ROBERT CONRY BRAUER AS JOINT AND SEVERAL RECEIVERS AND MANAGERS OF THE PROPERTY DETAILED IN THE INDORSEMENT TO THIS WRIT OF SUMMONS

ROBERT MICHAEL KIRMAN AS JOINT AND SEVERAL LIQUIDATORS OF THE SCHEME (AS DESCRIBED IN THE INDORSEMENT TO THIS WRIT OF SUMMONS) (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION)

ROBERT CONRY BRAUER AS JOINT AND SEVERAL LIQUIDATORS OF THE SCHEME (AS DESCRIBED IN THE INDORSEMENT TO THIS WRIT OF SUMMONS) (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION)

THE SCHEME (AS DESCRIBED IN THE INDORSEMENT TO THIS WRIT OF SUMMONS) (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION)

PETER ANDREW SANSOM AS A MEMBER OF THE FAVOUR PROJECT

CELIA JESSIE SANSOM AS A MEMBER OF THE FAVOUR PROJECT

PROSPER (WA) PTY LTD AS TRUSTEE FOR THE GOLD GROUP TRUST

Practice and procedure - Application for summary judgment pursuant to O 16 r 1 or O 20 r 19 of the Rules of the Supreme Court 1971 (WA) - Whether the defendants are so obviously entitled to the statutory defence under s 65(8) of the Trustees Act 1962 (WA) that the proceedings have no prospect of success - Where the interpretation and application of the defence in s 65(8) not settled law - Where complex questions of law remain to be determined - Where the defendants' evidence does not satisfy the Court there is no triable issue - Where matter not appropriate for summary determination - Application for summary judgment dismissed

Administration Act 1952 (NZ) s 30B

Administration Act 1969 (NZ) s 51

Corporations Act 2001 (Cth)

Interpretation Act 1984 (WA) s 19(1), s 19(2)(b), s 19(2)(f)

Judicature Act 1908 (NZ) s 94A, s 94B

Law Reform (Property, Perpetuities, and Succession) Act 1962 (WA)

Property Law Act 1969 (WA) s 124, s 125, s 125(1)

Rules of the Supreme Court 1971 (WA) O 16 r 1, O 16 r 2, O 20 r 19

Trustees Act 1962 (WA) s 65, s 65(1), s 65(3)(a), s 65(3)(b), s 65(2)(c), s 65(8)

1. The background to these proceedings lies in business activities conducted by Chris Marco (Mr Marco). They are and have been the subject of civil proceedings in the Federal Court and in this Court. Mr Marco has also been prosecuted and convicted of criminal charges in this Court.
2. In the broad, as will be seen, these proceedings allege that each of the defendants deposited moneys with Mr Marco and that those moneys were, with moneys deposited by many other non‑defendants, pooled and held by Mr Marco on trust for all of the depositors.
3. That pooling was described by Feutrill J in Australian Securities and Investments Commission v Marco (No 13) [2023] FCA 83 (Marco (No 13)) as a Ponzi scheme,[1] that is:

[3] ... the promised 'returns' to earlier 'investors' were paid out of the capital contributed by later 'investors' in the Scheme. The Scheme was insolvent from its inception and the remaining property of the Scheme is insufficient to meet 'investors' claims to capital and unpaid promised 'returns'.[2]

1. The allegations made in the present proceedings are then that each of the defendants was repaid, in total, their deposited moneys and some moneys in excess of that which they had deposited. Those 'excess' payments are said to have been paid from the pooled trust funds and are claimed by the plaintiffs pursuant to s 65 of the Trustees Act 1962 (WA) (Act).
2. Again, to quote Feutrill J:

[5] Due to the nature of a Ponzi scheme, many investors - particularly earlier investors - may have received 'returns' of the whole, substantially the whole, or more than the original capital sum contributed ... the nature and extent of any individual investors' recovery to date of the original capital sum contributed is arbitrary. In short, any substantial or full recoveries or gains by investors is down to 'dumb luck'. ...[3]

1. Between September 2002 and 31 October 2018, Mr Marco (and others) obtained moneys from investors (including, but not limited to, the defendants) and pooled those moneys in four Westpac Banking Corporation accounts in Mr Marco's name (Westpac accounts).[4]
2. That operation has been declared by the Federal Court to be an unregistered managed investment scheme (Scheme).[5]
3. The first and second plaintiffs[6] were appointed by the Federal Court, respectively, as joint and several receivers and managers and then as joint and several liquidators of the Scheme under the Corporations Act 2001 (Cth) (Corporations Act).[7]
4. The Federal Court orders are to the effect that the liquidators would be justified in treating investors 'as if and on the basis that they are persons entitled to make claims in the winding up of the Scheme, or to make claims as beneficial owners of the assets and property of the Scheme'.[8]
5. By a generally indorsed writ filed 11 October 2023, the plaintiffs commenced these proceedings.
6. A statement of claim was filed on 28 May 2025 (SOC).
7. By a chamber summons filed 6 August 2025, the defendants seek summary judgment:
   1. pursuant to O 16 r 1 of the Rules of the Supreme Court 1971 (WA) (Rules); or
   2. pursuant to O 20 r 19 of the Rules.
8. The defendants require leave to bring their application out of time and addressed in writing the reasons why time ought be extended.[9] The plaintiffs neither consent nor oppose the granting of the extension. In the circumstances, I have proceeded on the basis that if the defendants are otherwise entitled to succeed in their application, then leave should be given to extend the relevant time.
9. The following is pleaded in the SOC and, for the purpose of this application, is not in dispute.[10]
10. The SOC defines the moneys obtained from all the investors in the Scheme as Scheme Money.[11] The Scheme Money received by Mr Marco from investors and pooled as described was considerable - more than $261,000,000.[12]
11. The SOC pleads that the Scheme Money was held on trust at all times for the investors.[13]
12. Further, considerable sums (some $205.9 million) were paid out of the Westpac accounts to investors between September 2002 and 31 October 2018; although not the whole of the Scheme Money.[14]
13. That is, there was a very considerable shortfall between the Scheme Money received and that returned to investors.
14. Between about 5 April 2013 and about 1 November 2018, the defendants deposited various moneys into the Westpac accounts as investments and received payments from the Westpac accounts as purported returns on those investments.[15]
15. While it is pleaded that the defendants' deposits were 'into the Scheme', it is not pleaded that the defendants had knowledge of any other investors or deposits in the (broader) Scheme.
16. The SOC particularises the defendants' deposits to and receipts from the Scheme by Annexures A ‑ E to the SOC; which are respectively headed:
    1. Annexure A: Peter Sansom and/or nominee;
    2. Annexure B: Favour Project;
    3. Annexure C: Received Pty Ltd ATF Increase Trust;
    4. Annexure D: Emruni Holdings Pty Ltd; and
    5. Annexure E: Prosper (WA) Pty Ltd ATF The Gold Group Trust.
17. Mr Brauer, for the plaintiffs, gave evidence as to the preparation of those Annexures and further as to his belief that the Annexures are accurate for present purposes.[16] Most materially, for present purposes, Mr Brauer deposed that the Annexures to the SOC verify and support the factual allegations made in the SOC to the effect that the defendants received, from the Scheme, moneys in excess of the deposits they had made.[17]
18. Mr Sansom deposed to having reviewed the Annexures to the SOC and 'understands' that the sums in the Annexures appear to be 'substantially correct'.[18] Further, Mr Caughey deposed that, at least, Annexure B, Annexure C and Annexure D appear to be materially correct for respectively the Favour Project,[19] Received Pty Ltd,[20] and Emruni Holdings.[21]
19. I note the following about the Annexures to the SOC. Each has, to the right‑hand side of the page, five columns which are shaded. There was no evidence before the Court as to what those shaded columns represented. There is, rather, a direct link between the net benefits or excesses which it is pleaded that each of the defendants received and the final total figure produced in the non‑shaded parts of each of the Annexures, namely:
    1. the $69,000 which appears in Annexure A as the final total and the pleaded Peter Sansom Net Benefit in SOC [19];
    2. the $598,406 which appears in Annexure B as the final total for the Favour Project and the Favour Project Net Benefit pleaded in SOC [20];
    3. the $2,232,869 which appears in Annexure C as the final total and the pleaded Received Net Benefit in SOC [21];
    4. the $1,751,508 which appears in Annexure D as the final total and is the pleaded Emruni Net Benefit in SOC [22]; and
    5. the $171,912 which appears in Annexure B as the final total and the pleaded Prosper Net Benefit in SOC [23].
20. In the absence of explaining evidence, I have disregarded the shaded columns in the Annexures to the SOC. No party addressed any submissions to those shaded columns.
21. It suffices presently to note that the SOC claims are to the effect that each of the defendants received the 'principal' which they had deposited into the Scheme and, in addition, received some 'interest' or a 'return' on the 'principal' invested.
22. The plaintiffs say that 'return' or 'excess' payment that each of the defendants received was paid out of Scheme Money which was held on trust for all investors (not just the defendants) and so was paid to each of the defendants in breach of trust.[22]
23. The plaintiffs then claim against each of the defendants repayment of the excess sums pursuant to s 65 of the Act.
24. The SOC does not seek to recover from any defendant any repayment to them of their 'principal' deposited into the Scheme.
25. As noted, the SOC pleads that each of the 'excess' sums received, respectively, by the defendants was trust property which was applied, or alternatively wrongly distributed, by Mr Marco in breach of trust.[23]
26. As the defendants correctly note, the SOC does not plead that they knew that the excess payments received by them were a misapplication, a wrongful distribution or otherwise were distributed to them in breach of trust.[24] The plaintiffs do not contend that the defendants' knowledge is an element of their claims.

