Plaintiffs v Defendants

EQUITY - Undue influence - Whether will of each of the plaintiffs was overborne by undue influence - Rebuttable presumption arises from parent and child and trustee and beneficiary relationship - Presumption not rebutted - Whether undue influence by some directors on notice to company or can be imputed to company - Undue influence established - Princess Theatre Pty Ltd & Ors v Ansvar Insurance Limited [2024] VSC 363 applied - Harris v Jenkins [1922] HCA 54; (1922) 31 CLR 341 distinguished.

EQUITY - Unconscionable conduct - Whether plaintiffs were under special disadvantage - Whether defendants unconscientiously took advantage of special disadvantage - Whether unconscionable conduct by some directors was on notice to company or could be imputed to company - Unconscionable conduct established.

CONTRACTS - Two plaintiffs were minors when executing deed of assignment - Whether plaintiffs repudiated contract within reasonable time of attaining majority - Reasonableness of delay is a factual inquiry - Unreasonable delay found for one plaintiff - Edwards v Carter [1893] UKLawRpAC 21; [1893] AC 360 applied.

LIMITATION OF ACTIONS - Whether action in respect of breach of trust barred by s 21(2) of Limitation of Actions Act 1958 - Action in respect of breach of trust to which s 21(2) applied - Whether proviso in s 21(2) engaged - Whether plaintiffs' revisionary or remainder interest was a future interest - Right of action accrued at death of life tenant - Claim of fair-dealing was brought within time - Re Pauling's Settlement Trusts [1964] Ch 303, Armitage v Nurse [1998] Ch 241, Johns v Johns [2004] NZCA 42; [2004] 3 NZLR 202, Halford v Halford [2022] WASCA 1; (2022) 58 WAR 254 applied - Menegazzo v Pricewaterhousecoopers (A Firm) & Ors [2016] QSC 94 considered.

EQUITY - Laches - Whether there was unreasonable delay resulting in sufficient prejudice to result in laches - Two plaintiffs attained knowledge of assignment deed 17 years before commencement of proceeding - Delay prejudiced defendants in ability to respond to claims - Other plaintiffs did not have sufficient knowledge of assignment deed until after death of life tenant - Laches established with respect to two plaintiffs - Lindsay Petroleum Co v Hurd [1874] UKLawRpPC 1; (1874) LR 5 PC 221 applied.

EQUITY - Acquiescence - Plaintiffs did not acquiesce with respect to impugned transaction - Acquiescence not established - Orr v Ford [1989] HCA 4; (1989) 167 CLR 316, Byrnes v Kendle [2011] HCA 26; (2011) 243 CLR 253 applied.

1 Do the first and second defendants, as trustees of the deceased estate of Eric Parrington Fay (Eric Snr[1]), hold the residuary estate on trust for the plaintiffs, as originally provided by Eric Snr's will? Or are the plaintiffs bound by a deed they signed in November 1984 (the assignment deed), which assigned their rights under Eric Snr's will to the third defendant (RLF)?

2 The proceeding involves seven of the 11 children of Eric Snr and Zilla (sometimes called 'Zillah') Fay (Zilla).

3 The plaintiffs are the five youngest siblings (Jane, Mary, Desmond, Josephine and Simon), and the first and second defendants are the two eldest brothers (William, known as Bill; and Eric, known as Rick).

4 The third defendant, RLF, was incorporated in 1963 and at all times has been owned by members of the Fay family. Its current directors are Bill and Rick, and it is owned by the four eldest brothers, Bill, Rick, Mark and Luke, in virtually equal shareholdings. RLF was the registered proprietor of various parcels of land that, for many years until 1996, were farmed by a partnership of Eric Snr, Zilla, and the four eldest brothers ('EP and Z Fay & Sons' - the partnership). RLF and the partnership were managed by Zilla and others as a combined undertaking. The partnership was the trading arm of the undertaking.

5 The original family home, called 'Ripon Lea', stands in the south-eastern corner of a property on a title at 6376 Glenelg Highway, Carranballac, that includes over 300 acres of farming land to the west and north of the home. Across a side road to the east (the Beaufort-Carranballac Road) is another title associated with the same address of over 300 acres (together, the Carranballac land, or Ripon Lea).

6 Eric Snr inherited Ripon Lea and the Carranballac land from his father, and Eric Snr remained its registered proprietor until his death in 1983. The current registered proprietors are Zilla, Bill and Rick as the trustees of Eric Snr's estate, although Zilla herself died in 2017.

7 As well as farming the land registered to RLF, until 1996 the partnership also farmed the Carranballac land. Since then it has been farmed by Bill and Luke.

8 The four eldest brothers worked for the partnership, receiving no wages until 1987. The two eldest sisters and five younger siblings were not involved in the partnership and its farming operations. The family's living expenses were met from the income of the partnership.

9 Eric Snr died on 21 December 1983, leaving a will dated 16 September 1977 appointing Zilla, Bill and Rick as executors of the will and trustees of his estate. According to the inventory of his estate, Eric Snr's assets were the Carranballac land and a personal estate of about $134,000, the majority of which was his interest in the partnership and a loan to RLF. The will directed that the whole of the estate be held on trust for Zilla during her lifetime, and that after her death the residue then remaining be divided among the plaintiffs.

10 In the months after Eric Snr's death, various discussions involving Zilla, Bill, Rick and Murray Byrne, the family's solicitor, led to the preparation of the assignment deed. The plaintiffs each signed the assignment deed on separate occasions in November 1984, and Zilla signed as witness for each of them. By the assignment deed, the plaintiffs agreed to sell, and RLF agreed to purchase, the plaintiffs' reversionary interest (to vest after Zilla's death) in the residuary estate of Eric Snr under his will, in exchange for $100,000 to be paid to the plaintiffs in equal shares within a 10-year period, $2,000 of which would be payable on each of them turning 19 years old. The plaintiffs were then aged from 15 to 22 years old. As well as being trustees of the estate of Eric Snr, Zilla, Bill and Rick were the directors of RLF. Bill signed the assignment deed as a director of RLF. Each of Zilla, Bill and Rick also signed noting they had been advised of the assignment in their capacities as trustees.

11 Zilla died on 29 September 2017. Since Zilla's death, Bill and Rick have refused to transfer any of the remaining estate of Eric Snr to the plaintiffs, relying on the assignment deed.

12 The plaintiffs claim the defendants hold on trust for them the residue of Eric Snr's estate that would have been due to them in the absence of the assignment deed, which they claim should be set aside due to (1) breach of fair-dealing rule, (2) undue influence, and/or (3) unconscionable conduct. The two youngest (Josephine and Simon) also claim that the assignment deed is ineffective due to their minority when they signed it, and the fact that they never ratified it.

13 The plaintiffs seek a declaration that the assignment deed is void, or alternatively, that it is voidable and to be set aside, a declaration that the titles to the Carranballac land are held on trust for them, orders facilitating the transfer of the titles to them, and transfer of Eric Snr's remaining personal estate (including an amount representing his interest in the partnership, and other assets as specified in the inventory for his estate prepared for probate of his will in 1984), together with an accounting of the administration of his estate to date. They also seek equitable compensation and interest in respect of the use of the Carranballac land since Zilla's death.

14 The plaintiffs commenced this proceeding in December 2019, about 27 months after Zilla's death and about 35 years after they signed the assignment deed. This gave rise to a series of issues in the proceeding.

15 The defendants pleaded that the plaintiffs' breach of fair-dealing claim was barred by s 21 of the Limitation of Actions Act 1958 (the Limitation Act).

16 With respect to the breach of fair-dealing claim, the defendants contended that, pursuant to s 21(2) of the Limitation Act, the plaintiffs' causes of action accrued on 20 November 1984 when each of them executed the assignment deed, and therefore the breach of fair-dealing claims had been barred well before this proceeding was commenced in 2019. In response, the plaintiffs agreed that s 21(2) of the Limitation Act applied but claimed that, on a proper interpretation and application of that provision, the proviso in s 21(2) applied, with the result that the period within which they had to commence this proceeding commenced to run upon Zilla's death when their interest vested in possession, and so the proceeding was brought within time under s 21(2). The plaintiffs submitted that it follows that, with respect to the fair-dealing rule, the defence of laches was therefore unavailable. The plaintiffs alternatively submitted that if s 21(1) applied to the case, no limitation period applied, and they acknowledged that in this event laches would be available to be argued.

17 The defendants also pleaded that the plaintiffs' claims were all barred by laches, and/or by acquiescence. As well as contending that laches was not available as a defence to the breach of fair-dealing claim, the plaintiffs submitted that laches and acquiescence were not established in relation to any of their claims. With respect to the issue of Josephine and Simon's minority, the plaintiffs further submitted that that was not a claim in equity, and therefore the doctrine of laches does not apply.

18 The defendants contended that it was too late for Josephine and Simon to repudiate the assignment deed on the ground that they were minors when they signed it, because they had not repudiated it within a reasonable time of turning 18. No limitation period was identified as barring Josephine's and Simon's claims in this regard. The plaintiffs submitted that the proper analysis was that the assignment deed was not binding on them because they had never ratified, and in the alternative they contended that Josephine and Simon (particularly Josephine) had not unreasonably delayed repudiating the assignment deed in any event.

19 Based on the parties' joint statement of issues[2] and their pleadings,[3] the key questions for determination in this proceeding are as set out below. A brief outline of my conclusion on each question appears below each question. My detailed reasoning appears in part E of these reasons below.

20 First: did Zilla, Bill and/or Rick 'procure the execution' of the assignment deed?[4]

21 During closing addresses, the parties submitted that the question of who 'procured' the execution of the assignment deed was not relevant to the breach of fair-dealing claims. The parties were in agreement that the fair-dealing rule was directed to the features of the impugned transaction rather than the beneficiaries' execution of the transaction document. I accept that the application of the fair-dealing rule is not necessarily assisted by answering the narrow question of whether the trustees procured the plaintiffs' signatures on the document on a particular occasion. However, that question is not completely irrelevant, either. In my view, as well as the features of the transaction and the positions of the relevant persons and entities affected by it, the entirety of the circumstances in which the assignment deed came into existence is of potential relevance, and this includes the circumstances in which it came to be executed by the plaintiffs.

22 The inquiries required for the purposes of undue influence and unconscionability are different from the inquiry as to fair-dealing, and they are in turn somewhat different from one another. Undue influence focusses on whether each plaintiff exercised free will in entering into the assignment deed, and unconscionability focusses on the conduct of Zilla, Bill and Rick (and RLF) leading to the plaintiffs entering into the assignment. Both of these doctrines involve consideration of contextual matters such as any relevant disparity in bargaining positions between the trustees and plaintiffs. The circumstances of execution of the assignment deed are relevant to both.

23 Conscious of the differences in approach required under each claim, I was satisfied that all three trustees brought about the transaction represented by the assignment deed, and that Zilla (and to a lesser extent Bill) procured its execution by the plaintiffs.

24 Second: in the circumstances of its execution by the plaintiffs (or any of them) did Zilla, Bill and/or Rick breach the equitable rule of fair dealing that applies to trustees' involvement in transactions concerning beneficiaries' interests and trust property, with the result that the assignment deed should be set aside in relation to the plaintiffs (or any of them)?[5] This involved the following sub-questions:

(a) Did the 'fair-dealing rule' apply to the trustees' procurement of the plaintiffs' entry into the assignment deed here, even though they were not parties to the assignment and the assignee was RLF?[6]

The plaintiffs bore the onus on this sub-issue. The defendants submitted that unless RLF was the alter ego of the trustees, the claim must fail. RLF had a distinct legal personality and could not be characterised as the 'alter ego' of the trustees. I did not find that RLF was the 'alter ego' of any of the trustees but I did not accept that this precluded the operation of the fair-dealing rule. The trustees were the directors of RLF and controlled it, as well as being substantial minority shareholders in RLF. I resolved this issue in favour of the plaintiffs. Having regard to the principles on which the fair-dealing rule is based, I concluded that it applied here.

(b) Did the circumstances of the transaction meet the requirements of fair-dealing?

The defendants bore the onus on this issue. Its determination involved consideration of the following factors:

(i) Did Zilla, Bill and/or Rick take advantage of their position as trustees and executors of Eric Snr's estate?[7] I concluded that they did.

(ii) Did Zilla, Bill and/or Rick make full disclosure to each of the plaintiffs?[8] I concluded that they did not.

(iii) Was the transaction fair and honest?[9] I concluded that it was not fair.

(iv) Was independent advice for the plaintiffs required, and if so, was it obtained?[10] I concluded that this was not a specific requirement of the rule of fair dealing, but was a relevant matter. No such advice was provided here.

(c) Have the defendants established a defence?[11]

The available defences were that the claim was made after the deadline prescribed by the Limitation Act (if one applied), and acquiescence. Neither was made out. The parties agreed that laches (that is, delay causing prejudice) was not available as a defence to this claim. I concluded that the defendants did not establish a defence to the plaintiffs' claim to set aside the assignment deed for breach of the fair-dealing rule.

25 For these reasons, I concluded that the trustees breached the rule of fair-dealing, with the result that the deed of assignment is to be set aside, as regards all the plaintiffs.

26 Third: was the execution of the deed by the plaintiffs (or any of them) procured through undue influence, with the result that the deed of assignment is to be set aside for all or any of the plaintiffs?[12] This involved the following sub-questions:

(a) Was there a presumed or actual relationship of undue influence between the plaintiffs and Zilla, Bill and/or Rick?[13]

Yes, there was undue influence by Zilla (presumed and actual) over each of the plaintiffs. In addition, Bill exerted actual undue influence over Mary and Desmond.

(b) If there was undue influence, is the assignment deed capable of being set aside on this basis even though none of Zilla, Bill or Rick were parties to the assignment deed;[14] or in other words, was RLF affected by any undue influence through Zilla and Bill or Rick?[15]

Yes, the assignment deed may be set aside on the basis of the undue influence exercised by Zilla, and Bill, as RLF was on notice of their conduct.

(c) Has any presumption of undue influence been rebutted?[16]

No, the presumption of undue influence by Zilla was not rebutted.

27 Fourth: was the execution of the assignment deed by the plaintiffs (or any of them) procured through unconscionable conduct, with the result that it is to be set aside (and if so, for which plaintiffs)?[17] This involved the following sub-questions:

(a) Were any of the plaintiffs under a special disadvantage in relation to the assignment deed? If so, which plaintiffs?[18]

Yes, all the plaintiffs were under a special disadvantage vis-à-vis their trustees and senior close family members, Zilla, Bill and Rick.

(b) Did Zilla, Bill and/or Rick unconscientiously take advantage of that special disadvantage?[19]

Yes, they all unconscientiously took advantage of that special disadvantage with respect to all the plaintiffs.

(c) Did RLF unconscientiously take advantage of that special disadvantage?[20]

Yes, through conduct and states of mind of Zilla, Bill and Rick.

28 Fifth: have the defendants established a defence to the claims of undue influence and unconscionability?[21]

The scope for an effective defence to the plaintiffs' claims to set aside the assignment deed on grounds of undue influence and unconscionability was greater than for fair-dealing, because laches could be raised in response to undue influence and unconscionability.

I concluded that the defendants successfully established that Desmond and Simon were guilty of laches, and that this was an effective defence to the claims of undue influence and unconscionability made on behalf of each of them.

However, the defendants failed to prove when the remaining plaintiffs, Jane, Mary and Josephine, had sufficient knowledge of the assignment and its circumstances for the doctrine of laches to apply. I was not satisfied that Jane, Mary and Josephine had sufficient knowledge of this at any time before Zilla's death in 2017. That meant the defendants failed to establish a defence of either laches or acquiescence to the claims of undue influence and unconscionability made on behalf of Jane, Mary and Josephine. The acceptance by Jane and Mary of $2,000 each in about 1985 did not constitute acquiescence in the absence of a sufficiently detailed understanding of the assignment.

29 Sixth: did Simon and Josephine's minority at the time of execution affect whether the assignment deed was binding on them?[22] This involved the following sub-questions:

(a) Was the assignment deed binding unless repudiated/avoided? Or, not binding unless ratified?[23]

The assignment deed was binding on Josphine or Simon unless they repudiated it within a reasonable period after attaining legal majority (turning 18 years of age).

(b) Did Simon and Josephine avoid being legally bound by the assignment deed? Or, did they become legally bound by the assignment deed through ratifying it?[24]

They were required to repudiate/avoid it, and this did not occur until they attempted to do so by commencing this proceeding in 2019. Simon's attempt was ineffective because it was unreasonably late. Josephine's repudiation was effective. (If, contrary to my conclusion on sub-issue (a), ratification was relevant, there was no ratification or fresh agreement.)

(c) Does the Limitation Act bar a remedy for Simon and Josephine?[25]

The defendants did not identify any provision of the Limitation Act that barred any such remedy for Josephine.

(d) If Simon and Josephine avoided the assignment deed[26] and/or did not ratify it, and it is found that the assignment deed is otherwise binding on the remaining plaintiffs, what legal consequences flow?[27]

This question is not strictly necessary to determine, because I have found that the assignment deed is to be set aside in its application to each of the other plaintiffs in any event. However, if it were to remain binding on the other plaintiffs, and not Josphine, it would be ineffective against Josephine but effective against the others.

30 Seventh: if successful in having the assignment deed set aside, are the plaintiffs, or some of them (and if so, who), entitled to relief, and on what terms or conditions?[28] This involved the following sub-questions:

(a) To what extent, if any, should relief be conditional on Simon and Desmond repaying amounts paid to them under the settlement deed relating to the Federal Court proceeding in 2002?[29]

None. Simon and Desmond received a settlement sum at the conclusion of their Federal Court proceeding in 2002, in which they compromised claims they made as shareholders in RLF and through a derivative action on behalf of RLF. Their compromise of their claims in the Federal Court proceeding does not require counter-restitution in order for them to succeed in their claim of breach of the fair-dealing rule in this proceeding. The settlement deed expressly reserved their rights to make claims relating to their inheritance under Eric Snr's will.

(b) 'It being accepted that relief should be conditional on the plaintiffs repaying any amounts they received under the assignment deed':

(i) What amounts, if any, were paid to any of the plaintiffs under the assignment deed?[30]

Jane and Mary gave evidence that $2,000 was paid to them. Apart from this, on the available evidence, I was not satisfied that any other payments were made to the plaintiffs under the assignment deed that were reasonably identified as such.

(ii) What amounts must now be repaid by Simon and Desmond to RLF?[31]

My answer is 'none', because I am not satisfied that any amounts were paid to Simon and Desmond under the assignment deed, and they are not liable to repay any amounts under the settlement deed.

31 Eighth: Are the plaintiffs entitled to equitable compensation and interest for the use of the Carranballac land since Zilla's death?

I will invite further submissions on this question, and as to proper orders more generally, in light of the implications of my decision to set aside the assignment deed and my reasons for judgment as a whole.

32 The parties filed a brief agreed statement of facts that is binding and precludes any inconsistent findings.[32] The findings on background facts in this section of my reasons includes all the facts in that statement. It also includes additional findings on a number of other facts that appear to have been uncontroversial, most of which were introduced by the defendants.

33 The plaintiffs contended that many of these background facts were irrelevant. The plaintiffs contended that the facts necessary to determine their claims of unfair dealing, undue influence and unconscionable conduct were quite simple and limited in scope.

34 The defendants contended that a broader view was needed. They submitted that, in order to determine whether the assignment breached the fair-dealing principles, and also to determine whether it was the product of undue influence or unconscionable conduct, it was necessary to consider such matters as: the way the family farming business and household management expanded and evolved over many years, through various vicissitudes; the contributions of the elder sons to the farming enterprise; and the role of Zilla, the partnership and RLF in providing for the household at Ripon Lea and the family more broadly. I return to these in section E of these reasons, below.

35 Where there were factual controversies for me to resolve, I have noted them (without recording my findings on them) in this section. My findings on those controversies appear later in these reasons, in sections D and E below.

36 Eric Snr and Zilla lived at Ripon Lea on the Carranballac land, near Skipton, in the Western District. They raised 11 children, born between July 1951 and June 1969. In birth order their children were Geraldine, William (Bill), Carmel, Eric (Rick), Mark, Luke, Jane, Mary, Desmond, Josephine and Simon. Geraldine and Carmel are not involved in this proceeding. Mark was not available to give evidence.

37 RLF was incorporated on 18 March 1963. Eric Snr, Zilla and Bill were the original directors of RLF. According to the register of shareholders,[33] on 1 March 1963 the majority initial shareholders in RLF were Rick and Zilla (2,050 shares each) with the remaining shares held by Bill, Mark and Luke (1,000 each). On 10 May 1968, 1,000 shares in RLF were issued to Desmond. On 12 October 1973, 1,000 shares in RLF were issued to Simon.

38 RLF was a landholding entity, not a trading entity. On 24 April 1963, RLF became the registered proprietor of a 512-acre parcel of land known as 'Kerri'. On 26 September 1969 RLF became the registered proprietor of a 774-acre parcel of land known as 'Tara Downs'. On 25 November 1975 RLF became the registered proprietor of a 379-acre parcel of land known as 'Waldrons'.

39 On or around 24 June 1975, the partnership of 'EP & Z Fay & Sons' was formally established. I was invited to assume[34] that the partnership consisted of Eric Snr, Zilla, Bill, Rick and Mark, and that a partnership agreement was prepared by the Ballarat law firm of Byrne, Jones and Torney (BJT).[35] I treated these as uncontroversial facts. Murray Byrne of BJT was the family solicitor.

40 In February 1977 a bushfire, known as the Streatham bushfire, burned across much of the Western District, impacting sections of Eric Snr's land. During the Streatham bushfire, while fighting the fires and serving on the Carranballac fire truck, Bill suffered personal injuries.

41 On 16 September 1977, Eric Snr made his final will, in which he appointed Zilla, Bill and Rick as executors of his will and trustees of his estate. The will also provided that the whole of his estate would be held on trust for Zilla during her lifetime and that the residue remaining after her death would be equally divided among his five youngest children, the plaintiffs. Eric Snr's estate included the Carranballac land.[36]

42 By early 1981, Eric Snr was considerably impacted by deteriorating health, limiting his capacity for hands-on farming activities and meaning he relied on his sons more. His health continued to deteriorate in the following year.

43 Sometime around 1981 to 1982, approximately $200,000 compensation was paid out to Eric Snr by the Victorian State Electricity Commission for the impact of the Streatham bushfires after they accepted that faulty power lines were responsible. This contributed to the funds available for RLF to buy more land.

44 In or about the 1982-1983 financial year, Mr N ('Denis') Westbrook, the Fay family's accountant, wrote to Eric Snr advising that the drought would result in reduced income for the family, and that if the drought persisted, it would almost certainly mean their income in the 1983-1984 financial year would be reduced.

45 On 1 March 1983, in a letter to the Commonwealth Department of Education concerning the family's income, Eric Snr and Zilla wrote:[37]

July 1981 to June 1982 was a bountiful year. We were taxed accordingly. But since July 1982 we have experienced the worst drought that Victoria has ever recorded and that our grain crops which usually make up the bigger proportion of our income was a complete failure ... On advice from our accountant we have had to apply to taxation office to greatly reduce our provisional tax as it has been estimated that our income would be $4450 each for year 1982-1983. And possibly lower for 1983-‍84.

As my wife and I are totally responsible for the upkeep & education of four dependent children - on our portion of next income we could find it most difficult to meet our commitments.

46 In April 1983 Rick and Mark returned to work for the partnership after doing alternative work in NSW and Queensland during the drought period.

47 RLF continued to acquire land. Later that year, on 1 September 1983, a contract of sale of real estate was made for RLF to purchase a 1,075-acre parcel of land known as 'Russells'. Also, on 26 September 1983, RLF became the registered proprietor of a 1082-acre parcel of land known as 'Nerrin'.

48 On 16 December 1983 a contract of sale of real estate was made for the purchase by the four elder sons of a 216-acre property known as 'Partridges'. Sometime prior to purchasing the Partridges property, Bill had received around $105,000 in compensation for the injuries he sustained during the Streatham bushfire, which he used for the purchase.

49 Bill gave evidence at the trial that, at about this time, Eric Snr told him that he (Eric Snr) wished to change his will and bequeath the Carranballac land to RLF. Bill's oral evidence was that:[38]

'just before dad died he said he was going to leave Rippon Lea - one part of it to myself and one part of it to my brother Rick, ... and I said to him, 'Well. That might cause problems so we should put that into the Rippon Lea farming company and then everyone will get a share of it when that's divided up with six boys'. So he said, 'Yep. That's okay', and so [t]hen he obviously chatted to mum about it because he told me him and mum had decided to do that, and then when he went ... away for about two weeks holiday. He went up towards Mildura, him and mum. Finished up in hospital, and so that decision to transfer it over never happened, but mum was fully aware that was going to happen, and her and Murray Byrne must've realised that the deed was the way to activate that ... So I never had anything to do with thinking up how to get this deed going.'

50 Bill's evidence in his written affidavits did not note any conversation between himself and Eric Snr prior to his death about changing his will. One of Bill's affidavits referred to hearing from Murray Byrne that Eric Snr had wanted to keep the land together. Bill's affidavit referred to a number of documents he has read from the file of BJT, which he does not recall seeing at the time, and went on to say:

35. After my father's death, Rick and I attended a small number of meetings with our mother and Mr Byrne. While Rick and I attended these meetings, we did not participate in the sense that the discussion took place between our mother and Mr Byrne.

36. I have a general recollection of these meetings and the matters discussed at them. I recall discussing our father's will and the transfer of the farm to RLF. My recollection is that my mother wanted to get the farm into the name of RLF and that she discussed with Mr Byrne the need to keep the farming land together. While I have no specific recollection of what Mr Byrne said during any of these discussions, my memory is that Mr Byrne stated to our mother that he knew that our father wanted to ensure that the farm property was kept together and that he and Mr Byrne had discussed those matters before he died.

37. I have been shown documents which appear to be a file note taken by Mr Byrne of conferences that I attended with my mother and Rick on 10 February 1984 (P60) and with my mother on 18 May 1984 (P62). I have no specific recollection of these conferences, however, they are consistent with my general recollection that I attended a small number of meetings with Mr Byrne after my father's death. I have no reason to doubt the accuracy of Mr Byrne's notes.

38. Mr Byrne's file notes record discussions about my younger siblings transferring their interest in our father's estate to RLF in exchange for the payment of a sum of money. I have no doubt that these matters were discussed but they were not raised by me. As I say above, it is my impression that these matters were discussed by Mr Byrne and our mother, and that the conferences that I attended were really the continuation of prior discussions that had taken place without me being present.

51 Rick stated in one of his affidavits that in about 1982 Eric Snr expressed concerns to himself and Bill about money. In particular Rick recalls Eric Snr saying to him that he had to 'get the farm into the company' which Rick understood to mean that Eric Snr wanted to transfer Ripon Lea to RLF. When asked under cross-examination about the comments Eric Snr had made to him about transferring the properties to RLF, Rick's oral evidence confirmed this interaction had happened but that he had not discussed it with Bill or Zilla.

52 Luke also gave some evidence concerning remarks made by Eric Snr about how he wished to leave the Carranballac land.

53 This topic - concerning what Eric Snr might have said to Bill, Rick and Luke about how he intended to leave the Carranballac land - was somewhat controversial. I return to it and make findings about it later in these reasons.

54 Eric Snr died on 21 December 1983. On the same day, in his place, Rick became a director of RLF. Bill was 30 years old, and Rick was 25. Zilla was 57.

55 At this time, Bill, Rick, Luke and Mark each held 2522 shares in RLF, while Simon and Desmond held 1000 each, and Zilla and Eric Snr's estate each held six shares.[39] From this time to Zilla's death in 2017, the directors of RLF were Zilla, Bill and Rick.[40] The family's accountant, Denis Westbrook, was the company secretary.

56 On 10 February 1984 Zilla, Bill and Rick met with Murray Byrne and discussed, among other things, an intention to address the question of 'the purchase by the boys of the girls' interest in the farm'.[41] One of Rick's affidavits stated that he had a very clear memory of this meeting, and it was the only meeting he attended with Murray Byrne. He described it as follows:

I recall Mr Byrne reading through the details of our father's will. I don't have a specific recollection of the content of the will, as it was being read by Mr Byrne. However, I do recall that the discussion that followed was a discussion between Mr Byrne and our mother and that neither of Bill or I participated in.

57 He had no reason to doubt the accuracy of Mr Byrne's file note but did not recall the other matters in it being discussed. His affidavit went on to state:

At some point after the 10 February meeting, I was told that there was to be a deed of assignment. My recollection is that I was told words to the effect that there was a need to raise money for my younger siblings, that Ripon Lea would stay with our mother and that it would eventually come to RLF on her death because of her life interest. I can also recall being told words to the effect that Bill and I should leave the signing of the document to our mother and that Bill and I should not give any advice or assurances to the younger siblings because it could be construed as a conflict of interest. I do not recall who told me these things, although I can say it was not Bill (or any of my other siblings). To the best of my recollection, I was told these things by my mother. I did not question any of what I was told.

58 As I explain in more detail later in these reasons, Rick gave additional evidence at the trial that Zilla told him about the contents of the deed of assignment, including the amount to be paid by RLF.

59 On 13 April 1984 Zilla, Bill and Rick signed an affidavit supporting a probate application regarding Mr Fay's will. The inventory of Eric Snr's estate included in support of the application was:[42]

INVENTORY OF ASSETS

REAL ESTATE:

House and land situated at Carranballac

being described in Certificates of

Title Volume 3413 folio 579 and

Volume 4947 folio 263 $130,837.50

PERSONAL ESTATE:

South British United Life Assurance

Policy no. 1243-986

Sum assured plus bonuses $15,702.70

National Australia Bank, Skipton

Current account 130-0113 406.72

Riponlea Farming Co Pty Ltd

6 shares valued at 180.00

E.P. & Z. Fay & Sons

Deceased's interest in partnership 93,173.51

Valiant sedan 200.00

Loan to Riponlea Fanning Co Pty Ltd 24,468.26

$264,968.69

Dated this 13th day of April One thousand nine hundred

and eighty-four

Zilla Fay William Fay Eric Fay

............................................................

Executors

60 The Supreme Court granted probate of the will of Eric Snr on 18 May 1984.

61 That same day, Zilla and Bill had a further conference with Murray Byrne. Rick was not present. After the conference, Mr Byrne made a typed note (overlaid by hand annotations recorded in italics below) as follows:[43]

On the 18th May I had a conference with Mrs. Fay and William and after lengthy discussions with the family it was agreed that

Jane Fay, Secretary of "Riponlea" Caranballac [sic], 22 yrs

Mary Fay, Student " " " 20 yrs

Desmond Fay, Surveying Student " 19 yrs 18.8

Josephine Fay, Student " 17 yrs 3.8.67

Simon Fay, Student " 15 yrs on 12.6.

(we are aware, of course, that Simon and Josephine are not legally bound until they are eighteen to this agreement) the rest of the family that [sic] they will transfer all their interest in their father's estate for the sum of $30,000.00 each to be paid over a period of ten years by the Riponlea Farming Company. No acknowledgement of payments are to be made by any parties until they have attained eighteen years. No interest is to be paid'. Assignments result of sale. Transfer by sale of R/P.

It was also agreed that Geraldine and Carmel should be given some as well. Straight gift

MURRAY BYRNE

62 Another handwritten annotation appeared below Mr Byrne's name at the end of the note, on the same page, as follows:

63 On the basis of this note, I find that, as at 18 May 1984, there was a firm proposal between Zilla, Bill and Murray Byrne to bring about an assignment to RLF from the plaintiffs of their reversionary/remainder interests in the residuary estate of Eric Snr, for $150,000 ($30,000 each) over ten years, with no interest being payable.

64 On the basis of the evidence of Rick noted above, I find that by about May 1984 or shortly after that (and before November 1984), Rick was informed by Zilla of the proposal, and understood and voiced no opposition to it, which indicates that he supported it. My conclusion that Rick supported the proposal is consistent with and corroborated by him later putting his signature to the assignment deed. I set out my findings in more detail on this point in section E.1, below.

65 On 4 June 1984, RLF acquired 'Riponhurst'; a 226-acre parcel of land which had been purchased by a contract made shortly before Eric Snr died.

66 On 6 August 1984 Zilla, Bill and Rick became the registered proprietors of the two titles of Carranballac land (including Ripon Lea) in their capacities as trustees of Eric Snr's estate.

67 On 17 September 1984, Murray Byrne made a note titled 'Estate Eric Parrington Fay re Assignment of Family Interests' stating that he had 'further confirmation in respect to the suggested family assignment'. The note relevantly included the following:[44]

1. It has been agreed that the six shares in the family company owned by the estate should be transferred to the six sons who are shareholders in the family company and their names are William, Luke, Eric, Mark, Desmond and Simon.

2. We agree that Jane, Mary, Desmond, Josephine and Simon do a release and an assignment (?) of their interest in the estate for the sum of $26,000 payable over a period of 10 years.[45] The payment of $2,000 on their attaining the age of 19. No interest to be payable.

68 It is unclear whether the above information was conveyed at a meeting or in some other way, and who on the family's side communicated with Mr Byrne on this occasion. On the basis of this note, I find that the proposal referred to in paragraph 63 above was varied by the reduction of consideration to be paid by RLF from $150,000 to $130,000 ($26,000 for each plaintiff).

69 BJT then wrote to N Westbrook & Co Accountants on 24 September 1984, asking them to transfer the six RLF shares to the sons.[46] I infer that it was at about this time, in September 1984, that the annotation was made on Murray Byrne's note of the conference on 18 May 1984 referring to the sale of shares to the six sons, noted in paragraph 62 above.

70 Internal memos and notes of BJT in evidence before me revealed the following further communications within the firm in September 1984.

(a) On 25 September 1984, a memo addressed to Murray Byrne from Alan Meredith (also of BJT), referred to an attached draft assignment deed and noted the assignment of the children's interest in the estate for $130,000 (via payments in equal shares, which amounts to $26,000 each).[47] A draft assignment deed referring to payment of $130,000 to the vendors accompanied the memo.

