Plaintiff v Defendant

2 The plaintiff, Paul Groom, lives in the Olinda property. He says that the defendant should not be allowed to sell it. Rather, he says, the Court should require the defendant to transfer the property (subject to the mortgage) to him. He relies on matters said to arise from an alleged 'separation agreement' claimed to have been made, or finalised, on or about 11 September 2009. He says that the parties to that agreement were, or included, himself, one Thea Groom - to whom he was then married and with whom he had had a lengthy personal and business relationship and to whom he remains close - and the defendant company as the trustee of the Leafbusters Trust. The alleged separation agreement is said by the plaintiff to have affected, among other things, entitlements relating to a substantial roof gutter protection business that was being conducted, at that time, by the defendant company as trustee of the Leafbusters Trust. The business, the defendant company and the Leafbusters Trust were controlled from time to time by Paul and Thea Groom or by one or other of them. The 'separation agreement' is also said to have affected entitlements to 19 real properties, including the Olinda property, that, over the previous 13 years or so, the Grooms, acting together, had caused to be acquired either in the name of one or other or them or in the name of some entity associated with them.

3 However, the plaintiff does not sue in contract. His initial claim as pleaded[2] was to the effect that the alleged separation agreement gave rise to an express bare trust of the Olinda property in his favour, with the defendant company said to be the trustee. Then, in his filed reply and defence to counterclaim,[3] he further alleged that he had taken various steps pursuant to the alleged separation agreement; and he contended that, as a result, it would be unconscionable for the defendant company to deny the efficacy of the alleged separation agreement or to deny the claimed bare trust,[4] and that the defendant company was estopped 'by convention or representation' from denying that it held the Olinda property as bare trustee for him.[5] In the plaintiff's written outline of opening submissions, this latter claim was said to be based on 'the principles of a common intention constructive trust'.[6] The outline then set forth what it described as an alternative contention. This was to the effect that Paul had acted to his detriment in reliance on the alleged separation agreement by taking the abovementioned steps that had been referred to in the reply and defence to counterclaim and to the effect that, in consequence, the Court should impose a constructive trust in the plaintiff's favour over the Olinda property 'by application of the principles of proprietary estoppel'.[7] In his closing written submissions, counsel for the plaintiff appeared to run together his 'common intention constructive trust' claim and his 'proprietary estoppel' claim.[8] That this was counsel's intended approach was confirmed when he commenced his closing oral submissions. At that point, counsel abandoned the plaintiff's express trust claim. He accepted that it must fail for want of satisfaction of the writing requirements in s 53(1)(b) of the Property Law Act 1958.[9] Counsel proceeded immediately to say that, because of the abandonment of the express trust claim, it became necessary 'to focus essentially upon the subsequent acts of Paul Groom in reliance upon the rights conferred upon him under [the alleged separation agreement]'.[10] At later stages of his closing oral submissions, counsel for the plaintiff affirmed three more times that his client's claim now depended entirely on the alleged acts of detrimental reliance, being acts said to have commenced in 2009 (after the alleged finalisation, on or about 11 September 2009, of the alleged separation agreement) and to have continued until 2014 or 2016.[11]

4 Mr Groom bears the onus of proof in this case. On the evidence, I am not satisfied that the requirements for a common intention constructive trust (by way of proprietary estoppel) have been established. The centrepiece of the plaintiff's case is a photocopy of a rough, informal, unsigned document of three pages (one page being dated 11 September 2009), of doubtful status and doubtful meaning, which is said to encapsulate the 'separation agreement'. The defendant submits that I should not be satisfied that the document is authentic. With some hesitation, I am prepared to accept the authenticity of the document. However, the determinative effect which the plaintiff would seek to give to the document, and to the 'separation agreement' generally, is insufficiently supported by the actual terms of the document or by the other evidence in this case. Moreover it is squarely contradicted by some of the admitted subsequent conduct of the persons and entities concerned. The plaintiff has not satisfied me that the document, or the alleged 'separation agreement' itself, was really intended to commit, or should be taken to have committed, Thea Groom, much less the defendant company, to a new, permanent regime in relation to the control and the true beneficial ownership of the Olinda property (and the other relevant assets). I am not satisfied that anything that was agreed at that time was sufficiently clear or sufficiently definite for the purposes of the equitable claim now made by the plaintiff. Even if, contrary to my view, the subsequent conduct, to which I have referred, of the persons and entities concerned does not gainsay the prior making of sufficiently clear and definite commitments or promises of the kind alleged by the plaintiff, nevertheless, that conduct tends strongly to indicate, at least, that any arrangements made as part of the 'separation agreement' were soon departed from. Accordingly, any such arrangements should not be accorded the significance which the plaintiff claims for them in this proceeding. Further, and as a related matter, I am not satisfied that the plaintiff has incurred any or any sufficient detriment as a result of any or any reasonable reliance on the alleged separation agreement.

5 For those (summarily stated) reasons, the plaintiff's case cannot be upheld.

6 Further, even if, in equity, contrary to my view, the 'separation agreement' did give rise to some binding and persisting obligation on the part of the defendant company towards the plaintiff in respect of the Olinda property, nevertheless, as will be seen, any such obligation was, according to uncontradicted evidence given by Thea Groom (who was called as a witness by the plaintiff himself), conditional on the defendant company first paying the mortgage remaining on that property. That condition has not been met and it cannot ever be met hereafter, because the defendant company is in liquidation and the Olinda property would need to be sold by the defendant company to enable it to pay its remaining debts. For this additional reason, it would not be appropriate to require the defendant company to transfer the property to the plaintiff.

7 The plaintiff's claim in this proceeding falls to be dismissed and the defendant is entitled to consequential relief on its counterclaim.

8 The parties were not in dispute concerning the applicable equitable principles. The plaintiff relied on the following passage from the decision of Macaulay J in Mould v Canale:[12]

Principles of proprietary estoppel

In Donis v Donis Nettle JA (Maxwell ACJ and Ashely JA agreeing) expressed the underlying principle for proprietary estoppel in the following terms:

... As it is put in Meagher, Gummow and Lehane's Equity, the fraud of the promisor and the action of the complainant are sufficient to produce equity's intervention where it would otherwise decline interest. The underlying principle is that conduct of the promisor in engaging the complainant to change his or her position to their detriment on the footing that the promised property will be theirs, when acted upon by the complainant, creates an equity which binds the promisor to make good the expectation...

Where the expectation that is encouraged is an interest in property, the estoppel is not restricted by the minimum equity to do justice. The remedy relates to the understanding of the parties and the expectation that has been encouraged. Prima facie the equitable obligation is fulfilled by making good the promise which must be made good in conscience. Nevertheless, 'the prima facie position will yield to individual circumstances' so that -

...before granting the relief the court is required to consider all of the circumstances of the case, including the possible effects on third parties, and to avoid going beyond what is required for conscientious conduct [or] would do injustice to others... The requirement must be approached as part of a broad inquiry as to whether departure from a promise would be unconscionable in all the circumstances.

In deciding the form and scope of the constructive trust, the Court looks to the circumstances of the case to decide how equity can be satisfied. Where the subject of the representation is an interest in land this gives rise not just to a personal right to sue but an interest in the land itself.

Kaye J considered the principles of proprietary estoppel in Harrison v Harrison. Adapting the summary formulated by his Honour in that case, to establish proprietary estoppel, Ben must show that:

(a) the owner made promises and undertakings to him that they would confer on him an interest in property;

(b) he acted in reliance on those promises;

(c) he acted reasonably in reliance on the promises and undertakings made to him by the owner;

(d) the owner knew or intended that Ben would rely on their promises and undertakings; and

(e) he acted to his detriment on the basis of the undertakings and promises made to him by the owner.

The authorities show that on two questions of relevance to the facts in this case, the approach in equity is somewhat more flexible than the approach at law. The first matter concerns the question of the certainty or specificity of the promise or representation relied upon. The second concerns agency or the authority of a representor to bind the owner of property by way of estoppel.

In equity, a promise may form the basis of a proprietary estoppel claim even though not sufficiently certain or specific to satisfy the requirements of an enforceable contract at law. It was put by Dodds-Streeton JA in Accurate Financial Consultants as follows:

Where necessary to inhibit unconscionability, equity will construe a representation robustly in context, to determine its meaning as reasonably understood by the addressee. In my opinion, the standard of certainty, clarity and completeness required of the representation cannot sensibly be determined in isolation from other elements of proprietary estoppel in the circumstances of each particular case.

As to agency, in equity a representation will bind an entity where the person making the representation has ostensible, apparent or implied authority, as a person 'dealing with the matter', or who 'in the ordinary course of business...ordinarily acted for' the entity, or who was 'entrusted' by the entity with the ability to make representations.

In Northey v Bega Valley Shire Council, after surveying authorities on this matter, Brereton J concluded by saying that the:

...cases show that, in this field, where there is a more flexible approach to the concept of agency, the true issue is whether the defendant is so implicated in the plaintiff's assumption and reliance as to make it unconscionable for the defendant to deny it (citations omitted)

9 The passage quoted above reflects largely accepted principles,[13] although the elements have been set out in different ways in the authorities.[14] The different formulations reflect the underlying purpose of the doctrine of estoppel, that is, to avoid a detriment by compelling the party who has created an assumption or expectation, on which, reasonably, the innocent party has acted, to adhere to it.[15]

10 In Mould v Canale itself, it was accepted that a promise that had been made by a farmer about the future of the farm was to be attributed to the family company that was the registered proprietor of the land in question. In the present case, the plaintiff would seek to attribute to the corporate defendant, as the trustee of a discretionary trading trust, an obligation in equity under the alleged separation agreement. He seeks such a result on the basis that Thea was the sole director of the company at the relevant time, and that Thea was, in those circumstances, the sole controller of the Leafbusters Trust at that time. As will be seen, the plaintiff describes Thea as the 'alter ego' of the company. However, in my view, the matter is not so simple. A sole controller of a company who undertakes to do something in relation to the company is not necessarily to be regarded as speaking for and on behalf of the company, or to be committing the company itself to anything.[16]

11 However, it is unnecessary in this case to wrestle with such nice legal questions. This is because, in my view, Mr Groom's case comprehensively fails on the evidence and the facts. So, for example, it is not necessary to be concerned about the precise degree of clarity or certainty that may be required before equity will enforce a promise or assurance in this field.[17] Nor is it necessary to address the interrelation or overlap between common intention constructive trusts and equitable estoppel.[18] Likewise, it is unnecessary to address the question that was the subject of some discussion at the hearing (and of a post-hearing supplementary note from the defendant)[19] namely, in what circumstances the presence of third party interests (such as the interests of unsecured creditors of an insolvent corporate defendant) might need to be taken into account. It is sufficient for present purposes to note, and I understood it to be common ground, that proprietary estoppel and common intention constructive trusts share the aim of frustrating unconscionable conduct.[20]

12 The parties prepared a Court Book of 3,713 pages. They agreed upon the particular documents within it that should be treated as evidence in the case. Those documents comprise about two thirds of the Court Book. They have been received as evidence in accordance with the parties' agreement.[21]

13 The material before the Court also includes a joint, mainly agreed, basic chronology of events (of four pages) that was filed before trial.[22]

14 In addition, there is a jointly prepared document (of seven pages) which (among other things) lists the 19 properties referred to above.[23] It identifies, for each of those 19 properties, the property address, the registered proprietor (except in one case where the registered proprietor is said to be not known),[24] the date of registration and the beneficial owner (as agreed or, in the case of a dispute, as claimed). The document also includes comments about each property and references to material in the Court Book relating to the properties, including references to caveats, financial statements and tax returns. The list also includes a reference to a twentieth property that was acquired after the alleged separation agreement, namely a house property in Wattle Road, Hawthorn, that was registered in the name of Thea Groom in May 2013.[25]

15 The jointly prepared document also contains an agreed list of the plaintiff's directorships of, and shareholdings in, five relevant companies, including the defendant company, from time to time,[26] as indicated in ASIC records.[27]

16 In addition, the parties are agreed upon another document which contains two lists: first, a list of certain payments of money which, according to the plaintiff's bank statements, were made to the plaintiff by the defendant between 7 September 2012 and 6 June 2014; and, second, a partly overlapping list of payments of money which, according to the defendant's annual general ledger, were made to the plaintiff by the defendant between 25 March 2010 and 21 February 2014.[28]

17 Counsel for the plaintiff called three witnesses - the plaintiff (Mr Paul Groom) himself, Mr Con Caracoussis and Ms Thea Groom, in that order. Mr Caracoussis is an accountant who has acted for the Grooms and their companies for about 30 years. Each witness gave evidence in person in the court room. Although outlines of evidence had been provided in advance, each witness gave evidence-in-chief orally and each was cross-examined. Mr Groom and Mr Caracoussis were re-examined, but Thea Groom was not.

19 Counsel for the defendant contended in final submissions that the Court should treat the evidence of both Paul and Thea Groom with real caution; and that their oral evidence on 'critical issues' in the case should not be accepted.[29]

20 As to Paul Groom in particular, counsel for the defendant submitted that the evidence disclosed a pattern of conduct on his part - being mainly conduct engaged in prior to the commencement of this litigation - of saying whatever he perceived would advance his interests, regardless of the truthfulness or frankness of what he was saying. Counsel submitted that this conduct was coupled with a demonstrable lack of insight, and a flawed ability to distinguish right from wrong.[30] Counsel also submitted that the plaintiff had a poor recollection of critical matters. Counsel advanced several claimed examples of these things. I will return to some of the claimed examples in the course of dealing in more detail with the facts. Ultimately, counsel for the defendant submitted that Paul Groom was an unreliable witness whose evidence should not be accepted unless it was corroborated by an unimpeachable contemporaneous document or other objective and reliable evidence.[31] As will be seen, I accept that Paul's prior conduct was troubling in several respects and that his evidence was far from fully reliable.

