Soulos v Pagones; Soulos v Soulos; Soulos v Soulos; Soulos v Pagones; Kristallis v Soulos; Kristallis v Soulos; Kristallis v Pagones - [2023] NSWCA 243 - NSWCA 2023 case summary — Zoe

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Soulos v Pagones; Soulos v Soulos; Soulos v Soulos; Soulos v Pagones; Kristallis v Soulos; Kristallis v Soulos; Kristallis v Pagones

[2023] NSWCA 243

Court of Appeal (NSW)|2023-04-06|Before: Ward P, Meagher JA, Mitchelmore JA, Lindsay J

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At a glance

Source facts

Court

Court of Appeal (NSW)

Decision date

2023-04-06

Before

Ward P, Meagher JA, Mitchelmore JA, Lindsay J

Source

Original judgment source is linked above.

Judgment (78 paragraphs)

[1]

Background

The background to the present dispute, as gleaned from the primary judgment and material before his Honour, is as follows. In what follows, the paragraph references are to the primary judgment unless otherwise indicated.

[2]

Esperia Court

Esperia Court was incorporated in 1964 by the deceased and her late husband, Andreas (Andrew) Soulos ([75]). As noted above, Esperia Court's shareholding was divided into 500 management shares (whose holders are the only persons entitled to vote at any general meeting of the company) and 3,000 of each of the non-voting "A", "B", "C" and "D" class shares (whose holders are the only persons entitled to dividends or a surplus on a winding up) ([78]; [97]).
After the death of her husband in 2003, the deceased held all 500 management shares ([83]) and the office of Governing Director ([103]). As Governing Director, the deceased had all the powers and duties vested in the directors and in the general meeting, and all other directors were required to conform to her directions (see Article 86 of Esperia Court's articles of association, set out at [101]). It is worth noting that, on their own evidence, the deceased's children and grandchildren were not aware of the existence of the office of Governing Director until after the death of the deceased; however, it was understood that, as holder of all management shares, the deceased had complete control over Esperia Court ([111]; [190]).

[3]

