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[2010] VSC 54
Supreme Court of Victoria
2010-03-01
HARPER J
Original judgment source is linked above.
CONTRACT - Family business - Alleged oral agreements between father and son - Whether any intention to enter into a legally binding contract - Whether any exchange of promises - Implied contract - Whether exercise of trustee powers subject to oral agreement - Whether father agreed to increase son's allocation under the family trust - Whether father agreed to transfer superannuation assets to family trust upon his retirement or death - Whether agreement not to sell major asset of business until 2056 - Whether agreement that units and shares would be held by family companies on behalf of the son.
1 This proceeding is the regrettable result of a falling out between a father and his son. The plaintiff, Grant Anthony Robertson ("Grant"), and his father, Bernard Breslin Spencer Robertson ("Bernard"), were once both heavily involved in the operation of the family business. Now they are fighting over its control and ownership. That business, established in 1971 by Bernard, involves property development and investment. Grant alleges that over a number of years a series of agreements, none of them in writing, were made between him and his father about its ownership and control. Their subject matter varied. Put very broadly, they concerned: (i) the amount of Grant's entitlement under the family trust structure; (ii) the dealings in investments held by Bernard's superannuation fund; (iii) the future of the major asset of the business (the Bacchus Marsh Village Shopping Centre); (iv) whether certain units in a unit trust known as the Horsewhite Unit Trust are held by the third defendant, a company called Anihidi Pty Ltd ("Anihidi") for Grant's benefit; and, finally, (v) whether a parcel of shares in a company called Environinvest Ltd are similarly held by the fourth defendant, a company called Waverley Properties Pty Ltd. Grant alleges that his father has breached each of these agreements. He sues accordingly for breach of contract, or alternatively, specific performance.
2 In general terms the defence is that, although the relationship between father and son was once close, it was based upon ties of trust and family, not contract. There were and are no agreements by which either party is legally obliged to the other. While Bernard cannot recall the actual communications by which he and Grant developed and nurtured the way they did business together, he can say what he did not agree to. He made no agreements of the kind alleged by his son.
3 This is a case in which a particularly close examination of the pleadings is warranted. The family relationships, and the family business, were complicated. While as pleaded Grant's claims are clearly based on contract, they do not fit neatly into well-defined tenets of contract law. The law of trusts seems, at least at first glance, to accommodate them more comfortably. And the evidence does not fit neatly into the allegations made in the statement of claim.
4 The first plea in the current version of the statement of claim[1] (to which, for convenience, I shall refer as "the statement of claim") is that of the father/son relationship. It is admitted. So too is both the incorporation of Anihidi and its role as the trustee of a unit trust - the Robertson Unit Trust - which forms part of the family property. At the same time, as the defendants also concede, another company, Anikau Pty Ltd ("Anikau") "held all the units in the Robertson Unit Trust".[2] It did so as the trustee of the Robertson Family Settlement. It therefore seems, on the basis of these admitted claims, that Anihidi was the legal owner of the units while Anikau was simultaneously both their beneficial owner (qua Anihidi) and (qua the beneficiaries of the Robertson Family Settlement) trustee of them for those beneficiaries.
5 In addition to its other roles within the Robertson structure, Anikau "provided management services to the trustee companies of unit trusts and syndicates (in which members of the Robertson family had significant investments) that were established for the purposes of property development and property investment."[3] The individual trustee companies to which Anikau provided services in this way, and in which members of the family had significant investments, formed "the Robertson Group" of companies. This too is admitted.
6 The next allegation in the statement of claim is (it seems) to some extent controversial. It is to be found in paragraph 3(c) of the pleading. It is that the Robertson Family Settlement "is a trust established for the benefit of the Robertson family which is divided into four sub-funds respectively known, after each of Bernard's children, as 'Neil's Fund', 'Grant's Fund', 'Bradley's Fund' and 'Vicki's Fund' ".
7 Bernard and the other defendants admit "that the trust fund comprising the Robertson Family Settlement was divided into four sub-funds" with the names set out in the statement of claim; but they do not admit that the trust was established for the benefit of the Robertson family. The manner in which the defence is pleaded does not make it clear why this is an issue between the parties. The explanation cannot lie in the fact that two family members, Bernard and his wife, were not and are not beneficiaries; they are, the trustee having been given a discretion to divide the income of each child's fund among that child and his or her parents (and others).
8 The statement of claim then[4] alleges that Bernard (before 1984) controlled the Robertson Group. He did so because he was the majority shareholder in, and the managing director and chairman of the board of, Anikau and Anihidi, and the majority shareholder in all the companies in the Robertson Group.
9 The defendants admit that, both before and after 1984, and indeed to the present, Bernard held the relevant managing directorships. They also admit the fact that, before 1985, Bernard was the majority shareholder in Anikau and Anihidi. Otherwise, they do not admit the allegations recited in paragraph 3(d). It follows that they do not admit that before 1984 Bernard was chairman of the boards of Anikau and Anihidi, or was the majority shareholder in all the companies in the Robertson Group.
10 Grant then alleges that he was, before 1984, "executive director of each company in the Robertson Group", and held one share in each of Anihidi and Anikau - that one share amounting to 20% of the issued capital of each of those companies.[5] In response, the defendants plead that, while Grant was a director of a number of companies (each of which is identified in the defence), and while his appointment as such was necessary because the law at that time required the companies in question to have at least two directors, the allegations concerning Grant's position as executive director of each company in the Group is denied. Given, as Grant alleges, that Bernard was the managing director of (at least) two companies in the Group, Anikau and Anihidi, the denial is perhaps unsurprising: the reader of the statement of claim is proffered no definition of the expressions "managing director" and "executive director", and therefore has no means of ascertaining how a company might operate with one of each.
11 By contrast with the defendants' denial that Grant held the position of executive director, they admit that he held one share in each of Anihidi and Anikau, and that one share amounted to 20% of the issued capital of each of those companies. It is, however, not admitted that before 1984 Grant "had provided guarantees to financiers of the Robertson Group and to vendors who had sold land to companies in the ... Group": statement of claim, paragraph 3(g). The allegation made by paragraph 3(h) - that Grant before 1984 devoted substantial amounts of time to working for the Robertson group for no reward - is denied, save that the defendants concede that none of the directors of those companies in which it is admitted that Grant was a director received any director's fees before 1984.
12 The year 1984 is significant because it was during that year that Bernard married Rosemary Moores. It was his second marriage: Beryl, the mother of his four children, had died on 4 October 1980. According to Grant, the prospective marriage provided the impetus for a review of the structure of the family business. This review was, Grant alleges, informed by a recognition of his membership of the Robertson family, and of his past services to the Robertson Group, including his guarantee of its obligations not only to financiers, but also to those from whom it purchased the land it then developed. Moreover, the agreement to which the review gave rise was (or so the statement of claim would have it) in consideration of Grant (i) transferring both his share in Anihidi and his share in Anikau to the trustee of a new trust to be known as the Robertson Family Trust and (ii) agreeing to continue (a) to work for the Robertson Group and any companies that became part of it, and (b) to guarantee the obligations of its members, present and future.
13 All this is set out in paragraph 4 of the statement of claim, a paragraph that winds itself around nearly four pages of hyperactive text before meeting up with paragraph 5. In the latter part of its journey, it describes the agreement which, it alleges, was brought into being after the completion of the review. It refers to this agreement as "the 1984 agreement", and in the prayer for relief seeks an order that it be specifically performed or, alternatively, an order for damages - presumably, as a result of its breach.
14 Particulars of the 1984 agreement are given under paragraph 4. The agreement was, according to those particulars:
... partly oral and partly to be implied. Insofar as it was oral, it was constituted by conversations between Grant and Bernard ... between February 1984 and September 1984. ... Insofar as it was implied it was implied by the implementation of the facts alleged in paragraph 5 below that relate to the 1984 agreement."
15 By the terms of the 1984 agreement, as alleged in paragraph 4, Bernard and Grant agreed that Grant would restructure the Robertson Group; and he would do so in a manner that ensured 11 things. First, that the assets of the Robertson family would remain under the control of blood relatives. Secondly, that those assets would be protected even in the event that litigation against Anihidi, or Anikau, or both, were to be successful. Thirdly, that Grant would continue to work for the Robertson Group. Fourthly, that Bernard would "retain control of the Robertson Group until his death". Fifthly, that "Bernard and Grant would be the executive directors of Anikau and Anihidi and any further companies that became part of the Robertson Group". Sixthly, that Grant would continue to be executive director of all the existing members of the Group. Seventhly, that he "would be given an interest in ... the Robertson Family Trust that included separate funds attributed to Neil, Grant, Vicki, Bradley and Rosemary ... which in the case of Grant and Neil would reflect the amount of work that they had done and were expected to do for the Robertson Group ... and which in Grant's case reflected the matters referred to in paragraph 4(b)" (namely, the benefits which, by being guarantor for the Group, Grant conferred on the Group and therefore on the family). Eighthly, that "the Robertson Family Trust would have an unallocated fund [being an additional, and therefore the sixth, fund within the Trust] that could be allocated to each of the [five separate] funds referred to ... [above] having regard to future contributions made by Grant, Neil, Vicki and Rosemary to future growth in wealth of the Robertson Group". (The absence of any reference to Bradley at this point - paragraph 4(A)(viii) of the statement of claim - is unexplained). Ninthly, that "Grant and Bernard would determine how the assets contained in the unallocated fund referred to ... [above] would be allocated and would cause the trustee of the Robertson Family Trust to give effect to that determination". Tenthly, "that as Bernard reduced his involvement with the day to day affairs of the Robertson Group ... Grant would take over the day to day control of the ... Group". And, finally, that the trustee of the Robertson Family Trust would control any further companies that became part of the Robertson Group.
16 As pleaded in the statement of claim, the 1984 agreement also provided that "Bernard would make a new will in the form of a testamentary trust that ensured that upon Bernard's death Grant and Neil would together control all the companies in the Robertson Group" and that "Bernard would transfer his shares in Anihidi and his shares in Anikau to the trustees of the Robertson Family Trust."[6]
17 The defendants deny, in its entirety, paragraph 4 of the statement of claim. The consequence is that, if Grant is to succeed in obtaining the relief which he claims in relation to the 1984 agreement, he must prove on the balance of probabilities the facts upon which the existence of an agreement in the terms pleaded depends. But, although clarity may come when the litigation landscape is surveyed through wider lens than those provided by a mere portion of the pleadings, the view from the presently restricted horizon discloses potential difficulties. As pleaded, the agreement is internally inconsistent. It also contains elements that may not be sufficiently certain. And it sits within the context of complicated trust arrangements which were put in place to benefit not merely Grant but also the other members of Bernard's family. These arrangements bind the trustee or trustees; and the alleged agreement between Bernard and Grant was an agreement which had as its parties two people who were intimately familiar with the terms of the trusts and the rights and obligations attached to them. It follows that, insofar as the agreement purported to affect trust property, or to stand between a trustee and the trustee's duty, it could not be enforced by the court if to do so were to make the court complicit in a breach of trust. Nor could it be the subject of a claim by Grant if it were not intended to have binding force.
18 An example of each potential problem may readily be given. First, an internal inconsistency, or at least an inherent uncertainty, lies in the allegation that Grant would restructure the Robertson Group in a manner that ensured on the one hand that Bernard "retain control of the Robertson Group until his death" and on the other "that as Bernard reduced his involvement with the day to day affairs of the ... Group ... Grant would take over day to day control of the ... Group". Likewise, there appears to be an inconsistency in, on the one hand, the proposed allocations to Neil and Grant, the size of which was to reflect in part the work they were expected to do for the Group, and the other the disposition of the unallocated fund, which would be based in part on their like contributions - thus enabling them, as opposed to their siblings and Rosemary, to be rewarded twice for the same work.
19 Secondly, uncertainty lurks in the proposition that Grant would restructure the Group in a manner that ensured that he would remain working for the Group. In what circumstances? For life? For how many hours a day, or a week? For how many weeks in a year? For what remuneration? What duties were or would be included in his job description? Perhaps the answer is that we are at present looking only at paragraph 4 of the statement of claim, and therefore at what Grant undertook to ensure. On this assumption, and based on this paragraph, the reader is entitled to expect that the pleading will later include an allegation that Grant has fulfilled this undertaking by drawing a contract of employment which includes the terms necessary for such a contract to be efficacious and enforceable.
20 Thirdly (in relation to the complications inherent in imposing an agreement upon the structure of a trust) what right would repose in Bernard and Grant to "determine how the assets contained in the unallocated fund ... would be allocated" unless the trust instrument so provided? There is nothing in the statement of claim to suggest such a provision. Again, the reader is entitled to expect a subsequent allegation that Grant has drawn a trust deed which makes provision for the creation of an unallocated fund the assets and income of which are to be allocated according to the determination of Bernard and Grant, with some appropriate provision by which disagreements between them might be resolved.
21 Another point should be made about the agreement as pleaded in paragraph 4 of the statement of claim. It does not readily present to the reader as something which was intended to have binding force and upon which Grant might successfully sue. Rather, it is portrayed in the pleading more as a consensus, reached between Bernard and Grant as fellow trustees or directors, about certain aims which should be pursued. These having been agreed, Grant was given the responsibility of adding the necessary detail to a general concept. In other words, its description in the statement of claim would fit the kind of agreement which directors and trustees routinely make between themselves in the exercise of their duties as such, with no suggestion that they are thereby creating private obligations one to the other. It is particularly difficult to read paragraph 4 as pointing to the creation of private obligations owed by Bernard to Grant.
22 Evidence, when called, may of course alter this first impression of the case as pleaded by the plaintiff. Until then, the reader waits and wonders.
23 As pleaded, the agreement imposes but two obligations on Bernard. First, he was to make a will that ensured that upon his death Grant and Neil would control all the companies in the Group. Secondly, he was to transfer to the trustee of the soon-to-be-created Robertson Family Trust all his shares in both Anihidi and Anikau. According to paragraph 5(f) of the statement of claim, he fulfilled each of these obligations. At this point, therefore, the source of any complaint Grant may have, and upon which this litigation is founded, remains a mystery.
24 The mystery deepens when one contrasts what the plaintiff alleges that the 1984 agreement required him to accomplish with what he maintains he actually did and what he thereby achieved. While Bernard had only to make a new will giving control of the Robertson Group to Neil and Grant, and transfer some shares, Grant was by the 1984 agreement obliged to ensure each of the 11 outcomes to which I have already referred. But, according to his own allegations, he failed to accomplish a number of them. It is instructive at this point to make the comparison between aspiration and achievement.
25 Although, as Grant contends, he undertook to ensure that he remained working for the Robertson Group, he is no longer associated with it. This is the first miss-match between what he says was his responsibility and what he accomplished. Secondly, although part of his consideration for becoming a party to the 1984 agreement was that he would continue to guarantee the obligations of the Group, he no longer puts himself forward as a guarantor. Thirdly, although he undertook to ensure that he would continue to be a director of the member companies of the group, he no longer is. Fourthly, although he undertook to ensure that he and his father would determine how the assets contained in the unallocated fund would be allocated, and that the two of them would cause the trustee of the Robertson Family Trust to give effect to that determination, the evidence called at the trial revealed a trust deed which made no provision to this effect; and neither did any other instrument prepared by Grant or anybody else. Fifthly, although Grant undertook to ensure that, as Bernard reduced his involvement with the day to day affairs of the Robertson Group, Grant would take responsibility for those affairs, Grant has now gone from the Group, and Bernard dictates how great or small his own involvement is.
