Simmons v New South Wales Trustee and Guardian

Court of Appeal (NSW)|2014-09-15|Before: Beazley P, Barrett JA, Gleeson JA, Hammerschlag J

Background 19The main protagonists to the present dispute have been in conflict since late 1988 and engaged in litigation, in one form or another, on and off since 1992. The earlier proceeding between Father Simmons and his mother, Agnes Simmons, was heard before Windeyer J in the Equity Division and ultimately came before this Court in 1994 and again in 1995. Subsequently Father Simmons commenced the present proceeding against the three respondents on 11 March 2011. Aspects of that proceeding came before this Court in 2013. This Court upheld Father Simmons' challenge to an earlier order dismissing the proceedings against Mr Henwood and Dorothy Simmons: Simmons v Henwood [2013] NSWCA 184 (the 2013 Appeal). 20A summary, which is highly abbreviated, of the background to the present proceeding is to be found in the judgment of Emmett JA in the 2013 Appeal: "20 The proceeding concerns a grazing property situated in the Brewarrina District (the Property). The total area of the Property is approximately 17,823 acres. The Property consists of two separate parcels, which are separated by a distance of approximately 40km. One parcel is referred to as Goonoo and the other is referred to as Letona. At the relevant times, the Property was held under Western lands leases granted under the Western Lands Act 1901 (NSW). 21 Until mid 1994, the Property was owned by Mrs Agnes Simmons. Agnes Simmons is the mother of Father Simmons and the mother-in-law of Dorothy Simmons, who was married to John Simmons, another son of Agnes Simmons. On 21 July 1992, the management of the affairs of Agnes Simmons was committed to the Commissioner. On 2 December 1995, Agnes Simmons died, leaving her estate to Father Simmons. 22 On 28 June 1994, the Commissioner completed the sale of the Property to Mr Henwood. Shortly thereafter, Mr Henwood transferred part of the Property to Dorothy Simmons (Dorothy's parcel). Following completion of the sale by the Commissioner to Mr Henwood, a transfer was registered under the Real Property Act 1900, such that Mr Henwood became the registered proprietor of the Property. Thereafter, a transfer from Mr Henwood to Dorothy Simmons was registered and Dorothy Simmons became the registered proprietor of Dorothy's parcel. 23 In an earlier proceeding between Father Simmons and Agnes Simmons (the Earlier Proceeding), the Court of Appeal declared on 14 November 1994 that Father Simmons was entitled to have carried through and registered a transfer of the Property, from Agnes Simmons to Agnes Simmons and himself as joint tenants, subject to any ministerial consent required by the Western Lands Act. The Court of Appeal also ordered that the Commissioner do all things and take all steps necessary to have the title to the Property registered in the names of Agnes Simmons and Father Simmons as joint tenants. However, on 9 August 1995, after the attention of the Court of Appeal had been drawn to the transfer of the Property from Agnes Simmons to Mr Henwood, the Court of Appeal varied its orders. In lieu of those orders, the Court of Appeal declared that the net proceeds of the sale of the Property were held by the Commissioner in trust for Father Simmons and Agnes Simmons as joint tenants and ordered that the Commissioner deal with the net proceeds accordingly." 21It is necessary to supplement this brief summary with a reference to the dispute underlying the earlier proceeding and the circumstances in which the transfer of the Property to Mr Henwood in 1994, and the subsequent transfer of part of the Property by Mr Henwood to Dorothy Simmons shortly thereafter, is said to be contentious. Again a convenient summary may be taken from the judgment of Emmett JA in the 2013 Appeal: "The Earlier Proceeding and the Transfer of the Property 36 For many years, Dorothy Simmons lived on that part of the Property known as Letona. John Simmons, her husband, took on the management of the grazing business conducted on the Property following the death of his father in 1949. John Simmons died in 1977 but Dorothy Simmons continued to live on Letona. 37 In September 1987, Agnes Simmons granted to Dorothy Simmons a lease of the Property for a term of four years. The lease excluded the house in which Agnes Simmons and Father Simmons lived, together with one hectare of land surrounding that house. 38 In April 1988, Father Simmons and Agnes Simmons signed a partnership agreement for the carrying out of a partnership as farmers and graziers on the Property. It is not clear how the lease to Dorothy Simmons sits with the partnership agreement alleged to have been entered into between Father Simmons and Agnes Simmons. In any event, steps were thereafter taken by Agnes Simmons to transfer title to the Property into the names of herself and Father Simmons as joint tenants. 39 In September 1988, Dorothy Simmons lodged a caveat in respect of the Property, claiming an interest as lessee under the lease of September 1987. In August 1990, Agnes Simmons gave Dorothy Simmons notice to quit, requiring vacation on 23 September 1991. That would have been the expiration of the term of the lease of September 1987. In July 1991, Agnes Simmons, through her solicitors, requested removal of the caveat lodged by Dorothy Simmons. Subsequently, a summons for removal of the caveat was filed and the caveat was removed following an order made by Master Windeyer, as he then was, on 18 October 1991. 40 However, Dorothy Simmons then lodged a further caveat claiming an interest that was confined to Letona. The caveat lapsed following an application to the Land Titles Office made on 18 October 1991. Subsequently, four daughters of Agnes Simmons lodged a caveat in respect of the Property, asserting equitable interests based on promises and representations that they alleged had been made by Agnes Simmons. That caveat also lapsed. 41 On 19 December 1991, following the lapsing of the third caveat, a transfer of the Property from Agnes Simmons to herself and Father Simmons was registered by the Registrar General. New certificates of title dated 17 December 1991 were issued for the Property showing Agnes Simmons and Father Simmons as the registered proprietors as joint tenants. However, on 18 February 1992, the Registrar General reversed the registration of the transfer to Agnes Simmons and Father Simmons on the basis that the transfer was not valid, since it had not been registered within the period prescribed by s 18G(1)(b) of the Western Lands Act, which required registration within 6 months of the consent of the Minister. 42 On 20 February 1992, Dorothy Simmons commenced a proceeding in the Supreme Court of New South Wales (No 1661/92) against Agnes Simmons and Father Simmons. Father Simmons filed a cross-claim against Agnes Simmons and Dorothy Simmons asserting his interest as a joint tenant in the Property under the 1987 Agreement. The claims by Dorothy Simmons against Agnes Simmons and Father Simmons were subsequently compromised or abandoned. The cross-claim was also abandoned as against Dorothy Simmons. Accordingly, the only lis left on foot was the cross-claim by Father Simmons against Agnes Simmons. 43 In circumstances that are not entirely clear, an order for the management of the estate of Agnes Simmons under the Protected Estates Act 1983 (NSW) was made on 21 July 1992. That did not come to the notice of the solicitors for Father Simmons until very shortly before the cross-claim came on for trial before Windeyer J on 27 July 1993. When the hearing commenced on that day, orders were made to enable the proceeding to continue with the Commissioner as tutor for Agnes Simmons. 44 In early July 1993, before the commencement of the hearing of the cross-claim, Dorothy Simmons made an interlocutory application for an order restraining the Commissioner from dealing with the Property. The Commissioner opposed the application. On 14 July 1993, Hulme J granted an interlocutory injunction up to and including 30 July 1993 restraining the Commissioner from dealing with the Property. In the meantime, the trial of the cross-claim commenced before Windeyer J and the injunction was not extended. 45 Father Simmons gave evidence at the trial before Windeyer J and was cross-examined. Dorothy Simmons was called by the Commissioner and was also cross-examined. Windeyer J accepted the evidence of Father Simmons and was satisfied that there was an agreement under which Agnes Simmons agreed to enter into partnership with Father Simmons and transfer the Property to herself and Father Simmons as joint tenants, on the basis that Father Simmons would agree to manage the Property and look after Agnes Simmons and care for her. 46 However, Windeyer J found that there was insufficient memorandum in writing of the terms of the 1987 agreement and that there had been no part performance of the kind necessary to take the matter out of the operation of s 54A of the Conveyancing Act 1919. Windeyer J also found that there was no evidence that Father Simmons had suffered any detriment in reliance upon representations or a common intention and there was therefore no basis for an estoppel. Accordingly, on 28 September 1993, Windeyer J dismissed the cross-claim by Father Simmons (see Simmons v Simmons, Supreme Court of New South Wales, Equity Division, Windeyer J, 28 September 1993, unreported, No. 1661/92). 47 On 19 October 1993, Father Simmons appealed from the orders made by Windeyer J. However, on 24 December 1993, before the hearing of the appeal, the Commissioner, on behalf of Agnes Simmons, entered into a contract for the sale of the Property to Mr Henwood. That prompted Father Simmons to make an interlocutory application for, inter alia, an injunction restraining the Commissioner from taking any steps to sell, encumber or dispose of the Property. That application was heard by Windeyer J, who considered that the balance of convenience lay in allowing the Property to be sold as soon was convenient. Having regard to the conclusion that he had reached that the claims by Father Simmons to have an interest in the Property should be dismissed, his Honour declined to restrain the sale. 48 However, Windeyer J considered that there was no disadvantage in placing a restraint on the Commissioner in dealing with the proceeds of sale, so that they would be available to Father Simmons if he succeeded in his appeal. His Honour ordered that the Commissioner, as manager of the estate of Agnes Simmons, be restrained from dealing with the net proceeds of the sale of the Property other than for the purpose of investment. The order was to operate until the determination of the appeal to the Court of Appeal or until further order. 49 The appeal was heard by the Court of Appeal on 24 March 1994. The Court of Appeal reserved its decision. 50 On 28 June 1994, the contract for sale of the Property by the Commissioner to Mr Henwood was completed and, on 24 August 1994, a transfer from Agnes Simmons to Mr Henwood was registered under the Real Property Act. On 24 October 1994, a transfer from Mr Henwood to Dorothy Simmons of part of the Property was registered under the Real Property Act. 51 On 14 November 1994, the Court of Appeal gave judgment on the appeal. The Court of Appeal found that Father Simmons had established an estoppel binding Agnes Simmons and that the appropriate relief would be to hold Agnes Simmons to the common understanding that had arisen between her and Father Simmons. Accordingly, the Court declared that Father Simmons has, since the execution of the transfer of the Property, been entitled to have the registration of that transfer carried through, subject to any ministerial consent necessary under the Western Lands Act. The Court also ordered that the Commissioner do all things and take all steps necessary to have the title to the Property registered in the name of Agnes Simmons and Father Simmons as joint tenants. 52 In circumstances that are not entirely clear, the attention of the Court of Appeal was drawn to the fact that, after Windeyer J had decided the case at first instance, and before the hearing of the appeal, contracts for the sale of the Property had been exchanged on 24 December 1993. The Court of Appeal was also informed that, on 28 June 1994, after the argument but before judgment, the sale had been completed. Upon those matters being made known, the Court of Appeal indicated that it would make supplementary orders so that effect could be given to the substance of its judgment, in the changed circumstances of the case. Accordingly, on 9 August 1995 in lieu of the orders mentioned above, the Court of Appeal declared that the net proceeds of the sale of the Property were held by the Commissioner on trust for Father Simmons and Agnes Simmons as joint tenants and ordered that the Commissioner deal with the net proceeds accordingly."

The pleading 22In his original statement of claim Father Simmons made allegations against the Commissioner of breach of trust and breach of fiduciary duty. The essential allegation was that, as a consequence of the management of Mrs Simmons' affairs being committed to the Commissioner in July 1992, the Commissioner held the Property on trust, or alternatively as a fiduciary of Mrs Simmons, with obligations in equity to Father Simmons and Mrs Simmons as equitable joint tenants of the Property. It was alleged that the sale of the Property by the Commissioner to Mr Henwood in December 1993 amounted to a breach of trust or a breach of its fiduciary obligation to Father Simmons. He claimed aggravated and exemplary damages against the Commissioner. He also sought declaratory and other relief based on the alleged breach of trust and breach of fiduciary duty. 23In this statement of claim Father Simmons also made allegations against Mr Henwood that, at the time of the sale of the Property by the Commissioner to Mr Henwood, Mr Henwood had notice and was aware of Father Simmons' unregistered interest in the Property. As against Dorothy Simmons, allegations were made that, at the time of the sale of part of the Property by Mr Henwood to Dorothy Simmons, she also had notice and was aware of Father Simmons' unregistered interest in the Property. It was also alleged that the consideration given for the transfer to Dorothy Simmons was at significantly less than the market value. 24The "knowing receipt" claims against Mr Henwood and Dorothy Simmons may be taken to have been based on the first limb of Barnes v Addy. The only relief sought against Mr Henwood and Dorothy Simmons was proprietary - that they held the Property or part of the Property upon constructive trust for Father Simmons. There was no alternative claim for relief by way of equitable compensation.

First judgment of Hammerschlag J 25On 7 May 2012 Hammerschlag J dismissed Father Simmons' claim against Mr Henwood and Dorothy Simmons: Paul Ernest Simmons v Protective Commissioner of New South Wales (aka NSW Trustee & Guardian) [2012] NSWSC 455 (the first judgment). The basis for this conclusion was summarised by Emmett JA in the 2013 Appeal as follows: "24 The primary judge concluded that, in the light of the orders made by the Court of Appeal in the Earlier Proceeding, the proceeding by Father Simmons against the Respondents was an abuse of process, as it was inconsistent with those orders. His Honour also concluded that, since the Respondents had become registered proprietors of the respective parts of the Property under the Real Property Act, and there was no allegation of fraud against them in the proceeding, the claims made against them by Father Simmons in the proceeding could not succeed because of the operation of s 42 of the Real Property Act. Section 42 has the effect that, except in case of fraud, the registered proprietor for the time being of any estate or interest in land under the Real Property Act holds that estate or interest absolutely free from all other estates that are not so recorded." 26One aspect of the statement of claim, which was the subject of the summary dismissal order, should be mentioned. At [37] Hammerschlag J observed that Father Simmons: "... brings no claim in personam against them for equitable compensation but that if he had done so, it would have been incumbent upon him to plead and establish assistance on their part with knowledge in a dishonest and fraudulent design on the part of the Commissioner; Farah Construction Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 at 164-6 [179]-[186]." 27As will be seen, the proposed amendments to Father Simmons' claim (the subject of the present appeal), include claims for equitable compensation against Mr Henwood and Dorothy Simmons.

2013 Appeal 28On 25 June 2013 this Court granted leave to appeal against the first judgment and, by majority, allowed the appeal. 29This Court found that the primary judge had erred in his conclusion that the present proceeding is an abuse of process because it attempts to litigate or relitigate the central issue decided in the earlier proceeding. This Court also found there was no error by the primary judge in concluding that, on the pleading before him, the claim against Mr Henwood and Dorothy Simmons was doomed to fail by reason of the defence of indefeasibility afforded by s 42 of the Real Property Act: at [87]. 30Nonetheless at [97] of the 2013 Appeal, Emmett JA (with whom I agreed) said that the matter should be remitted to the primary judge for consideration: "of any application that Father Simmons wishes to make, either to file an amended statement of claim, or to file a reply to the defences filed on behalf of Mr Henwood and Dorothy Simmons, raising fraud within the meaning of the Real Property Act. The costs of the appeal should be the parties' costs of the proceeding." 31At [96] Emmett JA also said: "In the circumstances, I consider that it would be appropriate for Father Simmons to be given the opportunity of making an application to the primary judge for leave to amend, or to file a reply, to plead fraud within the meaning of s 42 of the Real Property Act. It would be entirely a matter for his Honour to determine whether any such indulgence should be granted. For example, whether such an application succeeded might depend upon a satisfactory explanation being advanced as to why the proposed pleading was not advanced earlier. Further, it may be that if leave were granted, it would be on appropriate terms as to the costs that have been thrown away, particularly in the light of the assertion made to the primary judge that fraud had been alleged in the statement of claim as particularised. They would be matters for the primary judge." 32Following the remittal of the proceeding to the Equity Division, Father Simmons filed a motion on 2 August 2013 seeking leave to amend the statement of claim. No leave was sought to file a reply to the existing defences of Mr Henwood and Dorothy Simmons which had pleaded indefeasibility as a defence to Father Simmons' claims.

