [2000] VSC 211, [49]-[53], [58]; Wright Prospecting Pty Limited v Hancock Prospecting Pty Limited [2007] WASC 118, [54]-[56].

[382] Defence to Fourth Further Amended Counterclaim (22 November 2017), [116H]; and see Crawley v Short [2009] NSWCA 410; (2009) 262 ALR 654 at 678 [163]-[170]; and below, [220].

[383] Fourth Further Amended Counterclaim (17 November 2017), [116A].

[384] Letter from Steven Foale to Leon Gorr (2 May 2007).

[385] See Deed of Separation and Release (13 July 2007), Recital D, cl 5, and cl 9.

[386] See Closing Submissions of the Defendants to Counterclaim (HGR Parties) (24 April 2018), Schedule, [230]-[237], [307]-[308].

[387] Defence to Fourth Further Amended Counterclaim (22 November 2017), [116G], [116H]; and see ss 5(1) and 27(b) of the Limitation of Actions Act 1958. Section 27(b) of the Limitation of Actions Act 1958 requires the essential elements of the cause of action to be concealed by conduct that is unconscionable: Levy v Watt (2014) 308 ALR 748 at 771-2 [83], [85]; Skrijel v Mengler [1998] VSC 71, [47]-[61]. The burden of proof rests upon Wilson. Section 21(1)(a) of the Limitation of Actions Act 1958 requires consciousness of wrongdoing: Seymour v Seymour (1996) 40 NSWLR 358 at 372; Honey v McLennan (1997) 18 WAR 384 at 392; Di Sante v Camando Nominees Pty Ltd [2000] VSC 211, [49]-[53], [58]; Wright Prospecting Pty Limited v Hancock Prospecting Pty Limited [2007] WASC 118, [54]-[56].

[388] Defence to Fourth Further Amended Counterclaim (22 November 2017), [131], [132].

[391] Defence to Fourth Further Amended Counterclaim (22 November 2017), [133].

[392] [1955] HCA 64; (1955) 94 CLR 216.

[393] Alati v Kruger [1955] HCA 64; (1955) 94 CLR 216 at 223-4.

[394] [2015] VSC 724; (2015) 304 FLR 199.

[395] [1955] HCA 64; (1955) 94 CLR 216 at 223-4.

[396] [2001] NSWSC 14, [428]-[429].

[397] See Closing Submissions of the Defendants to Counterclaim (HGR Parties) (24 April 2018), Schedule, [307], [310]; and see above, [179]. On interest: Krakowski and Krawoski v Trenorth Ltd (SCV, McDonald J, 7 May 1996).

[401] See [195]-[199] in these reasons.

[402] Fourth Further Amended Counterclaim (17 November 2017), [116(c)]. The generality of this question is not affected by questions (1), (2), (3), (4), (5), (6), (7) and (8).

[403] Munchies Management v Belperio [1989] FCA 413; (1988) 84 ALR 700 at 714; and see above, [190], [191].

[404] Further, Mr Wilson's claim for damages is barred by s 82(2) of the Trade Practices Act 1974 (Cth): the claim was filed 3 February 2015 in the Second Further Amended Counterclaim (3 February 2015).

[405] Fourth Further Amended Counterclaim (17 November 2017), [116E]. The generality of this question is not affected by questions (1), (2), (3), (4), (5), (6), (7) and (8).

[406] Maguire v Makaronis [1997] HCA 23; (1997) 188 CLR 449 at 466-7; Buttonwood Nominees Pty Ltd v Sundowner Minerals NL (1986) 10 ACLR 360 at 362; Nguyen v Phan [2015] VSC 634, [781].

[408] See Closing Submissions of the Defendants to Counterclaim (HGR Parties) (24 April 2018), Schedule, [243], [259].

[409] See Closing Submissions of the Defendants to Counterclaim (HGR Parties) (24 April 2018), Schedule, [294], [296].

[410] See above, [151]-[155].