26 It is noteworthy that the statement of claim does not allege that Bernard had responsibility for giving effect to Grant's undertakings. He could merely await the outcome. If it were not in accordance with the undertaking in question, Bernard (as the argument for the defendants runs) need do nothing.
27 These propositions must now be examined in the light of paragraphs 5 and 6 of the statement of claim. It will be necessary thereafter to turn to the evidence. Paragraph 5 begins with the assertion that "pursuant to the 1984 agreement" certain things were done. The list, however, does not bear an easy relationship with the list of eleven items included in paragraph 4 as those things which, according to that paragraph, Bernard and Grant agreed that Grant would do; or, to put more it accurately, the giving effect to which Grant would "ensure". To reiterate: paragraph 4 alleges that, by the agreement, Grant was to restructure the Robertson Group so as to ensure certain outcomes. By its introductory words, paragraph 5 alleges that, pursuant to the 1984 agreement, Grant "restructured the companies and trusts in the Robertson Group by causing" certain things to be done (as opposed to producing the results which Grant was to "ensure"). One thing which Grant caused to be done was the incorporation of Anahaw. He also, according to paragraph 5(a)(iii) of the statement of claim, caused that company to be appointed trustee of the Robertson Family Trust. The creation of that Trust was, as pleaded in paragraph 4 of the statement of claim, one of the things which Grant agreed to do; but that paragraph says nothing about the ranking of the new Trust amongst the several trusts within which the Robertson family cocooned its affairs. Nevertheless, paragraph 5 claims that, pursuant to the 1984 agreement, Grant "established [the Robertson Family Trust] as the main family trust for the Robertson family": paragraph 5(a)(ii)[7].
28 According to paragraph 5, all of the 60 issued shares in Anahaw, bar one, were - pursuant to the 1984 agreement - issued to Bernard; and the single share of which Bernard was not the legal and beneficial owner was issued to Grant on trust for his father. The 60 shares were in five classes: 15 "A" class; 15 "B" class, one of which was held by Grant in trust for Bernard; 10 "C" class, 10 "D" class and 10 "E" class. It is not alleged that different classes enjoyed different rights. All this was Grant's doing, since it all came about as a result of Grant's restructure, pursuant to the 1984 agreement, of the Robertson Group. As a result of Grant's restructure Bernard was, therefore, the beneficial owner of all the shares in Anahaw. This is consistent with the object of ensuring the retention of Bernard's control over the Group until his death; it is inconsistent with Grant assuming, gradually, control of the day to day affairs of the Group, since Anahaw (and therefore Bernard) was given effective ownership and control of all of the five shares in the issued capital of Anihidi and all of those, again five in number, in the issued capital of Anikau. According to paragraph 5(a)(v) of the statement of claim, four of the five shares in Anihidi were held outright by Anahaw, and the fifth was held by Bernard on trust for that company. The position with Anikau was the same.[8] Moreover, while paragraph 3(d)(iv) of the statement of claim alleges that before 1984 Bernard was "the majority shareholder in all the companies in the Robertson Group", and while paragraph 5(b) suggests that after the restructure "except for two companies in the Robertson Group, Anahaw and Anihidi were the owners of all the shares in the companies in [that] Group", any implied change in Bernard's position was without substance given his ownership of Anahaw and, through Anahaw, Anihidi. It must therefore be assumed that Bernard's control of the Group remained and remains unchanged.
29 According to paragraph 5(a)(vii) of the statement of claim, the restructuring effected by Grant pursuant to the 1984 agreement had the consequence that Bernard and Grant were appointed directors of Anahaw. It had, too, the further consequence that "the rights attaching to units in the Robertson Unit Trust held by Anikau as trustee of the Robertson Family Settlement [were] varied."[9] The statement of claim descends to no details of the variation. Instead, it immediately proceeds to allege that "new units [were] issued to Anahaw as trustee of the Robertson Family Trust which had different rights to those issued to Anikau."
30 Both the new and the old units were units in the Robertson Unit Trust. It was asserted in the particulars under paragraph 3(a) of the statement of claim that Anihidi was, before 1984, the trustee of that trust. There is nothing at or leading up to this point in the pleading - paragraph 5(a)(viii) - to suggest any change in that position. Paragraph 4 does not contain an assertion that Grant would include in his restructure of the Robertson Group the removal from Anihidi of its responsibilities to the Robertson Unit Trust; and paragraph 5 contains nothing to indicate that Grant's restructure had that effect. On the contrary, the particulars under paragraph 5(b) refer to Anihidi "as trustee of the Robertson Unit Trust".
31 The statement of claim does, however, set out at this point particulars of the new units issued to Anahaw and the variation in the rights of the old units held by Anikau. The latter became entitled to priority in the distribution of the first $20,000 of both capital and income. The (new) units held by Anahaw were "entitled ... to be considered for income distributions after income distributions paid to the holders of the [Anikau] units and the balance of the capital ... upon a winding up or redemption of units".[10]
32 I noted above that, if the particulars under paragraph 3(d)(iv) correctly state the position, Bernard was before 1984 "the majority shareholder in all the companies in the Robertson Group". This is an allegation denied by the defendants. After 1984, if paragraph 5(b) of the statement of claim is right, "except for two companies in the Robertson Group, Anahaw and Anihidi were the owners of all the shares in the companies in the Robertson Group". As explained above, the change nevertheless makes no material difference. This is made clear by both the statement of claim and the defence. As Grant pleads in paragraph 5 of the statement of claim, and as the defendants themselves assert in their defence, Bernard holds the legal and beneficial interest in four of the five shares in Anahaw, and the beneficial interest in the remaining one, and Anahaw in like fashion is the beneficial owner of all five shares in Anihidi (and, for that matter, Anikau). The defendants admit that Anahaw and Anihidi are shareholders in the individual companies identified in paragraph 5(d) of the defence as members of the Robertson Group. For reasons which will become apparent, it is of interest that they include Horsewhite Properties Pty Ltd, but not Eveleigh Nominees Pty Ltd.
33 To an outsider looking in, the multiplicity of companies and trusts and ownerships peering dimly out of the pages of the statement of claim presents itself as a world of smoke and mirrors, the necessity for which is unknown and perhaps unknowable. Granted, there may be good sense in having separate trusts and, perhaps, trustees for each separate property development. Granted, too, that a legitimate desire to restrict the spread of liability might have been a factor. But at the level of Anahaw and Anihidi and Bernard, and the Robertson family generally, there seems to be no reason save perhaps for taxation benefits why the arrangements could not have been much simpler, with the same end result.
34 The statement of claim is certainly productive of confusion about the structure of the Robertson arrangements. The claim in paragraph 5(b) that Anahaw and Anihidi were, following Grant's 1984 restructure, owners of all the shares in all bar two of the companies in the Robertson Group, is an example. For one thing, Anahaw was, following the restructure, the owner of all the shares in Anihidi. Relevantly, therefore, Anihidi drops out of the picture, and it becomes inappropriate to describe it as a joint owner, with Anahaw, of anything. Secondly, the paragraph goes on to identify the two exceptions as Horsewhite Properties Pty and Eveleigh Nominees Pty Ltd. Having done that, it asserts that the shareholders in those two entities were and are either (in the case of Horsewhite Properties) Anahaw and Anihidi and other members of the Group, or (in the case of Eveleigh, until 2007) other members of the Group (but neither Anahaw or Anihidi); and, if the particulars under paragraph 5(b) are correct, thereafter (again, in the case of Eveleigh) Anahaw and Anihidi directly. But the statement of claim has already asserted that the shares in those "other members" were themselves held by Anahaw and Anihidi. It follows, in these circumstances, that paragraph 5(b) cannot be correct in excepting Horsewhite Properties and Eveleigh Nominees from the proposition that Anahaw and Anihidi were after 1984 the owners of all the companies in the Robertson Group. There were, in truth, no exceptions.
35 The next allegation in the statement of claim seems to be undisputed, at least for the purposes of this litigation. It is that Bernard and Grant were appointed executive directors of all the Robertson Group companies.[11] In response, the defendants accept that "Grant and Bernard either are, or have at various times in the past been, directors of the companies in the Robertson Group";[12] but they also assert that nothing said in paragraph 5 to have been "implemented in pursuance of any contract between Grant and Bernard" was in fact thus effected.[13] If anything was done, its doing had no connection with any agreement between father and son.
36 This assertion would cover the next of Grant's allegations were it not denied altogether. It is that, pursuant to his agreement with his father, he guaranteed the obligations of the Robertson Group - involving total potential liabilities of $50,000,000, with a current exposure of $23,000,000.[14]
37 For reasons which do not appear in the statement of claim, Grant did not, as part of the 1984 agreement, undertake to "restructure the Robertson Group in a manner that ensured" Grant's "continuing to guarantee the obligations of companies in the Robertson group and further companies that became part of the Robertson Group". Paragraph 4(ii) merely alleges that such a guarantee was part of the consideration given by Grant for Bernard's promise to make a new will and transfer his shares in Anihidi and Anikau to the trustee of the Robertson Family Trust. This is in contrast to Grant's agreement to continue to work for the Robertson Group. The continuation of Grant's engagement in this way is alleged to be not only the other part of the consideration given by him for the two promises allegedly made by Bernard, but also something which Grant would "ensure" as part of the restructure of the Robertson Group.
38 The statement of claim, now at paragraph 5(e), pleads that, pursuant to the agreement, the Robertson Family Trust was established. It was divided into 100 parts, 18 of which were allocated "for Grant's family ('Grant's Fund')", and the same number "for Neil's family ('Neil's Fund')". The share "for Vicki's family ('Vicki's Fund')" was set at nine parts. Bradley's family received seven parts, and Rosemary's family received six. (Nothing is said about the composition of "Rosemary's family", so one is left to speculate about who might be included. Bernard? Bernard and the step-children? Other children by some other father?) A total of 52 parts having thus been allocated, the balance of 42 parts was, for the time being, deliberately left unallocated.
39 It is another unsatisfactory feature of the statement of claim that, although this allocation is described in paragraph 5 under the rubric of things allegedly done "pursuant to the 1984 agreement", paragraph 4 - which gives details of that agreement - says nothing about the share which any beneficiary is to take of the 100 parts into which the fruits of the new family trust were to be divided; and there is no reference in either paragraph 4 or paragraph 5 to the means by which those shares were, or were to be, fixed, save that (i) the (then unspecified) share of Grant and Neil was asserted in paragraph 4(A)(vii) as being, when fixed, intended to "reflect the amount of work that they had done and were expected to do for the Robertson Group" and (ii) that Grant and Bernard would determine how the assets contained in the unallocated fund would be allocated. It is therefore impossible from the statement of claim itself to ascertain whether or not the allocations were truly "pursuant to the 1984 agreement".[15] One can (and perhaps should) assume, however, that (i) Neil and Grant had in the past and (it was anticipated by Bernard and Grant) would in the future make contributions of about equal value and (ii) that the trust deed of the Robertson Family Trust would provide for an "unallocated fund" the income and capital of which were to be allocated in accordance with determinations made from time to time by Bernard and Grant .
40 Before searching the statement of claim for the anticipated allegations, it is appropriate to continue the examination of paragraph 5. According to paragraph 5(f), in September 1984 Bernard (again, pursuant to the 1984 agreement) made a will. In it, he divided the 60 shares in Anahaw so that Grant and Neil received 15 each, while ten were allocated to each of Vicki, Bradley and Rosemary. Paragraph 5(f) asserts that this "ensured that upon Bernard's death Grant and Neil would assume control of the Robertson Group." In fact, as its own terms reveal, it only ensured that - if the will remained unchanged - those two would have a 50% interest, while the other three would between them hold the other half.
41 The 1984 will was, if paragraph 5(g) of the statement of claim correctly describes the position, superseded by another made, in relevantly the same terms, in 1988. In the meantime, following 1984, "Grant continued to devote substantial amounts of his time to working for the Robertson Group".[16]
42 Whether paragraph 5(g) does or does not correctly describe the position is, on the pleadings, a question which on one level is easy to answer. The defence admits the making of the two wills. On the other hand, it does not address their terms other than to deny whatever in paragraph 5 is not admitted. Issue is therefore joined not only over the allegation about Grant's continued service, but also over the allegation concerning the terms of the wills.
43 Meanwhile, as paragraph 5 of the statement of claim moves beyond sub-paragraph (g), it continues to devote large amounts of space to the changing post-1984 landscape. In terms of strict pleading, the entirety of that landscape is said by the plaintiff to be the product of the 1984 agreement. The particulars under paragraph 5(i), however, describe one event which was not: Bradley's death on 25 April 1993. As those particulars would have it, he did not leave a family. The evidence was different. It disclosed that he left a wife. Indeed, he had left her before he died, and at the time of his death was living with a new partner. But he had no children. To say that he left no family was nevertheless inaccurate. To say that he left a wife who was regarded by Grant and Bernard, and perhaps others, as not entitled to her late husband's interest in the family fortune, is - on the evidence as I understand it - entirely correct. Although the statement of claim does not explicitly say so, it proceeds on the basis that Grant and Bernard treated Bradley's share as being no more than contingent. He had no enforceable right to, or interest in, the Robertson Family Trust. One may at this point in the examination of the statement of claim assume, since there is nothing in the pleading to suggest any relevant distinction between Bradley, his siblings and Rosemary, that at the time of Bradley's death nobody had a vested beneficial interest in the capital of that Trust.
44 It was presumably on this basis that (if the statement of claim is accurate) Bernard and Grant did not allow Bradley's notional share to fall into Bradley's estate. Rather, it was, according to paragraph 5(i) of the statement of claim, redistributed among the remaining contingently entitled beneficiaries of the Trust. In the words of that paragraph, "Pursuant to the 1984 agreement ... (i) in or about 1995, Grant and Bernard determined that Bradley's Fund in the Robertson Family Trust would be transferred into the unallocated fund and the unallocated fund allocated to ... Neil's Fund - 35.2%; Grant's Fund - 35.2%; Vicki's Fund - 17.65%; and Rosemary's Fund - 11.76%".
45 These percentages add up to 99.81. Perhaps there is a misprint somewhere in this portion of the statement of claim. Whatever the problem, the defence simply denies the relevant allegations; and Grant himself goes on to plead - in paragraph 5(j) - that he and his father "Pursuant to the 1984 agreement ... (j) in or about August 2005 ... determined that because of Grant's contribution to the growth in the wealth of the Robertson Group, Grant's Fund would be allocated assets from the unallocated fund so that Grant's Fund notionally held 40% of the assets of the Robertson Family Trust".[17]
46 This is another example of the capacity of this statement of claim to obscure, rather than reveal, the issues. As I have noted, paragraph 5(i) speaks of Grant's and Bernard's 1995 determination, under the rubric of the 1984 agreement, that "the unallocated fund [would be] allocated" to the four remaining funds: Neil's, Grant's, Vicki's and Rosemary's. If this determination was put into effect, as paragraph 5(i) implies it was, then there was nothing left in the unallocated fund to allocate. Yet (again, as I have noted) paragraph 5(j) asserts that such a further allocation was made - and one very favourable to Grant's Fund, because it "notionally" increased that fund's share in the assets of the Robertson Family Trust to 40%. It is entirely unclear whether this was at the expense of shares previously allocated to the funds of Neil, Vicki and Rosemary, or whether - despite the implication contained within paragraph 5(i) - the unallocated fund remained intact, or at least with something left to allocate. It does seem clear, for reasons which will later be addressed, that neither the 1995 allocation nor the further allocation could properly be effected without an amendment to the Robertson Family Trust Deed of Settlement.