Proposed amendments 33The amendments proposed to the statement of claim were lengthy. For ease of reference, it is convenient to include the text of the proposed pleading at the end of these reasons. It is to be noted that the amendments in paragraphs 23A and 30A of the proposed statement of claim were abandoned before the primary judge.

The claims for equitable relief 34Before the primary judge a written outline of oral submissions was provided by Father Simmons' counsel on the day of the hearing. This stated (WB 1/136) that Father Simmons' claims of constructive trust and equitable compensation against Mr Henwood and Dorothy Simmons were put in three ways: (1)that their conduct in purchasing the Property from the Commissioner, knowing that Father Simmons had an equity in the land and/or that the Commissioner held the land on "statutory trusts" for Father Simmons, gave rise to a constructive trust in each of them in circumstances where there was said to be an "additional ingredient", being something more than notice of Father Simmons' unregistered interest, to make out a case that each of Mr Henwood and Dorothy Simmons was bound to recognise Father Simmons' interest in the Property - see Bahr v Nicolay [No 2] (Bahr v Nicolay) [1988] HCA 16; 164 CLR 604; Heggies Bulkhaul Ltd v Global Minerals Australia Pty Ltd (Heggies) [2003] NSWSC 851; 59 NSWLR 312 at [104]; (2)knowing receipt of trust property, based on the first limb on Barnes v Addy; (3)knowing assistance in a breach of trust by the Commissioner and/or a fraudulent design, based on the second limb of Barnes v Addy. 35It may be observed that the written submissions of Father Simmons did not contend that the proposed statement of claim pleaded fraud against Mr Henwood or Dorothy Simmons. 36Indeed, before the primary judge, counsel for Father Simmons contended at one stage that fraud did not need to be pleaded in the proposed statement of claim, as it could be pleaded by way of a reply to the amended defences once filed by Mr Henwood and Dorothy Simmons (WB 1/122; T 53, lines 1-6). Later in oral argument before the primary judge, counsel for Father Simmons contended that fraud had been pleaded in the proposed statement of claim and referred to paragraph 27B (WB 1/123; T 51, lines 3-21). 37It may be accepted that this Court was not prescriptive when remitting the matter, following the 2013 Appeal, as to whether fraud needed to be pleaded in the statement of claim or alternatively in a reply. So much is clear from [96] of the reasons of Emmett J in the 2013 Appeal. Nonetheless as already mentioned, Father Simmons did not seek leave to file a reply to the defences which had already been filed. Instead he only sought leave to amend his statement of claim to plead what he asserted, during oral argument before the primary judge, included a fraud claim. 38In these circumstances, it was appropriate for the primary judge to approach the proposed pleading on the basis that it contained the fraud allegations which Father Simmons sought to make in answer to the indefeasibility defences which had already been pleaded by Mr Henwood and Dorothy Simmons. 39The primary judge properly sought clarification from counsel for Father Simmons as to which paragraphs of the proposed amendments were said to support the different claims for equitable relief. The transcript records the following explanation given by Father Simmons' counsel: (1)As against Mr Henwood, it was contended that the proposed amendments pleaded:

Second judgment of Hammerschlag J 40The amendment application and the extant motions for summary dismissal filed by Mr Henwood and Dorothy Simmons were heard by Hammerschlag J on 31 October 2013. On 15 November 2013 his Honour refused leave to amend and dismissed the proceedings against Mr Henwood and Mrs Dorothy Simmons. 41The parties' submissions before the primary judge were directed principally to the amendments to paragraphs 23, 23B, and 27A to 27F (as against Mr Henwood) and paragraphs 30, 30B, and 31A (as against Dorothy Simmons): at [25]. 42Significantly, his Honour's reasons make no reference to the proposed paragraphs 28A and 32A, which claimed equitable compensation against each of Mr Henwood and Dorothy Simmons. This omission is at the forefront of Father Simmons' attack on the primary judge's decision to refuse the proposed amendments. I will return to this issue below.

Paragraph 23 43Counsel for Father Simmons identified paragraph 23 as a claim under the first limb of Barnes v Addy, which was said to support the claim for relief by way of a constructive trust over the Property: at [26]. At [27] his Honour referred to Farah Constructions Pty Ltd v Say-Dee Pty Ltd (Farah) [2007] HCA 22; 230 CLR 89 at [192]-[198] for the well-established proposition that to prevail against the indefeasibility protection given to a registered proprietor by s 42 of the Real Property Act, a person claiming under the first limb of Barnes v Addy must establish fraud, meaning actual fraud, moral turpitude. His Honour further stated that there is no fraud for the purposes of s 42 if a person does no more than acquire and rely upon title and become the registered proprietor with notice of a prior unregistered interest: at [29]. 44His Honour found that paragraph 23 did not plead fraud nor was any allegation of dishonesty made. In these circumstances he considered that the claim (under the first limb of Barnes v Addy) was bound to fail and therefore the amendment must be refused.

Paragraph 23B 45As already mentioned, counsel for Father Simmons had identified paragraph 23B as a claim under the second limb of Barnes v Addy. His Honour's reasons do not refer to this characterisation of paragraph 23B, but it seems that he approached paragraph 23B as alleging fraud against Mr Henwood, or participation in fraud: at [35]. 46His Honour referred to the well-established principle that fraud must be pleaded specifically and with particularity (at [36]), and to the pleading rules which require the particulars of facts on which a party relies in alleging fraudulent intention to be given: Uniform Civil Procedure Rules 2005 (NSW) (UCPR) r 15.4. 47His Honour found that paragraph 23B did not meet these pleading requirements: at [37]. His reasons included: (1)the assertion that Mr Henwood, or his solicitor acting as his agent, "engaged in a dishonest and fraudulent design", did not satisfy the requirements of pleading because fraud must be pleaded specifically and with particularity: at [38]; (2)the proposed amendment did not distinguish between the facts alleged to have been known by Mr Henwood and those alleged to have been known by his solicitor (Mr Colin Day, now deceased): at [39]; (3)the absence of particulars of facts with respect to the pleaded knowledge of Mr Henwood, or his solicitor, of Father Simmons' alleged lack of awareness of, and consent to, the sale of the Property: at [42]; (4)the proposed paragraph 23B did not extend beyond alleging that Mr Henwood took his interest with knowledge that Windeyer J had dismissed Father Simmons' claim to an interest in the Property, and that Mr Henwood knew that an appeal was pending and that registration of his interest would defeat Father Simmons' claimed interest. His Honour considered that this did not amount to fraud: at [48].

Paragraphs 27B - 27F 48Proposed paragraphs 27B to 27F pleaded a claim of deceit against Mr Henwood based on an unparticularised representation alleged to have been made by him to Dorothy Simmons that they were lawfully free to, respectively, sell and purchase that part of the Property known as "Letona". This amendment was refused by his Honour on a number of grounds, including that: (1)it was bad in law because it was premised upon Dorothy Simmons, not Father Simmons, having acted on the alleged misrepresentation and that, far from being induced to act to her detriment, it was pleaded that she was induced to act for her benefit: at [59]; (2)there were no proper particulars of the alleged fraud - the time of the alleged representations were not identified other than referring to the time as about mid 1993 until prior to 24 October 1994, nor was the manner of the alleged representations particularised: at [61]; (3)there were no particulars provided distinguishing between Mr Henwood and his solicitor with respect to their respective conditions of mind which were said to found knowledge of the "falsity" of the alleged representation: at [65].

Paragraphs 30, 30B and 31A 49Applying the same reasoning, the primary judge refused the proposed amendments which sought to add allegations of a similar nature in paragraphs 30, 30A, and 31A against Dorothy Simmons: at [66].

Prejudice and inconvenience 50His Honour also found that the proposed amendments, if granted, would cause significant prejudice and inconvenience for Mr Henwood and Dorothy Simmons. In reaching this conclusion his Honour took into account a number of matters, including: (1)that the key witness who was implicated in the alleged dishonesty, Mr Day, a solicitor, had passed away, as had two other potential witnesses, Mr McLennan and Mr Gary Simmons: at [77]. (Mr McLennan was said to have been Mr Stanley Henwood's manager at the time, who had negotiated the purchase of the Property with the Commissioner. Mr Stanley Henwood was Mr Henwood's father. Mr Gary Simmons was the son of Dorothy Simmons, who was said to have carried out the negotiations relating to her purchase of part of the Property from Mr Henwood); (2)Dorothy Simmons and Mr Stanley Henwood (who was another potential witness) were both of advanced years, and Dorothy's memory was failing: at [76]; (3)there was no explanation given for the delay by Father Simmons, let alone a satisfactory one: at [80]; and (4)that the two reports from Dr Armstrong, Father Simmons' clinical psychiatrist, did not explain his delay. The earlier report bore no apparent connection to the issue of delay. The latter report established that Father Simmons was in a position of being able to bring his case at an earlier time: at [82]. 51Having determined that leave to amend should be refused, his Honour concluded that Father Simmons' claim against Mr Henwood and Dorothy Simmons should be dismissed: at [86]. 52I turn now to the three parts of the appeal.

A. Proposed amendments against the Commissioner 53As already mentioned, the Commissioner filed a submitting appearance on appeal, except as to costs. Counsel for the Commissioner appeared at the commencement of the appeal as a matter of courtesy and informed the Court that the Commissioner's position remained the same as that before Hammerschlag J, namely, that the amendments against the Commissioner were not opposed. 54The primary judge's reasons do not refer to the proposed amendments against the Commissioner beyond noting (at [15]) that the Commissioner took no part in the contest. The failure by his Honour to consider these proposed amendments, although seemingly an oversight, was nonetheless an error. The amendment application as against the Commissioner should not have been dismissed without his Honour having considered the substance of the proposed amendments, including the fact that they were not opposed (as recorded in Father Simmons' written submissions dated 18 October 2013: WB 1/131). 55The question for this Court is whether this aspect of the amendment application should be remitted to his Honour for reconsideration, or whether this Court should deal with the proposed amendments. The latter is the appropriate course here. 56The relevant amendments against the Commissioner are paragraphs 10(g), 10A, 10B, 10C, 13, 14A, 14B, 15, 16, 19(c), (d) and (e), 19A, 19B, and 22A of the proposed statement of claim. The only amendment to the prayers for relief against the Commissioner is a claim for interest in paragraph 11A. As the proposed amendments are unopposed, and no substantive or discretionary ground of objection has been raised by the Commissioner, the amendments should be allowed.

Costs 57The Commissioner should not be required to pay any costs on appeal. The Commissioner took the responsible position of filing a submitting appearance on appeal, except as to costs. The Commissioner bears no responsibility for the fact that the primary judge overlooked this aspect of the amendment application. In my view, that circumstance does not require the Commissioner to consent to the relief which was sought on appeal or else suffer a costs order against him. 58The appropriate costs order on appeal is that the costs of the proceedings in this Court against the Commissioner are the plaintiff's costs in the proceeding below. Father Simmons, if otherwise qualified, should have a certificate under the Suitors' Fund Act 1951 (NSW). 59As to the costs below, in my view, the appropriate order is that the costs of the amendment application (as against the Commissioner) be the plaintiff's costs in the proceeding. The Commissioner did not oppose the amendments. He should not be visited with the costs of the amendment application, unless Father Simmons ultimately succeeds in establishing his claim against the Commissioner.

B. Proposed amendments against Mr Henwood and Dorothy Simmons 60In this Court, counsel for Father Simmons maintained the position taken before the primary judge that the proposed statement of claim sought to advance the following claims for equitable relief: (a) a "knowing receipt" claim, based on the first limb of Barnes v Addy, for a constructive trust or alternatively equitable compensation; (b) an "accessorial liability" claim based on the second limb of Barnes v Addy, for equitable compensation; and (c) a claim for a constructive trust based upon a personal equity, including fraud, against Mr Henwood and Dorothy Simmons. 61When asked by the presiding judge to identify which paragraphs of the proposed statement of claim were relied upon as having pleaded fraud, counsel for Father Simmons responded as follows: (1)paragraph 23 does not plead fraud, as the primary judge rightly found, "in the strict sense" (AT 24, lines 8-9); (2)rather paragraphs 23 and 28A plead an in personam claim, being a claim for equitable compensation based on the first limb of Barnes v Addy (AT 24, lines 43-46); (3)paragraph 23B (which picks up allegations in para 23), together with paragraphs 24 to 27F, when read with the claim for relief by way of constructive trust in paragraph 28, pleads the fraud claim (AT 24, line 46 - 25, lines 14 and 36-41). 62Although requested to do so (AT 30, lines 48 - 31, line 3), counsel for Father Simmons did not specifically identify the paragraphs which were said to have pleaded fraud against Dorothy Simmons. Nonetheless, having regard to the similarity in the allegations made against each of Mr Henwood and Dorothy Simmons, it may be taken that the fraud pleading against Dorothy Simmons is contained in paragraph 30B (the claim under the second limb of Barnes v Addy), read together with paragraphs 31A and 32. 63Before turning to the proposed pleading, it is necessary to say something about the fraud exception to indefeasibility, the type of claims against a registered proprietor which may operate as an in personam claim against a registered proprietor, and the requirements for pleading fraud or similar allegations.