21 Mr Caracoussis was subpoenaed by the plaintiff to give evidence at the hearing. He is an accountant with over 40 years' experience. He is the principal of an Adelaide-based accounting practice. Counsel for the defendants submitted that Mr Caracoussis should be accepted as a witness of truth.[32]

22 As to Thea Groom, counsel for the defendant contended that the Court should find her an unreliable witness. On several occasions when giving evidence she became quite emotional, particularly in relation to events that occurred during a period of time that had apparently been deeply troubling for her. Counsel for the defendant submitted that Thea had difficulty viewing these matters objectively. He also raised several instances of Thea's alleged pre-litigation conduct said to diminish her credit, together with several suggested examples of Thea seeking to assist Paul Groom, in a manner said to be inappropriate, with the prosecution of this case. Again, I will return to those matters in due course. Counsel for the defendant made the same ultimate submission in relation to Thea Groom's evidence as he had made in relation to Paul Groom's evidence, namely that the Court should not accept it unless it was corroborated by an unimpeachable contemporaneous document or other objective and reliable evidence.[33] Once again, as will be seen, I accept that Thea Groom's pre-litigation conduct was unsatisfactory in various respects and that her evidence was far from fully reliable.

The background to the alleged separation agreement of 2008-2009: the Grooms; the Leafbusters business; the relevant companies, trusts and properties; the borrowings

23 I turn now in more detail to the circumstances that existed prior to the alleged separation agreement of 2008-2009. What follows in this section is largely agreed or undisputed or emerges from unchallenged oral evidence or unchallenged documentary material.

24 Paul Groom was born in the United Kingdom in 1962.[34] After coming to Australia, he grew up in Geelong.[35] He left school in Year 11 and joined the Australian Army.[36] Next he was employed in the management of supermarkets. Later he became a sales representative, working initially for Cadbury and then for Allied Grocery Products and later for Unilever. Unilever distributed various kinds of supermarket items. Paul's employment with Unilever took him to Adelaide.[37]

25 While living in Adelaide in 1991, Paul met Thea.[38] She had been born Theofani Tsioris in Greece in 1955. Her original married name was Thea Rillotta. Her marriage had ended. When Paul and Thea met, it was, as Paul put it: 'Oh, where have you been?'.[39] They 'very quickly' began living together as a couple.[40]

26 Around this time, Paul noticed that the roof gutters of his house would frequently become blocked with leaves from trees. He says that he came up with an idea for reducing the leaf litter problem. It involved using mesh as an extension of the roof to protect the gutters. Paul says that it was his own original idea, although he acknowledges that there were others who had similar ideas.[41] Paul told Thea about his gutter protection idea. Neither had any significant financial assets at that stage. Nevertheless, they began a business in Adelaide to exploit the idea.[42] The business was originally called Leafshield.

27 As at 1993, Caracoussis & Co were Thea's accountants. Thea introduced Paul to that firm, and Paul became a client too. In 1993, Caracoussis & Co arranged for the incorporation of the company that is now the defendant. It was so incorporated on 19 February 1993 under the name Sun Marketing (Aust) Pty Ltd ('Sun Marketing'). On the same day, the accountants also caused to be established, by deed, a trust entitled the Thea Rillotta and Paul Groom Settlement, with Sun Marketing appointed as the trustee. This was a discretionary trust. The terms of the trust included a power of capital distribution to beneficiaries. Paul and Thea were each named beneficiaries of the trust. It was the same trust as the one referred to above as the Leafbusters Trust. The business commenced to be conducted by this vehicle.[43]

28 In 1993, Paul and Thea became engaged to be married, but kept putting off the wedding.[44] They did eventually marry, but not until 2008 (see further below).

29 In about 1995, Paul and Thea moved to Victoria. Paul formed the view that the name of the gutter protection business should be changed to something more forceful and memorable. He came up with 'Leafbusters'. The business was renamed accordingly. A new logo was commissioned. On 9 November 1995 Sun Marketing changed its name to Leafbusters Pty Ltd.[45] For the time being, the trust deed remained unaltered.

30 The business had begun in a small way, but over the years it became 'very successful'.[46] According to Paul's own evidence, he (Paul) was 'like' the 'managing director'.[47] He went out and sold the products. Thea looked after all the 'admin side' and also 'some of the marketing side'. Eventually, the business built up sales teams and installers.[48] Despite the move to Victoria, Paul and Thea continued to retain Caracoussis & Co as their accountants.

31 Between about 1996 and about 2008, as already mentioned, Paul and Thea, acting together, caused 19 real estate properties to be acquired, progressively, in their own names or in the names of entities associated with them. Two were shops in Olinda. The rest were residential properties. Most were in rural or seaside locations. Some were in the Dandenongs. The properties were often acquired on 100% finance. Two of the properties, namely a house in Pyramid Hill and a block of four units in Traralgon, were held in Paul's name as registered proprietor, apparently without being subject to a trust. One of them - 1411 Mt Dandenong Tourist Road, Mt Dandenong - was held in Thea's name as registered proprietor, also apparently without being subject to a trust. Thea was the registered proprietor of three other properties as trustee of a trust (the Theofani Tsioris Trust). Each remaining property was held, as registered proprietor, by one or other of four additional companies controlled by the Grooms, most often subject to some additional settlement or trust (see further below). Each such structure was set up by and on the advice of Caracoussis & Co.

32 After moving to Victoria in or about 1995, Paul and Thea lived first in Geelong and then in Diamond Creek. As mentioned above, the property in question, the Olinda property, was acquired by the defendant company in 1996 as an asset of the defendant company as trustee of the Leafbusters Trust. At some stage thereafter, Paul and Thea lived in the Olinda property for a couple of years. Then they moved to the property at 1411 Mount Dandenong Tourist Road, which was a more valuable property with a larger house. The business began to be conducted from one of the shops in Olinda that had been acquired.

33 Throughout the period between 19 February 1993 and 19 March 2002 Paul and Thea were both directors of the defendant company. On 19 March 2002 Thea resigned as a director. The evidence does not reveal the reason or reasons for her doing so. In any event, between 19 March 2002 and 1 October 2008, Paul Groom was the sole director of the defendant company. Then, from 1 October 2008 until 26 February 2009, Paul and Thea were both, again, directors of the company. From 26 February 2009 until the company commenced to be wound up in insolvency on 30 January 2017, Thea was the sole director. From time to time, the two shares in the company have been held either by Paul alone, or by Paul and Thea holding one share each, or (since 26 February 2009) by Thea alone.

34 As indicated above, the Grooms had controlling interests from time to time in four other relevant companies. LBI Holdings Pty Ltd had a role as part of the Leafbusters gutter protection business, mainly holding intellectual property rights associated with that business. It was also a joint registered proprietor of one of the abovementioned 19 properties.[49] Lenvale Investments Pty Ltd was the other joint proprietor of that property. It also was the joint registered proprietor (with Thea Groom) of one other such property.[50] Polymesh Australasia Group Pty Ltd operated an associated gutter protection business involving a lower value product. In addition, it was the joint proprietor (with Thea Groom) of another of the properties.[51] Finally, Boof Pty Ltd was the registered proprietor of at least seven of the properties.[52] As at 2008, each of these four companies had two issued shares, one of which was held by Paul and one by Thea. Paul and Thea were each one of two directors of each of the four companies. As is also indicated above, most of the operations and holdings of these four Groom-controlled companies were subject to some trust or settlement that was also controlled by one or other or both of the Grooms.[53]

35 For some time up to 2007, the Grooms and entities associated with them, including the defendant company as trustee of the Leafbusters Trust, were in receipt of loan finance from the National Australia Bank.[54] By that year, they needed to arrange refinancing for the Leafbusters business. They had been in dispute with a competitor called Four Seasons Gutter Protection. This involved very costly litigation in the Federal Court.[55] As a result, the Grooms (and/or entities they controlled) owed their then solicitors, Cornwall Stoddart, $250,000.[56] According to Paul, the litigation 'nearly cost us the business'.[57] All of their work 'almost got totally wiped out'.[58] They needed 'major financing' to get out.[59] They consulted a finance broker, Kim Kershaw. He approached the ANZ Bank on their behalf. The bank was prepared to lend, but only on the security of 'the houses'.[60] And, according to the bank's valuers, the loan-to-value-ratio (LVR) would be 95% (whereas some years previously the LVR had been 24%).[61] In those circumstances, the ANZ Bank required, and took, cross-collateralised security across all of the real properties owned or controlled by the Grooms, except for three properties that were mortgaged to (or through) Wizard Home Loans Pty Ltd. The security taken by the ANZ Bank included the property now in question, the Olinda property, which, as already mentioned, was an asset held in the name of the defendant company as registered proprietor and as trustee of the Leafbusters Trust. Like the other relevant properties, the Olinda property was made the subject of a first ranking mortgage to the bank. The mortgage of the Olinda property was registered on 17 April 2007. The ANZ refinancing package as a whole was nominated to last for a period of five years. So, as at 2008, the real properties were heavily mortgaged, most to the ANZ Bank and a few to (or through) Wizard Home Loans Pty Ltd.

The plaintiff's overarching contentions about the alleged separation agreement of 2008-2009 and its aftermath

36 Although the plaintiff has now abandoned his express trust claim, the arrangements said to have been made in 2008 and 2009 relating to his alleged separation from Thea Groom remain at the centre of what is left of his case. Counsel for the plaintiff invites the Court to find that Paul and Thea separated 'permanently' in 2008 or 2009;[62] and that they made a 'separation agreement', quite complex in its terms, that was intended to be 'binding' as between themselves.[63] Counsel submits that the alleged separation agreement is also to be regarded, in equity, as involving a promise by the defendant company, as trustee of the Leafbusters Trust, to transfer the Olinda property to the plaintiff.[64] Finally, counsel seeks a finding that Paul acted to his detriment in (reasonable) reliance on the alleged separation agreement.[65]

The more detailed picture, as painted by the plaintiff, of the alleged separation agreement and its aftermath

37 In his closing written submissions, counsel for the plaintiff invites the Court, by reference to the pieces of evidence identified below, to make findings of fact relating to the alleged separation agreement and its aftermath as indicated in the following paragraphs of this section of this judgment.[66]

38 First, counsel submits that the Court should accept that Paul and Thea decided to separate, as husband and wife, in about August 2008;[67] and that they commenced discussions, at around the same time, as to how they would separate their financial affairs.[68]

39 Counsel notes, as is common ground, that on 26 February 2009, Paul resigned as a director of the defendant company, and transferred his sole share in it to Thea.[69]

40 As the plaintiff's counsel would have it, Paul and Thea reached agreement in September 2009 - they agreed upon the gross value of the assets under their control, the amount of debt relating to those assets, and the division of those assets between them.[70]

41 Counsel contends that the separation agreement should be found to be evidenced in writing,[71] by the abovementioned rough photocopied 3-page document, being the document which appears at pages 66-68 of the Court Book.[72] He observes that that document is complicated, dealing with many assets (including all of the real property assets described above, business assets, personal property and a debt said to have been owed to Paul's parents by the defendant company) and also a reasonably detailed arithmetic calculation regarding the value of the assets under Paul and Thea's control, the level of debt secured against those assets, and a cash equalisation payment so as to achieve a 50-50 split of the matrimonial assets.[73] Counsel submits that the 'separation agreement' is internally consistent with all of the contemporaneous evidence, and also consistent with the type of agreement that a married couple in a relationship, where assets were built up between them (and associated companies and trusts) over time, would be expected to enter into in the event of the relationship permanently breaking down. Counsel submits that the existence of the 'separation agreement' (in the exact terms as recorded in the document at CB 66-68) is also supported by both Paul and Thea's subsequent conduct:[74]

(1) with respect to the business assets, where Paul resigned as a director of LBI Holdings Pty Ltd, and, as Paul and Thea both claimed in evidence, ceased to have any involvement in the operation of the Leafbusters business;[75]

(2) with respect to the real property assets, by Paul's resignation and share transfers in respect of the trustee companies that owned and controlled real property;[76]

(3) by Thea's changing the name of the Leafbusters Trust from the Thea Rillotta and Paul Groom Settlement to the Thea Groom Family Trust on 13 October 2009;[77]

(4) by neither Paul nor Thea taking any other steps towards a financial settlement, including under the Family Law Act 1975 (Cth);[78]

(5) by Thea causing the defendant company to make payments of $1,000 per week and then $1,500 per week to Paul between 2009 and 2014,[79] totalling more than $400,000, despite Paul (allegedly) not working in the business and those payments being recorded in the financial statements of the defendant company as loans against Thea's loan account with the Leafbusters Trust;[80] and

(6) by Paul living rent-free in the Olinda property from at least 2010 until after Leafbusters went into liquidation in 2017.[81]

42 Counsel for the plaintiff submits that, under the terms of the 'separation agreement', the Olinda property and the Traralgon flats were to become Paul's, with Thea to take sole control and ownership of the Leafbusters business and to take sole control and ownership of all other real property assets. Counsel submits that it is clear that, in agreeing how to deal with the Olinda property, Thea was acting on behalf of the defendant company, of which she was then the sole director. According to counsel, Thea was, in September 2009, the alter ego of Leafbusters.[82]

43 Next, counsel for the plaintiff seeks to deal with a number of 'red flags' with respect to Paul's case that had been identified by counsel for the defendant company in his written outline of opening submissions.[83] Counsel for the plaintiff took these to mean red flags as to the truth of the existence of the separation agreement. However, they might equally be regarded as red flags as to the nature, features or qualities of the alleged separation agreement, particularly with regard to its terms, certainty, flexibility, longevity and current significance (if any). Counsel for the plaintiff submits that the major 'red flags' appear to be the facts that the Olinda property continued to be recorded as an asset of the Leafbusters Trust in the financial statements for the years ended 2010 to 2014 (which the plaintiff accepts), that the defendant company (by its sole director Thea) re-mortgaged the Olinda property with BankWest in 2012, and that Paul did not assert the existence of his interest in the Olinda property (by lodging a caveat) until after he knew Leafbusters to be in financial difficulty.