47 It is also clear that the statement of claim is predicated on the assumption that, since the 40% allocation to Grant's Fund was made pursuant to the 1984 agreement, earlier allocations could be revoked by those made later. Indeed, this is acknowledged by paragraph 5(k), which states that "Pursuant to the 1984 agreement ... (k) in or about August 2006, Grant and Bernard determined to revoke the 1995 determination". The particulars under this sub-paragraph refer to a document signed by Grant and Bernard, but give no further details. In the meantime, the reader of the statement of claim is left to wonder why the allocation the year before (in August 2005) of a notional 40% interest to Grant's Fund did not itself amount to a revocation of the determination of 1995.
48 As pleaded, Grant's Fund's entitlement to its "notional" 40% arises pursuant to the 1984 agreement, and not as the consequence of some independent agreement made between Bernard and Grant in August 2005, or any other time. No independent agreement is alleged. And if it were, it would confront the difficulty that the consideration for it was past: Grant's Fund was, as paragraph 5(j) of the statement of claim makes clear, allocated its notional 40% because of his past contribution to the Robertson Group. That allocation increased his fund's share of the 100 parts into which the assets of the Robertson Family Trust had been divided, and decreased that of the unallocated fund, or perhaps the funds of Grant's siblings and step-mother as well. There is no suggestion in the statement of claim that an amendment to the trust deed was required to effect this change. It follows that the statement of claim proceeds on the basis that the original 18% interest of Grant's Fund was merely contingent, as were all allocations made pursuant to the 1984 agreement. The reader is left to assume that the trust deed will reflect this.
49 The remaining allegations of paragraph 5, to be found in sub-paragraphs (l) and (m), are that, pursuant to the 1984 agreement, Grant and Bernard transferred to Anahaw not only the share (Grant) or shares (Bernard) each held separately in Anihidi, but also the share or shares each held separately in Anikau.
50 As I have recorded, the particulars under paragraph 4 of the statement of claim describe the 1984 agreement as being "partly to be implied". And "[i]nsofar as it was implied it was implied by the implementation of the facts alleged in paragraph 5 ... that relate to the 1984 agreement. The plaintiff's case (as alleged in paragraphs 4 and 5 of the statement of claim) is, therefore, that insofar as the 1984 agreement arose as by implication, it arose from Grant restructuring the companies and trusts in the Robertson Group by causing the eight outcomes identified in paragraph 5(a) of the statement of claim, namely:
(ii) the Robertson Family Trust to be established as the main family trust for the Robertson family;
(iii) Anahaw to be appointed trustee of the Robertson Family Trust;
(iv) all the shares in Anahaw to be held beneficially by Bernard;
(v) & (vi) Anahaw to be the beneficial owner of all the shares in both Anihidi and Anikau;
(vii) Bernard and Grant to be appointed directors of Anahaw;
(viii) the rights attaching to units in the Robertson Unit Trust held by Anahaw as trustee of the Robertson Family Settlement to be varied, and new units, with different rights, to be issued to Anahaw.
51 It may be accepted, at least for present purposes, that these steps are unlikely to have been taken without some agreement between Bernard and Grant. Grant, however, needs to go further if he is to qualify for the relief which he seeks in this litigation. Hence the statement of claim asserts that the 1984 agreement was also to be implied by the implementation of all the facts alleged in paragraph 5 that relate to the 1984 agreement. But all the facts alleged in paragraph 5 relate to that agreement. Thus, the 1984 agreement is, according to the case as pleaded in the statement of claim, to be implied (in part) from the fact that Anahaw became, directly or through Anihidi, the owner of all the shares in the member companies in the Robertson Group;[18] that Bernard and Grant were appointed executive directors of all those companies;[19] and that Grant guaranteed their obligations.[20] The agreement (so the allegations continue) was further to be implied following the allocation of the 100 parts into which the assets of the Robertson Family Trust were divided: namely, as to 18 for Neil's Fund, 18 for Grant's Fund, 9 for Vicki's Fund, 7 for Bradley's Fund, 6 for Rosemary's Fund and 42 for the unallocated fund.[21]
52 No relevant implication arises from any of this. Anahaw's assumption of the position of holding company for the Robertson Group does not imply any wider agreement than the narrowly-focussed consensus that it should assume that role. Nor does the appointment of Bernard and Grant as directors imply any wider agreement. Grant was a guarantor before 1984, so the fact that he continued in that position thereafter implies nothing. And, as pleaded, the 1984 agreement was silent about the division as between the funds of individual family members of the assets of the Robertson Family Trust. That division cannot therefore imply anything.
53 According to the plaintiff, the implication upon which he relies is further supported by Bernard's making, in 1984, of a new will by which, if implemented on Bernard's death, 15 shares in Anahaw would pass to Neil, 15 to Grant, and 10 to each of, respectively, Bradley, Vicki and Rosemary;[22] and that another will, containing like terms to those referred to in paragraph 5(f) of the statement of claim, was made in 1988.[23] Additionally, "Grant continued to devote substantial amounts of his time to working for the Robertson Group"[24] and "in or about 1995 Grant and Bernard determined that Bradley's fund in the Robertson Family Trust would be transferred into the Unallocated Fund which in turn would be allocated to the funds of the surviving beneficiaries so that Neil and Grant received 35.2%, Vicki received 17.65% and Rosemary 11.76%"[25] (a total of 99.81%). According to the statement of claim, the implication was further made out by the August 2005 determination to allocate assets from the unallocated fund to Grant's Fund so that the latter "notionally held 40% of the assets of the Robertson Family Trust".[26] And so the implications continue through the balance of paragraph 5 of the statement of claim: they arise, so the plaintiff alleges, from all of the above as well as from the 2006 determination to revoke the 1995 determination[27] and from the transfer to Anahaw by Grant and Bernard respectively of their shares in Anihidi and Anikau.[28]
54 There are difficulties with this analysis. An implication is to be distinguished from a conclusion derived from speculation. It is impermissible to speculate. In litigation, one reaches a conclusion by implication only after a process of reasoning based upon logic and experience; a process which in turn enables one to draw an inference which is more likely than not to be correct (sufficient to prove an element of a civil cause of action) or beyond reasonable doubt (sufficient to prove an element of a criminal charge). It follows, accordingly, that one cannot by implication conclude that a new set of circumstances has arisen simply on the basis of the continuation of an existing circumstance or set of circumstances. Bernard and Grant made decisions affecting the assets of the Robertson family before 1984. The fact that they continued to do so in the years after that does not give rise to the implication that post-1984 decisions were made pursuant to a particular 1984 agreement. Likewise, Grant worked for the Robertson Group before the agreement of 1984 was made, and before that agreement guaranteed the obligations of member companies of the group. Again, the fact that he continued to do so after 1984 cannot give rise to the implied conclusion that, in that year, a new agreement was made.
55 In short, none of the matters relied upon by the plaintiff support an implication that an agreement with all the elements of the 1984 agreement was made. Some, such as the incorporation of Anahaw, support no inference of any agreement at all, since many companies are incorporated following an individual decision made by a single person. Others, such as the appointment of Bernard and Grant as directors, were necessarily made by agreement, but not necessarily by an agreement of the 1984 kind.
56 There is another problem with the allegation that the matters set out in paragraph 5 of the statement of claim support the implication upon which the plaintiff relies. The 1984 will does not refer to shares in Anahaw. It simply requires the division of Bernard's residuary estate into 100 parts which are then to be held on trust as to 15 for Neil's Fund, 15 for Grant's Fund, 9 for Bradley's Fund, 11 for Vicki's Fund, 8 for Rosemary's Fund and the balance of 42 for the Unallocated Fund. Paragraph 5(f) of the statement of claim completely misstates this aspect of the 1984 will.
57 Paragraph 6 of the statement of claim exposes some of the problems foreshadowed by an examination of its predecessors. It was a core element of the 1984 agreement, as that agreement is described in paragraph 4A, that Grant "would restructure the Robertson Group in a manner that ensured ... [that] (v) Bernard and Grant would be the executive directors of ... Anihidi and any further companies that became part of the Robertson Group" and (vi) "Grant would continue to be executive director of all the existing companies in [that] Group". Paragraph 5, which is concerned to describe that restructure as effected by Grant, does not assert that he succeeded in this aspect of his contractual obligations: it merely asserts that, pursuant to the agreement, he caused "Bernard and Grant to be appointed directors of Anahaw"[29] and that "Bernard and Grant were appointed executive directors of all the companies in the Robertson Group".[30] It does not allege that those appointments could not be revoked. It does describe arrangements which were consistent with the allegation in paragraph 4 that, pursuant to the 1984 agreement, the restructure undertaken by Grant would ensure "that Bernard would retain control of the Robertson Group until his death". It does not suggest that Bernard made any promise to retain Grant in any of his directorships.
58 It is therefore not easy to understand how paragraph 6(a) of the statement of claim could allege, as it does, that in breach of the 1984 agreement, Bernard on 21 December 2007 caused Grant to be removed as a director of Anahaw and Anihidi. It is equally difficult to understand how paragraph 6(b) could allege, as it does, that in 2008 Bernard - again acting in breach of the 1984 agreement - likewise caused Grant to be removed as a director of a large number of other companies in the Robertson Group. It is at least as difficult to understand how an order for specific performance of that agreement could be made when that which would be required to be specifically performed - ensuring that Grant would continue in his directorships - was, according to the statement of claim, something Grant should have done himself. Courts do not make orders for specific performance of the obligations of the person seeking the order. Moreover, those orders are discretionary. They are not readily made where the effect would be to cut across the rules of a corporate body and force a director upon a board which, or upon shareholders who, by those rules, has or have power to dismiss, or to decline to re-elect, him or her.
59 Paragraph 6(c) of the statement of claim alleges another breach by Bernard of the 1984 agreement. It asserts that, in breach of that agreement, Bernard revoked his 1988 will; and paragraph 6(d) alleges that he made a new will on an unknown date. By that will, it is alleged, he bequeathed to Rosemary all the shares in Anahaw. This, it is alleged, constitutes a breach because, according to the version of the agreement set out in the statement of claim, Bernard promised that he would make a will that gave control to Neil and Grant of the companies in the Robertson Group. Anahaw is the holding company for the Group. Were Bernard's present will (as described in the statement of claim) to come into effect, therefore, it would give that control to Rosemary.
60 The defendants admit that Bernard has revoked his 1988 will. They allege that he was entitled to do so. They do not assert that a new will has been made, but rather that it exists in draft form. Its terms are not revealed. (They also submit that, even if Bernard promised to make a will leaving control to Neil and Grant, he never promised not to revoke it.)
61 The final breach alleged in paragraph 6 is to be found in sub-paragraph (e). It is there said that, in breach of the 1984 agreement, "Bernard has failed or refused to cause Anahaw (as trustee of the Robertson Family Trust) to allocate part of the unallocated fund to Grant's Fund so that Grant's Fund comprises 40 parts of the Robertson Family Trust". This, of course, is said to be a breach of that provision of the 1984 agreement which provided that "Grant would restructure the Robertson group in a manner that ensured ... (viii) the Robertson Family Trust would have an unallocated fund that could be allocated ... having regard to future contributions made by Grant, Neil, Vicki and Rosemary to future growth in wealth of the Robertson Group [and] (ix) Grant and Bernard would determine how the assets contained in the unallocated fund ... would be allocated and would cause the trustee of the Robertson Family Trust to give effect to that determination". It too must confront the difficulty that this provision does not place any responsibility upon Bernard to do anything. There is also the point that any attempt by Grant to ensure the two outcomes in question would almost certainly require the creation of a document embodying terms appropriate to effect that purpose. After all, the unallocated fund is likely to consist of both income and capital. One may assume, at least for the present, that income can without difficulty be distributed at intervals, and in accordance with such merit as is displayed by the individual family member/contributors over the interval in question. The allocation of capital in accordance with merit cannot so readily be managed. So when one speaks of an allocation made in, for example, 1995 or 2005, one has to wonder - until further information is known - whether that allocation was of capital or income and, if the former, how Grant should be entitled to retain it in circumstances where his contribution to the family's fortunes might wither to nothing (as, whether through his fault or not, it has) while that of others was increasing exponentially. Why, it might be asked, should Grant retain 40 of the 100 parts of the assets of the family trust when all the contributions to its wealth are now made by others?
62 Paragraph 6 of the defence deals at length with the claims made by Grant in paragraph 6 of his pleading. It begins by alleging that, on 31 March 2007, "Grant removed himself from any involvement in the management of the day-to-day affairs of the Robertson Group". In the particulars under paragraph 6(a), it is said that in January 2007 Grant told Bernard of his intention "effective 31 March ... to relinquish his day to day involvement in the Robertson Group." This was followed by a request from Grant to Bernard that the former not be included in the Group's professional indemnity insurance policy which was due for renewal on 1 April "as I will be resigning." Then, on or about 28 March, Grant told Bernard that "when I walk out the door on Friday, I hope I never see your face again in my life".
63 According to the defence, Grant nevertheless remained as a director of companies in the Group until his final removal in August 2008, while not discharging his duties as such in good faith or in the best interests of the companies. In the particulars under paragraph 6(b) of the defence, it is alleged that it was in the interests of the Group to sell during 2007 one of its assets: the Bacchus Marsh Shopping Centre. Grant accepted that this was so, but refused to sign documents necessary to effect the sale because "that would compromise his legal rights in litigation with Bernard." In addition, Grant "failed or refused to sign off financial accounts in respect of the Robertson Group which were necessary to enable tax returns to be completed for those entities for the year ended 30 June 2004." This failure has also, so it is claimed, prevented the completion of financial returns for the year ended 30 June 2005.
64 The defence proceeds, by paragraph 6(c), to allege that, given Grant's recalcitrance, Bernard caused his removal on 21 December 2007 as a director of Anahaw and Anihidi and, successively on 5 March 2008 and 7 August that year, as a director of other companies in the Group. It seems that the fact of removal, and the dates on which that occurred, are not a matter in contention.
65 The defendants' final response to the claims of breach made in paragraph 6 of the statement of claim is to be found in paragraphs 6(f) and 6(g) of the defence. They there admit that Bernard has not directed Anahaw to allocate part of the unallocated fund to Grant's Fund, say that he has no obligation to do so, and admit that Grant has guaranteed obligations of some of the companies in the Robertson Group.
66 Grant alleges, in paragraph 7 of the statement of claim, that the facts pleaded in the previous paragraphs have caused him to suffer loss and damage. Under the heading "Particulars" which follows, it is said, first, that Grant's share in the $35,500,000 which represents the value of the Robertson Family Trust has been wrongly held at 18%, whereas it ought to be 40%, or $14,200,000. Secondly, he "no longer has any control over distributions made from the Robertson Family Trust or any of the other trusts in respect of which he was a director". Nor does he have any "control over the companies in the Robertson Group in respect of which he has provided guarantees ... which has exposed him to potential liabilities of approximately $23,000,000".
67 These are serious claims. The reader of the statement of claim gets the impression that, whatever the legal niceties of the position, Grant is aggrieved that after expending much toil and many tears for the benefit of the business founded by his father, he now faces the prospect of being denied his legitimately expected reward. Nevertheless, on the basis of the cause of action as expounded in the statement of claim to this point, some aspects of Grant's claim to loss and damage do not impress. To the extent that Grant's influence over the affairs of the Robertson family derived from his position as a director of member companies in the Robertson Group, his loss of that influence may spring at least in part from his failure to ensure that he (in the words of paragraph 4(A)(vi) of the statement of claim) "would continue to be executive director of all the existing companies in [that] Group".