Fraud exception to indefeasibility 64Section 42 of the Real Property Act provides: "Notwithstanding the existence in any other person of any estate or interest which but for this Act might be held to be paramount or to have priority, the registered proprietor for the time being of any estate or interest in land recorded in a folio of the Register shall, except in case of fraud, hold the same, subject to such other estates and interests and such entries, if any, as are recorded in that folio, but absolutely free from all other estates and interests that are not so recorded ... ." [Emphasis added.] 65Fraud for the purposes of s 42 means "something more than mere disregard of rights of which the person sought to be affected had notice, and as importing something in the nature of personal dishonesty or moral turpitude": Stuart v Kingston [1923] HCA 17; 32 CLR 309 at 329 per Knox CJ; and involves "dishonesty on the part of the registered proprietor in securing ... registration as proprietor": Bahr v Nicolay at 614. 66In Farah at [192], the High Court confirmed the requirement that there be "actual fraud, moral turpitude". It is for this reason that merely to take a transfer with notice, or even actual knowledge, that its registration will defeat an existing unregistered interest is not, without more, fraud: Bahr v Nicolay at 630 (Wilson and Toohey JJ) and at 655 (Brennan J). 67In Bahr v Nicolay the members of the High Court were divided on the question of whether fraud within the meaning of s 42 is confined to fraud in the obtaining of a transfer or in securing registration. The purchaser in that case had undertaken to the vendor to hold his title subject to a third party's right to repurchase. Mason CJ and Dawson J (at 615) were of the view that the fraud exception would embrace fraudulent conduct arising from the dishonest repudiation of a prior interest which the registered proprietor has acknowledged or has agreed to recognise as a basis for obtaining title. 68Wilson and Toohey JJ preferred the view that the fraud must be committed in the act of acquiring a registered title (at 633). Nonetheless their Honours accepted (at 638) that the indefeasibility provisions do not protect a registered proprietor from the consequences of his own actions where those actions give rise to a personal equity in another. Such an equity may arise from conduct of the registered proprietor after registration (as occurred in that case). Wilson and Toohey JJ held (at 638-639) that the purchaser remained bound by his undertaking after the registration of the transfer and if the purchaser repudiated the third party's right to purchase, equity would impose a constructive trust so that the registered proprietor holds his title on trust for the third party to the extent of the third party's interest. 69Brennan J (at 654-655) was largely of a similar view to Wilson and Toohey JJ. His Honour drew a distinction between fraud in equity and at common law. He reasoned that where a registered proprietor has undertaken that his transfer should be subject to an unregistered interest and later repudiates the unregistered interest he is, in equity's eye, acting fraudulently and may be compelled to honour the unregistered interest. His Honour noted that one means by which equity intervenes to prevent the fraud is by imposing a constructive trust on the purchaser when he repudiates the unregistered interest. He observed that this is different to the situation where the registration of the transfer to a proprietor is affected by such fraud as may defeat the registered title (that is, actual fraud).

In personam claims as an exception to s 42 70The indefeasibility conferred on a registered proprietor by s 42 "in no way denies the right of a plaintiff to bring ... a claim in personam, founded in law or in equity, for such relief as the Court acting in personam may grant": Frazer v Walker [1967] 1 AC 569 at 585; Breskvar v Wall (1971) 126 CLR 376 at 384-5. Authority requires that the Court may recognise such a claim, commonly referred to as a "personal equity", notwithstanding that an in personam claim is not an exception contained in s 42 of the Real Property Act: Farah at [193]ff and Castle Constructions Pty Ltd v Sahab Holdings Pty Ltd [2013] HCA 11; 247 CLR 149 at [31]. 71However, as the High Court made clear in Farah, only certain legal or equitable causes of action against a registered proprietor operate as an in personam exception outside the indefeasibility provision in s 42(1): at [193]-[198]. Farah concerned whether the in personam exception to indefeasibility under s 42 extended to claims arising under the knowing receipt limb and the knowing assistance limb of Barnes v Addy. The High Court held that they did not: at [193]-[195]. 72Nonetheless the High Court recognised in Farah, at [195], that indefeasibility is no answer to a claim for a constructive trust where "the defendant was the primary wrongdoer, attempting to ignore an obligation to share or convey the land with or to the plaintiff" citing Pullin J in LHK Nominees Pty Ltd v Kenworthy [2002] WASCA 291; 26 WAR 517 at 571 [289]. This is because there is no analogy between those cases where the defendant is the primary wrongdoer and those which can arise from the application of the first limb of Barnes v Addy where the defendant is a party who merely had notice of an earlier interest or notice of third party fraud. 73In Heggies at [103]-[104] Austin J contrasted those cases where a personal equity will not be created (those where the registered proprietor merely asserts his registered title after acquiring it with notice of the unregistered interest) with those cases which contain what his Honour referred to as the "additional ingredient" sufficient to create a personal equity. Having reviewed the authorities, in particular Bahr v Nicolay, Austin J described the "additional ingredient" as conduct involving some form of acknowledgment of the unregistered interest, or an agreement or undertaking to act in accordance with it, from which the registered proprietor later resiles.

Fraud must be pleaded specifically 74Fraud must be specifically pleaded: UCPR 14.14(3). Likewise an allegation of dishonesty must be pleaded clearly and with particularity. The pleader must not use language which is equivocal, rendering it doubtful whether the pleader is in fact relying on an allegation of dishonesty: Belmont Finance Corp Ltd v Williams Furniture Ltd [1979] 1 Ch 250 at 268 (Buckley LJ). Similar principles apply to claims alleging accessory liability under Barnes v Addy: Farah at [170]; Yeshiva Properties No 1 Pty Ltd v Joan Marshall [2005] NSWCA 23 at [14] (Bryson JA; Mason P and Beazley JA agreeing) 75One further matter must be mentioned. UCPR 15.3 requires that a pleading must give particulars of any fraud on which the party relies. Authority requires that particulars of fraud must be exactly given: Wentworth v Rogers (No 5) (1986) 6 NSWLR 534 at 538. 76It is convenient to first consider the pleading of the Barnes v Addy claims and then the fraud pleading.

(a) The "knowing receipt" claim under the first limb of Barnes v Addy 77In this Court, Father Simmons' claim against Mr Henwood of knowing receipt of trust property under the first limb of Barnes v Addy was said to be pleaded in paragraphs 22B and 23 of the proposed statement of claim, read with the claims for relief in paragraphs 28 and 28A - namely, a constructive trust over Mr Henwood's interest in the Property in favour of Father Simmons (paragraph 28), or equitable compensation in respect of Mr Henwood's dealings and disbursements in relation to the Property (paragraph 28A). 78The equivalent pleading of the "knowing receipt" claim against Dorothy Simmons is contained in paragraph 30, read with the claims for relief in paragraphs 32 (proprietary relief against part of the Property) and 32A (equitable compensation).

The claim for relief by way of constructive trust over the Property 79As already mentioned, the primary judge's reasons focused on whether paragraph 23 (Mr Henwood) and paragraph 30 (Dorothy Simmons) pleaded fraud within the meaning of s 42 of the Real Property Act. For the reasons given by his Honour, with which I agree, these paragraphs did not plead actual fraud against Mr Henwood or Dorothy Simmons. Nor did they plead facts which amounted to dishonesty or moral turpitude. 80As mentioned at [61(1)] above, counsel for Father Simmons acknowledged on appeal that paragraph 23 does not plead fraud "in the strict sense". 81His Honour's conclusion that the "knowing receipt" claims were bound to fail because of the failure to plead fraud within the meaning of s 42 was undoubtedly correct, insofar as Father Simmons claimed a constructive trust over the Property. Absent pleading and establishing fraud, a claim relying upon the first limb of Barnes v Addy could not prevail against the indefeasible titles of Mr Henwood and Dorothy Simmons: Farah at [192]; nor is a claim to a constructive trust under the first limb of Barnes v Addy recognised as an in personam exception outside the indefeasibility provision in s 42 of the Real Property Act: Farah at [193]-[195].

The claim for relief by way of equitable compensation 82Counsel for Father Simmons sought to sustain paragraph 23 of the proposed statement of claim on the basis of the alternative claim for relief by way of equitable compensation contained in paragraphs 28A and 32A. He contended that the primary judge erred in failing to consider the proposed pleading based on the first limb of Barnes v Addy, read with the alternative claim for relief for equitable compensation. 83Although there was some debate before the primary judge about whether some of the proposed amendments were outside the terms of the remittal by this Court, it seems that ultimately both the parties and the primary judge proceeded upon the basis that the proposed amendments were to be considered on their merits, even if they raised matters beyond pleading fraud within the meaning of the Real Property Act (WB 1/107-108). He was correct to do so. The order made by this Court in the 2013 Appeal did not limit the terms of the remittal. The proceeding was remitted to the primary judge for consideration of any application that Father Simmons wished to make. 84Moreover, the orders of this Court in the 2013 Appeal included an order setting aside the earlier orders dismissing the proceeding against Mr Henwood and Dorothy Simmons. Thus it remained open to Father Simmons to make such application for leave to amend his statement of claim as he wished. It was then a matter for the primary judge to consider and determine whether any proposed amendments should be permitted. His Honour's failure to consider the proposed pleading in light of the alternative claim for relief for equitable compensation was, in my view, an error. 85Rather than remit the matter, it is appropriate that this Court consider the proposed pleading, as the matter has been fully argued on appeal. The proposed pleading is to be examined against the elements of a "knowing receipt" claim under the first limb of Barnes v Addy.

The elements of the first limb of Barnes v Addy 86In Farah at [112] the High Court defined the first limb of Barnes v Addy in this way: "Persons who receive trust property become chargeable if it is established that they have received it with notice of the trust." 87The High Court also accepted, in the absence of any argument to the contrary, that a claim under the first limb of Barnes v Addy may be made against not only a trustee who misapplies trust property, but also a fiduciary who deals with property, in respect of which he or she owes fiduciary obligations, in breach of such obligations: Farah at [113]. 88The elements of a claim under the first limb of Barnes v Addy may be taken to be: (1)the existence of a trust, or a fiduciary duty, with respect to property (trust property); (2)the misapplication of trust property by the trustee or fiduciary; (3)the receipt of trust property by the third party; (4)knowledge by the third party, at the time he or she received the relevant property, that it was trust property and that it was being misapplied or, in the case of breach by a fiduciary, that the trust property was transferred pursuant to a breach of fiduciary duty. 89The authorities which may be taken to establish element (4) above, include: Hancock Family Memorial Foundation Ltd v Porteous [1999] WASC 55; 32 ACSR 124 at 142 (Anderson J); Spangaro v Corporate Investment Australia Funds Management Ltd [2003] FCA 1025; 47 ACSR 285 at [55] (Finkelstein J); Grimaldi v Chameleon Mining NL (No 2) [2012] FCAFC 6; 200 FCR 296 at [20], [249]-[254]; Imobilari Pty Ltd v Opes Prime Stockbroking Ltd [2008] FCA 1920 at [15]; and Bell Group Ltd (In Liq) v Westpac Banking Corporation (No 9) (Bell Group (No 9)) [2008] WASC 239; 70 ACSR 1 at [4748] (Owen J). 90Although Farah did not consider the categories of knowledge sufficient to attract liability under element (4) of the first limb of Barnes v Addy, it may be accepted that the knowledge required is: (1)actual knowledge of the trust, or the existence of the fiduciary duty, and of the misapplication of trust property or transfer pursuant of to a breach of fiduciary duty; or (2)willfully shutting one's eyes to those things; or (3)abstaining in a calculated way from making such inquiries, as an honest and reasonable person would make, about the trust and the application of the trust property; or (4)knowledge of facts which to an honest and reasonable person would indicate the existence of the trust and the fact of misapplication. 91The authorities which have accepted that the above categories of knowledge are sufficient include: Kalls Enterprises Pty Ltd (in liq) v Balaglow [2007] NSWCA 191; 63 ACSR 557 at [176] (Giles JA; Ipp and Basten JJA agreeing); Hancock Family Memorial Foundation Ltd v Porteous at 142; Grimaldi v Chameleon Mining NL (No 2) at [268]-[270]. See also Westpac Banking Corporation v Bell Group Ltd (In Liq) (No 3) [2012] WASCA 157; 44 WAR 1 at [2130], when approving the view to which Owen J came at first instance in Bell Group Ltd (No 9) at [4748]. 92On the other hand, those authorities also establish that mere knowledge of circumstances which would put an honest and reasonable person on inquiry is not sufficient to establish liability for knowing receipt. 93I turn now to the proposed pleading.

Mr Henwood - paragraphs 22B, 23 and 28A 94Paragraph 22B is introductory only. It repeats the allegations which have been made against the Commissioner. 95Paragraph 23 is the critical pleading of the claim under the first limb of Barnes v Addy. In my view, paragraph 23 is deficient in pleading elements (2) and (4) of such a claim as identified at [88] above. 96As to element (1), the existence of trust property, it may be accepted that the pleading alleges that the Property was either trust property (held by the Commissioner upon a constructive trust) or property to which fiduciary obligations were attached, being obligations owed by the Commissioner to Mrs Simmons and Father Simmons. 97Although no particulars of the alleged trust are expressly provided, particular (f) to paragraph 23 incorporates the "trust" allegations earlier pleaded in paragraphs 19, 19A and 19B. The particulars of the alleged trust are contained in particular (c) to paragraph 19, which states that the Commissioner, upon his appointment as manager of Mrs Simmons' affairs in 1992, became constructive trustee of the Property for Father Simmons and Mrs Simmons, or alternatively was in a fiduciary relationship to both of them in respect of the Property. This particular must be read together with the allegation in paragraph 10C that Mrs Simmons was in a fiduciary relationship with Father Simmons and held the Property on trust for both of them as joint tenants in equity. 98As to element (2), misapplication of trust property, no such allegation is expressly pleaded in paragraph 23 itself. However such an allegation appears in particular (f) to paragraph 23, where it is stated that the conduct of the Commissioner in entering into the contract for sale of the property to Mr Henwood was a breach of trust, or breach of fiduciary duty, as alleged in paragraphs 19, 19A and 19B. 99Strictly, particular (f) to paragraph 23 is not a particular at all. It seeks to add new factual matters beyond the scope of the pleading in paragraph 23 itself. Particulars cannot rise above the allegations to which they relate. This reflects the material distinction between facts asserted in the body of the pleading, on the one hand, and particulars, on the other. The facts asserted in the body of the pleading must be sufficient, standing alone, to make out the party's case (whether for a remedy sought or as a factual answer in law to the previous pleading). Gaps in the pleading party's case cannot be filled in by providing particulars: H 1976 Nominees Pty Ltd v Galli [1979] FCA 114; 40 FLR 242 at [15]-[23]. 100In my view, the pleading of the alleged misapplication of trust property in proposed paragraph 23 is deficient in its present form. The difficulty identified above might be addressed if particular (f) was renumbered as a separate paragraph, such as 23AA. Whether such further amendment should be permitted may be deferred for the present. 101As to element (3), receipt of trust property, it may be accepted that paragraph 23 pleads that Mr Henwood received trust property, or property to which fiduciary obligations attached (in this case, the Property). 102As to element (4), "knowing receipt", the only category of knowledge which is alleged in paragraph 23 is actual knowledge on the part of Mr Henwood and, in one respect, his solicitor. No other category of knowledge is relied upon. Whilst it is alleged that, at the time of the sale of the Property, Mr Henwood knew that it was trust property held jointly for Mrs Simmons and Father Simmons, it is not alleged that Mr Henwood knew of the misapplication of the trust property by the Commissioner. Rather, the allegation which is made is that Mr Henwood knew that Father Simmons did not consent to the sale and was unaware of the contract for sale dated 24 December 1993. Those facts alone, in my view, do not amount to an allegation that Mr Henwood had actual knowledge of the misapplication of trust property by the Commissioner. There is no pleading of any material facts which would render a dealing with the trust property, in those circumstances - the absence of the beneficiary's consent or knowledge - a breach of trust or fiduciary duty. 103Further, I do not consider that particular (f) cures the deficiency in paragraph 23. Particular (f) states that Mr Henwood received the Property knowing of the facts which gave rise to the Commissioner's breach of trust and duty, as alleged in paragraphs 19, 19A, and 19B. However particular (f) then states "particulars of which knowledge of second defendant [Mr Henwood] is set out in (a)-(e) above". 104Particular (f) does not "fill the gap" in pleading element (4) of a claim under the first limb of Barnes v Addy. First, as already mentioned, particulars cannot rise above the pleading to which they relate. Here, particular (f) purports to introduce a new material allegation that Mr Henwood knew of the facts which gave rise to a breach of fiduciary duty by the Commissioner, when no allegation of breach of fiduciary duty, let alone knowledge of breach of fiduciary duty, is pleaded in paragraph 23 itself. 105Secondly, there is a fundamental disconnection between the assertion in particular (f) that Mr Henwood knew of the facts which are said to give rise to the Commissioner's breach of trust or breach of fiduciary duty (being the matters alleged in paragraphs 19, 19A and 19B) and the asserted particulars of Mr Henwood's knowledge of those facts (being particulars (a)-(e) to paragraph 23). The latter particulars of knowledge do not relate to the Commissioner's breach of trust or breach of fiduciary duty alleged in paragraphs 19, 19A and 19B. 106To take one example, particulars (a)-(e) to paragraph 23 do not address Mr Henwood's alleged knowledge of the facts which gave rise to the Commissioner's alleged conflict of interest between his duty to Father Simmons and his personal interest in disposing of the Property to satisfy debts assumed by the Commissioner as the manager of Mrs Simmons' estate. Again, by way of example, particulars (a)-(e) to paragraph 23 do not address Mr Henwood's alleged knowledge of the facts which would render the Commissioner's transfer of the Property to be in breach of his fiduciary obligations to Father Simmons. 107An allegation that a third party had notice of the misapplication of trust property, or the transfer of property in breach of fiduciary duty, must be expressly pleaded and sufficiently particularised. Paragraph 23 fails to do so.