(b) Two days after that, on 27 September 1984, a file note by Murray Byrne stated:[48]

After months of conferences with the family, the family agreed to the following assignment of interest and it is suggested that

1. when Simon becomes of age, i.e. 18, he further confirms his signature and consent.

2. that on Mrs. Fay's death, she being the life tenant, then the property is formally transferred over to the Company and these documents will form part of the proof of consideration and sale of the remainderman's interest in the estate. ...

71 In about early October 1984, there was a 21st birthday party at Ripon Lea for Mary.

72 On 2 October 1984, Murray Byrne wrote a letter to Zilla which commenced:[49]

As a result of our recent conference with you we have given the future of your late husband's estate considerable thought in light of the proposals which have been put forward by you and William over many months. We note that a decision has finally been reached between the family as to the future interests of all beneficiaries.

73 The letter went on to note that Mr Byrne was enclosing an original and two copies of a deed of assignment for perusal. It stated:

You will note that Riponlea Farming Company Pty Ltd will, of course be required to seal the document and I would suggest that possibly Mark or Luke, as they would appear to be the only Directors who are not either beneficiaries of the estate, should sign where indicated together with Denis Westbrook who, I understand, is the Secretary of the Company and arrange for the Company Seal to be endorsed on the document.

74 The reference to Mark or Luke being directors of RLF was incorrect. Only Zilla, Bill and Rick were directors of RLF. Also, the reference to Mark and Luke being 'the only Directors who are not either beneficiaries of the estate' suggests further confusion on the part of the author. It would have been more relevant to attempt to identify any directors of RLF who were not trustees of the estate. However, there were no such people. The trustees of the estate and the directors of RLF were the same people: Zilla, Bill and Rick.

75 The letter also stated that Simon's interest under the assignment deed would not be enforceable until he reached 18 years and confirmed his consent, but that 'there will, of course, be no other problems in carrying out the agreement arrived at by all the members of the family at this time'. The letter noted that RLF was 'responsible to the various beneficiaries for payments as indicated in the document'. It also noted that the titles would not be transferred until all money had been paid 'and then only upon [Zilla's] death'.[50]

76 I infer that three copies of the draft assignment deed referring to $130,000 being payable to the vendors were enclosed with Mr Byrne's letter to Zilla dated 2 October 1984. The evidence does not establish what happened to them.

77 On 10 October 1984, Zilla wrote a handwritten letter to Murray Byrne as follows:[51]

Dear Murray

Since our recent conference the family has again discussed the deed of assignment.

It has been agreed by Jane, Mary, Desmond, Josephine & Simon to accept $100,000.

I think this amount is fair to all the family.

Thanking you for your personal attention & help.

Yours sincerely

Zilla Fay

78 There is a significant controversy to be resolved concerning Zilla's letter of 10 October 1984. The plaintiffs dispute that they had been consulted about, or agreed to, the proposal referred to in the letter at the time it was written. I return to this issue and make my findings resolving this controversy in section D of my reasons, below.

79 In response, Murray Byrne wrote back to Zilla on 31 October 1984 enclosing another two re-drafted assignment deeds.[52] These deeds now referred to the price of the proposed assignment being $100,000 rather than $130,000.

80 In short, from May to the end of October 1984, the consideration RLF proposed to pay for the assignment of the plaintiffs' interests decreased in two steps from $150,000 (as first discussed between Zilla, Bill and Murray Bryne), to $130,000 (as conveyed by one or more unknown family members, most likely Zilla or Bill, to Murray Byrne in September), and finally to $100,000 (via Zilla's letter dated 10 October 1984). I infer from this and the other evidence mentioned above that there were discussions over this period at least between Zilla and Bill - and more likely than not between Zilla and Rick also - about what RLF should pay for the proposed assignment.

81 On or about 20 November 1984, the deed of assignment was executed between the five youngest Fay children - Jane, Mary, Desmond, Josephine and Simon - and RLF.[53] Under the assignment deed the plaintiffs assigned, or purported to assign, their interests as remaindermen to RLF, in exchange for a payment to the plaintiffs of $100,000 without interest.[54] The $100,000 was to be paid within 10 years, with the first $2,000 to be paid to each plaintiff upon them turning 19 years old.[55]

82 The clearest version of the assignment deed in evidence before me was as follows:[56]

BYRNE, JONES & TORNEY SOLICITORS BALLARAT

DEED OF ASSIGNMENT

THIS DEED OF ASSIGNMENT is made on the 20th day of November One thousand nine hundred and eighty-four BETWEEN JANE FAY, MARY FAY, DESMOND FAY, JOSEPHINE FAY, and SIMON FAY all of Carranballac (hereinafter call [sic] the "Vendors") of the first part and the RIPONLEA FARMING CO PTY LTD of 2 Drummond Street South Ballarat (hereinafter call [sic] "the Purchaser") of the other part

WHEREAS ERIC PARRINGTON FAY late of Carranballac who died on the twenty-first day of December One thousand nine hundred and eighty-three and whose Will dated the sixteenth day of September One thousand nine hundred and seventy-seven was proved in the SupremebCourt [sic] of Victoria on the Eighteenth day of May One thousand nine hundred and eighty-four

WHEREAS by his Will the said ERIC PARRINGTON FAY deceased appointed his wife ZILLAH FAY and sons WILLIAM LUKE FAY and ERIC JAMES FAY the Executors of this Will and the Trustees of his estate and after the payment of all his just debts funeral and testamentary expenses and the Probate and Estate duties payable upon the whole of his estate he gave devised and be-queather [sic] the balance then remaining to be held on Trust for his said wife ZILLAH FAY during her life-time and after her death the residue then remaining to be divided equally amongst the Vendors.

WHEREAS the Vendors are absolutely entitled subject to any encumbrances referred to in the Schedule to this Assignment to the reversionary interest hereinafter expressed to be here-by conveyed and have agreed with the Purchaser for the sale thereof to it at the price of ONE HUNDRED THOUSAND DOLLARS ($100,000.00)

NOW THIS DEED WITNESSETH that it is hereby agreed and declared as follows:-

(a) This deed is made in pursuance of the said agreement for the sale in consideration of the sume [sic] of ONE THOUSAND DOLLARS [sic] ($100,000.00) being paid by the Purchaser to the Vendors in equal shares within ten years of the date of this Deedwith [sic] the payment of TWO THOUSAND DOLLARS ($2,000.00) to each of the Vendors being made on their attaining age of nineteen years and any balance out-standing during the duration of the ten years being free of any interest.

(b) The vendors [sic] as beneficial owners convey to the Purchaser all that to which under the Trust of the said Will men-tioned hereinbefore the Vendors are now entitled in reversion expectant on the death of their mother ZILLAH FAY of and in the investments and property specified in the schedule hereto and of and in the investments and property at any time hereinafter representing the same or any part thereof to hold the same unto the Purchaser absolutely subject to the life interest of the said ZILLAH FAY under the said Will.

IN WITNESS whereof the parties have hereunto set their names and seals the day and year first hereinbefore written.

SCHEDULE HEREINBEFORE REFFERED TO

Particulars of the investments and encumbrances not [sic] cons-tituting or representing the residuary real and personal estate of the said ERIC PARRINGTON FAY deceased and all now held be or standing in the joint names of ZILLAH FAY, WILLIAM LUKE FAY and ERIC JAMES FAY the present Trustees of the said Will and estate.

Real Estate:

Property "Riponlea" at Carranballac

described in Certificates of Title

Volume 3414 [sic] folio 579 and Volume

4947 folio 263 valued as at date

of death

Personal Estate:

Interest in EP & Z Fay and Sons

partnership

Cash held in Trust on behalf of estate

Liabilities:

Interest free loan to estate by

Zillah Fay.

$130,833.75

97,173.51

3,765.80

$231,773.06

-- 9,992.70

$221,780.36

SIGNED SEALED AND DELIVERED by the ) Jane Fay

said JANE FAY in the presence of: ) Zilla Fay

SIGNED SEALED AND DELIVERED by the ) Mary Fay

said MARY FAY in the presence of: ) Zilla Fay

SIGNED SEALED AND DELIVERED by the ) Des Fay

said DESMOND FAY in the presence of: ) Zilla Fay

SIGNED SEALED AND DELIVERED by the ) Josephine Fay

said JOSEPHINE FAY in the presence )

of: ) Zilla Fay

SIGNED SEALED AND DELIVERED by the ) Simon Fay

said SIMON FAY in the presence of: ) Zilla Fay

THE COMMON SEAL of the RIPONLEA

FARMING CO PTY LTD was hereunto [seal affixed]

affixed in the presence of:

......William Fay....................Director

......N (Denis) Westbrook .......Secretary

We ZILLAH FAY, WILLIAM LUKE FAY and ERIC JAMES FAY as Executors of the estate of the late ERIC PARRINGTON FAY deceased acknow-ledge receipt of advice of the assignment contained within this Deed.

SIGNED SEALED AND DELIVERED by the ) Zilla Fay

said ZILLAH FAY in the presence of: ) Luke Fay

SIGNED SEALED AND DELIVERED by the )

said WILLIAM LUKE FAY in the ) William Fay

presence of: ) Luke Fay

SIGNED SEALED AND DELIVERED by the ) Eric J Fay

said ERIC JAMES FAY in the presence )

of: ) Luke Fay

83 There is considerable controversy about the circumstances in which each of the plaintiffs came to sign the assignment deed. I make my findings in that regard in sections D.3 and E.1 of my reasons, below.

84 On or about 20 November 1984 Murray Byrne sent a letter of that date to Phillip Westbrook (the son of Denis Westbrook) regarding the estate of the deceased, Eric Snr.[57] It noted that copies of the assignment deed were enclosed. It seems likely that all the Fay family had by now signed the deed, including Bill signing as director of RLF. Nothing was made of the possibility that Bill might not have been present when the company seal was affixed.

85 About a month later, on 19 December 1984, a note was addressed to Murray Byrne from N Westbrook & Co which responded to the 20 November 1984 letter and noted that the assignment deed had now been signed and was being returned.[58] I infer that this was a reference to the assignment deed being executed by RLF, by the affixing of RLF's company seal, co-signed by Mr Westbrook as secretary.

86 The assignment deed was also signed by Zilla, Bill and Rick in their capacities as trustees of the estate, recording that they were receiving notice (or 'advice') of the assignment.[59]

87 On 3 January 1985, BJT wrote to Zilla enclosing her stamped copy of the assignment deed 'together with an additional five copies which you may like to hand to the other members of the family'.[60] The evidence does not reveal what happened to these additional five copies of the assignment deed.

88 It was highly relevant to determine when each plaintiff received their own copy of the assignment deed, or (at least) a detailed understanding of it, so as to be sufficiently informed to make a decision about whether to take steps to repudiate or challenge it. I return to this highly controversial factual issue in sections D.3 and E of my reasons, below.

89 For the financial year ending 30 June 1985, financial statements were prepared for both RLF and the partnership, which were in evidence.[61] Notably, the RLF statement showed that the $120,000 mortgage account for 'Russells' from 1984 had been paid off. Included in RLF's list of freehold assets were five properties, with the last two identified as 'Russells' and 'Partridges'. The statement showed that RLF had owed the partnership $244,817 at the end of the 1984 financial year and showed that this had increased to $364,816.52 by the 1985 financial year. The partnership statement showed a Commonwealth Bank term deposit for $100,402.97, that working capital was $146,789.86, and that the partnership had received a loan from RLF for $315,616.52.

90 On 8 July 1985 RTR Russell noted receipt of $41,525.47 from the partnership.[62]

91 On 18 October 1985 a contract of sale of real estate was made by RLF as purchaser, for $518,787.75 for a further property.[63]

92 The partnership and RLF were established customers of the Commonwealth Bank of Australia (CBA), and dealt with the CBA in Ballarat and a manager called Reg Barker.

93 On 12 November 1985 a senior manager of the CBA in Ballarat sent a letter to RLF confirming approval of an application regarding an advance overdraft limit of $98,000, and noting amongst the terms and conditions, 'Existing security will be retained along with an unlimited guarantee from the Directors of the Company'.[64]

94 On behalf of the defendants, it was suggested that the approval of this CBA overdraft facility was connected in some way with the execution of the assignment deed the year before. It was suggested that the bank required the assignment deed in order to provide the overdraft.[65] This is controversial, or was at least not admitted by the plaintiffs, and I return to it later in these reasons.

95 For the financial year ending 30 June 1986, both RLF and the partnership again prepared financial statements, which were in evidence.[66] The RLF statement noted the new CBA loan for $98,000 and a new mortgage account for 'Alexanders' for $137,327.00. The 'Russells' mortgage account which was paid off in the previous financial year was no longer noted on the statement.

96 Rick gave evidence that around the time of the 30 June 1987 accounts a wool rebate cheque of $205,000 was received by the partnership and given to Zilla.[67] It was contended on behalf of the defendants that this cheque was probably used by Zilla to make the payments due from RLF to the plaintiffs under the assignment deed. This was controversial, and I return to it in section E, later in these reasons.

97 On 29 June 1987, a memo prepared within BJT noted that Simon was under the age of 18 when he signed the assignment deed and that his signature would be needed to confirm his agreement now he was an adult.[68] On the same date, BJT wrote a letter to Simon requesting that he make an appointment to reaffirm the agreement he had already signed and advising him strongly that he should make his own will owing to his interest in the estate.[69] Simon's evidence was that he did not sign the assignment deed.

98 RLF's statements for the financial year ending 30 June 1987 showed that the CBA loan for $98,000 had been fully paid,[70] while a loan for $137,327.00 for 'Alexanders' remained outstanding.[71] The loan from the partnership to RLF had further increased to $493,113.39.

99 RLF's landholdings continued to expand. On 10 June 1988 RLF became the registered proprietor of a further 1406-acre[72] parcel of land, known as 'Ricks'.[73] The financial statement for RLF for the year ending 30 June 1988 showed that RLF's property portfolio now included a seventh property referred to as 'Villeurs'.[74] The statement also showed that RLF had secured a new CBA loan for $703,758.90. The loan from the partnership had increased further again to $619,266.49. On 6 August 1988 RLF became the registered proprietor of a 500-acre parcel of land known as 'Ripponlea East'.[75] A few years later, on 18 October 1991, RLF also acquired registered proprietorship of a 645-acre property called 'Loyola'.[76] By this time, RLF held more than 6,000 acres of farmland.

100 On 14 December 1990 Bill was appointed as secretary of RLF, a position he still retains.[77]

101 The question of whether the amounts payable to the plaintiffs under the assignment deed were paid by the due date of November 1994, or at all, was highly controversial. Save for the $2,000 payments to each of Jane and Mary in 1985 that were admitted by them, the plaintiffs gave evidence that they had received no money under the terms of the assignment deed. Zilla made a set of diary entries, possibly in about 1988, that purportedly record various payments to the plaintiffs.[78] The evidence before me also included a handwritten list of unknown provenance dated '1984 - 1987' and titled 'payments made to remaindermen' showing sundry amounts listed.[79] This was a controversial topic, and I return to it later in these reasons.

102 For around a decade, following Eric Snr's death in 1984, until the mid-1990s, Bill, Rick, Luke and Mark continued to operate the farming partnership together. Wages were paid to Bill, Rick, Luke and Mark after 1987.[80]

103 In about 1995 the four elder brothers decided to dissolve the partnership. On 13 September 1995, Peter Byrne of BJT wrote a file memo which noted that it had been made following a meeting with Mark and Rick Fay.[81] The memo noted that it had been agreed between Bill, Rick, Luke and Mark that the partnership would be split up and that the land owned by RLF would also be split up too, with each of them to receive a separate farm. The memo noted that the older brothers saw two problems: stamp duty costs and the RLF shares held by the two younger brothers, Desmond and Simon. The land and house occupied by Zilla was noted as being 'in [Zilla's] name absolutely'.[82] This was incorrect: from 6 August 1984 the registered proprietors of the two titles of Carranballac land (including Ripon Lee) were Zilla, Bill and Rick in their capacities as trustees of Eric Snr's estate.

104 A handwritten note within BJT dated 14 August (the year was omitted, but I infer it was 1996)[83] recorded that Bill had been given 10 copies of the assignment deed to pass on to his sisters and brothers.[84] In one of his affidavits, Bill stated that he recalled receiving these copies of the deed,[85] and he gave these copies to Zilla,[86] and no-one else.[87] There is no evidence that Zilla distributed those copies to the plaintiffs or anyone else. The plaintiffs denied receiving copies of the assignment deed until later. I am satisfied on all the evidence that the plaintiffs did not receive copies of the assignment deed at this time.

105 Following the dissolution of the partnership, it appears from various land title searches that were in evidence that the land held by RLF was retained for several years, but was eventually mostly divested. RLF retains some land.[88]

106 From about 1996, Bill and Luke have farmed the Carranballac land.[89]

107 In 1996 Simon raised concerns with lawyers about whether he had been treated fairly in relation to the farming enterprise.[90] He retained the services of Ian Brown, from Ian Brown & Co Barristers and Solicitors.

108 On 23 August 1996, Mr Brown wrote to the Fay family solicitors, BJT, noting that his firm acted for Simon.[91] He requested copies of Mr Fay's will and RLF's financial statements from the last seven financial years. On 30 August 1996, with Simon's written authorisation included, Ian Brown wrote to RLF's then current accountant, Terry Rodoni of Bird Cameron Accountants. Mr Brown's letter sought, among other things, RLF's financial statements and minutes of company meetings relating to shares and dividend payments since June 1984.[92]

109 On 3 September 1996 Terry Rodoni wrote to Peter Byrne of BJT noting that he had included a copy of Ian Brown's correspondence and would send the requested information directly to Ian Brown.[93]

110 Over a year later, on 21 January 1998, Ian Brown again wrote to Bird Cameron seeking information regarding RLF's share transfers, its current shareholding and any information regarding Simon's interest in the business.[94]

111 On 20 August 1999 Ian Brown wrote to Bird Cameron seeking information on behalf of Simon to advance a 's 237 application'[95] and relating to various matters including RLF and the partnership's financial situations, any changes to RLF's shareholdings, changes to Mr Fay's interest in the partnership following his death, details of the partnership's use of RLF's assets and corresponding payments from the partnership to RLF, the location of RLF's financial records prior to 1991 and any allegation that Simon executed any documents after he turned 18 years old confirming the terms in the assignment deed.[96] The letter referred to Simon's execution of the assignment deed but did not expressly suggest that the contents and effect of the deed had not been explained to him at the time. The letter also noted that Simon had advised his lawyers that Bill had refused to provide information requested by Simon in a recent discussion.

112 On 6 September 1999 Ian Brown wrote a letter to BJT, in which he concurred with a previous letter from BJT stating that a valuation of company assets was needed as well as clarification as to whether Simon's interest in Eric Snr's estate had been validly transferred to RLF, given that Simon was under 18 years when the assignment deed was executed.[97] Mr Brown also sought details regarding the claim that payments had been made on behalf of RLF. He also noted that, in a recent discussion with family members, Simon had requested access to information about RLF's conduct but this had been refused.

113 By August 2001, a draft Statement of Claim to be issued in the Supreme Court was prepared by Foster Hart Lawyers on behalf of Simon, Desmond and (by derivative action) RLF as plaintiffs, naming Zilla, Bill, Eric, Mark and Luke as defendants.[98] This draft included extracted text from the assignment deed.

114 Soon after this, on 23 September 2001, Simon wrote a letter addressed to Zilla and all his siblings (except Desmond). This letter assumed significance in the proceeding. In it, Simon said that Bill had not given him any information about his interest in the farm.[99] Simon stated that his lawyers had informed him of 'wrong doings' by Bill and Rick as executors of Eric Snr's estate and by Bill, Rick, Mark and Luke as RLF shareholders. Simon's letter said:

These are serious breeches [sic] of the law , not to say the moral breech [sic] towards their own brothers .I no longer call Bill ,Mark ,Rick ,and Luke my brothers because brothers don't steal from each other.

115 In response to Simon's letter dated 23 September 2001, Bill wrote to him on 4 October 2001 (Bill's 2001 letter).[100] Bill began the letter by stating that he received the letter 'today'. He wrote:

It was decided by Mum and Murray Byrne the Solicitor at the time after conferring with Rick and myself that certain things needed to be changed in Dads [sic] estate so that Mum could continue to survive financially and support the remaining children dependent on her for education etc. etc.

...

The partnership of EP & Z Fay & Sons was formed to benefit those who were working on the farm at the time. An example of this was that the EP & Z Fay & Sons partnership worked the land and the partners taking a living out of the partnership to buy their day to day things. A car, a holiday etc. This was all pre Dads [sic] death. And paid off the land on behalf of the company.

After Dads [sic] death the partnership continued on supporting Mum and those members of the family that she was still required to support. Life continued on until each member of the family went their own way. Des and yourself included, chose your own career paths. As stated in your letter you approached me that you were interested in being involved in the land; I was not sure and wanted you to truly understand the meaning of farming. Considering you were used to working and receiving a stable pay, and I thought that at the time the land we had was fully stretched with debt repayments and supporting the families that were working the land.

...

Mum has a life interest in the home block - Ripon Lea - and as she could not work the land herself, Luke and I lease the farm off her and that is how Mum obtains her living.

...

Mum, Bill and Rick as Executors take equal responsibility of what has happened in the past and are fully aware of the decisions in the past. Mum is fully supportive of what the three Executors have done to the best of all concerned.

B.7 A Federal Court proceeding is commenced and settled

116 On 29 November 2002 a proceeding was commenced in the Federal Court of Australia by Simon, Desmond and RLF against their four elder brothers and Zilla.[101] Their statement of claim was prepared by Foster Hart Lawyers. It alleged, among other things, that the respondents had used the land of RLF without paying rent and that Bill, Rick and Zilla had breached their duties as directors of RLF and engaged in oppressive conduct towards Simon and Desmond.[102] Unlike the draft statement of claim dated August 2001 prepared for issuing in the Supreme Court, Simon and Desmond's statement of claim in the Federal Court proceeding in 2002 did not refer to the assignment deed.

117 On 28 August 2003 a Deed of Settlement and Release (settlement deed) between the parties to the Federal Court proceedings was executed and the claims in the proceeding were settled.[103] By cl 3.1 of the settlement deed, the parties released each other from claims arising out of or related to or connected with, among other things: (i) the proceedings; and (ii) any land, property, assets, goods or any other things owned or controlled by RLF or any of the defendants. However, the breadth of that release was subject to clause 3.2 of the settlement deed, which provided:

The release contained in clause 3.1 does not in any way interfere in [Desmond] and [Simon]'s entitlements under the Estate of Eric Parrington Fay or under any other estate that may arise from time to time ...

118 Settlement involved the shareholders of RLF, other than Simon and Desmond, agreeing to pay $650,000 for Simon's and Desmond's shares in RLF.

119 In the current proceeding the defendants contend that if Desmond and Simon receive the relief they seek they should be required to repay the settlement sum. They rely on the settlement deed. However, claims under Eric Snr's will were expressly excluded from this release. This is a matter of significant controversy, which I address at the end of section E, later in these reasons.

120 Following settlement, Simon and Desmond's shares in RLF were distributed amongst Bill, Rick, Luke and Mark. The settlement was implemented in full.

121 On 6 August 2009 Zilla made her last will, appointing Josephine as her executor.[104] Zilla bequeathed her shares in RLF to Bill and Luke and the balance of her estate was to be divided equally among her daughters.

122 Murray Byrne died on 7 November 2012.[105]

123 Zilla died on 29 September 2017.[106] Her RLF shares were equally divided between Bill and Luke.[107]

124 Soon after Zilla's death, Peta Maskell of BJT held a meeting attended by Josephine, as well as some other members of the family, including Bill. The evidence as to production of the assignment deed at that meeting was not clear, however, I am satisfied that someone - either Bill or Ms Maskell - produced a copy of the deed at the meeting. Following the meeting, copies of the assignment deed were provided to the other plaintiffs.

125 On 23 October 2017, Ms Maskell wrote to Josephine Fay in her capacity as executor.[108] The letter noted the possibility of a dispute about the assignment deed and other matters and urged negotiation and settlement of any issues. Various factual assertions were made in Ms Maskell's letter that provide part of the context, but which are not evidence in this proceeding, and which attract no weight in my determination of the issues. Ms Maskell's letter stated that the firm had been instructed that 'the life interest in the estate did not provide enough funds for your mother to raise all the children' and that the assignment deed had been drafted to overcome this issue. It further noted that the firm had been instructed that RLF had 'paid the sum of $100,000 at this time to your mother on behalf of all of the beneficiaries and funds were used for their up-bringing and benefit'. The letter also addressed whether the assignment deed was legally binding and whether RLF could enforce its rights considering it had been deregistered.

126 Further correspondence ensued between those representing the plaintiffs and those representing the defendants. Again, I put no weight on the assertions in the correspondence in determining the issues.

127 On 15 August 2018 Heinz & Partners on behalf of the defendants wrote to Gadens Lawyers (Gadens), representing the plaintiffs.[109] Among other things, the letter noted that the executors would be able to produce evidence of $110,00 being paid to Zilla's account, which she was then to distribute (said to comprise $100,000 and five payments of $2,000).

128 On 29 January 2019 a letter was sent by Mr Peter Kennedy and Ms Melissa Passarelli of Madgwicks Lawyers (Madgwicks) on behalf of the defendants to Gadens.[110] The letter asserted that Bill and Rick had paid the remaindermen $205,000 from the wool rebate that Zilla had received.

129 Bill and Rick have retained possession of the remainder of Eric Snr's estate, refusing to transfer it to the plaintiffs, and asserting that the terms of the assignment deed are to be upheld in full.[111] In particular, registered proprietorship of the Carranballac land has not been transferred to RLF, but remains in the names of Zilla, Bill and Rick as executors of Eric Snr's will.[112] The farming component of it is being farmed by Bill and Luke.

130 On 17 December 2019 the plaintiffs commenced this proceeding.[113]

131 Before trial the parties had proposed that the affidavits that have been filed in the proceeding were to be treated as witness outlines for the purpose of informing the opposing party as to the evidence expected to be given by a witness, but not otherwise.

132 All five plaintiffs gave oral evidence in chief and were cross-examined. There was some cross-examination that referred to their affidavits, but the affidavits were not tendered. For efficiency, the defendants departed without opposition from the plaintiffs from the original proposal, and tendered the affidavits of Bill, Rick and Luke. Mark was not available and no point was taken by the plaintiffs about no evidence being led from him.

133 Counsel for the plaintiffs made it clear that they alleged no deliberate wrongdoing in the nature of common law dishonesty against Bill and Rick, or (for that matter) against Zilla.

134 The defendants challenged the credibility of Josephine and Simon, on certain matters, and the credit of Mary in certain respects. The plaintiffs did not challenge the credibility of Bill, Rick or Luke.

135 In my view, all of the witnesses who gave oral evidence were doing their best to give truthful and accurate evidence. No witness was deliberately untruthful. My only real qualification about the oral evidence is that I formed the impression that Bill's memory about the key events in 1984 was not very reliable, which is not surprising given the passage of time since then. His evidence therefore tended to suggest that he was less involved than he actually was, and had less contemporaneous knowledge than he actually did.

136 The parties exchanged expert reports relating to valuation issues in the trial, and ultimately agreed on a joint tender of three reports: the joint statement of Alan Hives and Andrew Bray dated 31 July 2024 (exhibit P1), the joint statement of Alan Hives and Graeme Linke dated 31 July 2024 (exhibit P2), and the joint statement of Neekhil Shah and Corey Plover dated 2 August 2024 (exhibit P3). They were all received without any oral evidence.[114]

137 The plaintiffs each gave evidence on some common subjects including the circumstances under which they each signed the assignment deed, the payment of consideration under the deed, Eric Snr's will, their relationships with Zilla and their siblings, Zilla's character and personality, the interactions between Murray Byrne and/or BJT and the Fay family, their study, work, living arrangements, and sources of income, their knowledge of RLF and the partnership, and the proceedings in the Federal Court. I refer to each of the witnesses in more detail in the paragraphs that follow.

138 In addition to giving evidence on the topics noted above, Josephine also gave evidence on the application she made for probate of Zilla's estate, the family's office, chequebooks and financial management, Zilla's will, and the land and farms accumulated by the Fay family.

139 Josephine was cross-examined on behalf of the defendants. During closing addresses, senior counsel impugned Josephine's credit or (to be more precise) reliability in certain respects. Senior counsel did so by reference to a written submission that set out extracts from authorities relating to the making of findings against the reliability of witnesses in circumstances that did not involve the telling of deliberate untruths. As I understood his submissions, senior counsel did not allege that Josephine told any deliberate falsehoods, but that she was nevertheless not a reliable witness in certain respects.

140 I have considered the points senior counsel made against Josephine's reliability carefully, including as developed in an 'aide memoire' the defendants submitted on the question of Josephine's credit. I am satisfied that they should all be rejected.

141 In my view, Josephine gave her evidence clearly and appropriately. I do not accept the submissions that she was argumentative or defensive in the ways senior counsel contended. None of the examples that he proffered in support of these submissions indicated any lack of reliability, or subconscious (or conscious) distortion of the truth on Josephine's part. I accept Josephine's evidence without reservation.

142 There was a point of some contention arising from an answer Josphine gave during cross-examination, to the question 'Now, you're aware that your claim is that you were the victim of undue influence by Zillah?'. Josephine answered 'No, not by Zillah'. In their closing addresses, the defendants relied upon this as an abandonment of the claim of undue influence by and as regards Josephine. However, as the plaintiffs' counsel correctly submitted during closing addresses, it was nothing of the sort. Undue influence has a particular, quite technical, legal meaning. A brief opinion given as a lay person during cross-examination, unaccompanied by any explanation of what was intended by that remark, is virtually meaningless. I give this evidence, and the defendants' associated submission, no weight.

143 In addition to covering the common topics noted above, Simon gave evidence about the Federal Court proceeding that was commenced and settled on his and Desmond's behalf.

144 As with Josephine, so too with regard to Simon, the defendants submitted an aide memoire regarding his credibility as a witness during closing addresses. As this document illustrates, at times Simon became upset and emotional in giving his evidence, but I am satisfied he was doing his best telling the truth. Giving due regard to the need to understand the role of emotion in the expression of some of his opinions, there was only one topic that caused me any concern about the way he gave his evidence. That was the topic of when Simon acquired knowledge of the assignment deed. He told the Court that he obtained it in about 2000, but some of his answers during cross-examination seemed inconsistent with this.[115] My impression is that he became confused and had a poor memory of when he first learned the contents of the assignment deed and Eric Snr's will. I do not place any weight on his testimony on these matters, and prefer to draw inferences from the documents.

145 Senior counsel for the defendants indicated they would later provide a similar aide memoire regarding Jane's and Mary's credibility, and this was unopposed by counsel for the plaintiffs.[116] No such documents were received.[117]

146 Mary gave evidence on the common topics already mentioned, as well as being questioned about Zilla's handwritten letter dated 10 October 1984, Zilla's diary entries, the rights and/or interests she understood to be assigned under the deed, the Fay family's attitude to discussions about money, and her twenty-first birthday party, which took place at Ripon Lea in early October 1984.

147 In closing addresses, senior counsel for the defendants impugned the creditworthiness or reliability of two aspects of Mary's evidence[118] - first, Mary's denial that she understood, when signing the assignment deed, the extent of the Carranballac land referred to in the assignment deed; and second, Mary's denial that she asked Zilla for an explanation of the deed at the time of signing it and afterwards. I do not accept either of these challenges to Mary's credit or reliability.

148 As I note in section E.5, below, Mary clearly gleaned a comparatively good (though imperfect) understanding of the gist of the transaction from reading the assignment deed on the occasion when she signed it. In this she was alone among the plaintiffs.

150 Jane was the plaintiffs' third witness. She gave evidence over the second and third days of the trial. As well as giving evidence on the common subjects, Jane also gave evidence on Eric Snr's health, the 1977 Streatham bushfire, and Simon's 2001 letter to the family. There was no challenge to Jane's evidence by the defendants. Senior counsel accepted that she was a witness of truth. I accept Jane's evidence without reservation.

151 Desmond gave evidence on the common topics and also explained his involvement in the Federal Court proceedings as the other named plaintiff alongside Simon.

152 There was no challenge to Desmond's evidence by the defendants. Senior counsel did, however, characterise Desmond's memory as being poor, reflecting on the reliability of his evidence. I did not form any such impression. Desmond's evidence was clear and I accept his recollection of the events he spoke of. I note that his evidence of when he learned the contents of the assignment deed was economical. He merely said he did so prior to this proceeding. I return to this point later in these reasons. I have concluded that, in fact, he must have learned of its contents a good many years prior. Subject to this, I have no other reservations about his evidence.

153 Bill's evidence in chief was given through his affidavits, supplemented with oral evidence. Much of the background facts recorded in section B.1 of these reasons was drawn from his evidence. He also gave some, limited, evidence about the meetings with the family solicitors after Eric Snr's death, as already noted.

154 Bill did not appear to have retained a clear memory of the circumstances surrounding the execution of the assignment deed, the preparation and intention behind the deed, and the interactions and communications he had with BJT. Bill could not recall signing the deed himself.[119] He did not clearly recall the relevant events.[120] I reject his evidence that he was not present on the occasions when Mary and Desmond signed.

155 Bill's evidence at trial gave the impression of his not having paid much attention at the time to: his role as a director of RLF, his role as a partner of the family partnership, and his role as executor of Eric Snr's estate, or to the assignment proposal itself.

156 However, I prefer to place more weight on what he said many years earlier in the letter he wrote to Simon on 4 October 2001, and also on Murray Byrne's note of the meeting on 18 May 1984 and letter dated 2 October 1984 to Zilla, referring to 'the proposals which have been put forward by you and William over many months' (emphasis added). Bill was 30-31 years old and was clearly the leader of the farming enterprise by this time. He had been instrumental in recent land purchases on behalf of RLF. It would be most surprising if he had not had an instrumental role in the decision-making behind the proposal.