68 Grant next makes a claim which is put in the alternative to those that rely on the 1984 agreement. This alternative position was not pursued at the trial, so I briefly mention it here merely for completeness. It arises under clause 25 of the deed which governs the Robertson Family Trust. Grant, as the defendants admit, is a general beneficiary of that Trust. As such, clause 25 requires the trustee to provide him with adequate consideration for any benefit which, under "any contract agreement or transaction ... between [him and] the trustee" was received by the latter. There were, according to paragraph 10 of the statement of claim, many relevant contracts, agreements and transactions between him and Anahaw. This is pursued in paragraph 11, which claims that Anahaw benefited from these to the tune of approximately $28,000,000. But, according to paragraph 12, he has received nothing.
69 The defendants do not admit the existence of the contracts, agreements or transactions, and deny the amount claimed as their value. To the allegation, contained in paragraph 12 of the statement of claim, that Grant has received nothing for all the benefits which he has conferred on Anahaw, the defendants plead that he was, between 1995 and 2007 paid a salary of $5,000 per annum (by Anikau) and was the beneficiary of payments made by that company into its superannuation fund, so that by 2005 the amount standing to the credit of Grant's superannuation account was $355,246. What is more, from time to time (or so the defence contends) Grant withdrew for his personal use funds from a corporate member of the Robertson Group (Waverley Properties Pty Ltd). By 2005, the amount thus acquired by him totalled $1,300,000.
70 The defence then turns to an estoppel point. Again, I mention this only for completeness, because it was not a part of the dispute about which I was asked to pass judgment. It is alleged by paragraph 12A(a) of the defence that Grant never told "Anahaw that he expected to be compensated pursuant to clause 25 of the Robertson Family Trust Deed"; the next sub-paragraph asserts that on at least four occasions since 1995 he declined offers by Bernard to increase the $5,000 he was receiving in salary each year; and sub-paragraph (c) alleges that other family members (Bernard, Rosemary and Neil) provided services to Anahaw for less than a commercial reward, but Grant in his capacity as a director did not see fit to treat them in what he now says was the way he ought to have been treated.
71 This conduct, according to the defence, led Anahaw to assume that Grant would not make any claim under clause 25. Acting on that assumption, as Grant knew it was doing: (i) Anahaw did not seek or retain otherwise appropriate information; (ii) did not assess the work done for its worth, or even its necessity; (iii) allowed Grant to withdraw funds from Waverley Properties; and "did not make any payment to any other beneficiary ... for the work they may have done ... without adequate consideration".[31] Now, "[a]ny conduct by Grant contrary to the assumption will cause Anahaw detriment".[32] Other beneficiaries will also have entitlements, but Anahaw will have "little means of assessing the precise extent and nature of any work purportedly done by Grant or any other general beneficiary."[33] Furthermore, had Anahaw not assumed that no claims based on clause 25 would be made, it might have retained other service providers to do at far less cost that for which Grant is claiming some $28,000,000. In these circumstances, "Grant is estopped from acting contrary to the assumption". In any event, so the defendants contend, the claim is statute-barred.
72 The next of Grant's claims is presently in dispute. It arises from what he alleges is an anticipatory breach by Bernard of a promise to deal with his superannuation entitlements not as the superannuation scheme would have it - for the benefit of Bernard as retiree - but for the wider family through a distribution to the Robertson Unit Trust or the Robertson Family Trust. The relevant allegations, which begin at paragraph 14 of the statement of claim, are that, in or about 1991, Grant and Bernard considered the purchase of land in Ringwood. The defendants, in paragraph 14 of the defence, accept that this was so. They likewise accept the plaintiff's allegation, made in paragraph 17 of the statement of claim, that Bernard and Grant were then the trustees of the Anikau Pty Ltd Superannuation Fund. Grant goes on to allege that an agreement was subsequently reached between him and his father. This the defendants deny. In accordance with its terms as pleaded in paragraph 15 of the statement of claim, the "Highway Unit Trust" was established to purchase the Ringwood land, the address of which was 89 Maroondah Highway. The defendants admit that, by a deed dated 1 September 1991, a company called Per Ardua Pty Ltd was appointed trustee, and as such purchased the Maroondah Highway property; and they admit that the units were issued to Grant and Bernard as trustees of the Anikau Pty Ltd Superannuation Fund, in which Bernard had an account. They, however, deny Grant's allegation, contained in paragraph 15 of the statement of claim, that it was Bernard's obligation, imposed by the agreement which he made with his son, to ensure that when he retired or died "that part of his superannuation benefit that comprised the Highway units" would be paid in specie either to the Robertson Unit Trust or to the Robertson Family Trust.[34]
73 The nub of this aspect of the disagreements between father and son is not whether, as Grant alleges, Bernard "intends to pay that part of his superannuation benefit that comprises the Highway units to himself or Rosemary".[35] Bernard contends that he is entitled to deal with his superannuation benefits in any way he likes. He therefore does not put his intention in issue. The real dispute is whether the agreement for which Grant contends was made, and if so whether Bernard is bound to "do all things that [are] reasonably necessary to give effect to" it.[36] Grant alleges that, "in the absence of an amendment to the deed governing the superannuation fund, and a direction by Bernard to the trustees of the superannuation fund, the trustees of the superannuation fund cannot pay to the Robertson Unit Trust or the Robertson Family Trust that part of his superannuation benefit that comprises the Highway units by way of an in specie distribution."[37] The defendants "admit that Bernard will not agree to amend the deed governing the Anikau Pty Ltd Superannuation Fund to pay to the Robertson Unit Trust or the Robertson Family Trust any part of his superannuation benefit".[38]
74 It will be remembered that, according to the statement of claim, Anihidi is the trustee of the Robertson Unit Trust - paragraph 2(b) of that pleading - and that before 1984 Anikau, as the trustee of the Robertson Family Settlement, held all the units in the Robertson Unit Trust - paragraph 3(b). Bernard is, or at least before 1984 was, the majority shareholder in, and chairman of, both companies - paragraph 3(d). Grant restructured the trusts in the Robertson Group by causing the Robertson Family Trust to be established with Anahaw as trustee - sub-paragraphs 5(a)(ii) and 5(a)(iii) - and units in the Robertson Unit Trust issued to it. The statement of claim does not disclose the identity of the beneficiaries of the Robertson Family Settlement, or the sizes of their respective beneficial interests. Without recourse to the trust deed, the reader cannot therefore be confident that Grant's interest will not be different according as to whether payment was made to the Robertson Unit Trust or to the Robertson Family Trust. Yet, if there is a difference, it would be odd that Grant would be prepared to leave it to Bernard to decide which of the Family Settlement or the Family Trust would be favoured.
75 Grant seeks specific performance of the 1991 agreement, which (he asserts) imposed upon Bernard an obligation to ensure that when he retired or died his superannuation benefit would ultimately be paid either to the Robertson Unit Trust or to the Robertson Family Trust. A problem with this, apparent on the face of the statement of claim, is the lack of any allegation that Grant gave consideration for any promise which Bernard might have made. Another problem, again apparent on the face of the pleading, is that if there were an agreement, it was simply one made between the trustees about what to do with the Highway units. It was not an agreement intended to give any individual rights to Grant, more especially individual rights for the validation of which he could obtain the assistance of the law.
76 From Melbourne's outer east (Ringwood), the Robertson family spread its interests to the fruit-growing regions of Melbourne's far outer west. In or about 1996, some five years after the Ringwood venture first came under consideration, Bernard and Grant turned their attention to Bacchus Marsh. Land which now, if not then, forms part of the main Bacchus Marsh shopping centre, came on the market. According to paragraph 24 of the statement of claim, Bernard and Grant (who in 1996 continued to be the trustees of the Anikau Pty Ltd Superannuation Fund) agreed between themselves that one of the Robertson Group companies, Bradles Properties Pty Ltd, as the trustee of the Ferntree Unit Trust, would purchase that land ("the Bradles land") on terms that (a) they as trustees of the superannuation fund would subscribe for and own units in the Ferntree Unit Trust, and (b) would thereafter hold them to Bernard's account in that Fund. When Bernard retired, "that part of his superannuation benefit that comprised the Ferntree units would be paid to him by way of an in specie distribution and then transferred by him to the Robertson Unit Trust or the Robertson Family Trust".[39] If Bernard died before he retired, the benefit would be distributed in specie directly to one or the other of those trusts. In the meantime, the land in question would be incorporated into the existing Bacchus Marsh Village Shopping Centre; where (according to paragraph 23(f) of the statement of claim) it "could not be sold or transferred before 2056, being the vesting day of the Bacchus Marsh Unit Trust". It was (as paragraph 25 of the statement of claim goes on to assert) an implied term of the agreement that Grant and Bernard.
77 This, according to paragraph 27 of the statement of claim, is the reason why, on an unspecified date, Bernard and Grant as trustees of the superannuation fund, caused Bradles to issue the Ferntree units to them. They also caused Bradles to purchase the land in question. This was in 1996. Part of that land was then, in 1997 and the following year, leased to Coles for use as a supermarket, while another part was used as the site of a utility room for the purposes of the centre.
78 The defendants admit that in 1996 Grant and Bernard were trustees of the superannuation fund, and that they did as such acquire the units in the Ferntree Unit Trust. They likewise admit that Bradles as trustee of that trust has purchased the relevant land, which has been used as described in the statement of claim. The defendants otherwise deny the allegations in paragraphs 24-27 of that pleading.
79 Grant now alleges that, as with the Highway Unit Trust, so with the Ferntree Unit Trust. According to Grant, Bernard intends to disregard his obligation to ensure that, on his retirement or death, "his superannuation benefit that comprised the Ferntree units would be paid ... to the Robertson Unit Trust or the Robertson Family Trust".[40] Grant has, he alleges, thereby suffered loss and damage.
80 The defendants respond as they did to the Highway allegations. They maintain that Bernard "is entitled to deal with superannuation benefits paid to him by the trustees of the Anikau Pty Ltd Superannuation Fund in any manner that he sees fit".[41]
81 There is on the face of this portion of the statement of claim the same problems that surfaced in connection with the claim in relation to the Highway Trust. It contains no allegation that Grant gave any consideration for any promise by Bernard, and it presents as an agreement between two trustees who have no intention to confer on one of them (Grant) private rights for the vindication of which he may successfully sue.
82 Grant has an additional complaint arising from the agreement to purchase the Bradles land. He asserts that Bernard now threatens to sell it. The reader of the statement of claim must assume, although the pleading does not explicitly say so, that the threatened sale is to occur in the more or less immediate future, and certainly well before 2056, "being the vesting day of the Bacchus Marsh Unit Trust".[42] The defendants seem to accept that this is so, because although they too are silent about the date of any predicted sale, they plead in paragraph 32 of their defence that "by 9 October 2007, Bernard ... was desirous that Bradles ... should sell the Bradles land". They add, in an allegation which is plainly of significance, that Grant consented to "Bradles ... selling the Bradles land". This segment of the defence concludes with an alternative assertion. It is that, whether or not that consent was given, Bradles is and was entitled to sell.
83 Having pleaded the 1984 contract and the determinations made pursuant to it in 1995 and 2005, and having pleaded an agreement not to sell the land at Bacchus Marsh until 2056, Grant turns in paragraph 33 of the statement of claim to another agreement. It sits uneasily with its predecessors. It is Grant's contention as formulated in paragraph 33 that, on 21 November 1998, he and Bernard agreed that Grant "would reduce the time that he spent working as a partner of ... [the firm of solicitors known then as] Dibbs Abbott Stillman and then resign as a partner of that firm to devote more of his time working for the Robertson Group". In paragraph 33(b) it is asserted that "they [Grant and Bernard] would progressively purchase additional land in and around the Centre to enable further extensions to the Centre". This is followed by the allegation that, as part of the 21 November agreement, "Grant and Bernard would guarantee the obligations of the companies in the Robertson Group to the vendors ... and ... financiers".[43] Finally, they agreed that "the land on which the Centre was located would not be sold or transferred before 2056".[44]
84 There is a striking feature of the 1998 agreement as it is described in the statement of claim. If that pleading is correct, Grant had - by an agreement with Bernard made as far back as 1984 - undertaken to ensure that he would remain working for the Robertson Group. But there is no suggestion that he gave effect to this undertaking by drawing an appropriate - or any - contract of employment. Secondly, by the 1984 agreement he had also agreed to guarantee the obligations of the companies in the Robertson Group; and he had in 1996 agreed with Bernard that the Bradles land would not be sold until 2056. If the 1984 and 1996 agreements were in existence and were sufficiently certain, why replicate the relevant provisions in 1998? (It is true that the Bacchus Marsh Village Shopping Centre occupied more than merely the Bradles land; but by November 1998 it formed an integral part of that Centre because it then housed the Coles supermarket and "the utility room for the whole of the Centre".)[45]
85 The allegations contained in paragraph 33 of the statement of claim are denied by the defendants. They nevertheless admit that seven members of the Robertson Group have purchased land close to the Centre, and that Bernard and Grant have guaranteed the obligations of one of these companies. According to the defence, the obligations of another two - Ad Astra Properties Pty Ltd and Bradles Properties Pty Ltd - have also been similarly guaranteed. These two, however, do not appear in the list of seven alleged by the defendants to be the purchasers of the additional Bacchus Marsh land.
86 The next paragraph of the statement of claim illustrates the difficulties posed by allegations that a binding agreement exists within the context of, and impinges upon, a multitude of diverse interests held by a number of persons who may be affected by, but are not parties to, the agreement. These difficulties rear their heads throughout this statement of claim. Grant and Bernard were but two members of a larger family, but if Grant is correct in his contentions, their private dealings - to the extent to which they were effective - in his case enlarged, but frequently in the case of other family members diminished, their rights or expectations; yet, so far as one can tell from the statement of claim, only Bernard and Grant were given any say in the decision-making process.
87 Grant was also an important person within the structure of his law firm. What was the reaction of the firm to the proposition that he had a binding agreement with his father to spend more time on family matters and less on contributing to the firm? Perhaps he negotiated with the firm before he settled his agreement with his father. If so, the statement of claim is silent on the point. But, if so, one would expect that the time to be allocated to the firm, and perhaps even that to be given to the family, would be carefully delineated, and that the statement of claim would reflect that delineation.
88 Be that as it may, paragraph 34 of the statement of claim alleges that, "pursuant to the agreement alleged in paragraph 33 ... Grant devoted more of his time to working for the Robertson Group" and "reduced the amount of time that he was devoting to working as a partner of [the firm] and in March 2000 resigned as a partner". In addition, members of the Robertson Group of companies purchased land close to the Centre, and Grant and Bernard guaranteed the obligations to which those purchases gave rise. Now, however, Bernard threatens to sell the Centre. This, Grant contends, will cause him damage.
89 The defendants respond by conceding that Bernard in his capacity as director of the relevant companies desires to sell the Centre land. They add, however, that on 9 October 2007 Grant gave his consent to this; and even had he not, the owners of the land would have been, and are, entitled to sell it. Or so the defendants contend. (And a relevant point may be noted in this context: the statement of claim does not allege that Grant has any agreement with any member of the Robertson Group by which the power of that member to do what it likes with its property was curtailed.)
90 The statement of claim concludes with two short and discrete causes of action for breach of contract. The first concerns the Horsewhite Unit Trust. In paragraph 36 of the pleading, Grant claims that he borrowed $10,000 or thereabouts in August 1982. With it, and with $13,356 of his own money, he purchased 5118 "A" class units in the Trust. By agreement with Anihidi, he allowed that company to register those units in that company's name. For reasons which the statement of claim does not give, the agreement provided that the income derived from the units would be retained by Anihidi, while Grant remained responsible for servicing the loan.