44 According to counsel for the plaintiff, only the first of those matters is actually inconsistent with the existence of the trust for which Paul has contended, and, counsel says, it is only a minor matter compared to the 'overwhelming evidence' supporting the existence of the separation agreement.[84] Counsel submits that the continued recording of the Olinda property as an asset of the Leafbusters Trust until the end of 2014[85] was not an act of Paul, who (on the plaintiff's case) had no involvement with the Leafbusters Trust from February 2009. According to counsel, this matter cannot be relied upon as an admission by Paul of a matter against his interest.

45 Further, counsel for the plaintiff submits, Thea's evidence and the evidence of Mr Caracoussis, which (counsel submits) should be accepted, both explained why the defendant company did not change the manner in which it recorded the holding of the Olinda property and the re-mortgaging of it to BankWest. These explanations were to the effect that, because the existing mortgage over the Olinda property as at September 2009 was cross-collateralised with other secured debt to ANZ Bank, it was not possible at that time for Thea to cause the mortgage to be discharged and to transfer the Olinda property to Paul. Thea gave evidence, further, that at the point of re-financing the ANZ Bank debt to BankWest in 2012, it was not possible to discharge the ANZ Bank debt over the Olinda property without taking out a new mortgage. Thea further gave evidence to the effect that, at this time, she did ensure that the BankWest debt secured against the Olinda property was not cross-collateralised with the other debts to BankWest of the companies under her control (which, counsel submits, is consistent with her expressed intention to discharge the debt on the Olinda property separately so as to be able to honour the separation agreement and effect a transfer of the Olinda property to Paul), and to the effect that, as part of the re-finance to BankWest, the debt on the Traralgon flats owed to the ANZ Bank was fully discharged, and Paul obtained a clear title to them at that time.

46 As to the proposition that Paul did not assert the existence of his interest in the Olinda property (by lodging a caveat) until after he knew the Leafbusters business to be in financial difficulty, counsel submits that the logical response is 'why would he'? Until that time, counsel submits, Paul 'had every reason to expect that Thea would be true to her word and cause the eventual transfer of the Olinda Property to him when the debt position in respect of all her assets allowed this to occur'.[86]

47 In the next part of his outline of closing submissions, counsel for the plaintiff deals with Paul's alleged reliance on the 'common intention' embodied in the alleged separation agreement. He refers to the reply filed by Paul. He submits that the Court should make findings that, following the making of the alleged separation agreement, and in reliance upon it, Paul did a series of acts, as follows.

48 Counsel submits that the Court should find that, after September 2009, Paul did not assert or otherwise make any claim to any of the assets of the Leafbusters Trust, other than the Olinda property, including all assets comprising the business conducted by the defendant company as trustee of the Leafbusters Trust. He submits that Paul's and Thea's oral evidence was to the effect that Paul only did minimal work in respect of the Leafbusters business after February 2009, for which he was paid a few hundred dollars only, and that he played no role in the management or direction of the Leafbusters business.[87]

49 According to counsel, the Court should further find that, between September 2009 and April 2016, Paul did not seek to claim any interest in the real properties, other than the Olinda property and the Traralgon flats. During that time, one property (at Sunset Avenue, Olinda) was sold. Paul's evidence was that he did not receive any part of the proceeds of sale.

50 Counsel acknowledges that on 27 and 28 April 2016 Paul did lodge, through a solicitor, caveats claiming an interest in some of the real properties which (on the plaintiff's case) became Thea's under the separation agreement. In fact, Paul lodged eight such caveats. Three were later withdrawn. Five remain on title. (At the same time, Paul also lodged, and later withdrew, a caveat on the title to the abovementioned property in Wattle Road, Hawthorn that was acquired after the time of the alleged settlement agreement and that was registered in Thea's name in May 2013 and that was transferred to a third party in 2019.) However, counsel points to Paul's evidence that the caveats were lodged to secure the payment to Paul of monies which he was (allegedly) owed under the separation agreement. In those circumstances, according to counsel, the lodging of the caveats was not inconsistent with the separation agreement. Counsel relies also on Paul's evidence that he (Paul) does not assert an interest in those properties to any greater extent than that.

51 Counsel for the plaintiff notes that Paul transferred one of two shares in LBI Holdings Pty Ltd to Thea, and resigned as a director of that company, on or about 22 September 2009. Counsel points to Paul's oral evidence that, after that time, Paul played no role in the management or direction of LBI.[88] Counsel submits that, in doing this, Paul lost any ability to control the conduct of the trustee of the Leafbusters Business International Settlement, a discretionary trust.

52 Next, counsel notes that Paul transferred one of two shares in Boof Pty Ltd to Thea, and resigned as a director of Boof, on or about 22 September 2009. Again, counsel points to Paul's oral evidence that, after that time, Paul played no role in the management or direction of Boof.[89] In doing this, counsel submits, Paul lost any ability to control the conduct of the trustee of:

(i) the Boof Settlement, a discretionary trust, and the owner of multiple properties;

(ii) the Hagelthorn Street Wonthaggi Family Trust, a discretionary trust, and the owner of real properties;

(iii) the Fincher Street Wonthaggi Family Trust, a discretionary trust, and the owner of real properties;

(iv) the 41 Dunn Street Wonthaggi Family Trust, a discretionary trust, and the owner of real properties;

(v) the Victoria Street Pyramid Hill Family Trust, a discretionary trust, and the owner of real property.

53 Then, counsel notes that Paul transferred one of two shares in Polymesh Australasia Group Pty Ltd to Thea, and resigned as a director of Polymesh, on or about 22 September 2009. Counsel points to Paul's oral evidence that, after that time, Paul played no role in the management or direction of Polymesh.[90] In doing these things, counsel submits, Paul lost any ability to control the conduct of the trustee of the Polymesh Settlement, a discretionary trust which operated a substantial business (so it is said) and owned real property.

54 Next, counsel notes that Paul transferred one of two shares in Lenvale Investments Pty Ltd to Thea, and resigned as a director of Lenvale, on or about 22 September 2009. After that time, according to Paul's oral evidence, Paul played no role in the management or direction of Lenvale.[91] In this way, counsel submits, Paul lost any ability to control the conduct of the trustee of the Theofani Tsoiris Trust, a discretionary trust which owned real property.

55 Next, counsel submits that, in 2009,[92] Paul moved back into the Olinda property, upon the expiry of the then tenant's lease.[93] Counsel asks for a finding that Paul has lived in the Olinda property ever since, and has paid all outgoings and maintained the house at his own expense.

56 Further, counsel seeks a finding that, since September 2009, Paul has not sought any orders of the Family Court in respect of an adjustment of matrimonial property as between himself and Thea, nor otherwise entered into any binding financial agreement under the provisions of the Family Law Act 1975, but instead has observed the terms of the alleged separation agreement. Counsel submits that, by s 44(3) of the Family Law Act, unless leave of the Family Court is obtained, or the application is brought by consent of the husband and wife, a proceeding for a financial settlement in respect of property must be brought within 12 months of the divorce of a married couple (which occurred in the case of Paul and Thea in about 2010).[94] According to counsel, Paul may well be unable to obtain any orders from the Family Court in respect of properties now owned and controlled by Thea and the trustee companies of which she is a director.

57 Finally, counsel asks for a finding that Paul made no claims in respect of furniture (which was principally located at 1411 Mt Dandenong Tourist Road) with an estimated value of $150,000, which was jointly owned by him and Thea prior to the making of the alleged separation agreement, but Paul allowed Thea to take complete control of this property, and he purchased new furniture for his home.[95]

The centrality of matters of credit and reliability

58 As already mentioned, Paul Groom bears the onus of proof in this proceeding. His case relies heavily on his own oral evidence and that of Thea, especially in relation to the existence, the terms and the ongoing treatment of the 'separation agreement' that Paul alleges he struck with Thea. The defendant challenges that evidence, and, as is also mentioned above, it invites the Court to find that both Paul and Thea were witnesses of very little credit or reliability.[96] Indeed, as indicated above, the defendant goes so far as to submit, in effect, that I should not be satisfied that the document said to embody the separation agreement is an authentic document created at the time alleged. As I have indicated, I am prepared, with some hesitation, to accept that the document is authentic. However, as will be seen, I accept many of the points relied on by the defendant in this regard, and they strengthen my lack of satisfaction that Paul and Thea came to any agreement to the effect alleged that was intended to be binding as between themselves, as well as strengthening my (related) lack of satisfaction that the defendant company is to be fixed in equity with an obligation to transfer the Olinda property to Paul.

59 I turn first to the examples relied on by the defendant in relation to Paul's credit and reliability. On Paul's case, after the making of the 'separation agreement', Paul had no substantial involvement in the running of the Leafbusters business. However, as the defendant points out,[97] on 4 July 2016 Paul wrote to solicitors acting for a creditor of Leafbusters Pty Ltd, representing that he was at that time the General Manager of Leafbusters.[98] Paul's explanation for representing himself as holding that title, when, as he now claims, he in fact held no managerial role in Leafbusters, was that a solicitor advised him to use the title so that he could get information from the creditor's solicitor that might assist Leafbusters.[99] I find it hard to accept that any reputable solicitor would give such advice. In any event, I note that, in cross-examination, Paul did not accept that misrepresenting himself as the General Manager of Leafbusters in that context was, or would have been, wrong.[100]

60 Similarly, on 23 September 2016 Paul appeared before a Registrar of the Federal Court of Australia, and did not correct a representation made to the Registrar to the effect that he, Paul, was the General Manager of Leafbusters. When it was put to Paul in cross-examination in this proceeding that he had misled the Federal Court, he responded by saying that the title was 'a term that was just being used at that time', and that he had used the title only to allow Leafbusters to be heard whilst Thea was ill.[101]

61 When Leafbusters' liquidators later wrote to Paul, in February 2017, seeking information about the caveat he had lodged over the Olinda property, the liquidators said they understood that Paul held the position of General Manager of Leafbusters.[102] Paul responded in a letter dated 31 March 2017, saying, among other things, 'I deny your allegations that I am a "General Manager" or director of any sort of the Company since 2009'. In cross-examination, Paul said he was not embarrassed by that response.[103]

62 In my view, Paul was either misleading the solicitors for the creditor and misleading the Federal Court, or else he was misleading the liquidators and misleading this Court. Either way, these matters reflect very poorly on Paul's credit.

63 The evidence also discloses that Paul did not endeavour to assist Leafbusters' liquidators to consider properly his claim to the Olinda property. On 11 May 2017, Paul apparently wrote to Leafbusters' liquidators saying that he would substantiate the basis of his claim to the property by supplying 'affidavits in support of that agreement, sworn by Thea Groom and myself and the Accountant who was a party to the settlement of that agreement'.[104] No such affidavits have ever been provided. Indeed, in cross-examination, Paul admitted that he took no steps at all to procure an affidavit from the relevant accountant.[105] I accept the defendant's contention that Paul was generally unco-operative with requests from the liquidators to provide books and records. He admits that he rejected their request that he attend for an interview with them.[106] I also accept the defendant's submission that, but for the catalyst of Paul's eviction from the Olinda property at the instance of the liquidators in March 2018 (an eviction later reversed), Paul would likely have maintained his contemptuous stance towards the liquidators' requests for evidence in substantiation of his claim.[107]

64 Counsel for the defendant submits, and again I accept, that Paul's representations to the liquidators and his lack of co-operation with them reflect poorly on his credit.

65 As mentioned above, it is common ground that in April 2016 Paul, by his solicitor, lodged caveats on the titles to eight real properties in which he could not possibly have had a proprietary interest if the alleged separation agreement had been made and maintained in the terms now alleged.[108] In giving evidence, Paul was constrained to say, and did say, that he lodged the caveats as a bargaining chip,[109] to secure payment of amounts he contended were owed to him.[110] Counsel for the defendant submits that Paul's having done so demonstrates his preparedness to make improper claims to advance his own interests over those of genuine creditors.[111] However, Mr Groom was and is a layperson, albeit one experienced in business and litigation. He did not lodge the caveats personally: they were lodged on his behalf by a solicitor. I do not consider that the lodging of the caveats, in itself, weighs substantially against his credibility as a witness.[112] On the other hand, it is starkly inconsistent with the case he now brings. Unless the solicitor who lodged the caveats was acting in a most inappropriate and unprofessional manner, Paul must not have furnished him with instructions consistent with Paul's present case. I note that the solicitor was not called to give evidence in this proceeding.

66 On 9 October 2013, as the defendant points out,[113] Paul applied for, and was granted, a loan of $200,000 from the ANZ Bank. The loan application documents recorded Paul's occupation as 'consultant' to Leafbusters, a position, the document recorded, he had held at that time for 15 years, and that his gross annual income was $290,000.[114] Mr Groom conceded in the witness box that the description of his occupation as 'consultant' to Leafbusters was accurate in October 2013, when the loan application was made.[115] On the other hand, he disavowed having had a gross income of $290,000.[116] By way of explanation, Mr Groom's evidence in cross-examination was that some, but not all, signatures on the document were not his, and that parts of the document had been 'fudged'.[117] He also said that the fact that he was engaged by Leafbusters as a 'consultant' in October 2013 was not at odds with his evidence that he was not substantially involved in Leafbusters after 2009, because it was 'nothing to do with the management or operation of the business'.[118] Counsel for the defendant submitted that Paul's evidence concerning the loan application, and his explanation of the document, were palpably implausible.[119] I agree. And, I agree that those matters weigh substantially against Paul's credibility.

67 Paul's evidence also revealed that he and Thea had engaged in conferences with Paul's lawyers in which Paul and Thea discussed their prospective evidence.[120] That fact, counsel submitted, necessarily rendered Paul's and Thea's evidence tainted.[121] Again, I agree.

68 Finally, counsel for the defendant submitted that the evidence revealed that Paul had a poor recollection of critical events.[122] I accept that, initially, Paul had some trouble identifying the accountant, mentioned above, who was said to have attended the meeting at which Paul and Thea allegedly agreed on the document claimed to embody the 'separation agreement'.[123] I also accept that Paul, in several documents contained in the Court Book, asserted that he was owed by Leafbusters or Thea widely varying and inflated amounts, ranging from $700,000 to $1.1 million.[124] These two matters further diminish the reliability of Paul's evidence, albeit, of themselves, only to a limited extent.