157 I find that Bill did have such a role. During the course of preparation of the deed in draft form, in early October 1984 the purchase price that would be payable by RLF to the plaintiffs over ten years was significantly reduced from $130,000 in total and $26,000 each to $100,000 in total and $20,000 each, and this was conveyed to Murray Byrne via Zilla's handwritten letter dated 10 October 1984. That letter referred to 'the family' having again discussed the topic, and reaching agreement on this price. On the balance of probabilities, it is likely that this change occurred at the suggestion of at least Bill, and most likely this was discussed with Rick too. They, as significant shareholders of RLF, had far more cogent reasons than Zilla would have had to suggest and support such a change because it was RLF that would be assuming the obligation to pay the purchase price.

158 The relevant contents of Bill's letter dated 4 October 2001 on these matters, written when he was 48 years old and at a time only 17 years after the events of 1984, are far more reliable than Bill's recollections and evidence at the trial, when at age 71 he was trying to recall events that happened 40 years ago. As already noted, that letter states relevantly that '[i]t was decided by Mum and Murray Byrne ... after conferring with Rick and myself' that the relevant change in Eric Snr's estate was needed. Although the letter used the expression '[i]t was decided by Mum and Murray Byrne...' when referring to the assignment, the letter noted that this occurred after conferring with Bill and Rick, and closed by saying that all three of Zilla, Bill and Rick 'take equal responsibility' and 'are fully aware of the decisions in the past'. The letter is a clear admission that Bill was involved in making the decision to procure the assignment of the plaintiffs' interests under Eric Snr's will to RLF.

159 On all the evidence, I consider that Bill's evidence at trial de-emphasised the extent of his knowledge and involvement at the time of the assignment deed's preparation in 1984. To the extent that Bill's evidence at trial suggested that Zilla and Murray Byrne were the only ones who generated the proposal to obtain an assignment of the plaintiffs' interests to RLF, I do not accept this. In my view, Bill was just as involved as Zilla in the decision-making that led to the assignment, but has forgotten this, along with some of the details over the years. This led to Bill's evidence unintentionally understating the extent of his knowledge and involvement, and overstating Zilla's role in contrast to his own. Although Zilla was perhaps more frequently in contact with Murray Byrne, for all the above reasons I am satisfied that Bill was one of the people who made the decision to have the plaintiffs assign their interests to RLF.

160 Rick gave evidence about his somewhat limited part in the preparation of the deed, as well as adding to the evidence on background facts, and about a discussion with Eric Snr in which Eric Snr spoke of transferring the Carranballac land to RLF.

161 Rick did his best to provide truthful evidence. On some occasions he gave somewhat confusing evidence about the extent of his knowledge of the assignment deed, but in due course provided clarifications of these matters. It was not surprising that there were some points of clarification on the details of his knowledge of the transaction required, given how long ago most of the relevant events occurred, and his relatively young age of 25 at the time. Subject to this, I accept all the evidence he gave.

162 Luke was the defendants' third witness and he gave evidence on the fifth day of trial. He too added to some of the background information, and also spoke of Eric Snr's remarks about wishing to leave the 'home block' to Bill. He was not involved in the preparation of the proposal for the assignment deed and was only 23 years old at the time.

164 As already noted, the valuation experts gave no oral evidence. Three joint statements were tendered by agreement.

165 The first joint statement, dated 31 July 2024, was a statement of Mr Alan Hives and Mr Andrew Bray.[121] It addressed the value of Ripon Lea/the Carranballac land, as at 20 November 1984. The experts' valuation only differed minimally, by $5,000, on account of Mr Bray being advised by Bill that there was a second older style dwelling on the property in 1984 (Mr Hives was not provided with this information). Mr Bray estimated the total value to have been $350,000, while Mr Hives estimated it to be $345,000. They agreed to adopt $350,000 as the land value at 20 November 1984.

166 The second joint statement, dated 31 July 2024, was a statement of Mr Alan Hives and Mr Graeme Linke.[122] It addressed the market rental value of the Carranballac land as at the dates set out in the table below. The experts adopted the valuation in the final column as at each start date in the first column:

167 The third joint statement, dated 2 August 2024, was a statement of Corey Plover of Cumpston Sargeant Consulting Actuaries and Neekhil Shah of McGing Advisory & Actuarial.[123] It included a section titled 'Joint response' that addressed the substantive valuation questions before the actuaries as follows (omitting certain actuarial assumptions such as life expectancy and implied yields):

1. the value of the plaintiffs' remainder interest in the subject land as at 20 November 1984, using assumptions taken from the joint statement of valuation experts

Based on the joint statement of valuation experts and their provided valuation parameters (i.e. a $350,000 property value and $16,300 per annum rental income), both experts agree that the value of the remainder interest in the subject land as at 20 November 1984 would be $113,900.

...

1. the value of the plaintiffs' remainder interest in the personal property comprised in Mr EP Fay's estate as at 20 November 1984; ...

On the assumption that the personal property is valued at $134,149, both experts agree that the value of the remainder interest in the personal property as at 20 November 1984 would be $20,700.

On the assumption that the personal property is valued at $90,947, both experts agree that the value of the remainder interest in the personal property as at 20 November 1984 would be $14,000.

...

1. the present value of the promised consideration under the Assignment Deed as at 20 November 1984.

On the assumption that payments are deferred to their full extent possible (i.e. that $2,000 payments to each of Jane, Mary, and Desmond were payable immediately, $2,000 payments to each of Josephine and Simon were payable at their respective ages of 19, and the remaining $90,000 was payable on 20 November 1994), both experts agree that the value of the total consideration of $100,000 as at 20 November 1984 would be $34,800.

...

Mr Shah notes that this value would increase significantly if there were any alternate intention or expectation present in the timing of payments, in particular one that would act to accelerate the residual $90,000 payment to an earlier date. In such circumstances, the experts both agree that the present value of the promised consideration would require recalculation.

168 I accept the three joint statements without reservation.

169 In this section of my reasons, I set out my findings on certain key factual controversies that were not specifically covered by the parties' joint statement of issues.

D.1 Eric Snr's statements about leaving Ripon Lea to RLF or the elder sons

170 Rick gave evidence, in his affidavit, that in a period after around July 1982, during a severe drought:

Our father also stated to me that he had to "get the farm into the company". By this, I understood him to mean that he wanted Ripon Lea to be transferred to RLF. He said that he was worried about Bill, Mark, Luke and I having to re-buy the land. He explained to me that when his father had died, he had to buy his brothers and sisters out. He said to me words to the effect that he did not want that to happen to his sons.

171 Bill's affidavits were silent on this topic. However, during cross-examination, he volunteered the following evidence in response to a question about whether Bill, Rick and Zilla discussed changing the treatment of Eric Snr's estate from what was set out in the will:[124]

... just before dad died he said he was going to leave Rippon Lea - one part of it to myself and one part of it to my brother Rick, and he did that the last shearing we had he was in the ute with me, and we're bringing sheep down and he told me this. I said, 'Oh. That's good', and I said to him, 'Well. That might cause problems so we should put that into the Rippon Lea farming company and then everyone will get a share of it when that's divided up with six boys'. So he said, 'Yep. That's okay', and so when he obviously chatted to mum about it because he told me him and mum had decided to do that, and then when he went - so that was while we was shearing in November, and then he went away for about two weeks holiday. He went up towards Mildura, him and mum. Finished up in hospital, and so that decision to transfer it over never happened, but mum was fully aware that was going to happen, and her and Murray Byrne must've realised that the deed was the way to activate that what happens. So that's what happened there.

172 Not only did Bill omit these matters from his affidavits, they were not mentioned in his 2001 letter to Simon either. However, it was not suggested during his cross‑examination that these recollections were inaccurate.

173 As already noted, Luke Fay also gave evidence about Eric Snr making remarks inconsistent with the disposition of Ripon Lea and the Carranballac land in his will. In his affidavit, Luke deposed that, when Eric Snr was admitted at Ballarat Base Hospital shortly before he died, he said to Luke that he wanted to leave the 'home block' to Bill, which Luke understood to mean the family home at Ripon Lea.[125]

174 I accept that Eric Snr made the remarks attributed to him by Rick, Bill and Luke.

175 However, I do not go so far as to find that Eric Snr formed a clear intention to change his will, or that he expressed himself to Rick, Bill or Luke as having done so. If Eric Snr had firmly formed such an intention, he would have contacted a solicitor (probably Murray Byrne) and acted on that intention. Presumably, if he had set out to change the disposition of the Carranballac land in his will to a disposition in favour of RLF, he would also have given consideration to making some other provision for his youngest five children, given that three of them had no shares in RLF and the shareholdings of the other two were significantly smaller than those of the four eldest brothers. It is likely that he was still considering what to do when he succumbed to his final illness.

176 In any event, even if Eric Snr had expressed to Rick, Bill and/or Luke a clear and present intention to change the disposition of the Carranballac land in his will, this ultimately would not matter for the purposes of determining the issues in this proceeding. What matters is that there is no evidence that Eric Snr made a subsequent will, that no further informal will document has ever been placed before the Court, and that the executors never sought relief such as rectification relating to the provisions of the will granting the plaintiffs' revisionary interests in Eric Snr's residuary estate. If they wished to change the effect of Eric Snr's will, procuring the plaintiffs' entry into the assignment deed was not the right way to go about it.

177 I do not consider that the views expressed by Eric Snr to the effect recounted by Rick, Bill and Luke are relevant to my determination of the plaintiffs' claims of breach of the fair-dealing rule, undue influence or unconscionability. They are incapable, as a matter of logical application of the relevant equitable principles, of influencing my analysis as to whether the assignment deed met the fair-dealing rule, or my analysis as to whether it was the product of undue influence or unconscionable conduct. In my view, as a matter of principle, even if trustees of a testamentary trust considered that they were acting in accordance with the testator's informally stated wishes, that could not render an unfair dealing 'fair' in the relevant sense. What matters are the terms of the trust (as set out in the will) and the requirements of the fair-dealing rule.

D.2 Did the plaintiffs agree to the assignment in October 1984?

178 As noted in the 'Context' section of these reasons, there are significant issues to resolve in relation to Zilla's letter to Murray Byrne dated 10 October 1984. Both Zilla and Mr Byrne are now deceased. The letter was the subject of a hearsay notice served by the defendants under s 67 of the Evidence Act 2008. It was tendered by the defendants without objection by the plaintiffs. As already noted, it contains representations including 'It has been agreed by Jane, Mary, Desmond, Josephine and Simon to accept $100,000'.

179 Although previous representations made outside court are generally inadmissible to prove the truth of a fact the maker is taken to have intended to assert by making the representation (the hearsay rule),[126] this letter was admissible pursuant to the exception to the hearsay rule in s 63(2)(b) of the Evidence Act 2008. Section 63 applies in a civil proceeding 'if a person who made a previous representation is not available to give evidence about an asserted fact', and relevantly provides that the hearsay rule does not apply to 'a document so far as it contains the representation ...'.

180 In this case, Zilla is the person who made the previous representation. The previous representation is what is written in Zilla's letter. The asserted facts of relevance are that:

(a) the letter was written on 10 October 1984;

(b) since a recent conference Zilla called 'our conference' - meaning a conference with Murray Byrne attended by at least Zilla - 'the family' had again discussed the assignment deed;

(c) it had been agreed by the plaintiffs to accept $100,000; and

(d) Zilla thought that this amount was fair to all the family.

181 Zilla can reasonably be supposed to have intended that Mr Byrne would understand that she was asserting that the plaintiffs agreed to accept the amount of $100,000 and that she thought this amount to be fair to the family. This is consistent with the contextual facts, including the fact that when first proposed the transaction involved a figure of $150,000 ($30,000 for each plaintiff), which was then reduced to $130,000 ($26,000 for each plaintiff), and the draft assignment deed incorporated this figure. In order to further reduce the figure and obtain a redrafted assignment deed, Zilla had to provide new instructions to Murray Byrne, and probably to do so in writing. Murray Byrne's previous notes had placed some emphasis on the notion of the family agreeing with the proposal, and I infer that he had spoken in these terms at his conferences with Zilla.[127] In that context, it is understandable Zilla would write to him explicitly asserting agreement by the plaintiffs, with the intention that he, Murray Byrne, take this to be true.

182 Under s 67, and by reason of the unavailability of Zilla to give evidence, the hearsay rule does not apply, and so I am satisfied that the letter is admissible to prove the existence of all the asserted facts in it, including the assertion of agreement by each of the plaintiffs.

183 The plaintiffs suggested that the relevance of the letter may be confined to the 'undue influence' argument.[128] I disagree with any such suggestion. The question of whether the plaintiffs agreed to accept the $100,000, and the nature of that agreement, is potentially relevant to each of the plaintiffs' fair dealing, undue influence, and unconscionability claims.

184 However, I put very little weight on Zilla's assertion of agreement by the plaintiffs in the letter, for the following reasons.

185 Firstly, the relevant words of the letter are ambiguous. The defendants submitted that the letter evidenced that on 10 October 1984, Zilla had said that she discussed the assignment deed within the family and that in that discussion the five plaintiffs had all agreed.[129] However, the words of the letter do not clearly express this. There are two relevant points of ambiguity:

(a) As accepted by the first and second defendants,[130] it is unclear who 'the family' is that Zilla asserted had again discussed the deed. It is possible that the 'family' did not include any of the five plaintiffs. So an alternative interpretation of the letter could be that Zilla had a discussion with the family, but not all the family. The discussion might have excluded the plaintiffs and might even have been limited to Bill. Rick gave evidence that he was not aware of any discussions that his mother had with the plaintiffs and that he did not have any discussions with her in relation to the deed at that time.[131]

(b) The reference to the plaintiffs having 'agreed ... to accept $100,000' might have been a reference to something other than an explicit statement of agreement by each of them. For example, Zilla might have considered that, as the mother of the plaintiffs (all of whom were quite young and some of whom were still financially dependent on her), she could express their agreement to the figure of $100,000, on their behalf.

186 Secondly, even if I do adopt the interpretation that the plaintiffs had 'agreed to accept $100,000', the letter does not specify in what circumstances this agreement was reached and the extent to which the plaintiffs understood what they were agreeing to. The plaintiffs submitted that the letter does not prove that they were properly informed of what was involved at any time before they executed the assignment deed. I accept that submission. The deed contemplated assignment of the plaintiffs' reversionary (or remaindermen's) interests in their father's estate, which is a complex concept for a young person without commercial or legal experience to grasp. They would also have needed to understand Eric Snr's will and be informed of the assets in his estate in order to provide agreement in any meaningful way. Zilla's letter does not make any representations about these matters. Zilla's reference to the plaintiffs having agreed to accept $100,000 might have been based on something far less substantive.

187 Thirdly - and obviously - the asserted facts could not be explained by Zilla, or tested by cross-examination. That is a consideration that, though true of any evidence admitted under s 63(2)(b), I must take into account when determining the probative weight I will attribute to the letter. Zilla's letter must be given less weight because she could not be cross-examined.[132]

188 The defendants submitted that the letter clearly demonstrates that Zilla was trying to achieve fairness to all members of the family involved.[133] At trial, during cross-examination, each of Josephine,[134] Jane,[135] Desmond,[136] William,[137] Rick[138] and Luke[139] gave evidence of Zilla's good character, with references to her honesty, her morals, and to her treating the children equally. I accept this evidence. I also accept that Zilla was trying to achieve fairness for all the family, as her letter asserts. But I do not consider either of these points - or the defendants' submissions - to be inconsistent with the alternative interpretations posited in the preceding paragraphs. If anything, the reference to Zilla thinking that that amount was 'fair to all the family' tends to diminish the weight to be placed on the assertions that the plaintiffs had agreed to accept $100,000, in that it could have been included as a justification for Zilla expressing the plaintiffs' agreement on their behalf and in the knowledge that they had not been consulted.

189 Fourthly, I have decided that more weight should be put on the plaintiffs' oral evidence than on the letter. The plaintiffs submitted that the Court should prefer the plaintiffs' oral evidence.[140] I agree. The plaintiffs' oral evidence was tested by cross-examination. Both Josephine[141] and Mary[142] gave evidence that they did not participate in a family discussion regarding the assignment deed, and did not agree to accept the $100,000, contrary to the assertion in the letter. All the plaintiffs gave an account of signing the deed in November that indicated or at least implied they had no prior knowledge of its contents.

190 Incidentally, I note that none of the plaintiffs were squarely asked in cross-examination whether they had agreed to the transaction in October before being asked to sign the deed in November.

191 Mary gave evidence that Zilla, Bill and Rick had 'never discussed' the assignment deed with her either before or after she signed it.[143]

192 During cross-examination it was put to Desmond that during 1984 he would have had 'lots of quick chats or discussions with [Zilla] for all sorts of... reasons' and that because those discussions wouldn't have seemed very important at the time, Desmond would have forgotten them over time.[144] Desmond agreed. Later, after viewing Zilla's October letter, counsel for the defendants asked whether Desmond recalled having the discussion referred to in the letter with Zilla.[145] Desmond said he did not. It was then put to Desmond that this may have been 'one of those' discussions that didn't appear important at the time and was therefore forgotten.[146] Desmond said that Zilla 'never raised the question of the assignment deed with me at all', nor the possibility of receiving some money.[147]

193 The other plaintiffs all gave evidence about signing that assignment deed in November 1984 that implied they had not previously been given any information about the transaction. I address those circumstances in more detail in the next section, below.

194 In light of Desmond's and Mary's clear and direct evidence that Zilla had not raised the matter with them beforehand, and the impression given by the evidence of the other plaintiffs about the circumstances in which they executed the assignment deed in November, I am satisfied that none of the plaintiffs had had prior discussions about or knowledge of the transaction proposed in the assignment deed prior to signing it.

195 In placing most weight on the plaintiffs' oral evidence, I have taken into consideration the long period of time that has elapsed since the events in question, and the possibility that the plaintiffs might have forgotten a relevant discussion with Zilla. I do not think this is at all likely. On the defendants' case, if there were discussions and agreement as represented in the letter, presumably all the plaintiffs would have been involved. Yet two gave explicit evidence of not being consulted, and the accounts of all implied they had not been consulted. It is implausible that none of the plaintiffs would have remembered a discussion with them of this kind, if it had occurred with all of them as asserted in the letter. No suggestion was made that they had orchestrated their evidence, and there would have been no basis for any such suggestion.

196 For all these reasons, I am satisfied on the balance of probabilities that no such discussion or discussions between any of the plaintiffs and Zilla occurred, and none of them gave properly informed and meaningful agreement to the proposal to assign their interests for $100,000 in or about October 1984.

197 I acknowledge that this is difficult to reconcile with the uncontested but general evidence in the proceeding that Zilla was a scrupulous and honest person. The only conclusion I can draw from the letter is that something that Zilla regarded as 'agreement' by the plaintiffs had been reached, to her way of thinking. It is most probable that Zilla considered that something gave her the moral right to assert the plaintiffs' agreement to what appeared in the letter, and to treat them as having agreed to it, even though objectively speaking they had not given any informed agreement of the kind. I am not certain of what that might have been - it might perhaps have been the plaintiffs' young ages, her status as their mother, and their continuing financial dependency on her. It might have been an oblique and general reference of some kind in a casual conversation. All this is speculation. The only real relevance of this is that the defendants are clearly and severely prejudiced by being unable to call Zilla. I return to this point in section E, below.

198 Whatever the true reason for the assertions in Zilla's October letter of agreement by the plaintiffs may be, I am positively satisfied that - prior to being presented with the assignment deed on or about 20 November 1984 - no explanation had been given to each of the plaintiffs of Eric Snr's will, and of what Eric Snr had bequeathed to them. They were not told that they each had a one-fifth share in the reversionary interest in his residual estate remaining after Zilla's death, likely including the Carranballac land. I am satisfied on the balance of probabilities that, prior to being presented with the assignment deed for signature, each of the plaintiffs had no understanding of those rights or that they were being asked to surrender those rights in return for a promise from RLF to pay them $20,000 each, $2,000 on turning 19 and the remainder (without interest) by the end of ten years.

199 In other words, anything the plaintiffs might have said to Zilla was not a meaningful expression of agreement to the transaction, and they each had no understanding of it prior to being presented with the assignment deed.

D.3 The plaintiffs' accounts relating to the assignment deed

200 There is controversy about the circumstances in which two of the plaintiffs came to sign the assignment deed - Mary and Desmond. They each said Bill was involved, and Bill denied this. Those controversies must be resolved. In any event, it is necessary for me to make the most detailed findings the evidence will reasonably allow about the circumstances in which each plaintiff signed the deed. Those circumstances are highly relevant to the plaintiffs' claims of undue influence and unconscionability, and are also potentially relevant to the breach of fair-dealing claim.

201 The plaintiffs were all relatively young and were commercially inexperienced when they signed the assignment deed, the eldest (Jane) being only 22. Josephine and Simon were under 18 years.

202 As I have found, none of the plaintiffs knew what their rights were under Eric Snr's will and they had not been warned about the proposed transaction in any other way.

203 It was claimed that the plaintiffs each signed the assignment deed under their mother's undue influence, and (as regards Mary and Desmond) Bill's undue influence, and that they had no understanding of how signing the document would alter their rights and interests. Mary and Simon explicitly said during their evidence at trial that, had they known, they would not have signed the assignment deed.[148] In my view, this is also implied on the part of the other plaintiffs by the overall tenor of their evidence complaining of what had occurred. The defendants took no issue concerning the lack of explicit evidence to this effect on the part of the other plaintiffs. The key challenge mounted by the defendants was, rather, that 'each of the adult [scil, plaintiffs was] aware of what the Deed did or knew enough to have asked questions'.[149]

204 Jane is the eldest of the plaintiffs. She was 22 years old when she signed the deed.[150] She had been financially independent since she was 17 and a half.[151] At the time she signed the deed Jane was living and working away from home, in Ballarat.[152] During that time period she would go home (to the family farm) on a frequent basis.[153]

205 Jane recalled the occasion of signing the deed. She gave evidence that her mother had asked her to come into her home office to sign the deed. Her evidence was that although she read the deed before signing it, she did not understand it.[154] She said she had a brief discussion with her mother about it, and her mother said that they had to sell the farm if she didn't sign it. Initially Jane's evidence was that Zilla said there was money involved 'to pay for it'.[155] Following an overnight adjournment, Jane corrected this evidence, explaining that she meant to give evidence that Zilla told Jane that the deed was going to pay Jane money.[156] Nothing turns on this, and it only serves to show how seriously and conscientiously Jane approached the task of being a witness. Jane accepted during cross-examination that it was possible that Zilla mentioned the amount of money, but she could not recall it.[157] In short, Jane read and gained some understanding of the deed, but it was very limited.

206 Jane gave evidence about Zilla's attitude to discussions within the family about money-related topics. Jane explained that she saw on the deed that she was the first to sign the document and it (money) 'was never spoken about'.[158] During cross-examination about the deed and the possibility of Jane receiving money, Jane expressed her view that Zilla 'was a private person. She didn't want things to be talked about in our family, so I just let it be'.[159] She said that conversations about money '[c]ertainly didn't arise in our family' and she attributed this to Zilla being a private person who didn't like to discuss these kinds of things.[160]

207 I am satisfied of the truth of Jane's testimony about all these matters.

208 In 1984, when she signed the deed, Mary Fay had just turned 21 years old, and her birthday party had been held the month before at Ripon Lea. Earlier that year Mary had moved to Ballarat where she lived in a share-house and completed a Diploma of Education.[161] By November 1984 she had completed her studies and moved back to the family home.[162] In January 1985[163] she got her first teaching job.[164] Mary said that at around that time, before she started her teaching role, she had no money.[165]

209 Mary had a recollection of the day she signed the assignment deed. Her evidence was that she signed the assignment deed upon Bill asking her to, and that she got the impression from Bill that she needed to sign the deed to look after Zilla in the future.[166]

210 Bill gave evidence that he did not remember this.[167] Bill gave evidence that he did not speak with any of the plaintiffs about the deed.[168] As I explain in more detail below, I prefer Mary's evidence over Bill's on this point of inconsistency between them.

211 Mary gave evidence that she then went to the kitchen, where only Zilla was present. Mary said that she read the document or 'probably glazed over most of it because it was a very technical document'[169] and that all she picked up from the assignment deed was that her mum had a life interest, and that there was a separate entity called Rippon Lea Farming Company.[170] Her evidence was to the effect that she formed only a limited understanding of the deed before signing it, and there were some parts that she did not understand at all. She said:[171]

I did find it very difficult to process this document [the deed]. I didn't understand it. I mean I signed it, but I didn't fully understand the implications of - I didn't have a legal background. I didn't have a commercial background. So there were terms in there, like 'residue', well what - on the bottom of a test tube or something. Residual interest. Encumbrances. Vendors. There's even a passage there, I still read it today and go, 'It's so convoluted', I was thinking, 'I don't' - not [sic] disrespect to the law but I just have no understanding of it.

212 After reading the deed and seeing Jane's signature on it, Mary says she signed it.[172] She gave evidence that she had no discussions about this document at any stage with anyone.[173] She later gave evidence that when she read the deed, she understood that there was a large sum of money there, but did not know what an interest in a partnership meant.[174]

213 Mary gave evidence that she received a $2,000 payment[175] and that after ten years she thought that because she had not been paid the balance of the $18,000, the deed was invalid.[176]

214 Of all the plaintiffs, Mary gleaned the most information about what the deed might mean at about the time of signing it. The understanding she formed was not perfect or complete. Importantly, she did not appreciate the extent of the land that was referred to in the schedule to the assignment deed.[177] I return to this point in section E.5 of these reasons. However, she gained an understanding of the gist of the transaction - that she was assigning something that would otherwise come to her from her father's will after Zilla's life interest, relating to land, and other things of value, in return for receiving $2,000 up front and another $18,000 within ten years. She understood enough of all this to consider that, when the promised payment had not been made within ten years, the deed had become invalid. In about 1985, Mary discussed her concerns with a friend who suggested she find out more, and she then twice attempted to contact BJT. When these attempts were unsuccessful, she decided to leave it and get on with her career.[178]

215 I am satisfied of the truth of all of Mary's testimony, including with respect to Bill's involvement. The event would have stood out far more clearly to Mary at the time than to Bill, and her ability to absorb so much of the content of the assignment deed at the time shows that her powers of detailed observation and recall were exceptional. As already noted, Bill's recollections at trial of the events at the time were generally quite vague. I accept Mary's evidence over Bill's.

216 Mary also gave evidence about the family's attitude to discussions about money. In relation to Eric Snr, she said these kinds of topics were 'taboo subjects' to him that would never be discussed.[179] When asked further about taboo subjects, Mary's evidence was that discussing an inheritance would never be done with Eric Snr or 'any member of the family'.[180] She also described Zilla as a very private person with whom she never spoke about money.[181] Later, she gave evidence that while living with Zilla in the family home Mary was very conscious that the deed of assignment was not talked about, 'it was a bit of a secret, this whole thing. No one had ever discussed it with me'.[182] I accept this evidence. As already noted, I do not accept the challenges that were made to Mary's credit on this evidence.

217 Mary was asked about her relationship with Bill, and she described it in this way:

Bill and I got on really well. ... out of all my four brothers ... I liked him. He was sociable. He was ... communicative. ... he was responsible. ... my other brothers were a bit wild at that time. He was the figurehead of the family when my father died. He was the responsible mature one. And ... I saw him as that. And we ... did get on well. ... I remember him bringing back a ... gift from his ... trip overseas to America and it was one of those instant ... photo cameras ... So that was really significant to me at the time. And he also ... came with Mum to my graduation in 1984. And ... my mum hosted my 21st at the farm for about 80, 90 people ... Bill brought along his then-girlfriend, now his wife, to meet the family, and he gave my 21st speech. So I did look up to him in some ways.

218 I found Mary's evidence on her relationship to Bill candid and clear, and I accept it without reservation. Within the context of a family grieving the recent death of their father, and Mary being some nine years younger than Bill, it is unsurprising that she looked up to him, trusted him and thought of him as the best available person to support her at significant events in her life. His request for her to sign the assignment deed would have carried very great influence over her, as would Zilla's presence and the implication that carried: that Zilla wished Mary to sign.

219 Desmond was 19 years old when he signed the deed. After unsuccessfully attempting Year 12 in 1982, he went to the School of Mines in Ballarat to study surveying and mapping, completing this after nine years.[183]

220 In 1984 Desmond was living part-time between Ballarat and the family home.[184] Between 1984 and the trial, Desmond said he worked as a surveyor assistant, and did other work as a rouseabout (unskilled farm labourer), fruit-picking and, most recently, as a gardener.[185] He described his surveying work, which he began in 1985, as something that ran out as it was only available on a 'short basis'.[186]

221 Desmond did not give evidence that he was financially dependent on Zilla, however, based on his evidence of taking nearly a decade to complete his surveying qualification, the job insecurity he says he experienced, and his evidence that he lived part-time at home during 1984, I am satisfied he was financially dependent on Zilla during this period, at least for some of his financial requirements. At the time, Desmond gave evidence that he had trust in Bill.[187] I am satisfied of the truth of all this evidence.

222 Desmond recalled the occasion when he signed the assignment deed. Desmond walked into the kitchen, and Zilla and Bill were present. Desmond gave evidence that Bill asked him to sign the assignment deed, and he did so, without reading the deed before he signed it.[188] He did not otherwise discuss the deed with anyone and was not given a copy.[189] Desmond's evidence was lucid and unequivocal. I accept that Desmond had a clear recollection of this event, and I accept his evidence about it.

223 Desmond gave evidence that he did not understand the assignment deed when he signed it,[190] and I accept this. He also gave evidence that Zilla never raised the question of the deed of assignment at all with him, and did not discuss with Desmond the possibility of receiving any money. He gave evidence that his mother never discussed with him the possibility of receiving some money.[191] I accept all this evidence.

224 Bill denied that he told Desmond to sign the deed and gave evidence that he did not speak with any of the plaintiffs about the assignment deed and was not present when they signed it.[192] I am satisfied of the truth of Desmond's testimony, including with respect to Bill's involvement. I prefer Desmond's evidence over Bill's. I find that Bill has not retained a recollection of this event, and Desmond has.

225 Desmond gave evidence that he signed the document because he 'put my trust in my mother and my brother, William', and he believed 'that they [knew] exactly what they ... wanted me to sign'. As I explain in more detail later in these reasons, this evidence leads me to find that Desmond did not exercise free will in signing the assignment deed, but simply did so because of his relationship with Bill, Bill's request that Desmond sign it, and the presence of Zilla. I return to this finding later, in the context of undue influence and unconscionability.

226 Josephine was 17 years old in 1984 when she signed the deed.[193] During 1984 she was still completing her schooling, boarding in Hamilton.[194] Josephine completed secondary school in 1985, then did two years of childcare study in Melbourne, and then a further two years study at the School of Mines in Ballarat, after which she returned to the family home and worked nearby as a stock and station agent.[195] Josephine moved back to live in the family home with Zilla for what turned out to be the last 13 years or so of Zilla's life.[196]

227 Josephine gave evidence that on the relevant occasion in 1984 Zilla asked her to sign the assignment deed at the kitchen table at the home, while no-one else was present.[197] She gave evidence that she did not further discuss the document during or after that time.[198] She gave evidence that she never read the document, and never received any payments.[199] She gave evidence that she had never had a family discussion with respect to getting money or the $100,000 referred to in the 10 October letter.[200]

228 Josephine was partly dependent on money from Zilla for some part of 1987 and otherwise did some babysitting work.[201]

229 Josephine gave evidence that she 'never discussed' the deed with anyone, that Zilla 'never explained' it to her, and that she was not aware of any discussions between any of the plaintiffs around that time about receiving money in the future.[202]

230 Josephine gave evidence that Zilla had asked her to sign the deed within 12 months of Eric Snr dying and that because of that, she just signed it.[203] I infer that the reason Josephine signed the deed without asking questions[204] was to avoid potentially distressing Zilla and was also to please her.

231 I am satisfied of the truth of Josephine's testimony, and accept it without reservation. As already noted, I do not accept the challenges to her credit or reliability made on behalf of the defendants.

232 Simon was 15 years old when he signed the deed. He recalled the occasion when he signed it. Simon gave evidence that his mother asked him to sign the assignment deed, but did not explain what it was for and he did not see the document or otherwise have any discussion about the document with anyone else.[205] He gave evidence that when he signed the deed, he was not aware that the deed provided for him to receive money.[206] Simon's evidence was that he did not receive a copy of the deed of assignment upon signing it.[207]

233 I am satisfied of the truth of Simon's testimony on all these matters. As already noted, in the main, I reject the challenges that were made against his credit.

234 Jane's evidence was that she received a $2,000 payment in 1985, which she said Zilla conveyed to her being as 'part of the deed payment'. Jane said she received no other payments under the deed - the only payment she received under the assignment deed was the $2,000 in about 1985.[208] She understood that there was a connection between the deed and the payment of money.[209] I accept this evidence.

235 Mary gave evidence that she received $2,000 in or around January 1985, which she used to purchase a car for her first teaching job.[210] As noted above, she recalled forming a view that after ten years without any more payments, the deed was invalid. I am satisfied that this was the only payment Mary received that was identified as being made under the deed.

236 Desmond told the Court he did not receive $2,000, or any payments, under the deed of assignment.[211] I accept this, along with his other evidence about the deed.

237 Josephine gave evidence that she never received any payments under the assignment deed.[212] I accept this, along with the rest of her evidence regarding the deed.

238 Simon gave evidence that he did not receive any payments under the assignment deed.[213] I accept this, together with his other evidence about the deed.