1. The defendants rely on the following affidavits (read without objection) of:
   1. Peter Andrew Sansom made and filed 6 August 2025 (first Sansom affidavit): Mr Sansom is the first defendant;
   2. Peter Caughey, an accountant retained by some of the defendants, made and filed 6 August 2025 (Caughey affidavit);
   3. Hendrik Adriaan Piek made and filed 6 August 2025: Mr Piek is one of the defendants' solicitors;
   4. Mr Sansom made 12 November 2025 and filed 7 January 2026 (second Sansom affidavit); and
   5. Celia Jessie Sansom made 12 November 2025 and filed 7 January 2026 (Mrs Sansom's affidavit).
2. In opposition, the plaintiffs read, without objection, the affidavit of Robert Conry Brauer, the first‑named first and first‑named second plaintiff made 3 September and filed 5 September 2025 (Brauer affidavit).

The defendants and their pleaded excess receipts

1. The first and second defendants, Mr and Mrs Sansom, are a married couple.[25]
2. It is pleaded at [19] of the SOC that between about 5 April 2013 and 20 March 2014, Mr Sansom, in his own right, received $69,000 of Scheme Money in excess of principal moneys he had deposited into the Scheme. The SOC particularises by its Annexure A the cash deposits of, and repayments to, Mr Sansom in his own capacity.
3. Further, Mr Sansom is pleaded to be one member of the 'Favour Project', which in turn is pleaded to be an unincorporated not‑for‑profit association at [6] and [7] of the SOC.
4. Mrs Sansom is pleaded to be the other member of the Favour Project, and it is pleaded that Mr and Mrs Sansom were, at all material times, the only members of the Favour Project.[26]
5. The SOC particularises by its Annexure B the cash deposits into, and payments from, the Scheme by and to the Favour Project.
6. In respect of the Favour Project, the SOC pleads that the excess of moneys received (over the principal deposited) was received jointly by Mr and Mrs Sansom in their capacity as the sole members of the Favour Project, or alternatively in their own capacities.[27]
7. In the period between about 17 November 2014 and about 25 October 2018, Mr and Mrs Sansom are pleaded to have jointly received $598,406 of Scheme Money in excess of principal moneys deposited.[28]
8. It was common ground at the hearing that the Favour Project had no separate legal personality and the pleas concerning it should be treated as pleadings as to the personal positions of Mr and Mrs Sansom, albeit made under that label.[29]

1. The third defendant, Received Pty Ltd, is pleaded to be the trustee of the Increase Trust at SOC [10]. The SOC particularises by its Annexure C the cash deposits of, and repayments to, Received Pty Ltd.
2. In the period between about 31 December 2016 and about 1 November 2018, it is pleaded that Received Pty Ltd received $2,232,869 of Scheme Money in excess of moneys it had deposited.[30] I have proceeded on the basis, and I think the parties have as well, that the allegation is that Received Pty Ltd received that sum as trustee of the Increase Trust.

1. The fourth defendant, Emruni Holdings, is pleaded to be a duly incorporated company at SOC [11]. The SOC, by its Annexure D, particularises the cash deposits of, and repayments to, Emruni Holdings.
2. Between about 1 October 2013 and about 1 February 2018, it is pleaded that Emruni Holdings received $1,751,508 of Scheme Money in excess of deposits it made into the Scheme.[31]
3. Mr Sansom deposed that he is presently the sole director and shareholder of Emruni Holdings.[32]

1. The fifth defendant, Prosper (WA), is pleaded to be the trustee for the Gold Group Trust at SOC [12]. The SOC particularises by its Annexure E the cash deposits of, and repayments to, Prosper (WA).
2. Mr Sansom deposed to now being the sole director and shareholder of Prosper (WA) and that the Gold Group Trust is now dissolved.[33]
3. The plaintiffs, as I read it, do not seek to challenge the 'dissolution' of the Gold Group Trust and, indeed, have foreshadowed amendments to the SOC if the Court were satisfied that the Trust was 'dissolved' in 2017.[34]
4. Between about 30 May 2016 to 23 March 2017, it is pleaded that Prosper (WA) received $171,912 from the Scheme in excess of moneys it had deposited.[35]

1. As noted,[36] the defendants for the purposes of their application proceed on the basis that the facts pleaded in the statement of claim are taken to be established, including that the excess funds claimed were paid to the defendants from trust funds of the Scheme in breach of trust by Mr Marco.
2. Further, the defendants accepted that:
   1. the plaintiffs are making a claim within the meaning of s 65(2)(c) of the Act;[37] and
   2. the Court could make an order of the type set out in ss 65(3)(a) or (b) of the Act at the suit of the plaintiffs.[38]
3. The defendants limited their application to reliance on s 65(8) of the Act and submitted that the question to be resolved is:

... have the Defendants in these proceedings established that they are so obviously entitled to the benefit of the statutory exemption in section 65(8) that the proceedings have no prospects of success on the basis there is no evidence to refute such entitlement?[39]

1. The defendants say that 'it is unarguable' that the defence under s 65(8) of the Act applies and, so, these proceedings against the defendants are 'entirely without merit'.[40]
2. The defendants noted in their written submissions an argument that s 65 of the Act may not be applicable to the sort of claims made here. That is, that s 65 of the Act may be limited to the distribution of the estate of a deceased person.[41]
3. However, the defendants did not seek to agitate that issue further, and said it was 'not necessary for the determination of this application' to resolve that issue.[42]
4. I have proceeded on that basis.[43]

Principles to be applied to the defendants' applications

1. The following principles were not in dispute and may be considered, with respect, to be well established:
   1. a defendant bringing a summary judgment application bears the legal onus of establishing that there is no serious question to be tried on any cause of action raised by the plaintiff;[44]
   2. Order 16 r 2 of the Rules entitles a plaintiff to file an affidavit to show cause against the summary judgment application;[45]
   3. in establishing there is a real question to be tried, it is not enough for the plaintiff to suggest that evidence will or may be adduced in the future - it must be adduced by the plaintiff on the summary judgment application;[46]
   4. a very high bar must be cleared before summary judgment will be imposed. Summary judgment is only appropriate for cases that are not fit for trial in the sense that the action 'is so clearly untenable that it could not possibly succeed at a trial in the ordinary way';[47]
   5. an application for summary judgment is not the occasion to dispose of difficult or substantial questions of law which cannot be determined without full argument;[48]
   6. actions should not be disposed of summarily where material factual issues between the parties are in dispute;[49]
   7. the power to order summary judgment will only be exercised with great care (or 'exceptional caution') in the clearest of cases where there is a high degree of certainty about the ultimate outcome of the proceedings if they were to go to trial.[50] This is often expressed as summary processes not being used to stultify the development of the law; and
   8. likewise, the Court will proceed with caution before determining a strike out application.[51]

1. The relevant provisions of the Act are:
   1. Deceased estate, claims made after distribution of, tracing, following assets

(1) This section applies where a trustee has distributed any assets forming part of the estate of a deceased person or subject to a trust, and there is nothing in any Act to prevent the distribution from being disturbed.

(2) Where this section applies, the Court may make an order on a claim, being -

(a) an application under the Family Provision Act 1972; or

(b) a claim to which section 63 applies; or

(c) a claim by a person to be a beneficiary under the will, or to be entitled on the intestacy, of the deceased person, or to be beneficially interested under the trust;

any of which application or claims are, hereinafter in this section, called the claim.

(3) An order under subsection (2) may provide that -

(a) any person to whom any assets, to which the section applies, were distributed, or his personal representative, shall pay to the person making the claim or to the trustee a sum not exceeding the value of those assets; or

(b) any person, who has received, otherwise than in good faith and for valuable consideration, any interest in any assets, to which this section applies, from the person to whom they were distributed or his personal representative, shall pay to the person making the claim or to the trustee a sum not exceeding the value of that interest;

and for the purpose of giving effect to that order the Court may make such further order as it thinks fit.

...

(8) Where a trustee has made a distribution of any assets forming part of the estate of a deceased person or subject to a trust, relief (whether under this section or in equity or otherwise) against any person other than the trustee or in respect of any interest of any such person in any assets so distributed and in any money or property into which they have been converted, shall be denied, wholly or in part, if the person from whom relief is sought received the assets or interest in good faith and has so altered his position in reliance on his having an indefeasible interest in the assets or interest, that, in the opinion of the Court, having regard to all possible implications in respect of the trustee and other persons, it is inequitable to grant relief or to grant relief in full.

(9) Without prejudice to the provisions of subsection (8), an order under this section may provide that any payment directed to be made by that order shall be made by periodic payments or by instalments, and the Court may fix the amount or rate thereof in the order, and may from time to time vary, suspend or discharge the order for cause shown, as the Court thinks fit. (emphasis in the original)

1. The defendants submitted:
   1. In order to establish whether the statutory exemption from liability under s 65(8) applies, it is submitted all it is necessary for the Defendants to establish on the evidence is that:

28.1. they received the relevant payments in good faith;

28.2. they changed their position on receipt of those payments; and

28.3. the change was in reliance of having an indefeasible interest in the funds paid to them.[52]

1. For the purposes of this application, the plaintiffs were content to accept that the defendants must establish those matters.[53] As will be seen, the plaintiffs also pointed to the last part of s 65(8) of the Act, as to the opinion which the Court must reach to deny the plaintiffs relief or relief in full.[54]
2. The defendants further submitted:
   1. In any event, in these proceedings, the overwhelming and definitive evidence as now provided to the Court in support of the present application is to the effect that the Defendants:

49.1. acted in good faith;

49.2. have altered their position on the basis they had indefeasible interest in the capital and revenue returned to them;

49.3. acted on reliance of their entitlement to the capital and returns paid.

1. It is to be reiterated, the Plaintiffs provide the Court with no evidence whatsoever in relation to seeking to challenge the evidence outlined in the preceding paragraph.[55]

Good faith: Defendants' evidence as to their decision‑making

1. The defendants relied, as I understood it, on evidence of their decision‑making as to the making of investments into the Scheme as establishing their good faith in receiving the payments of Scheme money.
2. Investment decisions, at least initially, must have preceded the receipt of any return. But as time went on, the defendants continued to make investments as they received returns and so, in this case, there is not a bright line between the making of the investment in good faith and receiving a return in good faith over time.
3. The plaintiffs engaged with the evidence and submissions on that basis, and I have also.