69 I turn now to the matters relied on by the defendant in relation to Thea's credit and reliability as a witness.

70 Like Paul, Thea did not co-operate with the liquidators' investigations into the defendant company's affairs. Indeed, Thea's behaviour was apparently the more egregious. She was charged with, and fined for, offences related to her non-compliance with the liquidators' requests for information.[125]

71 By contrast, Thea has provided substantial assistance to the preparation of Paul's case. Thea was not compelled by subpoena, and gave her evidence voluntarily. Indeed, as outlined above, Thea and Paul attended conferences together with Paul's solicitors, and discussed events relevant to the proceeding, including the making of the alleged separation agreement. [126] This conferencing of witnesses taints Thea's evidence.

72 Thea firmly supported Paul in registering the abovementioned caveats on properties in relation to which, on his present case, he had relinquished any interest, Paul having done this when there was a threat that BankWest would begin to realise the properties. I agree with the defendant that this was another matter going to Thea's discredit.[127]

73 As well, contrary to Thea's assertion that Paul occupied the Olinda property as its beneficial owner, several documents for which Thea was directly or indirectly responsible would have indicated to third parties, including the taxation authorities, that the property was subject to a lease. First, a valuer's report prepared for a prospective mortgagee in June 2012 listed figures described as 'market rent' and 'actual rent'.[128] Thea disputed that the property was subject to a lease, but could not explain the origin of the figures.[129] Second, a certificate of insurance from 2013 indicates that a company associated with the Grooms, Lenvale Investments Pty Ltd, was insured for renter default or theft by the tenant of the Olinda property.[130] Thea said in cross-examination that she did not know where the figures came from.[131] Likewise, on 7 October 2016 solicitors then acting for the defendant company wrote a letter to solicitors acting for one of its creditors, purportedly on Thea's instructions, saying that the Olinda property was at that time subject to a 20-year lease.[132] Thea denied having instructed the solicitors that the property was subject to a lease, but did not explain the origin of the assertion.[133] Counsel for the defendant submitted that this documentary evidence, and Thea's inability to provide plausible explanations for it, cast doubt on Thea's veracity.[134] I agree.

The dearth of contemporaneous documentation and the late emergence of the document said to embody the 'separation agreement'

74 As mentioned above, most of the evidence Mr Groom relies on to prove the existence of the alleged separation agreement is contained in his own oral evidence and that of Mrs Groom. That is because, leaving aside the document said to embody the separation agreement, no contemporaneous documents are in evidence that refer to or otherwise substantiate the existence of the agreement. Counsel for the defendant submitted, and I accept, that there is a general dearth of documents evidencing or relating to the purported agreement.[135] Certainly, no contemporaneous file notes or emails refer to or otherwise evidence the existence of the alleged agreement. Nor, as counsel for Mr Groom accepted, was the alleged agreement recorded in any resolutions, minutes, books or other documents of the defendant company.[136]

75 As the defendant submits,[137] this absence of any proper documentary record of the alleged arrangement in the books and records of the defendant company is particularly striking in circumstances where:

(a) the Olinda property was a significant asset of the Leafbusters Trust, and the only real property held in the trust;

(b) the defendant company, as trustee of the Leafbusters Trust, had an obligation under the trust deed to 'keep proper minutes of all resolutions and proceedings and proper books of account and records of and in connection with the trust property';[138] and

(c) Thea was the sole director of the company and (putting aside the suggestion that the bookkeeper, Jason Edwards, was present at the time)[139] there was no one else (other than Paul) who could speak to the existence of the alleged arrangement.

76 In these circumstances, as the defendant further submits,[140] it would have been particularly important, if the alleged transaction was entered into and was to be effective, that:

(a) a proper documentary record be created (as required under the trust deed); and

(b) those advising the defendant company, including its accountant Mr Caracoussis, if directed to document or implement the transaction (and, as the defendant says, there was not a shred of evidence to suggest that any such direction was given) ensure that that occurred.[141]

77 The document said to embody the 'separation agreement' emerged only belatedly. As the defendant points out,[142] the document was not produced to the liquidators until 20 March 2018, shortly before the present proceeding was commenced on 16 May 2018, and after Paul attended a conference with his current solicitors.[143] No explanation as to the circumstances of its discovery was provided at that time.[144] The original could not be produced. Nothing more than a photocopy has ever been produced.

78 The existence of such a document was not alluded to in any document created prior to 20 March 2018.[145]

79 As the defendant further submits,[146] in the face of repeated requests by the liquidators for Paul to produce documentary evidence in support of his claimed caveatable interest over the Olinda property, no mention was made of the existence of the document said to embody the 'separation agreement'. From the documents in the Court Book, the defendant makes the following points in this regard, each point being a valid one:

(a) by letter dated 6 February 2017, the liquidators requested that Paul provide the basis on which the caveat on the title of the Olinda property was lodged and any documentation in support of the claimed caveatable interest;[147]

(b) by letter dated 17 February 2017, Paul's then solicitor, Angelo Karamanis, responded to the liquidator's letter.[148] That letter stated that the caveat was lodged pursuant to a constructive trust. No reference was made to the document now said to embody the separation agreement. Paul's evidence was that he did not even mention the existence of the document to Mr Karamanis.[149] The caveat itself was not drawn with reference to the document;

(c) an email sent to the liquidators on 17 February 2017, from Thea's email account, but composed jointly by Thea and Paul, made no reference to the document.[150] Nor did the subsequent letter from Paul to the liquidators dated 31 February 2017;[151]

(d) a letter from the liquidators to Paul dated 6 April 2017 noted that Paul had not provided any documentation in support of the claimed caveatable interest;[152]

(e) by email sent from Paul's email account[153] to the liquidators on 11 May 2017, Paul apparently said, as mentioned above, that he would 'supply affidavits in support of [the alleged separation] agreement, sworn by Thea Groom, myself and the Accountant who was a party to the settlement of that agreement'.[154] As is also mentioned above, no such affidavits were ever provided;

(f) the document in question was not produced in response to a demand addressed to Paul for production of the defendant company's books and records made on 19 May 2017.[155]

80 The defendant submits that, if the document in question was by this time (May 2017) in existence, it 'beggars belief' that it was not sought to be relied upon or otherwise mentioned in this context. I would agree that, if the document was then in existence, it is remarkable - indeed extraordinary - that it was not even mentioned at that time. And I agree with the defendant[156] that the absence of any reliance upon the document in Paul and Thea's communications with the liquidators is all the more striking given that, according to Paul's evidence, Paul was conscious of the existence of the document around the time of the liquidators' first demand (in February 2017) for documentary evidence in substantiation of his claim.[157] Paul's only explanation for this was to the effect that the document was not to hand.[158] Asked why he did not go looking for it, he said, first, that things were tough at the time because the bank had taken possession of the Leafbusters office.[159] However, he could not explain why he did not ask the bank to allow him into the office to search for the document. Later, in his evidence, Paul claimed that there was, or may have been, nothing in the office anyway because Leafbusters' own staff had removed all the documents that had been in the office.[160] Paul claimed that the document was ultimately found, not at Leafbusters' office, but, after a search that occupied many hours, in the house at the property in question at 64 Olinda-Monbulk Road, Olinda. That is to say, Paul claims that the document was eventually found in the very house in which he says he had been living since about 2010.[161] He said in evidence that this searching for and finding of the document only took place after he had been evicted from the Olinda property and, a month or two later, allowed back in.[162] He further said in evidence that he went through everything in the house to try and find the document and eventually found it in a box containing miscellaneous invoices, receipts and other documents. He acknowledged that the document had not been kept in any special place during any part of the period of eight years after its alleged creation. He had no mental picture or recollection of where it was until he found it. And he found it in a pile of unrelated papers.[163]

81 I agree with the defendant[164] to the following extent also: that the obvious and natural response for Paul to make to the liquidators' requests and demands would have been to assert the existence of the document, even if the document could not immediately be found.

82 The defendant further submits that the late emergence of a document of such central importance, which then translates into a common recollection, is simply not credible and is redolent of collusion; and that, in the circumstances, the Court should not be satisfied that the document in question was created before about March 2018.[165] That would amount to a conclusion that I was not satisfied that the document was not an elaborate forgery. In my view, the roughness and informality of the document point away from such a conclusion. With considerable hesitation, I am prepared to accept Mr Groom's evidence that he found the (photocopied) document at the Olinda property within the box of unrelated papers. I note that Thea corroborated this account in her evidence.[166] The real explanation for the failure of Paul and Thea to mention the document prior to March 2018 may be that they themselves had never regarded it as a document of any or any lasting significance. Such a view would have been quite consistent with the scrappy form and contents of the document and much of the other evidence in this case. Indeed, Paul described the document as 'working papers'.[167]

The document said to embody the 'separation agreement'

83 The document itself comprises only three pages.[168] As already indicated, the original is not in evidence, and is said to have been lost.[169] The first two pages (as set out in the Court Book) are wholly handwritten. The first page includes a squiggle in the bottom right hand corner which, according to evidence given by Thea, was designed to indicate that the matters set out above it were complete and finalised. I find it hard to interpret the squiggle in that way. Because of the poor quality of the photocopying, it is difficult to make out some of the handwritten words. The first page reads:

Thea

Keeps all properties except for Olinda Monbulk Rd + Traralgon flats.

Keeps business - pays $150k back to Anne + Ken

Keeps furniture, gator + mower parts from piano, couch caravan.

Thea pays Paul $858,988

Paul

Keeps Land Rover, Thea keeps paying payments then gives title to Paul.

Takes caravan, pian $ couch.

Paul to get title of 64 Olinda - Monbulk Rd, OLINDA + title of Elliot St. Traralgon flats.

Paul hands over all companies to Thea

84 The second page purports to set out the Grooms' assets and debts, and some calculations concerning those amounts, in two columns headed 'VALUE' and 'DEBT'. Relevantly, the assets column contains at the bottom two values described as 'ASSETS', of $5,633,900, and 'DEBTS' of $6,020, 745. Several amounts on the second page are circled. Some are crossed out, and arrows connect some amounts with others.

85 The third page includes a table, partly typed and partly in handwriting, setting out the addresses and valuations of 20 properties, including each of the 19 properties the Grooms are now said to have owned or controlled in September 2009. For each of the properties listed in the typed part, a typed valuation is included, together with, in handwriting, what appears to be a higher valuation, except that, in one case, the handwritten 'valuation' is lower. There are five properties listed entirely in handwriting. There is a single valuation stated for each one of these. Many of the rows in the table and some of the handwritten rows have been crossed out. A large doodle drawing in the shape of a fold-over clip occupies the top of the page.

86 Without the detailed descriptions and purported explanations given by Paul and Thea in their oral evidence, the document is close to meaningless.

No sufficient agreement, promise or commitment is to be found

87 Because the plaintiff has abandoned his express trust claim, I need not stop to consider the defendant's submissions to the effect that the creator of a trust must manifest an intention presently to create a trust; that the intention must be to create an immediately operative trust; that an intention that the trust be constituted at a later date will be ineffective to create a trust either at the time of the declaration or at that later date; and that the document in question in this case does not evidence the making of an agreement or a present intention to create a trust.[170]

88 However, there is continued relevance in the submission made by the defendant, in the same context, to the effect that, on the assumption that the document in question is authentic, nevertheless, properly understood, the document was equivocal or represented no more than discussions about a possible future arrangement, under which Paul was 'to get title of 64 Olinda-Monbulk Road, Olinda'.[171]

89 The defendant submits that there was no evidence as to any meeting of the minds between Paul and Thea on essential terms of the alleged separation agreement, such as who had the obligation to pay off the mortgage over the Olinda property; by when that was to occur; what consequences would flow from any failure to pay off the mortgage; by when the sum of $858,988 was to be paid (and in what installments); or what consequences would flow from a failure to pay the $858,988 or any part thereof.[172] I would agree with the defendant that there was no documentary or other objective evidence of any of those things. Without agreement as to those things, the proposal, as recorded in the document, was incomplete, as the defendant submits.[173]

90 Further, I agree with the defendant that, if there had been an intention to implement the arrangement as envisaged in the document in question, one might have expected, at the very least, for that arrangement to be conveyed fully and accurately to the company's accountants, especially if there was any intention to bind the company itself. One might have expected the creation of a proper documentary record of the alleged arrangement; and for the arrangement to be reflected in the books of account of the Leafbusters Trust.[174]

91 Further again, I accept that it tells against the earnestness, the finality and the intended implementation of the suggested arrangement that Paul did not:

(a) take any steps to verify the informal, oral valuation of $2 million said to have been attributed to the Leafbusters business by Mr Caracoussis, given that a verified valuation would have informed a judgment about the capacity of the company to pay, or enable Thea to pay, the $858,988;[175]

(b) monitor or record the balance of the $858,988 debt said to be owed to Paul from time to time;[176]

(c) follow-up what steps were being taken to pay off the mortgage over the Olinda property so as to ascertain when that was likely to occur;[177]

(d) ask to see bank statements;[178] or

(e) otherwise take other steps to monitor compliance with the alleged separation agreement.

92 It appears to be common ground that, between 2009 and 2014, Leafbusters made payments to Paul, initially of $1,000 per week and later of $1,500 per week. It also appears to be common ground that these payments were debited to Thea's loan account with the defendant company in the books of the company. The plaintiff invites me to find that the company made these payments on behalf of Thea pursuant to the alleged separation agreement. The defendant contends for a finding that the payments were unconnected to the alleged separation agreement. The defendant submits that they reflected fees that Paul was receiving for consultancy services he was providing to the defendant company during the relevant period (a portion of which Paul was receiving in cash, but not declaring as personal income on his tax returns).[179] The defendant submits that the documentary evidence supports such a finding.[180] I agree. There were 31 instances of the payments being labelled as wages in Paul's bank statements, without Paul ever raising any query about this. No satisfactory explanation for that circumstance was given.[181] Jason Edwards, the bookkeeper for the Leafbusters business during the relevant period, was responsible for attending to the payment of wages.[182] But he was not called. In my view, as explained in more detail below, it is appropriate to draw an inference against the plaintiff on this point under the Jones v Dunkel principle. Further, as mentioned above, Paul's loan application to the ANZ Bank in October 2013 recorded that he had been a consultant to Leafbusters for 15 years and that he had a gross annual income of $290,000. I agree with the defendant that this provides a coherent explanation for the regular payments made by Leafbusters to Paul. I reject Paul's evidence that his statement of financial position provided to the bank had been fabricated. Paul seemed to hint that his own finance broker might have been the culprit. But that was Kim Kershaw, whom Thea had also used and with whom Thea seemed to be entirely happy.[183] This evidence was self-serving and implausible. In addition, as is also mentioned above, Paul held himself out, on at least two occasions, in 2016 and 2017, to be Leafbusters' general manager.