239 As to the plaintiffs' evidence that they did not receive the payments promised under the assignment deed, Bill disputed this, saying that Zilla would have paid all five of the plaintiffs.[214] Rick gave similar evidence.[215] I address this dispute in more detail in section E.7, below. However, in brief, I accept Jane's evidence that the only payment she received was the single payment of $2,000 in about 1985, Mary's that she only received a similar payment of $2,000 in 1985, and that the other plaintiffs received nothing identified to them as a payment under the deed.

240 Jane gave evidence that, after signing the deed in November 1984, she next saw the deed of assignment in December 2017, after BJT sent a copy to her in the mail.[216] I accept this.

241 Mary's evidence did not expressly identify the date she saw the deed following the occasion when she signed it, but she did say that 'Peta' (whom I infer was Peta Maskell, of BJT) sent her a copy in the mail,[217] and I infer that this occurred following the meeting Josephine had with Peta Maskell in late 2017, following Zilla's death.

242 Desmond's oral evidence was that he didn't see a copy of the assignment deed until 'prior to' these proceedings and that he didn't recall receiving a copy in 1996 from Zilla.[218] As I explain in more detail in section E below, I am satisfied that Desmond had a copy of the assignment deed available to him, through the lawyers he shared with Simon, in the period when he and Simon were preparing to commence a court proceeding in 2001-2002.

243 From Josephine's oral evidence I infer that the next time she saw a copy of the deed after signing it in 1984 was sometime in the month between Zilla's death on 29 September 2017 and 23 October 2017, when Peta Maskell sent her letter to Josephine identifying the potential dispute relating to the deed.[219]

244 Simon's oral evidence was that he saw a copy of the deed much earlier, sometime around the year 2000, when he was trying to obtain a copy from RLF's representatives through his lawyer, Ian Brown.[220] I accept that Simon obtained a copy of the deed in about the late 1990s or 2000, and that this was the first time he read it or formed an understanding of it. Some of his oral testimony seemed inconsistent with this, and (as already noted) I give that testimony no weight. I think those parts of his testimony were affected by a degree of confusion.

245 In short, my findings are as follows. Mary formed a reasonably good understanding of the assignment deed from reading it on one occasion in 1984, when she signed it, and she then considered it frequently over the following years, concluding that it became invalid in 1994. Simon and Desmond obtained copies of it and an understanding of it in about 2000-2001. Jane read it but did not form much of an understanding of it in 1984, and then did not see it again until late 2017. And Josephine did not read it or have any understanding of it when she signed it in 1984, and first received a copy of it in late 2017.

E. Consideration of the key questions identified by the parties

246 In this section, I address the key questions for determination that are identified in section A.2 of these reasons above, as distilled from the parties' joint statement of issues and pleadings.

247 In doing that, I set out my findings on all the remaining contentious questions of fact that I identified for further consideration in section B of these reasons. Each of those findings appears as part of my determination of the issue to which it most closely relates.

E.1 Did the trustees 'procure execution' of the assignment deed?

248 As already noted, the parties' joint statement of issues posed a question in this form, using the phrase 'procure the execution', in relation to fair dealing, undue influence and unconscionability.[221]

249 Whether any of the trustees 'procured' the execution by the plaintiffs of the assignment deed is clearly relevant to the plaintiffs' claim to have the deed set aside on grounds of undue influence, addressed in section E.3 below. However, the pleadings on fair dealing and unconscionability did not raise a question in this form.[222] Framed in the form it was, the relevance of the question is probably confined to undue influence. However, if interpreted broadly, the issue was potentially relevant to the claim of unconscionability and breach of fair dealing also.

250 The parties' written submissions indicated that they disagreed on what is meant by 'procure the execution ' of the assignment deed. The defendants took a narrow view, focussing on the time at which each plaintiff signed the assignment deed. The defendants contended that only Zilla 'procured the execution' of the assignment deed, and that Bill and Rick did not do so. In the defendants' closing submissions at [116]-[118], they pointed out that Bill's evidence was that he [and Rick] were told not to have anything to do with the execution of the assignment deed and to let Zilla handle it all.

251 The plaintiffs took a broader view, encompassing the role of each of Zilla, Bill and Rick in bringing the assignment deed into existence through to its execution. On this basis, the plaintiffs submitted that all three of the people who were both the trustees of Eric Snr's estate and RLF's directors at the time - Zilla, Bill and Rick - procured the execution of the assignment deed.

252 In my view, the principles applicable to fair dealing and unconscionability, which I address in more detail in sections E.2 and E.4 below, indicate that I must consider the overall role of Zilla, Bill and Rick in bringing about the transaction represented by the assignment deed, and not just the occasion when the plaintiffs each signed the document. What matters is the character and degree of the three trustees' involvement in bringing about the preparation and not just the circumstances of the execution of the assignment deed by the plaintiffs and RLF. I therefore adopted a broad interpretation of 'procure the execution' of the assignment deed, as that phrase appears in the joint statement of issues, for the purposes of the fair-dealing rule and unconscionability.

253 I am satisfied on the balance of probabilities and find that, in the months after Eric Snr's death, Zilla, Bill and Rick discussed a proposal to have the plaintiffs assign their rights under Eric Snr's will to RLF, having discussed an early version of this proposal at the conference they all attended with Murray Byrne in February 1984.

254 I am also satisfied and find that, later in the year, at or about the time of the conference Zilla and Bill had with Murray Byrne in May 1984, Zilla and Bill, with Rick's support, made a decision agreeing to implement the proposal to have the plaintiffs assign their interests to RLF, and to instruct Murray Byrne to prepare the necessary documentation to enable this to happen.

255 Over the period from May to November 1984, I am satisfied and find that Zilla consulted with at least Bill, and probably also Rick, on the amount RLF should pay for the assignment, and this decreased in two steps as a result, ultimately to $100,000, or $20,000 for each plaintiff, $2,000 upfront and the balance payable over ten years, without interest.

256 As to conversations between Eric Snr and each of Bill, Rick and Luke in the period shortly before Eric Snr's death in which Eric Snr said the Carranballac land should ultimately go to RLF or the elder sons or Bill, I consider this matter to be immaterial to the claims I must determine. Whether or not the idea to bring the assignment about originated in any conversation Bill or Rick (or for that matter Zilla or Murray Byrne) had with Eric Snr, what matters is the actions they took to implement the proposed assignment and what they told (or failed to tell) the plaintiffs.

257 I accept that the gist of Bill's evidence was that he and Rick were told not to have anything to do with the execution of the assignment deed and to let Zilla do it all. I accept that Bill was _'_instructed not to advise any of the siblings of, of their ability to sign or not sign.'[223] Nevertheless, I find that he was involved in Mary's and Desmond's execution of the assignment deed, preferring their evidence on that topic for the reasons I have already mentioned.

258 In summary, as already noted, Mary and Desmond gave evidence that Bill played a part directly related to their signing of the assignment deed - that Bill asked Mary to go to Zilla and sign the deed, and that Bill was present with Zilla when Desmond signed. In spite of Bill's denial I accept the evidence of both Mary and Desmond. I find that Bill did not have an independent recollection of the relevant events, and I accept that Mary and Desmond have retained clear recollections of what was a very unusual or unique event in their young lives up to that point.

259 The other three plaintiffs were only asked by Zilla to sign it, and only she was present when they did.

260 There was no suggestion that Rick was present when any of the plaintiffs signed.

261 It was uncontroversial that Zilla was involved at all stages from the genesis to implementation of the transaction by which the plaintiffs assigned their interests in Eric Snr's estate to RLF. I make a finding to this effect.

262 For the purposes of the fair-dealing rule and unconscionability, I must also determine whether Bill and Rick had a broader role in bringing about the transaction set out in the assignment deed.

263 As to the details of Bill's involvement, the evidence was as follows.

264 Bill gave evidence that the decisions in respect of the deed were discussed between himself, Rick and Zilla prior to the deed being created.[224] Bill accepted that one of the things discussed between himself, Rick and Zilla was the land being transferred ultimately to RLF instead of to the plaintiffs.[225] Bill discussed Eric Snr's estate with Rick, Zilla and Murray Byrne.[226] Bill discussed with Zilla and Rick the land being ultimately transferred to RLF instead of the plaintiffs.[227] Bill gave evidence that the deed was Murray Byrne's idea,[228] but the decision that was reflected in the deed was a joint decision of himself, Rick and Zilla.[229] Bill's evidence was that he needed the assistance of either Murray Byrne or Zilla to understand the deed.[230] Bill gave evidence that though he could not remember doing so, it must have been Zilla who caused Bill to sign the deed.[231] It is significant that Bill signed for RLF, and that one of the three trustees had to do so, because they comprised all the directors of RLF.

265 Bill's letter to Simon dated 4 October 2001, exhibit 134, contains a significant description of the genesis of the assignment deed, which I accept:

[I]t was decided by mum and Murray Byrne, the solicitor at the time, after conferring with Rick and myself that certain things needed to be changed in dad's estate so mum could continue to survive financially and support the remaining children dependent on her for education, etc.

...

Mum, Bill and Rick as executors take equal responsibility of what has happened in the past and are fully aware of the decisions in the past. ...

266 Bill's role in bringing about the transaction was not identical to Zilla's but was just as pivotal overall. I am satisfied that Bill was closely involved in the decision-making that led to the preparation of the assignment deed, including by attending conferences with Zilla and Murray Byrne in 1984 and in providing instructions to Murray Byrne. Bill also had an instrumental role in ushering Mary into Zilla's presence and he actively encouraged Mary to sign it. He was present when Desmond signed. In this way, he directly facilitated Mary and Desmond signing the deed. He did not have any such direct role for Jane, Josephine and Simon. Bill signed the deed in his capacity as a trustee formally recording that he had received notice of the transaction.

267 As to the details of Rick's involvement, the evidence was as follows. Rick gave evidence that Zilla told him one day that she had the deed and asked him to sign it, to which Rick agreed. When Rick was asked by counsel whether he knew what deed Zilla was referring to, Rick said:

Yes, I did. ... Because ... she told me that it was coming a few days before. Might have been a week or a fortnight, I forget now, but she ... explained how the deed finished up, what was in it, and, ... so I didn't really have to read it. That's what I thought.[232]

268 When asked by counsel whether there had been discussions about the deed, Rick said that he had not discussed it with Zilla, or Murray Byrne,[233] but he knew that Zilla and Murray Byrne had discussed it together.[234] Rick said he was not present during these discussions, with the exception of one meeting on 10 February 1984, which he said was at the start of the discussions,[235] but he knew of them because Zilla had told him. Rick's evidence was that Zilla had informed him about the reason for the deed, from which he understood the main reason to be 'to raise money ... to keep the family going' while the farm recovered from drought.[236] He also understood the terms of the deed.[237] Rick said he neither heard from Zilla about any draft versions of the deed, nor saw any drafts.[238]

269 I accept Rick's evidence, which was that his role in bringing the transaction about was a largely passive one, involving at least implied, and more probably express, agreement with what Zilla, Bill and Murray Byrne were doing. I place significant weight on Murray Byrne's file notes in this regard, which indicate that Bill and not Rick joined Zilla for the significant conference on 18 May 1984, and that it was Zilla and Bill who gave subsequent instructions. Further, Rick had no role in ensuring that the plaintiffs each put their signatures on the assignment deed. He merely signed it as a trustee receiving notice of the assignment.

270 Although Rick's role was less direct than either of Zilla's or Bill's, I am satisfied that Rick agreed with the decisions made by Zilla and Bill. I find that he supported all of Zilla and Bill's decision-making regarding the assignment. Rick participated in an early conference with Murray Byrne in February 1984, and he thereafter provided his agreement or acquiescence as both director of RLF and as a trustee of the estate, until the deed had been executed - ultimately signing it as trustee. Rick's support was essential to the transaction occurring, and he provided that support.

271 I accept that both Murray Byrne and Denis Westbrook were involved in implementing the proposal. Mr Byrne procured the affixing of RLF's company seal to the document by Mr Westbrook, the family accountant and company secretary of RLF. Mr Westbrook signed the deed as a witness when affixing the company seal of RLF in his capacity as company secretary.

272 The defendants also emphasised the role of Murray Byrne. I am not satisfied and do not find that he was responsible for the substance of the proposal. I find that he had a series of conferences with Zilla and Bill (and one with Rick), in which he took instructions from Zilla and Bill, and gave advice about giving effect to the instructions through a deed of assignment. I find that he had the deed prepared within the firm, provided a draft to Zilla, and then revised it on Zilla's instructions and produced a final version of the assignment deed for execution. But I am satisfied that he did not generate the idea for the assignment of the plaintiffs' interests to RLF.

273 In short, I accept that Mr Byrne and Mr Westbrook were professional advisers of the Fay family entities who had no material interest in the assignment. In my view, the involvement of both these men was incidental and did not negate or diminish the responsibility of Zilla, Bill and Rick for the transaction. Further, even if Mr Byrne had proposed the transaction from the outset, and Zilla, Bill and Rick had acted entirely on the advice of Mr Byrne at all stages, this could not justify them acting in conflict with their fiduciary duties - a point I address next. It would merely mean that they believed their actions to be justified.

274 Both Zilla and Bill communicated the relevant instructions to Murray Byrne, and Rick agreed or at least stood by while they did so. I find on the balance of probabilities that Zilla and Bill together decided to instruct Mr Byrne to prepare the deed of assignment and to authorise Mr Westbrook to seal it on RLF's behalf, and Zilla obtained Rick's agreement to these steps.

275 In my view, each of Zilla, Bill and Rick has a sufficient role in bringing the transaction about for the purposes of the potential application of the fair-dealing rule and the doctrine of unconscionability. Each of Zilla and Bill had a very significant role in bringing the transaction about and procuring the entry by the plaintiffs into the assignment deed, as already outlined. Rick's role was not as significant. However, Rick's support was also essential to the transaction proceeding, and he provided it.

276 For the above reasons, and even before considering the role of each trustee at the time each plaintiff signed the assignment deed, I am satisfied that each of Zilla, Bill and Rick were responsible for the transaction coming into existence and being implemented, and this means they were all responsible for 'procuring' the execution by the plaintiffs of the assignment deed in the broad sense that is relevant to the fair‑dealing rule and unconscionability.

277 In addition, I am satisfied that on the occasion when each plaintiff signed the deed, Zilla directly 'procured' the signature of each plaintiff, and in addition Bill directly 'procured' the signature of Mary and Desmond.

E.2 Did the trustees breach the fair-dealing rule?

278 The 'fair-dealing rule' was explained by the High Court in Clay v Clay.[239] It is to the effect that a transaction whereby the beneficial interest of a beneficiary is purchased by the trustee may be set aside, unless the trustee can show that no advantage has been taken of the position of trustee, that full disclosure has been made to the beneficiary, and that the transaction was fair and honest. Where the trustee meets these burdens, the result is that the interest acquired by the trustee is placed beyond any claim by the beneficiary or those claiming under the beneficiary.[240]

279 There is a related rule of equity, the 'self-dealing rule', which applies where the trustee acquires the trust property itself (as opposed to the beneficiary's interest in the trust property).

280 In Clay v Clay at [51] the High Court plurality (Gleeson CJ, McHugh, Gummow, Hayne and Callinan JJ) referred to both the self-dealing rule and the fair-dealing rule, noting that a transaction in breach of the former will be set aside ex debito justiciae (as a matter of right) whereas a transaction in breach of the latter may be set aside unless the trustee can show that no advantage has been taken of the position of trustee.[241]

281 The plaintiffs plead that any transfer of the plaintiffs' interest in the residue of Eric Snr's estate to RLF under the assignment deed constituted a sale to the trustees of the estate for the purposes of the fair-dealing rule.[242] They submitted that Zilla, Bill and Rick, in bringing about the assignment, contravened the fair-dealing rule.[243] The plaintiffs plead that pursuant to the fair-dealing rule, the assignment deed and any transfer of the plaintiffs' interest in the residue of Eric Snr's estate should be set aside.[244]

282 There is a question of principle to resolve relating to the scope of the relevant equitable doctrine: does the fair-dealing rule apply where the relevant trustees are not parties to an assignment by the beneficiaries of their interests, but the assignee is a corporate entity controlled - and partly (but not majority) owned - by the trustees?

283 I have decided that question in favour of the plaintiffs. Having regard to the principles on which the fair-dealing rule is based, I have decided that it applies to the present case. If that were not so, a transaction in clear breach of the no-conflict rule would be beyond the reach of the doctrine. My detailed reasoning for this conclusion is set out in the paragraphs that follow.

284 The plaintiffs and defendants both addressed the applicable principles in detail in their respective closing submissions.[245]

285 The plaintiffs pointed out, correctly, that fiduciaries such as trustees have a duty not to promote their own personal interests by making or pursuing a gain in circumstances where there is 'a conflict or a real or substantial possibility of a conflict' between their personal interests and those to whom the duty is owed.[246] This is the 'no-conflict rule'.

286 The plaintiffs submitted that the duty to avoid such conflicts unpinned both the 'self-dealing rule' and the 'fair-dealing rule'.

287 This submission is clearly correct. In Wright v Lemon, the Court of Appeal of the Supreme Court of Western Australia recently reconfirmed that the fair-dealing rule is a particular application of the more general principle that fiduciaries 'must not put themselves in a position where their duty and interest conflict' - in other words, the 'no conflict rule'.[247]

288 In my view, it must be likewise engaged where the conflict in question is one between competing duties, because the no-conflict rule also applies in such circumstances.

289 The defendants submitted[248] that the plaintiffs' fair‑dealing claim could not lead to relief against RLF, relying on the reasons of Megarry VC in Tito v Waddel.[249] Megarry VC said that if an assignee is the trustee's 'alter ego',[250] the fair-dealing rule would apply 'without any great difficulty', but if the trustee and the assignee are 'distinct', even where the trustee has a financial interest (such as shares) in the assignee, the rule will not apply.

290 The defendants acknowledged that the concept of an alter ego has been called 'difficult',[251] and 'slippery'[252] and the relevant inquiry is fact-specific.[253] They submitted that the present case would not meet the requirements for RLF to be treated as the alter ego of Zilla, Bill and Rick. The defendants submitted that in various ways RLF should not be regarded as the alter ego of Zilla, Bill and Rick. They pointed out that RLF was an established company long before the assignment occurred, that it had a long history holding an expanding portfolio of land, and that this continued after the assignment. They pointed out that RLF had an independent secretary (Mr Westbrook), and that its shareholdings and directorships had changed over time. I accept that, at the time of execution of the assignment deed, Zilla, Bill and Rick had only recently become RLF's three directors, and that they together held a minority of its issued shares.

291 I consider that, were the case to be governed by the alter ego principle, the factors relied upon by the defendants tend to indicate that RLF should probably not be described as the 'alter ego' of any one of Zilla, Bill or Rick, or as some kind of combined 'alter ego' of all three of them (if such a thing is possible).

292 In their closing address, the plaintiffs submitted that the 'alter ego' cases derived from analysis about application of the principles in Barnes v Addy[254] about attaching third party liability to persons knowingly assisting breaches of trust, or knowingly receiving property obtained in breach of trust. The plaintiffs eschewed any reliance on this form of analysis, and submitted that it was irrelevant to the fair-dealing rule.

293 The defendants submitted that the alter ego analysis was the correct approach, because the plaintiffs were seeking to 'impose liability' on RLF, and to do so 'as a substitute for the trustees or fiduciaries'.[255] However, I do not think that this is the most appropriate characterisation of the application of the fair-dealing rule to the case.

294 A better characterisation of the analysis is to ask whether equity extends the application of the fair-dealing rule to the assignment to RLF, because of the close connection between the trustees (who are relevantly subject to the no-conflict rule), RLF (which was under their directorship and control) and the assignment of the beneficiaries' interests to RLF. The question is whether, because of those connections, the assignment is liable to be set aside under the rule unless the trustees can establish that the dealing was fair, even though RLF has a distinct legal personality.

295 Ultimately, in my view, it is unnecessary for me to reach a concluded view as to whether the label 'alter ego' has to be applied to RLF, as that term was employed by Megarry VC in Tito v Waddell. That is because Megarry VC's remarks in Tito v Waddell should not be read as meaning that the 'alter ego' cases are the only circumstances in which the fair-dealing rule will apply to an assignment to a company in which a trustee holds shares. Sir Robert's remarks did not address the case of an assignee in which one or more trustees not only hold shares but are also its directors. He expressed no view about such a case. It is therefore necessary to look further into the case law to obtain guidance on that point.

296 The plaintiffs submitted that 'the case law relevantly establishes that a trustee cannot avoid the operation of the self-dealing rule by interposing a company of which the trustee is a director and shareholder'. They gave three examples as follows.

297 In Re Thompson's Settlement,[256] trustees sold trust property to a company of which one of the trustees was managing director. Vinelott J concluded that the self-dealing rule applied.

298 In Re James (deceased),[257] the corporate trustees of two testamentary trusts sought an order approving the sale of trust property to a director of one of the trustees. Mayo J said that approval was required because 'the duties and responsibilities of the [director] in relation to each estate ... in itself create[d] a conflict of interest'.[258]

299 In Yates v Halliday,[259] an executor sold shares he held in his capacity as executor to a family company of which he was a director and shareholder. Lloyd AJ held that this conduct infringed the rule 'that trustees are prohibited from purchasing trust property'. In Soulos v Pagones, the New South Wales Court of Appeal referred to the outcome in Yates v Halliday as an example of 'the rule against self-dealing [being] applied in modern contexts in the corporate sphere'.[260]

300 Although these cases related to the self-dealing rule rather than the fair-dealing rule, the plaintiffs invited the Court to see the distinction between them as one of convenience not principle.[261] In post-hearing submissions relating to Re Thompson's Settlement, the defendants submitted that the distinction was critical. They submitted that it was only in the case of the self-dealing rule that the principle described by Vinelott J in the following passage would apply:[262]

It is clear that the self-dealing rule is an application of the wider principle that a man must not put himself in a position where duty and interest conflict or where his duty to one conflicts with his duty to another ... . The principle is applied stringently in cases where a trustee concurs in a transaction which cannot be carried into effect without his concurrence and who also has an interest in or owes a fiduciary duty to another in relation to the same transaction.

301 The defendants correctly pointed out that Vinelott J, in referring to 'concurrence' of trustees, had in mind the formal consent that was required from the trustees in that case as a condition of the validity of the transactions in question. So much may be accepted, but that does not deprive the remarks of Vinelott J of their relevance to my task in this case. Here too, although not in precisely the same way, the concurrence of the trustees was required for the assignment to occur. That is because the agreement of RLF to purchase the plaintiffs' interests was required, and the directors of RLF were the very same people as those directors. Further, the point the defendants made about the above comments from Re Thompson's Settlement applying only to the self-dealing rule (to the exclusion of the fair-dealing rule) is unpersuasive. The passage immediately before the quoted text records that counsel for the trustees was seeking to confine the self-dealing rule but accepted that the less stringent fair-dealing rule would apply. The broader discussion on this page of Vinelott J's judgment makes it clear that the same principle underpins both.

302 The plaintiffs pointed to cases in which beneficiaries' interests had been purchased by companies in which trustees held a minority shareholding. They drew to the Court's attention a 1888 case in which an exception to the full force of the self-dealing rule was recognised where the trustee held only a minor ownership interest in the acquiring company (the 1888 case of Farrar v Farrars Ltd).[263] However, the plaintiffs submitted that if a trustee is not only a 'small minority shareholder' but also a director, the self-dealing rule applies.[264] The plaintiffs pointed out that, in Fenwick v Naera,[265] the Supreme Court of New Zealand reviewed the authorities and held that where the person holding the interest is a director of the purchaser 'and so effectively "on both sides" of the negotiation for the transaction' there is no exception to the self-dealing rule based on the ownership interest being a minor one.

303 The plaintiffs submitted that these cases showed that 'the self-dealing rule cannot be avoided by the interposition of the company of which the trustee is a director and shareholder', and they invited the Court to 'hold that the same is true of the fair-dealing rule'. I accept that this is correct.

304 I accept the plaintiffs' submissions that the principles underlying the self-dealing and fair-dealing rules are the same. The foundation of both is the requirement that trustees avoid any dealing where the trustee's duty to act in a beneficiary's interests may conflict with the trustee's own personal interest, or with a competing duty owed by the trustee. There is no reason for confining the fair-dealing rule to circumstances where the interest in question is directly acquired by the trustee. It could apply in any circumstances where the acquisition gives rise to a conflict and the trustee's participation was essential to bringing the transaction about. Equity will scrutinise any such dealing carefully, by placing the onus on the trustee to demonstrate that no advantage was taken of the beneficiary.

305 Applying those principles to the present facts, it is clear that the fair-dealing rule applied to the assignment deed and to the circumstances in which it was brought into existence and executed.

306 As already noted, I have found that all three trustees of Eric Snr's estate, Zilla, Bill and Rick, procured the creation and execution of the assignment deed. Zilla and Bill were more directly involved, but Rick's supporting role was also instrumental.

307 They did so at a time when they constituted the entire body of directors of RLF.

308 I do not make any finding that RLF was the 'alter ego' of Zilla, Bill and Rick. In my view, however, the knowledge and purposes of Zilla, Bill and Rick regarding the assignment from the plaintiffs to RLF, were (through Zilla, Bill and Rick being the three directors of RLF at the time) to be imputed to RLF.[266] This may not directly matter in the context of fair-dealing, but it assumes potential significance in the context of undue influence and unconscionability.

309 Zilla, Bill and Rick did not own all or even a majority of the shares in RLF, but Bill and Rick stood to benefit from any enhancement of the value of RLF.

310 Further, as directors of RLF, Zilla, Bill and Rick owed RLF duties, including a fiduciary duty that required them to act in RLF's best interests (as well as acting lawfully and for a proper purpose).[267]

311 They acted consistently with that duty. On the evidence as a whole I am satisfied that they sought to advance RLF's interests by bringing about the transaction proposed in the assignment deed.

312 At the same time, of course, Zilla, Bill and Rick were the trustees of Eric Snr's estate, and as such owed the plaintiffs fiduciary duties, requiring them (relevantly) to act in the plaintiffs' best interests with regard to their remainder interests in the residue of the estate to vest in them after Zilla's death.

313 In other words, it should have been obvious to Zilla, Bill and Rick that they owed fiduciary duties to the entity and people on both sides of that transaction, requiring them to act in the best interests of both. There was a clear risk that Zilla, Bill and Rick's duties as the trustees of the estate in respect of the plaintiffs' interests, and their duties as directors of RLF, would conflict over the transaction contemplated by the assignment deed. In my view, that was sufficient for the principles of fair dealing recognised in Clay v Clay to apply to the proposed assignment.

314 To borrow Vinelott J's expressions in Re Thompson's Settlement[268] by analogy, the principle against trustees engaging in conflicts of duties or in conflicts of interest and duty 'is applied stringently' where the 'trustee concurs in a transaction which cannot be carried into effect without his concurrence' and where the trustee 'has an interest in or owes a fiduciary duty to another in relation to the same transaction'. RLF's acquisition of the plaintiffs' reversionary interests in Eric Snr's estate, which were interests held on trust by its own directors and subject to fiduciary duties owed to others, was clearly such a transaction.

315 If I am incorrect in reaching that conclusion based only on the potential for conflict of competing duties on the part of Zilla, Bill and Rick's duties as fiduciaries on both sides of the assignment, then I have in any event also formed the view that Bill and Rick each stood to gain personally - albeit indirectly and not as direct assignees - from the transaction. This gave rise to a potential conflict of duty and personal interest on their part too. Bill and Rick stood to benefit personally from the transaction through their shareholding in RLF, through the potential for the partnership to continue to farm the Carranballac land after Zilla's death, and the commensurate enhancement in the value of RLF's assets (which would include any expectancies such as the remainder interest in the Carranballac land).

316 Whether Zilla had any personal interest in the assignment was less clear. Zilla had only a small shareholding in RLF at the time, which was immaterial for present purposes.

317 However, the defendants' own explanation of the facts of the case gave rise to the possibility that Zilla too had a personal interest in the assignment. The defendants submitted that Zilla obtained access from RLF to additional funds ($98,000) that were advanced as a loan by the CBA about a year following the assignment, and they submitted that the execution of the assignment deed was for the purpose of enabling this to occur. The defendants submitted that Zilla wished to have access to this money sourced from CBA to meet expenses needed to support the family and the household. If this theory were to be accepted, it would follow that Zilla too stood to gain personally, and for the family as a whole, from the transaction. However, I make no finding that this theory was correct, and so decline to make any finding that Zilla was personally interested.

318 Even without Zilla having a personal interest, the clear personal interests of Bill and Rick were sufficient to engage the fair-dealing rule, especially when combined with the obvious potential for conflict between their fiduciary duties as trustees of the estate and as directors of RLF.

(a) In all the circumstances, there were sufficient connections between the trust over the estate of Eric Snr, the interests of the plaintiffs as reversionary residuary beneficiaries of the estate under that trust, the assignment contemplated by the deed, and the proposed assignee RLF, for the duties of Zilla and Bill (and Rick) as both directors and as trustees to come into conflict, and so for the rule of fair dealing to govern the trustees' conduct leading to the plaintiffs' and RLF's entry into the assignment.

(b) In addition, if it matters, the personal interests of Bill and Rick were advanced by the transaction, providing yet another factor in support of this conclusion.

320 For these reasons, the fair-dealing rule applied to the transaction represented by the assignment deed. As a result, even though RLF was not itself a trustee, and even though the trustees were not assignees, in my view the assignment to RLF may be set aside unless the defendants can establish that the transaction met the requirements of fair dealing, or unless a defence applies.

E.2(b) Did the transaction meet the requirements of fair dealing?

321 The parties identified four potential sub-issues relevant to whether the transaction met the fair-dealing rule. The first three sub-issues identified reflected the criteria identified in Clay v Clay that trustees must establish for a transaction to meet the requirements of fair dealing (joint statement issues 3(a)-(c)):

(a) 'no advantage has been taken of the position of trustee',

(b) 'full disclosure has been made to the beneficiary', and

(c) 'the transaction is fair and honest'.

322 In addition, the parties jointly posed an additional sub-issue (joint statement issue 3(d)) for my consideration:

(d) Is it relevant whether any of the plaintiffs received independent advice? If so, did they receive that advice?

323 The plaintiffs first imputed various arguments to the defendants based on the defendants' opening submissions and conduct of their case, and then addressed each in turn, submitting that they did not meet the criteria in Clay v Clay.[269]

324 The plaintiffs began by identifying a critical disagreement between the parties as to what was meant by 'fair'.[270] According to the plaintiffs, the defendants appeared to be arguing that the application of the fair-dealing rule should take into account the older brothers' work for the family farming business, Zilla's care for the plaintiffs, and Eric Snr's wishes conveyed to Bill, Rick and Luke that the Carranballac land go to RLF or one or more of the older brothers. It was suggested that perhaps the application of the rule might also be influenced by the theory that the assignment was to benefit Zilla and enable her to care for the plaintiffs. The plaintiffs submitted that these matters were all irrelevant. They submitted that the applicable test is much simpler: '[f]or the purposes of the fair-dealing rule, a transaction is not "fair" unless the trustee "gave full value for the interest of the beneficiary".'[271]

325 Viewing 'fairness' in this manner, the plaintiffs submitted that the defendants could not meet their burden in seeking to uphold the assignment deed because (a) RLF did not provide full value, (b) full disclosure was not made to the plaintiffs, and (c) Zilla, Bill and Rick took advantage of their position as executors and trustees.[272] In effect, the plaintiffs contended that these matters were determinative of the question of the fairness of the transaction for the purposes of the fair-dealing rule.

326 The defendants' closing submissions addressed the applicable principles (at [110]-[115]) and their application ([121]-[149]) to each of the four sub-issues. As to the applicable principles, the defendants referred to Wright v Lemon[273] and an article of Professor Conaglen.[274] The defendants submitted that 'the critical question is disclosure'. They said price is important but submitted that this was because 'purchase at an undervalue may indicate that full disclosure was not made', noting that in itself price is not determinative. The defendants' references to Professor Conaglen's article also implied their acknowledgement that fully informed consent of the beneficiaries was also critical.

327 In the paragraphs that follow, I address each of the four sub-issues, explaining my reasons in response to the defendants' submissions on each, in the order they addressed them. Ultimately, I have concluded that the defendants have failed to establish that the transaction met the requirements of the fair-dealing rule, for the reasons that follow.

328 The defendants first addressed the parties' joint statement of issues, sub-issue 3(d): independent advice. They acknowledged that there was no evidence that the plaintiffs received independent advice, but they submitted that there was no requirement for independent advice in any event.[275] I agree with the defendants that the authorities do not impose a distinct, specific requirement that the trustees must ensure the beneficiaries received independent advice. However, in my view, the presence or absence of such advice is a relevant fact to take into account. It may have a significant influence on the Court's assessment of whether full disclosure was made, the trustees did not take advantage of their position, and the transaction was fair.

329 On the plaintiffs' evidence it was clear that they were never offered any advice by the trustees or at their instigation, independent or otherwise, and they received none. In my view, although not determinative in itself, this is a matter to be taken into account in deciding whether the criteria in Clay v Clay were met. On balance, it weighs against a conclusion that the transaction was a fair one in the relevant sense.

Did the trustees take advantage of their position?

330 The defendants next addressed the parties' joint statement of issues, sub-issue 3(a): whether Zilla, Bill and Rick had taken advantage of their positions as trustees.[276] The defendants referred to their contention that Bill and Rick did not 'procure' the execution of the assignment deed, and on that basis the defendants submitted that Bill and Rick did not take advantage of their position as trustees.

331 I refer to my findings on that question, set out in section D.1 above. For the reasons given there, I am satisfied that not only Zilla, but also Bill and Rick materially contributed to bringing about the preparation and execution of assignment deed.

332 In my view, it would not matter if Bill or Rick 'deferred' to Zilla's wishes or 'relied on the advice of Murray Byrne' in doing so.[277] Their duties as trustees were not delegable in that manner.