1. Although he did not expressly say, Mr Sansom's evidence, without objection, was relied upon by all of the defendants and I have proceeded on the basis that he was authorised to give evidence for each of the defendants.
2. Much of Mr Sansom's evidence is general in the sense that it is not specific to a particular defendant.
3. Mr Sansom deposed to having had some knowledge of, and contact with, Mr Marco prior to being approached directly by him in approximately 2013 to invest in what Mr Marco described as a 'private placement program', which Mr Sansom defined as PPP.[56]
4. Mr Sansom deposed that Mr Marco told him that the returns on a PPP investment 'would be much higher than returns that could be achieved through conventional investing'.[57]
5. Mr Sansom deposed that Mr Marco did not, to his recollection, provide any specific details of the investments[58] and that the investments which the defendants made were undertaken pursuant to documents headed 'Declaration of Trust'.[59] Mr Sansom deposed that each of the Declaration of Trust documents was in the same terms and varied only as to the amount deposited, the rate of return, the commencement date, the maturity date and the investment type.[60] I have attached the first Declaration of Trust to these reasons as Annexure A.[61]
6. Mr Sansom deposed to the 'return payable' pursuant to the various Declaration of Trust documents being paid as provided for, with the exception of the time when what he calls the 'Marco Schemes' went into liquidation and the payments ceased.[62]
7. Mr Sansom deposed:

10.12 I recognised that there was a high level of trust in making these investments with Mr Marco. However, Mr Marco had in our conferrals persuaded me that he was genuine in achieving outcomes that he promised and that the investments were genuinely being pursued by him in order to achieve the returns which were duly paid. More particularly, as the payments due pursuant to the Declaration of Trust agreement were made as promised, the level of confidence in Mr Marco's Schemes increased and, accordingly, it was on this basis I made the decision to make further investments. That is, during my entire period of mine and my associates investing with Mr Marco, no issues arose which would have caused me to be concerned that Mr Marco was not managing the Schemes appropriately and/or achieving the returns. That is, until, to my complete surprise, when the Marco Schemes collapsed and the Liquidators were appointed.[63]

1. Mr Sansom deposed to his complete confidence that the 'Marco Schemes' were operating 'properly' and operating in exactly the way they had been promised to by Mr Marco.[64]
2. As part of his evidence, Mr Sansom deposed that he:

... did from time to time, in the ordinary course, check with Mr Marco that everything was in order.[65]

1. No further detail was provided by Mr Sansom as to what he means by 'in the ordinary course' or that 'everything was in order'.
2. Mr Sansom sought to corroborate his evidence (as to his confidence in the investments managed by Mr Marco) by deposing that he introduced his father to make similar investments with Mr Marco[66] and recommended a number of his business and investment associates to do the same, although he was unable to give details of the latter.[67]
3. In further 'corroboration' Mr Sansom deposed that Mr Caughey told him:
   1. he, Mr Caughey, was an investor in the Scheme through a syndicate; and
   2. his (Mr Caughey's) general position was that the Marco Schemes were unconventional but were proving to be a good investment.
4. Mr Sansom deposed that he took further reassurance and confidence from Mr Caughey's investment/s that the Marco Schemes were genuine and a good investment.[68]
   1. Mr Sansom deposed to his 'companies and entities' investing in investments provided by Mr Marco.[69] It is clear that he was referring to the Favour Project, Received Pty Ltd, Emruni Holdings and Prosper (WA). Mr Sansom did not depose to any moneys he deposited in his own right with Mr Marco, nor did he give any evidence as to the capacity in which his wife, Mrs Sansom, deposited and received moneys as pleaded in the alternative in the SOC.
   2. Although Mr Sansom gave no evidence as to his state of mind when making investments in his own right as alleged in the SOC (as distinct from as part of the Favour Project), the plaintiffs quite properly accepted they would not be prejudiced if, favourably to Mr Sansom, I took his more general evidence to be his state of mind when making his personal investments.[70] I have done so.
   3. I make the following observations from Mr Sansom's general evidence.
   4. The sums invested on behalf of the defendants were very considerable.
   5. The rate of return, for very short periods of time, could only be described as extraordinary.
   6. Mr Sansom was never given any details - specific or otherwise - as to what the moneys were being invested in and at best was told that they were 'unconventional'.
   7. The investments were documented by unsophisticated and short form Declarations of Trust.
   8. It appeared to Mr Sansom that Mr Marco was a one-man band; including from the Declarations of Trust. As was apparent from the Declarations, there was no different entity (from Mr Marco) securing the return of the principal deposited.
   9. Mr Sansom conducted no due diligence himself and received, as will be apparent, no due diligence report as to any of Mr Marco, the Scheme or any of the PPPs.
   10. No independent, or non‑independent, audit was sought by, or provided to, Mr Sansom.
   11. The plaintiffs contended that:

On one view, Mr Sansom's evidence in relation to the issue of good faith, ... does no more than demonstrate that he believed that he was on to a good thing - i.e., that he was confident of the investments' performance, rather than their legitimacy.[71]

1. There is considerable force in that submission.

1. Mr Caughey is a public tax accountant and a registered tax agent.[72] However, significantly, Mr Caughey deposed that he had not given any financial advice to any of the defendants and noted that his professional services company does not hold a Financial Services Licence.[73]
2. Mr Caughey deposed, without particularisation, that in 2013 he undertook a due diligence process in relation to the 'Marco Schemes' for another client and for the purpose of his own investment interests and then he personally invested in them.[74] Whether or not such 'due diligence' for the other client constituted financial advice is not addressed by Mr Caughey. Mr Caughey gave no evidence that he communicated the results of his due diligence to Mr Sansom or to any other of the defendants.
3. I have set out the following evidence of Mr Caughey in full:

[16] For the purposes of this affidavit, I depose that given I had undertaken due diligence in relation to the genuineness of the Marco Schemes, when I identified from its financial records that the Favour Project (and the other Defendants) had invested in and continued to invest in the Marco Schemes, I nor Meta [Mr Caughey's professional company] raised with Mr Sansom on behalf of the Favour Project or the other Defendants any issue in relation to that genuineness of that investment. However, I did disclose to Mr Sansom that I was also an investor in the Marco Schemes and from time to time we discussed the Marco Schemes and the revenue being returned. During those discussions, we exchanged words to the effect "Chris Marco's schemes are not conventional, but we do seem to be doing well. Even though they are unconventional, Chris' schemes are proving to be a good investment". Mr Sansom would answer with words to the effect "yes, I am very happy with the investment and the outcomes - the investment with Chris is working out well".

[17] The above is qualified by the fact that I had a concern that the Marco Schemes had very limited management resources and, more particularly, appeared to be principally or solely managed by Mr Marco. However, this general concern appeared not to be an issue given the Marco Schemes paid to the Favour Project the interest payments and capital returns as contracted for (as it did for my own investment), over the entire period between when the investments were originally made until the Marco Schemes collapsed or became redundant in 2018. That is, I had confidence in the Marco Schemes as a result of the performance of those Schemes in terms of paying returns and returning capital when requested. Given this history, there appeared to be no reason to believe that the Marco Schemes were not genuine and not a legitimate investment by the Favour Project, accordingly, in my general conferral with Mr Sansom in relation to our mutual investments, I did not raise any issues in relation to the Favour Project (or the other Defendants) maintaining that investment. Other than, we were all completely reliant upon our trust in Mr Marco.[75]

1. This evidence of Mr Caughey, on its face, does not reduce the force of any of the observations I made above about Mr Sansom's general evidence in [82] ‑ [88]; nor the force of the plaintiff's submission recorded in [89] above.

1. As I understand it, the defendants also intend that Mr Sansom should be taken as having deposed that he caused the Favour Project to invest in the Scheme.[76]
2. Mrs Sansom deposed that at no stage did she sign any agreement in respect of an investment in the Scheme and cannot recall ever investing in the Scheme personally.[77]
3. She gave evidence that she is a pharmacist and has obligation to act with integrity and honesty.[78]
4. She deposed to having established the Favour Project with Mr Sansom in October 2014.[79]
5. Her evidence was that she was aware of the investment decisions being made by the Favour Project in the Scheme and 'had no issue' with them.[80]
6. Her evidence was that Mr Sansom consulted with her prior to 'investments' being made in the Scheme[81] and that investment decisions made by the Favour Project were usually decisions made jointly between her and Mr Sansom or decisions about which she was informed and consulted about before they were made.[82] Mrs Sansom's evidence was at a high level of generality on this aspect.
7. Mrs Sansom's evidence was that investments made in the Scheme by the Favour Project or Prosper (WA) paid the returns contracted for on time and she had no reason to believe that Mr Marco was involved in any unlawful activity.[83] Mrs Sansom purported to give evidence, also, as to 'other entities controlled by Peter and myself',[84] but did not depose to which other entity she was referring, nor any role she may have had in them.
8. She gave some general evidence that prior to investing in the Scheme:
   1. 'we maintained a reasonably conservative investment strategy';[85]
   2. 'we altered our investment strategy or strategies' to invest in the Scheme;[86]
   3. the alteration was away from investing no more than 10% of the portfolio assets in one particular investment and towards being 'more heavily invested' in the Scheme;[87] and
   4. 'We have now lost the capital invested in the [Scheme]. We are victims to the unlawful conduct of Mr Marco'.[88]
9. There was no evidence before the Court of any professional investment advice having been received as to investments in the Scheme; nor of any 'investment strategy' having been developed, before or afterwards, with an outside professional for any of the defendants.
10. It may be noted that Mr Sansom did not give any similar evidence as to any particular investment strategy, nor any change thereto.
11. Nor was there any evidence as to whether any such strategy, or change thereto, was documented at any point in time.
12. Mrs Sansom did not depose to when exactly the deposed to investment strategy was changed, nor to what she was referring to by her evidence of having lost 'the' capital invested in the Scheme. It may be that this part of Mrs Sansom's evidence concerned some expectation loss and may have some relationship with the shaded columns in the Annexures to the SOC. However, counsel for the defendants was unable to assist the Court with an explanation of this evidence and given the defendants' acceptance of the pleas in the SOC,[89] I have put this evidence to one side.
13. In what was something of a theme in the defendants' submissions, it was submitted that the plaintiffs' 'failure' to provide evidence that Mrs Sansom acted in bad faith should be taken by the Court as being 'conclusive' that, for the present purposes, there is no line of reasonable enquiry in respect of whether Mrs Sansom did act in bad faith.[90]
14. With respect, to adopt that approach, in my view, would lead to the sort of error identified by Pullin JA in Alpha Wealth Financial Services Pty Ltd v Frankland River Olive Company Ltd [2008] WASCA 119 [39] (Alpha Wealth); which case is further discussed below.
15. Mr Caughey's evidence was that from his role he could 'identify' that investment decisions by the Favour Project were made by Mr Sansom as the active member of the Favour Project.[91] Mr Caughey did not identify how that was so. Further, Mr Caughey gave no evidence of Mrs Sansom's role in decision making for the Favour Project.
16. To the extent that there are inconsistencies between Mrs Sansom's evidence and Mr Caughey's evidence (and Mr Sansom's assumed evidence) as to decision making for the Favour Project, they were not addressed by the defendants in their material.
17. An inconsistency of this kind in the defendants' evidence does not assist the defendants in establishing that their defence/s must succeed.