93 It is true that Mr Caracoussis gave evidence that in about April 2010, during a meeting with Thea, Thea mentioned to him that she and Paul had come to an arrangement under which money would be paid to Paul and that Paul was to have some property, including the Olinda property, transferred to him (at some unstated future time).[184] However, as the defendant points out,[185] Mr Caracoussis said in evidence that he did not get into the specifics of the arrangement with Thea and that he was given limited information about it.[186] Moreover, Mr Caracoussis twice accepted that this was a private arrangement, that did not touch Leafbusters or the Leafbusters Trust.[187]

94 As the defendant further points out,[188] Mr Caracoussis did not receive any documents from Leafbusters that reflected any dealings concerning the Olinda property and it is clear on the evidence that he was not given the 'separation document'. Nor, importantly, did Mr Caracoussis receive any direction to treat the beneficial owner of the property as anyone other than the defendant as trustee of the Leafbusters Trust.[189]

95 As the defendant further submits,[190] the fact that the alleged separation agreement was not formalised through lawyers or accountants is of particular significance in this case. As the defendant points out, at the time of the critical events in 2009, Paul and Thea were experienced in business affairs: they had managed a successful business since about 1993. Further, Paul and Thea had had the experience of being involved in lengthy litigation. Paul had also given evidence in a civil trial in which there was an issue concerning the existence of an alleged oral agreement between Paul and another person.[191] Against that background, as the defendant submits, both Paul and Thea understood that it was a good idea to have important contracts reduced to writing.[192]

96 As the defendant observes, Paul and Thea's experience in business affairs was not brought to bear so far as concerns the formalisation of the alleged separation agreement. The thrust of their evidence was that the separation agreement was a private matter between persons who trusted each other without attendant formalities.[193] Despite the alleged breakdown in their marital relationship, they engaged no lawyer or accountant to attend to the formalisation of the agreement. As the defendant submits, no good reason for that circumstance was offered by Paul or Thea.[194] This was the situation notwithstanding that Leafbusters had been using Caracoussis & Co as its accountants since 1993. Both Paul and Thea had also used that firm as their personal accountants for many years. And I agree with the defendant's comment that the absence of any formalisation of the alleged separation agreement is particularly notable, given that, on Paul and Thea's evidence, the agreement was entered into for the purpose of effecting the division of matrimonial assets of not insignificant value.[195]

The subsequent treatment of the Olinda property in financial statements and tax returns

97 As mentioned above, it is common ground that the Olinda property continued to be recorded as an asset of the Leafbusters Trust in the financial statements for the years ending 2010 to 2014. This is a significant obstacle for the plaintiff's case.[196]

98 As the defendant points out, the financial statements are books that the defendant company, as trustee of the Leafbusters Trust, was required to keep under the Corporations Act 2001 (Cth). Section 286(1) of that Act requires a company to keep written financial records that correctly record and explain its transactions and financial position and performance; and that would enable true and fair financial statements to be prepared and audited. That obligation extends to transactions undertaken as trustee. The financial records must be retained for seven years after the transactions covered by the records are completed: s 286(2). Failure to comply with these obligations constitutes an offence: s 286(3).

99 The defendant further points out that section 1035(1) of the Corporations Act provides that a book kept by a body corporate under a requirement of the Act is admissible in evidence in any proceeding and is prima facie evidence of any matter recorded in the book. I agree with the defendant that the prima facie evidence supplied by the financial statements as to the beneficial ownership of the Olinda property has not been displaced.[197]

100 As the defendant points out,[198] both Mr Caracoussis and Thea completed the appropriate declarations in the financial statements. Thea agreed in evidence that she would not have completed the declarations unless she believed them to be true.[199] Thea had a good understanding of financial statements and balance sheets,[200] and appreciated the importance of a company's keeping records that correctly recorded and explained its transactions and its financial position.[201] Mr Caracoussis accepted that it would have been improper for him to sign off on the financial statements for the Leafbusters Trust if he had any basis to believe that the Olinda property was no longer an asset of the trust.[202] Mr Caracoussis was aware of the potential for the financial statements to be produced to a bank.[203]

101 Moreover, as the defendant further points out,[204] the 2014 financial statements stated that they had 'been prepared to meet the requirements of beneficiaries, the information needs of stakeholders and for the basis of preparation of the income tax return'.[205] In the 2010 to 2013 financial statements, the basis of preparation had been stated to be 'to meet the requirements of beneficiaries'. These statements, that could have been read by any of the beneficiaries or stakeholders referred to, amounted to assurances that they could act on the faith of the representations contained in the financial statements. These statements underscored the importance of ensuring the accuracy of the financial statements. But there was no disclosure in the financial statements of the arrangement between Paul and Thea now claimed to have been in place.

102 The defendant further notes that the financial statements were used as the basis for the preparation of the tax returns for the Leafbusters Trust.[206] The tax returns for the years ended 2010 to 2013 were all prepared by reference to the financial statements, and on the basis that the Olinda property was an asset of the trust. The statement of the trust's total assets matched the total assets recorded in the relevant year's balance sheet for the trust.[207] The defendant further observes[208] that, for the purpose of the preparation of the 2010 tax return, a rental schedule was prepared which included the Olinda property as an asset of the Leafbusters Trust.[209] The rental schedule was signed by Thea. The rental schedule recorded that the Olinda property was rented from 1 July 2009 to 30 June 2010; rental income was declared and expenses were claimed as a deduction. It was at some stage in 2010, after the expiry of a lease to existing tenants, that, according to Paul, he commenced his occupation of the Olinda property. Rental schedules continued to be prepared for the years 2011 to 2013.

103 Thus, as the defendant submits, for the years 2010 to 2013, representations were made to the Australian Taxation Office to the effect that the Olinda property formed part of the total assets of the Leafbusters Trust.[210] Thea appreciated the importance of ensuring that any tax returns were true and correct.[211] Mr Caracoussis accepted that he would not be a party to the making of representations to the Australian Taxation Office that he knew to be false.[212]

104 The defendant further notes that, for the years 2010 to 2014, Caracoussis & Co continued to generate rental worksheets for the Olinda property for the purpose of preparing the Leafbusters Trust's tax returns.[213] The 2011 and 2014 rental worksheets contain a handwritten notation: 'Paul living here'. In September 2011 and January 2014, an accountant within the employ of Caracoussis & Co made enquiries of Jason Edwards as to whether the Olinda property had been rented during the previous year. The response was that the property had not been rented out; Paul was living there. As the defendant submits, there is nothing in these documents to indicate that Caracoussis & Co had been instructed that the Olinda property was no longer beneficially owned by the trust. Mr Caracoussis had not given any instructions to his employee accountant to that effect.[214]

105 Accordingly, the defendant submits,[215] in the contemporaneous documents prepared by Caracoussis & Co (the accountants for the Leafbusters Trust and for Thea and Paul's interests generally), on the instructions of Thea, the Olinda property continued to be treated as being beneficially owned by the Leafbusters Trust. I accept the defendant's submission that those records are inconsistent with the creation of the purported trust or with the alleged separation agreement ever having been created or carried into effect.

Thea's conduct after September 2009 is inconsistent with the plaintiff's claim

106 The defendant submits, and I accept, that Thea's conduct after September 2009 is inconsistent with the alleged separation agreement (or with an intention to create a trust). As the defendant further submits,[216] Thea, from that point on, continued to exercise dominion over the Olinda property. The explanations and justifications given, on behalf of the plaintiff, for those actions are not persuasive.

107 As the defendant notes,[217] in 2012 Thea made an application to BankWest to refinance certain loans. In the course of that application process, on 10 July 2012, Thea represented to BankWest, in a letter of offer from BankWest which Thea signed that day on behalf of the defendant company, that the company held the Olinda property as trustee of the Leafbusters Trust (and, therefore, not on trust for Paul, as Paul and Thea now contend).[218] The borrower was named as Leafbusters Pty Ltd as trustee for the Leafbusters Trust. The security to be taken by BankWest was noted to be a mortgage from Leafbusters Pty Ltd, as trustee for the Leafbusters Trust, over the Olinda property.

108 Also on 10 July 2012, as the defendant further points out,[219] Thea on behalf of Leafbusters Pty Ltd signed a mortgage by which the company put up the Olinda property as security for an advance of $336,000 to the company as trustee of the Leafbusters Trust.

109 As the defendant says,[220] there was no evidence of any disclosure to BankWest of the purported trust or of any interest in or claim to the Olinda property by Paul, thereby indicating (consistent with Thea's representations to BankWest) that the company as trustee of the Leafbusters Trust was the beneficial owner of the property.

110 Moreover, as the defendant submits,[221] the refinancing with BankWest, and BankWest's taking of a mortgage over the Olinda property, occurred with Paul's knowledge.[222] Paul dealt with a valuer appointed by BankWest. Paul did not, at that point, assert or disclose to BankWest that he was the beneficial owner of the Olinda property.[223] Nor did Paul complain about the fact that a fresh mortgage was being granted over the property.[224] He did not press for unencumbered title to be conveyed to him at that point.

111 As mentioned above, the plaintiff's counsel seeks to make something of the fact that, in connection with the refinancing of 2012, whereby BankWest took over from the ANZ Bank as the Grooms' principal financier, a mortgage that had previously covered the Traralgon flats was discharged, giving Paul a clear title; and the Olinda property became no longer the subject of cross-collateralised security. In my view, this is not strong evidence in favour of the existence or persistence of the alleged separation agreement. The Traralgon flats had always been registered in the name of Paul alone. The lifting of the collateralised security is not necessarily to be connected with any intention to transfer the Olinda property to Paul. It was not the only property released from the cross-collateralised security. Rather, all of the properties were so released.

Further conduct by Paul and Thea after September 2009 inconsistent with the alleged separation agreement

112 As the defendant submits,[225] there were many other ways in which Paul and Thea's conduct after 11 September 2009, over a long period of time, was inconsistent with the making (or the maintenance) of the alleged separation agreement. The defendant gives nine examples, each of which, I agree, tells against the plaintiff's case.

113 First, in Paul's tax returns for the years 2011 to 2013, Paul declared as income in excess of $150,000 in distributions from trusts in respect of which, according to the alleged separation agreement, Paul had relinquished any interest.[226] (I would add that Paul was never removed as a named beneficiary of the Leafbusters Trust; and that there is no evidence that he was ever removed as a named beneficiary of any of the numerous other trusts concerned.) In addition, the tax returns for the Leafbusters Trust for 2012 to 2014 record that distributions of the income of the trust were declared in Paul's favour ($22,894, $67,644 and $129,367 respectively).[227] This is to be contrasted with Paul's evidence that, according to his understanding of the alleged separation agreement, he was not to take any benefit at all from the business operations of Leafbusters.[228] As the defendant submits, it is not to the point that, as commonly occurs, any trust distributions to a beneficiary were not in fact paid. The unpaid amount is an unpaid present entitlement. The beneficiary has the right to demand payment from the trustee or to require that the trustee properly reinvest, accumulate or capitalise those funds in the trust.[229] The distributions to Paul were made on Thea's instructions.[230] Mr Caracoussis accepted that Paul had a legal entitlement to call for payment of the amounts standing to his credit in his account.[231] Mr Caracoussis also accepted that, in respect of any particular trust, distributions would not have been made to Paul from that trust if he had been instructed that Paul had repudiated his entitlement to any such distributions. Mr Caracoussis further accepted that the tax returns were prepared on the basis that they accurately reflected the arrangements in place.[232] It was not contended that the distributions constituted sham transactions that were entered into in order to defraud the revenue.

114 Second, as the defendant submits, there was no evidence that Paul took any steps to disclaim his interest as a beneficiary of any of the relevant trusts[233] (even though the abovementioned variations to the trust deed for the Leafbusters Trust made on 13 October 2009, on which counsel for the plaintiff sought to rely, introduced a mechanism by which that could occur).[234] As the defendant submits, the purported relinquishment of any interest in the business operations of Leafbusters was an important feature of the alleged separation agreement. The fact that no steps were taken to effect a disclaimer of Paul's interest is a circumstance which speaks against the existence of the agreement.

115 Third, in Paul's tax returns for the years 2010 to 2013, as the defendant notes, Paul declared as income rent derived from 59 Kelly Street, Pyramid Hill, being a property over which, according to the alleged separation agreement, Paul had relinquished any interest.

116 Fourth, Paul also remained the registered proprietor of the property at 59 Kelly Street, Pyramid Hill. Paul gave evidence that the property was sold in or about 2017 or 2018 at the instance of BankWest.[235]

117 Fifth, as mentioned above, on 27 and 28 April 2016, Paul registered caveats on the titles to eight of the properties in respect of which he is said to have relinquished his interest (five of which remain registered on title). As the defendant notes, Paul pleaded ignorance as to whether he was entitled to lodge the caveats, saying that he did so on the advice of his then solicitor, Mr Karamanis. As mentioned above, Mr Karamanis was not called to give evidence. I have already dealt with this matter in the context of the defendant's attack on the credibility of Paul as a witness. In the present context, the defendant adds a reference to the fact that, in a conference in about October 2016, Paul and Thea received advice from an accountant, Graeme Watters, to the effect that the caveats could not be used to secure repayment of debts owed by Thea.[236] However, while the inconsistency is very evident, it remains the case that Mr Groom is not legally qualified. Nor, for that matter, does Mr Watters appear to be legally qualified.