[411] See Closing Submissions of the Defendants to Counterclaim (HGR Parties) (24 April 2018), Schedule, [257]; Transcript, 372, 394, 395; Geer Statement, [289]; Gorr Statement, [95C].

[412] Letter from Steven Foale to Leon Gorr (2 May 2007); Deed of Separation and Release (13 July 2007), Recital D, cll 5, 9.

[413] See Closing Submissions of the Defendants to Counterclaim (HGR Parties) (24 April 2018), Schedule, [161]-[169]; and see above, [183].

[415] Munchies Management v Belperio [1989] FCA 413; (1988) 84 ALR 700 at 714.

[416] Defence to Fourth Further Amended Counterclaim (22 November 2017), [116G]; and see ss 5(1) and 27(b) of the Limitation of Actions Act 1958. Section 27(b) of the Limitation of Actions Act 1958 requires the essential elements of the cause of action to be concealed by conduct that is unconscionable: Levy v Watt (2014) 308 ALR 748 at 771-2 [83], [85]; Skrijel v Mengler [1998] VSC 71, [47]-[61]. The burden of proof rests upon Wilson. Section 21(1)(a) of the Limitation of Actions Act 1958 requires consciousness of wrongdoing: Seymour v Seymour (1996) 40 NSWLR 358 at 372; Honey v McLennan (1997) 18 WAR 384 at 392; Di Sante v Camando Nominees Pty Ltd [2000] VSC 211, [49]-[53], [58]; Wright Prospecting Pty Limited v Hancock Prospecting Pty Limited [2007] WASC 118, [54]-[56].

[417] Defence to Fourth Further Amended Counterclaim (22 November 2017), [116H]; and see Crawley v Short [2009] NSWCA 410; (2009) 262 ALR 654 at 678 [163]-[170]; and below, [220].

[418] See above, [71]-[118].

[419] See above, [175]-[178].

[420] Outline of Closing Submissions of the Plaintiff by Counterclaim (28 April 2018), [61]-[62].

[421] Byrnes v Kendle [2011] HCA 26; (2011) 243 CLR 253.

[422] Defence to Third Further Amended Counterclaim (28 April 2017), [79].

[423] Fourth Further Amended Counterclaim (17 November 2017).

[424] Outline of Closing Submissions of the Plaintiff by Counterclaim (28 April 2018), [61]-[76]; and see also [77]-[83] (in relation to sales proceeds where the same position, vis a vis Wilson applies).

[425] See ss 5(1) and 27(b) of the Limitation of Actions Act 1958. Section 27(b) of the Limitation of Actions Act 1958 requires the essential elements of the cause of action to be concealed by conduct that is unconscionable: Levy v Watt (2014) 308 ALR 748 at 771-2 [83], [85]; Skrijel v Mengler [1998] VSC 71, [47]-[61]. The burden of proof rests upon Wilson. Section 21(1)(a) of the Limitation of Actions Act 1958 requires consciousness of wrongdoing: Seymour v Seymour (1996) 40 NSWLR 358 at 372; Honey v McLennan (1997) 18 WAR 384 at 392; Di Sante v Camando Nominees Pty Ltd [2000] VSC 211, [49]-[53], [58]; Wright Prospecting Pty Limited v Hancock Prospecting Pty Limited [2007] WASC 118, [54]-[56].

[426] See Outline of Closing Submissions of the Plaintiff by Counterclaim (28 April 2018), [77]-[83].

[427] Closing Submissions of the Defendants to Counterclaim (HGR Parties) (24 April 2018), Schedule, [65]-[82].

[428] Closing Submissions of the Defendants to Counterclaim (HGR Parties) (24 April 2018), Schedule, [65]-[82]; Geer Statement, [94T]-[94AAD]; Palermo Statement, [171]-[241]; Taylor Statement, [142]-[144].