1. Mr Sansom deposed to being a director and shareholder of Received Pty Ltd.[92] There does not appear to have been any other director of Received Pty Ltd.[93]
2. Mr Caughey deposed that, 'from his experience', investment decisions for Received Pty Ltd were made by Mr Sansom.[94] Mr Caughey did not identify how that was so or the experience he was drawing upon.

1. Mr Sansom deposed initially that he was a director and shareholder of Emruni Holdings;[95] and then deposed that he is presently the sole director and shareholder of Emruni Holdings.[96]
2. That there were other directors of Emruni Holdings at relevant times was identified by the plaintiffs in their submissions.[97]
3. Mr Sansom then further deposed in his second affidavit[98] that there were other directors at different times of Emruni Holdings, namely:
   1. from 29 January 2014 to 5 February 2015, his brother (Mark) and his father (Graeme);[99] and
   2. from 5 February 2015 to 7 September 2015, David Hadingham was a director.[100]
4. Additionally, it may be noted that the ASIC search showed another individual was a director between 19 June 2013 and 24 September 2013, but that period pre-dated the first entry in Annexure D to the SOC, and that individual may be disregarded.
5. In the period between 29 January 2014 and 7 September 2015 (when there were other directors of Emruni Holdings), Annexure D to the SOC records 17 deposits into, or withdrawals from, the Scheme, including two deposits of $1.5 million and $2 million respectively on 9 May 2014 and 11 February 2015. Those amounts may be seen to be significant deposits in and of themselves.
6. Mr Caughey's evidence was that Mr Sansom was the sole director of Emruni Holdings for the 'relevant period 2013 to 2019'.[101] That is obviously inconsistent with Mr Sansom's evidence and the ASIC search adduced. That discrepancy was unexplained by the defendants.
7. Mr Caughey's evidence was that, from his experience, Mr Sansom made investment decisions as the sole director of Emruni Holdings,[102] and made no reference in his evidence to any other director of Emruni Holdings. With respect, it is unclear the basis on which that statement is made (e.g. what is the 'experience' Mr Caughey is drawing upon).
8. In his first affidavit, Mr Sansom did not give any specific evidence as to how investment decisions were made by Emruni Holdings.
9. Mr Sansom's evidence in his second affidavit about the role of each of his brother, his father and Mr Hadingham in the making of decisions to invest in the Scheme was not, with respect, clear. He deposed, concerning Emruni Holdings, that:
   1. My role as director of the company was to make the substantial investment decisions, and neither Graeme nor Mark were involved in the executive investment decision making of the company. Graeme and Mark were appointed as directors of Emruni to review and provide input on the investment decisions that were being made, and maintaining the investment.
   2. Mr David Hadingham was an investment professional who worked for Emruni, and was also appointed in a role of director to monitor and review investment decisions of the company. I continued to make the executive investment decisions of the company during David's time as a director.[103] (emphasis added)
10. No evidence was given as to what was said to Mr Sansom in the course of those reviews and inputs by Mr Sansom's brother and father and Mr Hadingham respectively.
11. I think the defendants wish the Court to infer that any review and input by his father would have been positive given that his father also was an investor and lost a considerable sum of money by reason of the Scheme.[104]
12. The plaintiffs maintained their submission that even with the second Sansom affidavit, there was not clear evidence, at least for the periods when Mr Sansom's brother and father and Mr Hadingham were directors, as to what was said to, and in the mind of, Mr Sansom as the guiding mind of Emruni Holdings (on the assumption that he made all of the executive investment decisions).
13. That there is not evidence of what was said to Mr Sansom by the others and that there are areas where the evidence as to the decision making of Emruni Holdings is unclear are matters which do not assist the defendants in seeking to establish the inevitability of their defence/s.

1. As noted, Mr Sansom is now the sole director and shareholder of Prosper (WA).[105] Mr Sansom's first affidavit had simply deposed that he was a director and shareholder of Prosper (WA).[106]
2. As was the case with Emruni Holdings, Mr Sansom expressly deposed to there being other directors of Prosper (WA) following the filing of the plaintiffs' submissions.[107]
3. He deposed that previously Prosper (WA) had additional directors, namely:
   1. Kevin Das, between 1 March 2016 and 25 July 2023;[108] and
   2. Mrs Sansom, between 2 December 2014 and 20 June 2023.[109]
4. Mr Sansom deposed that Mr Das was not involved in any decisions on the part of Prosper (WA) to invest in the Scheme, but that Mrs Sansom was.[110]
5. Leaving Mr Das to one side, in the period that Mrs Sansom was a director of Prosper (WA), it made all but two of the transactions into and out of the Scheme as alleged in Annexure E to the SOC.
6. Mrs Sansom deposed that while she was a director of Prosper (WA), decisions were made by the board, and that Mr Sansom was 'substantially' involved in a number of these decisions.[111]
7. It is not clear what Mrs Sansom meant by that evidence exactly. Taken on its face, Mrs Sansom's evidence, viewed against the objective fact of Mr Das being a director of Prosper (WA) between March 2016 and July 2023, was that the board, at least insofar as it comprised Mr Sansom and Mr Das (depending on whether she was including herself or not), made investment decisions.
8. That is, obviously enough, not consistent with Mr Sansom's evidence. That inconsistency was not addressed in the defendants' material.
9. Mrs Sansom further deposed that she was aware of 'substantial' investment decisions made by Prosper (WA) including into the Scheme and did not have any objection.[112] As may be seen, there is some tension in the words Mrs Sansom used between whether she, as a member of the board, made the investment decisions for Prosper (WA) to invest in the Scheme or was simply aware of them and did not object. That tension was not further addressed nor resolved by the defendants.
10. Again, I would repeat the substance of my observations above as to the lack of clarity in this evidence not assisting the defendants to establish the inevitability of their defence/s.

1. The defendants' evidence as to their change of position was as follows:
   1. moneys received from the Scheme were intermingled with other moneys of each particular defendant;
   2. the moneys were then used by the particular defendants in the ordinary course of their business or undertaking;
   3. the moneys would not have been mixed or spent in the ordinary course if any of the defendants had any cause to consider there was a problem with investing in the Scheme;
   4. the defendants would have sought to have their deposits immediately repaid or, alternatively, would not have reinvested or recapitalised the investment funds into the Scheme;
   5. as the receipts from the Scheme were from years ago, it would now not be possible to 'trace' or identify how those funds had been applied by the particular defendant; and
   6. the defendants either could not, or could not without great difficulty, repay the sums claimed in the SOC.
2. Before considering that evidence further, I note the following two matters.
3. Firstly, neither Mr nor Mrs Sansom adduced any evidence as to their personal positions.
4. Secondly, at least in respect of the Favour Project and Prosper (WA), there was some confusion evident in the defendants' materials and submissions as to what was the relevant legal entity. It was rather assumed in the defendants' evidence and submissions that the Favour Project and the Gold Group Trust were separate legal persons which is, obviously, contrary to the position at law.
5. The significance of that is that the relevant party's or parties' (namely Mr and Mrs Sansom and Prosper (WA) respectively) change of position has not been dealt with by the defendants to the extent it relies on their current financial position. As will be seen below, there is also a question as to whether a recipient's current financial position is relevant to whether it has altered its position or it is inequitable to grant the relief sought.

1. Mr Sansom deposed that each entity's bank account was a general account for the particular entity or defendant and that the moneys received from Mr Marco were deposited into those bank accounts.[113] On a fair reading of the evidence, Mr Sansom gave no evidence of any bank accounts he held, nor where any of the receipts he allegedly received personally (as alleged in the SOC) were deposited. The same may be said for Mrs Sansom's evidence.
2. Mr Sansom deposed that - aside from the Favour Project which was not required to lodge a tax return or pay tax - the other corporate defendants completed tax returns which included the 'income' they received from Mr Marco.[114]
3. As to the Favour Project, Received Pty Ltd, and Emruni Holdings, Mr Caughey deposed that it would be impossible to trace revenue received from the Marco Schemes into particular payments made or investments made by the Favour Project because of the intermingling of funds, which were then used for general purposes.[115]

Receipts used in the ordinary course of business and what the defendants would have done

1. It appears in relation to the assertion of a change of position on the part of the defendants, Mr Sansom deposed that if the 'revenue' received from Mr Marco by the defendants was in any doubt, then:
   1. he would not have taken the risk of having the funds 'intermingled' with other funds received by those corporate defendants;[116]
   2. he would not have authorised the revenue to be recorded in the tax returns (where applicable);[117]
   3. he would have made different investment decisions (which are not specified) if he had had any doubt that the revenue from Mr Marco was not 'indefeasibly held' by the relevant entity;[118]
   4. such other (unspecified) investments would 'in the ordinary course' have provided positive returns;[119] and
   5. a 'substantial amount' of the operating expenses incurred by the Favour Project and the corporate defendants was incurred and expended on the basis of the revenue from Mr Marco and the understanding that it was held by them 'indefeasibly'.[120]
2. The defendants' evidence does not seek to establish any alteration of position based on good faith receipt, other than the fact that the defendants carried on their normal operations or activities without segregating the receipts.
3. For example, Mr Sansom deposed:
   1. I depose that in circumstances if there had been any doubt whatsoever that the entity which earned income from the Marco Schemes did not indefeasibly hold that income as its own, I would not have then taken the risk of having those funds intermingled with the other funds belonging to the entity and those funds then used for further investing or, further, the payment of costs and expenses.[121]
4. Mr Sansom repeatedly deposed to a belief as to income or funds being 'indefeasibly held'. Although it is not of great moment, I would be very surprised if that is language that Mr Sansom generally uses; and if those words were not inserted by a legal representative of the defendants with an eye to the words used in s 65(8) of the Act.
5. More significantly, as is apparent from that quotation, none of the defendants sought to demonstrate exactly how they changed their position on receipt of the excesses paid from the Scheme.