91 The result, if Grant is correct, was wholly lopsided. According to paragraph 37, he paid out the loan. Meanwhile, Anihidi retained the income - all $200,000 of it. And, despite a demand made by Grant on 29 March 2007, Anihidi has refused to hand the units back.[46] Bernard, as a director of Anihidi, was involved from first to last. Grant now seeks an order that the units be transferred to him. He also seeks damages in the alternative, or in addition to, the transfer.
92 Each of these allegations is denied by the defendants.
93 The second of the final contractual claims concerns the fourth defendant, Waverley Properties Pty Ltd. The defendants admit that Bernard is a director. According to paragraph 43 of the statement of claim, Grant was in 2000 the owner of shares in a company called Environinvest Ltd. That year, he agreed with Bernard that Waverley could not only register those shares in its name, but also retain the dividends. Its only obligation was to return the shares to their owner, Grant, on demand. The defendants deny these allegations.
94 Dividends were paid. According to paragraph 44 of the statement of claim, Waverley received $5,000 in this way. But when, on 29 March 2007, Grant asked for the shares to be returned (something which the defendants do not admit), Waverley declined his request.
95 The defendants deny this allegation. This could, and indeed on its face does, mean that, according to them, the request was met. But to the reader who knows nothing of the facts, this seems unlikely. Given the probability that the dispute centres upon the obligation to return rather than the fact of return, the plea is not, as it should be, a clear and unambiguous response to Grant's claim.
96 According to Grant, the shares are worth about $220,000. The defendants deny this, but put forward no valuation of their own. The statement of claim concludes with a claim for an order requiring the transfer, or (in the alternative) damages. Accordingly, I now turn to the evidence.
Contributions by Family Members to the Business
97 In 1971 Bernard was a Squadron Leader in the Royal Australian Air Force. With an eye to the future, he decided to take 6 months leave without pay to pursue an interest in property development. In 1974, with his interest in property development still strong, Bernard resigned from the Air Force (with the rank of Wing Commander). At this time he was approached by some other Air Force officers to form a syndicate, pooling about $100,000, to be invested in various commercial and industrial property transactions. Bernard contributed his share of $20,000 by using a combination of his Air Force pension, some insurance policies and the proceeds of the sale of a Mercedes Benz that he had bought in London and shipped back to Australia. The syndicate was formed, and Bernard's new career began in earnest. Of the members of the Robertson family, it was Bernard alone who contributed the seeding capital with which the syndicate commenced its operations.
98 In this context it is perhaps helpful to examine Grant's contributions to the family business. He says that up until 1984 he had extensive involvement, though not a full time basis. Since 1974 he had been appointed a director of assorted companies in the family business. He says he performed various types of clerical work for his father while he was studying at Monash University. His evidence was that from 1976 he did much of the accounting work for most of the group's entities, although Deloittes prepared the group's tax returns. He graduated with a Bachelor of Economics in 1977 and Bachelor of Laws in 1980, and was admitted to practice as a barrister and solicitor in October 1980. Before his admission to practice, between 1979 and 1980, he worked for two years full time at Price Waterhouse. Following admission he gained employment at the law firm Abbott Stillman & Wilson, where he became a partner in 1983. He became a certified practising accountant in 1985.
99 Bernard gave evidence that Grant's work for the business while he was still at university and then working for Price Waterhouse was limited to typing letters for his father (who then corrected them) and then posting them. His father said that his son did not have a great deal of time to devote to the business when he was working at Price Waterhouse and started to work at Abbott Stillman & Wilson. In any event, the work Grant did was not "magnificent or high level, it was just routine".[47]
100 Although Grant continued to work as a partner at Abbott Stillman & Wilson (he was appointed partner in 1983 and became senior commercial partner in 1991), he says he devoted a very considerable amount of his time to the family business. In the period up to early 1984, he worked at Miller Crescent on family business affairs every Monday night, every Wednesday night, and almost all Saturdays. That pattern continued through 1985 to 1995, when he would work with his brother Neil inputting the accounting records for the group into the computerised accounting system. The plaintiff gave evidence about that work, and the roles he and his brother took, in the following terms:
Neil would sit to my left, I would dictate to him from a pre-coded bank statement that I had attended to from which I would look at the invoice or the bank receipt, I would then check that off against the bank statement, I would then code the bank statement and I would dictate to Neil, date of the transaction, the account code, the amount involved, and a narrative of what the transaction involved. [48]
101 The plaintiff said that he also carried out all the legal, tax and accounting work for the business, and a variety of executive tasks. That work included such things as discussions with councils for planning and building permits, and reviewing numerous plans for various properties; joining with his father in negotiating the acquisition and lease of properties; structuring finance facilities and purchasing companies; and procuring finance from banks and giving personal guarantees. He was also involved with a number of matters relating to the Ringwood property, particularly in dealing with objections.
102 In 1997 and 1998 he was very heavily involved in one of the most significant projects undertaken by the family business which were major works on the Bacchus Marsh shopping centre. This involved building a 12,500 square metre extension to the shopping centre, including the construction of a Coles Supermarket, a Target discount department store, 400 car parks and about 30 specialty shops. In addition to organising and supervising the large construction project, there were arrangements to be reached with major new tenants, including Coles, and refinancing up to about $13 million.
103 By contrast, the plaintiff asserts that his brother Bradley and his sister Vicki contributed nothing to the family business. He also appeared to be dismissive of the contribution made by his step mother, Rosemary. He said that after she retired from being a primary school art teacher in 1987, she worked as an administrative clerk for the business. Since 2000 she has been the Centre Manager for the Bacchus Marsh shopping centre. While his brother Neil assisted between 1985 and 1995 with inputting data as outlined above, the plaintiff asserted that from 2000 his brother's role was limited to being at call to help if there was a problem with the computer system, perhaps every six months or so. But otherwise, from the plaintiff's observation, Neil would come to Miller Crescent "on a father/son relationship" about once a week, but not to work.
104 Together with his father, Grant says he was the only one of the four children to give personal guarantees to the Commonwealth Bank - he estimates about 30 guarantees over the years in total for up to $22.75 million - for the finance taken out by companies in the family business for various projects and investments, including the Bacchus Marsh development. In addition, he said he and his father had to give personal guarantees to suppliers, in particular to a meat supplier when the butcher engaged by them for the shopping centre walked out and the plaintiff had to organise a butcher's licence under his name to operate the butcher shop. The plaintiff's matrimonial home, registered in the name of his wife, was also proffered as security by the provision to the bank of the duplicate title, the duplicate mortgage (discharged but not registered as such) and a discharge of mortgage.
105 The plaintiff asserts that most of the work on the Bacchus Marsh project was done by him. At the same time he remained a partner of Abbott Stillman & Wilson, until he retired after 2001 and worked full time in the family business until at least March 2007. He says that it was the combination of commitments, and the consequential tensions between the plaintiff and his partners at Abbott Stillman & Wilson, that eventually became a factor behind his retirement from that firm.
106 It was during the period 1997 to 2000 that Grant asserts that his father handed over the managing director's responsibilities to him, even though Bernard retained the title. His evidence was that he would attend meetings with his father, where he would do most of the talking and the negotiating, while his father would sit and listen. In the late 1990's, his father would say "Whatever you think is best, I am happy with" after they had discussed the business decisions to be made.
107 The plaintiff says that the level of remuneration he received from the business was modest given the amount of work he did for it, and the level of commitment he showed by guaranteeing finance. He estimates that the sum total of his receipts for 30 or more years of work in the family business, including loans on which he paid commercial rates of interest, has been in the order of about $1.5 million, and certainly no more than $2 million. This relatively modest reward, he submits, should be taken into account by the Court as a relevant factor in determining whether an agreement of the kind that he alleges was made.
108 According to the plaintiff, the trust distributions that have been made over the years have been modest, with the focus being on capital growth and retaining the wealth within the operating entities. Throughout this period the plaintiff was paid a salary of $5,000 per annum. His best estimate - given he no longer has access to the business' financial documents - is that his salary and distributions for the period 1971 to 2008 amount to no more than $217,385.
109 In addition to these drawings, the plaintiff also had the benefit of loans from one of the company entities, Waverley Properties Pty Ltd. He estimated that his outstanding loan balance from that company at the date of trial was approximately $1.243 million. He asserted that these were genuine commercial loans and that he has been paying interest on them at commercial rates. He also received the use and enjoyment of various Jaguar cars held in the name of Anikau.
110 The plaintiff points to various admissions he says were made on behalf of his father and the other defendants to demonstrate that there is no substantial dispute about the large amount of work carried out by him in the business up to at least March 2007. The admissions include statements made by Bernard in various cards sent to both the plaintiff and his wife, acknowledging the contributions made by them. So, in a birthday card written by Bernard to the plaintiff in October 2006, he wrote:
Words are totally inadequate to express my respect, my appreciation, my need and my love for you and your contribution to the empire you helped to create. ... With your wide skills the future is only limited by the time available to plan well and implement and manage. Too soon you will be in full control ...[49]
111 Another example is a handwritten note from father to son in about early December 2006, in the following terms:
The pressure we have been under for years has had damaging effect. It has been concealed in the past, but it has erupted in the last few weeks. To say that I don't appreciate you and have no confidence in you is so far from the truth that it is unmeasurable. Firstly I love you more than you will ever know, you are the main reason I have worked so long and so determinately. You have skills that can make what we both have created into something beyond our dream at that time. You have no peers at anything associated with our holdings. You are needed, your wisdom and breadth of knowledge is unmatched. I would like to discuss the future with you when the dust settles. Please don't make any quick decisions until we look at the big picture. The CBA Bank should help in the near future. I love you more than my life and you deserve much love and respect. Your loving father, please don't act too quickly.[50]
112 Further admissions were made, following a breakdown in relations between father and son, in a note sent by Bernard to the plaintiff on about 22 December 2006 referring to a Father's Day card sent to him by Grant and his grandchildren:
Not so long ago you wrote a special card - copy attached all was well. Today and for some time in the past and only God knows the future. (sic) Surely as a father (if not as the MD [managing director]) I can help repair some of the problems created in the business. I need your help. I have lost 6 KG. I don't sleep despite double the recommended tablets. I take too many Valiums. And the health future is not good. Please, so Xmas is what it should be let me write a cheque to be cashed today. I beg you I can't go on with the guilt I am carrying. Please let me be your father you will do anything for your wife and children. Let me do a little to ease the problem, and let me get back to wanting to live.[51]
113 Statements such as this confirm, the plaintiff submits, that he worked far more for the business than any other family member, with the possible exception of his father. Moreover, he asserts that from the late 1990's he increasingly took over the reins from his father, who was ageing and had recognised that he was unable to engage in the cut and thrust of business. He therefore left those matters to the plaintiff. I also note that evidence was called to substantiate the proposition that Bernard intended that Grant would ultimately succeed him as the head of the business.
114 This background evidence goes far to establishing Grant's contention that he over a prolonged period gave his father significant assistance in the management of the family's affairs. The next, and more difficult question, is whether his relationship with his father gives rise to any cause of action enforceable against him. It is to this that I turn below.
115 There were problems with the accounting system after the accountant who had been engaged by the business since 1997 left in 2005. These problems were exacerbated, if not caused by, a succession of accountants who, according to the plaintiff, underperformed. The result was that the accounts were out of date.
116 In addition to these problems, it is clear that Grant and his step mother did not get on. He described the circumstances in the following terms:
... she thought she was accountable to no one except possibly my father. When I asked her to do various things she quite often wouldn't do them. She wasn't accountable, when I asked for things, concerning the marketing of the structure, she would often go and say to my father "He is asking for this" and I would be told by my father "Keep out of it". There were decisions that were being made by my father and I in our offices, and Rosemary would take him out into the bedroom and then all of a sudden the decision was changed. So it got to a stage where my father said to me "If you stay around here any longer, I will end up with" - he would end up with a stroke or a heart attack.[52]
117 The plaintiff's response was to pack up and leave. By 31 December 2006 he had left the Miller Crescent house for the last time. But, he said, he kept receiving requests for help and information from his father or from Ms Cassissi in 2007, with the result that he continued to have involvement in the group's business affairs - including attending mediations in relation to disputes with the builder and the architect engaged by the business, settling the contract of sale for the Spargo property and attending the settlement, negotiating with the Commonwealth Bank and providing a personal guarantee and reviewing draft leases. Relations were exacerbated in March 2007 by Bernard's refusal at Grant's request to honour either the 2005 agreement to increase his share to 40%, or the Horsewhite Unit Trust agreement, or the Environinvest agreement.
118 In late 2007 and early 2008, steps were taken to remove Grant as a director of various companies.
119 On 22 September 1984, some four years after the death of his wife Beryl, Bernard married Rosemary Moores. In about March 1984, at the time he announced his intention to remarry, Bernard discussed with Grant the future ownership and control of the family business. Those discussions continued until the wedding. In total the plaintiff says there were about 20 or 30 such conversations. It was during the course of them, so the plaintiff asserts, that the 1984 agreement was concluded.
120 As Grant recalled the first of the relevant conversations, his father said: "We have to fix up the structure between Anikau and Anihidi." The plaintiff explained the concerns about that structure in the following terms:
... the situation pre September 1984 was that Anikau owned Anihidi, or Robertson Family Settlement owned all of the issued units in Robertson Unit Trust. Robertson Unit Trust was to stand alone as a sacrosanct entity so that it incurred as few liabilities as possible, and that each property that Anihidi had an interest in would be in a stand-alone trust, and if any of those properties had a financial difficulty, it might fall over, but it wouldn't be a domino effect and fall over and affect the Robertson Unit Trust or Anihidi. Anikau was providing the management services for all of the entities in the group. It was also entering into various liabilities. It was providing entrepreneurial services to the whole group. My father's concern, which was matched by me, was that Anikau had potential liabilities through negligence because we had at that stage say about 15 trusts with third parties involved. At that stage the Robertson family did not have a majority interest in those. And we were concerned that if one of the projects was to get into financial difficulty, that a disgruntled unit holder, syndicate member, bank, tenant might attack Anikau and that Anikau had ownership of all of the other assets in the group. So what we wanted to do was isolate Anikau and introduce a new unit trust to take control of Anihidi and have all of the capital, benefits, save for the first 20 grand ... in income and capital. So it was mainly an exercise of isolating Anikau from potential liabilities.[53]
121 According to the plaintiff, Bernard told his son, "What I want is a new trust fund to be established", and he outlined his intention, which was:
that the control of that trust fund would rest with him during his lifetime, that there would be reward for the effort that each of the members of the family, including Rosemary, would put in to date at that time, and subsequently, that he and I would still continue to be the directors of the companies, and that he wanted to make sure that the blood line retain[ed] control of the group.[54]
122 Bernard gave evidence that these concerns were raised by him with his son following a visit from the accounting firm, Deloittes, which drew Bernard's attention to the exposure of the assets of the business as a whole should one segment of it be the subject of a claim by a litigious adversary. He says the work subsequently performed to establish a new arrangement was performed by Grant in conjunction with Deloittes.
123 Grant's evidence was that he agreed to re-examine the structure of the group. Having done so, he advised his father to establish a new family trust with six funds (as opposed to the four established under the Robertson Family Settlement). Each of the four children, and Rosemary, would be the principal beneficiary of one fund, with the sixth being unallocated. Its fate would be determined by the plaintiff and his father, who would "distribute [it] to those who were considered to have increased the net wealth of the family."