Dorothy Simmons - paragraphs 30, 31A, and 32A 108Paragraph 30 pleads the claim under the first limb of Barnes v Addy against Dorothy Simmons in almost identical terms to paragraph 23 concerning Mr Henwood. The only material difference is with regards to the time at which Dorothy Simmons is alleged to have had the requisite notice that part of the Property (which was transferred to her by Mr Henwood) was trust property. This is alleged to be at the time of that transfer - 24 October 1994. Accordingly, it may be accepted that paragraph 30 contains the same deficiencies as those identified above in relation to paragraph 23. 109Although there are some differences in the particulars to paragraph 30, compared to paragraph 23, none of these differences cure these pleading deficiencies. Further, particular (g) to paragraph 30, which is similar to particular (f) to paragraph 23, contains an additional deficiency. It includes a new allegation that the sale of part of the Property by Mr Henwood to Dorothy Simmons was "in further breach of trust by him as alleged in paragraphs 23, 23B and 27A ....". Paragraph 30 itself does not allege any breach of trust by Mr Henwood. The new allegation of a breach of trust by Mr Henwood relies upon paragraphs 23, 23B and 27A, but counsel for Father Simmons only identified these paragraphs as pleading claims based on the alleged breach of trust, or breach of fiduciary duty, of the Commissioner (paragraphs 23 and 27A - first limb of Barnes v Addy), or the alleged dishonest and fraudulent design of the Commissioner (paragraph 23B - second limb of Barnes v Addy). This leaves the new allegation in particular (g) of breach of trust by Mr Henwood both unpleaded and unparticularised. 110In my view, paragraphs 30, 31A, and 32A fail to plead a claim for equitable relief by way of compensation or damages based on the first limb of Barnes v Addy.

(b) The "knowing assistance" claim under Barnes v Addy

The elements of the second limb of Barnes v Addy 111In New Cap Reinsurance Corporation Ltd v General Cologne Re Australia Ltd [2004] NSWSC 781 at [15], Young CJ in Eq stated in the context of a pleading dispute: "It is essential to plead the elements of the second limb in Barnes v Addy which Jacobs, Law of Trusts (6th ed, 1997, Butterworths) at [1339] sets out as: (1) The existence of a fiduciary duty; (2) A dishonest and fraudulent design by the fiduciary; (3) The assistance by the third party in that design; (4) With knowledge." 112As Farah makes clear (at [174]-[177]), Consul Development Pty Ltd v DPC Estates Pty Ltd [1975] HCA 8; 132 CLR 373 supports the proposition that knowledge within categories (i) to (iv) of Baden v Sociéte Générale pour Favoriser le Développement du Commerce et de l'lndustrie en France SA (Baden) [1993] 1 WLR 509 at 575-576 is sufficient for the purposes of the second limb of Barnes v Addy, but constructive knowledge within category (v) of Baden is insufficient, that is, knowledge of circumstances which would put an honest and reasonable man on inquiry. 113Thus, for the purposes of pleading a second limb claim, the categories of knowledge are: (i) actual knowledge; (ii) willfully shutting one's eyes to the obvious; (iii) willfully and recklessly failing to make such inquiries as an honest and reasonable man would make; and (iv) knowledge of circumstances which would indicate the facts to an honest and reasonable man. 114Farah also established that liability under the second limb of Barnes v Addy is confined to cases where the breach of fiduciary duty amounts to a "dishonest and fraudulent design": see the analysis by Leeming JA (with whom I agreed) in Hasler v Singtel Optus Pty Ltd (Hasler v Singtel Optus) [2014] NSWCA 266 at [121]-[125]. Farah requires that such an allegation ought to be pleaded and sufficiently particularised: at [170]. 115For present purposes, what is meant by the phrase "dishonest and fraudulent design" is succinctly explained in the following paragraphs of the judgment of Leeming JA in Hasler v Singtel Optus: "[123] The short point is that Lord Selborne's formulation avoids the potential for dispute as to the meaning of "fraud" in equity, by requiring that there must also be dishonesty on the part of the fiduciary. [124] Dishonesty amounts to a transgression of ordinary standards of honest behaviour. It is not necessary to say anything else by way of elaboration, save to confirm that it is not necessary to demonstrate that the person thought about what those standards were. (I have paraphrased Lord Hoffmann's account in Barlow Clowes International Ltd (in liq) v Eurotrust International Ltd [2006] 1 All ER 333 at [16].)"

Mr Henwood - paragraph 23B 116Paragraph 23B of the proposed statement of claim alleges that Mr Henwood, or his solicitor acting as his agent, engaged in a "dishonest and fraudulent design". The alleged "design" is identified as the contract of sale dated 24 December 1993 pursuant to which Mr Henwood purchased the Property from the Commissioner and received title to the Property. 117It is also alleged that Mr Henwood engaged in "morally reprehensible or in moral turpitude" by taking title to the Property from the Commissioner knowing particular matters. These matters relevantly included that Father Simmons was unaware of, and had not consented to, the sale; that Father Simmons had an interest in the Property (or knowing the facts which gave rise to an interest in the Property); and that Father Simmons had appealed the decision of the Windeyer J. 118In my view, the proposed pleading is wholly deficient in pleading elements (2), (3) and (4) of a claim of "accessorial liability", as identified in [111] above. 119As to element (2), the allegation that Mr Henwood or his solicitor "engaged" in a dishonest and fraudulent design is somewhat inapt. It may be assumed that what the pleader intended to convey by the expression "engaged" is that Mr Henwood or his solicitor "participated" or "assisted" in a dishonest and fraudulent design by the Commissioner. This would seem to follow from the "design" which is pleaded, being the contract for sale of the Property by the Commissioner to Mr Henwood in December 1993. 120However, even if the proposed pleading is viewed in this way, there is no pleading of any facts which would render the Commissioner's conduct dishonest. This may be seen when one examines the allegations which are made against the Commissioner of breach of trust, or breach of fiduciary duty. These are found in paragraphs 19, 19A, and 19B of the proposed statement of claim. 121As to paragraph 19, none of the particulars of the alleged breach of trust or breach of fiduciary duty by the Commissioner involve any suggestion of dishonest conduct by the Commissioner. The bare allegation that the Commissioner sold the Property as the manager of Mrs Simmons' estate, aware of Father Simmons' unregistered equitable interest in the Property, does not involve an allegation of dishonest conduct. Nor could it be said, absent pleading other material facts, that the allegation that the Commissioner agreed to agist Mr Henwood's cattle on the Property prior to settlement of the contract for sale, without seeking or obtaining the consent of Father Simmons, involved any element of dishonesty by the Commissioner. 122As to paragraphs 19A and 19B, these allege that the Commissioner had a conflict of interest between his fiduciary duty as manager of Mrs Simmons' estate and his own interest in selling or disposing of the Property in satisfaction of debts incurred by the Commissioner in his capacity as manager of Mrs Simmons' estate, and that the Commissioner breached this duty. A number of observations may be made in relation to these paragraphs. 123 First, no facts are pleaded seeking to make out a case that there was a "real and sensible possibility" of conflict between the Commissioner's personal interests and Mrs Simmons' interests in the context of the allegation that the Commissioner sold the Property in satisfaction of debts owing by Mrs Simmons. 124Secondly, it is not alleged that the Commissioner made any undisclosed profit in selling the Property. 125Thirdly, assuming Father Simmons' case to be that the Commissioner's alleged breach of fiduciary duty caused loss to Father Simmons, there are no material facts pleaded which might make out causation of loss, in circumstances where the complaint is that the Commissioner sold the Property to meet debts owing by Mrs Simmons' estate. It was not suggested that the discharge of such debts was in any way improper, let alone dishonest conduct by the Commissioner. 126Fourthly, even assuming a breach of fiduciary duty by the Commissioner, again no facts are pleaded which would support the characterisation of such breach as involving dishonesty. 127As to element (3), the proposed pleading does not specify, with respect to each of Mr Henwood and his alleged agent (Mr Colin Day, solicitor), how each of them relevantly "engaged" in (let alone "assisted") a dishonest and fraudulent "design" by the Commissioner. The pleading also fails to specify what overt acts are alleged to have constituted the assistance given by each of them to the Commissioner's "design". 128As to element (4), as the primary judge correctly observed, the proposed pleading does not look at each of Mr Henwood and his solicitor and state what knowledge they are each relevantly alleged to have had of the Commissioner's alleged "dishonest and fraudulent design".

Dorothy Simmons - paragraph 30B 129There are similar deficiencies in relation to proposed paragraph 30B, as against Dorothy Simmons. These may be dealt with briefly. 130As to element (2), the alleged dishonest and fraudulent "design" is said to be both the contract of sale by the Commissioner to Mr Henwood in December 1993 and the later transfer of part of the Property by Mr Henwood to Dorothy Simmons. However, again, no facts are pleaded which involve any plan or any dishonesty on the part of the Commissioner in entering into the contract for sale of the Property with Mr Henwood. Further, it is not pleaded that the "design" of the Commissioner included that Mr Henwood would on-sell part of the Property to Dorothy Simmons, in order to defeat Father Simmons' unregistered interest in respect of that part of the Property. 131As to element (3), paragraph 30B fails to specify what overt acts are alleged to have constituted the assistance by each of Dorothy Simmons or her solicitor in the alleged dishonest and fraudulent design by the Commissioner, beyond the fact that Dorothy Simmons received a transfer in respect of part of the Property. 132As to element (4), paragraph 30B does not look at each of Dorothy Simmons and her solicitor and state what knowledge they are each relevantly alleged to have had of the Commissioner's alleged "dishonest and fraudulent design". 133In my view, there was no error in his Honour's conclusion that leave should not be granted to include proposed paragraphs 23B and 30B.

(c) Fraud allegations - paragraphs 23B, 27A-27F 134The primary judge rejected the proposed amendments insofar as it was contended by Father Simmons that they were sufficient to plead the fraud exception to indefeasibility. For the reasons given by the primary judge, with which I agree, fraud in the sense of actual fraud (moral turpitude), was not pleaded specifically and with particularity against either Mr Henwood or Dorothy Simmons. 135In this Court counsel for Father Simmons sought to sidestep this difficulty in two ways. First it was contended, relying upon statements in Farah at [195], that each of Mr Henwood and Dorothy Simmons was a "primary wrongdoer" and that indefeasibility was no answer to a claim against them for a constructive trust over the Property in those circumstances. 136Secondly, it was contended that the proposed paragraphs pleaded an in personam claim which operated outside of s 42. It was said that these paragraphs, when read with paragraph 23 (which contained the "additional ingredient"), were sufficient to create a "personal equity" of the type recognized in Bahr v Nicolay and Heggies. 137Each of these contentions should be rejected. 138First, the attempt to characterise the proposed paragraphs as advancing a claim that Mr Henwood and Dorothy Simmons were each a "primary wrongdoer" is inconsistent with the terms of the proposed pleading and the way in which the amendment application was advanced both before the primary judge and in this Court. 139Furthermore the proposed paragraphs do not allege any facts which might support the characterisation of Mr Henwood or Dorothy Simmons as a "primary wrongdoer". It is not pleaded that either of them had agreed with, or undertaken to, the Commissioner to share or convey the Property with or to Father Simmons, let alone that they had repudiated any such obligation by relying upon the defence of indefeasibility after they had obtained legal title. 140Secondly, Farah at [193]-[195] established that the in personam exception operating outside of s 42 does not extend to claims arising under the first and second limbs of Barnes v Addy. Accordingly, paragraphs 23 and 23B cannot be taken to plead a personal equity against Mr Henwood and Dorothy Simmons which could prevail against s 42 of the Real Property Act. 141Thirdly, contrary to the submissions of counsel for Father Simmons (AT, p 24, lines 43-49), the matters pleaded in paragraph 23 cannot fairly be described as pleading the "additional ingredient" (of the kind referred to by Austin J in Heggies) which, in combination with the knowledge of Father Simmons' unregistered interest, would be sufficient to create a personal equity against the registered proprietor. 142As already mentioned, the pleading does not allege that either Mr Henwood or Dorothy Simmons agreed with, or undertook to, the Commissioner to recognise Father Simmons' unregistered rights which he alleged he had in respect of the Property, and which were the subject of his pending appeal to this Court at the time of the transfer of the Property. 143However Father Simmons contended that the matters contained in particulars (d) and (e) to paragraph 23 constitute the "additional ingredient" sufficient to create a personal equity against Mr Henwood. 144As to particular (d), the relevant clauses of the contract of sale (at Supp WB 92-94), which was in evidence before the primary judge, do not reasonably bear the characterisation of an "acknowledgment" of Father Simmons' claimed interest in the Property. Clauses 8(c) and (d) of the contract for sale provided: "8. The purchaser acknowledges: .... (c) that there is a caveat 1237393 by Paul Simmons registered on the titles ('the Caveat'). (d) (i) that the vendor will use her best endeavours to obtain a Withdrawal of the Caveat and possession of that part of the property occupied by the Caveator Paul Simmons; (ii) that in the event the vendor is unable to obtain the said Withdrawal and possession by the day of 1993, she is entitled by notice in writing to the purchaser to rescind the within contract and upon the refund to the purchaser of the deposit will not otherwise be liable to pay any damages, costs or expenses." 145These clauses do not amount to any agreement with, or undertaking by, Mr Henwood to the Commissioner to recognise Father Simmons' alleged interest in the Property. The clauses do no more than establish that Mr Henwood was on notice that Father Simmons had lodged a caveat against the titles to the land claiming an interest in the Property. This is insufficient to create a personal equity of the type which would prevail against s 42 of the Real Property Act. 146As to particular (e), the subject matter of the alleged agreement between Mr Henwood and Father Simmons could not give rise to a personal equity against Mr Henwood. The subject matter concerns Mr Henwood allegedly taking the Property from the Commissioner without requiring "vacant possession" of the land, that is, without requiring Father Simmons to vacate the Property (where he was, at the time, residing). The complaint referred to in particular (e) relates to the subsequent eviction of Father Simmons from the Property by Mr Henwood. Particular (e) does not allege that Mr Henwood agreed with, or undertook to, Father Simmons to recognise his unregistered alleged interest in the Property. It is directed to the question of Father Simmons' possession as an occupier, not an agreement to recognise his alleged beneficial interest in the Property. 147As against Dorothy Simmons, the alleged pleading of a personal equity against her is said to be contained in paragraph 30B. This contention must be rejected. There is simply no pleading of any agreement or undertaking by Dorothy Simmons with either the Commissioner, or Mr Henwood (from whom she received the transfer), to recognise Father Simmons' alleged interest in the Property. 148In my view, the primary judge did not err in rejecting the proposed paragraphs which were said to have pleaded fraud or a personal equity against Mr Henwood and Dorothy Simmons.