1. Further, Mr Sansom deposed that none of the Favour Project, nor the corporate entities, could repay the excess funds claimed by the plaintiffs.[122]
2. Mr Caughey deposed that:
   1. it would be impossible or likely to be impossible for the Favour Project to repay the specific returns from the Marco Schemes;[123]
   2. to raise the funds necessary to repay the returns from the Marco Schemes, the Favour Project would have to sell assets to repay those amounts and would have significant difficulties in raising the necessary funds;[124] and
   3. the Favour Project had a net negative asset position of over $5 million at 2025.[125]
3. As may be seen, Mr Caughey's affidavit proceeded, in effect, on the basis that the Favour Project is a separate legal person from Mr and Mrs Sansom.
4. In relation to Received Pty Ltd, Mr Caughey deposed that:
   1. Received Pty Ltd's only activity was as trustee for the Increase Trust;[126]
   2. all the net income of the Increase Trust was distributed to the Favour Project;[127]
   3. Received Pty Ltd and the Increase Trust were investment entities principally established to hold investments in the Marco Schemes;[128]
   4. if Received Pty Ltd had to in 2025 repay specific returns received from the Marco Schemes that would be impossible or likely to be impossible;[129] and
   5. the Increase Trust as at 2025 (by reference to the 2024 financial year) had a net negative asset position and had recoverable investment assets less than its liabilities to third parties.[130]
5. Mr Caughey's evidence in relation to Received Pty Ltd and the Increase Trust treated them as separate legal entities one from the other, which may be the position as a matter of Australian taxation law, but is not the position at general law.
6. Further, it is not clear what other activities Received Pty Ltd engaged in such that there were 'other funds' in its account, other than from the Marco Schemes.
7. In relation to Emruni Holdings, Mr Caughey deposed that:
   1. if Emruni Holdings was asked in 2025 to repay the specific returns received from the Marco Schemes that would be impossible or likely to be impossible;[131] and
   2. at 2025, Emruni Holdings had a net negative asset position of more than $6 million and had likely recoverable assets of about $900,000 but liabilities to other parties of over $10 million.[132]
8. In relation to Prosper (WA) and the Gold Group Trust, Mr Caughey deposed:
   1. that he or his business had not been engaged by Prosper (WA);[133]
   2. in 2017, he had been engaged to assist in the 'dissolution' of the Gold Group Trust, and that Prosper (WA) continued to trade in its own right following that 'dissolution';[134]
   3. because of the dissolution, there were no assets owned by the Gold Group Trust which could meet any obligation to pay the plaintiffs;[135] and
   4. the interest in the Marco Schemes held by the Gold Group Trust was assigned to Emruni Holdings.[136]
9. The evidence Mr Caughey gave in relation to Prosper (WA) and the Gold Group Trust proceeded, obviously, on the basis that the Gold Group Trust was a separate legal entity from Prosper (WA). I repeat here the observations I made above as to Received Pty Ltd and the Increase Trust.
10. Mr Caughey's affidavit did not explain in any detail what was meant by the 'dissolution' of the Gold Group Trust: that is not an expression with an accepted meaning in trust law.
11. Mr Caughey's affidavit did not descend to any particulars as to the deposed to assignment to Emruni Holdings and did not depose to the financial position of Prosper (WA).
12. In the ordinary course, the trustee (Prosper (WA)) would be liable personally for the debts of the 'trust' (as expressed loosely). The trustee would have a right of indemnity against trust assets but its liability to the world outside of the trust would not be, without more, limited to the available assets of the trust.

1. As will be seen below, there is a question as to whether the current financial position of a recipient is relevant to the defence in s 65(8) of the Act.
2. At least in respect of Mr and Mrs Sansom personally (which includes the Favour Project) and Prosper (WA), the evidence does not establish financial incapacity to repay.
3. Further, it is not immediately plain in relation to Emruni Holdings what Mr Caughey's evidence as to the net negative asset position means when compared with liabilities over recoverable assets.

1. When one considers the wording of s 65(8) of the Act, the question of whether it would be 'inequitable to grant relief or to grant relief in full' is to be decided by the Court, considering multiple factors.
2. The defendants submitted that, in the absence of evidence from the plaintiffs, it was not necessary for the Court on their application to consider whether (to use the language of s 65(8) of the Act) 'having regard to all possible implications in respect of the trustee and other persons, it is inequitable to grant relief or grant relief in full'.[137]
3. Further, the defendants submitted:

To be clear, the mere assumed fact that the outcome of the orders sought by the Plaintiffs being made would increase the pool of funds to be paid to the body of creditors or assist in funding the liquidation, is entirely inadequate. To reach a conclusion of positive inequity, it would be necessary for full disclosure of the status and entitlements of every creditor to be proved to then determine if it would be inequitable for that creditor to not have the benefit of the payment in or if that creditor is in the same position as the Defendants and or, in any event, if every creditor has acted in good faith in relation to their investments in or dealings with the Marco Schemes. No relevant disclosure has been given.[138]

1. I do not accept that submission as being obviously correct.
2. I note, for example, that as the claims in the SOC are to recover payments made over and above the principal/s invested, then an obvious matter for the Court to consider would be whether increasing the pool for investors who may have lost their principal would have the effect that it was not inequitable for the plaintiffs to recover against the defendants here.
3. The defendants, rather, focused on their own position as victims of the Ponzi scheme.[139] The defendants submitted that:
   1. they would suffer prejudice if they had to repay the excess sums claimed in the SOC;[140]
   2. the action by the plaintiffs was late, which in equity would weigh against the grant of the relief sought;[141] and
   3. the defendants could not repay readily or at all some of the excess sums claimed.[142]
4. In short, it is not plain to me that the Court has before it sufficient material to be confident on a summary determination that it would be inequitable to grant relief or to grant relief in full.
5. In this context, I repeat the observations of Feutrill J which I quoted in [5] above to the effect that whether an investor in a Ponzi scheme, such as that run by Mr Marco, recovered: their principal and promised return; only their principal; or none of their principal and promised return is a matter of luck.
6. As a matter of statutory construction, it is at least arguable that all of the matters of:
   1. 'good faith';
   2. the alteration of position in reliance; and
   3. 'all possible implications in respect of other persons'

must be considered before the Court could conclude that it would be inequitable to deny relief in whole or in part to the plaintiffs.

1. I do not consider that exercise can be done on the state of the defendants' present evidence, even assuming that the principles applicable to the defence found in s 65(8) of the Act were settled (which I do not consider them to be).

1. Section 65 of the Act was part of the Trustees Act as passed in 1962.
2. The section had no previous analogue in the Trustees Act 1900 (WA) or any other relevant statute in Western Australia.
3. The Act was passed with a suite of other legislation including the Law Reform (Property, Perpetuities, and Succession) Act 1962 (WA). That (latter) Act contained ss 23 and 24 respectively which, in effect, later became ss 124 and 125 of the Property Law Act 1969 (WA) (PL Act) as passed in 1969. The PL Act repealed the Law Reform (Property, Perpetuities, and Succession) Act.
4. As is apparent from the Parliamentary debates,[143] the Act (and the other legislation passed as part of the suite) owed a great deal to a Report of the Law Reform Sub‑Committee of the Law Society (Report) which was chaired by J M Lavan, as he then was, and comprised P R Adams, D E Allan, as he then was, T A S Davey, I G Medcalf, as he then was, J L Toohey, as he then was, G D Wright, D G Sander and J H Wheatley.
5. Beech J, as he then was, took the view that regard could be had to the Report by s 19(1) of the Interpretation Act 1984 (WA) in Corporate Systems Publishing Pty Ltd v Lingard [No 4] [2008] WASC 21 (Corporate Systems Publishing) at [182]; and I have done the same.
6. The Report stated that what would become Part VI of the Act:

... introduces an entirely new scheme (though in part through the extension of existing provisions) to enable a trustee to distribute the estate at the earliest possible moment without having to hold back part of the estate to meet possible future claims the existence of which he was not aware at the time of the distribution. The interests of such future claimants are protected by preserving their right, subject to safe-guards, to follow the trust property into the hands of the recipients. ... We propose that those provisions should be made of general application and that they should be recast to distinguish between and to treat separately the different types of claim which may arise. Our proposals are contained in clauses 62 - 66 inclusive and clause 74 of the Trustee Bill, in clauses 8A and 9A of the Testator's Family Maintenance Bill and in clauses 23 ‑ 24 of the Law Reform (Property, Perpetuities and Succession) Bill. These clauses carry to its logical conclusion a pattern of development of the law over the last 100 years, and are based largely on amendments introduced in New Zealand some years ago.[144]