124 In a subsequent conversation, Grant discussed with his father in what proportions the assets of the Robertson Family Trust would be allocated across the six funds. Under the structure of the Robertson Family Settlement, each of the four funds were equal. This precedent was not adopted for the Family Trust. According to the plaintiff, his father said:
You and Neil have done most of the work, so you should get 18% each. Vicki, she's done nothing, but she is still a member of the family and she is still my daughter. She will get 9[%].[55]
As further recounted by Grant in his evidence, Bernard determined that his third son, Brad, would get 7%, while Rosemary would get 6%, leaving the unallocated fund at 42%. According to Grant, "that would be allocated pursuant to an agreement between he and I when the time came".[56]
125 The picture is of a father very much in control. It was Bernard alone who fixed the shares each would initially take in the Family Trust. This is consistent with his intention, as expressed in paragraph 4(A)(iv) of the statement of claim and reflected by Grant in some of his evidence, that Bernard was to remain in charge of the family's affairs during Bernard's lifetime. It is not consistent with his alleged agreement to join with Grant in allocating the fruits of the unallocated fund. And the general tenor of the evidence is that, if such an agreement were made, Bernard and Grant would have a deliberative vote, with Bernard having the casting vote.
126 The plaintiff proceeded in late 1984 and early 1985 to restructure the business. A new company, Anahaw Pty Ltd, was incorporated in August 1984. The directors and shareholders were Bernard and Grant, although all its issued shares were owned beneficially by the former. Given that Anahaw was also by its own shareholdings made the ultimate holding company for the group, Bernard remained in complete control.
127 A new family trust, designated the "Robertson Family Trust", was also established. This was effected by deed executed on 21 September 1984 - the day before Bernard remarried. It became exhibit P6 in the trial. It may be convenient here to briefly examine its terms. It provides, by clause 3, that the trustee shall divide the trust fund, including all additions to it, into 100 equal parts or shares. Eighteen of these were designated as "Neil's Fund"; 18 became "Grant's Fund"; 7 were allocated to "Bradley's Fund"; 9 to "Vicky's Fund"; and 6 to "Rosemary's Fund". That accounts for 58% of the total. The balance of 42% was to constitute and be called the "unallocated fund".
128 The particular provisions made in the deed for each fund, even the unallocated fund, mirror each other. For each, there is a "specified beneficiary" - in the case of the first five, the person after whom the particular fund is named; and in the case of the unallocated fund, Bernard himself. Each specified beneficiary of a fund, including Bernard, is also a general beneficiary of that fund. Indeed, Bernard is as much a beneficiary of the unallocated fund as the other specified beneficiaries are of the funds which bear their name.
129 The trust deed deals with each fund separately, but provides for each (including the unallocated fund) that until the vesting day the trustee shall before the expiration of any 12-month accounting period "divide all or any part of the net income of [the] fund for such accounting period and hold the same upon [certain specified] trusts", including the payment of that income to any general beneficiary of that fund. Then, as and from the vesting day, the trustee shall stand possessed of the capital and income in trust for such of the general beneficiaries of that fund, or for such charitable purposes "as the trustees ... may by instrument in writing revocable or irrevocable ... before the vesting day appoint". There is no provision for the distribution, before the vesting day, of capital from the unallocated fund.
130 Thus the trust deed contains no provision which would facilitate, let alone enable, Bernard and Grant to do what, according to paragraph 4(A)(ix), Grant undertook to ensure: namely, to "determine how the assets contained in the unallocated fund ... would be allocated". Not even the trustee can do that before the vesting day - certainly not so as to effect a re-division of the 100 parts into which the assets of the Fund as a whole was originally divided. Such a re-division would require an amendment to the deed.
131 In summary, the effect of the relevant provisions of the Robertson Family Trust Deed of Settlement is to put practically impossible barriers between that which, as pleaded in paragraph 4(A)(ix) of the statement of claim, Grant undertook to achieve: that he and Bernard would determine how the assets contained in the unallocated fund would be allocated, and would cause the trustee of the Robertson Family Trust to give effect to that determination.
132 The assets of the unallocated fund cannot be allocated until the vesting day of that fund. There is no evidence that that day has arrived. The trustee may, before the vesting day, by instrument in writing, appoint a general beneficiary (of whom Grant is one) as a general beneficiary for who on the vesting day such proportion of the capital and income of the fund as the trustee determines will thereafter until paid over be held in trust. Such appointment may be either revocable or irrevocable. Bernard, in the exercise of his control over the trustee, could cause such an appointment to be made. But, before the vesting day, it would be of no more than a contingent benefit to Grant even were it in writing and irrevocable; and even after the vesting day, were it to result in an increase in the share of Grant's Fund in the capital of the Robertson Family Trust it would not be available to any beneficiary of that fund until that fund's vesting day had in turn arrived. Even then, Grant would have no more than a contingent interest in it because he is but one of many beneficiaries of his fund, and by the terms of the trust deed, he will not necessarily take anything for himself.
133 The long and short of it, therefore, is that Grant failed to ensure that he and Bernard would determine how the assets contained in the unallocated fund would be allocated. He also failed to ensure that, such determination having been made, Bernard would cause the trustee of the Robertson Family Trust to give to Grant whatever the determination decreed Grant should have. On the contrary, Grant drew a trust deed that put many barriers in the way of the outcome he contracted to ensure. And it is not merely a problem arising from the fact that a determination by Bernard and Grant, were it to be given effect, would by private agreement remove from the trustee a power given to the trustee by the trust deed. Grant might have got around that problem by having himself and his father appointed trustees. But under the deed as drawn by Grant, not even the trustee has the power to deal with the assets before the vesting day.
134 In these circumstances, several questions arise. First, given these discrepancies between the 1984 agreement as pleaded in paragraph 4 of the statement of claim and what was (according to paragraph) done pursuant to it, can it be said that there was any agreement at all in 1984? Secondly, even if there was, is Grant or Bernard in breach of it?
135 It will be remembered that paragraph 4 of the statement of claim concerns what it designates as "the 1984 agreement". It will also be remembered that the defendants deny its existence, as they deny every allegation made in that paragraph. This, according to the final submission of senior counsel for the plaintiff, gives rise to "the critical issue in this case: did Grant and Bernard Robertson agree in 1984 that they would jointly decide allocations from the unallocated fund?"[57]
136 I have already noted that Grant seeks to enforce rights which are not only contractual but which are personal to him. Directors of companies, and persons in analogous positions, make decisions by agreement every day without as a result creating, as between themselves, rights of this kind. The critical question in this case is, therefore, not simply whether Grant and Bernard agreed in 1984 that they would make joint decisions about allocations from the unallocated fund. It is whether, even if they did, that agreement created private rights in Grant enforceable against Bernard - and in circumstances where such enforcement might result in beneficiaries' interests being adversely affected.
137 As posited in paragraph 4 of the statement of claim, the consideration given by Grant for the making of the 1984 agreement consisted of (i) his transfer to the trustee of the Robertson Family trust of his single share in Anihidi and his single share in Anikau; (ii) his agreement to continue working for the Robertson Group; and (iii) his continuing to guarantee the obligations of the members of the Group. Only the first of these is attended with such certainty as to be capable of meaningful application, since the conditions which might impinge upon the continuing performance of the others are so varied as to make meaningless any unconditional promises to continue both working and guaranteeing. Nevertheless, the courts are not concerned to enquire into the sufficiency of the consideration given in exchange for a contract; and so the promise to transfer the two shares is enough.
138 At the heart of this, the major area of dispute between father and son, is Grant's assertion that there was an agreement made between himself and his father in 1984, and that Bernard is in breach of it in four ways set out in paragraph 6 of the statement of claim. First, that he caused Grant to be removed from Robertson Group directorships. Secondly, that he revoked a will he made in 1988. Thirdly, that he later made a new will in which he bequeathed to his wife (Rosemary) his shares in Anahaw, the company which controlled the Group. And, fourthly, that having with Grant decided to allocate to Grant 40% of the trust funds of the Robertson Family Trust, he refused or failed to cause Anahaw as trustee to give effect to that decision.
139 I reject these assertions. I turn to my reasons for doing so.
140 Insofar as the agreement is alleged to have been oral, the statement of claim contends that it was constituted by conversations between Grant and Bernard at a number of meetings between February 1984 and the following September. In his evidence at the trial, Grant spoke of that part of the 1984 agreement which was oral. He said this:
To the best of my knowledge, the first conversation was: "We have to fix up the structure between Anikau and Anihidi ...". What then occurred was that [my father] said words to the effect: "What I want is a new trust fund to be established", that the control of that trust fund would rest with him during his lifetime, [and] that there would be reward for the effort that each of the members of the family, including Rosemary, would put in to date at that time, and subsequently. That he and I would still continue to be the directors of the companies, and that he wanted to make sure that the bloodline retained control of the group.
Now, that's the first conversation that I recall. ... I said "Fine, I can start looking at how we can structure the whole arrangement". He said words to the effect: "Well, is there anything wrong with the Anikau sub trust structure?" And I said: "Well, that's what I was going to be looking at as the mirror image of the new trust structure". And then subsequent discussions occurred. So what I have just indicated was the first one.
Subsequent discussions after I had sufficient time to take into account what he had said, I went back and said to him words to the effect that: "What we should do is establish a new family trust", that that new family trust would have six funds similar to the structure that we had for the Robertson Family Settlement, which had four funds. But the six funds would be for, one for each child, one for Rosemary, and one be an unallocated fund, and that unallocated fund would be used by he and I to distribute to those who were considered to have increased the net wealth of the family. Further, as part of that same or similar circumstances around that discussion, he indicated that he wanted to have a new will to take into account that revised structure. He also wanted to ensure that he and I retained the directorships, and that he and I would have a hand-over, take-over procedure, whereby in due course he would reduce his involvement in the business and that I would eventually take over those activities that he was doing.
In one of the subsequent 20 or 30 conversations, I raised the point concerning what is going to be the allocation of the funds. In the Robertson Family Settlement, whether it is 25, 25, 25 for each of the children? I asked my father specifically: "What allocation do you want?" And he said to me words to the effect: "You and Neil have done most of the work, so you should get 18% each. Vicki, she's done nothing, but she is still a member of the family and she is still my daughter. She will get 9". My brother being Brad had caused problems, he would get 7. Rosemary would get 6, and the unallocated fund which was 42%, had been set aside, and that would be allocated pursuant to an agreement between he and I when the time came.[58]
141 This could not be an example of a joint determination by Bernard and Grant. It was pure Bernard. Nor is there anything in this evidence to support the allegation that Grant agreed as consideration for Bernard's part of the bargain to: (i) transfer to the trustee of the Robertson Family trust his single share in Anihidi and his single share in Anikau; or (ii) continue working for the Robertson Group; or (iii) continue to guarantee the obligations of the members of the Group. I have already held that these terms do not arise by implication. Likewise, there is nothing in this evidence to support the allegation that Bernard promised (as opposed to expressing a wish) to make a will, let alone a will which ensured that upon his death Grant and Neil would together control all the companies in the Robertson Group. On the contrary, the evidence is that Grant drew for his father a will which did not give Neil and himself that control. It is also to be noted that Grant gave sworn evidence of Bernard's wish that "the control of [the new] trust fund would rest with him during his lifetime".[59] This is inconsistent with the term of the agreement pleaded in paragraph 4(A)(ix) that "Grant and Bernard would determine how the assets contained in the unallocated fund ... would be allocated".
142 Bernard denied that there was any agreement that the discretion to distribute from the unallocated fund would be exercised by him in conjunction with Grant. He gave the following evidence:
The unallocated fund could be used precisely and exactly as I wanted to do. I could keep it myself totally and use it myself. It was my money to start with, so it was my money that I was distributing, or was being distributed to the other four trusts ... I was the only person who had authority to alter it, there was nobody else. There was nobody else like Grant or anybody else ... influencing me or with authority to act in conjunction with me.[60]
143 I am not satisfied that Bernard made an agreement binding him to exercise his power to retain Grant as a director of any company in the Robertson group. I am also not satisfied that Bernard gave a promise to Grant to the effect that he would make and not revoke a will containing specified provisions. Finally I am not satisfied that Bernard was under any legally enforceable obligation to cause Anahaw to allocate part of the unallocated fund to Grant's Fund. Even if he was, I am of the opinion that he is not in breach of that obligation. Because the allegations surrounding the two determinations upon which Grant relied were extensively canvassed, I have nevertheless examined them as separate incidents.
144 The plaintiff asserts that on two occasions he and his father made a determination of the kind contemplated by his version of the 1984 agreement. The first, made in 1994, was that Grant would be entitled to 35.2% of the unallocated fund. The second, which he says occurred in 2005, was that his entitlement under the trust would rise to 40% of the whole. The plaintiff asserts that these determinations acknowledged his work for the family business. They also took into account variations in circumstances.
145 According to the plaintiff, the 1994 variation was occasioned by the death of his brother, Bradley, who drowned on Anzac Day in 1993. It would seem, therefore, that consideration of contributions to the combined family fortune did not come into it. From September 1993 through to January 1994, on about half a dozen occasions, the plaintiff and his father discussed what was to become of Bradley's share of the inter vivos and testamentary trusts. These discussions were prompted by concerns that Bradley's former wife might seek to make claims on the Robertson family trust.
146 At the time of his death, Bradley had left his wife, Colleen, and was living with another woman. He had led his father to believe that he was going to marry his new partner. In these circumstances, Bernard after consultation with Grant, decided to remove Colleen as a general beneficiary under the Robertson Family Trust deed and designate her "an excluded beneficiary". This was effected on or about 30 June 1993. In either December that year or January the next, Bernard, again after discussion with Grant, further decided to allocate Bradley's fund in the Robertson Family Trust to the other surviving funds "in the proportion that each of those bore to the others of those funds".[61]
147 There is nothing in the above to suggest that the reallocation of Bradley's Fund was made (as the statement of claim posits) bearing in mind post-1984 "contributions ... to future growth in wealth of the Robertson Group".[62] Grant nevertheless asserts that the result was a partly oral and partly written determination, the effect of which was to increase his share of the Robertson Family Trust to 35.2%. It should be noted, however, that Neil's Fund was increased in the same proportion. The written components were said by the plaintiff to be three in number. First was a codicil to Bernard's will by which the status of beneficiaries of each of Neil's, Grant's, Vicki's and Rosemary's Funds was conferred on the beneficiaries of Bradley's Fund. Second was a one page typewritten document addressed to "My Trustees" which read:
The unallocated fund should be held for the benefit of NEIL'S FUND, GRANT'S FUND, VICKI'S FUND and ROSEMARY'S FUND in the proportion that each bears to the aggregate of NEIL'S, GRANT'S, VICKI'S and ROSEMARY'S FUND.[63]
This was dated 15 January 1994 and was signed by Bernard.
148 Grant also gave evidence about a third document, being:
a memorandum of resolution of the trustees of Anahaw, and it provided for the trustees making a determination to vest Brad's fund in the unallocated fund, and to make a revocable determination to distribute the unallocated fund to each of the other surviving funds in the proportions that each of them bore to the aggregate of them.[64]
That document has not been produced. The plaintiff said he last saw the document, which he drafted, in 2005 or 2006 "in the first or second cabinet on the left-hand side of the filing cabinets at Miller Crescent, attached [by] a bullnose clip to the trust deed...".[65]
149 None of these documents materially assist the plaintiff's case. The codicil cannot do it, and the evidence showed that the document addressed to Bernard's trustees was intended to be a direction to the trustees of his testamentary trust, not the Robertson Family Trust or the Robertson Unit Trust. The third gets closest, but it is not itself in evidence, and a revocable decision made by Bernard can be unmade by him.