Acquisition of the Symond Arcade

According to Nick's evidence, Esperia Court had, since at least 2008, explored the possibility of development of its (then three) Strathfield properties in connection with a proposed redevelopment of the Strathfield town centre. It had obtained development consent for an 11-storey mixed-use development across the three sites ([207]). Since 2014, there had been negotiations with the owner of the Symond Arcade with a view to Esperia Court either purchasing the Symond Arcade or undertaking a joint development project Involving the Symond Arcade ([304]-[317]).
On 6 March 2017, Nick learnt that the Symond Arcade had been listed for auction on 28 March 2017 ([312]). Nick considered that it might be necessary to pay $30 million to acquire the Symond Arcade (there being a competing purchaser 'in the wings') and he was concerned about Esperia Court's ability to borrow from its banker, National Australia Bank (NAB), that amount of money. Nick indicated his willingness to assist in funding the acquisition by providing, as security, land in Silverwater worth at least $5 million owned by Cyan Holdings Pty Ltd, the trustee of his family trust (the Cyan Family Trust) ([316]-[318]; [320]; [334]; [338]).
According to a file note prepared by Mr Kristallis of a meeting of the directors of Esperia Court on 15 March 2017 (at which the deceased, Nick and John were recorded as being in attendance, as well as at least one representative of NAB), it was resolved to "go ahead" with the purchase of the Symond Arcade and it was decided to apply for a loan of up to $25 million (see also Nick's affidavit sworn 18 August 2021 at [119]). There is also reference in the documents to discussions for over six months between Esperia Court and LendLease as to a redevelopment of the Strathfield town plaza (see, for example, the email dated 21 March 2017 from Nick, in his capacity as director of Esperia Court, to an NAB bank officer).
Prior to the day of the auction, the directors of Esperia Court resolved to make an offer to the vendor of the Symond Arcade for up to $25 million and to offer any property of Esperia Court as security for the finance for the purchase including by way of mortgage ([329]) (see Board minutes dated 24 March 2017, which followed the text of a draft Board resolution that had been prepared by solicitors and forwarded to Nick and John by email on 21 March 2017). That offer was not accepted by the vendor ([333]).
On the morning of 28 March 2017 (the day of the anticipated auction), there was a meeting at the deceased's home (77 The Boulevarde, Strathfield) between the deceased, Nick and John (at which Nick's other son, Andrew, was also present) ([338]).
Nick's evidence is that on that morning he went to the deceased's house and he explained to the deceased what had happened in relation to the $25 million offer (see his affidavit sworn 18 August 2021 at [127]); that he told the deceased that he wanted to offer $30 million for the Symond Arcade just before the auction; and that the deceased agreed to this (see Nick's affidavit sworn 18 August 2021 at [127], as set out at [338]). Nick deposed that, shortly after this, his sons John and Andrew arrived at the deceased's home and that they agreed that "[Symond] Arcade was worth getting and that we should offer $30M" (see [130] of his affidavit sworn 18 August 2021). Nick deposed that at this stage he was factoring into his calculations his Silverwater properties (which he thought could be sold for $5 million to "top up" the amount required for the purchase) (see [125]; [128] of his affidavit sworn 18 August 2021).
Nick's evidence is that by about 7.15am that morning they had decided to buy the Symond Arcade and the first resolution was passed ([131] of his affidavit sworn 18 August 2021). The first resolution largely followed the format of the earlier signed resolution (the 24 March 2017 resolution) but, rather than being expressed as a resolution of the directors alone, this resolution was prefaced by the words "The directors of Esperia Court ("the Company"), Nick Soulos in personal capacity and John Soulos in personal capacity resolve to …". This resolution otherwise followed the previous resolution but for the amendment to the purchase price (this now being specified as a sum not exceeding $30,000,000).
However, Nick went on to depose that, after passing the first resolution, they talked about it for a while and he said that "If worst comes to worst, I'll sell [my property in] Silverwater" in response to which the deceased said "I don't want it. Tear it up" (Nick's affidavit sworn 18 August 2021 at [131]), by which Nick understood the deceased to be referring to the resolution that had just been signed; and that the deceased then said "I want you to have it. Use Esperia's property as the guarantee" (by which Nick understood the deceased to mean that she wanted him and his two sons to have the property) (Nick's affidavit sworn 18 August 2021 at [132], set out at [338]).
Nick's other son, Andrew (who did not ultimately take any ownership interest in the Symond Arcade), deposed that the deceased said "I want you [i.e., Andrew, John and Nick] to have it. It's yours" (see Andrew's affidavit sworn 17 August 2021 at [14]). John similarly deposed that the deceased said "I want your family to buy it. If you won't buy it, then I don't want it"; and that words to that effect were said about three times (John's affidavit sworn 17 August 2021 at [87]-[88]).
The evidence of Nick and John was that this was the first time that they had heard of any desire of the deceased for them to buy the Symond Arcade themselves (see Nick's affidavit sworn 18 August 2021 at [133], set out at [338]). Nick also recalled that Andrew and John said words to the effect "we shouldn't buy it like that because it doesn't look right" and "It isn't fair" (Nick's affidavit sworn 18 August 2021 at [134]).
The evidence of each of Nick, John and Andrew was that they rejected the idea (that they buy the Symond Arcade themselves) (see [338], and also John's affidavit sworn 17 August 2021 at [88], [94] and Andrew's affidavit sworn 17 August 2021 at [14]). Both Nick and John gave evidence to the effect that they sought unsuccessfully to persuade the deceased to allow Esperia Court to acquire the entirety of the Symond Arcade. John deposed (see his affidavit sworn 17 August 2021 at [95]) that: I recall that there was some more discussion between my Dad, Andrew, Yiayia [the deceased] and I, during which we tried to convince Yiayia that Esperia should buy the property, but she continued to refuse. At this point, it became apparent to me that Yiayia was not going to agree to only Esperia [Court] buying the Symond Arcade
John said in cross-examination that he pleaded with the deceased to allow Esperia Court to acquire the entirety of the Symond Arcade "but she would not agree" (T 170.30-31); Nick said that they spoke for about ten minutes and "she wouldn't budge on us buying the whole lot" (T 217.47-48).
Nick deposed that he suggested a "20/80 split" of the Symond Arcade (i.e., a split in which he and John would acquire a 20% interest in the ownership of the property and Esperia Court an 80% interest) but that the deceased refused (see his affidavit sworn 18 August 2021at [135], set out at [338]) (T 218.32-34). This was explained as being in the context that Nick was proposing to put up the Silverwater properties owned by his family trust (the Cyan Family Trust) as security for the loan or to sell them to contribute $5 million to the purchase price (T 178.44-47) (see John's affidavit sworn 17 August 2021 at [96]). Pausing here, the 20/80 split is accepted by Nick and John to be a mistaken arithmetical calculation of the proportionate contribution then proposed to be made by the parties (i.e., a $5 million contribution by Nick in relation to a $30 million purchase would in fact be a 16.7% contribution by Nick, not 20%). There has, however, been no suggestion that the proportionate holdings be adjusted. In oral submissions, Senior Counsel for Nick and John said that if the worst came to the worst the percentage could be adjusted - see AT 4 April 2023 at 20, though he pointed out that stamp duty and partnership expenses have been borne in accordance with the 20/80 split and would also require adjustment - see AT 4 April 2023 at 21).
Nick's evidence is that the deceased initially said no to the 20/80 split (T 218.47-49) but then, within about 15 seconds after an exchange in Greek, the deceased said "All right I'll sign" (T 219.4-6) (see Nick's affidavit sworn 18 August 2021 at [135]-[137] set out at [338]). The deceased's agreement to sign followed Nick saying to her "Look, we've only got the loan for 1 year. When the 1 year is up, if Jim for some reason gains control of the company, me and John could owe $30M and not have anything to back it up" (see Nick's affidavit sworn 18 August 2021 at [136]). Pausing here, at this stage it does not appear that any loan had been arranged in relation to the purchase of the Symond Arcade; indeed, Nick goes on to depose that he did not remember seeing before the auction the NAB email dated 28 March 2017 (which was received at 8.45am) attaching the NAB's Business Lending Proposal for a loan of $25 million for a term of three years (see Nick's affidavit sworn 18 August 2021 at [142]), so it is not clear to what Nick's reference to a one year loan related. While there was subsequently a letter of offer from NAB on 25 October 2017 for a loan of $29,050,000 with a 12 month term (see Nick's affidavit sworn 18 August 2021 at [175]), this surely could not have been foreseen as at 28 March 2017.
Nick's evidence is that he knew that the deceased would only be persuaded (to accept the 20/80 split) if she understood that she could harm "us" (i.e., could harm Nick's family with her wish for Nick's family to have all of the Symond Arcade) (see his affidavit sworn 18 August 2021 at [137]).
John deposed that he had several conversations in which the deceased expressed concern that James could take control of Esperia Court and the Symond Arcade (see his affidavit sworn 17 August 2021 at [35], [89], [126]-[127]). As I understand John's account, there had been aggravation on the part of the deceased due to her perception that James was hiding his business dealings from her, was "hassling" her about the acquisition of the Symond Arcade, and may have asked for his shares back before she died (see John's affidavit sworn 17 August 2021 at [42], [129] and AT 4 April 2023 at 17).