333 Zilla, Bill and Rick were in a position to bring the assignment about because they were on both sides of the transaction. As trustees of the estate of Eric Snr they had a fiduciary obligation to ensure that the plaintiffs did not enter into the deed without receiving all material information known to the trustees, on which to make a properly informed decision on that issue. By the period February to November 1984, Bill and Rick (as well as Zilla) had a reasonable understanding of the provisions and effect of Eric Snr's will, and of the assets constituting his estate and their value. They knew that Eric Snr's will left the remainder of the estate to the plaintiffs after Zilla's death. As I have found, Bill actively joined with Zilla in proposing the assignment of the plaintiffs' rights to RLF in return for a promise by RLF to pay $100,000 to the plaintiffs in equal shares within ten years, and Rick agreed with the proposal. They knew that Murray Byrne had prepared a document, the assignment deed, to put that transaction into effect. Each of Bill and Rick left it to Zilla to ensure the plaintiffs signed the assignment deed, without taking any step to ensure that the plaintiffs understood their rights under Eric Snr's will and what they were being asked to do with those rights. Bill went further and actively participated in ensuring Mary and Desmond signed. Bill signed for RLF. They each also signed the document in their capacity as trustees receiving notice of the assignment. Although that step was probably taken after the plaintiffs signed, and the plaintiffs did not argue that it was essential to the transaction's effectiveness, it does at least reinforce the conclusion that Zilla, Bill and Rick had full knowledge of the transaction.

334 For these reasons, I am satisfied that all three of Zilla, Bill and Rick took advantage of their position as trustees to bring the assignment about, albeit in different ways, and to differing degrees.

335 Further and in any event, I note that the defendants bore the burden of establishing that the three trustees did not take advantage of their position. In my view, even if just one of the trustees had taken advantage of his or her position, without the others preventing that outcome, that alone would mean that the defendants had failed to establish that this aspect of fair-dealing was met. Equity must be taken to focus on the substantive outcome and to extend protection to beneficiaries from a breach of duty, even if committed by only one amongst a group of trustees.

336 The defendants submitted that not only RLF benefited from the assignment deed, but the plaintiffs did too, and that the 'benefits and burdens of the Deed must be equally assayed'. I agree with the defendants that any benefit to the plaintiffs must be considered. However, compared with what they were signing away, the assignment deed patently provided very little benefit to most of the plaintiffs. Aside from the promise to each plaintiff of $2,000 upon turning 19, the consideration under the deed amounted to an unsecured promise from a company to make payments of the balance owing of $18,000 each at some time up to 10 years in the future, without interest. As the agreed valuation evidence showed, this was worth far less than what was assigned away - a point I address in detail, below.

337 The position of Desmond and Simon was different from the other plaintiffs, because they held 1,000 shares each in RLF. I accept that, through their shareholdings, they stood to gain more than the other plaintiffs. But this is insufficient to outweigh the other circumstances of the case that support a finding that the trustees took advantage of their position in bringing the assignment about. The transaction was conceived from the outset, and was documented in the deed of assignment as involving the assignment by all five plaintiffs of their reversionary rights to Eric's Snr residuary estate to RLF, thus bringing the Carranballac land into RLF's proprietorship. In other words, the transaction contemplated the entirety of the revisionary interest in the estate being assigned to RLF, and bringing that outcome about required the trustees to take advantage of their instrumental positions on both sides of the transaction regardless of differential impacts on beneficiaries. Even though the transaction could be described as being less unfair to two of the plaintiffs than the others, the trustees took advantage of their position with respect to all of them.

338 The defendants next addressed the parties' joint statement of issues, sub-issue 3(b): the question of whether full disclosure was made to each of the plaintiffs.[278]

339 As I have already noted, the defendants submitted that full disclosure was the critical issue, and their submissions also implied the importance of the closely related question of informed consent. The defendants' closing submissions distilled the key issue in this regard as being 'whether any of Bill, Rick or Zilla had information which they did not disclose'. The defendants submitted that there was no evidence to suggest they did.

340 In this manner, the defendants sought to characterise the expert valuation evidence received at trial as beside the point. They said that, even though that evidence now showed that the valuation of Ripon Lea in the assignment deed at the time was inaccurate, there was no evidence that this was known by the trustees at the time, and no suggestion of dishonesty or negligence in how that figure came to be included in the deed.

341 The defendants' submissions on these points are not persuasive.

342 I do not accept the defendants' submissions that full disclosure was made to the plaintiffs by reason of the contents of the assignment deed. Given the young age and inexperience of the plaintiffs, and the circumstances in which they were asked to sign (and did sign) the assignment deed, I would have hesitated to draw any such conclusion even if the deed had been clearly expressed. Further, it was not clearly expressed. It was written in highly technical legal language, had a number of apparent errors in it,[279] and would have been a confusing document for anybody to try to understand at short notice. Further, it was written as though the plaintiffs had already agreed to its key terms, a matter on which I have already made a finding. As I have found, I am not satisfied that any of the plaintiffs knew that Eric Snr had left them something in his will, or that there was any proposal for the assignment of their interests under the will of Eric Snr in return for money, before they were presented with the assignment deed. Only Jane and Mary formed some level of understanding about the contents of the deed on reading it at the time they signed it. Josephine, Desmond and Simon formed no understanding of it at all, and simply signed it on being told to do so, without reading it.

343 It is fanciful to think that any of the plaintiffs would have gleaned enough information from the assignment deed to amount to full disclosure. In the event, only Mary was able to glean the gist of the transaction from the deed, and even in her case I am not satisfied that there was anything amounting to full disclosure.

344 Further and in any event, the value assigned to the Carranballac land / Ripon Lea in the assignment deed was a significant undervalue. Rather than stating that the Carranballac land was worth '$130,833.75', the schedule to the deed should have stated that the land was worth $350,000 in the dollars of the time. The evidence established that Bill knew that the valuation in the deed was a significant undervalue.

345 The defendants pointed out that three of the plaintiffs (Josephine, Desmond and Simon) did not read the assignment deed, so this did not matter. Rather than assisting the defendants' case, I consider this point serves to reinforce the fanciful nature of the contention that the plaintiffs could be expected to understand the deed properly. The fact remains that for any plaintiff (such as Jane or Mary) who persevered in attempting to gain an understanding, this understanding would be distorted by the misleading value given to Carranballac in the schedule.

346 The defendants submitted that '[n]o allegation has been made ... to support any withholding of information that was attainable or held'. This was incorrect. It was squarely alleged by the plaintiffs that Bill knew at the time of, and did not provide to the plaintiffs, information about pricing of comparable land in the district. The plaintiffs cross-examined Bill about this topic at some length, and ultimately relied on Bill's contemporaneous knowledge of, per-acre prices of comparable land in the district. They also cross-examined Rick on this point, albeit briefly.

347 The value attributed to Ripon Lea/the Carranballac land in the schedule to the assignment deed was calculated using a price of precisely $200 per acre.[280] As the plaintiffs pointed out, Bill admitted that he knew from a recent land sale he had been involved in that this value was a significant undervalue. Bill knew that similar land in the district had recently sold for much more.

348 By November 1984, Bill had been farming full-time for approximately fifteen years,[281] and he had been involved in purchasing property on behalf of RLF, including from the Russell family (at Nerrin Nerrin) and the Partridge family.[282] Bill agreed that the land purchased from the Russell family and the land purchased from the Partridge family was similarly productive to the land at Ripon Lea,[283] yet it was priced much higher than $200 per acre.

349 Bill accepted during cross-examination that the price per acre RLF paid for the Russell family land was a bit over $300 per acre and that it struck him at the time that the value for the Carranballac land in the assignment deed was only two-thirds of that price. He also accepted that the price per acre RLF paid for the Patridge family land was $425 per acre, but he did not accept that he was aware of disparity between that price and the price per acre attributed to the Carranballac land in the assignment deed at the time. I am satisfied that Bill was and remained aware of the price per acre RLF paid for the Patridge family land at the time the plaintiffs entered into the assignment deed, but he has since forgotten that he remained aware of it. I am satisfied that he knew at the time that the assignment deed materially undervalued the Carranballac land.

350 Bill also knew that the plaintiffs were most unlikely to be able to judge for themselves what a fair valuation of the Carranballac land might be, due to their inexperience in such matters. He accepted that the plaintiffs would have benefited from his judgement in respect of the value of land per acre and how it compared to other purchases that he was aware of in 1984.[284] Yet he did not give them any such advice.

351 Rick was also cross-examined on this topic.[285] He said that he did not read the deed of assignment before signing it, but it was 'explained' to him by Zilla.[286] He said he did not 'see' and was not 'aware' of the value of about $130,000 being put on the Carranballac land at the time he signed the deed,[287] but a little later he agreed that he 'would have' been aware about the value being put on the land when he signed it, because he discussed it with Zilla.[288]

352 I find on the balance of probabilities that Rick discussed the contents of the deed with Zilla during its preparation and before it was executed, including the value being placed on the Carranballac land for the purposes of the deed and the consideration to be paid by RLF under the deed.

353 In the course of cross-examination, Rick also gave the following evidence about the value placed on the Carranballac land and the consideration in the deed of assignment. He agreed that the value for the Carranballac land in the deed equated to $200 per acre.[289] He also agreed that RLF had recently purchased two parcels of similarly productive land, at about $300 per acre and at $425 per acre.[290] However, despite this, Rick denied that the price of $200 per acre was a significant undervalue of the Carranballac land.[291] He said, by way of explanation for this denial:

Well, it's the circumstances of it all. ... this was a deal between the family and the other ones were a commercial deal. ... We had to raise the money to get it and obviously that was our limit.

354 The comparison in Rick's mind between a 'commercial deal' and a deal between 'the family' is illuminating. I find that Rick had no proper notion of his role as trustee of the estate and no notion of having a duty to act in the interests of the plaintiffs.

355 I am not persuaded by his evidence denying that $200 per acre was an undervalue. His explanation makes it clear that he only regarded it as a fair value because the transaction was taking place within the family, and that he knew a commercial price would have been higher. In other words, his evidence amounts to an implied concession that he knew the land was not valued on an arms-length basis.

356 Further, his evidence that 'obviously that was our limit' also shows he had no notion of acting in the plaintiffs' interests - his view was that the consideration to be provided for assignment would simply be limited by what 'we' could afford. I find that 'we', on the balance of probabilities, was RLF acting as the purchaser under the deed, or perhaps Zilla, Bill and Rick acting as RLF's directors.

357 Although Rick could not clearly recall at trial the extent of his detailed knowledge at the time of the transaction, I am satisfied that at the time Rick knew the key elements of the assignment, including the $100,000 consideration and the $130,000 value ascribed to the Carranballac land, and that he knew the figure placed on the Carranballac land equated to $200 per acre, and that this was a significant undervalue, which he considered justified because the assignment was taking place within the family, and that he knew that the overall payment of $100,000 under the deed was determined by the limit RLF's directors were willing to pay.

358 None of this information known to Bill and Rick was explained to the plaintiffs at the time.

359 For all these reasons, I am satisfied that there was nothing resembling full disclosure to the plaintiffs of what the trustees knew about the transaction. For the same reasons, it also follows the plaintiffs did not give anything resembling informed consent to the assignment.

360 The defendants relied on Zilla's letter dated 10 October 1984 as evidence of disclosure and consent. As I have already noted, I am satisfied that the plaintiffs did not agree to the assignment, and gave no consent to it in or about October 1984.

361 I am also satisfied that, in spite of their signatures appearing on the deed of assignment, the plaintiffs did not receive full disclosure and give informed consent to the assignment in November 1984 either. They put their signatures on the document because Zilla asked them to (and, in the case of Mary and Desmond, because Bill did too).

362 The defendants finally addressed the question posed in the parties' joint statement of issues as sub-issue 3(c): was the transaction was 'fair and honest'?

363 There was no suggestion that it was dishonest. As already noted, the plaintiffs submitted that the transaction was not 'fair' unless the trustees 'gave full value for the interest of the beneficiary'.[292] They submitted that the undervalue of the plaintiffs' reversionary interest by a factor of 3.5 meant that it was unfair.

364 The defendants advanced six arguments to the effect that the assignment was not 'improvident' and was fair.[293]

... whilst the Plaintiffs now say that the valuation of Ripon Lea in the Assignment Deed is less than the experts' retrospective determination of its value, the Defendants by dent of time have been unable to explain how the value ascribed to Ripon Lea in the Assignment Deed in 1983/4 was arrived at, its true value, had a valuation been then undertaken. In any event, that value was not known at the time the Assignment Deed was executed. For reasons already outlined, there was no obligation for Zilla, Bill or Rick to disclose that which they did not know.

366 As I have already explained, I am satisfied that Bill and Rick understood at the time that the Carranballac land was significantly undervalued in the assignment deed.

... it is the value of the remainder interest, not the total value of Ripon Lea which is relevant. Having regard to the Joint Statement of Actuaries:

(a) the value of the remainer interest in Ripon Lea, assuming a $350,000 property value and $16,300 rental income was $113,900 in 1984; and

(b) the value of the remainer interest in E.P. Fay's personal property is between $14,000 and $20,700 in 1984.[294]

368 It is true that the Court must consider, amongst other things, whether the consideration set out in the assignment deed was fair in comparison to the value of the plaintiffs' reversionary interest, and not the true total value of the Carranballac land at the time. The true total value was relevant to consideration of whether the inclusion of the amount of $130,833.75 in the schedule to the assignment deed amounted to full disclosure to the plaintiffs - a point I have already addressed. However, the comparator against which the consideration offered in the deed must be assessed is the valuation of the reversionary interest. I agree that the defendants are correct to begin the valuation of that interest, expressed in 1984 dollars, as being based on a range of $127,900 to $134,600. If the trust over the estate of Eric Snr were to provide for Zilla's needs during her life entirely from income, the residue remaining after her death would be an inflation-adjusted figure in that range.

369 The third point the defendants made was to submit that:

... pursuant to section 38 of the Trustee Act 1958 (Vic), the Trustees of the Estate of E.P. Fay were entitled to pay out of the estate of E.P Fay an amount not exceeding half of the assets of the residuary estate in the manner that they saw fit. Had they chosen to do so, Bill and Rick could have stopped farming the Ripon Lea land and, instead, provided for Zilla through the equity in Ripon Lea.

370 The plaintiffs denied that s 38 applied to the trust created by the will. They submitted that Zilla was not 'entitled to the capital of the trust property' within the meaning of that provision. This issue gives rise to challenging questions of a somewhat technical nature. Should I notionally deduct half of the estimated value of the residuary estate assumed to remain after Zilla's death for the purposes of deciding whether the offered consideration of $100,000 within ten years was fair? And if I did so, what assumptions should be made about the timing of that deduction and its rate of progression, and what impact would be made on the progressive calculations needed to adjust the value of the residuary estate for inflation?

371 I do not think it is necessary to resolve these questions. That is because, even if the value of the residuary estate assumed to remain after Zilla's death were to be halved from the outset (reducing it to a figure in the range of $63,950 to $67,000 in 1984 dollars), the consideration offered in the assignment deed would still represent a substantial undervalue of that amount of money. That is because of the discount factor that must be applied to translate the promised payment of $100,000 into 1984 dollars.

372 The deed provided for only $2,000 each ($10,000) of the promised consideration to be paid in the near future, upon each plaintiff turning 19 years of age. The balance of $90,000 was not required to be paid until November 1994, without any interest being payable. As the relevant expert report shows, appropriate discount factors must be applied to the $100,000 offered in the deed, to render it into present value at the time of the assignment deed. When this is done, its value is considerably lower than appeared on the face of the assignment deed.[295] The expert evidence was that its value as at 20 November 1984 was only $34,800.[296] That means that, even taking an approach to the arithmetic that is more advantageous to the defendants than would be reasonable, the consideration offered by the deed of assignment was still only a little above half of the true value of what was being taken away from the plaintiffs.

... when the Assignment Deed is considered with their contemporary existing shareholdings in RLF, the Deed was especially generous to Simon and Desmond. As at 20 November 1984, each of Desmond and Simon held 1,000 of 12,100 (approximately 8.3%) issued shares in RLF.[297] Under the Assignment Deed, they each received the right to $20,000 as assignees and the consequential benefit which flowed to RLF from the acquisition of the remainder interest in Ripon Lea).

374 The assignment deed was less disadvantageous to Desmond and Simon than the other plaintiffs. However, as I have already explained, the transaction contemplated by the deed depended on all plaintiffs assigning their interest, and it is artificial and merely hypothetical to attempt to carve out the interests of Desmond and Simon from the whole, and to apply a separate analysis to them.

... the background circumstances to the execution of the Deed of Assignment are critical to the assessment of whether the transaction was fair. It would be wrong for the Court to disregard the circumstances surrounding the Fay family and assess the fairness of the transaction as an arithmetic exercise only.

376 I refer to paragraph 324 above. As already noted, the scope of matters to be taken into account in applying the fair-dealing rule was a major point of contention between the parties.

377 I accept the submissions of the plaintiffs on this point. I accept, on the balance of probabilities, that each of Zilla, Bill and Rick considered what they were doing was fair to all the family. This probably involved recognition of the central role of the farming business, operated through the partnership and RLF, in providing the family's income, and meeting the living expenses of the younger children - the plaintiffs. It probably also involved recognition of the largely unremunerated efforts of the elder four sons in the work of the farming business.

378 I am also willing to accept that, in November 1984, there were concerns harboured by Zilla, Bill and Rick that there would be cashflow constraints facing the farming business in the near future. At that time, the landholdings of RLF had recently been significantly extended, and RLF was facing loan repayments in relation to those acquisitions. As already noted, on 23 October 2017 Ms Peta Maskell of BJT wrote to Josephine Fay referring to instructions that the life interest in the estate had not provided enough funds for Zilla to raise the children and the assignment deed had been drafted to overcome this issue. The letter also asserted that the sum of $100,000 was paid at the time for that purpose. I give this letter, and the instructions conveyed in it, no additional weight. The letter was simply conveying instructions that I assume were obtained from Bill and Rick, they have given evidence of the concerns that were harboured at the time and their understanding of why the transaction occurred, and I have accepted that the trustees were motivated by concerns of that kind.

379 None of this means that the assignment deed was 'fair' in the relevant sense. Fairness in the context of the fair-dealing rule did not turn on these contextual matters. I accept the plaintiffs' submission on this point.

380 The defendants' sixth and final submission on this topic was:

... it is impossible for the Court to put itself in the position of the various members of the Fay family back in 1984. The evidence as to what payments were received is hopelessly incomplete. This is the result of the Plaintiffs' failure to bring their claims within a reasonable time. The plaintiffs have each had numerous opportunities to bring their claims in a timely manner during the lifetimes of the key witnesses who could give [direct] evidence on the issue of payments and other important matters. The Court should resist the temptation to try and calculate - with the benefit of hindsight - the respective entitlements of each of the plaintiffs as at 1984 or to draw any comparisons to the evidence of what they received. Rather, the Court should have regard to the evidence as a whole. That evidence is consistent with a finding that while the value of Ripon Lea may have been more than the probate value adopted in the Assignment Deed, what the Plaintiffs were entitled to was not dissimilar to the stated consideration in the Assignment Deed.

381 There is some force in parts of this submission. Jane and Mary admitted that they had each received $2,000 from Zilla under the deed of assignment. Otherwise, the plaintiffs denied that any payments had been made to them under the deed. I was not taken to any evidence that could be regarded as a reliable record of such payments being made. No entries in orthodox financial statements, account statements or other business records were in evidence. There were two noteworthy documents in evidence that might be thought to be relevant. For reasons I give in more detail in section E.7 below, neither leads me to find that any payments were made to the plaintiffs over and above the two $2,000 payments admitted by Jane and Mary.

382 I accept that the defendants were disadvantaged by not being able to call Zilla to explain what other payments she might have made to the plaintiffs under the deed. Putting this potential disadvantage to the defendants to one side, however, the defendants' sixth and final submission responding to the unfairness and improvidence of the assignment deed is unpersuasive. For the reasons already given the assignment was a gross undervalue and so was unfair to the plaintiffs. I do not accept that I should decline to assess the 'respective entitlements of each of the plaintiffs as at 1984', and I do not accept that '... what the Plaintiffs were entitled to was not dissimilar to the stated consideration in the Assignment Deed'. On the contrary, I am satisfied on the joint statements of the experts that what was promised in the assignment deed was a substantial undervalue of what the plaintiffs signed away under the deed.

383 Further, even the potential disadvantage to the defendants from not being able to call Zilla is of limited cogency, and I give it little weight. In short, it is possible that, if Zilla were alive, the defendants might be able to attempt to prove further payments were made by reference to the assignment deed, over and above the minor payments that are admitted by Jane and Mary. But this would not alter the fact that the consideration promised by the assignment deed was inadequate and unfair, and that the trustees failed to disclose their knowledge that the valuation of the Carranballac land used for the purposes of the transaction and appearing in the assignment deed was too low.

384 For all these reasons, I am not satisfied that the defendants have established that the requirements of the fair-dealing rule were met. Subject to any defences, I am satisfied that it was breached.

385 As already noted, the Court's power to set aside the assignment deed is discretionary, not exercised as of right. However, aside from raising defences related to the plaintiffs' delay in commencing the proceeding, and the question of what money may have to be repaid by the plaintiffs in order to obtain relief, the defendants did not advance some additional argument that any residual discretion should be exercised against granting relief. None of the parties addressed the considerations that might bear on any residual discretion I might have. I return to this point in the 'Conclusion' section at the end of these reasons.

E.2(c) Have the defendants established a defence?

386 The defendants asserted that the plaintiffs' claims of breach of the fair-dealing rule were time-barred by section 21(2) of the Limitation Act.[298]

387 The defendants also pleaded the defences of laches and acquiescence in answer to the whole of the claims against them. However, in their submissions it appeared that they did not assert those doctrines as defences to the plaintiffs' claims of breach of the fair-dealing rule.[299] I found the defendants' position somewhat unclear on this point. Out of an abundance of caution, I have considered whether laches and acquiescence could apply to the plaintiffs' claim of breach of the fair-dealing rule as well.

388 As explained in the reasons that follow, these aspects of the case were complex. In the end, however, I have decided that none of these defences can prevent the plaintiffs' claim for breach of the fair-dealing rule from succeeding.

389 Section 21 of the Limitation Act relevantly provides (and at all material times provided):

21 Limitation of actions in respect of trust property

(1) No period of limitation prescribed by this Act shall apply to an action by a beneficiary under a trust, being an action -

(a) in respect of any fraud or fraudulent breach of trust to which the trustee was a party or privy; or

(b) to recover from the trustee trust property or the proceeds thereof in the possession of the trustee, or previously received by the trustee and converted to his use.

(2) Subject as aforesaid, an action by a beneficiary to recover trust property or in respect of any breach of trust, not being an action for which a period of limitation is prescribed by any other provision of this Act, shall not be brought after the expiration of six years from the date on which the right of action accrued:

Provided that the right of action shall not be deemed to have accrued to any beneficiary entitled to a future interest in the trust property until the interest fell into possession.

390 Some unusual features of sub-s (2) are immediately apparent. Sub-section (2) has two clauses, a primary clause and a proviso. The primary clause is introduced by the words 'Subject as aforesaid', making it clear that sub-s (2) as a whole applies only if sub-s (1) does not. The proviso is introduced by the word 'Provided', making it clear that the proviso alters the effect of the primary clause in some circumstances. In the circumstances in which the proviso applies, it deems a delay in the accrual of the relevant right of action, resulting in deemed delay in the commencement of the six-year limitation period contained in the primary clause.

391 The defendants pleaded that, for the purposes of s 21(2), the plaintiffs' causes of action accrued on 20 November 1984, when each of them executed the assignment deed.[300] The defendants submitted that the primary clause of s 21(2) applied and the proviso did not apply.[301] In other words, the defendants submitted that the claim to have the deed of assignment set aside for breach of the fair-dealing rule was an action by beneficiaries for non-fraudulent breach of trust,[302] thus falling within s 21(2), and that the proviso did not apply. On this basis, they argued that the cause of action accrued in November 1984, not when Zilla died. Thus the plaintiffs' claim became statute-barred in 1990.

392 Further, the defendants pleaded that the proviso was inapplicable here because it had 'no application where the action is not one to recover trust property or in respect of any fraud or fraudulent breach of trust by a trustee'.[303] During closing addresses, the defendants indicated that it may be unnecessary for me to consider this pleading, because it was included on the basis of a particular understanding of the way the plaintiffs were putting their case and would be otiose if the plaintiffs were no longer putting their case that way.

393 Although it is possible that this pleading was otiose, it was not formally deleted from the pleading, and there was some shifting in the plaintiffs' position on the Limitation Act issues all the way to their reply address, so I will address the defendants' pleaded construction point out of abundant caution. My understanding of the point being made is that s 21 should be interpreted in such a way that the proviso would not apply unless the case fell within s 21(1)(a) or (b). I did not find this at all persuasive. The defendants cited no authority in support of this construction, and it would be contrary to one of the precepts of statutory interpretation, in that it would give no substantive function to the proviso in s 21(2). That is because, in my view, 21(2) as a whole only applies in cases where s 21(1) does not. The defendants' pleaded construction would render the proviso to s 21(2) otiose. I reject this construction.

394 However, in their submissions, the defendants advanced an alternative argument. They argued that the proviso did not apply because the plaintiffs were not entitled to a future interest in the residuary estate of Eric Snr which fell into their possession on Zilla's death. As the discussion in this section shows, there is obiter authority (Menegazzo[304]) that supports this argument. Should I follow it?

395 The plaintiffs submitted that the proviso applied and that the right of action accrued on 29 September 2017, upon the death of Zilla, when the plaintiffs' remainder interests (being 'future interests' within the meaning of the proviso) fell into their possession.[305] On this basis, their claims would not have become statute-barred until September 2023, well after the proceeding was commenced and the claim was pleaded.

396 In determining whether the proviso applies, I must consider:

(a) What is the proper construction of the proviso?

(b) On that construction, did the plaintiffs have an interest in the trust property, and was it a future interest, such that it fell into their possession on Zilla's death?

397 I will first address s 21(1), because an understanding of its scope is a necessary precondition of interpreting s 21(2). Section 21(1) refers to two kinds of actions by beneficiaries of trusts for which no limitation period prescribed by the Limitation Act applies to such an action. The legislative purpose in relation to these kinds of actions marks the legislature's view of the seriousness of this kind of conduct on the part of a trustee: no matter how long ago the relevant cause of action might have accrued, no limitation period applies.

398 Section 21(1)(a) applies to 'an action by a beneficiary under a trust ... in respect of any fraud or fraudulent breach of trust to which the trustee was a party or privy'.

399 There is a view available on the authorities that equitable fraud falls within s 21(1)(a) and that this provision should be construed widely.[306] It may be arguable that the allegations made by the plaintiffs against the defendants in relation to their procurement of the assignment deed might be regarded as equitable fraud, although this was denied by the defendants. The plaintiffs had initially submitted that s 21(1)(a) applies on the basis that there was fraud in the equitable sense,[307] but in the end their primary case did not rely on s 21(1)(a).

400 There is also authority that a consciousness that what is being done is wrong is required in order for s 21(1)(a) to apply.[308] The plaintiffs made no allegation of this kind in the proceeding. On this basis, their primary case was that s 21(1)(a) did not apply, and s 21(2) did.

401 The defendants denied that s 21(1) applies to any claims in this case, submitting that equitable fraud is insufficient for the purposes of s 21(1)(a).

402 As a formal alternative submission made during closing addresses, the plaintiffs drew the Court's attention to the suggestions in the authorities that equitable fraud is sufficient to enliven s 21(1)(a),[309] and submitted that (if the proviso in s 21(2) does not govern the case), s 21(1)(a) applies, on basis that the claims in this proceeding constituted claims of equitable fraud. The plaintiffs accepted that if that was the case, they would have to confront the potential availability of laches as a defence.[310] The plaintiffs indicated that they wished to make this formal submission in case it was needed on any appeal. I decline to decide this issue. As no party ultimately pressed the submission that s 21(1)(a) applied as part of their primary case, it was essentially accepted by the parties that it did not apply, and so it would be inappropriate for me to form a different view.

403 Turning to s 21(1)(b), it applies to 'an action by a beneficiary under a trust ... to recover from the trustee trust property or the proceeds thereof in the possession of the trustee, or previously received by the trustee and converted to his use'. No party submitted that the plaintiffs' claim to have the assignment deed set aside for breach of the fair-dealing rule was an action to recover trust property or the proceeds thereof. As I explain in more detail below, in my view it was an action to recover or restore the plaintiffs' reversionary interests in Eric Snr's residual estate in order to compel the trustees to perform the original terms of Eric Snr's will, but claims of this kind are distinguishable from recovery of any relevant 'trust property' itself.[311]

404 I now turn to s 21(2). Given the parties' positions as summarised in the preceding paragraphs, it was uncontroversial that s 21(2) applied to the plaintiffs' fair-dealing claim, as it was common ground that it was a claim of breach of trust, and that s 21(1) did not apply to it,[312] and no other provision of the Limitation Act was identified by the parties as prescribing a limitation period for the claim.

405 The critical controversy between the parties was the applicability of the proviso, and thus the date on which the 'right of action' accrued.

406 The proviso must be interpreted in its proper context, including the primary operative clause in s 21(2), which are the words most proximate to the proviso. It must also be interpreted on the premise that each of the elements of s 21 as a whole are intended to have work to do. After stating that s 21(2) is subject to s 21(1), the primary clause of the proviso relevantly refers to two kinds of actions - 'an action by a beneficiary to recover trust property or in respect of any breach of trust', and prescribes a six-year limitation period for such an action, subject to the proviso. The proviso then refers to 'the right of action'.

407 In my view the proviso can operate in relation to both 'an action by a beneficiary to recover trust property' and an action 'in respect of any breach of trust'. This conclusion is informed by consideration of the legislative history of the proviso. The proviso originates from a provision included in s 8 of the Trustee Act 1888.[313] Before examining the 1888 provision, it is instructive to note some of the early cases on the question of claims of breach of trust made by remaindermen in circumstances where delay was asserted as an answer to such claims.

408 The first case of note is Roberts v Tunstall [1845] EngR 576; (1845) 67 ER 645. This was decided prior to the statutory limitation introduced by the Trustee Act 1888, but provides some insight into the application of laches prior to an interest vesting in possession. There, a testator gave his estate to his wife for life, and to her and her heirs on trust, such that upon her death, it was to be divided amongst his children (subject to a power of appointment). The testator died in 1809, leaving a son and two daughters from his second marriage, and five daughters from his first. In 1824, the wife purchased the interest in remainder of the five daughters at an undervalue. The wife died in 1827, leaving her estate to her son (subject to debts including a £2,000 loan which he paid). The husband of one of the five daughters became insolvent, and the plaintiff was the assignee under insolvency. In 1842, he commenced an action against the executor of the wife, seeking to impugn the transaction of 1824 as being both a purchase by a trustee from a beneficiary, and at a gross undervalue. Wigram VC first considered the issue of delay, and while accepting an argument that the time in which laches could be imputed commenced from the wife's death, the time which had run during her lifetime was not to be 'wholly disregarded'.[314] On the facts, the relevant 'dependency of the seller on the purchaser' ended in 1827, and as no reason was provided for the subsequent delay of 15 years, save for the husband (who went insolvent) being poor, the claim was rejected.

409 The next case of note is Life Association of Scotland v Siddal [1861] EngR 300; (1861) 3 De GF & J 58; 45 ER 800. In that case, it was held that where an express trust is definite and clear, a remainderman could not be said to have acquiesced in a breach of trust 'by the mere knowledge and non-interference on part of the cestui que trust before his interest has come into possession'.[315]

410 As these two examples from the period indicate, there was some uncertainty as to the principles applicable to cases of delay by remaindermen alleging breaches of trust that occurred before the vesting of their reversionary interests.

411 This uncertainty was allayed by s 8(1)(b) of the Trustee Act 1888. It contained a version of the proviso which was relevantly to the following effect (emphasis added):

If the action or other proceeding is brought to recover money or other property, and is one to which no existing statute of limitations applies, the trustee or person claiming through him shall be entitled to the benefit of and be at liberty to plead the lapse of time as a bar to such action or other proceeding in the like manner and to the like extent as if the claim had been against him in an action of debt for money had and received, ...but shall not begin to run against any beneficiary unless and until the interest of such beneficiary shall be an interest in possession.

412 Much later, the High Court had occasion to consider s 8 in Clay v Clay.[316] The High Court described the effect of s 8 as follows:[317]

The effect of s 8 of the 1888 Act was that, unless the trustee had been guilty of fraud or was still retaining the trust property or had converted it to his own use, the limitation period was to run against the beneficiary from the date when the beneficiary became vested in possession of his interest; there was no limitation protection for a trustee who retained trust property improperly at the time of the action or who had employed the trust property for his own benefit, or for the trustee who was personally guilty of fraud.

413 After 1888, a number of early English cases recognised that pursuant to s 8, a life tenant could be time-barred, while time had not yet commenced against the remainder beneficiary. Those cases indicate that a broad and abstract view of the expressions 'interest of such beneficiary' and 'interest in possession' was taken, and it was not deemed necessary that the relevant interest be an interest in specific property that the beneficiary sought to recover.

414 In Re Somerset [1893] UKLawRpCh 142; [1894] 1 Ch 231, trustees innocently loaned trust funds secured by a mortgage, but the property was of insufficient value. Fourteen years after the funds were advanced, the life tenant and infant remainderman commenced a proceeding claiming breach of trust. In applying s 8 of the Trustee Act 1888, Kekewich J held that the claim of the life tenant was barred (as more than six years had elapsed), but that of the infant remainderman was not.[318] Re Somerset was evidently not a claim for recovery of trust property, but rather a claim for compensation for losses caused by breach of trust. Nevertheless, it was held that the early form of the proviso applied.