[429] See ss 5(1) and 27(b) of the Limitation of Actions Act 1958. Section 27(b) of the Limitation of Actions Act 1958 requires the essential elements of the cause of action to be concealed by conduct that is unconscionable: Levy v Watt (2014) 308 ALR 748 at 771-2 [83], [85]; Skrijel v Mengler [1998] VSC 71, [47]-[61]. The burden of proof rests upon Wilson. Section 21(1)(a) of the Limitation of Actions Act 1958 requires consciousness of wrongdoing: Seymour v Seymour (1996) 40 NSWLR 358 at 372; Honey v McLennan (1997) 18 WAR 384 at 392; Di Sante v Camando Nominees Pty Ltd [2000] VSC 211, [49]-[53], [58]; Wright Prospecting Pty Limited v Hancock Prospecting Pty Limited [2007] WASC 118, [54]-[56].

[430] Oupan Resources Pty Ltd Financial Statements for Year Ended 30 June 1980; Oupan Resources Pty Ltd Financial Statements for Year Ended 30 June 1981; Oupan Resources Pty Ltd Financial Statements for Year Ended 30 June 1982; Oupan Resources Pty Ltd Financial Statements for Year Ended 30 June 1983; Oupan Resources Pty Ltd Financial Statements for Year Ended 30 June 1984; Oupan Resources Pty Ltd Financial Statements for Year Ended 30 June 1985; Oupan Resources Trust Trustee - Oupan Resources Pty Ltd - Financial Statements Year Ended 30th June 1993.

[431] Oupan Resources Trust Trustee - Oupan Resources Pty Ltd - Financial Statements Year Ended 30th June 1993, [14].

[435] Closing Submissions of the Defendants to Counterclaim (HGR Parties) (24 April 2018), Schedule [58(k)]-[58(n)]; and see above, [94].

[436] Geer Statement, [265]-[277].

[437] See ss 5(1) and 27(b) of the Limitation of Actions Act 1958. Section 27(b) of the Limitation of Actions Act 1958 requires the essential elements of the cause of action to be concealed by conduct that is unconscionable: Levy v Watt (2014) 308 ALR 748 at 771-2 [83], [85]; Skrijel v Mengler [1998] VSC 71, [47]-[61]. The burden of proof rests upon Wilson. Section 21(1)(a) of the Limitation of Actions Act 1958 requires consciousness of wrongdoing: Seymour v Seymour (1996) 40 NSWLR 358 at 372; Honey v McLennan (1997) 18 WAR 384 at 392; Di Sante v Camando Nominees Pty Ltd [2000] VSC 211, [49]-[53], [58]; Wright Prospecting Pty Limited v Hancock Prospecting Pty Limited [2007] WASC 118, [54]-[56].

[439] Geer Statement, [344A]; May Statement, [38]; Gorr Statement, [126].

[440] Taylor Statement, [116]-[117].

[441] Taylor Statement, [122], [126]. The work paper is Waigani Pty Ltd atf the Deer Park Trust Work Paper.

[443] Taylor Statement, [132]-[133].

[444] Defence to Fourth Further Amended Counterclaim (22 November 2017), [83A], [83B].

[445] Section 21(1)(a) of the Limitation of Actions Act 1958 requires consciousness of wrongdoing: Seymour v Seymour (1996) 40 NSWLR 358 at 372; Honey v McLennan (1997) 18 WAR 384 at 392; Di Sante v Camando Nominees Pty Ltd [2000] VSC 211, [49]-[53], [58]; Wright Prospecting Pty Limited v Hancock Prospecting Pty Limited [2007] WASC 118, [54]-[56].

[446] Section 27(b) of the Limitation of Actions Act 1958 requires the essential elements of the cause of action to be concealed by conduct that is unconscionable: Levy v Watt (2014) 308 ALR 748 at 771-2 [83], [85]; Skrijel v Mengler [1998] VSC 71, [47]-[61]. The burden of proof rests upon Wilson.