(vi) In many cases the law itself provides an adequate remedy to enable claimants whose right against the trustee is barred by the above provisions to follow the assets into the hands of subsequent holders. However, for the avoidance of any doubts and to be certain that there shall be an adequate remedy, clause 65 of the Trustee Bill provides a new statutory right to follow assets, in addition to any other right which the claimant may have. We recommend that this new right should be available to all classes of claimants including claimants under the Testator's Family Maintenance Act. The clause provides that action will lie against any person to whom the assets were distributed, or his personal representative or any other person who has received an interest in those assets other than as a bona fide purchaser for value. Such persons are liable up to the value of the assets or interest they have received ... Finally the Court may take into account relative circumstances of the claimant and the person who will be required to restore assets, and may accordingly deny relief in whole or in part if the person to whom the assets were distributed had so altered his position in reliance on the validity of the distribution that it would be inequitable to insist on repayment; ...[145]

1. As noted above, the defendants identified there may be an argument that s 65 of the Act should be limited to the distribution of deceased estates. It may be that some of the above quoted sections of the Report support that proposition. However, and perhaps in deference to the apparently broader words 'or subject to a trust ...' included in s 65 of the Act, the defendants have not sought to argue that construction on this application.
2. It may be noted that the Report described s 65(8) as:
   1. a 'safe-guard';[146]
   2. allowing the Court to take into account the relative circumstances of the claimant and the person who will be required to restore assets and deny relief in whole or in part if the person had so altered his position in reliance on the validity of the distribution;[147] and
   3. introducing a 'greater hardship discretion', which was being similarly introduced by cll 23 - 24 of the Law Reform (Property, Perpetuities, and Succession) Bill.[148]
3. As seen above, the Report described the s 65(8) defence as allowing or requiring the Court to consider the 'greater hardship' between the recipient and other persons and to take into account of 'relevant circumstances'.

1. The marginal note to s 65(1) of the Act as passed[149] noted s 30B of the Administration Act 1952 (NZ), which was also identified by Beech J in Corporate Systems Publishing [179].[150] As quoted in [180], the Report had noted 'amendments introduced in New Zealand some years ago' without identifying the particular provisions.
2. Section 30B of the Administration Act 1952 (NZ), as introduced in 1960, provided, relevantly for present purposes:

30B. Following of assets, etc - (1) In any case where an administrator or trustee has made a distribution of any assets forming part of the estate of any deceased person or subject to any trust and there is nothing in any Act to prevent the distribution from being disturbed, the Court may -

(a) Make, in respect of any interest in any such assets that is for the time being retained by the person to whom those assets were distributed or his administrator or any person who has received any interest in those assets from either of them otherwise than in good faith and for valuable consideration, any order to which section 30A of this Act applies, or an order on any claim to which section 35 of the Trustee Act 1956 applies:

(b) Order that any person to whom any assets were so distributed or his administrator shall pay to any applicant for an order to which section 30A of this Act applies or for an order on any claim to which section 35 of the Trustee Act 1956 applies, or to the administrator of the deceased or the trustee, a sum not exceeding the value of the assets:

(c) Order that any person who has received any interest in any such assets from the person to whom they were distributed or his administrator, otherwise than in good faith and for valuable consideration, shall pay to any applicant for an order to which section 30A of this Act applies, or for an order on any claim to which section 35 of the Trustee Act 1956 applies, or to the administrator of the deceased or the trustee, a sum not exceeding the value of that interest:

(d) For the purpose of giving effect to any such order, make such further order as it thinks fit.

...

(6) In any case where an administrator or trustee has made a distribution of any assets forming part of the estate of any deceased person or subject to any trust, relief (whether under subsection (1) of this section or in equity or otherwise) against any person other than the administrator or trustee or in respect of any interest of any such person in any assets so distributed and in any money or property into which they have been converted, shall be denied wholly or in part if the person from whom relief is sought received the assets or interest in good faith and has so altered his position in reliance on his having an indefeasible interest in the assets or interest that in the opinion of the Court, having regard to all possible implications in respect of the administrator or trustee and other persons, it is inequitable to grant relief or to grant relief in full, as the case may be.

1. Section 51 of the Administration Act 1969 (NZ) (the successor provision to s 30B) now provides a slightly different formulation from that in s 65(8) of the Act. It may now be a provision to a different effect, because relief may be denied if the person has altered their position 'in the reasonably held belief that the distribution was properly made and would not be set aside': see s 51(a) of the Administration Act 1969 (NZ).
2. New Zealand also had a separate statutory provision (from that quoted in the Administration Act 1952 above) in its s 94A and s 94B of the Judicature Act 1908 (NZ); which paralleled the statutory provisions in Western Australia between the Act and the PL Act.
3. The New Zealand Court of Appeal in National Bank of New Zealand Ltd v Waitaki International Processing (NI) Ltd [1999] 2 NZLR 211 (Waitaki) considered s 94B of the Judicature Act 1908. The Court split on whether the recipient had altered its position within the meaning of the statutory defence. The Court, however, held unanimously that the statutory defence was not an exclusive regime for denying relief to a mistaken payer.
4. The Court was also unanimous in affirming the trial judge's conclusion as to where the relevant equities stood following an assessment of factors. This may suggest that the discretion may be subject to what is commonly described in this country as the House v The King standard,[151] rather than the correctness standard.
5. The matter on which the Court was split suggests that, at least in New Zealand, reasonable minds have differed as to what would constitute an alteration of position.
6. What I take from Waitaki, relevantly for present purposes, is that there appears to be room in this Court for further argument as to what would constitute an alteration of position in s 65(8) of the Act.
7. Subsection 113(3) of the Trusts Act 1973 (Qld) is in similar terms to s 65(8) of the Act, but is not identical. The subsection provides:
   1. Remedies for wrongful distribution of trust property

...

(3) Where any remedy is sought to be enforced against a person to whom a wrongful distribution of trust property or the estate of a deceased person has been made and that person has received the distribution in good faith and has so altered the person's position in reliance on the propriety of the distribution that, in the opinion of the court, it would be inequitable to enforce the remedy, the court may make such order as it considers to be just in all the circumstances.

1. As far as I am aware, subsection 113(3) of the Trusts Act 1973 (Qld) has not been the subject of a superior court judgment.

1. It was common ground before me that s 65(8) of the Act has not, relevantly, been the subject of detailed judicial consideration - at least in this jurisdiction. I accept that submission broadly, while noting that the subsection has been applied by Master Bredmeyer in Clay v James [2001] WASC 101 at [8] and by Commissioner Johnson QC, as she then was, in Wendt v Orr [2004] WASC 28 (Wendt).
2. In Young v Kestel [2003] WASCA 190, EM Heenan J (with whom McLure J, as she then was, agreed) stated:

[71] It must be recognized that the full extent of the defence of change of position provided by s 65(8) of the Trustees Act, where access to the remedy of tracing or following assets of an estate which have been distributed is available, does not appear to be the subject of authoritative judicial analysis at this date. However, the statutory enactment of such a defence plainly is designed to overcome an earlier view that there was, in equity, no general defence against a change of position by a party who had received the proceeds of a trust fund - Ministry of Health v Simpson [1921] AC 251 at 76. Now, however, the existence of such a defence, at least in some circumstances, has been recognised in Lipkin Gorman (a firm) v Karpnale Ltd [1991] 2 AC 548 and, more significantly, in Australia in David Securities Pty Ltd & Ors v Commonwealth Bank of Australia [1992] HCA 48; (1992) 175 CLR 353 where it was held that in appropriate circumstances the change of position defence will be effective - see also Australia and New Zealand Banking Group Ltd v Westpac Banking Corporation (1988) 164 CLR 662 and Bank of New South Wales v Murphett [1983] VicRp 45; [1983] 1 VR 489. (emphasis in the original)

1. Commissioner Johnson in Wendt considered that, in effect, s 65(8) of the Act was a statutory defence which was to a similar effect to that recognised or established in Australia by David Securities Pty Ltd v Commonwealth Bank of Australia [1992] HCA 48; (1992) 175 CLR 353 (David Securities): see [213] and [219].
2. Commissioner Johnson, in considering the application of the defence in s 65(8) of the Act, accepted that the recipient's decision not to pursue a family maintenance claim and to apply for a payment under the will did constitute change of position.[152] However, her Honour rejected the recipient's advanced age and increasingly poor state of health as being such, and said:

I do not accept that the Court can or should refuse to order repayment of funds distributed in breach of trust based on personal circumstances other than an alteration of position in reliance on a belief in an indefeasible title to the funds. Other matters personal to a beneficiary, including lack of means, should only be taken into account under subs (9) in determining the manner of repayment.[153]

1. With respect, I do not consider that these observations are inarguably wrong. If a current lack of means is, or is arguably, irrelevant to the s 65(8) of the Act defence, then a good part of the evidence relied upon by the defendants as to current financial difficulties (to the extent that such evidence was led) would fall away.
2. The Report suggested that the same concept was introduced in the defences in the new Trustees Act and the Law Reform (Property, Perpetuities, and Succession) Act; even if the two provisions were to have possibly different spheres of operation.
3. Elise Bant and Peter Creighton considered that ss 65(8) of the Act and s 125(1) of the PL Act were 'clearly ... not co-extensive' but did 'overlap'.[154] The learned authors concluded:

The courts face difficult questions of interpretation in determining the proper scope and application of the Western Australian statutory defences. Amongst the most important of these are whether the statutory provisions oust or supplement the common law in the areas covered, and whose interests are to be weighed in deciding whether it would be inequitable to grant relief against the defendant. Regardless of how those questions are resolved, it can be seen that the statutory defences are in some ways wider and in some ways narrower than the common law. For example, the statutory defences appear to be narrower than the common law in requiring reliance on the validity of the transaction by which the benefit was conferred. By contrast, they may be wider in so far as the court may have regard to the implications for third parties in deciding whether to deny relief to the plaintiff. ...[155]