415 In Re Taylor (1900) 81 LT 812, the deceased bequeathed his residuary estate (including certain securities) to his daughter for life and upon her death, to whomever she appointed. In 1883, orders were made for a former trustee, who was in America, to hand over the securities to a new trustee in England. However, between 1883 and 1892, the daughter continued to receive income from the securities via the former trustees. At some point between 1889 and 1892 the securities were misappropriated, and in 1892 the daughter died. By her will, she appointed her husband residuary legatee and sole executor, and he subsequently commenced a proceeding against the former trustee. The former trustee sought to rely upon s 8 of the Trustee Act 1888 or laches. The husband's own claim was not barred by s 8, as his interest only came into possession in 1892. The husband was ultimately unsuccessful, but only because it was held that he could have commenced proceedings through the life tenant during her life, under the principles that then permitted a husband to sue in his wife's name. On that basis, he was guilty of laches.[319] Much later, in Halford v Halford (addressed below) the Court of Appeal of the Supreme Court of Western Australia had the following to say about the outcome in Re Taylor:[320]

Re Taylor does not appear to have been followed, or even considered, in Australia or England. Mr Lightwood, in his book 'The Time Limit on Actions', considered, in effect, that Re Taylor was wrongly decided and said that '[t]he doctrine of laches ... is confined to equitable claims which are subject to no statutory bar either expressly or by analogy' (emphasis added).

416 In Re Fontaine [1909] UKLawRpCh 87; [1909] 2 Ch 382, an approach similar to Re Somerset was taken. It was accepted that the six-year limitation period in s 8 of the Trustee Act 1888 was available as a defence against the life tenant only, with the remainderman protected by the proviso.

417 The English limitation law was reviewed by the Law Revision Committee in 1936,[321] recommendations of which were implemented in the Limitation Act 1939 (UK). Section 19(2) of the Limitation Act 1939 (UK) contained a modernised version of the proviso as follows:

Provided that the right of action shall not be deemed to have accrued to any beneficiary entitled to a future interest in the trust property, until the interest fell into possession.

418 Sub-sections 19(1) and (2) were virtually identical to what is now s 21 of the Victorian Limitation Act.

419 Section 19(2) of the Limitation Act 1939 (UK) was considered by Wilberforce J (as his Lordship then was) in Re Pauling's Settlement Trusts.[322]

420 In that case, a marriage settlement was made in 1919, with the defendant bank as trustee. Under the settlement, income of the trust fund was to be paid to the mother, and upon the mother's death, the bank had a power to appoint the capital to her children. Failing appointment, the capital was to go to her children who attained 21 years, or 'being female, married under that age'.[323] Clause 11 of the settlement afforded the bank the power to raise, with the written consent of the mother, up to half of the 'expectant or presumptive or vested share of any child ...' and pay or apply it to their advancement.[324] Between 1948 and 1954, multiple advances were made under cl 11, with the mother's written consent and the agreement of her children. Regarding the two eldest sons, the trustees applied the funds to: purchase a house in the name of the parents (without the sons' consent); pay off the mother's overdrawn account (without the sons' consent); and, pay off a loan of the mother (with the sons' consent and assignment of the mother's life insurance policies). As to a daughter, advances were made at her request, purportedly to purchase furniture in a house that she owned. However, some were paid to the father or applied toward the mother's overdraft account. Similarly, advances were made at the request of the youngest son, but paid to his mother's account. In 1954 the four children (the plaintiffs) became aware that the advances might have been a breach of trust, and in 1958, commenced a proceeding seeking that the bank make good the funds wrongfully advanced. The bank sought to rely upon s 19(2) of the Limitation Act 1939 (UK) and laches.[325]

421 At first instance, Wilberforce J determined that time had not commenced under s 19(2) as the children had a 'future interest' that had not fallen into possession. Specifically, the mother's consent did not constitute a release of her life interest, and the only way a capital sum could have fallen into possession was by way of a valid advance.[326] This approach was upheld upon appeal.[327]

422 The limitation law in Victoria largely follows the early legislative developments in England.[328] Section 67 of the Trustee Act 1928 (Vic) reflected s 8 of the Trustee Act 1888.

423 Partridge v Equity Trustees Executors and Agency Company Pty Ltd (1947) 75 CLR 149 concerned s 67 of the Trustee Act 1928 (Vic). In that case, the deceased's will left all of his real and personal estate to his executor and trustee to sell, call in and convert, before bequeathing the income to each of his children in equal shares during their lives, and thereafter for the child or children of each deceased child who attained the age of 21 years. Certain trust funds were lost and the beneficiaries brought a claim of breach of trust. The High Court determined that the interests of the grandchildren were that in remainder under the trusts of the residue, which had not vested in possession, and it was not contended that they were time-barred.[329] As to the children, it was held that the estate was vested in the defendant as trustee rather than executor (the residue had long since been ascertained and the trusts of the will had become operative), such that defences relying upon the defendant's status as executor failed. However, the defendant was able to rely on s 67 against the life tenants.[330]

424 Section 67 of the Trustee Act 1928 (Vic) was essentially re-enacted as s 79 of the Trustee Act 1953 (Vic).

425 There is another provision of relevance to the legislative history of s 21 of the Limitation Act. Section 62(1) of the Supreme Court Act 1928 stated:

Except as provided by the Trustee Act 1928 no claim of a cestui que trust against his trustee for any property held on an express trust or in respect of any breach of such trust shall be held to be barred by any Statute of Limitations[.]

426 This provision is derived from the Supreme Court of Judicature Act 1873, 38 & 39 Vict, c 66, s 25(2), via the Supreme Court Act 1915 (Vic), s 25.

427 The next step was that the above provisions, s 79 of the Trustee Act 1953 (Vic) and s 62(1) of the Supreme Court Act 1928, were in effect consolidated and re-enacted in s 21 of the new Victorian statute dealing with limitation periods, the Limitation of Actions Act 1955 (Vic). Upon the review of the statutes in 1958, this became s 21 of the Limitation Act.

428 The scope of s 21(2) encompasses two kinds of actions by beneficiaries. The first is an action for the recovery of trust property.

429 In Tito v Waddell (No 2),[331] a case concerning, amongst other things, a claim by the Banaban people that the Crown owed them fiduciary duties, Megarry VC reasoned in obiter that an action concerning the claimant's beneficial interest in a trust, was not an action to recover trust property for the purposes of the Limitation Act 1939 s 19(2):[332]

[A]n action 'to recover trust property,' is open to the difficulty that an action to recover a beneficial interest in trust property cannot readily be described as an action to recover 'trust property': what a man owns beneficially is essentially different from what a man holds not beneficially but in trust.

430 This has been followed in a number of cases since, and the parties accepted that it represents the law for the purposes of s 21(2) of the Limitation Act.

431 Section 21(2) also relates to 'an action by a beneficiary... in respect of any breach of trust'. Is a claim of breach of the fair-dealing rule a claim 'in respect of a breach of trust' for these purposes?

432 In Tito v Waddell, Megarry VC also observed by way of obiter that a breach of the fair-dealing rule is not a breach of trust. Sir Robert reasoned that the requirements for fair dealing are a disability and not a trust duty, so a failure to comply with the fair‑dealing rule did not amount to a breach of trust.[333]

433 Armitage v Nurse[334] is often cited as identifying the purpose of the proviso. There, a trust was settled in 1984 according to which the plaintiff's mother was a tenant for life of certain farming land, and the plaintiff was entitled to the remainder of the land, together with a sum of £30,000. Under the terms of the settlement, the trustees held the income upon trust until the plaintiff attained 25 years, and thereafter had the power to pay it to her or apply it to her benefit. When she was younger than 25, the plaintiff commenced a claim asserting breaches of trust. The defendants sought to rely on s 21(3) of the Limitation Act 1980, contending that that plaintiff had an 'interest in possession' and citing the meaning of 'interest' as identified in a tax law case. This argument was rejected by Millet LJ, who determined that the meaning of 'interest' had to be ascertained from its context. In the circumstances, the plaintiff had no present right to capital or income, only a right to require the trustees to consider from time to time whether to accumulate that income or pay it or apply it for her benefit, which was a 'future interest' and did not amount to an 'interest in possession'.[335] The rationale for s 21(3) was identified as follows:[336]

A beneficiary with a future interest ... should not be compelled to litigate (at considerable personal expense) in respect of an injury to an interest which he may never live to enjoy.

434 In Gwembe Valley Development Company Ltd v Koshy,[337] the Court of Appeal of England and Wales disapproved Megarry VC's obiter remarks concerning the fair-dealing ruling not being a breach of trust. This was a case in which a company asserted breach of the 'no profit' rule by one of its directors and sought an account. The Court of Appeal disagreed with Megarry VC's approach, referring to the distinction between duties and disabilities as follows:[338]

... the Tito v Waddell distinction would itself lead to anomaly. Across the wide spectrum of conduct which may give rise to fiduciary liability, the six year limitation would apply except at the two extremes. At one end, fraud would be excepted by section 21(1)(a); at the other, innocent breach of the no-profit rule would be excepted because it relates to a disability rather than a duty. The former exception is defensible in legal policy terms; the latter is not.

435 In Johns v Johns,[339] the defendants brought a strike out application concerning breaches of trust said to have occurred 30 years earlier. An express trust was settled in 1967, and the plaintiff was a beneficiary under the trust deed, entitled to a share of the residuary. Documents indicated that a final distribution of the trust funds occurred in around 1999 (which included a payment from the capital to the plaintiff).[340] The proceeding was commenced in 2000, asserting breaches of trust in the 1970s. It was accepted that whether those claims were available turned on application of the proviso in s 21(2) of the Limitation Act 1950 (NZ).[341] At first instance, Potter J found in favour of the defendants, reasoning amongst other things, that the plaintiff did not have an interest as the trustees had discretion to make distributions and all of the funds had been distributed. In discussing this point, the Court of Appeal of New Zealand reasoned:[342]

[60] ... The first thing to note about this aspect of the case is that whether a beneficiary has a future interest for the purposes of the proviso should be examined without reference to the actual state or amount of the trust property. For the purposes of the proviso the expression 'the trust property' is an abstract rather than a concrete concept. Unless this were so the proviso would be defeated when it was most needed; for example if the trustees had, by breach of trust, lost the whole of the trust property so that there was no trust property in existence at the time the application of the proviso came in issue.

[61] As Millett LJ said in Armitage v Nurse the rationale for the proviso is that beneficiaries should not have to sue unless and until their interest falls into possession and can be tangibly enjoyed. If at that point a beneficiary's interest would have been worth a substantial sum had the trustees not committed breaches of trust, they, the trustees, can hardly be heard to say that the proviso cannot be invoked because there is now no trust property, or what there was has been fully distributed. It might be objected that there is an element of circularity in this approach, because it will not be known whether breaches of trust have been committed unless the proceeding can be brought. Nevertheless in the light of the statutory purpose of the proviso, it would be even more unsatisfactory to allow trustees to rely on the absence of any actual trust property to prevent a beneficiary, who might enjoy as of right an interest in possession if there were trust property, from taking proceedings to establish that fact.

436 In the event, the Court of Appeal held that the plaintiff did have a 'future interest' and could challenge the alleged 1970s breaches: his residuary interest did not fall into possession, if at all, until 1999 at the earliest.[343]

437 The Court's reference to 'the trust property' in the proviso being an 'abstract' rather than a concrete concept is of importance to the conclusions I have reached in this case, for reasons I explain below.

438 The decision of Applegarth J in the Queensland Supreme Court in Menegazzo[344] was referred to at length by the parties. Applegarth J accepted in obiter that a breach of the fair-dealing rule would come within the scope of 'breach of trust' for the purposes of the Queensland analogue of s 21 of the Limitation Act, s 27 of the Limitation of Actions Act 1974 (Qld).[345] Applegarth J went on to make obiter remarks that the proviso would not apply in circumstances where the relevant beneficiary had assigned his interests and received consideration by way of a payment from the relevant trust. In short, these obiter dicta were that an assignment of that kind would result in the beneficiary's interests vesting at the time of the assignment, with the result that the beneficiary no longer had a future interest. Applegarth J expressed these views even though the assignment in question was impugned as a breach of the fair-dealing rule.

439 Finally, the parties referred at some length to the recent decision of the Court of Appeal of Western Australia Halford v Halford.[346] In Halford, the Court of Appeal addressed many of the authorities and points of legislative history I have noted above. Halford arose from facts that bear a similarity to the present case. A remainderman under a testamentary trust claimed that, many years earlier, the trustees had taken out loans secured by trust assets, diminishing their value. The primary judge held that the remainderman was prevented by laches from succeeding in his claim of breach of trust. The Court of Appeal, reversing the primary decision, concluded that the remainderman had not been guilty of delay in a manner that met the criteria for laches.[347] In obiter remarks, the Court of Appeal also suggested that the limitation period applicable to the remainderman's claims did not commence running until the death of the life tenant.[348]

440 A further constructional question about the proviso arises: in assisting to prescribe the limitation period for the kinds of actions to which it relates, is the proviso intended to be read as referring to what is claimed, or the present state of affairs (absent the relief claimed)?

441 This question is significant because the effect of the fair-dealing rule is somewhat limited. Under the fair-dealing rule, the impugned transaction is not voidable ex debito justitiae. That suggests that the deed is in effect unless and until set aside by an exercise of discretion on the part of the Court.

442 In my view, it is open on the text of the proviso to construe it as describing the claims of the beneficiary, not the status quo. This approach is open on the text because the introductory words of the proviso refer to the right of action: '... the right of action shall not be deemed to have accrued to any beneficiary entitled ...'. It follows that the remainder of the text is a description of what is claimed in the action.

443 Further, the legislative purpose behind s 21 as identified in Re Pauling's Settlement Trusts;[349] Armitage v Nurse;[350] Johns v Johns[351] supports the proviso being read in this manner. In effect, the proviso relates to any beneficiary who but for the claimed breach of trust is entitled to a future interest in the trust property. As Millet LJ said in Armitage v Nurse, there is an element of circularity involved in this approach, but the alternative approach also involves circularity, and in my view should be rejected because it would defeat the legislative intention.

444 As already noted, the parties all contended that s 21(2) applied, but they diverged on the question of whether the claim fell within the proviso.

445 It was not in dispute[352] that the claim of breach of the fair-dealing rule was a claim of 'breach of trust' for the purposes of s 21.[353]

446 In order to fall within the proviso, the plaintiffs' claims of breach of the fair-dealing rule must be claims by each of them as a 'beneficiary entitled to a future interest in the trust property' and their 'interest fell into possession' on the death of the life tenant, Zilla.

447 The first question is whether the plaintiffs had a 'future interest in the trust property'.

448 The plaintiffs submitted that where the property is left on trust to a life tenant and then to one or more remaindermen, the interest of the remaindermen during the life of the life tenant is a future interest that vests in possession when the life tenant dies.[354]

449 There is no doubt that a reversionary or remainder interest in trust property is to be regarded as a future interest for present purposes.

450 While 'future interest' is not defined in the Limitation Act, s 10 of the Limitation Act supports the view that a remainder interest is a future interest for the purposes of the Limitation Act. Section 10(1) is worded as follows:

10 Accrual of right of action in case of future interests

(1) Subject as hereafter in this section provided, the right of action to recover land shall, in a case where -

(a) the estate or interest claimed was an estate or interest in reversion or remainder or any other future estate or interest; and

(b) no person has taken possession of the land by virtue of the estate or interest claimed -

be deemed to have accrued on the date on which the estate or interest became an estate or interest in possession.

451 It is clear from s 10 that 'future interests' includes 'an estate or interest in... remainder' at s 10(1)(a). The same approach must be taken to the meaning of 'future interest' in s 21(2).

452 That future interests include remainder interests for the purpose of the statute of limitations is consistent with the approach undertaken in other jurisdictions.[355]

453 The defendants submitted that the plaintiffs no longer had any future interest after they transferred their interests to the third defendant in 1984.[356]

454 The defendants relied on Applegarth J's obiter in Menegazzo v PWC.[357] There the plaintiff sought to impugn an alleged agreement that he entered into relinquishing his entitlements under his father's will in exchange for certain properties and a release from a loan.[358] Applegarth J, in obiter, found 'considerable force' in the argument that the 'plaintiff does not have a "future interest" or any interest for that matter, in the trust property since, on his case, he sold whatever interests he held, whether present or future.'[359] His Honour said that the claims for breach of the fair dealing rule were causes of action to which the Queensland equivalent of s 21(2) applied so as to impose a six year limitation period.[360]

455 The defendants submitted that in both Menegazzo and in this case, the plaintiffs sued to set aside the assignment deed, and not to enforce the relevant will. They submitted that the plaintiffs assigned their interest in the estate on 20 November 1984 pursuant to the terms of the assignment deed and it is on that date that the cause of action accrued.[361]

456 The claims in Menegazzo included breach of the fair-dealing rule.[362] The plaintiff argued that the Queensland equivalent of the proviso applied to him, and that time had not commenced to run against him under that provision because the relevant trusts had an 'end vesting date' which had not yet occurred. Applegarth J did not accept this argument.[363] His Honour distinguished Johns v Johns, pointing out that property under the trust had vested in the plaintiff many years earlier and he was no longer a residuary beneficiary.[364]

457 Applegarth J said that there was force in the argument that the plaintiff did not have any interest in the trust property as he had sold whatever interests he held in that property through the impugned agreement.[365]

458 There are distinguishing features between Menegazzo and the present case. For example, at the time of the assignment impugned in Menegazzo, the beneficiary was no longer a remainderman. The life tenant, his father, had already died when that transaction took place. Further, the transaction involved a distribution of some of the trust property to the plaintiff.

459 Nevertheless, on one view, Applegarth J's obiter remarks might be thought to be influential over the present case. Here, the plaintiffs are claiming a reversionary interest in a testamentary trust which they (if the assignment remains effective) relinquished through the impugned agreement (the assignment deed). To that extent, there is a similarity between the cases.

460 I respectfully decline to follow any such approach. In my view, the plaintiffs here have an 'interest in the trust property', notwithstanding the assignment deed and notwithstanding that their claim to set that deed aside has not yet been adjudicated. In my view, the necessary interest need only be an 'abstract' one in the sense described by the New Zealand Court of Appeal in Johns v Johns. The plaintiffs were recognised in Eric Snr's will as reversionary beneficiaries in his residual estate. Subject to the effect of the assignment deed, which they impugn, they had future interests in the trust property which would only vest in possession on the death of Zilla. As already explained, the proviso is to be interpreted as referring to the effect of what is claimed by a beneficiary, and not by reference to the status quo before any relief is granted. For those reasons, the plaintiffs fell within the proviso up until Zilla's death.

461 This approach and conclusion is consistent with Wilberforce J's reasoning in Re Pauling's Settlement Trust when considering the proviso in s 19(2) of the Limitation Act 1939 (UK) (which mirrors the proviso in s 21(2) of the Limitation Act in Victoria):[366]

The relevant provision is section 19 (2), and the whole question is whether the plaintiffs' rights are preserved by the proviso. In my judgment, they are. Undoubtedly they had 'a future interest' and, in my judgment, that interest did not fall into possession when the trustees by an (ex hypothesi) invalid advance raised a sum of money out of the capital. Mrs. Younghusband's consent to the advance was not, in my view, equivalent to a release of her life interest, and the only way (without a release) in which a capital sum could fall into possession would be by means of a valid advance. This defence, in my judgment fails.

462 It is also consistent with the obiter remarks in Halford v Halford, which I have already discussed.[367]

463 The Court in Halford referred to s 3(1) of the Limitation Act 2005 (WA)[368] which provides:

future interest means an estate in reversion or remainder or other vested or contingent interest in property which is yet to entitle immediate possession of the property[.]

464 Although no such definition is included in the Limitation Act in Victoria, as already explained, s 10 of the Limitation Act shows that a reversionary or remainder interest is a future interest for the purposes of the Limitation Act in Victoria as well.

465 The Court of Appeal in Halford referred approvingly to the remarks of Millet LJ in Armitage v Nurse[369] already noted above, to the effect that the purpose of the proviso is that a beneficiary with a future interest 'should not be compelled to litigate (at considerable personal expense) in respect of an injury to an interest which he may never live to enjoy'.[370] If a remainder beneficiary's right of action under s 21(2) of the Limitation Act were to accrue upon entry into the impugned assignment and before the beneficiary's interest vested in possession, this would defeat that statutory purpose.

466 As already noted, on their primary cases at least, the parties appeared to be in agreement that, with respect to the fair-dealing claim, the doctrines of laches and acquiescence were excluded because s 21(2) applied.[371] However, the defendants had pleaded laches and acquiescence in relation to the entirety of the claim,[372] and their final position was not as clear as it might have been. Also, as part of their formal, alternative position in s 21(1)(a), the plaintiffs accepted that they might have to confront laches directly.

467 Section 31 of the Limitation Act provides:

31 Acquiescence

Nothing in this Act shall affect any equitable jurisdiction to refuse relief on the ground of acquiescence or otherwise.

468 Some authorities suggest that the doctrine of laches might apply even where a limitation period is prescribed. Meagher JA in Gerace v Auzhair Supplies Pty Ltd discussed whether laches can be found prior to the expiration of a limitation period:[373]

The second English decision is P&O Nedlloyd BV v Arab Metals Co (No 2) [2006] EWCA Civ 1717; [2007] 1 WLR 2288... Referring to dicta in cases that included Archbold v Scully and In re Pauling's Settlement Trusts [1962] 1 WLR 86, it accepted that a mere lapse of time could not provide a laches defence before the expiration of the limitation period for the corresponding action at law. The court, however, suggested that there was no reason in principle why "unjustified delay coupled with an adverse effect of some kind on the defendant or a third party should not be capable of providing a defence in the form of laches even before the expiration of the limitation period".

This last observation may not take sufficient account of the distinction between laches and acquiescence - the latter used in the Ramsden v Dyson [1866] UKLawRpHL 7; (1866) LR 1 HL 129 sense of standing by when one's rights are being violated. In the first of the early authorities referred to, Rochdale Canal Company v King [1851] EngR 777; (1851) 2 Sim (NS) 78, there was acquiescence in this sense. In the second, Archbold v Scully, Lord Wensleydale said at 383 that so "far as laches is a defence, ... the objection of simple laches does not apply until the expiration of the time allowed by the statute. But acquiescence is a different thing; it means more than laches ... but the fact, of simply neglecting to enforce a claim for the period during which the law permits him to delay, without losing this right, I conceive cannot be any equitable bar".

These two decisions were cited in Halsbury's Laws of England (3rd ed, 1956, London, Butterworths), vol 14 at [1181] fn (q) for the proposition that the "defence of laches, however, is only allowed where there is no statutory bar. If there is a statutory bar, operating either expressly or by way of analogy, the plaintiff is entitled to the full statutory period before his claim becomes unenforceable". A narrower proposition, limited to where there is "an express statutory provision", was approved and applied by Wilberforce J in In re Pauling's Settlement Trusts at 115 and on appeal [1964] 1 Ch 303. Whether the broader statement, which is repeated in Halsbury's Laws of England (4th ed, 1973, reissue 2003, London, LexisNexis), vol 16(2) at [910], remains correct does not need to be decided in this appeal.

469 Further, in Halford, the Court of Appeal, in obiter remarks, said:[374]

A consideration of the above authorities would suggest that, at least in respect of breach of express trust where the trustee retains the trust property, even if the claim of a beneficiary, within the meaning of s 62 of the Limitation Act 2005, whose interest is not vested in possession at the time of the breach might theoretically be amenable to a defence of laches in the sense of delay coupled with prejudice for not bringing proceedings in the period prior to the interest vesting in possession, the defence would only be made out in exceptional circumstances.

470 However, I put that suggestion to one side, because of the parties' joint position on this issue. The suggestion that laches might be available in answer to the fair-dealing claim was not part of the parties' primary positions on s 21, and so I decline to form a concluded view on whether laches is available.

471 As to acquiescence, the authorities are somewhat firmer in suggesting that that the Court may refuse relief on grounds of acquiescence even where a claim is brought within a period prescribed by the Limitations of Actions Act.[375]

472 Out of abundant caution I have decided to record my finding that, assuming acquiescence to be available in defence of a claim of breach of the fair-dealing rule in this case, it has not been made out on the facts. The reasons for this conclusion appear later in these reasons, in relation to undue influence and unconscionability. In brief compass, I was not satisfied that anything any of the plaintiffs did following their execution of the assignment deed amounted to acquiescence (as opposed to laches).

E.3 Was the execution of the deed procured by undue influence?

473 The equitable doctrine of undue influence was authoritatively considered by the High Court in Thorne v Kennedy.[376] The doctrine focuses on whether a person who entered a relevant transaction did so without free will[377] and on the quality of the consent or assent of the weaker party.[378] The plurality noted that one source of influence might be excessive pressure, and in such a case it is not necessary that the pressure which contributes to a conclusion of undue influence be characterised as illegitimate or improper.[379] This suggests that a conclusion of undue influence is a characterisation of the effect of influence on the mind of the weaker party, irrespective of the motives of the person who exerted the influence.

474 The doctrine recognises that certain relationships give rise to a presumption that a person entering into a disadvantageous transaction at the instigation of a person in a dominant position over them will have done so under the undue influence of the dominant person in the relationship.[380]

475 One such category is the relationship of trustee and beneficiary, and another is child and parent. The plaintiffs submitted that each of Zilla, Bill and Rick were trustees of each of the plaintiffs' interests in Eric Snr's estate when the plaintiffs executed the deed.[381] The plaintiffs also relied on Zilla's position as parent of each of the plaintiffs.

476 The relationship between parent and child is one of presumed influence, but only for so long as the child is yet to be 'emancipated' from the control of their parent. When emancipation occurs is not fixed but is to be determined by reference to the ongoing nature of the relationship between parent and child.[382] Here, Josephine and Simon were both minors at the time they executed the deed and were clearly subject to the presumption of undue influence exercisable by Zilla when they entered into the assignment deed. Each of Jane, Mary and Desmond was above 18 years of age. However, the plaintiffs submitted that they were not emancipated from the control of their mother, including as evidenced by the fact that they each signed the deed without understanding it because their mother wanted them to.[383]

477 Where a presumption applies, it is rebuttable by the defendants, who must prove that the transaction was, in its particular circumstances, nevertheless the result of the plaintiffs' free will.[384]

478 Further and in any event, the plaintiffs submitted that Mary executed the deed as a result of the actual undue influence of Bill.[385] They relied on Mary's evidence that she looked up to Bill, and signed the deed upon him asking her to, despite not properly understanding what it meant.[386]

479 The plaintiffs seek to have the assignment to RLF set aside. RLF itself did not exert influence - they claimed that this was done by Zilla and Bill. However, where a third person benefiting from the transaction (RLF) had either actual or constructive notice that the transaction was obtained through undue influence, such a transaction may be set aside as against the third person.[387]

480 In summary, the plaintiffs rely chiefly on the following circumstances of the case to establish their claim of undue influence to set aside their assignment to RLF:

(a) their claim that their execution of the assignment deed was procured by Zilla and Bill;[388]

(b) the presumption of undue influence arising from the relationship of trustee and beneficiary in relation to each of Zilla, Bill and Rick;[389]

(c) the presumption of undue influence arising from the relationship of parent and child as between Zilla and each of the plaintiffs;[390]

(d) further and in the alternative, Mary and Desmond were subject to actual undue influence exerted by Bill.[391]

482 I refer to the findings I have already made about the extent of involvement of each of Zilla, Bill and Rick in bringing about the transaction reflected in the assignment deed.

483 For the purposes of applying the principles of undue influence, it is necessary to focus on whether the will of each of the plaintiffs was relevantly presumed to be, or actually is, overborne by undue influence. Each of the plaintiffs gave evidence that they only learned of the transaction at the time the assignment deed was presented to them in the presence of Zilla or by Zilla on about 20 November 1984. This narrows the inquiry chiefly to the occasion each of them executed the assignment deed, because any influence on them can only have come to bear on that occasion.

484 Further, except for Mary and Desmond, as regards the other plaintiffs only undue influence by Zilla is claimed.[392]

485 I have found that Zilla procured the execution of the assignment deed by each of the plaintiffs. I have found that Bill also procured the execution of the assignment deed by Mary and Desmond.

486 The defendants submitted that the broader context may be relevant. They submitted that, in addition to the question of whether the plaintiffs were presumed to be, or were actually, under the influence of Zilla, it is also necessary to consider whether the influence in question had the necessary characteristics to be 'undue'. As indicated by cases such as Watkins v Combes [1922] HCA 3; (1922) 30 CLR 180, 193-4 (Isaacs J) and Harris v Jenkins [1922] HCA 54; (1922) 31 CLR 341, 367-8 (Starke J), the defendants submitted that this may involve a broader inquiry as to whether the transaction as a whole was itself unconscionable.

487 The plaintiffs submitted that these authorities should be treated with caution because they pre-dated Johnson v Buttress,[393] which they described as the wellspring of the jurisprudence recognised in Thorne v Kennedy. I agree with the plaintiffs to this extent: the modern formulation of the doctrine does not posit any inquiry into the motives of the influencer, and focuses on the quality of the volition of the weaker party. If the weaker party's will was overborne, the influence was 'undue' irrespective of the morality of the motives of the influencer.

E.3(a) Was there a presumed or actual relationship of undue influence between the plaintiffs and Zilla, Bill and/or Rick?

488 I am satisfied that a rebuttable presumption of undue influence arises from the status of each of Zilla and Bill as trustees of the testamentary trust created by Eric Snr's will, and the position of each of the plaintiffs as reversionary beneficiaries.

489 Each of Zilla and Bill was in a position to exercise undue influence over each of the plaintiffs by reason of that relationship, and it therefore falls on the defendants to rebut the presumption that the plaintiffs entered into the assignment deed as a result of that presumed undue influence.

490 In addition, I am satisfied that a rebuttable presumption arises that Zilla was likewise in such a position by virtue of being the parent on whom each of Mary, Josephine, Desmond and Simon remained dependent to varying degrees. Jane, being recently self-employed and living independently, was emancipated from her dependency on Zilla at the time, so a presumption based on the parent-child relationship does not arise between them. All the other plaintiffs remained dependent upon Zilla and subject to the presumption.

E.3(b) Has any presumption of undue influence been rebutted?

491 The defendants failed to rebut either of these presumptions. With the exception of Jane, each of the plaintiffs signed the assignment deed at the direction of Zilla or Bill without hesitation. Even Jane, in spite of her curiosity about the meaning of the document, signed it in compliance with Zilla's direction without reaching a proper understanding of it. Far from the presumption being rebutted by the defendants, these circumstances satisfy me that even in the absence of a presumption, I would find that Zilla exercised undue influence over each of the plaintiffs. Even in the absence of the presumption, the evidence satisfied me that each of the plaintiffs trusted Zilla and were prepared to sign the assignment deed on the strength of her direction that they do so, without seeking to ensure that it promoted their interests.

492 Mary and Desmond likewise trusted Bill and did what he directed. I am satisfied that a relationship of influence existed between Mary and Bill, such that Bill was in a position to exercise undue influence over her, and he did so by requesting that she too sign the assignment deed. Desmond signed the assignment deed in the presence of both Zilla and Bill. It was Bill who requested him to sign it. The presence of Zilla implies that she also was directing or requesting that he do so. The plaintiffs did not include a submission in their written closing submissions that Bill exercised undue influence over Desmond, but in oral submissions they corrected this. I am satisfied that undue influence was exerted by Zilla. I also find that Desmond was subjected to undue influence by Bill.

E.3(c) What was the effect of any undue influence on RLF / the assignment to RLF?

493 Can the undue influence exercised by Zilla and Bill be imputed to RLF, and can the assignment deed in favour of RLF be set aside by reason of that undue influence? I think it can.

494 In Princess Theatre Pty Ltd & Ors v Ansvar Insurance Limited [2024] VSC 363, M Osborne J recently summarised the principles regarding attribution of state of mind to a company (citations omitted):

[220] For the purposes of deriving the state of mind of an entity, it is necessary to identify an individual who may be regarded as the directing mind and will of a company such that the state of knowledge of that individual may be imputed to the company. In an oft quoted passage, Lord Reid in Tesco Supermarkets Ltd v Nattrass said as to the state of mind of a company:

I must start by considering the nature of the personality which by a fiction of the law attributes to a corporation. A living person has a mind which can have knowledge or intention or be negligent and he has hands to carry out his intentions. A corporation has none of these: it must act through living persons, though not always one or the same person. Then the person who acts is not speaking or acting for the company. He is acting as the company and his mind which directs his acts is the mind of the company. There is no question of the company being vicariously liable. He is not acting as a servant, representative, agent or delegate. He is an embodiment of the company or, one could say, he hears and speaks through the persona of the company, within his appropriate sphere, and his mind is the mind of the company. If it is a guilty mind then that guilt is the guilt of the company. It must be a question of law whether, once the facts have been ascertained, a person in doing particular things is to be regarded as the company or merely as the company's servant or agent. In that case any liability of the company can only be a statutory or vicarious liability.

[221] In Beach Petroleum NL v Johnson, von Doussa J said:

These authorities indicate that if a company is to be imputed with the conduct and knowledge of a director, the director must be acting within the scope of his or her authority, that is, within the scope of his or her actual or apparent authority. The scope of the authority of a director may vary widely from company to company and according to the circumstances of the case. In many instances, a director might not be formally appointed by resolution of the board to act on the company's behalf for a particular purpose, but may assume that role without dissent from those who customarily run the company, perhaps even assuming a role of managing director...

495 In the circumstances of this case, the above criteria were amply met. Zilla and Bill were two of the three directors of RLF at the time. The third director, Rick, left it to Zilla to ensure execution of the assignment deed. The principal task of ensuring the plaintiffs executed the assignment deed was left to Zilla, essentially meaning that she became RLF's guiding mind on the occasion of each plaintiff executing the assignment deed. To the extent that Bill was involved in fulfilling this function, he too became a guiding mind of RLF for that purpose.