Andrew records the deceased saying "I didn't want it that way, but that's acceptable" (see his affidavit sworn 17 August 2021at [18]). Andrew described this as "the compromise that my late grandmother made, the compromise position she took" (T 251.8-9), saying that "that was essentially as far as we could get, with [the deceased's] concordance" (T 250.21-22).
I interpose here to note that Maria places significance on the evidence (referred to at [33] above) that Andrew told Nick that it would be "unfair" to exclude Maria, James and Dennis from involvement in the purchase (see 349). Nick and John say that Maria has mischaracterised this evidence and that what Andrew (and John) thought would be unfair was that their family should acquire the whole of the Symond Arcade in their own names (see [132]-[134] of Nick's affidavit sworn 18 August 2021, set out at [338]).
Both Nick and John gave evidence that they agreed to take an interest in the Symond Arcade because it was the only way in which they could convince the deceased to permit Esperia Court to acquire the property at all. John deposed in his affidavit sworn 17 August 2021 (at [102]) that: I did have some concerns about me becoming an owner of the Symond Arcade, due to its impact on my personal capacity to get credit and the potential for the bank to recover the debt from my Dad or me personally. I personally felt purchasing the Arcade in my own name was a bit of a noose. I agreed with the other directors to purchase Symond Arcade in this way in order to enable Esperia [Court] to make the purchase, as I understood how important Symond Arcade was to Esperia [Court]'s longer term goals. Beyond enabling the deal to be done for Esperia [Court]'s benefit, I had no desire to own part of the Symond Arcade personally.
In cross-examination, John said that "My grandma was not going to agree for Esperia Court to buy the arcade" (T 169.5); that "I ended up putting my name on the title just to secure it for the company" (T 168.48-49); and that "I went into the transaction to secure the arcade when my grandma refused for Esperia Court to buy it" (T 181.13-14).
Nick deposed that "if I had not proposed the 20/80 compromise, and convinced by [sic] mother to accept it, then I do not think she would have let Esperia buy the Arcade at all" (see Nick's affidavit sworn 18 August 2021 at [138], set out at [338]). In cross-examination, Nick said that "I didn't want it either" and "I did it [i.e., took an interest in the Symond Arcade] to help" (T 215.20-28); that "I wanted my mother to buy the arcade. I didn't want her to say 'I'm not going ahead'. I was worried she was going to take the whole arcade and say 'We're not buying it'" (T 215.31-33).
However, as the primary judge noted, despite their professed unwillingness to take a personal interest in the property, Nick and John have staunchly resisted any suggestion that it be held on trust for Esperia Court ([65]). That, of course, does not mean that they were not unwilling to do so at the time; and for present purposes nothing turns on their subsequent seeming change of heart in this regard. Further, any adjustment in the beneficial holding to that effect would require account to be taken of their contribution to the purchase of the property and contributions to the property made by them since then (and there was apparently a dispute by Maria as to whether or how such account should be taken, which may provide part of the explanation for their present stance, as well as perhaps a concern as to the feasibility of that accounting process). Indeed, there was some concern expressed by Nick and John in the course of submissions as to the import of Order 9(c) in the Oppression Proceeding, which reserved liberty to any party to apply to have the Court determine the sum to which Nick and John are entitled to receive from any sale proceeds of the Symond Arcade in respect of any capital expenditure paid by each of them in respect of the acquisition of the Symond Arcade (see AT 4 April 2023 at 24-25). (As I read Order 9, what was intended by (a) to (c) was to note that Nick and John reserve their rights to claim an entitlement to be indemnified for any liability they may have to NAB arising from the NAB loan made jointly to Esperia Court, Nick and John; and liberty was granted for any party to apply - if there was a sale of the Symond Arcade and the parties could not agree the amount Nick and John were entitled to receive from the sale proceeds for their capital expenditure on the acquisition of the property - for the determination of that sum; not that the primary judge was reserving that issue for further consideration on his part.) Nevertheless, there is no little irony in the emphasis now (and at first instance) placed by Nick and John on their unwillingness at the time to take a personal interest in the property given their appeal from the orders seeking to unwind that acquisition.
Nick and John say that the fact that they did not know at the time that the deceased occupied the role of Governing Director (to which Maria has referred in her submissions) goes nowhere given that the primary judge accepts they knew the deceased held the office of "Managing Director" and the management shares in Esperia Court ([352]). Further, they note that there was uncontested evidence that Nick and John appreciated that the deceased was in charge of the company and they were required to comply with her wishes in the conduct of its affairs (T 170.9; John's affidavit sworn 17 August 2021 at [6]-[7]; Nick's affidavit sworn 18 August 2021 at [49]).
The second resolution signed on 28 March 2017 (after the conversations referred to above) was found by the primary judge to have superseded the first ([341]). The second resolution again contained a resolution by the directors and by Nick and John in their personal capacities for the purchase of the Symond Arcade for a sum not exceeding $30 million but this resolution provided for it to be purchased in the name of Esperia Court, Nick and John. John agreed in cross-examination that he inserted that language (T 162.11-43). The resolution noted that "Esperia Court will provide $25,000,000 and Nick Soulos will provide $5,000,000" (see [340]).
Maria complains that at no stage has Nick "provided" $5 million to the purchase of the Symond Arcade. Nick and John, however, argue that their contribution was by way of the provision of security for the loan obtained from NAB and they point out that they were joint borrowers in respect of the whole of the funds obtained from NAB from the purchase of the property. They further argue that neither did Esperia Court "provide" its $25 million - at most the whole of the funds being advanced by way of loan (but this suffers from the same problem as Maria's complaint in relation to Nick himself - since the company was a joint borrower for the whole of the funds required for the purchase).
John deposed that in a conversation he had with the deceased between exchange and settlement the deceased said "Why did you take 20%, I wanted you to take 100%...I wanted you and Nick to buy all of it…Can you change it?" but that the deceased ultimately agreed to leave the matter be (see John's affidavit sworn 17 August 2021 at [126]-[127]).
Pausing here, Nick and John argue that, to the extent that his Honour's findings at [353], [354] and [357] entail rejection of the proposition that the deceased refused to permit Esperia Court to purchase the Symond Arcade in its own name, and that Nick and John acquired a 20% interest only to overcome that refusal, they are contrary to the unchallenged evidence of Nick, John and Andrew referred to above.
Contracts were exchanged on 28 March 2017 for the purchase of the Symond Arcade for the sum of $30 million; with the purchasers being Esperia Court, on the one hand, and Nick and John, on the other, in the 80/20 proportions proposed by Nick ([342]). Completion occurred on 14 November 2017 ([34]).
The $30 million purchase price was funded by a 10% deposit ($3 million) and the balance by an NAB loan ($29,050,000) ([343]). Of the $3 million deposit, Esperia Court paid $2 million, the deceased paid $150,000, John paid $140,000 and the trustee of Nick's family trust (Cyan Holdings) paid $710,000. John and Nick (the latter through his family trust) thus together contributed in excess of 20% (namely 28.33%) of the deposit for the Symond Arcade ([343]), although that amount was later adjusted in Esperia Court's books in their favour ([363]).
The balance of the purchase price was paid with funds borrowed from NAB. Nick, John and Esperia Court jointly assumed liability to NAB for a $29.05 million loan to finance the purchase ([345]-[346]). The NAB loan was secured by mortgages over all of Esperia Court's properties as well as security given by Nick's family trust (though the security provided by Nick's family trust was not long after released in 2019) ([291]; [293]).
Pausing here, Maria argues that the first registered mortgages given by Esperia Court over its commercial properties represented the security which caused NAB to advance the loan. Nick and John cavil with this proposition and say that there is no evidence to support this. They point out that the primary judge did not make any such finding and that when Esperia Court was proposing to use its own properties alone as security, in March 2017, it had been able to obtain only a loan offer of $25 million (see [316], [338]). Nick and John say that this suggests that the additional securities provided by Nick's family trust were essential to obtaining the $29.05 million offer which Esperia Court, Nick and John received in October 2017 ([345]). Further, Nick and John emphasise that (whether or not the securities put up by Nick's family trust were essential) as Nick perceived the matter in March 2017 those additional securities might be necessary to enable Esperia Court to borrow $30 million. Nick, John and the company remain liable to NAB for the entire $29.05 million advanced ([343]; [345]).
On or about 5 February 2018, NAB extended the term of its loan from one year to two years, expiring on 31 October 2019 ([292]). The loan was extended again in October 2019 (until 31 October 2022) but the security given by Nick's family trust and related entity SPH was released at that time, as adverted to above ([293]).