Discretionary considerations - delay, prejudice and inconvenience 149There remains for consideration Father Simmons' challenge to the primary judge's findings in relation to various discretionary factors taken into account in refusing the proposed amendments.

Submissions 150The written submissions of Father Simmons primarily focused on two matters: the findings by the primary judge concerning delay and prejudice, and the degree of inconvenience which the amendments would cause to Mr Henwood and Dorothy Simmons. 151Complaint was also made about the primary judge's refusal to permit cross-examination of the deponents in relation to certain affidavits on this or any other issue. This was said to have prevented Father Simmons from relying on admissions which might have been obtained in cross-examination as to the lack of prejudice and as to the want of any notice of the case against them. 152On the issue of delay, Father Simmons contended that the relevant period of delay was not between 1993 and 2011 (when the current proceedings commenced) but rather the much shorter period being the time between filing his reply to defences (which were filed in October 2011 and pleaded the s 42 defence) and the provision of the new draft pleading (which was said to have occurred on 7 August 2012). This period was said to have been less than eight months. 153A related complaint on the issue of delay was that the primary judge had disregarded evidence of an explanation said to be contained in an affidavit of Dr Armstrong, Father Simmons' consulting psychiatrist. 154On the issue of prejudice, Father Simmons contended that there was no evidence of any prejudice suffered by Mr Henwood or Dorothy Simmons either substantively or procedurally. In relation to loss of potential witnesses, it was asserted by counsel for Father Simmons that Mr Henwood had misled the Court in his affidavit as to the identity of the relevant station manager of Mr Stanley Henwood at the time of the sale of the Property by the Commissioner, and that Dorothy Simmons had similarly misled the Court in her affidavit as to her capacity to travel to Sydney in connection with the proceeding (Appellant's outline of argument at [61]). 155Before considering these contentions it is appropriate to refer to the power given to the Court in relation to amending documents and pleadings.

Power of the Court to allow amendments 156Section 64 of the Civil Procedure Act 2005 (NSW) gives very wide power to the court in relation to amending documents and pleadings. Section 64(2) provides: "(2) Subject to s 58, all necessary amendments are to be made for the purpose of determining the real questions raised by or otherwise depending on the proceedings, correcting any defect or error in the proceedings and avoiding multiplicity of proceedings." 157Section 58(1)(a)(i) makes express reference to orders for amendment of documents and provides that the Court must seek to act in accordance with the dictates of justice. Section 58(2) then provides: "(2) For the purpose of determining what are the dictates of justice in a particular case, the court: (a) must have regard to the provisions of ss 56 and 57, and (b) may have regard to the following matters to the extent to which it considers them relevant: (i) the degree of difficulty or complexity to which the issues in the proceedings give rise, (ii) the degree of expedition with which the respective parties have approached the proceedings, including the degree to which they have been timely in their interlocutory activities, (iii) the degree to which any lack of expedition in approaching the proceedings has arisen from circumstances beyond the control of the respective parties, (iv) the degree to which the respective parties have fulfilled their duties under s 56 (3), (v) the use that any party has made, or could have made, of any opportunity that has been available to the party in the course of the proceedings, whether under rules of court, the practice of the court or any direction of a procedural nature given in the proceedings, (vi) the degree of injustice that would be suffered by the respective parties as a consequence of any order or direction, (vii) such other matters as the court considers relevant in the circumstances of the case." 158Thus under subs (2) the court must have regard to ss 56 and 57 and may have regard to the listed matters which are considered relevant. A number of the matters listed are relevant to the present applicant and were considered by the primary judge. 159The Court is required by s 56 to give effect to the "overriding purpose" of facilitating the just, quick, and cheap resolution of the real issues in proceedings. Litigants similarly are under a duty to assist the Courts in furtherance of that purpose. 160Section 57 requires Court proceedings to be managed having regard to the criteria listed in subs (1): the just determination of the proceedings; the efficient disposal of the business of the Court; the efficient use of available judicial and administrative resources; and the timely disposal of the proceedings, and all other proceedings in the Court, at a cost affordable by the respective parties.

Consideration 161In the present case, the primary judge expressly adverted to the "overriding purpose" specified in s 56, when concluding that the proposed amendments should be refused (at [7]). 162The primary judge also noted (at [17]) that the proposed amended statement of claim was the third version of the draft pleading which Father Simmons had sought to advance since 31 July 2013 following remittal of the matter by this Court.

Ground 9 - delay 163The primary judge considered whether the delay on the part of Father Simmons had caused real prejudice to Mr Henwood and Dorothy Simmons in meeting the new case sought to be advanced. It was in this context that his Honour observed that the proceeding had been commenced by Father Simmons almost 17 years after they had acquired their legal interests in the Property in 1994 with no allegation of dishonesty having previously been made against them. His Honour further observed that at the time of the amendment application nearly 20 years had elapsed. 164The primary judge proceeded upon the basis that delay between the date the cause of action arose and the application for leave to amend was a relevant factor. Father Simmons contended that this was an error because his Honour should have confined his attention to the prejudice suffered by Mr Henwood and Dorothy Simmons after the expiry of the time by which Father Simmons could file a reply to the defences filed in October 2011 pleading the defence of indefeasibility. 165To confine the consideration of the effects of delay merely to the period after defences had been filed in October 2011 pleading indefeasibility, would be to obscure the reality of the prejudicial effects of the delay by Father Simmons in the present case. The disappearance or death of witnesses, the fading of their recollections, or the loss or destruction of records, are obvious examples of the kind of prejudice that might arise between the date the cause of action arose and the amendment application. 166In weighing any suggested prejudice to Mr Henwood and Dorothy Simmons, the primary judge was not limited to considerations only arising after October 2011. In my view, there was no error in the approach of the primary judge to the period of delay, which was relevant to the discretion whether to allow or refuse the amendments. 167Here the primary judge made a finding of actual prejudice. There was no error in making this finding. The evidence established that actual prejudice had resulted from the delay - not only the unavailability of witnesses, but also the fading of the recollections of other witnesses. Relevantly, in relation to Mr Henwood, there is no challenge to his Honour's findings that: (1)His then solicitor, Mr Colin Day, who it was alleged is implicated in the fraud, is now deceased; (2)Mr McLennan, who was said to be Mr Stanley Henwood's station manager at the time of the purchase of the Property, and involved in the negotiations to purchase the Property, is also deceased; (3)Mr Stanley Henwood was, at the time of the application before the primary judge, 88 years of age. He was a potential witness. By his affidavit of 3 October 2013 he said that he arranged the purchase of the Property from the Commissioner relying on his then Station Manager at the time, Mr McLennan. 168Although counsel for Father Simmons contended before the primary judge that Mr McLennan was not a potential witness because another person, Mr Gilligan, was Mr Stanley Henwood's relevant station manager at the time of the purchase of the Property, it was unnecessary, in my view, for his Honour to resolve this factual dispute. 169In circumstances where no contrary evidence was led by Father Simmons from Mr Gilligan, it was appropriate for the primary judge to proceed upon the basis that Mr McLennan was a potential witness. In describing Mr McLennan in this manner, his Honour no doubt took into account the contention of Father Simmons that ultimately Mr McLennan might not be a relevant witness. There was no error, in my view, in the approach which the primary judge took to the significance of the absence of Mr McLennan. 170In relation to Dorothy Simmons, there is no challenge to his Honour's findings that: (1)she was of advanced years and her memory was failing: at [76]. (As already mentioned, she is now deceased); (2)Mr Gary Simmons, a potential witness, was now deceased. Dorothy Simmons gave evidence that her son, Mr Gary Simmons, carried out the negotiations relating to her purchase of part of the Property, through Elders Real Estate, Brewarrina. He passed away in 2000. 171Further, there was no challenge to his Honour's findings that to permit new allegations of dishonesty almost 20 years after the events in issue would undoubtedly induce significant personal stress and would entail significant inconvenience and expense for Mr Henwood and Dorothy Simmons: at [74].

Grounds 12 and 13 - Dr Armstrong's evidence 172Father Simmons did challenge the finding by the primary judge that there was no explanation for why the proposed pleading was not advanced earlier: at [78]. In this regard, Father Simmons relies upon evidence from Dr Armstrong, his consulting psychiatrist. 173It is to be noted that Father Simmons himself did not provide any direct evidence seeking to explain the delay. The primary judge was entitled, as he did, to take this absence of any explanation from Father Simmons into account. 174Turning to the evidence of Dr Armstrong, his affidavit attached two reports. The earlier report, dated 7 October 2007, dealt with the delay by Father Simmons in seeking review of certain Court findings made in relation to charges on unrelated events in 1983 and 1984. It was not suggested that the primary judge erred in finding that this report was irrelevant: at [82]. 175The latter report, dated 27 September 2012, described various difficulties experienced by Father Simmons in dealing with the legal system, having regard to a series of traumatic events in his earlier life. The primary judge noted that counsel for Father Simmons had not placed reliance upon this second report, and that this was not surprising. His Honor found that Dr Armstrong's evidence established that Father Simmons was in a position of being able to bring his case at an earlier point of time and to that extent Dr Armstrong's report did not assist Father Simmons on the question of delay: at [82]. 176The challenge to this finding must be rejected. The finding is amply supported by the history of the legal assistance which Father Simmons sought and obtained between 1995 and 2003 from various sources as recorded by Dr Armstrong in his report (which, it may be inferred, was based on instructions from Father Simmons) (WB 2/13-14).

Ground 10 - refusal to permit cross-examination 177Ground 10 contends that the primary judge erred in failing to permit cross-examination of Mr Henwood, Mr Stanley Henwood, and Dorothy Simmons upon affidavits read and relied on in opposing the proposed amendments. This challenge must confront the substantial hurdle of establishing error in the primary judge's exercise of discretion on a matter of practice and procedure on an interlocutory application: House v The King [1936] HCA 40; 55 CLR 499 at 505. 178The submissions of Father Simmons did not contend that in refusing to permit cross-examination the primary judge acted upon a wrong principle, took into account an irrelevant matter, mistook the facts, or failed to take into account some material consideration. The complaint seems to be based on the last category of error in House v The King, that it was "unreasonable or plainly unjust" to refuse to permit cross-examination.

Cross-examination of Mr Stanley Henwood and Mr Henwood 179His Honour was dealing with a pleading amendment. Counsel for Mr Henwood had indicated to the primary judge that the limited purpose of the affidavits from Mr Stanley Henwood and Mr Henwood was to establish the fact of the death of Mr Henwood's solicitor (Mr Colin Day) and the fact of the death of Mr McLennan who was said to be the station manager of the Mr Stanley Henwood at the time who was involved in the negotiations for the purchase of the Property (WB 1/76, Tcpt 4, lines 30-33). Thus the evidence went to the issue of whether relevant or potentially relevant witnesses were no longer available. 180Counsel for Father Simmons sought to cross-examine these deponents on various factual matters referred to in their affidavits, including a statement as to the price paid per acre for the Property and whether another person, Mr Gilligan, was Mr Stanley Henwood's relevant station manager at the time of the purchase of the Property (WB 1/75, Tcpt 3, lines 16-35). The primary judge refused to permit cross-examination of these deponents. 181Insofar as the cross-examination was directed to the credit of both Mr Stanley Henwood and Mr Henwood on the issue of whether Mr McLennan or Mr Gilligan was the relevant station manager at the time of the purchase of the Property, the discretion to refuse to permit cross-examination did not miscarry. The amendment application was not the occasion to determine this factual controversy. Nor was Father Simmons prejudiced by the refusal to cross-examine on this topic. As already mentioned, his Honour placed only limited weight on this evidence when he accepted that Mr McLennan was a "potential" witness. The foreshadowed cross-examination went far beyond the limited purpose for which this evidence was relied upon by Mr Henwood, namely, to establish the unavailability of Mr Day and Mr McLennan, who were both now deceased. 182Insofar as the intended purpose of cross-examination was to build support for the allegations in the proposed statement of claim, again the primary judge's discretion did not miscarry. He was dealing with a pleading amendment, not with whether Father Simmons was likely to be able to ultimately establish the facts asserted in the proposed pleading.

Cross-examination of Dorothy Simmons 183The affidavit evidence of Dorothy Simmons went to two matters. First, the unavailability of a potential witness, her son Mr Gary Simmons, who had died. As already mentioned, he was said to have been involved in the negotiations on her behalf in relation to acquisition of part of the Property from Mr Henwood. Secondly, her evidence went to personal prejudice and inconvenience including her failing memory and her physical condition which made it difficult for her to travel to Sydney to instruct lawyers and attend court. 184Counsel for Father Simmons sought to cross-examine Dorothy Simmons on a number of issues, including her involvement in the transactions, her degree of knowledge, the documents that she had, and the issues of prejudice (WB 1/82, Tcpt 10, lines 39-44). This request was opposed by her counsel having regard to the interlocutory nature of the application and Dorothy Simmons' physical condition as deposed in her affidavit (WB 1/82, Tcpt 10, lines 26-30). The primary judge refused to allow cross-examination of Dorothy Simmons. 185No error has been demonstrated. The amendment application was not the occasion to enter into the factual controversies which counsel for Father Simmons had foreshadowed he wished to explore in cross-examination of Dorothy Simmons. Nor was it the occasion to permit cross examination going only to issues of credit, relevantly whether Dorothy Simmons' physical condition made it difficult for her to travel to Sydney to instruct lawyers and to attend court, a matter upon which counsel for Father Simmons asserted that she had misled the Court. At the relevant time she was aged 86 years. Even in the absence of direct evidence, an inference of inconvenience in view of her advanced age would have been available to be drawn by his Honour. In all the circumstances, including the nature of the application his Honour was dealing with and the advanced age of the deponent, it was well within the discretion of the primary judge to refuse to permit cross-examination of Dorothy Simmons. 186In my view, the various challenges to his Honour's findings on the discretionary considerations must fail. Accordingly, error has not been demonstrated in his Honour's refusal of the amendment application. 187It is necessary to refer to one further matter. Counsel for Father Simmons took the position in both written and oral submissions before the primary judge that the proposed statement of claim addressed all of the complaints which had been raised in the respondents' submissions. Counsel confirmed that Father Simmons had been given the opportunity to plead fraud and said this had been done (WB 1/129, Tcpt 57, lines 1-4). No application for an adjournment to re-examine the sufficiency of the pleadings, or for leave to re-plead was made before his Honour. 188Nonetheless, Father Simmons contended in this Court that he should be given a further opportunity to revise the proposed pleading in light of the objections made by Mr Henwood and Dorothy Simmons and accepted by the primary judge. This was contrary to the position which Father Simmons took before the primary judge. It is also not the subject of any ground of appeal, nor could it be as the primary judge was not asked to give a further opportunity to re-plead if the proposed amendments were refused. Nor is it within the relief sought in the Notice of Appeal. 189In circumstances where Father Simmons has now had four attempts at pleading fraud or a claim for equitable relief, I do not consider that this Court should entertain this request on appeal, the matter not having been raised or argued below.