150 Bernard denies the existence of the 1994 determination. I accept his denial. There is simply no evidence of Bernard and Grant together deciding anything; and a unilateral decision by Bernard would bind no-one, and certainly not Bernard. In any event, such a resolution would at most require the trustee to declare that Bradley's Fund had vested, and thereafter hold the capital and income of that fund on the same trusts as those of the unallocated fund. The income of the unallocated fund, thus enlarged, would until the vesting day of that fund be allocated in the agreed proportions.
151 According to Grant, his share of the unallocated fund was then calculated by aggregating the individual shares of the three surviving siblings and Rosemary. These total 51%: 18% (Neil) + 18% (Grant) + 9% (Vicki) + 6% (Rosemary). Grant's proportion of the aggregate was therefore, he contends, 18/51 i.e. 35.2%. But even were this calculation correct, and even were the determination to be effective, he would thereby become entitled only to 35.2% of the income of the enlarged unallocated fund. Because the decision embodied in the resolution was revocable, however, he had no more than a merely contingent interest in the capital of the fund.
152 The conclusion that Bradley's Fund had vested, and that its capital and income had been placed under the umbrella of the unallocated fund, would be much easier to reach were there evidence that the income of the unallocated fund was supplemented by the income from the assets formerly held in Bradley's Fund. There is no such evidence.
153 The plaintiff alleges that in 2005 a further determination was made pursuant to the 1984 agreement. He says that the determination was oral, and that it was made in about August 2005 as he was driving his father home along the Monash freeway following a meeting they had attended in the city with some superannuation fund advisers. According to Grant, his father said:
You and your family have sacrificed a lot for the growth of this empire. You should be rewarded because you haven't been rewarded to date. We should look at issuing units to you in St Bernard's Unit Trust.[66]
154 The St Bernard's Unit Trust was the principal unit trust which owned the Bacchus Marsh shopping centre. But, according to the plaintiff, he declined the offer because the issue of additional units to him would unfairly dilute the interests of minority unit holders who then held about 6% of the total. He therefore proposed in lieu issuing a further amount to Grant's Fund in the Robertson Family Trust. His father agreed, and suggested 40%. The plaintiff said "Good, thanks". That was the end of the discussion.
155 From time to time thereafter between September and December 2005, as father and son breakfasted together, Bernard would ask, "How are we going with that document for the allocation?" The plaintiff said that during this period he was under pressure to ensure that the accounts were properly maintained, and so he responded, "What do you want me to do? Do you want me to get the accounting work up to date or do you want to do this allocation?"[67] The result was that the plaintiff did not document and did not implement the 2005 determination, even assuming there was one and even assuming that, if there was, it was made pursuant to the 1984 agreement. His inaction supports the conclusion, to which I have come, that there was not.
156 On 1 June 2006 the plaintiff witnessed the cancellation by his father of the direction to the trustees of the testamentary trust to which I have referred in paragraph [147] above. The copy of the document in the court book is crossed with two lines with the words "Cancelled Cancelled" appearing between them together with the date "1 Jun 06" and the signature of Bernard. Grant said he was sitting at Rosemary's desk in the office at Miller Crescent when his father approached him with the document already bearing the crossing and his signature, and asked the plaintiff "Could you sign this?" The plaintiff said he was busy doing something at the time, "and I just saw it and said 'fine', I signed it. And from recollection the exchange lasted no more than 30 seco[68]s".68 His father did not offer any explanation to him about the document.
157 Again, this evidence does not accord with the making of a joint determination based upon any, let alone an objective, assessment of the contributions made to the family's wealth by the several members of the Robertson family. It is evidence of a unilateral decision made by Bernard to which Grant was pleased to accede, but which he never implemented.
158 The plaintiff says that in December 2006, at a time when relations between father and son had broken down, he asked his father "Are you going to sign the allocation for Anahaw?" to which his father replied: "If it is not in writing, I am not going to honour anything".[69] This is consistent with Bernard's denial of the existence of the 2005 determination, and his consequent refusal to consent to an implementation of it. In my opinion, Grant has not made out a case for that implementation.
159 The plaintiff further alleges that he and his father reached agreements about the superannuation fund forming part of the family business. The original trust deed, created in 1974, named Anikau as the nominee, and appointed Bernard and Beryl Robertson as the original trustees. That original arrangement was subsequently varied. By November 1994, the new trustees were Bernard, Grant, Neil and Rosemary.
160 The superannuation fund held two investments: one was the units in the Highway Unit Trust and the other was the units in the Ferntree Unit Trust. As a result of changes in superannuation law and the consequential changes in tax benefits that became available through superannuation funds, it was decided to channel certain of the family investments through the superannuation fund to take advantage of those tax benefits. This decision was made after receiving advice from Mr George Beaumont QC. But the plaintiff asserts that it was not intended that those investments were to be held on the trusts of the superannuation fund, but rather on the trusts of the normal family business. The plaintiff says that he made an oral agreement with his father in respect of the Highway Unit Trust in 1991 the effect of which was that when, either upon the death or retirement of his father, that property was distributed, it would be held on the trusts of the Robertson Family Trust. There was a like agreement in respect of the Ferntree Unit Trust. Bernard has refused to accept any obligation to honour these agreements. Accordingly, Grant asserts that there has been a breach, or at least an anticipatory breach, of them.
161 Grant gave evidence that in 1992 (not 1991, as pleaded) his father told him that he had been approached by the real estate agents for the receivers of Pyramid Building Society. They drew his attention to a partially developed block of land on Maroondah Highway in Ringwood that "he was looking at buying". He asked whether the plaintiff was interested in its acquisition "as part of the Robertson Group".[70] Grant said he agreed, but recommended that the investment be placed into the unit trust owned by the superannuation fund in order to ''overcome the in-house asset rule" and to receive the benefit of the 15% tax rate.
162 According to Grant, he and his father agreed that:
... the unit trust would be established and that the units would be held in the unit trust on his account, but the ultimate beneficiary was going to be the Robertson Family Trust, Robertson Unit Trust at that stage, or the Robertson Family Trust. And in relation to which trust it was going to be, I said to him at the time words to the effect "Time will sort the thing out".[71]
163 However, Grant's evidence about what exactly was said by him and his father during this conversation makes no reference to either the Robertson Family Trust or the Robertson Unit Trust as being the ultimate beneficiary. This is apparent from the following exchange, which occurred during the course of his evidence in chief:
Q: You said "we agreed", but can you tell his Honour what you recall he said and you said?
A: Okay. I said "Why don't we put it into this, a unit trust owned by the super fund?" He said words to the effect of "Sounds okay to me, whatever you think is best we will go with".[72]
164 For his part, Bernard gave evidence that he could recall none of this.
165 The defendants say that Grant's evidence is consistent with him conceiving a means to deal with the units for tax purposes, without explaining that to Bernard at the time, and subsequently reconstructing conversations to reflect his (Grant's) intention. Even more significantly, the defendants submit that the evidence given by Grant discloses no exchange of promises by him and his father. In particular, the defendants assert, Grant did not give evidence that Bernard promised that on his death or retirement such portion of the assets of the superannuation fund as consisted of units in the Highway Unit Trust would be paid to Bernard and then transferred by Bernard to either the Robertson Family Trust or the Robertson Unit Trust (or perhaps more accurately, the trustees of those two trusts, or of one or other of them). Indeed, the absence of evidence of the giving of mutual promises - and therefore of the making of a contract - is striking. In these circumstances, the defendants submit, Grant has not established any contract which is enforceable by him against his father.
166 In this context one can compare the version of the "agreement" outlined by Grant in his evidence with that described in the general endorsement on the writ filed on 17 December 2007. The general endorsement posited an agreement between Grant and his father to the effect that the benefits derived by each of them from the superannuation fund "would be held by each of them in trust for the Robertson Group trusts".[73] There was no suggestion in the case put at trial of Grant promising anything.
167 I agree that Grant has not established any enforceable contract. After listening carefully to him in the witness box, I have concluded that there was no proper discussion, and no agreement, about who would ultimately benefit from the assets held in the superannuation fund. The beneficiaries would differ according to whether the favoured repository was the Robertson Family Trust or the Robertson Unit Trust or some other trust. And, through his control of Anahaw and Anihidi, Bernard would have the ultimate say in the disposition of the funds in any event: neither the pleadings nor the evidence suggest any restrictions on that ultimate authority. Moreover, neither the pleadings nor the evidence support the conclusion that Grant gave any consideration for any promise that might be enforced by him. Nor, indeed, is there any evidence of any relevant intention in Bernard to confer on Grant a private right enforceable against his father.
168 But whatever agreement Grant and Bernard may or may not have reached, the reality is that the fate of the assets of the superannuation trust fund is governed by the superannuation trust fund deed. That deed does not contemplate that particular assets would be held on behalf of particular beneficiaries; rather, it provides that they are to be held to the benefit of all the members, who in turn will receive entitlements depending upon their rights. These, in turn, are determined on the basis of the contributions made by them or on their behalf.
169 Any amendment to that deed would now need the consent of both Rosemary and Neil, who are also trustees. Accordingly, Bernard is not in a position to effect unilaterally such amendments as would be required to enable a transfer of assets from the trustee of the superannuation fund to the trustee of the Robertson Family Trust or the Robertson Unit Trust, still less to satisfy any personal claim upon which Grant might seek to rely.
170 In my opinion, the plaintiff has failed to sustain his allegation, based upon paragraph 15 of the statement of claim, that it was Bernard's obligation, imposed by the agreement which he made with his son, to ensure that when he retired or died that part of his superannuation benefit that comprised the Highway units would ultimately be paid either to the Robertson Unit Trust or to the Robertson Family Trust. There was no such agreement. In particular, there was no agreement enforceable by Grant against his father.
171 As the pleadings reveal, it is common ground that in 1996 Bernard and Grant were considering purchasing land, referred to by the parties as "the Bradles land", at Bacchus Marsh. It is likewise common ground that (a) the two men were then trustees of the Anikau Pty Ltd Superannuation Fund; (b) in that capacity they acquired units in a trust known as the Ferntree Unit Trust, the trustee of which was Bradles Properties Pty Ltd; and (c) that that company purchased the Bradles land, which has since in part been leased for use as a Coles supermarket, and in part had constructed on it a utility room for the Bacchus Marsh Shopping Centre.
172 Grant alleges that, by agreement between him and Bernard, the Bradles land was purchased by Bradles Properties in its capacity as trustee of the Ferntree Unit Trust on terms that the trustees of the superannuation fund would subscribe for units in that trust, and hold them to Bernard's account. When he retired they would be transferred in specie to him and he would then in turn transfer them to the Robertson Unit Trust or the Robertson Family Trust. If, he died before he retired, the in specie distribution would be made by the trustees directly.
173 The plaintiff says that it all began when he suggested to his father that "This property would give us the benefit of playing around with the valuation of the property". He explained his reasoning in the following terms:
I wanted Bradles [the trustee of the Ferntree Unit Trust] to own it ... we were intending to ... straddle properties. We had three property owners at Bacchus Marsh all part of the Robertson group. Those three property owners were building a discount department store or a supermarket straddling titles. With one unit holder being Bradles in this case, Bradles could control what the two others, being Beryljay and Ad Astra, who are two other members of the Robertson Group, it could in effect have a veto in what those two other entities could do. By having that veto, the value of that interest increased significantly, and it would permit us to, on my father's death, to take out potential capital gains, unrealised capital gains into the super fund, and then from the super fund into Anahaw.[74]
174 According to Grant, he said to his father "I believe that the ultimate beneficial ownership should rest with the super fund ... and [be] owned ... ultimately by the Robertson Family Trust".[75] This, in Grant's view, would provide significant benefits for the group, with little or no tax payable on potential unrealised gains. A few lines later, the transcript records that, according to the plaintiff, his father then said "Okay, whatever you think is best", or words to that effect.
175 Grant said that in 2005 he suggested that they formalise the arrangement to which, on his account of events, he and his father had come. His father agreed. The plaintiff also pointed out that, as things presently stood, Rosemary was his father's sole dependent and that she would receive the whole of the superannuation fund. He says that his father was not aware of this, and said "... if it is the case we have got to change it". They went to see a group called SMF Funds Management in August 2005. The advice they received was that the existing deed did not permit the sort of transaction that they were envisaging, that they would have to amend it, and that Bernard would have to sign a binding death benefit in relation to the trust arrangement making it clear that he was to hold it for the Robertson Family Trust. As the plaintiff tells the story, in September 2005 he drafted a letter to SMF Funds Management, but as far as he is aware, no further action has been taken. He also understood that a variation to the Anikau superannuation trust has been prepared, but he did not know whether a binding death benefit had been prepared.
176 Bernard agreed that, at Grant's suggestion, the purchase of this land became part of his superannuation fund. His evidence was that:
... Grant was the one who would be saying, well, that should be probably, that that becomes the superannuation, and I agreed that it should.[76]
However, he denied that there was any agreement on the side that in reality the investments, although nominally included among the assets of the superannuation fund, would, either then or in the future, be held on the normal family trusts. His evidence was that:
... whatever went into my name, whatever went to Grant's name, whatever went to Rosemary's name ... That was their money. I didn't question it, I asked for it and I was quite satisfied with the result. What other things went on, Grant with his fiddling around, trying to save money and those sort of things, I don't know. I preferred so many times that the money goes into my name, stays in my name.[77]
177 As with the Highway Trust, in my opinion, the plaintiff has failed to sustain his allegation, based this time on paragraph 24 of the statement of claim, that it was Bernard's obligation, imposed by an agreement which he made with his son and enforceable by Grant, to ensure that when he retired or died "his superannuation benefit that comprised the Ferntree units" would ultimately be paid either to the Robertson Unit Trust or to the Robertson Family Trust.[78] Equally, there was no such agreement enforceable by Grant against his father. Accordingly, Grant is not under this head in a position successfully to claim damages as a result of a breach of contract.
178 In his written submissions, the plaintiff purports to set out the pleaded elements of the Ferntree Unit Trust agreement. The submissions do not refer to paragraph 24(f) of the statement of claim, which alleges that the agreement contained a term that "the Bradles land could not be sold or transferred before 2056". There may be a reason for this omission. That reason may be that there was no evidence to support it. Certainly, the plaintiff called none.
179 The question of the possible sale of the Bradles land, or the Bacchus Marsh Shopping Centre, is addressed not only in paragraph 24, but also in paragraph 33, of the statement of claim. In paragraph 33, the plaintiff alleges that, at the opening of the Centre on 21 November 1998, he and his father agreed that the land on which the Centre is located would not be sold before 2056. As I observed earlier in this judgment, that plea does not sit well with the allegation, made in paragraph 24, that that very thing was a term of the 1996 agreement, made two years earlier.
180 No evidence was called to support the allegation made in paragraph 24. The allegation made in paragraph was similarly unsupported. The best the plaintiff could do was to point to statements allegedly made by Bernard that he wanted to make sure (a) that the Centre was not squandered for future generations, and (b) that things could be sorted out so that somehow the property could last for many generations to come. This is not evidence of a promise binding upon Bernard and enforceable by Grant to refrain from selling the Centre until 2056. The claim for damages for breach therefore cannot be sustained. Nor can the claim for injunctive relief.