[5]

Lease to SPH

As to the lease of the Strathfield Private Hotel ([366]-[376]), from 2000 to 2013 the hotel had been managed by Nick and his wife in partnership (again undocumented) with Esperia Court ([372]). Nick deposed that in 2013 that partnership was terminated as he and his wife were unwilling to undertake the work required to manage the hotel (see Nick's affidavit sworn 18 August 2021 at [74]-[75]).
In 2014, Nick agreed to return to manage the hotel at the deceased's request ([373]) and a lease was entered into between Esperia Court, as lessor, and Nick's corporate vehicle, SPH, as lessee, for a five-year term from 1 January 2015, with two further five-year terms available at SPH's option ([367]). The first term of the lease expired on 31 December 2019. The first option for renewal was exercised on 27 September 2019 and a new lease was executed on 18 March 2020, terminating on 31 December 2024 ([286]; [368]). That current lease was executed by Nick twice (in his capacities both as a director of Esperia Court and as a director of SPH) and by John (as a director of Esperia Court).
The SPH lease does not contain a demolition clause, namely a clause which would enable the lessor to terminate the lease in aid of a decision by it to demolish the structures on the land ([286]), this being one of the complaints that Maria raised in the Oppression Proceeding. Maria also complained that the rent for the lease was below market ([375]) and relied on this as another instance of oppressive conduct. (The primary judge was not prepared to find that there was oppression in relation to the grant of the lease to SPH at below market rate, because the deceased wished to entice Nick back as the manager - see [376]-[377].)
Nick's evidence was that he did not recall discussing a demolition clause with the deceased when, on 11 July 2014, a handwritten agreement was signed setting out the terms on which Esperia Court would lease the hotel to Nick's company ([288]). Maria has referred (see below) to evidence as to the instructions given in relation to the new (option) lease executed in 2020, arguing that it can be inferred that instructions were given at that time not to include a demolition clause in that lease. Nick and John, however, point out that, on the valid exercise of an option for lease, there comes into existence an agreement for lease on the terms provided by the agreement under which the option is granted; and they say that in the present case the option lease was, relevantly, to be on the same terms as the lease being renewed, which did not include a demolition clause.

[6]

Chapman Street Property

It is relevant, in the context of Dennis' proprietary estoppel claim, to note the circumstances in which A&R became the registered proprietor of the Chapman Street Property.
The deceased and her late husband were directors of A&R from the time of its incorporation up to her husband's death in December 2003, after which the deceased was the sole director ([139]).
Dennis' evidence is that, when he and his then wife, Kerrie, were in the process of dividing their assets as part of their divorce proceedings (in about 1997 or 1998), the deceased and her husband were anxious to avoid Dennis' wife taking the 3,000 "A" class shares that Dennis held in Esperia Court and they encouraged him to agree to a settlement where Kerrie kept the matrimonial home so that his shares in Esperia Court would not be at risk (of passing to an "outsider"). Dennis says that, as part of those discussions and in a context in which Dennis was being effectively asked to give up the prospect of an overall cash settlement with his wife that would enable him to buy his own property after their separation, his parents told him that they would help him get back into the property market.
As part of the couple's property settlement, Kerrie received the majority of the proceeds of sale of the former matrimonial home. Dennis then found the Chapman Street Property for sale for $370,000 and his parents gave him $37,000 for the deposit.
Dennis' evidence is that, before contracts were exchanged for the purchase of the Chapman Street Property, the deceased and Mr Kristallis proposed to him that the property be purchased by A&R; that it be rented to him so as to provide a source of funds for A&R's mortgage repayments on the property; and that A&R be given to him on the deaths of his parents so that Dennis would (in effect) own the Chapman Street Property. Dennis agreed to this and A&R then purchased the property in September 1998 at a price of approximately $360,000. Dennis has lived at the Chapman Street Property since then. Dennis paid rent up until December 2003, when he was told that he no longer needed to do so. Dennis has used the property both as his residence and as his workplace (conducting a signage business within a commercial space on the ground floor).
Dennis' evidence is that in late 1998, not long after the Chapman Street Property had been purchased, Dennis discussed with the deceased proposed substantial renovations to the property (including the addition of a second storey to the building on the property so as to double the floor area). Dennis says that the deceased agreed but said words to the effect "[b]ut I am not going to pay you for your work because the property will be yours one day anyway". Dennis' evidence is that this statement was repeated many times by the deceased.
Dennis relies on the renovation work carried out to the Chapman Street Property, which he gave evidence he would not have undertaken at his own expense had he not been told that he would receive the property. That work involved the contribution of Dennis' own labour, for approximately 52 weeks, completing most of the work for the renovation (including all of the construction management, together with labouring, masonry works, render works, floor laying and internal fit out). Dennis says that his work had a value of $2,000 per week (and thus amounted to $104,000 for the whole renovation) and that, while the deceased reimbursed part of Dennis' out-of-pocket costs in paying third party sub-contractors, Dennis paid a sum of $98,758 to a carpenter (Jack Pullar) for which he was not reimbursed by the deceased. In all, Dennis says that he contributed over $202,000 towards the improvement of the property (being $104,000 worth of his own labour plus $98,758 paid to the carpenter), noting that this was more than half of the cost of purchasing the property shortly before the renovations were undertaken.
Dennis' evidence is that the first time he realised that the Chapman Street Property was not going to be left to him was when he read the Will after her death.