C. Dismissal of proceedings 190The final matter for consideration is the challenge to his Honour's decision dismissing the proceedings against Mr Henwood and Dorothy Simmons.

Submissions 191Father Simmons contended that the primary judge failed to reconsider the dismissal applications in accordance with established principles as reiterated by this Court in O'Brien v Bank of Western Australia Ltd [2013] NSWCA 71; 16 BPR 31,705. 192In O'Brien v Bank of Western Australia Ltd Macfarlan JA at [3], although noting that the High Court decision in Spencer v Commonwealth [2010] HCA 28; 241 CLR 118 was concerned with s 31A(2) of the Federal Court of Australia Act 1976 (Cth), said that the following principles stated in it were of general application (in the context of a summary judgment application): "(a) On a summary judgment application, the real issue is whether there is an underlying cause of action or defence, not simply whether one is pleaded: at [23]. (b) The critical question can be expressed as whether there is more than a "fanciful" prospect of success (at [25]) per French CJ and Gummow J) or whether the outcome is so certain that it would be an abuse of the process of the court to allow the action to go forward: at [54] in the judgment of the plurality. Demonstration of the outcome of the litigation is required, not an assessment of the prospect of its success (ibid). (c) Powers to summarily terminate proceedings must be exercised with exceptional caution: ibid at [55]; see also French CJ and Gummow J at [24]." 193Ward JA expressed a similar view at [68], noting that on an application for summary judgment the issue is whether (having regard to the potential outcome of the litigation) there is an underlying defence that has a real (or more than fanciful) prospect of success. If so, then summary judgment should not be granted. Her Honour emphasised that the existence of a defence and the pleading of a defence are distinct concepts. Beazley P, at [1], agreed with the reasons of both Macfarlan JA and Ward JA. 194Here Father Simmons' essential complaint is that the primary judge failed to address whether there is an underlying cause of action, not simply whether one is pleaded. It was also said that the primary judge erred by failing to consider whether there is more than a "fanciful" prospect of success at trial, or whether the outcome is so certain that it would be an abuse of process of the Court to allow the action to go forward. 195Mr Henwood and Dorothy Simmons contended that, having regard to the conclusion of this Court in the 2013 Appeal (at [87]) that on the original pleading the claim against Mr Henwood and Dorothy Simmons was bound to fail, the failure after ample opportunity to plead a reasonable cause of action demonstrates that none exists. It was therefore argued that his Honour did not err in his discretionary decision to dismiss the proceeding.

Relevant principles on summary dismissal application 196It is not in dispute that "great care must be exercised to ensure that under the guise of achieving expeditious finality a plaintiff is not improperly deprived of his opportunity for the trial of his cause by the appointed tribunal": General Steel Industries Inc v Commissioner for Railways (NSW) (General Steel) [1964] HCA 69; 112 CLR 125 at 130 (Barwick CJ). 197More recently in Agar v Hyde [2000] HCA 41; 201 CLR 552, Gaudron, McHugh, Gummow and Hayne JJ said at [57]: "Ordinarily, a party is not to be denied the opportunity to place his or her case before the court in the ordinary way, and after taking advantage of the usual interlocutory processes. The test to be applied has been expressed in various ways, but all of the verbal formulae which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way." 198Subsequent authorities have reaffirmed that formulation: see Batistatos v Roads and Traffic Authority (NSW) [2006] HCA 27; 226 CLR 256 at [46]; Spencer v Commonwealth at [24]. 199In Shaw v New South Wales [2012] NSWCA 102, Barrett JA (with whom Beazley, McColl, Macfarlan JJA, and McClellan CJ at CL agreed) expressed the test for summary dismissal as follows at [32]: "The question is...whether the claims in question are so obviously untenable or groundless that there is 'a high degree of certainty' that they will fail if allowed to go to trial; and whether this is one of the 'clearest of cases' in which the court may accordingly intervene to prevent the claims being litigated." 200Further, that assessment is to be made taking the plaintiff's case at its highest. The party applying for summary dismissal must accept the truth of all allegations in the statement of claim, and the ranges of meaning which the assertions of fact in the statement of claim are capable of bearing: Penthouse Publications Ltd v McWilliam (Court of Appeal (NSW), Priestley and Meagher JJA and Wardell AJA, 15 March 1991, unrep); Agius v New South Wales [2001] NSWCA 371 at [24]. 201No argument was raised on this appeal as to whether this test requires refinement in light of provisions of the Civil Procedure Act. That is, whether the statutory directives about case management and the "overriding purpose" of the rules might warrant courts striking out proceedings on "less substantial grounds" than those stated in General Steel: see Commonwealth of Australia v Griffiths [2007] NSWCA 370; 70 NSWLR 268 at [155] (Young CJ in Eq); Bott v Carter [2012] NSWCA 89 at [13]-[14] (Basten JA); Shaw v New South Wales at [33] and [128]-[134] (Barrett JA).

Consideration 202It may be accepted that his Honour's reasons for dismissing the claims against Mr Henwood and Dorothy Simmons were expressed in conclusionary terms only: at [86]. However it is necessary to keep in mind the following matters when considering the challenge to his Honour's reasons. 203First, having rejected the amendment application, the claim against Mr Henwood and Dorothy Simmons which his Honour dismissed was that contained in the original statement of claim. As already mentioned, the only relief claimed in the original statement of claim was proprietary: a constructive trust over the Property. 204Secondly, his Honour's reasons in the second judgment expressly incorporated (by reference at [7]) the earlier reasons in his first judgment. In his first judgment he concluded that, on the original pleading, the claim against Mr Henwood and Dorothy Simmons was bound to fail. In reaching that conclusion, his Honour approached the matter (at [26]-[27] of the first judgment) on the basis that it was necessary for Mr Henwood and Dorothy Simmons to show that there is no real question, whether in fact or law, to be tried so that Father Simmons' proceedings are so clearly untenable that they cannot possibly succeed. His Honour expressed himself as applying the test stated by the High Court in Spencer v Commonwealth, that it was necessary to demonstrate that there is a certainty of failure on the part of the losing party. 205Thirdly, having regard to the approach to summary dismissal recorded in his Honour's first judgment and the incorporation of those reasons by reference in his second judgment (at [7]), his Honour should be taken to have applied the same approach in his second judgment. 206Fourthly, at [29]-[45] of the first judgment, his Honour provided detailed reasons why the claims (for proprietary relief) could not succeed. It was unnecessary, in my view, for his Honour to specifically refer to or repeat his earlier reasons in the second judgment. They were sufficiently incorporated by reference. Moreover, this Court similarly concluded in the 2013 Appeal (at [87]) that, on the original pleading, the claim against Mr Henwood and Dorothy Simmons was bound to fail. 207Fifthly, the proposed pleading was, in practical terms, the fourth attempt by Father Simmons (taking into account his original statement of claim) to plead a reasonable cause of action against Mr Henwood and Dorothy Simmons. His original statement of claim failed to do so because of the absence of pleading of fraud. Despite three further attempts in connection with the amendment application, the proposed amended statement of claim also failed to plead fraud, or any claim for equitable relief based on a recognised personal equity, which might provide relief by way of constructive trust over the Property. 208Nonetheless, Father Simmons contended that in summarily dismissing the claim the primary judge erred because he failed to address whether there was an underlying claim for relief by way of equitable compensation, not simply whether one is pleaded. 209This complaint has some substance. His Honour does not seem to have directed himself to the possibility of a claim for relief by way of equitable compensation when he summarily dismissed the claim against Mr Henwood and Dorothy Simmons. For this reason, I would be prepared to conclude that the exercise by the primary judge of the discretion to summarily dismiss the proceeding miscarried. This conclusion requires this Court to re-exercise the discretion. 210Applying the General Steel test, I am satisfied that there is "a high degree of certainty" that the claim for equitable compensation sought to be advanced in the proposed statement of claim would fail if allowed to go to trial: Agar v Hyde at [57]. 211The failure, after ample opportunity, to plead a reasonable cause of action leads to the conclusion that none exists and therefore that Father Simmons has no reasonable prospects of success. The deficiencies in the proposed pleading of the claim for equitable compensation do not relate merely to a deficiency of particulars which might be cured by directions requiring the provision of particulars. The pleading deficiencies are of a fundamental kind which have the consequence that no reasonable cause of action is disclosed. Even if allowance is made to treat some of the existing "particulars" as, in substance, material facts, the proposed pleading does not plead the material facts which would be required to establish a claim under either limbs of Barnes v Addy, or a personal equity, such as would afford Father Simmons relief by way of equitable compensation. 212Notably no attempt was made by Father Simmons in this Court to demonstrate how the deficiencies in the proposed pleading, as found by the primary judge, and those identified in the written submissions of Mr Henwood and Dorothy Simmons served in advance of the appeal, might be addressed if this Court remitted the matter again so that Father Simmons might be given yet a further opportunity to apply for leave to re-plead. 213In my view, Father Simmons has had ample opportunity to plead a reasonable cause of action. As already mentioned, he did not seek an adjournment before the primary judge to re-examine the proposed pleading, nor did he seek leave to re-plead if his Honour rejected the proposed pleading. He did not seek to rely upon any further version of the proposed pleading in this Court. Whether there is a "high degree of certainty" that Father Simmons' claim for equitable compensation would fail if allowed to go to trial is to be determined by reference to the proposed pleading relied upon before the primary judge, taking into account that this was the third attempt at this version of the proposed pleading. 214In these circumstances, I would exercise the discretion in the same way as his Honour and dismiss Father Simmons' claim against Mr Henwood and Dorothy Simmons. 215The challenge to the summary dismissal order must fail.

Conclusion and orders 216In my view, the appeal should be allowed in part. Leave should be granted to Father Simmons to amend his statement of claim against the Commissioner in the form of the amended draft statement of claim dated 31 October 2013. Otherwise the appeal should be dismissed. 217In relation to costs as between Father Simmons and the Commissioner, I have dealt with this above at [57]-[59]. As to the costs of Mr Henwood and Dorothy Simmons, there is no reason to displace the ordinary rule that costs of the appeal should follow the event. 218I propose the following orders: (1)Appeal allowed in part, as against the first respondent. (2)Set aside order 1 made by Hammerschlag J on 15 November 2013 insofar as it relates to the first respondent. (3)Grant leave to the appellant to amend the statement of claim as against the first respondent in the form of the draft amended statement of claim dated 31 October 2013. (4)Direct the appellant to file and serve the amended statement of claim against the first respondent within seven (7) days. (5)The appellant's costs in this Court as against the first respondent shall be the plaintiff's costs in the proceedings below. (6)Appeal dismissed, as against the second and third respondents. (7)The appellant to pay the second and third respondents' costs in this Court. (8)The appellant, if otherwise qualified, shall have a certificate under the Suitors' Fund Act 1951 (NSW) in respect of the costs of the appeal as against the first respondent.

DRAFT AMENDED STATEMENT OF CLAIM Revised 30 October 2013 RELIEF CLAIMED

1 DECLARATION that the first defendant at all material times held the land specified in the Schedule hereto and the funds received in respect thereof on trust for the plaintiff and Agnes Mary Simmons (deceased) until her death on 2 December 1995 as joint tenants and thereafter absolutely for the plaintiff. 2 Alternatively DECLARATION that the first defendant at all material times held the land specified in the Schedule hereto and the funds received in respect thereof as the fiduciary of or upon an obligation in equity to the plaintiff and Agnes Mary Simmons (deceased) until her death on 2 December 1995 as joint tenants and thereafter absolutely for the plaintiff. 3 DECLARATION that the first defendant held the funds it received from the sale of the land known as "Goonoo", Brewarrina, in 1994 upon trust for the plaintiff. 4 DECLARATION that the first defendant paid moneys the subject of the sale to persons other than the plaintiff and Agnes Mary Simmons (deceased) in breach of trust or fiduciary duty or an obligation in equity. 5 DECLARATION that the sale of the land by the first defendant in purported compliance with the orders of the Court made 28 September 1993 in or in relation to the protective estate of the late Agnes Mary Simmons was void or voidable and or should be set aside. 6 DECLARATION that the second defendant holds the land upon constructive trust for the plaintiff. 6A ORDER that the second defendant transfer the land specified in the schedule to the plaintiff, failing which appoint the Registrar of the Court to make orders pursuant to Civil Procedure Act 2005 section 135 to give effect to such transfer as to the Court seems fit. 7 DECLARATION that the third defendant holds the land upon constructive trust for the plaintiff. 7A ORDER for tracing the funds the subject of the sale of the land by the first defendant under contract for sale made in or about 24 December 1993. 7B ORDER that the third defendant transfer the land specified in the schedule to the plaintiff, failing which appoint the Registrar of the Court to make orders pursuant to Civil Procedure Act 2005 section 135 to give effect to such transfer as to the Court seems fit. 8 THE SUM being the sum equivalent to one half of the net proceeds of sale of the land known as "Goonoo" together with interest thereon at Supreme Court rates. 9 Further or alternatively DAMAGES for breach of duty as trustee or fiduciary in selling the land to the second and third Defendants in 1994 together with interest. 10 Further or alternatively ORDER that an ACCOUNT be taken and/or compensation in equity be paid to the plaintiff by the first defendant, by the second defendant and by the third defendant in such sum as the Court shall determine. 11 Aggravated and exemplary DAMAGES as against the first defendant. 11A. Interest 12 FURTHER or other relief. 13 COSTS. SCHEDULE Property Certificate of Title Western Lands Lease Goonoo 2688/764769 470 Goonoo 6133/768981 470 Goonoo 6490/760647 1598 Letona 2163/764276 4368 Letona 3989/766462 8311

1 The first defendant: a. Is a statutory corporation established by and having such functions as are conferred or imposed on it by the NSW Trustee and Guardian Act (2009); b. Is, by operation of clause 5(1)(a) of Schedule 1 to that Act, taken to have done or omitted to have done any act matter or thing done or omitted by, to or in relation to the Protective Commissioner before 1 July 2009. 2 The plaintiff is the son of Agnes Mary Simmons ("Mrs Simmons"), who died on 2 December 1995. 3 At all material times Mrs Simmons was the registered proprietor of a grazing property in the Brewarrina district known as "Goonoo" ("the land"), which: a. collectively consisted of two separate areas of land known individually as "Goonoo" and "Letona" which were separated by a distance of approximately 40km; b. had a total land area of approximately 17,823 acres. 4 At all material times the title to the land comprised five Certificates of Title in respect of four Western Lands leases granted pursuant to the Western Lands Act (1901) ("the WL leases") as follows: Property Certificate of Title Western Lands Lease Goonoo 2688/764769 470 Goonoo 6133/768981 470 Goonoo 6490/760647 1598 Letona 2163/764276 4368 Letona 3989/766462 8311