[447] Crawley v Short [2009] NSWCA 410; (2009) 262 ALR 654 at 678 [163]-[170]; and see G E Dal Pont, Law of Limitation (LexisNexis Butterworths, Australia, 2016), 258-265 [13.1]-[13.16].

[448] See above, [189].

[449] Fourth Further Amended Counterclaim (17 November 2017), [81].

[450] See, for example, Deutsch v Deutsch [2011] VSC 345, [10]-[13]; Ying Mui v Frank Kiang Ngan Hoh (No 6) [2017] VSC 730, [570]-[584].

[451] Outline of Closing Submissions of the Plaintiff by Counterclaim (28 April 2018), [106]-[112].

[452] Referring to Miller v Cameron [1936] HCA 13; (1936) 54 CLR 572 at 580.

[453] See above, [119]-[149].

[454] See above, [167]-[170].

[455] See above, [171]-[173].

[456] Fourth Further Amended Counterclaim (17 November 2017).

[457] See Outline of Closing Submissions of the Plaintiff by Counterclaim (28 April 2018), [82].

[458] Taylor Statement, [114]-[115].

[461] Taylor Statement, [114]-[115].

[463] Geer Statement, [344A]; Gorr Statement, [126]; May Statement, [38].

[464] Taylor Statement, [116]-[117].

[465] Taylor Statement, [122], [126].

[466] Taylor Statement, [132]-[133].

[467] Waigani's financial statements are listed at Taylor Statement, [94]; Palermo Statement, [133].

[468] Defence to Fourth Further Amended Counterclaim (22 November 2017), [52A], [52B]; see Question 10(b); and see Crawley v Short [2009] NSWCA 410; (2009) 262 ALR 654 at 678 [163]-[170]; and above, [209].

[469] Section 21(1)(a) of the Limitation of Actions Act 1958 requires consciousness of wrongdoing: Seymour v Seymour (1996) 40 NSWLR 358 at 372; Honey v McLennan (1997) 18 WAR 384 at 392; Di Sante v Camando Nominees Pty Ltd [2000] VSC 211, [49]-[53], [58]; Wright Prospecting Pty Limited v Hancock Prospecting Pty Limited [2007] WASC 118, [54]-[56].

[470] Section 27(b) of the Limitation of Actions Act 1958 requires the essential elements of the cause of action to be concealed by conduct that is unconscionable: Levy v Watt (2014) 308 ALR 748 at 771-2 [83], [85]; Skrijel v Mengler [1998] VSC 71, [47]-[61]. The burden of proof rests upon Wilson.

[471] Fourth Further Amended Counterclaim (17 November 2017), [50].

[472] See above, [213]-[219].

[473] Fourth Further Amended Counterclaim (17 November 2017), [23(c)].

[479] Deed of Name Change: "Southern Cross" to "Deer Park" Trust (19 April 1982).

[481] Transcript, 283; and see above, [34].

[482] Letter from Herbert Geer & Rundle to Wilson (25 January 1983).

[483] The HGR file entitled "Deer Park Trust" contains a unit certificate issued to Wilson.

[484] Income Tax Return for the Deer Park Trust for Year Ended 30 June 1985; Income Tax Return for the Deer Park Trust for Year Ended 30 June 1986.

[485] Document of Oupan Resources Pty Ltd (1:07PM on 30 June 1994).

[487] Geer Statement, [364]-[365].

[492] Wilson Statement, [23]; Deed of Name Change: "Southern Cross" to "Deer Park" Trust (19 April 1982).

[493] Deed of Name Change: "Southern Cross" to "Deer Park" Trust (19 April 1982); Transcript, 281-2. Daydeb Nominees Pty Ltd apparently signed as a unitholder in its capacity as trustee for the Geer Wentworth Trust and as trustee for the Keith Trust, see Geer Statement, [204].

[494] Geer Statement, [197]-[206].

[495] Letter from Herbert Geer & Rundle to Wilson (25 January 1983); Deer Park Trust Unit Certificate of William Robert Wilson (19 April 1982).