118 The defendant submits that Thea's conduct in this regard is also inconsistent with the alleged separation agreement. If the separation agreement had in fact been entered into, the defendant submits, one would expect Thea to have objected to the lodgement of the caveats over properties in which Paul had relinquished any interest. I agree. As it was, Thea supported Paul's actions, and rejected in strident terms Mr Watters' advice that the caveats would not stand up.[237]

119 Sixth, as the defendant further points out, by a letter dated 17 February 2017, Paul's then solicitor, Mr Karamanis, informed the liquidators that, with respect to a caveat that Paul had lodged over the Olinda property, the caveat was to remain registered until Paul received payment in full from Leafbusters and Thea of an asserted debt said to be owed to Paul in the amount of $800,000 to $1 million.[238] That assertion, made on instructions from Paul, bears little resemblance to the terms of the separation agreement now alleged. It also assumes, contrary to the manner in which Paul now advances his case, that the defendant company (not Thea) was liable to pay the money.

120 Seventh, in April 2016, as is common ground, Paul was appointed as a director of, and shareholder in, companies in which he is said to have relinquished any interest, LBI Holdings Pty Ltd, Boof Pty Ltd and Lenvale Investments Pty Ltd. Paul remains the sole director and shareholder of LBI Holdings Pty Ltd. Although Paul claimed that this was done only as a temporary emergency measure out of concern for Thea's health at the time, I consider that it betokens a very close level of co-operation between Paul and Thea in relation to these matters.

121 Eighth, if the payments made by the defendant company to Paul between 2009 and 2014 were in truth on account of consultancy fees payable to Paul, that circumstance is incompatible with the alleged separation agreement.

122 Ninth, Paul did not pay for insurance or land tax referable to the Olinda property.[239]

Absence of communication of the purported trust

123 The defendant acknowledges that it is possible to create a trust by declaration without communication to any person. However, as the defendant correctly submits, the fact of little or no communication is a relevant factor to take into account in assessing whether any trust exists at all.[240] This remains important in the present case notwithstanding the abandonment of the plaintiff's express trust claim. In this context,[241] the defendant refers to In re Cozens[242] in which Neville J considered the effect of non-communication of a declaration of trust:

'[T]he absence of communication raises a strong inference against an intention to make an appropriation irrevocable. In the absence of evidence to the contrary, I think the inference of silence was intended to enable the declarant to adhere to or abandon the declaration as best served his advantage for the time being.'

124 As the defendant also submits,[243] there was no documentary evidence that indicated that Paul or Thea mentioned the existence of the purported trust to anybody else until many years after it was allegedly created.[244] I accept the defendant's submission that Thea's evidence that she disclosed the arrangement to her broker is not supported by any documents and should not be accepted. The broker was not called.

125 In this regard, I also take into account against the plaintiff the following matters noted by the defendant:[245]

(a) the 'separation document' was not given to the company's accountants, Caracoussis & Co;

(b) Paul's October 2013 loan application to the ANZ Bank contained no reference to the Olinda property forming part of his assets;[246] and

(c) Paul did not disclose any beneficial interest in the Olinda property in his tax returns or in any other contemporaneous document.

Paul took no positive steps to assert his interest in the Olinda property until 27 April 2016

126 As the defendant notes,[247] Paul took no positive steps to assert his interest in the Olinda property until he registered a caveat on the title to the property on 27 April 2016, with the ground of claim relied upon being an 'implied, resulting or constructive trust'. On 17 May 2017, that caveat lapsed in accordance with s 89A of the Transfer of Land Act 1958 (Vic). The nature of Paul's claim then shifted from one based on the existence of an 'implied, resulting or constructive trust' to one based on a declaration of trust, as reflected in the caveat registered by Paul on the title to the Olinda property on 20 March 2018. By the time Paul took steps to assert his interest in the Olinda property, Leafbusters was in financial jeopardy and thus Paul, and, I would add, Thea, had the incentive to put the property beyond the reach of the creditors of the Leafbusters Trust. I do not accept the suggestion by the plaintiff's counsel that, on the plaintiff's case, there was no reason for Paul to assert his interest in the Olinda property, by lodging a caveat or by other means, at an earlier time.

References to the Olinda property being subject to a tenancy

127 Contrary to Paul's case that the Olinda property was at all relevant times held on trust for him, there are, as the defendant submits,[248] multiple documentary references to the property being subject to a tenancy arrangement. Particulars are given in the defendant's written closing submissions.[249] I have already referred to some of them. Perhaps the most striking is the letter dated 7 October 2016 from Bentley Watters to a judgment creditor of the Leafbusters business, which included the following:

'As the company is no longer trading and has unsecured debt totalling in excess of $450,000, we have also discussed placing the company into liquidation, with its only asset being a property with approximately $200,000 available in equity and a 20 year lease in place'.[250]

128 Each of the references relied on by the defendant is contained in the records of third parties. They are directly inconsistent with Paul's evidence that he has been in occupation of the Olinda property in accordance with the alleged separation agreement, on the basis that occupation was rent-free, with Paul required only to pay outgoings in connection with the property.[251]

129 I agree with the defendant[252] that Thea and Paul were unable to offer any satisfactory explanation as to how or why it was that these third parties' records reflected the Olinda property being subject to a tenancy. I agree that it is highly improbable that the records of all of those third parties were faulty. I accept that the more probable explanation is that those records accurately captured what Thea (and, in one case, Paul) told the relevant third party: that the property was occupied pursuant to a tenancy, and that this was the fact, whether or not any rent was payable or paid.

The Olinda property continued to be treated as an asset controlled by Thea

130 As the defendant submits, the Bentley Watters documents are predicated on the Olinda property being part of the assets and trusts controlled by Thea.[253] An apt example given by the defendant is the Bentley Watters' letter to BankWest dated 10 October 2016 which states that Bentley Watters held instructions to sell or refinance properties which included the Olinda property.

131 Mr Jason Edwards is the former 'bookkeeper' and 'chief financial officer' of the Leafbusters business, who was said by the Grooms to have been present in person when the document said to embody the separation agreement was completed and the agreement itself was allegedly made. He was also said to be responsible for arranging the weekly payments of $1,000 or $1,500 by Leafbusters to Paul, being payments which, on Paul's case, were made to Paul by Leafbusters on Thea's behalf, solely by way of paying down Thea's alleged debt to Paul of $858,988 under the alleged separation agreement. As the plaintiff and his lawyers knew, the defendant disputed this characterisation of the payments, many of them having been listed in bank records as 'wages'. As indicated above, Mr Edwards was not called as a witness. Counsel for the defendant invited the Court to draw a Jones v Dunkel inference, from Mr Groom's failure to call Mr Edwards, to the effect that Mr Edwards' evidence would not have supported the plaintiff's case in relation to the alleged separation agreement.[254] For the following reasons, I accept that submission, though my conclusions in this case would be the same even if I had not accepted it.

132 The learned authors of Cross on Evidence set out the rule in Jones v Dunkel[255] as follows:

unexplained failure by a party to give evidence, to call witnesses, or to tender documents or other evidence or produce particular material to an expert witness may (not must) in appropriate circumstances lead to an inference that the uncalled evidence or missing material would not have assisted that party's case...The appropriate circumstances exist where it was within the power of the party to tender the evidence which was not tendered (citations omitted).[256]

133 The rule operates only where it is natural for the party who fails to call the witness to do so, or where that party might reasonably be expected to call the witness. This aspect of the rule has been described in various different ways in the authorities.[257] The central idea is that, for the inference to be available, the missing witness must be able to be described as in one party's 'camp'.[258]

134 Whether a witness falls into one or another party's camp will turn on the facts and the nature of the litigation in each case. As a general proposition, however, a party is not necessarily expected to call its own employees.[259] Ordinarily, a party would be expected to call its own accountant.[260]

135 Neither of those observations determine the issue with respect to Mr Edwards. Mr Edwards was neither Mr Groom's personal accountant, nor his employee. However, it is safe to say that Mr Edwards was in Mr Groom's camp from at least as early as Mr Edwards' (asserted) participation in the making of the alleged separation agreement in September 2009 until at least as late as 11 May 2017, when (as mentioned above), Mr Groom (or Thea, or the two of them working together) indicated to the liquidators of Leafbusters Pty Ltd that Mr Edwards would provide an affidavit confirming the agreement.[261]

136 There is some authority to the effect that the rule in Jones v Dunkel will not operate to require a party to give merely cumulative evidence.[262] So, for example, where many people attend a meeting and only some attendees are called, an inference is not available merely because a party failed to call each attendee. That is, a party is not required to waste time calling merely confirmatory evidence.[263]

137 In my view, that line of authority does not greatly assist Mr Groom. Mr Edwards' putative evidence would not properly be characterised as merely cumulative. Counsel for the defendant made clear in his opening written submissions that Paul's and Thea's evidence about the creation of the alleged agreement and the document said to embody it would be challenged.[264] The defendant also put Mr Groom on notice that it would allege that Paul and Thea were acting in concert.[265] Finally, a range of material in evidence contradicted the existence of the alleged agreement.[266] That material was evidence 'requiring an answer' from Mr Groom.[267]

138 Taken in that context, it must have been plain to Mr Groom that Mr Edwards' evidence about the alleged agreement and the document said to embody it could have provided an independent (or at least more independent) account than those provided by Paul and Thea. Whatever he said about those matters, Mr Edwards' evidence (had he given it) would likely have materially changed the complexion of the case. That Paul (or his privy) told the liquidators in May 2017 that Mr Edwards would provide an affidavit confirming Paul's version of events is also a telling circumstance.

139 The fact that Paul and Thea gave direct evidence about the agreement is not to the point. The inference urged on the Court by the defendant is that the failure to call Mr Edwards tends to show that Paul and Thea's evidence about the agreement is unreliable. Such an inference is available at least where (as here) it is apparent that the reliability of the direct evidence is going to be disputed.[268]

140 Of course, if there is a proper reason for the omission to call a witness, the Jones v Dunkel inference is not available. The Court may draw the inference only where it can be inferred that the reason the witness was not called is because the party expected to call the witness feared to do so.[269] But a reason not to call a witness must itself be proved by evidence, and not merely presumed.[270]

141 Mr Groom made a brief attempt to explain the omission to call Mr Edwards in cross-examination. He said 'we sort of suspected that he might have taken some money as well from the business', and that Thea might have tried to call him on some old phone numbers.[271] That evidence does not satisfy me that Mr Groom had a proper reason not to call Mr Edwards. It does not establish that Mr Edwards left Leafbusters in 'acrimonious circumstances' or, indeed, that he had fallen out with the Grooms in any meaningful way.[272] It does not even establish that Mr Edwards knew the Grooms accused him of stealing from them. If indeed there was reason to think that Mr Edwards would be hostile to Mr Groom's case, I can see no reason why that matter could not have been proved on appropriate evidence by Paul or Thea Groom.

142 I consider that it is open to me to draw an inference from Mr Groom's failure to call Mr Edwards that Mr Edwards' evidence would not have assisted Mr Groom's case. I do so, but with the single rider that, as mentioned above, I am prepared to accept the plaintiff's contention that the document relied on is not a forgery or fabrication.

An alternative characterisation of what took place between Paul and Thea between 2008 and 2009 in relation to the Leafbusters business and the real properties

143 Enough has been said above to indicate that I am simply not satisfied that Paul and Thea Groom came to an agreement in 2008 - 2009 that was meant to divide up between them, on a permanent basis, particular parts of their joint pool of assets. I can accept that, at that time, they regarded the total pool of assets as belonging to them in equal shares (50/50). However, I do not accept that it was agreed that Paul would depart from the management of the business. It seems to me that his continued involvement in the management of the business would have been seen to be essential to the prospects of the business recovering from its then difficulties and returning to a successful path. They were matters in which both he and Thea had a fundamental interest. I note that, of the $200,000 that Paul borrowed from the ANZ Bank in 2013, 50% ($100,000) was provided to the defendant company to support the Leafbusters business. I note also that, on Paul and Thea's own evidence, Paul went on business trips to New Zealand for the Leafbusters business after 2009,[273] and that he did at least some physical work in setting up displays of Leafbusters products in various places after 2009.[274]

144 It is true that, on paper at least, changes were made to the shareholdings and directorships of the relevant companies. However, I suspect (though, of course, I do not need to finally determine) that the real and only explanation and catalyst for the changes that were made in 2008 - 2009 to the shareholdings and directorships is that both Paul and Thea (especially Thea) were determined to protect the business and the other assets from a certain person who, they feared, might make a claim against them.

145 Both Paul and Thea said almost as much in evidence.

146 Thea Groom said in evidence, and I have no reason to doubt, that, before 2008, she and Paul Groom had twice had 'splits'.[275] Apparently, neither of those 'splits' led to any rearrangement of their property interests or business affairs, unless Thea's otherwise unexplained absence from the directorship of the defendant company between 19 March 2002 and 1 October 2008 was related to such a split. But things were apparently different in 2008 - 2009.

147 The plaintiff said in evidence that he had had an affair in 2008.[276] He did not say in which month it began. He did not say how long it lasted. He did not name the other party. However, according to Thea's evidence, the first name of the other party was Julia. In any event, in June of that same year (2008), Paul and Thea, at long last, were married. They even had a honeymoon.[277] Counsel for the plaintiff, in opening, said that, on his instructions, the marriage in June 2008 had come as part of an attempt by Paul and Thea to reconcile with each other, and to renew their personal relationship, but it failed.[278] According to Thea, she and Paul split up permanently two months later, in August 2008.[279] However, it was certainly not an acrimonious split. Paul himself describes it as an 'amicable split'.[280] They 'kept their friendship'.[281] They remained in close contact. From (at the latest) 2014 or 2015, they 'regularly' stayed overnight in each other's homes, albeit, Paul says, in separate rooms.[282]

148 Early in his evidence-in-chief, Paul was asked whether there was a point at which he and Thea decided to separate. In answer, he said that, initially, they were 'trying to work together to see if [they] could get through things, even though [they] were separated'. He claimed that, ultimately, they found that they just could not work together.[283] Thea said something similar in her evidence,[284] but she attributed the work difficulties to Paul being distracted by his affair. And, in my view, it was almost certainly the affair, not a desire to permanently split up their assets, that led to the changes to directorships and shareholdings on which the plaintiff now places such great emphasis. Paul and Thea both gave express evidence that it was Thea's concern about the potential for Julia to make a claim that would affect the Leafbusters business that prompted the changes made in 2008 and 2009. Thus, Paul referred in his evidence to having had discussions with Thea 'about signing all businesses over', and he explained that by reference to his affair.[285] He said:

Thea was very concerned that the person might try and come back on Leafbusters, so I signed the business over to her, the Leafbuster business, in about February, I think it was, 2009.