496 The defendants submitted that I could not be satisfied that the undue influence in question was 'undue'. I take that word to refer to the nature of the effect on the weaker party's free will, not the motivations of the influencer. However, in case that is incorrect, I should address the defendants' submission. They relied on Starke J's judgment in Harris v Jenkins.[394] In that case, a relationship of undue influence was alleged between a brother and a sister where the brother procured the sister's agreement to the alteration of distributions under the father's will. Starke J found on the facts that the agreements were brought about by the desire to observe their dead father's express wishes and not by any abuse on the part of the brother. Starke J accepted that the brother was in a position to exercise undue influence over his sisters, but in circumstances where he found that all the members of the family were intending to bring about an outcome they believed had been intended by the testator, no undue influence was exerted.[395]

497 The defendants' reliance on Harris v Jenkins was misplaced. It is clearly distinguishable, because the purpose of bringing distributions of property into line with a testator's wishes was not by any means shared by all the relevant members of the Fay family. The present plaintiffs had no such purpose. In light of the evidence revealed at the trial, I accept that Eric Snr expressed wishes inconsistent with his will to each of Bill, Rick and Luke. But there is no evidence that he said anything of the kind to the plaintiffs and no suggestion that they were motivated by any such wishes in entering into the assignment deed.

498 For all these reasons, I find that the claim to set aside the assignment deed as the result of undue influence is made out, subject to any defences.

E.4 Was the execution of the assignment deed procured through unconscionable conduct?

499 Unconscionable conduct involves 'a relationship that places one party at a "special disadvantage" vis-à-vis the other; knowledge of that special disadvantage by the stronger party; and unconscientious exploitation by the stronger party of the weaker party's disadvantage'.[396]

500 Relevant indicia of special disadvantage include age and 'lack of assistance or explanation where assistance or explanation is necessary'.[397]

501 Emphasis should be put on whether 'the disabling condition or circumstance is one which seriously affects the ability of the innocent party to make a judgment as to his [or her] own best interests, when the other party knows or ought to know of the existence of that condition or circumstance and of its effect on the innocent party.'[398]

502 I refer to the findings I have already made to the effect that each of Zilla, Bill and Rick brought about the transaction represented by the assignment deed. In the context of applying the principles of unconscionability, it is appropriate to take a broad view of their involvement, not limited to the occasion on which each plaintiff executed the assignment deed. That is because the focus of the doctrine of unconscionability is on the conscience of the defendants, and it is therefore necessary to consider their conduct and motives, and not merely the plaintiffs' position of special disadvantage.

503 The success of the claim depends on the sub-issues considered under the next three headings.

E.4(a) Were any of the plaintiffs under a special disadvantage in relation to the assignment deed?

504 For the same reasons given in support of my conclusion that the fair-dealing rule was engaged, I am satisfied that each of the plaintiffs was in a position of special disadvantage vis-a-vis Zilla, Bill and Rick with respect to the assignment deed.

505 In summary, that is because Zilla, Bill and Rick were trustees of the relevant interests, they were close relatives who had immeasurably more experience than the plaintiffs, the plaintiffs were given no real opportunity to understand their rights under the will of Eric Snr or the proposed transaction, and such information as they might have gleaned from the assignment deed was affected by the undervaluation of the Carranballac land and the fact that the consideration of $100,000 referred to in the deed was payable over ten years without interest. The trustees, on the other hand, had worked on the transaction for months, understood all its elements, knew that the valuation of the Carranballac land was a significant undervalue compared with recent sales in the district, and were motivated and duty-bound to act in the best interests of the assignee, RLF.

E.4(b) Did Zilla, Bill and/or Rick unconscientiously take advantage of that special disadvantage?

506 I am satisfied that each of Zilla, Bill and Rick unconscientiously took advantage of the plaintiffs in bringing about the transaction represented by the assignment deed. Bill and Rick knew that the plaintiffs were inexperienced and had no real chance of understanding the deed without independent advice, and I infer that Zilla knew this too. They did not ensure the provision of any such advice. As regards Bill and Rick only (and without making any such finding about Zilla), they knew that the valuation of the Carranballac land in the deed was a significant undervalue compared with recent sales in the district. Also the assignment to RLF promoted their personal interests, as they were the owners of 42% of the shares in RLF.

507 For all these reasons, Bill and Rick unconscientiously took advantage of the plaintiffs.

508 The conduct of Bill and Rick suffices for the plaintiffs' claim to succeed. It is therefore perhaps unnecessary for me to reach a concluded finding on whether Zilla, too, engaged in unconscionable conduct. Without Zilla being available as a witness in the case, any findings about her actual motivations must be reached by inference. It is unclear whether she stood to gain personally from the assignment and I make no finding to that effect. Can any motivation inferable on her part be described as unconscientious? I think it was. I am satisfied that her failure to obtain independent advice for the plaintiffs and (when witnessing their signatures) her failure to give them any adequate explanation of it herself, was sufficient for me to infer unconscientious conduct taking advantage of the plaintiffs. On that basis, I find that Zilla, too, engaged in unconscionable conduct. Of course, I accept that had Zilla been available to give evidence, she might have been able to persuade the Court of a different outcome on this issue.

509 The defendants again relied on the broader context and the notion that Zilla, Bill and Rick were motivated to do what was fair for the family, and their purposes were therefore not predatory. In all the circumstances of this case, the fact that Zilla, Bill and Rick thought they were acting for the good of the family as a whole does not absolve them. For the reasons already stated, their conduct was unconscientious so as to come within the scope of the doctrine.

E.4(c) What was the effect of any unconscionability on RLF / the assignment to RLF?

510 I repeat my reasoning in relation to the effect of Zilla, Bill and Rick's knowledge and state of mind on the company of which they were directors, RLF, set out in paragraphs 493-495 above. I am satisfied that their unconscionable conduct may be imputed to RLF with the result that the assignment in RLF's favour is to be set aside.

511 I am satisfied that this is the case even if I had made no finding that Zilla engaged in unconscionable conduct. Bill and Rick were two of the three directors of RLF at the time and were far more significant shareholders than Zilla was. The instrumental role of a majority of the directors in bringing the transaction about for unconscionable purposes is sufficient, in my view, for RLF to be imputed with their conduct.

512 For all these reasons, I am satisfied that the assignment deed is liable to be set aside as the product of unconscionable conduct, subject to any defences.

E.5 Have the defendants established a defence of laches or acquiescence?

513 The parties were in agreement that laches and acquiescence were available as defences to claims of undue influence and unconscionability.

514 The parties' common ground on that issue appears to have been based on their common view that no limitation period was prescribed in relation to the plaintiffs' claims of undue influence and unconscionability. The parties submitted that the Limitation Act does not apply to the undue influence and unconscionability claims, as (unlike the breach of fair-dealing claim) they were not claims in respect of breach of trust, and no other provision was identified that prescribed a limitation period.

515 In certain circumstances, statutory limitation periods may apply to equitable claims through the doctrine of analogy.[399] This doctrine operates where the claim made in equity is analogous to a claim which is expressly provided for in the limitation statute, and where the equitable remedy has some relation or similarity to the legal remedy.[400] For example, s 5(8) of the Limitation Act preserves the doctrine of analogy with respect to contractual and tortious claims. However, no submission was made in this case that the Limitation Act applies by analogy to the equitable claims in this proceeding, and I will not consider any further whether the doctrine of analogy could apply here.

516 The parties were in agreement that the absence of any prescribed limitation period leaves the claims based on unconscionability and undue influence subject to the potential application of the principles developed in equity to address cases of delay in bringing claims. These principles are encapsulated by the doctrines of laches and acquiescence. The defendants relied on both.

517 The term 'laches' has historically been used to convey different concepts. First, 'laches' has been used to refer to mere delay, regardless of whether any prejudice has resulted. Second, 'laches' has been used to refer to the equitable doctrine of laches, whereby unreasonable delay on behalf of claimants resulted in sufficient prejudice so as to render it inequitable to grant the relief sought by the claimants. Third, 'laches' has been used to refer to the equitable doctrine of acquiescence. References to 'laches' in this judgment are references to the second definition, being the equitable doctrine of laches.

518 As explained by Deane J in Orr v Ford, the term 'acquiescence' has also been subject to much uncertainty:[401]

There has, over the years, been considerable criticism of the loose use of the word 'acquiescence' as a broad conjunctive or disjunctive companion to 'laches'. Such criticism has obvious force in that, so used, the word has a chameleon-like quality which adds little besides confusion to an already vague area of equity doctrine. Strictly used, acquiescence indicates the contemporaneous and informed ('knowing') acceptance or standing by which is treated by equity as 'assent' (i.e. consent) to what would otherwise be an infringement of rights. The word is commonly also used to refer: (i) to a representation by silence of a type which may found an estoppel by conduct; or (ii) to acceptance of a past wrongful act in circumstances which give rise to an active waiver of rights or a release of liability; or (iii) to an election to abandon or not enforce rights. A plaintiff may, however, lose his right to relief by an 'inferior species of acquiescence' which does not amount to assent, waiver or election or give rise to an estoppel. In these cases, acquiescence may be used in at least one of three ways. First, it is sometimes used as an indefinite overlapping component of a catchall phrase also incorporating 'laches' or 'gross laches' and/or 'delay'. While such phrases may provide a convenient means of referring to a general area of equity, they tend to obscure principle rather than to assist in its identification. Secondly, acquiescence is used as a true alternative to 'laches' to divide the field between inaction in the face of 'the assertion of adverse rights' ('acquiescence') and inaction 'in prosecuting rights' ('laches'). Upon analysis, that use of the word 'acquiescence' is not helpful since laches ('an old French word for slacknesse or negligence or not doing') comprehends silence or inaction in the face of an unwarranted assertion of adverse rights by another as well as inaction or delay in prosecuting one's own rights. Thirdly, and more commonly, acquiescence is used, in a context where laches is used to indicate either mere delay or delay with knowledge, to refer to conduct by a person, with knowledge of the acts of another person, which encourages that other person reasonably to believe that his acts are accepted (if past) or not opposed (if contemporaneous).

519 Laches and acquiescence are therefore separate doctrines.

520 Deane J in Orr v Ford[402] stated that the ultimate test for laches remains set out by Lord Selbourne in Lindsay Petroleum Co v Hurd:[403]

Now the doctrine of laches in Courts of Equity is not an arbitrary or a technical doctrine. Where it would be practically unjust to give a remedy, either because the party has, by his conduct, done that which might fairly be regarded as equivalent to a waiver of it, or where by his conduct and neglect he has, though perhaps not waiving that remedy, yet put the other party in a situation in which it would not be reasonable to place him if the remedy were afterwards to be asserted, in either of these cases, lapse of time and delay are most material. But in every case, if an argument against relief, which otherwise would be just, is founded upon mere delay, that delay of course not amounting to a bar by any statute of limitations, the validity of that defence must be tried upon principles substantially equitable. Two circumstances, always important in such cases, are, the length of the delay and the nature of the acts done during the interval, which might affect either party and cause a balance of justice or injustice in taking the one course or the other, so far as relates to the remedy.

521 To determine whether the defence of laches is met, I must consider whether there was unreasonable delay by the plaintiffs resulting in such prejudice to the defendants that, on balance, it would be inequitable to grant the relief sought by the plaintiffs.[404] I must also have regard to the principles of equity from which the defence of laches originates.[405]

522 This involves at least the following three factors: knowledge of the wrong, delay, and unconscionable prejudice caused to the opponent by the delay.[406]

523 As to knowledge of the wrong, the defendants submit that the plaintiffs had knowledge of the existence of the deed from the date they executed it in 1984, and that as adults, each of the plaintiffs were aware of the deed's function, or had enough knowledge to ask questions.[407] This is unpersuasive and I reject it. As I have already said, the plaintiffs were commercially inexperienced, young, completely unassisted, and had insufficient time to comprehend the deed properly. The suggestion that they should be taken to have retained a sufficient knowledge of the deed to give rise to laches, based merely on the brief occasion on which they were asked to sign it, is fanciful and I reject it.

524 The plaintiffs submitted that the evidence of Jane, Mary and Josephine was that they did not understand the deed when they signed it and did not see it again until Zilla's death.[408] Josephine and Jane said they also did not see Eric Snr's will until after Zilla died.[409] Mary gave the same evidence, that she only saw it when BJT provided her a copy after Zilla's death.[410]

525 Jane's evidence involved two points: first, that she read the deed but didn't understand it because she had no prior knowledge of the contents of the document.[411] Jane's second point, clarified later in cross-examination, was that she became aware that she would be paid money under the deed not because of what she read in the document, but because of what Zilla told her verbally.[412]

526 I am not satisfied that Jane had sufficient knowledge or understanding of the transaction represented by the assignment deed to trigger the doctrine of laches, at any time before Zilla's death (after which, she received a copy of the assignment deed).

527 Likewise, her acceptance of $2,000 in 1985 does not amount to acquiescence, because she had only the vaguest notion, and an insufficient understanding, of what she was giving away. Neither of the defences is made out against Jane.

528 Mary's evidence was that she read the deed but 'glazed over most of it' because it was very technical.[413] She said that at the time she did not know whether the land contemplated in the deed was limited to the home block, or perhaps only the house and the few acres of land around that house, and she did not understand that it included the farming land or the parcel of land across the Beaufort-Carranballac Road.[414] Nevertheless, Mary formed a reasonably good understanding of the gist of the transaction: she was to receive $20,000 within ten years in return for her rights following Zilla's life interest under Eric Snr's will, $2,000 of which would be paid up front.

529 Importantly, however, Mary's evidence makes it clear that she did not form an accurate understanding of what the assignment deed required her to sell. In particular, she formed a materially inaccurate understanding of the extent of the land involved. She thought it was the Ripon Lea house, not the surrounding farm land and land across the Beaufort-Carranballac Road.[415] Under cross-examination on this topic, she said:[416]

I was not aware until we started this proceeding, finding out volumes of land and what volumes meant, that I was drawn to the fact that it was two parcels of land, ... I wasn't aware of that reading the deed. And ... I didn't understand the term 'life interest'. Life interest for me, at that time, educated guess, was that my mum had a house to live in for the rest of her life. But I wasn't aware at that time that she also had this land that she could've done anything she liked with.

530 For this reason, I am not persuaded that she had an adequate understanding of the wrong to trigger the doctrine of laches at any time until after she received the assignment deed in 2017. Likewise, her acceptance of $2,000 does not constitute acquiescence. Neither of these defences has been established against her.

531 Josephine didn't read the document at all when she signed it.[417] Neither laches nor acquiescence is made out against her.

532 As to Simon, on 23 August 1996 his lawyers wrote to BJT requesting a copy of Eric Snr's will and RLF financial statements, but did not make any mention of the assignment deed.[418]

533 Three years later, on 20 August 1999, Simon's solicitors sent another letter requesting information, this time from Bird Cameron.[419] It referred to conversations with Bill Fay in which a request by Simon for specific information was also refused. Intriguingly it also refers to the assignment deed by its date but it does not indicate that the deed was in the possession of Simon at the time, or how he or his lawyers came about knowing of the assignment deed or its date.

534 On 6 September 1999, Simon's lawyers sought information from BJT about whether Simon's interest in the estate had been validly transferred to RLF through the assignment deed (despite Simon being a minor when he signed it).[420] This letter again implies that Simon had some knowledge of the deed by September 1999, although it does not prove that he had a copy of it. Simon's oral evidence was that he didn't get information 'about' the deed until close to 2000.[421]

535 There is a gap in the evidence at this point. Desmond and Simon's statement of claim in their 2002 Federal Court pleading referred to a letter from BJT to them dated 16 August 1999. This letter was not tendered. This might or might not have included a copy of the deed. Whether or not this letter might have shown that the deed was provided to Simon in 1999 does not ultimately affect my conclusions.

536 The plaintiffs accept that Desmond and Simon were 'likely to have become aware' of the assignment deed in the context of the Federal Court proceedings sometime around 2000 to 2002.[422] I am satisfied that, by late 2001, Desmond and Simon's knowledge of the assignment deed was greater than a mere state of general awareness. I find that by late 2001 Desmond and Simon - through their lawyers and/or directly - had possession of a copy of the assignment deed, that they had full knowledge of its contents, and that they had a reasonable understanding of both the entitlements they had under Eric Snr's will and the purported effect of the assignment deed on those entitlements. I infer this from the fact that by late 2001 their lawyers had prepared a draft statement of claim in their names for use in a proposed Supreme Court proceeding that Desmond and Simon were considering commencing again Zilla, Bill, Rick, Mark and Luke.

537 The draft statement of claim bore the date August 2001 and was prepared by Foster Hart Lawyers.[423] It named RLF, Simon and Desmond as plaintiffs. It contained significant extracts from the assignment deed, making it clear beyond doubt that those representing Simon and Desmond had a copy of the deed as they prepared the draft statement of claim in 2001. How and when they came into possession of it remains a mystery, but I do not need to resolve this issue, because it leads me to find that Desmond and Simon were equipped with all the information they needed by late 2001 to make an informed decision about impugning the assignment deed. Perhaps they, or at least Simon, had that information a year or two earlier, but this is immaterial.

538 Desmond's evidence was that prior to signing the deed he did not read it or see a copy of it, and neither, after signing it, was he given a copy of it or did he discuss the deed with anyone.[424] Desmond's evidence was that he had no knowledge at all about the real estate, personal estate or liabilities noted in the deed when he signed it.[425] Desmond said he did not receive a copy of the assignment deed in 1996[426] and that after signing the deed the next time he saw a copy was 'prior to' these proceedings.[427] Desmond was the third named applicant on the application in the Federal Court proceedings dated 29 November 2002.[428] I am satisfied that Desmond saw and had full knowledge of the deed by late 2001, along with access to the assistance of lawyers on all related issues, before the commencement of the Federal Court proceeding, and substantially prior to the commencement of this proceeding.

539 Simon and Desmond's knowledge of the assignment deed by the period 2000-2001 triggered the doctrine of laches. Their delay from that point exposes them to the doctrine.

540 As to delay more generally, it is uncontroversial that there was a period of around 35 years between the signing of the assignment deed and the commencement of this proceeding. What matters, however, is delay after the plaintiff has acquired knowledge of the wrong.

541 The plaintiffs submitted that delay must be measured having regard to the nature of the plaintiffs' claim, and that the plaintiffs cannot be criticised for waiting for the interest to vest in their possession in 2017 before commencing proceedings, citing the principle in Armitage v Nurse that a beneficiary should not 'be compelled to litigate ... in respect of an injury to an interest which he may never live to enjoy.'[429]

542 I reject this submission. In my view, Desmond and Simon knew everything they needed to know to make an informed decision about whether to seek to impugn the assignment deed by late 2001. Their delay from that time cannot be explained away by reference to the purpose of the proviso to s 21(2) of the Limitation Act, as identified in Armitage v Nurse. That purpose, underlying s 21(2) as it does, results in a construction of that provision that is advantageous to the plaintiffs on the question of whether they are statute-barred from prosecuting their claim of breach of the fair-dealing rule, but that is where its relevance ends. It does not govern the approach to laches.

543 As to prejudice, the plaintiffs submitted that there is no unconscionable prejudice to the defendants as there are uncontroversial facts sufficient for the plaintiffs to succeed on each of their claims, which would not have been affected by the testimony of any absent witness.[430] The defendants, on the other hand, submitted that evidence that could have been relied on to meet the plaintiffs' claim has been lost over the course of time, particularly noting their inability to call Zilla as a witness.[431]

544 I accept the defendants' submissions on this point. The delay of Desmond and Simon has unconscionably prejudiced the defendants with regard to the claims of undue influence and unconscionable conduct made on behalf of Desmond and Simon.

545 My present findings on the undue influence and unconscionability claims are on the basis of the evidence that was made available to the Court and relied upon by the parties. Though I have been persuaded on the balance of probabilities that both undue influence and unconscionability were established on the basis of this evidence, there is an open possibility that Zilla, if she were alive, may have given evidence material enough to change these findings. This means that the defendants have been materially prejudiced by Simon and Desmond's delay with respect to those claims on their behalf.

546 With respect to undue influence, I found that Zilla exercised undue influence over each of the plaintiffs in procuring the execution of the assignment deed, including Desmond and Simon. Her evidence, if she had been available to give it, would have been highly relevant to this finding, and my conclusion with respect to Simon turned solely on Zilla's role.

547 With respect to unconscionability, though I was satisfied that not only Zilla but also Bill and Rick engaged in unconscionable conduct toward both Simon and Desmond, I find that Zilla's evidence, if she had been available to give it, would have been material to the finding of unconscionability as well.

548 It is not only the death of relevant witnesses such as Zilla and Murray Byrne that matters: deterioration of the witnesses' recollection of the relevant events over the passage of time itself constitutes a form of prejudice relevant to the effect of Simon and Desmond's delay. Bill and Rick's recollections of the relevant events were not particularly clear. I have preferred the plaintiffs' evidence over their evidence in a number of instances. It is possible that evidence given by Zilla and/or Murray Byrne of the events surrounding the unconscionable conduct could have been material to my determination of the unconscionability claim.

549 I therefore find that there was sufficient prejudice to the defendants as a result of Desmond and Simon's decision to commence the proceeding after Zilla's death to give rise to laches.

551 I acknowledge that the doctrine of acquiescence may overlap on the facts with the doctrine of laches. Is this such a case? I do not think so.

552 In Byrnes v Kendle, French CJ relevantly stated that the defence of acquiescence can be used in a case where a 'person being aware of a violation of his or her rights which has occurred fails to take timely proceedings to obtain equitable relief.'[432] Gummow and Hayne JJ similarly stated that the defence of acquiescence 'is best understood as requiring calculated (that is, deliberate and informed) inaction by [the plaintiff] or standing by, which encouraged [the defendant] reasonably to believe that his omissions were accepted or not opposed by [the plaintiff].'[433]

553 I have already concluded that I am not satisfied that Jane, Mary and Josephine had sufficient knowledge of the wrong before late 2017. In particular, and for this reason, I do not consider that Jane's and Mary's acceptance of $2,000 each in 1985 constituted or is evidence of acquiescence. Nor was their failure to commence a proceeding of the present kind at any time before they acquired knowledge of the wrong in late 2017. As to the two years of delay between then and the commencement of this proceeding, they were actively involved in the dispute. In all the circumstances of the case, I am satisfied that they did not acquiesce in the assignment deed.

554 The position of Desmond and Simon on the question of acquiescence is more difficult. Were it not for cl 3.2 of the settlement deed, they would be at real risk of a finding that - by delaying their commencement of a proceeding like this one for some 17 years after settlement of the Federal Court proceeding - they are guilty of acquiescence in the assignment deed. The certainly had all the knowledge they required of the wrong by the end of the Federal Court proceeding. However, on balance, I am not satisfied that their delay between 2002 and 2019 should be characterised as giving rise to acquiescence. This is because they had effectively foreshadowed the potential that they would make a claim about Eric Snr's will in cl 3.2 of the settlement deed. The defendants cannot reasonably have assumed that Simon and Desmond's delay from 2002 betokened acceptance of the assignment deed.

555 None of the defences of acquiescence have been established.

556 However, I am satisfied that Desmond and Simon are guilty of laches that precludes them from securing relief based on their undue influence and unconscionability claims.

E.6 Did Simon and Josephine's minority affect whether the assignment deed was binding on them?

557 The plaintiffs pleaded that the assignment deed is void against Josephine and Simon, as they had not attained the age of majority when they executed the assignment deed in 1984, and had not since ratified the assignment deed.[434] The plaintiffs relied on the 1749 case of Hearle v Greenbank[435] and on s 50 of the Supreme Court Act 1986 in support of their submission that the assignment deed was not binding on Josephine and Simon as a matter of law.[436]

558 The defendants pleaded that neither Simon nor Josephine repudiated the assignment deed before the lapse of a reasonable time after reaching the age of majority, and accordingly the deed is binding between each of them and the third defendant.[437] The defendants relied on Edwards v Carter [1893] UKLawRpAC 21; [1893] AC 360, which I address in more detail below. They submitted that, on the authority of that case, Josephine and Simon were required to repudiate the assignment deed within a reasonable time of attaining their majority, and they had not done so. Further or in the alternative, if ratification was required before the defendants could rely on the assignment deed against Josephine and Simon, the first and second defendants submitted that their silence, and (further) their acceptance of benefits under the deed, constituted ratification.[438]

559 The plaintiffs alternatively submitted that, if they were required to repudiate the assignment deed within a reasonable time of attaining their majority, Simon and Josephine repudiated the assignment deed by commencing the proceeding, which they did in reasonable time, provided this was to be assessed by reference to the time their interest vested in possession.[439]

560 This appears to be an area that has not been closely or recently scrutinised in the caselaw. Although a relatively old case, it seems that Edwards v Carter is the most authoritative case on point, and it favours the defendants.

561 In Edwards v Carter, the House of Lords considered whether a person could repudiate a settlement deed he had signed as a minor. The background facts were as follows. By a marriage settlement the father of the intended husband (then a minor) covenanted with the trustees to pay them an annuity during the life of the intended wife or of any child or grandchild of the marriage, and the trustees were to pay the annuity to the husband during his life or until his bankruptcy, and after determination of his interest for the benefit of the wife and the issue of the marriage. The settlement contained an agreement by the husband to vest in the trustees upon certain trusts all property to which he should become entitled under the will of his father. The husband came of age about a month after he had executed the settlement. The father died nearly four years later, leaving property by will to his son. More than a year after his father's death the husband repudiated the settlement. The House of Lords, affirming the decision of the Court of Appeal ([1892] 2 Ch. 278), held:[440]

that the settlement was as regards the husband voidable, not void; that if he chose to repudiate it he must do so within a reasonable time after he came of age; that he must be treated as knowing the contents of the deed whether he knew them or not; and that his repudiation not being made within a reasonable time, he was bound by the settlement.

562 However, their Lordships noted that the key issue was not disputed before them:[441]

... it is not disputed that this contract executed and entered into by Martin Albert Silber was not absolutely void, but was voidable only, that is to say, that after he came of age it was as binding as if he had been of age at the time when he executed it, subject only to this, that the law enabled him to avoid his obligations provided he did so within a reasonable time.

563 The defendants submitted that, applying the analysis required by Edwards v Carter, Josephine and Simon were required to repudiate the assignment deed some reasonable time after they each turned 18, and doing so by commencing this proceeding by 2019, and after the death of Zilla, was far too late.

564 The relevance of the plaintiffs' reliance on s 50 of the Supreme Court Act 1986 is not clear to me. Section 50 is entitled 'No proceeding to be brought on ratification of minor's contract'. It provides:

(1) No proceeding can be brought to charge a person -

(a) on a promise made after full age to pay a debt contracted during minority; or

(b) on a ratification made after full age of a promise or contract made during minority.

(2) This section applies whether or not there was any new consideration for the promise or ratification.

565 This provision would have precluded any claim being brought against Josephine or Simon based on the assignment deed, or on any ratification by them of it after they attained 18 years of age. Perhaps it might be contended that an implication arises from this provision to the effect that, even though the defendants are making no claim against Josephine and Simon, they may not be permitted to rely on the assignment deed in answer to claims brought by Josephine and Simon either. If an argument of this was intended by the plaintiffs, it was not developed.

566 As I have reached conclusions that the assignment deed is to be set aside on grounds of breach of the fair-dealing rule as regards all of the plaintiffs, and on grounds of undue influence and unconscionability against Jane, Mary and Josephine, it is strictly unnecessary for me to reach a conclusion on this aspect of the plaintiffs' claim.

567 However, it may be of utility to express my views, especially as regards Simon, whom I have found to be guilty of laches (along with Desmond), and therefore to have been unsuccessful in his undue influence and unconscionability claims.

568 There was considerable force in the defendants' submissions that repudiation within a reasonable time was required, or else Simon and Josephine would lose any right to avoid the assignment deed on grounds that they were minors when they executed it. On the basis of the submissions and caselaw identified by the parties in this case, I am not satisfied that the question was one of ratification being required before the assignment deed became valid. The better view is that the assignment deed was not void, but voidable at the election of Josephine and Simon, provided they repudiated it within a reasonable time of attaining their majority.

569 In assessing whether repudiation occurred without unreasonable delay, contrary to the plaintiffs' submissions, in my view the deemed accrual of their rights to complain of breach of the fair-dealing rule under s 21(2) of the Limitation Act is of no relevance. Section 21(2) did not apply to Josephine's and Simon's claim to rescind the assignment deed on grounds of their minority when they executed it.

570 The assessment of the reasonableness of their delay is a factual inquiry specific to each plaintiff, and dependent on matters such as the time they acquired sufficient knowledge of the transaction to make an informed decision whether to repudiate it.

571 Simon is in a much weaker position than Josephine on this issue.

572 Simon clearly had all material knowledge of the wrong constituted by the trustees' procurement of his execution of the assignment deed by 2001, when the draft statement of claim for a proposed Supreme Court proceeding was prepared in his name, incorporating proposed allegations concerning the assignment deed and reproducing its text in detail. The subsequent Federal Court proceeding was settled in 2002, on the basis that he (and Desmond) remained free to bring claims concerning the estate of Eric Snr. From that point, his delay counts against him. His delay in commencing this proceeding for 18 years from that point was, in my view, clearly unreasonable. For essentially the same reasons as I have found him to be guilty of laches, I also find that he lost his ability to repudiate the assignment deed on the ground of his minority at the time he executed it by unreasonable delay.

573 I do not make any such finding concerning Josephine. For essentially the same reason that I have not found her guilty of laches, I am unsatisfied that her repudiation of the assignment deed by commencing this proceeding in 2019 was unreasonably late. That is because I am unable to make any finding that she acquired her knowledge of the essential elements of the case, including the key features of the assignment deed, at any time before she received a copy of the assignment deed in late 2017.

574 At some risk of repetition, I now address the sub-issues identified from the parties' joint statement of issues, as distilled in section A.2 above.

E.6(a) Was the assignment deed binding unless avoided? Or, not binding unless ratified?

575 In my view, the assignment deed was binding unless repudiated/avoided. It was required to be repudiated without unreasonable delay after the affected plaintiff attained their majority. This is the view most consistent with Edwards v Carter.

E.6(b) Did Simon and Josephine avoid being legally bound by the assignment deed? Or, did they become legally bound by the assignment deed through ratifying it?

576 I am satisfied that, although Murray Byrne advised at the outset of the need for Simon to be asked to ratify the assignment deed after he turned 18, no-one took concrete steps to ensure that either Simon or Josephine ratified or affirmed the assignment deed after they turned 18, and they did not do so. Rick's evidence was simply that this was 'up to them'.[442] However, I am not persuaded that there was any onus on them to approach BJT.

577 As already noted, I am satisfied that Simon knew all the essential elements of the transaction represented by the assignment deed by about 2001, when a draft statement of claim in the proposed Supreme Court proceeding was prepared on his behalf. At that time, he was sufficiently informed to make an appropriate decision about whether or not to repudiate the assignment deed. His delay in repudiating the deed until the commencement in this proceeding in 2019, after the death of Zilla, was unreasonable.

578 There is no evidence that Josephine had a copy of the assignment deed until the period of preparations for this proceeding, after Zilla's death. Without the assignment deed, I am not satisfied that Josephine could have made a fully informed decision to repudiate it. I am satisfied that her delay in repudiating the deed was therefore reasonable.

579 I find that Josephine is entitled to repudiate the assignment deed on grounds that she was a minor when she executed it, and because her delay in repudiating it was reasonable.

E.6(c) Does the Limitation Act bar a remedy for Simon and Josephine?

580 The question of whether the Limitation Act bars a remedy for Josephine in repudiating the assignment deed on grounds of her minority when she executed it was raised in the joint statement of issues, but was not the subject of any submissions.

581 The onus lies on the defendants to demonstrate such a bar, however they did not identify what provision of the Limitation Act might apply, or develop any other submission on this issue. I am not satisfied that any statutory limitation has been breached by Josephine's repudiation of the assignment deed.

582 For completeness, and because laches and acquiescence were pleaded in answer to the entirety of the plaintiffs' claims, I will also address whether laches or acquiescence might have any role to play. The plaintiffs submitted that the recission of the assignment deed on grounds of minority when it was executed was not an equitable claim and therefore laches would not apply.[443] The defendants made no submission on this issue.

583 I agree with the plaintiffs that laches as an equitable defence would not apply to Josephine's or Simon's claim to avoid the assignment deed on grounds of their minority when it was executed. Nevertheless, much of the factual analysis supporting my finding that Simon was guilty of laches in relation to his claims of undue influence and unconscionability also supports my conclusion that his delay in repudiating the assignment deed was unreasonable. Josephine was not guilty of laches in any event, as I have already found.

584 I am satisfied that neither Simon nor Josephine could be said to have acquiesced in their execution of the assignment deed as minors.

E.6(d) If Simon and Josephine avoided the assignment deed and/or did not ratify it, and it is found that the assignment deed is otherwise binding on the remaining plaintiffs, what legal consequences flow?

585 This question is unnecessary to answer, because I have found that the assignment deed will be set aside as regards all the plaintiffs. It would be unduly hypothetical to venture an answer on any alternative bases.

E.7 If successful on having the assignment deed set aside, are the plaintiffs, or some of them (and if so, who), entitled to relief, and on what terms and conditions?

586 All the plaintiffs are entitled to relief in the form of an order setting aside the assignment deed.

E.7(a) To what extent should relief be conditional on Simon and Desmond repaying amounts paid to them under the settlement deed relating to the Federal Court proceeding in 2002?

587 I am not satisfied that Simon and Desmond were paid any money under the settlement deed relating to the Federal Court proceeding that would amount to double-dipping with any distribution and compensation they will receive in this proceeding.

588 The settlement deed preserved Desmond and Simon's ability to make claims relating to Eric Snr's will and estate, indicating that no part of the consideration they received was for any compromise of their claims to have the assignment deed set aside or any consequential entitlements.

589 The notion that RLF was the assignee of the plaintiffs' reversionary interests in the residual estate of Eric Snr at the time of the compromise of the Federal Court proceeding, and that this might have had some impact on the value of the shareholdings of Desmond and Simon at the time, was not explored. I am not satisfied that any such notion had a quantifiable impact on the settlement amount received by Desmond and Simon.