5 In about July 1987 Mrs Simmons agreed for consideration to transfer the land to herself and the plaintiff as joint tenants ("the 1987 agreement"). Particulars a. In an oral conversation that took place during a visit to Nyngan Mrs Simmons offered to transfer a half ownership of the land to the plaintiff in consideration of the plaintiff: i. Entering into a partnership with Mrs Simmons arrangement for the purposes of carrying on the farming and grazing business on the land, and ii. Continuing to live with and care for Mrs Simmons on the land; b. In the same oral conversation the plaintiff accepted Mrs Simmons' offer. 6 On 6 April 1988 in furtherance of the 1987 agreement the plaintiff and Mrs Simmons entered into a partnership to be known as AM and PE Simmons for the purposes of carrying on the farming and grazing business on the land as equal partners ("the partnership agreement"). Particulars a. Written partnership agreement executed on 6 April 1988 7 Clause 7 of the partnership agreement provided that each partner shall punctually pay and discharge his or her present and future separate debts and engagements and shall at all times keep indemnified the other partner and his representatives and the property of the partnership against the same and all actions proceedings costs claims and demands in respect thereof. 8 At the time the partnership agreement was entered into Mrs Simmons was indebted to the State Bank of New South Wales in respect of the outstanding balance of account number 820335-00. 9 At all material times the outstanding balance of account number 820335-00 was a discreet and separate debt of Mrs Simmons which, pursuant to the partnership agreement, the plaintiff was entitled to be kept indemnified against by Mrs Simmons. 10 In furtherance of the 1987 agreement Mrs Simmons did the following things: a. Executed an Application for Consent to Transfer the WL leases to herself and the plaintiff as joint tenants on 15 June 1989; b. Obtained a valuation of the land as evidence of value for stamp duty on 29 August 1989; c. Executed a transfer of the titles from herself to herself and the plaintiff as joint tenants on 29 August 1989; d. Obtained consent to the transfer from the Western Lands Commissioner on 27 September 1989; e. Obtained consent to the transfer from the mortgagee bank on 24 October 1989; f. Again requested the consent of the Western Lands Commissioner to the transfer of the WL leases on 11 November 1991, due to the consent previously granted having since lapsed; g. Registered the Transfer recording the plaintiff's intended registered interest in the land on 17 December 1991; h. Requested that the Western Lands Commissioner expedite her 11 November 1991 request for consent to the transfer on 4 February 1992. 10A. By October 1989 in accordance with the 1987 agreement and the partnership agreement, and the common intention of the parties thereto being herself and the plaintiff which endured until her death on 2 December 1995 that the land was owned by them as joint tenants in equity, Mrs Simmons did and had done everything in her power and which she was able to do to transfer the land to herself and the plaintiff as joint tenants. 10B. At about the time of the 1987 and/or the partnership agreement, the third defendant became aware of the matters in paragraph 10A and thereafter the third defendant sought to obstruct and frustrate the intention of the parties to the said agreements including by lodging several different caveats to prevent registration of the transfer of the plaintiff's interest at law and then allowing the caveats to lapse, and/or in communicating objections to the same effect to the Western Lands Commissioner, the Registrar General and the Protective Commissioner and/or in commencing legal proceedings against Mrs Simmons and the plaintiff. 10C. As from the 1987 agreement and latest by 29 August 1989 Mrs Simmons was in a fiduciary relationship with the plaintiff and held the land on trust for them both as joint tenants in equity. 11 The Registrar-General subsequently deregistered the transfer on 18 February 1992 consequent upon registration having been effected more than six months from the date upon which the Western Lands Commissioner granted consent to the transfer. 12 Since the execution of the Transfer on 29 August 1989 the plaintiff had been entitled to have the registration of that Transfer carried through in accordance with the Real Property Act (1900) subject to any Ministerial consent necessary in accordance with the Western Lands Act (1901). Particulars a. Declaration of Court of Appeal on 14 November 1994 in proceedings numbered CA40570/93. 13 On 21 July 1992 the management of Mrs Simmons' affairs was committed to the Protective Commissioner pursuant to the Protected Estates Act NSW 1983 by an order of the Guardianship Board made on that date as a result of which the management of the land of Mrs Simmons and the plaintiff as joint tenants in equity was committed to the first defendant on or shortly after 21 July 1992 pursuant to Protected Estates Act NSW 1983 Part 3 Division 3 with power to sell and execute documents for the sale and transfer of the land. 14 Upon the management of Mrs Simmons' affairs being committed to the first defendant the first defendant thereafter held the property on trust OR IN THE ALTERNATIVE as the fiduciary or upon an obligation in equity for the plaintiff and Mrs Simmons as joint tenants. 14A. On 5 April 1993 the plaintiff lodged a caveat on the titles to the land giving public notice of an equitable interest in the land. 14B. At and from 5 April 1993 the defendants and each of them were aware of the plaintiff's equitable interest as joint tenant of the land with Mrs Simmons. Particulars a. Each defendant personally and by their respective solicitors at the time was aware of the plaintiff's equitable interest in the land as stated in and notified by the plaintiff's caveat lodged 5 April 1993; b. As from 21 July 1992 the first defendant was aware that the land was trust property and had the knowledge of Mrs Simmons with respect to and for the land as referred to in paragraph 10A; c. The first and third defendants challenged the plaintiff's interest in the land in Equity Division proceedings in the Court No 1661 of 1992 brought by the third defendant upon the ground of the absolute nature of the transaction and want of writing under Conveyancing Act 1919 section 54A in order to defeat the plaintiff's equitable interest with full knowledge of that interest; d. The second defendant personally and by his solicitors at the time was aware of the said Equity Division proceedings No 1661 of 1992 and of the appointment of the first defendant in or about July 1993, and was personally aware of the facts and matters set out in paragraphs 10A and 10B herein. 15 On 24 December 1993 each with knowledge that the land was trust property the first defendant exchanged contracts with the second defendant for the sale of the land. 16 The contract referred to in the preceding paragraph provided for a purchase price of $390,000, which price was at an undervalue to the then prevailing market for river front land with significant potential for water licences. Particulars a. The first defendant did not advertise properly or at all or make the property available for sale on the open market; b. The first defendant did not seek any expressions of interest in the property from persons other than the second and third defendants. 17 The sale of the land to the second defendant was completed on about 28 June 1994. 18 On 31 January 1991 Mrs Simmons executed a Will leaving the whole of her estate both real and personal solely to the plaintiff. Cause of Action against the First Defendant 19 The entry into the contract as alleged in paragraph 15 and the sale of the land to the second defendant was made in breach of trust OR IN THE ALTERNATIVE in breach of the first defendant's fiduciary duty or obligation in equity to the plaintiff. Particulars a. At the time of the sale of the land to the second defendant the first defendant had notice and was aware of the plaintiff's unregistered equitable interest in the land. b. FURTHER OR IN THE ALTERNATIVE by operation of the Partnership Act (1892) the first defendant was a partner and a fiduciary of the plaintiff in respect of the partnership property. c. At all material times after assuming the office of Protective Commissioner in 1992 the first defendant was constructive trustee of the land for the plaintiff and Mrs Simmons as joint tenants in equity or alternatively was in a fiduciary relationship to both Mrs Simmons and the plaintiff in respect of their interests as joint tenants of the land in equity. d. The sale documents failed to make any sufficient provision for protection and sufficient recognition of the equitable interest of the plaintiff in the land and the partnership and /or for the equitable joint tenancy of Mrs Simmons and the plaintiff notwithstanding that the First Defendant had knowledge of the Plaintiff's interest in the land and in the partnership between herself and the Plaintiff in respect of the land. e. After entry into the contract for sale the first defendant agreed to agist the second defendant's cattle on the land prior to settlement without seeking or obtaining the consent of the plaintiff. 19A. Further or alternatively, the first defendant at all material times had a conflict of interest between the fiduciary duty to Mrs Simmons's estate and the interest in selling or disposing of the land in satisfaction of the debts assumed by the Protective Commissioner and the duty and interest as manager of the estate of Mrs Simmons and the land. 19B. In breach of the fiduciary relationship and duty referred to in paragraph 19A the first defendant on 24 December 1993 entered into a contract to sell the land to the second defendant knowing that the Plaintiff did not consent to the said sale with a view to him selling part to the third defendant without making any or any sufficient provision for the equitable interest of the plaintiff and/or refused to acknowledge the interest of the plaintiff, and/or relied on the absolute nature of the title to the land held in the name of Mrs Simmons to defeat the plaintiff's interest in the land. 20 As a result of the first defendant's breach of trust OR IN THE ALTERNATIVE breach of fiduciary duty or obligation in equity to the plaintiff the plaintiff has suffered and continues to suffer loss and damage. 21 Upon the first defendant's receipt of the proceeds of sale of the land the first defendant held such proceeds on trust OR IN THE ALTERNATIVE as the fiduciary or upon an obligation in equity for the plaintiff and Mrs Simmons as joint tenants until her death on 2 December 1995 and thereafter absolutely for the plaintiff. 22 The first defendant disbursed and/or dealt with the proceeds of sale of the land in breach of trust OR IN THE ALTERNATIVE in breach of its fiduciary duty or obligation in equity to the plaintiff. Particulars a. The plaintiff will provide particulars after discovery and interrogatories herein. 22A. The plaintiff seeks equitable compensation or an order for account in respect of the First Defendant's dealings and disbursements in relation to the land. Cause of action as against second defendant 22B. The Plaintiff repeats paragraphs 1 to 22A. 23 At the time of the sale of the land to the second defendant the second defendant had notice and was aware of the plaintiff's unregistered equitable interest in the land and purchased the land knowing there was a risk that the plaintiff had a subsisting interest in the land to which his interest if any was subject and that the land was trust property held jointly for Mrs Simmons and the plaintiff and that the plaintiff did not consent to the said sale and was unaware of the contract dated 24 December 1993 at the date thereof. Particulars a. The plaintiff repeats paragraphs 14B particulars (a) and (d); b. The second defendant or his solicitor as his agent by reason of the conduct of searches of the title to the land was aware of the plaintiff's equitable estate, his possession of the land, and of the partnership of the farming business conducted by Mrs Simmons and the plaintiff on the land; c. The second defendant was aware of the factual findings in proceedings No 1661 of 1992 as to the equitable interest of each of the joint tenants ie Mrs Simmons and the plaintiff, subject to the operation of Conveyancing Act 1919 NSW section 54A; d. The drafts of the contract for sale prepared by or with the consent of his solicitor and the final form thereof executed by him referred to and acknowledged or recognised the plaintiff's claimed interest in the land in clause 8(c) and (d); e. The second defendant agreed with the plaintiff on or about 15 June 1994 to take the land "with you in it" and without requiring "vacant possession" of the land, whereas on or shortly after settlement he evicted the plaintiff and transferred part of the land to the third defendant. f. In the premises aforesaid the second defendant entered into the contract for sale dated 24 December 1993 and thereafter assumed or received title to 'Goonoo' knowing of the facts which gave rise to the First Defendant's breach of trust and duty alleged in paragraphs 19, 19A and 19B herein particulars of which knowledge of second defendant is set out in a - e above. 23A. Further or alternatively the second defendant received the land sold to him under the contract for sale with the first defendant dated 24 December 1993 with knowledge of the trust and/or fiduciary relationship of the first defendant and/or Mrs Simmons to the plaintiff with respect to the equitable joint tenancy in the land. 23B. Further or alternatively the second defendant by himself or his solicitor acting as his agent engaged in a dishonest and fraudulent design constituted by the sale dated 24 12 1993 and the assumption or receipt thereafter of title to Goonoo by the Second Defendant derived therefrom in that he was morally reprehensible or engaged in moral turpitude in taking the land by way of sale under the contract dated 24 December 1993 knowing at the time that the plaintiff being unaware of the said sale and not consenting thereto had an interest in the land or facts which gave rise to an interest in the land the particulars of which awareness are the particulars to paragraph 23 hereof, and that the plaintiff had appealed from the decision of the Supreme Court prior to the date of the sale in order to obtain the legal title thereto which appeal was unresolved at the time of the contract and the settlement thereof and thereafter relying upon the absolute nature of the title to defeat the plaintiff's interest under Conveyancing Act 1919 section 54A and Real Property Act 1900 section 42 and in doing so acted with the intention of acquiring the land free of the plaintiff's interest of which he was aware. 24 In the premises the sale of the land to the second defendant was and is void or voidable and should be set aside. 25 Prior to purchasing the land in or about June 1993 the second defendant entered into an informal arrangement or agreement with the third defendant to transfer by way of sale or reimbursement or remittance a portion of the land to the third defendant. 25A. The first defendant was aware of the agreement between the second and third defendants referred to in paragraph 25 as communicated in correspondence from the estate agent at Brewarrina Sam Lawler to the first defendant prior to 24 December 1993. 26 Within weeks of the sale of the land to the second defendant having been completed the second defendant took steps to transfer that part of the land concerning an area of land in the order of 485.6 hectares having Certificate of Title 6490/760647 and subject to WL 1598 to the third defendant including: a. Requesting the consent of the Western Lands Commissioner to the transfer of the WL lease on 18 August 1994; b. Obtaining the Minister's consent to the transfer on 7 September 1994; c. Executing a transfer in appropriate form under the Real Property Act 1900 on 24 October 1994; d. Registering the said transfer subsequently. 27 The consideration for the transfer was: a. $28,608; and b. Was substantially less than the market value of that part of the land at the time the transfer occurred. 27A. By reason of the matters alleged herein the second defendant wrongfully and in breach of trust took and received the land without regard to the plaintiff's unregistered interest in it and thereafter knowing of the plaintiff's unregistered interest transferred part of the land to the third defendant. Particulars of Breach of Trust and Duty by First Defendant: The Plaintiff repeats paragraphs 19, 19A and 19B; Particulars of Knowledge of the Plaintiff's Interest: The Plaintiff repeats paragraphs 23 and 25. 27B. Further or alternatively, in order to induce the Third Defendant to purchase a part of the land and to participate in the sale the Second Defendant represented to the Third Defendant between about mid- 1993 at a time to be particularised after discovery until prior to 24 October 1994 with the knowledge of the First Defendant that the First and Second Defendants were lawfully ready willing and able to sell part of the land to the Third Defendant free of any interest or claim of the Plaintiff in the land and the partnership with the late Agnes Simmons his mother. Particulars The Plaintiff repeats paragraphs 25 and 25A. 27C. In fact the representation was false as neither the First nor the Second Defendant were in a position to lawfully sell or to sell with the consent of the owners of the land in equity including the Plaintiff of whose equity in the land they were by reason of the matters alleged in paragraphs 19B, 23 and 27A each aware, and further the first and/or second defendants was each only ready willing and able to sell the land or that portion which the Third Defendant desired to purchase free of the interest of the Plaintiff in the land and in the partnership . 27D. The Second Defendant knew that the representation or representations in paragraph 27B were false or were made recklessly by him in that the Second Defendant and his agent for that purpose Mr Day, his solicitor in relation to the sale, had been informed by the First Defendant was aware from his personal knowledge of the circumstances of 'Goonoo' and 'Letona' as a neighbour of the interests and claims of the plaintiff and that the plaintiff did not consent to the sale or transfer of 'Goonoo' prior to entry into the contract with the First Defendant and also with the Second Defendant, by caveat no 1237393 lodged by the Plaintiff on the title to the land and disclosed in clause 8 of the contract for sale dated 24 December 1993, and/or by knowledge of the judgment of Windeyer J of 28 September 1993 and the appeal of the Plaintiff therefrom and/or by inquiry made to the First and Third Defendants by himself and his agent Mr Day on or prior to settlement on 24 October 1994. 27E. Induced by and acting in reliance on the representation by the Second Defendant the Third Defendant entered into the contract for sale with the Second Defendant to purchase the land to the loss and damage of the Plaintiff with a view to defeating the equity and interest of the Plaintiff in the land and the partnership, and/or has refused to recognise or acknowledge any interest of the land prior to settlement even though in consideration of settlement the Second Defendant agreed to allow the Plaintiff possession of the land and to occupy same, and/or has set up the absolute character of the transaction as an answer to the claim and interest of the Plaintiff and has repudiated the claims and interest of the Plaintiff with the object of destroying the unregistered interest of the Plaintiff notwithstanding the preservation of that interest was the foundation or assumption underlying the contracts for sale between the First and Second Defendants and between the Second and Third Defendants and the execution of the transfers. 27F. As a result of the matters complained of the Plaintiff has lost the benefit and use of the land and the partnership in the land with his mother and has been placed in penury and disadvantage since, which has further caused the Plaintiff anguish, and disappointment and loss. 28 In the premises the second defendant holds the land upon constructive trust for the plaintiff. 28A. The plaintiff seeks equitable compensation or an order for account in respect of the Second Defendant's dealings and disbursements in relation to the land. Cause of action as against third defendant 29 The plaintiff repeats paragraphs 1 23 to 28 herein as against the third defendant. 30 At the time of the transfer of that part of the land from the second defendant to the third defendant the third defendant had notice and was aware of the plaintiff's unregistered interest in the land and received that part of the land knowing that there was a risk that the plaintiff had a subsisting interest in that part of the land to which her interest was subject and that the land was trust property held jointly for Mrs Simmons and the plaintiff and that the Plaintiff did not consent to the said sale and was unaware of the contract dated 24 12 1993 at the date thereof. Particulars a. The plaintiff repeats paragraphs 10A, 10B, and 14B particulars (a) and (c); b. The third defendant or her solicitors as her agent by reason of the conduct of searches of the title to the land was aware of the plaintiff's equitable estate, his possession of the land, and of the partnership of the farming business conducted by Mrs Simmons and the plaintiff on the land; c. The third defendant as a party thereto was aware of the factual findings in proceedings No 1661 of 1992 as to the equitable interest of each of the joint tenants ie Mrs Simmons and the plaintiff, subject to the operation of Conveyancing Act 1919 [NSW] section 54A; d. The third defendant did not seek to intervene or become a party to the appeal proceedings from the decision of Windeyer J but was aware of those proceedings; e. The plaintiff repeats the allegations in paragraph 25; f. In order to defeat the interest of the plaintiff in the land the third defendant has relied on and still relies on the absolute nature of the transaction as to the title of Mrs Simmons and of herself to the land whereby the statutes designed to prevent fraud have been abused for that purpose namely Conveyancing Act 1919 section 54A and Real Property Act 1900 section 42. g. In the premises aforesaid the third defendant entered into the arrangement alleged in paragraphs 25 and 25A and accepted the transfer from the Second Defendant of 'Letona' being part of 'Goonoo' following the contract for sale dated 24 12 1993 and therafter assumed or received title thereto knowing of the facts which gave rise to the First Defendant's breach of trust in selling the land to the Second Defendant alleged in paragraphs 19, 19A and 19B and the on-sale by him to her in further breach of trust by him as allege in paragraphs 23, 23B and 27A and in particular that as at 24 December 1993 the Plaintiff had an equity in the land and the facts which gave rise to that equity being the matters alleged in (a) to (f ) above and that the Plaintiff did not consent to the said sale of his equity to the Second or Third Defendants. 30A. Further or alternatively the third defendant received the land sold to her under the agreement alleged in paragraph 25 with the second defendant with knowledge of the trust and/or of the fiduciary relationship of the first defendant and/or Mrs Simmons to the plaintiff with respect to the equitable joint tenancy in the land. 30B. Further or alternatively the Third Defendant by herself or her solicitor acting as her agent engaged in a dishonest and fraudulent design constituted by the sale dated 24 December 1993 and the later assumption or receipt of title to Goonoo by the Second and Third Defendants derived therefrom in that the Third Defendant was morally reprehensible or engaged in moral turpitude in taking the land by way of the subsequent sub-sale to her knowing at the time that the plaintiff being unaware of the said sale and not consenting thereto had an interest in the land as found by the Supreme Court and that the plaintiff had appealed from the decision of the Supreme Court prior to the date of the sale in order to obtain the legal title thereto which appeal was unresolved at the time of the contract and the settlement thereof and thereafter relying upon the absolute nature of the title to defeat the plaintiff's interest under Conveyancing Act 1919 section 54A and Real Property Act 1900 section 42 and in doing so acted with the intention of acquiring the land free of the plaintiff's interest of which she was aware. 31 In the premises the subsequent transfer of that part of the land to the third defendant was and is void or voidable and should be set aside. 31A. By reason of the matters pleaded herein the third defendant wrongfully and in breach of trust took and acquired part of the land without regard to the plaintiff's equitable interest in it and thereafter knowing of the plaintiff's interest took part thereof for herself and denied the plaintiff's interest. 32 In the premises the third defendant holds that part of the land upon constructive trust for the plaintiff. 32A. The plaintiff seeks equitable compensation or an order for account in respect of the Third Defendant's dealings and disbursements in relation to the land. Claim for aggravated & exemplary damages against first defendant 33 In the premises the plaintiff claims aggravated and exemplary damages against the first defendant. Particulars of aggravated damages 34 Dispossession of and from the family farm, which was the plaintiff's home and to which the plaintiff had a personal and long standing attachment of which the first defendant was aware or should have been aware. a. Being rendered homeless as a result of the plaintiff having been dispossessed of his home. b. Being rendered impecunious and dependant upon welfare as a result of the way in which the first defendant dealt with the proceeds of the sale of the land. c. Causing the plaintiff to suffer significant emotional distress, anxiety and depression as a result of the way in the first defendant dealt with the land. Particulars of exemplary damages d. Proceeding to dispose of the property in circumstances where the first defendant was aware of the prospect that the plaintiff's rights in the land would be recognised by the Court of Appeal in proceedings numbered CA40570/93. e. Proceeding to dispose of the land with high handed disregard for the plaintiff's rights and feelings. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 02 December 2014