1. With respect, I agree with their assessment as to the difficult questions and interpretation which lie ahead.
2. In Alpha Wealth, the Court of Appeal considered the defence of 'change of position' at general law following David Securities and also as provided for in s 125(1) of the PL Act. The Court did not consider the relationship between s 125(1) of the PL Act and s 65(8) of the Act; nor the above observations from Young v Kestel. Nonetheless, I consider that I should, for present purposes, proceed on the basis that Alpha Wealth may inform the interpretation of s 65(8) of the Act. That is especially so as I consider that the two statutory provisions share a genesis.
3. It appears that Pullin JA may have treated the change of position defence at general law as being materially the same as that provided for in s 125(1) of the PL Act: see [20] - [25] and [38] of Alpha Wealth.
4. Significantly, by reference to authority, Pullin JA identified that the expression 'in good faith' may have different meanings in different statutes at [24]. His Honour then said:

[25] Whether the 'good faith' requirement is a requirement to prove a particular subjective state of mind of the recipient, or an objective assessment of the recipients' conduct or both, does not have to be decided in this case, for the reasons appearing below.[156]

1. The defendants, as seen, principally relied on Mr Sansom's subjective state of mind (whether in his own capacity or as the guiding mind of a corporate defendant). As I understood it, the defendants did not seek to satisfy the Court that, objectively, Mr Sansom had acted in good faith. The plaintiff, as I understand it, agitated that an objective assessment may nonetheless be relevant to the statutory question raised by the statutory defence containing 'in good faith'.
2. Obviously enough, the observations I made in [82] - [88] above about Mr Sansom's evidence may well impact on the objective assessment even if the Court were to accept Mr Sansom's subjective belief going to the 'good faith'.
3. Buss JA, as he then was, (and with whom Steytler P agreed) rather appeared to suggest there were 'divergences' between the elements of the statutory defence and the elements of the common law defence: cf [202] with [207] and see [208] of Alpha Wealth; but said it was unnecessary to analyse those in that case. That was because the recipient had not called any evidence and so could not make out the 'requisite elements of [either of] the defences': see [210] ‑ [212] of Alpha Wealth.
4. Because of that, the relationship between the statutory defence in s 125(1) of the PL Act (and, to my mind, by extension s 65(8) of the Act) with the general law defence remains unsettled.
5. Further, Buss JA noted that it was apparent that the recipient had obtained advice from solicitors and that such advice could have been an area of cross‑examination if recipient had adduced evidence as to the state of mind of its controllers at [212].[157] At least in relation to those corporate defendants where there were directors other than Mr Sansom who provided reviews and input into investment decisions, that observation of Buss JA may also be applied.

1. The interpretation of s 65(8) of the Act falls, then, to be considered in this application without the benefit of authoritative guidance.
2. Broadly, the plaintiffs submitted that has the effect that the defendants' application is not one which is appropriate or apt for summary determination.
3. The plaintiffs submitted, for example, that the defendants had not identified the legal principles applicable to the Court's consideration of the defence in s 65(8) of the Act.[158] With respect, I accept that submission.
4. The plaintiffs submitted that the interpretation of 'good faith' and 'altered his position' in s 65(8) of the Act should be, at least, informed by the general law's 'change of position'.[159] With respect, I consider that is an arguable position.
5. The defendants submitted that:
   1. ... the test to be applied under s65(8) is more liberal than the test to be implied under the change of position defence in respect of unjust enrichment claims. The s 65(8) defence being more protective of "recipients" within the context of the Trustees Act rather than defendants who are defending claims of unjust enrichment.[160] (emphasis in the original)
6. Correctly, with respect, the plaintiffs submitted that the defendants did not articulate in their submissions what test should be applied to 'good faith' or 'altering position' in s 65(8) of the Act.[161] Nor did the defendants articulate why their contended‑for‑test (to the extent that it was articulated) was more liberal than that submitted by the plaintiffs.
7. I have noted above, the question of what 'good faith' means may be present in the interpretation of the statutory defence as identified by Pullin JA in Alpha Wealth at [38] - [39].
8. The plaintiffs submitted that it was uncertain at general law what level of knowledge on the part of the recipient defendants would deny them the element of good faith in their asserted change of position defence.[162]
9. The plaintiffs sought to make good that point by referring to the uncertainty found as to which of the five categories of Baden knowledge[163] might deny the recipient a change of position defence at general law.
10. For present purposes, I see the connection between Baden knowledge and the s 65(8) of the Act defence as being that certain types of knowledge on the part of a recipient will deny it being able to establish a good faith receipt and reliant alteration of position within the statutory defence.
11. The use of the Baden categories of knowledge and notice has been somewhat deprecated by the full Federal Court in Grimaldi v Chameleon Mining NL [No 2] [2012] FCAFC 6; (2012) 200 FCR 296 (Grimaldi) [260] (Finn, Stone & Perram JJ). Notwithstanding that, I agree, with respect, with the statement of Leeming JA of the Baden categories that:

... the formulation helpfully emphasises that the conclusions of mixed fact and law which often comprise the elements of what a defendant "knows" come in shades of grey.[164]

1. The plaintiffs submitted that it remains an open question as to whether the fourth and fifth categories of knowledge described in Baden meant that the good faith part of the defence in s 65(8) of the Act cannot be made out by these defendants.[165] The plaintiffs point to certain aspects of the defendants' evidence and submitted that Mr Sansom may have known circumstances that would indicate the facts to an honest and reasonable person (Baden category 4); or which would have put an honest and reasonable person on enquiry (Baden category 5).[166]
2. I note, in this context, the observations of Besanko J in K&S Corporation Ltd v Sportingbet Australia [2003] SASC 96; (2003) 86 SASR 312 [26] to the effect that:
   1. categories 4 and 5 are not necessarily cases of constructive notice only; and
   2. there is little difference between the third and fourth categories.
3. I am not presently finding that Besanko J was unarguably correct in these observations. But, with respect, they are sensible and arguable, even if they remain ultimately contestable.
4. Given the trend in the authorities is away from adopting Baden category 5, that part of the plaintiffs' submissions, to the effect that such knowledge may deprive the defendants of acting in good faith, may be somewhat optimistic on their part. However, in my view, at the moment, the same cannot be said about the potential applicability of Baden category 4[167] to the question of knowledge and whether it would prevent any of the defendants from relying on the statutory defence of 'good faith' and consequent reliant alteration of position.
5. The applicability of any or all of the knowledge or notice categories from Baden, and whether what is mandated by the defence in s 65(8) of the Act is conscience or fault based[168] is not the subject of authoritative guidance.
6. It seems to me that the answer to those questions and the availability of the defence under s 65(8) of the Act will need to be worked out after detailed fact finding (as occurs after a trial) and full argument as to the interpretation and application of the relevant statutory provisions to those facts as found.
7. In those circumstances, courts have, as a matter of well‑established practice, been careful not to stifle the development of the law by inappropriate summary adjudication.
8. Further, the plaintiffs submitted that the evidence led in support of the defendants' application was not 'definitive evidence' of the good faith of each of the defendants for the purposes of s 65(8) of the Act.[169]
9. In short, the plaintiffs submitted that whether the defence in s 65(8) of the Act is available and whether the defendants' liability should be relieved in whole or part:

... are complex questions of fact and law that are not suited for determination otherwise than at trial. They are not matters for summary determination having regard to the high level of certainty that is required to dispose of an action at that stage.[170]

1. In addition to the other claims made by the defendants, Received Pty Ltd asserts that there is an issue estoppel which arises in its favour from the Federal Court decision in Marco (No 13).[171]
2. Prior to that decision there had been a number of substantive applications heard and determined by the Federal Court arising out of the Scheme.
3. On 23 November 2021, the present plaintiffs filed an application in the Federal Court which is the subject of Marco (No 13).[172]
4. The issue estoppel for which Received Pty Ltd contended was set out as follows:

[67] Given the above, the issue of whether the Defendants and, specifically, Received, are required to repay any revenue and capital received from the Marco Schemes has been the subject of a judicial finding on the application of the Liquidators in proceedings to which Increase was a party. The finding being to the effect that parties in the position of the Defendants in these proceedings do not have to do so in circumstances where they make no claim against the Scheme in relation to an outstanding entitlement to a payment.

...

[70] In the above circumstances, a binding issue estoppel arises to prevent the Liquidators from now making a claim against Received and by extension each of the Defendants (generally or as associated or related companies) so as to relitigate the express above findings by the Federal Court.[173] (citations omitted)

1. Received Pty Ltd was joined to that application in January 2022 as a representative of that group of Scheme members or investors:

... in whose interests it is to contend that the remaining property of the Scheme should be distributed in accordance with one of the pari passu (a) and Courtenay House Net Investment methods. ...[174]

1. As Feutrill J stated, the application was, relevantly, for directions relating to the winding up of the Scheme and the distribution of property of the Scheme.[175]
2. Relevantly, Feutrill J stated:

[29] ... The proper subject of a liquidator's application for directions is the manner in which the liquidator should act in carrying out his or her functions. The only binding effect of, or arising from, a direction given in pursuance of such an application (other than rendering the liquidator liable to appropriate sanctions if a direction in mandatory or prohibitary form is disobeyed) is that the liquidator, if he or she has made full and fair disclosure to the Court of the material facts, will be protected from liability for any alleged breach of duty as liquidator to a creditor or contributory or to the company in respect of anything done by him or her in accordance with the direction: ... (emphasis added)

[7] I have concluded that the Liquidators would be justified in treating remaining property of the Scheme as property held on trust and as a single (mixed) fund for the benefit of Scheme members and that it is not reasonably practicable or economically feasible to 'trace' individual Scheme member's property into an identifiable part or portion of that mixed fund. Having regard to that conclusion, as a matter of principle, it is more appropriate for the Liquidators to distribute the remaining property of the Scheme in a manner that reflects the equitable proprietary interests of Scheme members in that property. Therefore, the Scheme members asserted personal rights to accrued interest and rolled‑over or reinvested interest should be ignored for the purposes of determining the distribution of property of the Scheme. Accordingly, payments made out of property of the Scheme during its operation (irrespective of the manner in which the payment was characterised) should be treated as transfers of property of the Scheme to Scheme members. Scheme members are entitled to retain the benefit of that property as bona fide recipients for value without notice. However, Scheme members who received transfers of property of the Scheme during the operation of the Scheme should be required to 'bring in' to hotchpot the benefit of that property before becoming entitled to a rateably equal share of the remaining property of the Scheme.