149 I note that while it was only the defendant company (which was the main operating company of the Leafbusters business) that was 'signed over' in February 2009, the other abovementioned companies were dealt with in the same way between 1 October 2008 and 22 September 2009.

150 Turning to the evidence given by Thea on this point, I note that it was quite dramatic. Thea had a nickname for Julia. Thea called her 'Olive Oyl', after the character of that name in the Popeye cartoons. Thea said:[286]

First of all, because Paul was seeing Olive Oyl, I felt that the company, Leafbusters, was at risk because she could get us - I was pretty sure she was a gold digger. I felt that if she got herself pregnant, then she could say to Paul, 'I want half of what you've got'. And I didn't think the company could or should have to suffer that. I actually asked him to come in and it was February - it was January we talked about it, and I said, 'Would you sign the company over to me because I feel that Julia could do something dangerous.'

[Paul] came in and he signed the company over to me and I - we hadn't even written our agreement yet. I mean, we had the promise of 50-50, but he did, he signed the company to me because of the fear I had of the company being attacked by Olive Oyl.

152 The evidence is not clear as to how long Julia/Olive Oyl remained on the scene. She may not have lasted beyond about 2014 or 2015, because Paul referred in evidence to his having had girlfriends (plural) at some point before 2014 - 2015.[287] However, it would seem that the rearrangement of the directorships and shareholdings was satisfactory to them both for some years. Later, as mentioned above, there was a quick, if mainly temporary, reversal in relation to some of the companies.

No promise or assurance; no reliance (reasonable or otherwise); no detriment; no unconscionability

153 It follows from what appears above that I am not satisfied that there was any relevant promise or assurance made to Paul Groom. Strictly speaking, therefore, I need not be concerned about the elements of reliance, detriment or (if a separate element) unconscionability. However, the defendant made some submissions about those matters, particularly about detrimental reliance, which, in deference to the careful nature of the submissions, I should address.

154 The defendant describes the plaintiff's case in this regard as constituted by an allegation that Paul acted upon 'the expectation that Leafbusters held its interest in the Olinda property as trustee for him', to his detriment, in the following ways:[288]

(a) first, by not asserting any claims in respect of (i) any other assets of the Leafbusters trust; (ii) real property of which he says that he and/or Thea were the ultimate beneficial owners as at September 2009 (save for the Olinda property and the Traralgon flats); or (iii) certain items of furniture;

(b) second, by resigning as a director of, and transferring to Thea his interest in shares in, four companies: namely, LBI Holdings Pty Ltd, Boof Pty Ltd, Polymesh Australasia Group Pty Ltd and Lenvale Investments Pty Ltd;

(c) third, by not seeking any orders in the Family Court or entering into any binding financial agreement; and

(d) fourth, by paying all outgoings and maintaining the Olinda property at his own expense.

155 The defendant contends that, even assuming the existence of the alleged separation agreement, the critical element of detrimental reliance is absent.[289]

156 By way of overriding observation, the defendant says that, as the evidence of Paul and Thea's dealings with each other since September 2009 illustrated, Paul and Thea have shown a preparedness to act in concert, whenever they perceived that it suited their collective interests to do so (and even if such actions be contrary to Thea's apparent self-interest).[290] The defendant submits that those actions were without reference to, and without being restrained or inhibited in any way by, the alleged separation agreement or any representations said to have been made by the defendant company. Put another way, the defendant says, the evidence establishes that Thea, as a matter of course, acts to advance Paul's interests - even to her own apparent detriment. This includes voluntarily giving evidence at trial in support of Paul's claims. I agree with all of this.

157 Next, the defendant examines in turn each of Paul's pleaded claims of detrimental reliance.

158 Dealing first with the claim that Paul had failed to assert claims over the Leafbusters Trust, the real property and the furniture, the defendant submits that Paul did not change his position to his detriment in reliance upon the alleged conduct. Rather, the defendant submits, Paul maintained the status quo. He has continued to derive the economic benefit from the assets.[291] In particular, the defendant submits,[292] distributions of the income of the Leafbusters Trust continued to be declared in Paul's favour. In 2012 and 2014, the distributions of the Leafbusters Trust were declared 50:50 as between Paul and Thea (ie, distributions to each of them of $22,894 and $129,367 respectively). In 2013, 35% of the distributions of the Leafbusters trust were declared in Paul's favour, (ie, a distribution of $67,644, with the balance declared in favour of Thea, the Theofani Tsioris Trust and (Thea's daughter) Laeyna Rillotta). Those figures are not in dispute.

159 As for the real properties, as already mentioned, Paul, in his returns for the years 2011 to 2013, declared as income in excess of $150,000 in distributions from trusts that held those properties.[293]

160 I would add that it was tolerably clear to me, from the evidence overall, that the collective aim of Paul, Thea and Mr Caracoussis was to provide the most tax effective result for Paul and Thea, without regard to which of them was nominally in control of particular companies, trusts or properties.

161 Further, the defendant notes again that, in April 2016, Paul (with Thea's approval) registered caveats on the titles to eight of the properties in respect of which he is said to have relinquished any interest, as well as registering a caveat on a subsequently acquired property.[294] Thus, the defendant submits, Paul and Thea have conducted themselves on the basis that Paul retained a beneficial interest in those properties. I accept that submission.

162 Accordingly, I accept the defendant's submission[295] that, even on the present assumptions, Paul's first claim as to detrimental reliance would fail.

163 The defendant then turns to the second alleged form of detrimental reliance, namely, Paul's resigning as a director of, and transferring to Thea his interest in shares in, the four abovementioned companies.[296] The defendant notes that each of the four companies was the registered proprietor of real properties (in their respective capacities as trustee of a discretionary trust); and that, in the period following September 2009, Paul declared as income distributions from those trusts. Thus, the defendant submits, Paul has continued to derive economic benefits from trusts for which the four companies are trustees. I accept that that is so, at least by way of obtaining the most tax effective result that could be achieved.

164 Next, the defendant submits, and I agree, that there was no evidence that Paul suffered any financial loss or other detriment by reason of the mere circumstance that he had resigned as a director of, and had transferred to Thea his interest in shares in, the four companies.[297] Finally, on this second claim of detrimental reliance, the defendant submits, and I accept, that, on the evidence, Paul has not, in any real sense, irretrievably yielded control of the companies to Thea. As mentioned above, in April 2016, Paul was appointed as a director of, and shareholder in, companies in which he is said to have relinquished any interest; and he remains the sole director and sole shareholder of one of those companies (LBI Holdings Pty Ltd).[298]

165 The third alleged form of detrimental reliance is Paul's omission to seek any orders in the Family Court and omission to enter into any binding financial arrangement under the Family Law Act 1995 (Cth).

166 I agree with the defendant that the prospect that Paul would be unable to obtain any orders from the Family Court in respect of properties now, on paper, owned and controlled by Thea, because of a failure to either obtain the leave of the Family Court or Thea's consent, must be seen as speculative and remote.[299] I agree that any assessment of Thea's likely position on any such application must be informed by the evidence supplied by the present case of her preparedness to act so as to advance Paul's interests, contrary to her own apparent self-interest. In any event, as the defendant further submits, a dismissal of Paul's claim in this proceeding is a consideration that would weigh heavily in the exercise of the Family Court's discretion to grant leave to institute a proceeding out of time. I further agree with the defendant that there was no evidence adduced to establish that Paul suffered any financial detriment by reason of his omission to seek any orders in the Family Court or to enter into any binding financial agreement.[300]

167 So, again, I agree with the defendant that this third form of alleged detrimental reliance is not made out.

168 The plaintiff's fourth alleged form of detrimental reliance is that he has paid all outgoings and maintained the Olinda property at his own expense.[301] As the defendant submits, there is no substance to this point.[302]

169 The evidence that Paul has incurred outgoings in connection with the Olinda property was sparse.[303] It seems that, at the very least, he did not pay for building insurance or land tax referable to the property, and, as mentioned already, there is no clear evidence about the payment of municipal rates and charges.

170 More importantly, as the defendant submits,[304] since 2009 Paul has occupied the Olinda property without servicing the mortgage debt over the property. On Paul's case, his occupation of the property has been rent-free; on the documents, his occupation has been for a price of about $300 per week. In any event, as the defendant submits, Paul would have incurred normal domestic outgoings (telephone, gas, electricity etc) irrespective of whether her was living at the Olinda property or elsewhere.

171 Hence, I agree with the defendant that it is difficult to conclude, on the balance of probabilities, that Paul is any worse off by reason of his occupation of the Olinda property and the payment of outgoings.[305]

172 Further, I agree with the defendant's final point in this context,[306] to the effect that no evidence was adduced to show that Paul has incurred expenses in attending to the maintenance of the property.

No departure from the putative conditional promise

173 As outlined in the overview above, even on Mr Groom's case, there is a conditional element to the alleged separation agreement.[307] The Olinda property is subject to a mortgage. Initially, from 17 April 2007, it was mortgaged to the ANZ Bank. That mortgage was cross-collateralised with other secured debt. In 2012, the property was re-mortgaged to BankWest, though the debt secured over it was no longer cross-collateralised with other debt.

174 The document said to embody the alleged separation agreement does not deal with the mortgage, or who was responsible for paying it. But it is clear enough from Paul's and Thea's evidence and from submissions made on Paul's behalf, that the mortgage was to be repaid by Leafbusters or Thea. Counsel for the plaintiff submitted as much, though he did not allege that, under the agreement for which he contended, there was any time by which the mortgage needed to be discharged.[308] Indeed, counsel said that, whilst Leafbusters Pty Ltd or Thea were obliged under the alleged agreement to discharge the mortgage, Paul did not seek to enforce that obligation on the understanding that the defendant company's assets would not be sufficient to do so.[309]

175 That, under the agreement he alleged, Paul was only to receive title to the Olinda property once Leafbusters was able to and did discharge the mortgage was reflected in Paul's evidence, when he said that the agreement was that Thea would hold the Olinda property for him and he would live there rent-free until Leafbusters could pay out the mortgage.[310] Like his counsel, Mr Groom said that there was no time by which the mortgage was required to be paid out and title transferred to him.[311] The possibility that the mortgage might never be paid off, he said, didn't occur to him at the time.[312]

176 Thea described the agreement as conditional in a similar way. When asked by counsel for the defendants to confirm that it was her evidence that Paul was to get title to the Olinda property, Thea agreed, saying 'Yes, once I paid the mortgage, yes, I was going to give it to him'.[313] Later in cross-examination, she also said 'It was always his house as soon as I paid off the mortgage and gave him the title'.[314]

177 Plainly, and as was common ground, the mortgage was never repaid.[315] That is, the only circumstance in which, on his own case, Paul was to gain an interest in the property never arose. Put another way, the representation that Paul relies on was never departed from: he was only ever to acquire an interest in the property on the occurrence of an event (the discharge of the mortgage by Leafbusters Pty Ltd or Thea) that never occurred and now cannot occur.

178 This forms an additional, independent basis on which to dismiss Paul's claim in this proceeding.

179 As foreshadowed in the overview above, and for the reasons summarised there and then elaborated upon, the plaintiff's claim will be dismissed and judgment will be given for the defendant on that claim.

180 The defendant company appears to be entitled to an order for the removal of the caveat lodged by the plaintiff on the title to the Olinda property, as sought in the counterclaim. It is not clear whether the defendant or (if they have standing) the liquidators, press for any of the other orders sought by the prayer for relief in the counterclaim.

181 The practitioners for the parties are invited to consult with each other and to provide to the Court, within 14 days, an agreed form of judgment or order to give effect to these reasons for judgment, and to dispose of the proceeding, including in relation to costs. If full agreement is not reached and communicated to the Court within 14 days, the matter will be listed for a short oral hearing to deal with the outstanding matters.

[1] A letter dated 7 October 2016 from a firm of insolvency accountants then engaged on behalf of the defendant company stated that the company had ceased trading, had unsecured debt totalling in excess of $450,000 and had only one asset (this was a reference to the Olinda property) with approximately $200,000 available in equity: Court Book (CB) 77. It seems that the quoted figures of $450,000 and $200,000 may not have been accurate, but the insolvency of the company, then and now, is not in dispute.

[2] See the indorsement of claim on the writ (CB 4-7) and the plaintiff's amended statement of claim (CB 8-13).

[4] Plaintiff's reply and defence to counterclaim dated 28 October 2018, [7(j)] (CB 33).

[6] Plaintiff's outline of opening submissions dated 28 November 2019, [11(2)].

[7] Ibid [12] citing Donis v Donis [2007] VSCA 89; (2007) 19 VR 577 and Sidhu v Van Dyke (2014) 251 CLR 505.

[8] Plaintiff's closing written submissions dated 24 February 2020 at [14], [21]-[30] and [32(2)]-[40]. See especially at [35] where counsel for the plaintiff cites, together, Baumgartner v Baumgartner [1987] HCA 59; (1987) 164 CLR 137, Donis v Donis [2007] VSCA 89; (2007) 19 VR 577, Harrison v Harrison [2011] VSC 459, Harrison v Harrison [2013] VSCA 170, Sidhu v Van Dyke (2014) 251 CLR 505, Young v Young [2014] TASSC 24, McNab v Graham [2017] VSCA 352 and Mould v Canale [2017] VSC 793.

[12] [2017] VSC 793, [44]-[51] (Macaulay J).