Suitors' Fund Act 1951(NSW)

Western Lands Act 1901(NSW)

Protected Estates Act 1983(NSW)

Civil Procedure Act 2005(NSW)ss 56, 57, 58, 64

Supreme Court Act 1970(NSW)s 101(2)(e)

iform Civil Procedure Rules 2005 (NSW) r 15.3, 15.4 Western Lands Act 1901 (NSW) Protected Estates Act 1983 (NSW) Cases Cited: Agar v Hyde [2000] HCA 41; 201 CLR 552 Agius v New South Wales [2001] NSWCA 371 Baden v Sociéte Générale pour Favoriser le Développement du Commerce et de l'lndustrie en France SA [1993] 1 WLR 509 Bahr v Nicolay [No 2] [1988] HCA 16; 164 CLR 604 Barlow Clowes International Ltd (in liq) v Eurotrust International Ltd [2006] 1 All ER 333 Barnes v Addy (1874) LR 9 Ch App 244 Batistatos v Roads and Traffic Authority (NSW) [2006] HCA 27; 226 CLR 256 Bell Group Ltd (In Liq) v Westpac Banking Corporation (No 9) [2008] WASC 239; 70 ACSR 1 Belmont Finance Corp Ltd v Williams Furniture Ltd [1979] 1 Ch 250 Bott v Carter [2012] NSWCA 89 Breskvar v Wall (1971) 126 CLR 376 Castle Constructions Pty Ltd v Sahab Holdings Pty Ltd [2013] HCA 11; 247 CLR 149 Commonwealth of Australia v Griffiths [2007] NSWCA 370; 70 NSWLR 268 Consul Development Pty Ltd v DPC Estates Pty Ltd [1975] HCA 8; 132 CLR 373 Farah Construction Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; 230 CLR 89 Frazer v Walker [1967] 1 AC 569 General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; 112 CLR 125 Grimaldi v Chameleon Mining NL (No 2) [2012] FCAFC 6; 200 FCR 296 H 1976 Nominees Pty Ltd v Galli [1979] FCA 114; 40 FLR 242 Hancock Family Memorial Foundation Ltd v Porteous [1999] WASC 55; 32 ACSR 124 Hasler v Singtel Optus Pty Ltd [2014] NSWCA 266 Heggies Bulkhaul Ltd v Global Minerals Australia Pty Ltd [2003] NSWSC 851; 59 NSWLR 312 House v The King [1936] HCA 40; 55 CLR 499 Imobilari Pty Ltd v Opes Prime Stockbroking Ltd [2008] FCA 1920 LHK Nominees Pty Ltd v Kenworthy [2002] WASCA 291; 26 WAR 517 Kalls Enterprises Pty Ltd (in liq) v Balaglow [2007] NSWCA 191; 63 ACSR 557 New Cap Reinsurance Corporation Ltd v General Cologne Re Australia Ltd [2004] NSWSC 781 O'Brien v Bank of Western Australia Ltd [2013] NSWCA 71; 16 BPR 31,705 Paul Ernest Simmons v Protective Commissioner of New South Wales (aka NSW Trustee & Guardian) [2012] NSWSC 455 Paul Ernest Simmons v NSW Trustee and Guardian [2013] NSWSC 1688 Paul Ernest Simmons v Protective Commissioner of NSW (aka NSW Trustee) [No 2] [2013] NSWSC 1770 Penthouse Publications Ltd v McWilliam (Court of Appeal (NSW), Priestley and Meagher JJA and Wardell AJA, 15 March 1991, unrep) Shaw v State of New South Wales [2012] NSWCA 102 Simmons v Henwood [2013] NSWCA 184 Simmons v Simmons, (Supreme Court (NSW), Equity Division, Windeyer J, 28 September 1993, unrep) Spangaro v Corporate Investment Australia Funds Management Ltd [2003] FCA 1025; 47 ACSR 285 Spencer v Commonwealth [2010] HCA 28; 241 CLR 118 Stuart v Kingston [1923] HCA 17; 32 CLR 309 Wentworth v Rogers (No 5) (1986) 6 NSWLR 534 Westpac Banking Corporation v Bell Group Ltd (In Liq) (No 3) [2012] WASCA 157; 44 WAR 1 Yeshiva Properties No 1 Pty Ltd v Joan Marshall [2005] NSWCA 23 Texts Cited: Jacobs, Law of Trusts (6th ed, 1997, Butterworths) Category: Principal judgment Parties: Paul Ernest Simmons (Appellant) Protective Commissioner of New South Wales (known as New South Wales Trustee and Guardian) (First respondent) Raymond John Henwood (Second respondent) Reginald Joseph Simmons, Sally Catherine Pearce, Pamela Anne Simmons, Daniel Francis Simmons and Helen Maree Simmons as representatives of the Estate of Dorothy Francis Simmons deceased (Third respondent) Representation: Counsel: P E King (Appellant) R Bhalla - submitting appearance (First respondent) J M Ireland (Second respondent) S F Hughes (Third respondent) Solicitors: The Peoples Solicitors Pty Ltd (Appellant) I V Knight, Crown Solicitor (First respondent) Denniston & Day (Second respondent) Boyd House & Partners (Third respondent) File Number(s): 2013/356521 Publication restriction: No Decision under appeal Jurisdiction: 9111 Citation: [2013] NSWSC 1688 Date of Decision: 2013-11-15 00:00:00 Before: Hammerschlag J File Number(s): 2011/79920

Judgment 1BEAZLEY P: I have had the advantage of reading in draft the reasons of Gleeson JA. I agree with his Honour's reasons and the orders he proposes. I also agree with the additional comments of Barrett JA. 2BARRETT JA: I have had the advantage of reading in draft the judgment to be delivered by Gleeson JA. It is clear that the primary judge overlooked the amendments concerning the first respondent. Those amendments were not opposed by the only party affected by them and leave to amend should have been granted. The appeal should therefore be allowed as it relates to the first respondent and the other orders in that respect proposed by Gleeson JA should be made. 3As to the matters concerning the second and third respondents, I agree with Gleeson JA and have nothing to add save that, since the appellant has deliberately and openly proceeded on the footing that pleading of fraud in the sense relevant to s 42 of the Real Property Act 1900 (NSW) is a component of the positive case to be articulated in his statement of claim, the decision in this appeal adverse to him precludes future resort to the proposition that such pleading may (or should be permitted to) be by way of the filing of a reply. 4GLEESON JA: The appellant, Father Paul Simmons, challenges orders made by a judge of the Equity Division in a proceeding commenced by him on 11 March 2011 against three defendants. Father Simmons claims an interest in a substantial grazing property near Brewarrina, New South Wales, known as "Goonoo" (the Property). The events giving rise to the claim by Father Simmons date back to the sale of the Property in 1994 and earlier. 5The New South Wales Trustee and Guardian, which is the statutory successor of the Protective Commissioner (the Commissioner), is the first respondent to the appeal and was the first defendant in the proceeding. The second and third respondents, Raymond Henwood (Mr Henwood) and Dorothy Simmons (Dorothy Simmons), were the second and third defendants respectively. 6The orders which are challenged are first, the dismissal of Father Simmons' motion filed 2 August 2013 seeking leave to amend his statement of claim and secondly, an order summarily dismissing Father Simmons' claim against Mr Henwood and Dorothy Simmons: Paul Ernest Simmons v NSW Trustee and Guardian [2013] NSWSC 1688. 7The essential basis for these orders was that the amendments proposed to the statement of claim did not plead fraud against Mr Henwood or Dorothy Simmons and accordingly the claims made against them by Father Simmons could not succeed. The primary judge also considered that leave to amend ought to be refused for discretionary reasons on the grounds of delay and prejudice. 8Father Simmons contends that the primary judge erred in refusing the amendment application in its entirety and in dismissing his claim against Mr Henwood and Dorothy Simmons. 9Father Simmons also challenges the decision with respect to costs given on 29 November 2013: Paul Ernest Simmons v Protective Commissioner of NSW (aka NSW Trustee) [No 2] [2013] NSWSC 1770. 10As the orders are interlocutory leave to appeal is required: s 101(2)(e) Supreme Court Act 1970 (NSW). Leave to appeal was granted by this Court on 29 April 2014. 11Dorothy Simmons died on 10 July 2014. Subsequently, on 1 September 2014, Barrett JA made an order that certain persons be appointed to represent the estate of Dorothy Simmons for the purpose of these proceedings. Those persons are the executors named in the Will of Dorothy Simmons dated 23 September 2010, in respect of which a grant of probate has not yet been made.

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