[7]

Dennis' work on other properties

Relevant at the very least to Dennis' family provision claim (but also relied upon in the context of the proprietary estoppel claim) was evidence he gave that he made substantial contributions to other properties (on the basis, he says, of promises by the deceased that they too would one day be his), namely, the Parsons Avenue Property (which was bequeathed to Maria and in respect of which Dennis ultimately abandoned his claim for the "betterment" of Maria) and the Smith Street Property in Summer Hill (an old art-deco mixed-use premises with five downstairs shops and three upstairs units), which the deceased bequeathed to Dennis.
Dennis' evidence is that he had located the Smith Street Property as a potential investment property, and discussed the purchase of it with the deceased in 2003; that the deceased originally said she would buy it as an investment property for Dennis and Nick and suggested that Dennis and Nick pay the deposit; that Nick was not interested and said he thought it was a bad investment; and that he, Dennis, wanted the purchase to proceed but could not then afford to pay the deposit on his own. Dennis says that he and the deceased agreed to proceed on the basis that the deceased would fund the deposit in the first instance, with Dennis to make repayments to her for half of the deposit when he was able to do so.
Dennis gave evidence that, shortly after the purchase of the Smith Street Property, he undertook significant renovation and restoration works to the property, including reinstating the entire building to its original art deco condition (which he says required a large amount of time and effort, particularly in the sourcing of authentic features such as brass shopfronts, leadlights and other items), renovating the residential units, converting one of the shops to a café, and renovating the rear downstairs courtyard, toilets and storage garage. Dennis' evidence is that he did all of this work in a context in which the deceased had told him that she was buying it for him, that the property would be left to Dennis in her will, and that in those circumstances it was up to him to look after it and maintain it. Dennis argues that this work resulted in him being able to negotiate an increase in rent for the café space from $180 a week to $1,000 a week, and an increase in rent for an upstairs unit from $80 a week to $180 a week, reflecting a weekly increase in the income stream for the property of the order of $920 a week as from about 2005 (that is, $47,840 a year). In this way, Dennis has calculated that this translates to about half a million dollars over a decade, and he says that it amounts to about $815,000 over the time since the renovations were done. Dennis says that this rental stream serviced the mortgage over the property.
In addition, Dennis says that he undertook a series of renovations to the deceased's property (at 77 The Boulevarde) converting the house so that it would continue to be fit for his parents as they grew older. Dennis says that he was not paid for his work on that project, which took 13 weeks. Dennis' evidence is that he also built a conservatory on the verandah, providing four weeks of his own labour without payment. Dennis also says that he made considerable improvements to the Parsons Avenue Property, including building a new kitchen and new laundry facilities, repainting the house, and renovating the bathroom; he estimates that the total costs of the renovations (including both his labour and material costs) were around $50,000. Finally, Dennis says that he carried out a range of valuable renovations, repairs and maintenance to the property at Churchill Avenue, Strathfield, which is owned by Esperia Court, over the course of about a decade, spending at least one to two days per month doing this work, at a value of about $30,000.

[8]