181 The Horsewhite agreement involved units in the Horsewhite Unit Trust. It will be remembered that, in paragraph 36 of the pleading, Grant claims that he borrowed $10,000 or thereabouts in August 1982. With it, and with $13,356 of his own money, he purchased 5118 "A" class units in the Trust. By agreement with Anihidi, he allowed that company to register those units in that company's name. For reasons which the statement of claim does not give, the agreement provided that the income derived from the units would be retained by Anihidi, while Grant remained responsible for servicing the loan. The result, if Grant is correct, was wholly lopsided. According to paragraph 37, he paid out the loan. Meanwhile, Anihidi retained the income - all $200,000 of it. And, despite a demand made by Grant on 29 March 2007, Anihidi has refused to hand the units back.[79]
182 The evidence given at trial does not correspond with the pleading. Grant says that in August 1982 he and his father agreed in a conversation that Anihidi would acquire 5,118 units in that Trust to be held by it for the benefit of Grant. His evidence was that his father said to him "There are two groups of A class units that are being sold by the Guest Furniture group, do you want to buy half of them?" The plaintiff said he replied: "Yes, but I would have to borrow money from the CBA". And he added: "I don't have a trust. Because of my potential guarantee liabilities, would it be okay to put those units into Anihidi?" By this he meant, register the units that he was buying in the Horsewhite Unit Trust in Anihidi's name rather than in his own name. He maintains that his father agreed.
183 Grant also maintains that, on the basis of that agreement, he purchased the units - all 5118 of them. The plaintiff relies on a cheque butt which on its face appears to relate to a cheque for $20,000 drawn on his account, dated 20 August 1982, and payable to Anihidi. It bears the additional notation that the associated cheque was for "H/w units".[80] The difficulty there is that the vendor of the units was the Guests Furniture group, and Grant cannot explain why he would pay Anihidi for something Grant was purchasing from someone else. The best he could do was contend in cross examination was that he paid Anihidi "[b]ecause Anihidi was going to be the registered legal owner of those units".[81]
184 Grant also relies on (a) a notation in the register of the unit holders of the Horsewhite Unit Trust, which under an entry dated 20 August 1982 reads: "Transfer from Wyatt Nominees Pty Ltd" for 5,118 units;[82] (b) on an entry in the Horsewhite Unit Trust transfer journal recording 5118 units being transferred from Wyatt Nominees Pty Ltd to Anihidi;[83] and (c) on evidence that Anihidi was a unit holder of the Horsewhite Unit Trust.[84] On this basis the plaintiff, in the latter half of March 2007, called on Anihidi to transfer those units to him. Anihidi has refused. Grant says that, when he raised the agreement with his father, Bernard replied: "If it is not in writing I am not going to honour it".
185 Grant gave no evidence about actually borrowing $10,000, or about contributing $13,356 of his own funds. Nor did he give evidence that he repaid that loan. And in a further indication that evidence and allegation were not in alignment, the plaintiff's written submissions contend - merely on the basis of the statement of claim, and with no suggestion that the evidence might support it - that "Grant agreed with Anihidi that Anihidi could register the units in Anihidi's name on terms that: (i) Anihidi would receive any income paid in respect of the units; and (ii) Grant would repay the loan and pay any interest payable in respect of the loan". The submissions go on to say, again without reference to any evidence, that the term referred to in (ii) above about Grant paying the loan and interest "arises because Grant was the borrower of the funds from the CBA and no agreement was reached with Bernard that any other person would pay those funds".
186 Bernard could not recall the conversation with Grant in 1982 or the circumstances in which these units were transferred to Anihidi.[85] He did confirm, however, that given his lack of knowledge of this transaction, he told Grant in 2007 he would not acknowledge his son's claim to these units in the absence any documentation to support Grant's interest.[86]
187 The defendants submit, and I agree, that the evidence given by Grant does not support the contract alleged in the statement of claim. As I have noted, Grant did not give evidence of an exchange of promises with his father. Nor did his evidence address the allegation that Anihidi would receive the income from those shares, or that he would repay the loan he took out or the interest on it. More particularly, the defendants point out that there was no evidence of an agreement that, through Bernard, Anihidi would transfer the units to Grant on demand. Indeed, the state of the evidence is so uncertain, submit the defendants, that the Court could not conclude that on the balance of probabilities any agreement has been established by Grant. The events occurred so long ago that the Court could not conclude that either father or son had any actual recollection of what was said. Further, there is nothing on the face of the register of members of the Horsewhite Unit Trust to show that Anihidi does not own the units beneficially. This is significant given that, two years later, Grant purchased a parcel of units in his own name, suggesting that he did not have any particular aversion to owning units himself.
188 The defendants also point to a letter written to Abbott Stillman & Wilson on 28 September 1982 in relation to the transfer of units in the Horsewhite Unit Trust, including this group of units, which carries a notation "NB * Beneficial interest transferred on 25th February 1982".[87] This notation suggests, it is submitted, that the beneficial ownership of the units was transferred to Anihidi on that date.
189 During his cross examination on this letter Grant insisted that the notation referred not to the units, but to loan amounts noted in the letter. He pointed to the position of the asterisk on the first page of the letter next to the column heading "Amount of Loan Indebtedness Due to Trust". He explained:
The loan relates to the 30 June each year the income is determined, and the income distribution or entitlement to income accrues, and is credited to a loan account of each unit holder, because the account[s] weren't finished off at ... 30 June '82 there is from my recollection an undertaking given by myself and/or my father to the Guests that as soon as we worked out what their income entitlement for the 30 June '[8]2 was, that we would pay them out that income entitlement.
The reference to "Trust" in the heading on the first page was, he said, a reference to the trust for which the registered unit holder (in this case Wyatt Nominees Pty Ltd) was trustee.
190 I prefer the explanation put forward by the defendants. The ultimate beneficial interest in income of the 1982 financial year could not be known until that income had been allocated, in accordance with the trust instrument, to the eligible beneficiaries, and adjustments made for amounts received in advance as loans. This could not happen before 30 June 1982. It therefore could not happen on 25 February that year.
191 Finally, the defendants point out that the cheque butt relied on by Grant refers to a sum of $20,000, while the purchase price of the units was $23,536. Grant maintained that he could not account for the difference without access to the relevant ledgers, which he asserted the defendants had failed to discover.[88] But it is for him to prove his case. If he cannot say how he obtained the funds to pay for property he claims is his, a court cannot but conclude that there is a gap in his evidence.
192 At best, say the defendants, there may be an agreement that Anihidi would hold the units as a bare trustee for Grant. But that has not been pleaded; the claim made by Grant is for common law damages for breach of contract. The existing plea in contract cannot amount to an allegation of trusteeship.
193 The lack of evidential clarity which bedevils an attempt to ascertain the facts in this case is illustrated by the controversy over the Horsewhite Unit Trust. At one point Grant gave evidence that Anihidi purchased the units on his behalf, and transferred the beneficial ownership of the units to him.[89] A short time later, however, he gave evidence that because he desired to avoid the risk that the units might be available to satisfy some liability he might have had as a guarantor, he did not acquire or retain the beneficial ownership of them. He therefore assigned the full interest in the units to Anihidi for a period of not less than seven years, with the ancillary result that no tax would be payable under the Income Tax Assessment Act. During that seven year period, Grant asserted that he had "only ... the right to reclaim back after seven years".[90] This arrangement, however, was not documented. He agreed that his interest in the units could have been noted in the register of members, but it was not. Rather, "once again I relied upon the relationship between a father and a son",[91] even though his evidence about his conversation with Bernard made no mention of any discussion or agreement about the basis on which Anihidi would hold the units or about Grant's right to have the units transferred to him by Anihidi at any point in the future.
194 Confronted by evidence as incomplete, and as difficult to follow, as this, I conclude that Grant has failed to discharge the burden of proof in relation to the Horsewhite Unit Trust. I am not in a position to hold that the 5118 units in question are held by Anihidi pursuant to an agreement to transfer them, on demand, to him. Indeed, I cannot make any positive finding about the circumstances in which Anihidi acquired the Horsewhite units
195 Finally, the plaintiff alleges a breach by the defendants of an agreement involving another family company, the fourth defendant ("Waverley"), in relation to shares held by it in a publicly listed company, Environinvest Limited ("Environinvest"). Grant alleges, by paragraph 43 of the statement of claim, that in 2000 he "agreed with Waverley that that company could register in its name 437,198 shares owned by Grant in the capital of Environinvest" on terms that (a) Waverley would receive any dividends in respect of the shares; and (b) upon demand Waverley would transfer the shares to Grant.[92] The agreement is said to have been oral and was made between Grant and Bernard, both being Waverley directors. Pursuant to that agreement the shares were registered in Waverley's name and the company received about $5,000 in dividends. Grant demanded the return of the shares on 28 March 2007. Waverley failed to comply. As a result Grant claims loss and damage of approximately $220,000, being the value of the shares.
196 Once again, Grant's evidence is difficult to reconcile with the pleadings. But to begin with the background. He told the Court that Environinvest was established in 1997 by its chairman and managing director, a former State Parliamentarian, the Honourable Roger Pescott, who initially approached Bernard about investing in the company. When Bernard indicated he was not interested, he referred Mr Pescott to Grant and Abbott Stillman & Wilson. The plaintiff says he was appointed to the board as a non-executive member in about 1997 or 1998, and was chairman until about two months before the appointment of an administrator in September 2008. He gave evidence that in about 2000 Mr Pescott arranged, in return for work performed by the plaintiff, to transfer 460,000 fifty cent shares from Mr Pescott's wife, Caroline Mackenzie. According to the plaintiff, the transfer of these shares was as a result of a "moral obligation" on the part of Mr Pescott because Grant had been attending board meetings and doing unpaid work as a director, including giving Mr Pescott "ideas as to how things should proceed".[93] The name of the transferee was left for the plaintiff to complete. He said he spoke to his father and said "Look, is it okay if I put Waverley Properties Pty Ltd as the registered owner?" He said his father agreed and signed the transfer. Waverley had often been used by the Robertson group as a nominee entity for purchasing properties. The plaintiff maintains that, similarly, in this instance Waverley was acting purely as nominee. Yet when in late March 2007 the plaintiff called for the transfer of the shares, Waverley refused to comply. Environinvest has now gone into administration.
197 The defendants say that the evidence given by Grant does not establish the contract alleged. He did not give evidence of any agreement reached by him with Bernard that Waverley could retain any income generated by the shares, or that on demand Waverley would transfer the shares to him. In the absence of evidence of a contract, there could be no breach. At best, the defendants submit, Environinvest may hold the shares on a bare trust. Indeed, the defendants in their written submissions acknowledge that Waverley does not claim any beneficial interest in them. However, the submissions continue, Waverley could not transfer the shares to Grant without being satisfied that Grant was their beneficial owner.
198 Waverley's position in this regard seems to me to be entirely justified. Its attempts to obtain sufficient information to reach the required level of satisfaction, and to avoid the necessity of joining Waverley as a party to this litigation, came to nothing. Despite its best efforts to resolve this issue, Waverley was frustrated by lack of an appropriate response from the plaintiff.
199 As early as 21 August 2008 the solicitors for the defendants wrote to Grant's solicitor in the following terms:
We note that the statement of claim includes an allegation that Waverley Properties Pty Ltd hold shares in Environinvest Limited on trust for your client. We also note that despite making these allegations, Waverley ... is not a party to the proceedings.
On our instructions no information has been provided concerning the circumstances or terms on which Waverley ... became a shareholder in Environinvest ... . In the event that you provide us with information or documents that describe the circumstances and show the source of the consideration for the purchase of the shares in Environinvest ... in support of your client's allegation, it is likely that we will obtain instructions that Waverley ... does not claim a beneficial interest in the shares in Environinvest.
Therefore we suggest that you provide this information to us before deciding to delete the allegations from the statement of claim or alternatively making application to add Waverley ... as a defendant to the proceedings.
If you do make an application to join Waverley ... as a defendant without first providing the information we seek, please be advised that such an application will be opposed and this letter produced in that application as to costs.
200 No reply was received to this letter. Accordingly, the defendants' solicitors on 5 February 2009 took the matter up again - this time with the new solicitors for the plaintiff. Included in that letter were the following paragraphs:
You may not be aware that we wrote to your client on 21 August 2008 inviting him to produce evidence in support of his claim and indicating that it might be possible for us to get instructions not to dispute the claim.
...
Your client did not respond at all to that letter of 21 August 2008 and his discovery produced no documents to support his claim.
201 In their response of 9 February 2009 the plaintiff's solicitors addressed this issue for the first time. They said:
... we are instructed that your clients are well aware that our client did not pay for the ... shares in question. They were a gratis beneficial distribution to him in recognition of work done and services rendered by him for Environinvest. Therefore, no proof of payment as referred to by you exists.
202 The letter of 9 February 2009 produced a response dated 11 February 2009. In that response the defendants' solicitors said, in part:
It is not clear to us how this explanation [of the lack of consideration for Grant's receipt of the shares] is consistent with the agreement your client has alleged, or whether it is intended to constitute a different basis on which your client alleges that he is entitled to an order requiring Waverley to transfer the shares to him.
Our clients deny any agreement as alleged in the statement of claim, and have no knowledge of the arrangements as alleged between your client and Environinvest. However, our clients have no interest in occupying the Court's time in determining issues in relation to Waverley that can be addressed between the parties. If your client is entitled to beneficial ownership of the Environinvest shares then our clients will not claim these shares for themselves.
We invite your client to provide us with the information and documents that he relies on. ...
203 According to the defendants, Grant's response to their attempt to establish the validity of his claim was confusing, and inconsistent with the allegations pleaded. Waverley was therefore unable to come to any conclusion about Grant's entitlement to the shares, despite the fact that it had an open mind, was prepared to accede to Grant's demands where there was evidence to sustain them, and was anxious to avoid being drawn into this litigation.
204 The position has since been clarified, although recent enquiries made by Grant's solicitors with the receiver and manager of Environinvest failed to result in the discovery of the share transfer and share certificates.[94] But, while Ms Mackenzie was not called as a witness, her husband was. Mr Pescott's evidence was brief. Nevertheless, he confirmed that he arranged for his wife to transfer the shares to or at the direction of Grant. These shares, he said, were offered to Grant and others who had worked in senior positions for Environinvest.[95] I accept this evidence. In my opinion, it does establish that the beneficial ownership in the shares was transferred by Ms Mackenzie to the plaintiff. Waverley accepts that it has no evidence of giving any consideration for them, and no evidence to contradict Grant's account of how it - or he - came to hold them.
205 In these circumstances, it seems to me that Grant has failed to establish any contract between him and Waverley by the terms of which he is entitled to any contractual relief against that company. I am, however, prepared to grant a declaration that the plaintiff is the beneficial owner of the Environinvest shares in question. For the reasons otherwise set out, the balance of his claims must, however, be dismissed. There will be judgment accordingly. I will hear the parties on the question of the necessary ancillary orders, including orders as to costs.
[1] Consolidated amended statement of claim filed 11 November 2008.
[5] Statement of claim, paragraph 3(e) and 3(f).
[6] Statement of claim, para.4(B) and 4(C).
[15] Statement of claim, para. 4(A)(ix).
[28] Statement of claim, paras.5(l) and 5(m).
[29] Statement of claim, para.5(a)(vii).
[33] Particulars under para.12E of the defence.
[34] Statement of claim, paras.15(c) and 15(d).
[40] Statement of claim, para.24(c) and (d).
[45] Statement of claim, para.27(e)(ii).
[62] Statement of claim, para.4(A)(viii).
[73] General endorsement on Writ filed 17 December 2007, paragraph 26.
[78] Statement of claim, paras.24(c) and 25(d).
[87] CB.1808. Letter included in Exhibit D4.
[94] CB.1873; exhibit D4, document F009.
Robertson
Robertson & Ors [2010] VSC 54