[13] Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387, 428-9 (Brennan J). See the related statements of the elements in CC Growth Pty Ltd v Amiga Growth No. 2 Pty Ltd [2019] VSC 340, [81] (Riordan J).

[14] Ibid; see also Barport Pty Ltd v Baum [2019] VSCA 167, [104]-[107] (Kyrou, McLeish and Niall JJA); CC Growth Pty Ltd v Amiga Growth No. 2 Pty Ltd [2019] VSC 340, [81] (Riordan J) and the authorities there cited; Harris v Harris [2021] VSCA 138, [29] (Beach, Niall and Kennedy JJA).

[15] Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd [2016] HCA 26; (2016) 260 CLR 1, [39] (French CJ, Kiefel and Bell JJ). See also Nettle J's statement of the foundational principle on which equitable estoppel in all its forms is grounded at [217].

[16] See Austin v Keele (Supreme Court of New South Wales, Kirby P, Hope JA, McHugh JA, 22 November 1985) 34-37. Cf Austin v Keele (1987) 10 NSWLR 283, 289-290.

[17] As to the degree of certainty required to found a promissory and, if the test is different, a proprietary estoppel, see Foran v Wight [1989] HCA 51; (1989) 168 CLR 385; Flinn v Flinn (1999) 3 VR 712, [80]; Westpac Banking Corporation v The Bell Group Ltd (No 3) [2012] WASCA 157; (2012) 270 FLR 1, [1748]-[1789] (Drummond AJA); Hammond v JP Morgan Trust Australia Ltd [2012] NSWCA 295, [52] (Meagher JA), special leave to appeal in that case was refused on a different point [2012] HCATrans 299; Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd [2016] HCA 26; (2016) 260 CLR 1, [35] (French CJ, Kiefel and Bell JJ); Barport Pty Ltd v Baum [2019] VSCA 167, [110]-[112]; Commercial & General Corporation Pty Ltd v Manassen Holdings Pty Ltd [2021] SASCFC 40, [210].

[18] See Alderuccio v Alderuccio [2019] VSC 404, [40]-[41] (Derham AsJ); McNab v Graham [2017] VSCA 352; (2017) 53 VR 311, [120] (Tate JA, Santamaria JA and Keogh AJA agreeing); Bijkerk v Bikic [2020] NSWSC 1336, [111]-[119] (Leeming JA); Zekry v Zekry [2020] VSCA 336 [76] (Tate, Kyrou and Niall JJA).

[19] Defendant's supplementary note dated 27 March 2020. See Australian Receivables Ltd v Tekitu Pty Ltd (Subject to Deed of Co Arrangement) (Deed Administrators Appointed) [2011] NSWSC 1306, [129]-[130], [132] referring to, among other cases Parsons v McBain [2001] FCA 376; (2001) 109 FCR 120.

[20] McNab v Graham [2017] VSCA 352; (2017) 53 VR 311, [120]; Secretary, Department of Social Security v Agnew [2000] FCA 59; (2000) 96 FCR 357, [14].

[21] The plaintiff foreshadowed, but later abandoned, an objection to the admissibility of one document, namely the abovementioned letter dated 7 October 2016 at CB 77 (see footnote 1). Otherwise there were no objections to the admissibility of any documents.

[22] The agreed chronology was filed on 18 November 2019.

[23] The list comprises the first part of exhibit D1, which, in its finally agreed form, was provided to the Court by email on 7 February 2020.

[24] Namely, a property in West Terrace, Murray Bridge (SA).

[25] According to the jointly prepared document, it is agreed that on 28 April 2016 Paul registered a caveat on the title to the Hawthorn property; that the caveat was withdrawn on 12 November 2018; and that the property was transferred to a third party in March 2019.

[26] But not earlier than 26 February 2009.

[27] This comprises the second part of exhibit D1.

[28] This document comprises pages 14-15 of the plaintiff's outline of closing submissions dated 24 February 2020.

[29] Defendant's outline of closing submissions dated 27 February 2020 [36].

[38] On Mr Groom's evidence (T132), this occurred in 'about' 1992/3, but I prefer Thea Groom's clearer recollection (T345) that it occurred in 1991.

[40] P. Groom, T132. According to Thea, she and Paul began living together before the end of 1991, probably within a couple of months of their first meeting: T. Groom, T345.

[49] Namely 7 Cedar Grove, Mt Barker, South Australia.

[50] Namely 1/23A Gladstone Street, Nairne, South Australia.

[51] Namely 107 Murray Drive, Murray Bridge, South Australia.

[52] As listed in Exhibit D1. As indicated above, there are two additional properties for which the registered proprietor is stated in Exhibit D1 to be 'unknown'. However, the beneficial owner in each case is listed as 'Boof Settlement'.

[63] Plaintiff's outline of closing submissions dated 24 February 2020 [13], [15].

[64] Ibid, [16]. As will be seen, the alleged agreement did not involve the proposed provision by Paul of anything to, or for the benefit of, the defendant company. In other words, vis-à-vis the defendant company, Paul was a volunteer. However, I gather that the plaintiff relies on an exception to the principle that equity will not assist a volunteer. He submits, I gather, that equity may find a common intention constructive trust against a promisor in favour of a volunteer where there has been reasonable detrimental reliance by the volunteer on the promise made: Donis v Donis [2007] VSCA 89; (2007) 19 VR 577, 589 [36].

[66] See plaintiff's outline of closing submissions dated 24 February 2020 [11]-[30].

[67] P. Groom, T142, T152; T. Groom, T345.

[70] P. Groom, T143-5; T. Groom, T353-5.

[71] In the plaintiff's closing written submissions dated 24 February 2020, this contention was apparently directed principally to the, then extent, express trust claim. However, the contention remains of relevance to the remaining constructive trust/proprietary estoppel claim.

[74] Emphasis as in counsel's written submissions.

[82] Here counsel cites Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 at [128]; Hamilton v Whitehead [1988] HCA 65; (1988) 166 CLR 121 at 127. But see paragraph [10] of this judgment.

[83] Defendant's outline of opening submissions dated 2 December 2019.

[84] Counsel for the defendant was here referring to the evidence to which he had already pointed, as recounted above.

[85] No financial statements for the years after 2014 are included in the material before the Court. However, I believe it to be common ground that the Olinda property has not ever been recorded otherwise than as an asset of the Leafbusters Trust.

[86] These words are taken verbatim from paragraph 20 of the plaintiff's outline of closing submissions dated 24 February 2020. In my view, they are of more help to the defendant's case than to the plaintiff's.

[92] Other evidence suggests that this may have occurred in 2010.

[96] Defendant's outline of closing submissions dated 27 February 2020, especially at [36] (both Paul and Thea), at [37], [41], [47] and [50] (Paul) and at [51] and [57] (Thea).

[106] CB 144-150. Paul disputed that his declining to attend an interview amounted to a 'refusal', citing his claim that he had not had anything to do with the running of the business after 2009: P. Groom, T 179.

[107] Defendant's outline of closing submissions dated 27 February 2020, [42]; Paul T248-249.

[108] Plaintiff's outline of closing submissions dated 24 February 2020, [24]; Defendant's outline of closing submissions dated 27 February 2020, [44]. At the same time Paul lodged a ninth caveat on a subsequently acquired property, as noted above.

[111] Defendant's outline of closing submissions dated 27 February 2020, [44].

[113] Defendant's outline of closing submissions dated 27 February 2020, [45].

[119] Defendant's outline of closing submissions dated 27 February 2020, [45].

[121] Defendant's outline of closing submissions dated 27 February 2020, [46].

[124] CB 123; CB 145.

[127] Defendant's outline of closing submissions dated 27 February 2020, [54].

[134] Defendant's outline of closing submissions dated 27 February 2020, [56].

[137] Defendant's outline of closing submissions dated 27 February 2020, [63].

[138] Trust deed for the Thea Rillotta and Paul Groom Settlement, clause 8 (CB 40). As the defendant also points out, clause 8 of the trust deed further provided that: the exercise of any discretion or power conferred or imposed upon the Trustee or the making of any decision or determination by the Trustee: where the Trustee is a company, may be exercised or made by a resolution of the Board of Directors or other governing body of the Trustee (cl 8.1.1); and whether or not the Trustee is a company, shall be sufficiently evidenced if noted in minutes kept by the Trustee of its proceedings as trustee and signed as a true record by the Trustee or a Director of the Trustee and when so noted and if not expressed to be revocable shall be deemed to be irrevocable and binding upon all the beneficiaries (cl 8.1.2).

[140] Defendant's outline of closing submissions dated 27 February 2020, [64].

[141] Indeed, as mentioned below, the relevant directions to Mr Caracoussis were to the opposite effect.

[142] Defendant's outline of closing submissions dated 27 February 2020, [65].

[146] Defendant's outline of closing submissions dated 27 February 2020, [67].

[153] The defendant acknowledges that Paul's evidence was that he could not be certain that he had composed this email: T246, T248. However, it was obviously composed either by Paul or by Thea or by the two of them working together.

[156] Defendant's outline of closing submissions dated 27 February 2020, [68].

[164] Defendant's outline of closing submissions dated 27 February 2020, [68].

[170] Defendant's outline of closing submissions dated 27 February 2020, [71]-[72], citing principally, Pascoe v Boensch [2008] FCAFC 147; (2008) 250 ALR 24.

[171] Ibid [71], referring to the first page of the document at CB 66.

[172] Ibid, [73], referring to P. Groom, T218-220.

[179] Defendant's written closing submissions dated 27 February 2020, [76]-[77], referring to P. Groom, T209-214.

[181] P. Groom, T205-207; T. Groom, T436.

[185] Defendant's outline of closing submissions dated 27 February 2020, [79].

[188] Defendant's outline of closing submissions dated 27 February 2020, [80].

[190] Defendant's outline of closing submissions dated 27 February 2020, [81]-[82].

[191] P. Groom, T200-201; T. Groom, T386.

[193] P. Groom, T204; T. Groom, T391-392.

[196] Compare defendant's outline of written submissions dated 27 February 2020, [83].

[204] Defendant's outline of closing submissions dated 27 February 2020, [87].

[206] Defendant's outline of closing submissions dated 27 February 2020, [88].

[207] Examples are given in the defendant's written submissions.

[210] Defendant's outline of closing submissions dated 27 February 2020, [90].

[213] Defendant's outline of closing submissions dated 27 February 2020, [91].

[215] Defendant's outline of closing submissions dated 27 February 2020, [92].

[219] Defendant's outline of written submissions dated 27 February 2020, [95].

[225] Defendant's outline of closing submissions dated 27 February 2020, [99].

[226] The particulars are set out in paragraph [99(a)] of the defendant's outline of closing submissions dated 27 February 2020.

[227] Paul's 2014 tax return is not in evidence.

[229] Federal Commission of Taxation v Whiting [1943] HCA 45; (1943) 68 CLR 199, 215-6 (Latham CJ and Williams J).

[233] P. Groom, T275-276. The defendant submits, and I accept, that such a disclaimer is effective: see, eg, JW Broomhead (Vic) Pty Ltd (in liq) v JW Broomhead Pty Ltd [1985] VicRp 88; [1985] VR 891, 930-1 (McGarvie J); Commissioner of Taxation (Cth) v Ramsden [2005] FCAFC 39; (2005) 58 ATR 485 (FCAFC), [26] (per curiam).

[234] See cl 2(2) of the variation deed at CB 62.

[237] CB 2049. See also T. Groom, T432.

[239] CB 3344; P. Groom, T239, 279. The evidence is not explicit as to whether Paul paid the local government rates and charges referable to Olinda property.

[240] Hyhonie Holdings Pty Ltd v Leroy [2003] NSWSC 624, [42] (Young CJ in Eq).

[241] Defendant's outline of closing submissions dated 27 February 2020, [100]-[101].

[242] [1913] UKLawRpCh 67; [1913] 2 Ch 478, 486.

[243] Defendant's outline of closing submissions dated 27 February 2020, [102].

[245] Defendant's outline of closing submissions dated 27 February 2020, [103].

[247] Defendant's outline of closing submissions dated 27 February 2020, [104].

[248] Defendant's outline of closing submissions dated 27 February 2020, [107].

[252] Defendant's outline of closing submissions dated 27 February 2020, [109].

[253] Ibid, [110]. The Bentley Watters documents include one in which Thea says 'Graeme Watters is trying to settle my properties with BankWest'.

[255] [1959] HCA 8; (1959) 101 CLR 298.

[256] JD Heydon, Cross on Evidence (LexisNexis Butterworths, 9th ed, 2013) [1215].

[257] See, eg, O'Donnell v Reichard [1975] VR 916929; Payne v Parker [1976] 1 NSWLR 191, 201-2.

[258] See, eg, Cayford v Let Danny Do it Pty Ltd [2021] VSC 707, [9(a)] (Gorton J) and the authorities there cited.

[259] Earle v Castlemaine District Community Hospital [1974] VicRp 86; [1974] VR 722, 734.

[260] Stelle v Mirror Newspapers Ltd [1974] 2 NSWLR 348, 366-7.

[262] Cubillo v Commonwealth [2000] FCA 1084; (2000) 103 FCR 1, [360].

[264] Defendant's outline of opening submissions dated 2 December 2019, [19]-[35], [41].

[266] Defendant's outline of closing submissions dated 27 February 2020, [83]-[92].

[267] Schellenberg v Tunnel Holdings Pty Ltd [2000] HCA 18; (2000) 200 CLR 121, [51].

[268] Cayford v Let Danny Do it Pty Ltd [2021] VSC 707, [12].

[269] Fabre v Arenales (1992) 27 NSWLR 437, 449-450 (Mahoney JA, Priestley JA and Sheller JA)

[270] West v Government Insurance Office of NSW [1981] HCA 38; (1981) 148 CLR 62, 70.

[274] P. Groom, T209-210. T. Groom, T366.

[288] Defendant's outline of closing submissions dated 27 February 2020, [129].

[314] T. Groom, T380. See to the same effect, T395, 419, 420, 422.

[315] Title search - 64 Olinda-Monbulk Road, Olinda, CB 2546.