[496] See ss 5(1) and 27(b) of the Limitation of Actions Act 1958. Section 27(b) of the Limitation of Actions Act 1958 requires the essential elements of the cause of action to be concealed by conduct that is unconscionable: Levy v Watt (2014) 308 ALR 748 at 771-2 [83], [85]; Skrijel v Mengler [1998] VSC 71, [47]-[61]. The burden of proof rests upon Wilson. Section 21(1)(a) of the Limitation of Actions Act 1958 requires consciousness of wrongdoing: Seymour v Seymour (1996) 40 NSWLR 358 at 372; Honey v McLennan (1997) 18 WAR 384 at 392; Di Sante v Camando Nominees Pty Ltd [2000] VSC 211, [49]-[53], [58]; Wright Prospecting Pty Limited v Hancock Prospecting Pty Limited [2007] WASC 118, [54]-[56].

[497] Transcript, 140; Joint Venture Agreement regarding Longforest Road Property (1 January 1980).

[498] Joint Venture Agreement regarding Longforest Road Property (1 January 1980); Transcript, 129-30.

[500] See Outline of Opening Submissions of the Defendants to Counterclaim (HGR Parties) (8 May 2017), [77], fn 118.

[501] Herbert, Geer & Rundle File (Completed No 55712, opened 14 February 1984); Transcript, 439; see also Geer Statement, [154]-[159].

[503] See Closing Submissions of the Defendants to Counterclaim (HGR Parties) (24 April 2018), Schedule, [348]-[427].

[504] Outline of Closing Submissions of the Plaintiff by Counterclaim (28 April 2018), [28]-[31].

[509] Confirmation of Manning Land being held for Oupan Resources Pty Ltd (19 December 1991); Certificate by Independent Solicitor (16 October 1992).

[510] See Closing Submissions of the Defendants to Counterclaim (24 April 2018), [187]-[189]; and see Schedule, [348]-[427]; cf Outline of Closing Submissions of the Plaintiff by Counterclaim (28 April 2018), [113]-[122] which are unresponsive in substance with respect to the matters raised and relied upon in the HGR parties' submissions.

[511] Registrar of the Accident Compensation Tribunal v Federal Commissioner of Taxation (1993) 178 CLR 145 at 166.

[512] Garrett v L'Estrange [1911] HCA 67; (1911) 13 CLR 430 at 434.

[513] Korda v Australian Executor Trustees (SA) Ltd [2015] HCA 6; (2015) 255 CLR 62 at 72 [10]; Calverley v Green [1984] HCA 81; (1984) 155 CLR 242.

[515] Proposed Organisation Structure for Oupan (4 November 1988); Oupan Resources Trust Trustee - Oupan Resources Pty Ltd - Financial Statements Year Ended 30th June 1993, "Subdivisional Land for Resale & Work in Progress"; Oupan Resources Trust - Trustee - Oupan Resources Pty Ltd - Financial Statements - Year Ended June 30 1994; PwC Debt Clearance Plan for Oupan Resources Pty Ltd and Alice Roof Tiles Aust Pty Ltd, 8; Transcript, 347; Oupan Resources Pty Ltd - Minutes of Meeting of Directors (24 September 1997); Transcript, 354.

[516] Confirmation of Manning Land being held for Oupan Resources Pty Ltd (19 December 1991).

[517] See Closing Submissions of the Defendants to Counterclaim (HGR Parties) (24 April 2018), Schedule, [348]-[427].

[518] Statutory Declaration of William Robert Wilson (13 July 2007).

[519] Byrnes v Kendle [2011] HCA 26; (2011) 243 CLR 253 at 273 [53], 289 [113].

[520] Defence to Fourth Further Amended Counterclaim (22 November 2017), [95A].