[8] As a consequence of the view I have taken regarding the appropriate treatment of accrued interest, rolled-over or reinvested interest and payments to Scheme members (analysed as exchanges of property as opposed to the existence of contractual rights), I have concluded that none of the proposed eight distribution methods should be applied without modification. Ultimately, I am of the view that a modified application of the alternative Letten formula method (or the Letten preliminary dividend method) is the most appropriate method for distributing the remaining property of the Scheme, in this case.[176] (emphasis in the original)

1. In my view, with respect, the contention by Received Pty Ltd that the orders made in Marco (No 13) could give rise to an issue estoppel is misconceived.
2. I do not consider that the directions made by Feutrill J in Marco (No 13) constitute any finding which precludes the plaintiffs' present action. With respect, there was no determination of Received Pty Ltd's legal position as against the plaintiffs.

1. I do not consider that this is the sort of 'clearest' case which should attract summary disposition.
2. I do not consider that the principles which should be applied to a defence under s 65(8) of the Act are settled.
3. I do not consider that the evidence led by the defendants establishes that they 'are so obviously entitled' to the defence 'that the proceedings have no prospects of success'.[177] I do not accept that the defendants' evidence is relevantly 'overwhelming' or 'definitive' as was submitted.[178]
4. I consider that the important considerations to which the Court is to have regard in deciding whether it is inequitable to grant the plaintiffs their relief, are not so obviously dealt with in the defendants' evidence or material, such that I could conclude at this time that it would be inequitable to grant the plaintiffs relief or relief in full.
5. Accordingly, I will dismiss the defendants' applications. I will hear the parties, as needs be, as to the final form of orders and costs.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] Recently, two central bankers wrote: 'In practice, there are many Ponzi schemes that take off even though they cannot be sustained indefinitely. These schemes, including the one hatched by Charles Ponzi after whom these schemes are named, tend to involve an element of fraud: The borrower hides the fact that they are using funds from new investors to repay previous investors and instead purports to be using the proceeds from some real investment activity. Barlevy and Xavier (2025) 'A model of Charles Ponzi' Finance and Economics Discussion Series 2025-020. Washington: Board of Governors of the Federal Reserve system HTTPS://doi.org/10.17016/FEDS.2025.020 at page 1.

[4] Statement of claim filed on 28 May 2025 (SOC) [13] and [1].

[6] From here I will refer to the first and second plaintiffs simply as the 'plaintiffs'.

[9] Defendants' supplementary submissions filed 20 October 2025 (Defendants' supplementary submissions).

[10] Defendants' submissions filed 3 October 2025 (Defendants' submissions) [19]; ts 11, 15, 16, 18 and 26.

[16] Affidavit of Robert Conry Brauer made 3 September 2025 and filed 5 September 2025 (Brauer affidavit) [51] ‑ [54].

[18] Affidavit of Peter Andrew Sansom made and filed 6 August 2025 (first Sansom affidavit) [23].

[19] Affidavit of Peter Caughey made and filed 6 August 2025 (Caughey affidavit) [14.2].

[25] First Sansom affidavit [3]; Mrs Sansom's affidavit [2].

[37] Defendants' submissions [21] - [23] and [25].

[39] Defendants' submissions [18] and [27].

[41] Defendants' submissions [12] ‑ [16]. See also defendants' submissions filed 14 November 2025 (defendants' further submissions) [10], for example. Some support for that proposition may be found in extrinsic material which I refer to below by reference to s 19(1) and s 19(2)(b) and (f) of the Interpretation Act 1984 (WA).

[43] The plaintiffs also proceeded on that basis: see plaintiffs' submissions filed 31 October 2025 (plaintiffs' submissions) [34].

[44] Defendants' submissions [2] (citations omitted); plaintiffs' submissions [4].

[45] Defendants' submissions [3]; plaintiffs' submissions [4].

[46] Defendants' submissions [4]; plaintiffs' submissions [4].

[53] Plaintiffs' submissions [8] - [9].

[56] First Sansom affidavit [10.1] ‑ [10.3].

[57] First Sansom affidavit [10.3]; see also [10.6].

[59] Mr Sansom deposed at [10.8] of the first Sansom affidavit that a number of such Declaration of Trust documents were issued to the defendants by Mr Marco and attached, at 'PS‑5', a number of them.

[61] The Declaration of Trust is at page 101 and is part of 'PS‑5' to the first Sansom affidavit.

[62] First Sansom affidavit [10.10] and [10.11].

[64] First Sansom affidavit [11.1] ‑ [11.9].

[66] First Sansom affidavit [11.4], [11.5] and [11.8].

[67] First Sansom affidavit [11.6] and [11.8].

[69] First Sansom affidavit [9] and [10].

[71] Plaintiffs' submissions [16(g)].

[75] Caughey affidavit [16] - [17].

[76] First Sansom affidavit [9] and [10].

[83] Mrs Sansom's affidavit [12] and [13].

[90] Defendants' further submissions [14.6].

[93] See the ASIC search for Received Pty Ltd: 'PS-2' to the first Sansom affidavit at page 28.

[97] Plaintiffs' submissions [14(b)(ii)].

[98] 'PS-3' to the first Sansom affidavit was an ASIC search for Emruni Holdings which disclosed previous directors at pages 53 - 54.

[100] Second Sansom affidavit [2.2].

[106] First Sansom affidavit [2.3]. The first Sansom affidavit had annexed the historical ASIC search for Prosper (WA) which showed the previous directors: 'PS-4' at page 79.

[107] Plaintiffs' submissions [14(b)(iii)].

[108] Second Sansom affidavit [8.1].

[109] Second Sansom affidavit [8.2].

[110] Second Sansom affidavit [9] - [10].

[113] First Sansom affidavit [14], [15] and [19]. Both Mr Sansom and Mr Caughey adduced some financial statements of the Favour Project and the third to fifth defendants. As I understand it, that evidence is led in support of the propositions that receipts were intermingled and then used in the ordinary course of business or undertaking.

[114] First Sansom affidavit [18] and [21].

[115] Caughey affidavit [19], [32], [33], [44] and [45].

[130] Caughey affidavit [35] and [36].

[137] Defendants' submissions [55] and [56].

[141] Defendants' submissions [59] - [61].

[143] Western Australia, Parliamentary Debates, Legislative Council, 16 August 1962, 508 (Hon Mr A F Griffin, Minister for Justice); Western Australia, Parliamentary Debates, Legislative Council, 26 September 1962, 1256 (Hon Mr A F Griffin, Minister for Justice); Western Australia, Parliamentary Debates, Legislative Council, 9 October 1962, 1556 (Hon E M Heenan, North-East); Western Australia, Parliamentary Debates, Legislative Council, 10 October 1962, 1607 (Hon Mr AF Griffin, Minister for Justice); Western Australia, Parliamentary Debates, Legislative Assembly, 18 October 1962, 1853 (Mr Court, Minister for Industrial Development); Western Australia, Parliamentary Debates, Legislative Assembly, 1 November 1962, 2294 (Mr Hawke, Leader of the Opposition).

[145] Report - Part VI(2)(vi) at pages 23 - 24.

[147] Report - Part VI(2)(vi) at pages 23 - 24.

[148] Report - Part VI(2)(vi) at page 24.

[149] Which marginal note is not part of the written law: s 32(2) of the Interpretation Act.

[150] As noted by Bant & Creighton, s 30B was substantially re-enacted as ss 49 - 51 of the Administration Act 1969 (NZ): see The Statutory Change of Position Defences in Western Australia, footnote 4. There was a New Zealand equivalent in ss 94A and 94B of the Judicature Act 1908 (NZ) to what has become ss 124 and 125 of the PL Act. Section 94B of the Judicature Act (NZ) was considered in the leading case of National Bank of New Zealand Ltd v Waitaki International Processing (NI) Ltd [1999] 2 NZLR 211. E Bant & P Creighton, The Statutory Change of Position Defences in Western Australia 31(1) UWALR 47, footnote 8.

[151] House v The King [1936] HCA 40; (1936) 55 CLR 499.

[154] E Bant & P Creighton, The Statutory Change of Position Defences in Western Australia [2003] UWALawRw 4; (2003) 31(1) UWALR 47, 50.

[155] E Bant & P Creighton, The Statutory Change of Position Defences in Western Australia [2003] UWALawRw 4; (2005) 31(1) UWALR 47, 68.

[160] Defendants' further submissions; see also in those submissions [11.4] ‑ [11.6] and [12]; ts 61.

[163] Five categories of knowledge and notice were postulated by Peter Gibson J in Baden v Société Générale pour Favouriser le Développment du Commerce et de l'Industrie en France SA [1993] 1 WLR 509(Baden) at [250]. They are: (i) 'actual' knowledge; (ii) the wilful shutting of eyes to the obvious ('Nelsonian' knowledge); (iii) wilfully and recklessly failing to make such inquiries as an honest and reasonable man would make; (iv) knowledge of circumstances which would indicate the facts to an honest and reasonable man; and (v) knowledge of circumstances which would put an honest reasonable man on inquiry (that is, constructive notice as traditionally understood).

[164] Pittmore Pty Ltd v Chan [2020] NSWCA 344; (2020) 104 NSWLR 62 [191] (Leeming JA, with whom Bell CJ & Brereton JA agreed).

[165] Plaintiffs' submissions [16(b)].

[166] Plaintiffs' submissions [16(e) ‑ (h)].

[167] That is especially so if this Court were ultimately to uphold the second observation I referenced from K&S Corporation in paragraph [223] above.

[173] Defendants' submissions [67] and [70].

[177] cf Defendants' submissions [18] and [27].

[178] cf Defendants' submissions [49].