E.7(b) To what extent should relief be conditional on the plaintiffs repaying any amounts they received under the assignment deed?

590 The plaintiffs accepted that relief should be conditional on them repaying any amounts they received under the assignment deed. I am satisfied that this must be so.

591 However, the evidence before me was only sufficient to support findings that Jane and Mary must repay $2,000 each, adjusted for inflation since 1984 or 1985, when they received those payments.

592 Bill disputed this saying he was confident that Zilla would have paid all five of the plaintiffs. When asked about this, Bill disagreed that the plaintiffs weren't paid under the deed, but he said that it was unlikely that the payment came from RLF as it 'can't trade, because it's got no cheque book' whereas the partnership was able to.[444] He explained later that the 'whole family structure for the farm' was based on an understanding that that RLF and the partnership were 'one and the same'[445] and explained that he didn't know why there were 'two different names' for the entities, but believed it must have been for accountancy reasons.[446]

593 When Bill was asked under cross-examination about the amounts the plaintiffs were paid pursuant to the deed, he said:

Well, in 1996, when the partnership was splitting up, I went up and, ah, I had these 10, um - 10, um, dockets to give to Mum from Peter Byrne and probably, ah, because we were wanting to split the partnership and we're wanting to have a discussion with her about that. And I - I took up, ah, copies of the deed, 10 of them, Your Honour, and I gave them to Mum, and I said to her - probably one of the - I said, 'Now, has all this been paid? Have you paid the plaintiffs?'. So they've got the money because Peter Byrne, who was our solicitor in Ballarat, was very keen to get that tidied up. And Mum said, 'Yeah, I've got them all cheques and I've got this and I've invested this and I've done this and that' and she said, 'They may not have it in their own bank accounts yet, but they - I have got control of it' and I said, 'Well, that's fine. Just as long as - - -?' and she said, 'I'll hand it out when I think it's necessary'. I said, 'That's fine'. So that - that was the closest I got for her to say, 'Yes, we've squared our debt up on it', Your Honour.

You say that happened in 1996, did it?---well, yeah, it's written there somewhere in our, um, court documents, that 1996.

594 Rick gave similar evidence.[447] He said he had a conversation with Zilla to the effect that she wanted the wool rebate cheque of $205,000 (received in about 1987) and that the money came to Zilla.[448] Rick's evidence was that Zilla had said she wanted the money from the wool rebate cheque in part to pay the other children the money under the assignment deed.[449] Neither Bill nor Rick claimed direct knowledge of any such payments actually being made.

595 A hearsay notice filed on behalf of the first and second defendants also gave notice of representations by Zilla in written form on 12 September 2000, 26 October 2000, and 27 March 2001 purportedly referring to payments to Simon and Josephine. However, these were not tendered and I give these references in the notice no weight.

596 The evidence also included (exhibit 109) a handwritten list dated '1984-1987' and titled 'payments made to remaindermen' showing various amounts and tendered as exhibit 109, and a set of entries in Zilla's diary, probably made in 1988, relied upon in a hearsay notice and tendered as exhibit 221.[450]

597 Doing the best I can to decipher these two exhibits, they fall a long way short of establishing that each plaintiff was paid the money referred to in the assignment deed.[451] The high water mark of this material is the final two pages of exhibit 221. These pages immediately follow a series of entries summarising monthly payments to the elder sons, concluding with payments apparently made in July 1988.

598 On the last two pages of the exhibit, under the heading 'Dads', are the following markings, which I infer were made by Zilla:[452]

Dads

Jane $2000 Simon

$3000

Mary $2000

July 87

Jo $3000 $1000

Des $6000

599 These entries were the subject of an Evidence Act s 67 hearsay notice and I take them into account, as I must. They constitute representations by Zilla that, by about July 1988, payments had been made under the assignment deed to each of the plaintiffs in the sums stated. Those representations are corroborated to some extent, because Jane and Mary admitted the payments to them. Do they also establish that the other payments were made, to the other plaintiffs, as recorded by Zilla?

600 On balance, I do not think so. Compared with both Zilla's diary entries and Bill and Rick's assertions that Zilla would have made payments, I place more weight on the direct evidence of each of these plaintiffs denying receipt of any payments under the assignment deed. As I have already noted, the evidence of each of them on this topic was clear, and I regard it as honestly given and as reliable. If they had been told they were receiving a payment under the assignment deed in lieu of their rights under Eric Snr's will, I am convinced that they would have retained a clear memory of that. I accept their evidence that they never received such a payment.

601 The finances of the family farming business and the household budget appear to have been managed by Zilla in a manner that makes it difficult to be sure whether any payments Zilla thought were fairly attributable to the assignment deed were actually so attributable. It appears that little if any distinction was made between the business of the partnership and RLF, and that Zilla had a key role in managing payments. I was not taken to any financial statements of RLF or the partnership recording any such payments, or even any liabilities to the plaintiffs. Even so, because of the way the business was conducted, it is possible that Zilla might have made unrecorded payments to the plaintiffs from partnership income, intending that they be treated as payments on behalf of RLF under the assignment deed.

602 It is possible that, when Zilla made her diary entries in about 1988, at that time she considered that, in meeting various expenses related to the upkeep or education of Josephine, Desmond and Simon, she was making payments on behalf of RLF under the assignment deed. If she believed this, I consider that to have been incorrect. In order to constitute a payment under the assignment deed, at the very least it was necessary for that payment to be clearly identified to the plaintiffs as such.

603 In making my findings on this issue on the basis of the plaintiffs' direct testimony, I also note Bill's evidence extracted above of his conversation with Zilla in 1996, which was to the effect that Zilla had not yet, at that time, made the requisite payments under the deed. This undermines the contents of the diary extract to some extent. I also note that none of the financial statements of RLF ever acknowledged any liability to the plaintiffs or recorded any payment to them. Nor was any cheque to the plaintiffs or other payment to them identified from any partnership financial statements or bank records. I do not rely on these matters, but they do tend to be consistent with my conclusion that the plaintiffs received no other payment identified as a payment under the assignment deed.

604 I am not satisfied that any other payments were made under the assignment deed to the plaintiffs, apart from the $2,000 payments acknowledged in the evidence of each of Jane and Mary. Further, I am positively satisfied that no other payments properly identified to the plaintiffs as payments under the assignment deed were made by or on behalf of RLF to the plaintiffs.

E.7(c) Are the plaintiffs otherwise entitled to relief?

605 There is no other potential impediment raised to the granting of the relief sought by the plaintiffs. They are entitled to relief.

E.8 Are the plaintiffs (or any of them) entitled to equitable compensation relating to the use of the Carranballac land since Zilla's death?

606 The plaintiffs seek equitable compensation.[453] They submitted that they are entitled to equitable compensation in the form of the loss they have suffered as a consequence of Bill and Rick's conduct in preventing them from enjoying the benefit of the Carranballac land since Zilla's death. They submitted that their loss is the rent they would have received.[454]

607 The plaintiffs bear the onus of establishing the quantum of their claim for equitable compensation.[455] Here, they submitted that the lost rent should be calculated in accordance with the joint statement of Alan Hives and Graeme Linke dated 31 July 2024, which establishes the market rent of the Carranballac land to be:[456]

(a) for the three-year period starting 29 September 2017 - $82,000 per annum;

(b) for the three-year period starting 29 September 2020 - $127,000 per annum; and

(c) for the three-year period starting 29 September 2023 - $114,000 per annum.

608 The Court can assess equitable compensation with respect to deprivation of a property on a broad-brush basis, taking into account relevant factors.[457] In Grant v Grant, the Court granted equitable compensation for an estate being deprived of the use of a property, taking into the nature of the property, rental income, expenses incurred, and the impact of the Covid-19 pandemic on earnings.[458]

609 Further, while equitable compensation is often computed by reference to the loss suffered by the innocent party, compensation may also be achieved by requiring a fiduciary to disgorge the equivalent of the advantage that has been taken.[459] The evidence at trial was that Bill and Luke (but not Rick) have farmed the farming land component of the Carranballac land since about 1996.[460] Luke was not a fiduciary and is not a defendant. Further, it may be inequitable to compel the defaulting fiduciary to disgorge all of the profits if some of those profits are attributable to the use of his or her own skill, efforts, property or resources. This is a matter of judgement that depends on the facts of the case. The onus falls on the defaulting fiduciary to establish that, in all of the circumstances, it would be inequitable not to apportion the profits or to make some other allowance.[461]

610 Further, equitable compensation is aimed at restoring the innocent party to the position they would have been in had the breach of fiduciary duty not occurred.[462] Generally, this means equitable compensation is assessed as at the time of trial, with the full benefit of hindsight.[463] With respect to property values, the quantum of equitable compensation is assessed as at the date of judgment in the circumstances prevailing at the date of judgment.[464] Lost rents probably fall within the former category, and should be assessable up to trial. However, before reaching a final decision on that point, I will give the parties a further opportunity to be heard on the approach that should apply to this question and as to the quantification of equitable compensation more generally.

611 I have found that all three of the trustees of the estate of Eric Snr and the directors of RLF - Zilla, Bill, and Rick - brought about the preparation and execution of the assignment deed.

612 They did so in circumstances in which the fair-dealing rule applied to the assignment contemplated by the deed, even though that was an assignment to RLF. The transaction in question was the assignment of the plaintiffs' equally shared reversionary / remainder interest in the residual estate of Eric Snr remaining after the death of Zilla to RLF, in return for promises by RLF to pay them the amounts specified in the assignment deed.

613 The defendants have not established that this transaction met the requirements of the fair-dealing rule. The assignment deed is therefore liable to be set aside, as regards all the plaintiffs, subject to any defences.

614 The defendants claimed that the plaintiffs' claim to have the assignment deed set aside for breach of the fair-dealing rule was statute-barred, by reason of the application of Limitation Act s 21(2) (other than the proviso). However, I concluded that this defence failed. On the proper construction of s 21(2), its proviso applied to the circumstances of this case. So, read as a whole, s 21(2) prescribed a limitation period of six years after Zilla's death, for the commencement of the plaintiffs' claim that the assignment deed breached the fair‑dealing rule. The plaintiffs' claim was made within that period.

615 As regards all the plaintiffs' claims of breach of the fair-dealing rule, the operation of laches was excluded by implication arising from the operation of the Limitation Act s 21(2). This was conceded by the defendants in their submissions.

616 Because a limitation period was prescribed (and met), the equitable defence of laches was not available as an answer to the plaintiffs' claim to have the assignment deed set aside for breach of the fair-dealing rule.

617 Acquiescence might have been available, but it was not made out on the facts.

618 The plaintiffs also claimed that the assignment deed was liable to be set aside on grounds of undue influence and unconscionability, subject to any defences.

619 Undue influence and unconscionability were both established, as regards all five of the plaintiffs. The assignment deed was the product of Zilla's (and to a lesser extent, Bill's) undue influence over all the plaintiffs, and was also a product of the unconscionable conduct of Zilla, Bill and Rick toward all the plaintiffs. RLF was on notice of the relevant conduct so as to enable the assignment deed to be set aside on these grounds, and in any event the conduct and states of mind of the trustees were to be imputed to RLF.

620 The defendants asserted defences of laches and acquiescence. I concluded that Desmond and Simon were guilty of laches: after attaining full knowledge of the assignment deed in the course of preparation for a proposed Supreme Court proceeding in about 2001, and after the settlement of an actual proceeding in the Federal Court the next year, they then delayed commencing this proceeding for about 17 years. This delay extended until after Zilla's death, and the deaths of other material witnesses (including Murray Byrne). This prejudiced the defendants in their ability to respond to the claims made by the plaintiffs.

621 Laches was not established on the part of the other plaintiffs, because it was not established that they had sufficient knowledge of the assignment deed until after Zilla's death.

622 Acquiescence was not established against any plaintiff.

623 By reason of their laches, Desmond and Simon are precluded from obtaining any relief for undue influence or unconscionability. The other plaintiffs are entitled to obtain relief on those grounds, if needs be.

624 Josephine and Simon were minors when they were made to execute the assignment deed. Simon failed to repudiate the assignment deed on this ground within a reasonable period of becoming fully aware of the details of the assignment deed, and is prevented from repudiating it on this basis. Josephine has repudiated the assignment deed on this basis within a reasonable period of becoming sufficiently aware of its details, and is entitled to avoid the deed on this ground, if she needs to.

625 In order to obtain equitable relief in the form of a declaration or order setting aside the assignment deed for breach of the fair-dealing rule, or for undue influence or unconscionability, and to obtain consequential equitable damages associated with the remaining trustees' refusal to assign the residual estate to the plaintiffs, the plaintiffs must themselves do equity by repaying any payments they received under the assignment deed. In this regard, Jane and Mary must repay $2,000 each, plus interest at an appropriate rate.

626 The authorities suggest that I 'may' set aside the assignment deed 'unless' the trustees establish that it was a fair dealing. This formulation is perhaps ambiguous as to whether: (a) I must set aside the deed if the trustees do not establish a fair dealing; or (b) I retain a residual discretion whether or not to grant the relief sought by the plaintiffs even if the trustees fail to establish fair dealing. The parties did not address this point.

627 Assuming I might retain a residual discretion of that kind, in any event I would exercise it in favour of the plaintiffs. The only factors that might appear to militate against granting them relief are factors that arose in the course of my consideration of the defences asserted by the defendants and the requirement that the plaintiffs repay amounts they received under the assignment deed.

628 The key point would be prejudicial delay. But exercising discretion against the plaintiffs on the ground of prejudicial delay would defeat the principle (accepted by the parties in this case) that a prescribed limitation period excludes the operation of the doctrine of laches. In short, declining to grant relief on that basis would defeat legislative intention.

629 Aside from prejudicial delay, there are no other factors that would lead me to deny relief, provided the plaintiffs repay the amounts received under the deed. Having regard to all the other circumstances of the case, I am affirmatively satisfied that it is in the interests of justice the plaintiffs should have the orders they seek. I would therefore decide to exercise any residual discretion in the plaintiffs' favour.

630 I will hear the parties on the question of any consequential equitable damages having regard to my conclusions on the assignment deed, as well as on the proper criteria for an assessment of such damages, and I will hear the parties more generally on the orders otherwise appropriate to carry these reasons for judgment into effect.

631 I will also hear the parties on the question of costs.

WILLIAM LUKE FAY in his capacity as Trustee and Administrator of the Estate of EP Fay, Deceased and in his Personal Capacity

ERIC JAMES FAY in his capacity as Trustee and Administrator of the Estate of EP Fay, Deceased and in his personal capacity

RIPON LEA FARMING COMPANY PROPRIETARY LIMITED (ACN 004 568 245)

[1] In these reasons, members of the Fay family are generally referred to by their first names.

[2] By orders made on 12 May 2023 and 19 July 2024, the parties consented to orders that they would prepare a joint statement of issues. The joint statement of issues did not supplant the pleadings. For example, the plaintiffs noted that it omitted the plaintiffs' pleaded claim for equitable compensation. The defendants ultimately did not press [22]-[24] of the joint statement of issues.

[3] Third further amended statement of claim (Third FASOC); Defence of the first and second defendants to the third further amended statement of claim, dated 6 August 2024, and filed 7 August 2024 (D1 and D2 defence). Defence of the third defendant to the third further amended statement of claim, dated and filed 8 August 2024 (D3 defence); Reply to defence of first and second defendants dated 22 July 2024, dated and filed 23 July 2024 (Reply to D1 and D2); and Reply to defence of third defendant dated 16 July 2024, dated and filed 18 July 2024 (Reply to D3).

[4] Joint statement of issues [1], [6], and see also [13].

[5] Joint statement of issues [4], [5].

[10] Joint statement of issues [3(d)].

[11] Joint statement of issues [25], [26].

[12] Joint statement of issues [7]-[12].

[13] Joint statement of issues [7(a)-(c)].

[14] Joint statement of issues [8]; see also Third FASOC [23], [23A] (albeit not referring to Rick), [24].

[15] Joint statement of issues [9]; see also Third FASOC [23], [23A] (albeit not referring to Rick), [24].

[17] Joint statement of issues [13]-[16].

[18] Joint statement of issues [13] see also Third FASOC [27] (albeit not referring to Rick).

[19] Joint statement of issues [14]; Third FASOC [28] (albeit not referring to Rick).

[20] This issue was not included in the joint statement of issues but arises from the Third FASOC [27], [28].

[21] Joint statement of issues [25], [26].

[22] Joint statement of issues [17]-[21]; Third FASOC [18], [20(a)], [21].

[23] Joint statement of issues [17(a)], [17(b)]; see also Third FASOC [18], [20(a)], [21].

[24] Joint statement of issues [18], [19]; see also Third FASOC [18], [20(a)], [21].

[26] Joint statement of issues [21], says 'did not avoid', but in context that must be read as 'did avoid'.

[28] Joint statement of issues [27]-[28].

[30] Joint statement of issues [28(a)].

[31] Joint statement of issues [28(b)].

[32] Evidence Act 2008 s 191.

[33] Exhibit 65. Oddly, Eric Snr does not appear on the register, unless some confusion between him and Rick has occurred.

[34] The first and second defendants' opening submissions [16] (D1 and D2 opening submissions); The third defendant's opening submissions [13] (D3 opening submissions).

[35] D1 and D2 opening submissions [16]; D3 opening submissions [13].

[36] Statement of agreed facts [5] (Statement of agreed facts). The deed of assignment referred to Certificates of Title Volume 4947 Folio 263 and Volume 3414 Folio 579, whereas the correct volume number for the latter title should have been Volume 3413. This title was correctly recorded on the inventory of assets in Eric Snr's will.

[45] I infer from the draft assignment deed later prepared by Mr Byrne that this was identified as the sum payable to each, making a total of $130,000.

[59] The parties agreed that nothing turned on this, because this was not a purported assignment under statute requiring notice to the trustees, but was an assignment in equity. The defendants' note dated 14 August 2024 contrasted the case with an assignment under Property Law Act 1958 s 134, distinguishing Federal Commissioner of Taxation v Everett [1980] HCA 6; (1980) 143 CLR 440, 447; and relying on Thomas v National Australia Bank Limited [1999] QCA 525; [2000] 2 Qd R 448, [19]-[25] (Pincus JA) for the proposition that in equity an assignment requires no notice to the trustee. The plaintiffs did not dispute the defendants' analysis: plaintiffs' responsive note dated 19 August 2024, [7].

[65] The first, second and third defendants' closing submissions [71] (Defendants' closing submissions).

[70] The $98,000 was noted as a mortgage account with the Commonwealth Trading Bank in RLF's financial statements for the previous financial year ending 30 June 1986 (exhibit 95) but did not feature in RLF's financial statement for the year ending 30 June 1987.

[83] In his affidavit of 11 August 2021, Bill says that the file note was of a conversation he recalls between himself and Peter Byrne that took place on 14 August 1996. I am satisfied that this file note was in reference to a conversation that occurred in 1996 at around the time that the farming partnership was dissolved.

[86] T558.16-24; Exhibit 20 [60]-[61].

[95] Section 237 of the Corporations Act 2001 (Cth) governs applications for leave to bring a derivative action, that is, leave to bring or intervene in proceedings on behalf of a company.

[106] Statement of agreed facts [12].

[111] Statement of agreed facts [14].

[112] Statement of agreed facts [13].

[113] Originating motion between parties dated '9 January 2020', filed 17 December 2019.

[117] Counsel for the defendants indicated that they would provide four further aides-memoire relating, to the best of my understanding, two going to the credit of Jane and Mary, and two more providing evidentiary references in support of the defence of laches and demonstrating prejudice caused to the defendants. I made directions permitting the further aides memoire to be provided, and permitting counsel for the plaintiffs time provide aides-memoire in response. However, aside from two notes on legal issues relating to Re Thompson's Settlement [1986] Ch 99 pursuant to other directions I made during the final day, no further documents were received. I assume that the defendants decided that the further four aides memoire addressing the credibility of witnesses and laches were unnecessary.

[120] Eg, T478.12-26, T479.15-31, T480.1-3.

[121] Exhibit P1, Joint Statement by Valuers for 'Ripon Lea' 6376 Glenelg Highway, Carranballac by Alan Hives and Andrew Bray dated 31 July 2024.

[122] Exhibit P2, Joint Statement by Valuers for 'Ripon Lea' 6376 by Alan Hives and Graeme Linke dated 31 July 2024.

[123] Exhibit P3, Joint Statement by Actuaries by Neekhil Shah and Corey Plover dated 2 August 2024.

[126] Evidence Act 2008 s 59.

[127] Eg exhibit 69, relating to 27 September 1984.

[132] See Amaca Pty Ltd v CSR Ltd [2015] VSC 582 [184]-[189] (Macaulay J); Goddard Elliot (A Firm) v Fritsch [2012] VSC 87 [65]-[68] (Bell J).

[133] Defendants' closing submissions [181].

[148] T223.28-31 [Mary]; T318.23-31 [Simon].

[149] Defendants' closing submissions, [238].

[150] T265.23-30; T264.19-20; Third FASOC [20].

[152] T264.19-24; T302.18-19, T302.23-24.

[163] I infer from the context in Mary's evidence in chief that this occurred in 1985, as she made no mention of any substantial delay between Mary completing her Diploma and securing a teaching role.

[200] T176.8-10; 176.23-27; T169.28-T170.1.

[210] T191.8-16, T219.27-29, T227.16-20.

[219] Josephine did not identify a specific date or time period when she next saw the deed of assignment; she instead recalled that she saw it in the first meeting she had with Peta Maskell of BJT (the solicitor for Zilla's estate) and Bill. I infer that Josephine's first meeting with Peta regarding Zilla's estate would have been shortly after Zilla died, and most probably in early October 2017. At this meeting Josephine says 'Bill pulled it out of his pocket and [Peta] had to go and photocopy a copy for everyone' (T150.1-18). In Ms Maskell's letter to Josephine dated 23 October 2017 Ms Maskell indicated that BJT had been provided with or had possession of a copy of the deed of assignment.

[222] Third FASOC [22], with reference to the allegation of undue influence by without specifying in the main paragraph the person who is alleged to have procured the execution, and referring to Zilla and Bill in the particulars. See also, in the context of unconscionability, the reference in the particulars to Third FASOC [28] to RLF allegedly procuring consent of the plaintiffs to the assignment. The pleadings relating to the fair-dealing rule do not depend on an allegation of procurement of execution of the assignment deed.

[239] (2001) 202 CLR 410 (Clay v Clay).

[240] Clay v Clay, [50] (per Gleeson CJ, McHugh, Gummow, Hayne and Callinan JJ). See also Tito v Waddell (No 2) [1977] Ch 106 at 241.

[241] That is, the transaction may be set aside as a matter of the discretion of the court, rather than as a matter of right or obligation.

[243] Plaintiffs' closing submissions [130].

[245] Plaintiffs' closing submissions [98]-[106]; Defendants' closing submissions [91]-[105].

[246] Citing Pilmer v Duke Group Ltd (in liq) [2001] HCA 31; (2001) 207 CLR 165 at [78] (McHugh, Gummow, Hayne and Callinan JJ), in turn quoting from Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41 at 103 (Mason J). See also Snell's Equity (34th ed, 2020) at [7-018].

[247] Wright v Lemon [2024] WASCA 19, [419] (Buss P, Vaughan and Hall JJA agreeing).

[248] Defendants' closing submissions, [91]-[97].

[249] Tito v Waddell (No 2) [1977] Ch 106, 241-242 (Tito v Waddell).

[250] Further as to the consequences of a finding that a company is the alter ego of the trustee in the context of the alleged breaches of the trustee's fiduciary duties, see Grimaldi v Chamelon Mining NL (No 2) [2012] FCAFC 6; (2012) 200 FCR 296 at [243].

[251] Cornerstone Property & Development Pty Ltd v Suellen Properties Pty Ltd (2014) Qd R 75 at [101].

[252] Zibara v Ultra Management (Sports) Pty Ltd, [2021] FCAFC 4; (2021) 283 FCR 18 [2262] Derrington J.

[253] Australian Careers Institute Pty Ltd v Australian Institute of Fitness Pty Ltd [2016] NSWCA 347; (2016) 340 ALR 580.

[254] [1874] UKLawRpCh 20; (1874) LR 9 Ch App 244.

[255] Defendants' closing submissions [93].

1. [256] [1986] Ch 99 at 115 (Vinelott J).

[257] Re James [1949] SAStRp 8; [1949] SASR 143.

[258] Re James [1949] SAStRp 8; [1949] SASR 143 at 146 (Mayo J).

[259] [2006] NSWSC 1346 at [38].

1. [260] Soulos v Pagones [2023] NSWCA 243 at [182] (Ward P; Meagher and Mitchelmore JJA agreeing). See also Carrington v Wallace [2022] NSWSC 1078 at [197] (Ward P).

[261] Relying on Snell's Equity (34th ed, 2020) at [7-021], in turn citing Conaglen, 'A Re-Appraisal of the Fiduciary Self-Dealing and Fair-Dealing Rules' (2006) 65 Cambridge Law Journal 366.

[262] Re Thompson's Settlement [1986] Ch 99, 115.

1. [263] Farrar v Farrars Ltd [1888] UKLawRpCh 209; (1888) 40 Ch D 395 at 414 (Lindley LJ for Cotton, Lindley and Bowen LJJ).

[264] The plaintiffs cited Transvaal Lands Co v New Belgium (Transvaal) Land & Development Co [1914] 2 Ch 488, discussed in Movitex Ltd v Bulfield [1988] BCLC 104 at 122 (Vinelott J). In Transvaal, a director of the plaintiff voted in favour of a resolution to purchase shares of a company in which he held 0.5% of the ordinary shares. The transaction was set aside on account of the director's conflict of interest.

1. [265] [2015] NZSC 68; [2016] NZLR 354 at [93] (Glazebrook J for McGrath, Glazebrook, O'Regan and Blanchard JJ); see also [94], where the Glazebrook J also said that 'the exception, if it exists, would require a fact-specific inquiry into the nature and extent of the interest held and the nature and significance of the transaction'.

[266] See e.g. Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 on the question of whether their knowledge and intentions could be imputed to RLF, [128]; Zibara v Ultra Management (Sports) Pty Ltd at [148]-[157] (per McKerracher and Anderson JJ). But see In the matter of Sunnya Pty Ltd [2024] NSWSC 403, [671] (Williams J). See also Tesco Supermarkets Ltd v Nattrass [1971] UKHL 1; (1972) AC 153, 170 (Lord Reid).

[267] See generally Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41, 68 (Gibbs CJ), 96-97 (Mason J), 141 (Dawson J).

[268] [1986] Ch 99, 115.

[269] Plaintiffs' closing submissions [114]-[130].

[270] Plaintiffs' closing submissions at [114]-[116].

[271] Wright v Lemon [2024] WASCA 19 at [722] (Buss P; Vaughan and Hall JJA). See also Pickering v Smoothpool Nominees (2001) 81 SASR 175 at [52] (Gray J; Prior ACJ and Wicks J agreeing); Trinkler v Beale [2009] NSWCA 30; (2009) 72 NSWLR 365 at [20] (Macfarlan JA; Giles JA and Gyles AJA agreeing).

[272] Plaintiffs' closing submissions [117].

[273] Wright v Lemon [2024] WASCA 19 especially at [419], [434], [437] (Buss P, Vaughan and Hall JJA agreeing).

[274] Conaglen, M, 'A Reappraisal of the Fiduciary Self-dealing and Fair-dealing Rules' (2006) 65 Cambridge Law Journal 366, 376-377. See Defendants' closing submissions, [114].

[275] Defendants' closing submissions [126].

[276] Defendants' closing submissions [127]-[128].

[277] Compare defendants' closing submissions [127].

[278] Defendants' closing submissions [129]-[136].

[279] As well as containing various minor grammatical and spelling errors, in one place, the consideration for the assignment was recorded as 'ONE THOUSAND DOLLARS', and the assets and liabilities listed in the schedule were introduced by the words: 'Particulars of the investments and encumbrances not constituting or representing the residuary real and personal estate ...' of Eric Snr, which was presumably meant to be 'now'.

[280] The combined area of the two titles to the Carranballac land was 654 acres and 17 perches, equating to 654.16875 acres. At $200 per acre, this produces the exact figure used in the assignment deed of $130,833.75. The figure in the inventory for Eric Snr's estate is clearly intended to be the same figure, but has been affected by a minor typographical error: $130,837.50.

[284] T508.1-7. Bill added 'but they were compensated in other ways', perhaps referring to education and upkeep.

[292] Wright v Lemon [2024] WASCA 19 at [722] (Buss P; Vaughan and Hall JJA). See also Pickering v Smoothpool Nominees (2001) 81 SASR 175 at [52] (Gray J; Prior ACJ and Wicks J agreeing); Trinkler v Beale [2009] NSWCA 30; (2009) 72 NSWLR 365 at [20] (Macfarlan JA; Giles JA and Gyles AJA agreeing).

[293] Defendants' closing submissions [140]-[147].

[294] Exhibit P3 (Joint Statement of Actuaries dated 2 August 2024).

[295] Incidentally, even if the plaintiffs had been able to penetrate the confusing and technical language used in the assignment deed, without commercial experience or knowledge it is fanciful to think they would have appreciated this point about the impact of inflation on the consideration offered in the deed of assignment. I infer that at least one of Zilla, Bill or Rick understood it well, as shown by the fact that the accrual of interest on RLF's debt to the plaintiffs was excluded by the deed. That is yet another reason why the deed cannot be regarded as having provided the plaintiffs with full disclosure of material facts likely to have been known to the trustees.

[296] Exhibit 193, letter and report of Corey Plover dated 30 May 2024, letter [3], report [3.15]-[3.18].

[298] First and second defendants' defence [26B], see also [30EA]; third defendant's defence [26B].

[299] D1 and D2 defence [30F] and D3 defence [38], which were both pleaded as an 'answer to the whole of the claims made ... in the proceeding', however the scope of the assertion of the defences of laches and acquiescence was ultimately limited to the claims of undue influence and unconscionability in the defendants' closing submissions: [206] 'Laches is only available where there is no express limitation period', and [211].

[300] D1 and D2 defence to third FASOC [26B]; D3 defence [37A].

[301] Plaintiffs' closing submissions [170], T809.31.

[302] Defendants' closing submissions [197]-[198].

[303] First and second defendant's defence [26B(a) and (b)]; third defendant's defence [26B(1) and (2)].

[304] Menegazzo v Pricewaterhousecoopers (A Firm) & Ors [2016] QSC 94 ('Menegazzo').

[306] See, eg, Bullhead Pty Ltd v Brickmakers Place [2017] VSC 206, [109] (Sifris J); Reader v Fried [2001] VSC 495, [25] (Pagone J).

[308] Seymour v Seymour (1996) 40 NSWLR 358, 372 (Mahoney ACJ).

[309] See Reader v Fried [2001] VSC 495, and the discussion of the applicable authorities by Pagone J at [23] and following.

[310] Sze Tu v Lowe [2014] 89 NSWLR 317; [2014] NSWCA 462, [414] (Gleeson JA, Meagher and Barrett JJA agreeing).

[311] No doubt for these reasons, it was not suggested that Limitation Act ss 8 or 11 could apply. It was uncontroversial that this was not a claim for recovery of land, or in relation to an equitable interest in land.

[312] Defendants' closing submissions [198]; Plaintiffs' closing submissions [170].

[313] Trustee Act 1888 (51 & 52 Vict, c 59) (Trustee Act 1888).

[314] [1845] EngR 576; (1845) 67 ER 645, 648.

[315] Life Association of Scotland v Siddal [1861] EngR 300; (1861) 3 De GF & J 58, 73‑74; [1861] EngR 300; 45 ER 800, 806.

[316] Clay v Clay (2001) 202 CLR 410. There, the High Court was considering the Limitation Act 1935 (WA), which contained relevant provisions in somewhat different form from s 21 of the Limitation Act in Victoria.

[317] Clay v Clay (2001) 202 CLR 410, 424-425 [24] (Gleeson CJ, McHugh, Gummow, Hayne and Callinan JJ) (citations omitted).

[318] Re Somerset [1893] UKLawRpCh 142; [1894] 1 Ch 231, 255, 257-258.

1. [319] Re Taylor (1900) 81 LT 812, 816. The wife's interest at that time was considered a vested interest (capable of forming the foundation of a claim), but not for her separate use.

[320] [2022] WASCA 1, [178] (Quinlan CJ, Murphy JA and Tottle J) (citations omitted) (emphasis in original).

[321] UK Law Revision Committee, Statutes of Limitation (Fifth Interim Report, 1936).

[322] [1962] 1 WLR 86; upheld in part: Re Pauling's Settlement Trusts [1964] 1 Ch 303.

[327] Re Pauling's Settlement Trusts 1 [1964] Ch 303.

[328] See David Jackson, 'The Legal Effects of the Passing of Time' [1970] MelbULawRw 12; (1970) 7(4) Melbourne University Law Review 449, 453.

[329] Partridge v Equity Trustees Executors and Agency Company Pty Ltd (1947) 75 CLR 149, 166 (Starke, Dixon and Williams JJ).

[331] [1977] Ch 106.

[332] Tito v Waddell (No 2) [1977] Ch 106, 247.

[337] [2003] EWCA Civ 1048.

[338] Gwembe Valley Development Company Ltd v Koshy [2003] EWCA Civ 1048 [108].

[339] [2004] NZCA 42; [2004] 3 NZLR 202.

[341] Limitation Act 1950 (NZ) s 21 is in the same terms as s 21 of the Limitation Act: '...Provided that the right of action shall not be deemed to have accrued to any beneficiary entitled to a future interest in the trust property until the interest fell into possession.'

[342] Johns v Johns [2004] NZCA 42; [2004] 3 NZLR 202, 219 [60]-[61].

[344] Menegazzo v Pricewaterhousecoopers (A Firm) & Ors [2016] QSC 94.