[521] See ss 5(1) and 27(b) of the Limitation of Actions Act 1958. Section 27(b) of the Limitation of Actions Act 1958 requires the essential elements of the cause of action to be concealed by conduct that is unconscionable: Levy v Watt (2014) 308 ALR 748 at 771-2 [83], [85]; Skrijel v Mengler [1998] VSC 71, [47]-[61]. The burden of proof rests upon Wilson. Section 21(1)(a) of the Limitation of Actions Act 1958 requires consciousness of wrongdoing: Seymour v Seymour (1996) 40 NSWLR 358 at 372; Honey v McLennan (1997) 18 WAR 384 at 392; Di Sante v Camando Nominees Pty Ltd [2000] VSC 211, [49]-[53], [58]; Wright Prospecting Pty Limited v Hancock Prospecting Pty Limited [2007] WASC 118, [54]-[56].

[522] Defence to Fourth Further Amended Counterclaim (22 November 2017), [104]; and see Crawley v Short [2009] NSWCA 410; (2009) 262 ALR 654 at 678 [163]-[170]; and see above, [209].

[523] [2000] HCA 63; (2000) 205 CLR 337.

[524] Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337 at 344 [6].

[525] Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337 at 345 [8].

[526] See AJH Lawyers Pty Ltd v Careri [2011] VSCA 425; (2011) 34 VR 236 at 241-3 [17]-[25]; Michael Wilson & Partners Limited v Nicholls [2011] HCA 48; (2011) 244 CLR 427 at 437-8 [31]-[33]; Isbester v Knox City Council [2015] HCA 20; (2015) 255 CLR 135 at 146 [20]-[23].

[527] Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337 at 345 [8].

[529] British American Tobacco Australia Limited v Gordon [2007] NSWSC 109, [94].

[530] Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337 at 345 [7].

[531] Smits v Roach [2004] NSWCA 233; (2004) 60 NSWLR 711 at 736 [35].

[532] Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337 at 345 [7].

[533] Builders Registration Board of Queensland v Raubner (1983) 47 ALR 55 at 69.

[534] Webb v The Queen [1994] HCA 30; (1994) 181 CLR 41 at 51-52, 55, 57, 76, 87-8; Concrete Pty Ltd v Parramatta Design and Developments Pty Ltd [2006] HCA 55; (2006) 229 CLR 577 at 582 [4], 609-10 [110]-[112], 612 [120], 635-6 [177]; Vakauta v Kelley [1989] HCA 44; (1989) 167 CLR 568 at 584-5; British American Tobacco Australia Limited v Gordon [2007] NSWSC 109, [63].

[535] Webb v The Queen [1994] HCA 30; (1994) 181 CLR 41 at 52.

[536] S & M Motor Repairs Pty Ltd v Caltex Oil (Australia) Pty Ltd (1988) 12 NSWLR 358 at 369; British American Tobacco Australia Limited v Gordon [2007] NSWSC 109. This was the approach taken in QBH Commercial Enterprises Pty Ltd v Dalle Projects Pty Ltd (No 2) [2018] VSC 231.

[537] Webb v The Queen [1994] HCA 30; (1994) 181 CLR 41 at 74.

[538] Dovade Pty Ltd v Westpac Banking Group [1999] NSWCA 113; (1999) 46 NSWLR 168.

[541] Transcript, 263, 269, 282, 303, 317, 323, 357, 436.

[551] Transcript, 1073-4; Jones v National Coal Board [1957] EWCA Civ 3; [1957] 2 QB 55 at 64.

[552] Jones v National Coal Board [1957] EWCA Civ 3; [1957] 2 QB 55 at 64.

[554] Herbert, Geer & Rundle File (Completed No 55712, opened 14 February 1984); the particular agreement being Joint Venture Agreement regarding the Manning Land (November 1985).

[556] Transcript, 610. This question was repeated in the same terms later, see Transcript, 611, 612-3.

[557] Transcript, 430-1; see also, 1086-7.

[583] Transcript, 656-7, 733, 781-2, 821-2.