The deceased's Will dated 13 March 2017

The deceased died in 2018. As the primary judge noted (at [2]), the deceased was a prolific will maker.
As to the historical sequence of the deceased's wills (see the Exhibit to Mr Cork's affidavit sworn 6 December 2018), the Executors emphasise that, over the period from 1995, the deceased changed her testamentary provisions in various ways.
Relevantly, it may be noted that in each of the deceased's 22 January 2003 and 3 February 2003 wills the deceased recorded a gift to Dennis of a life interest in the shares in the company that was later renamed A&R (which would have given Dennis control, during his lifetime, over the Chapman Street Property). By the deceased's 4 June 2008 will, the deceased left the entirety of her shares in A&R to Dennis (this was not combined with any gift of a freehold interest in any other real estate), which again would have given Dennis the ability to control A&R and to continue to reside in the Chapman Street Property. In her 11 June 2010 will, the deceased gave a life estate in the Chapman Street Property to Dennis, as well as a 50% interest in the Smith Street Property.
The Executors note that in each of her 11 June 2010, 12 May 2011, 18 May 2011, 13 December 2012, 22 March 2013, and 26 March 2013 wills, the deceased proposed to leave 50% of the Smith Street Property to Dennis, and that, under the 26 March 2013 will, Dennis was to receive a life estate in both the Chapman Street Property and the Parsons Avenue Property, and 50% of the Smith Street Property.
Ultimately, in both an informally executed 8 February 2017 testamentary document and in her last will (13 March 2017), the deceased varied the position again so as to leave 100% of the Smith Street Property to Dennis.
Pausing here, Dennis notes that the effect of the change from the 2013-2015 wills is that, in the informally executed 8 February 2017 document and the (final) Will (where Dennis is to receive 100% of the Smith Street Property), what "disappears" is the gift in respect of the Parsons Avenue Property. Thus, Dennis argues that if any inference is to be drawn from the change in the wills in relation to the gift of the Smith Street Property it is that this was to be in substitution for the Parsons Avenue Property (and not a substitute gift for the Chapman Street Property).
As already noted, under the deceased's final will executed on 13 March 2017 (the Will), the deceased appointed Mr Kristallis, Mr Cork and Nick as her executors and trustees (cl 2). The deceased gave to Nick the 500 management shares in Esperia Court (cl 4) and also 1,000 of each of the "A" class and "B" class non-voting shares (cll 7 and 9). As to the balance of the non-voting class shares held by the deceased, under the Will 2,000 "A" class shares were left to James and 2,000 "B" class shares were left to Dennis (cll 6 and 8). As noted earlier, it was accepted that the Will should be rectified so as to identify the 2,000 class shares left to Dennis as "A" (not "B") class shares and vice versa in relation to James. (The remaining non-voting shares were not held by the deceased and so were not subject of gift under the Will, those being the "C" class shares held by Maria and the "D" class shares held by Nick.)
It would seem that the position of Governing Director of Esperia Court simply ceased on the deceased's death, there being no provision for the appointment of a Governing Director to succeed the deceased on her death. The deceased expressed the wish (see cl 10) that none of the class shares be sold or transferred to any person, including other shareholders at the date of her death, and that the shares in the issued capital of Esperia Court only be sold or transferred to the company itself as part of a share buy-back. The deceased also expressed the wish that the class shares bequeathed to James and Dennis be left by those sons to their son or sons, respectively (see cll 6 and 8).
The deceased bequeathed her shares in A&R (which was the owner of the Chapman Street Property and which the deceased stated in the Will was subject to a lease in favour of Dennis) to her grandsons in equal shares as tenants in common, expressing the wish that the grandsons continue to lease the property to Dennis during his lifetime and not sell the property but retain, develop and improve the property (cl 11).
The deceased gave: the Parsons Avenue Property to Maria (cl 12); the Smith Street Property to Dennis (cl 13); the 77 The Boulevarde Property (the deceased's home prior to her death) to Nick (cl 15); the 79 The Boulevarde, Strathfield property to James (subject to a constraint on sale of that property by James for a five year period) (cl 16); a unit at Balmoral Beach to Nick and his sons as tenants in common in equal shares (cl 17); and all of the deceased's Greek property to Maria (cl 28). By cl 14, the deceased noted that she had sold a factory unit at Bankstown prior to her death to her grandsons (Nick's sons) and had provided vendor finance for that purchase; the deceased releasing her grandsons from the debt under the Will.
The deceased made a number of pecuniary legacies (cll 18-27) and left the residue of her estate to be divided equally among her four children (cl 30).
The Smith Street Property (with a value estimated in the broad range from $3.4 million to $5.8 million) ([442]) is accepted as being much more valuable than the Chapman Street Property (which was valued in the vicinity of $2.8 million). The latter property is the only asset of A&R ([175]) and hence the value of that property was reflected in the parties' agreed valuation of A&R. In submissions on the appeal some issue was taken as to the value to be attributed to the Smith Street Property (on the basis that the Executors had produced only a kerbside valuation whereas Dennis had relied upon an expert valuation) but nothing turns on this).
By the time of the proceedings at first instance, it was the Executors' position that certain of the properties the subject of bequest under the Will would need to be sold to meet the costs of administration of the estate (including the costs of the proceedings). This is of no little significance in the context of the contention by the Executors that the bequest to Dennis of the Smith Street Property (a more valuable property albeit, as noted, the value being within a broad range - from $3.4 million to $5.8 million; see at [442] of the primary judgment) should in effect assuage the deceased's conscience in relation to promises made in relation to the Chapman Street Property (valued at about $2.8 million and the only asset of A&R ([175])), an argument which I consider in due course.

[9]

Oppression claim

In Maria's amended statement of claim, the alleged oppression pleaded in relation to the Symond Arcade, the lease to SPH and the partnership, was: allowing Nick and John to take a 20% interest in the Symond Arcade for themselves when it was in Esperia Court's interests to acquire 100% of the property (see pleading at 2-(c); the grant of a lease to SPH on terms that were "materially prejudicial" to Esperia Court (2) (which included the grant of a lease without a demolition clause) (see 35); and operating the partnership with Nick and John on an 80/20 basis notwithstanding that it was in Esperia Court's interests to receive all the income from the partnership (2). In her written submissions on appeal, Maria more than once described the heart of the oppression as being the self-dealing by Nick and John in acquiring their 20% interest in the Symond Arcade and in the partnership in relation thereto; and in oral submissions (see AT 5 April 2023 at 106) the diversion of a corporate opportunity was said to be a paradigm example of self-dealing.
The primary judge concluded that the conduct in relation to the acquisition of the Symond Arcade, the partnership between Esperia Court, Nick and John regarding the leasing of rental space within the Symond Arcade, and the lease to SPH (on terms which did not include a demolition clause) involved: a total disregard by the directors for the interests of Esperia Court as a whole or the interests of Maria, in particular, as a member (383) and the exercise of powers to benefit Nick's family (383(i)). In this regard, his Honour noted that there was no evidence that at any time in or about or after mid-2014 that any consideration was given by any of the deceased, Nick or John to the interests of Maria as a member of Esperia Court; and his Honour considered that "decisions appear, on the contrary, to have been made in the interests of the deceased and Nick personally in disregard of Maria's interests and without any consultation of her", characterising this conduct as self-dealing and concluding that the directors preferred the personal interests of Nick and John (see [349]-[351]; [380]; [388]-[389]). Although the primary judge found that the rent for the SPH lease was below the market rate ([375]), his Honour was not prepared to find that this was oppressive conduct because the deceased needed to "entice" Nick to manage the hotel so that she could preserve the licence attached to the premises ([375]-[377]).
His Honour found that this conduct was in breach of ss 232(d) and (e) of the Corporations Act (see [381]-[390]), being conduct which the notional objective bystander would consider was unfair, because the directors of Esperia Court had treated and continued to treat the company as their own ([386]).
In the course of his Honour's reasons (though Maria argues that this was in assessing Nick's evidence rather than in assessing whether the conduct was oppressive), his Honour identified that there was: a dramatic shift in focus by Esperia Court from commercial enterprise to property development; bank finance of near 100% of the purchase price; and the intermingling of the affairs of Nick and John with those of the company (see [349]; [365]; [390]). Insofar as these are matters that informed the assessment of whether there was oppressive conduct, they are the subject of challenge by Nick and John (as explained in due course), not least because the first two of those matters were not pleaded as being or amounting to oppression.
The primary judge further found that each of the deceased, Nick and John (by pursuit of his or her self-interests) had breached ss 180-182 of the Corporations Act ([391]) but that this breach did not sound in damages to the company (though it served to inform the nature and extent of the relief necessary to put an end to the oppression that had been found) ([392]).
The primary judge identified that, as at the date of the hearing, the oppression was continuing because the constitution of Esperia Court, the ownership and operation of the business of the Symond Arcade, and the terms of SPH's lease of the Strathfield Private Hotel (in combination with the determination of Nick and John to maintain their control of Esperia Court and its property) militated against a finding that the conduct of the affairs of Esperia Court were being conducted "without the taint of oppression" ([395]). His Honour considered that this required relief "to facilitate an orderly transition of the management of Esperia Court to a regime untainted by oppression" ([401]).

[10]

Dennis' proprietary estoppel claim

As noted above, Dennis claimed an entitlement to the shares in A&R or alternatively to the Chapman Street Property on two bases (see further amended statement of claim at [51]-[70]), invoking the principles of proprietary estoppel claim and of a common intention constructive trust.
Dennis relied on evidence (see his affidavit sworn 24 March 2021 at [50]-[74]) as to the making of promises by the deceased to the effect that the deceased would help him back into the property market (if he agreed to a settlement of his family law proceedings, that did not put his then shares in Esperia Court at risk) and that the Chapman Street Property would be his (see above). Dennis contended that he relied on those promises in two ways: first, that he had been induced to forego the opportunity to purchase the Chapman Street Property himself (with some financial assistance from his parents) (see his pleading at [56]); Dennis' affidavit sworn 24 March 2021 at [56]-[58]; Dennis' closing submissions dated 14 September 2022 at [9]; and, second, by reason of his payment of rent (to December 2003) and his performance of renovation work (see his pleading at [58]-[60]).
There was no evidence contradicting Dennis' evidence as to the promises made to him and reliance by him on those promises and Dennis was not cross-examined about these matters ([217]). Dennis also gave evidence regarding contributions to the Smith Street Property (see his affidavit sworn 24 March 2021 at [30]-[49]) as noted above.
The Executors' defence put Dennis to proof of those allegations (by not admitting the relevant allegations). The Executors argue that it is incorrect to say that they did not oppose Dennis' claim, submitting that their pleaded non-admission, where the truth or falsity of the alleged facts was not known to them, operated as a denial of Dennis' entitlement to relief). It is noted by the Executors that, in oral opening submissions, they expressed reservation about acceptance of Dennis' claim, noting that Dennis was a beneficiary who would receive a gift of other property under the Will (referring to opening submissions at [90] and T 451.16-453.5); and that, in closing submissions, they submitted that it could not be concluded that there remained any inequity to which relief ought to be directed in respect of Dennis' established estoppel, because the deceased had left the Smith Street Property to Dennis in the Will (referring to closing submissions at [59]-[62]).
The primary judge found that Dennis' proprietary estoppel claim was made good and, by way of relief, declared that A&R holds the Chapman Street Property on trust for Dennis. His Honour made an order for the transfer of the property to Dennis ([230]).

[11]

Succession Act claims

As referred to above, the primary judge summarised his ultimate conclusion as to the claims by each of the children at [424]: In my opinion, each of James, Maria and Dennis has been left without adequate provision for his or her maintenance, education or advancement in life if and to the extent they are unable to unlock the asset-backed value of their "A", "B" and "C" class shares in Esperia Court and they remain without a voice in management of the Company. That is because they were, throughout the joint and several lives of their parents, encouraged in an expectation that the shares would enable them to enjoy substantial wealth in their mature years and the shares, in themselves, provide a measure of what the parents regarded as proper provision for their children. For this reason, I propose to make orders (supported by orders made under Chapter 3 of the Succession Act 2006 NSW, as well as orders made under section 233 of the Corporations Act 2001 Cth) to the effect that, in addition to any provision made for them in the will of the deceased, they each receive 125 of the 500 shares held by the deceased in her lifetime in the character of management shares in Esperia Court.
The reference at [424] to an expectation on the part of the siblings that their shares in Esperia Court would enable them to enjoy substantial wealth in their mature years (the characterisation of which is sought to be put in issue by Nick in his proposed amended notices of appeal in the Succession Act appeals) followed earlier references to such an expectation in the context of the Oppression Proceeding (see at [388]) and references by the primary judge to evidence of conversations to which various of the siblings had deposed (see at [188]-[193]).
Relevantly, the primary judge found (see [186]-[205]) that the deceased (and her late husband, prior to his death) had encouraged in her children an expectation that they would be able to realise the full value of their shares in Esperia Court upon her death. At [194], after giving examples of some of the unchallenged conversations to which the siblings had deposed, the primary judge said: None of this evidence was challenged during the course of the hearing. It is consistent with the structure of the share capital of Esperia Court; the designation of the deceased's husband and the deceased herself, in succession, as Governing Directors of the Company; and an expectation that the children would be able to realise the full value of their shares upon the death of the survivor of their parents. Upon the basis of that expectation, the children waited patiently, but with rumbling discontent, to come into their inheritance.
The primary judge dealt only briefly with the detail of each of the individual family provision applications. In particular, the primary judge did not set out in detail the evidence as to the respective siblings' financial circumstances or the needs to which they had deposed. Indeed, the Executors complain that there was no finding by the primary judge as to the general or specific financial needs of any of the siblings nor any finding that the deceased had left the siblings with inadequate provision for those needs.
First, as to James, the primary judge dealt with James' application at [425]-[434]. His Honour considered this to be the most challenging of the three family provision applications "at least as regards his claim for the remaining 1,000 "B" class shares in Esperia Court that were left by the deceased to Nick rather than to him" ([425]) (which to my mind indicates that his Honour did not regard James' claim as being so challenging in other respects)). His Honour explained that there were five fundamental reasons for the challenging nature of James' claim to the remaining 1,000 "B" class shares (at [426]): First, although James' case is able to be presented as that of an impecunious claimant his impecuniosity is in part due to a decision, of his own making, to place property in a discretionary trust for the benefit of his family, rendering him reliant upon the continuing support of his wife and children in management of the trust. Secondly, respect needs to be given to the deceased's deliberate intention that Nick be favoured over James, albeit that the favour the deceased showed towards Nick was in part a response to Nick's displacement of James in the performance of work for Esperia Court after 2008 or thereabouts; Nick's displacement of James' [sic] soured relationships between James (on the one hand) and Nick and the deceased (on the other hand). Thirdly, James' claim is essentially grounded less on "need" than upon a "moral" claim for return to him of all the shares which his parents, he submits "unjustly", required him to surrender as a consequence of a marriage of which they disapproved. Fourthly, James' claim is based on an expectation, fuelled by the deceased during her lifetime, that his shares (upon which no dividends had ever been paid to him) would be returned to him upon the deceased's death so that, in common with his siblings, he could enjoy substantial material wealth. Fifthly, James' advanced age might be thought to limit the extent of any personal, future "need" on his part beyond the satisfaction he might experience from passing family wealth onto his own children.
While his Honour accepted that, paying attention to all those factors and the extent of the deceased's bounty under the Will (particularly, the bequest to James of 2,000 class shares in Esperia Court and ownership of the property at 79 The Boulevarde which had an agreed value of $2.3 million), it might reasonably be concluded that James had not been left without "adequate" or "proper" provision from the deceased's estate ([427]), ultimately, his Honour did not so conclude.
His Honour considered that in the circumstances of this case the question of what was adequate and proper for the purpose of s 59(1)(c) was closely associated with the question of what, if any, family provision order ought be made in disposition of James' application upon an exercise of the discretion for which s 59(2) provides. This was because his Honour accepted that "within the community of the deceased (her extended family) if not also within the broader community, the allocation of 3,000 shares to each of the deceased's children was long seen as necessary and appropriate to make proper provision for them" ([430]). His Honour said that the allocation of the 3,000 shares was in recognition of the roles the deceased's children played in helping the family to acquire the wealth embedded in the assets of Esperia Court, including the fact that they acquiesced in the absence of any payment of dividend to them throughout the better part of their lives; and that the expectation of James and other members of the Soulos family was that James' shares would be returned to him; and that Nick had no expectation that he would be the beneficiary of any of the shares formerly held by James.
Pausing here, the initial allocation of class shares to the children cannot have been in recognition of the children's roles in wealth creation, as his Honour seems to have contemplated, since the shares were allocated when the children were infants. However, as I understand it, the primary judge's focus here was on the fact that, as at the time of the incorporation of Esperia Court, the deceased and her husband had considered it appropriate that each child be allocated an equal parcel of the class shares; and that, thereafter, the children who were class shareholders had not received any dividends.
The primary judge considered that the outcome that was appropriate (namely, that James receive the 1,000 shares given to Nick and that Nick bear the burden of that order for provision) was consistent with what was demanded by wisdom, justice and community standards "in so far as it makes good the injustice of the deceased's confiscation of James' shares at the commencement of what appears to have been, in retrospect, a long and happy marriage" ([432]). His Honour concluded (at [433]) that James should have the benefit of all the 3,000 "B" class shares formerly held by him, together with 125 of the 500 management shares formerly held by the deceased; and that nothing more could be justified in circumstances where the deceased's testamentary constraint on James' disposal of the property at 79 The Boulevarde was about to expire (and in any event would not diminish James' enjoyment of the value of the property). The Executors attach some significance to that last statement at [433] (i.e., that "[n]othing more [than the two parcels of shares] can be justified") as indicating that there was no finding that James had any obvious need that actuated an obligation on the deceased's part to provide more financial provision for him.
His Honour considered that there was no need to make an adjustment under Ch 3 of the Succession Act in favour of Nick, as compensation for the loss of the 1,000 "B" class shares gifted to him but which were to be returned to James, because Nick retained: the 3,000 "D" class shares held by him independently of the Will; 125 of the 500 management shares formerly held by the deceased; and the right, in the due administration of the estate, to be compensated for the Executors' sale of the property gifted to him under the Will at 77 The Boulevarde (which was sold for $4,201,000). His Honour also noted in this context that Nick's sons, to whom his Honour said Nick was close, retained the deceased's Balmoral Beach unit (with an agreed value of $2.1 million), with any indebtedness to the estate for finance provided for acquisition of property forgiven under terms of the Will ([434]). (Nick points out that the forgiving of the vendor finance related to the deceased's Bankstown property, not the Balmoral Beach unit - see below.)
Second, as to Maria, his Honour simply stated (at [435] his opinion that Maria had been left without adequate and proper provision for her maintenance, education or advancement in life from the deceased's estate "only in so far as she has not been given" under the Will 125 of the 500 management shares formerly held by the deceased and that ([at 436]) the measure of the inadequacy of proper provision made for Maria informed an exercise of the discretion in her favour under s 59(2) of the Succession Act. His Honour was of the view that there was no foundation for the making of a legacy in lieu of the gift of the Parsons Avenue Property made to Maria in the Will (noting that it had a value in the vicinity of $1.35-1.5 million) and his Honour referred to the fact that Maria retained her 3,000 "C" class shares in Esperia Court and the deceased's Greek property gifted to her under the Will ([437]-[438]).
Third, as to Dennis, as noted earlier his Honour had already determined in Dennis' favour the proprietary estoppel claim in relation to the Chapman Street Property. Turning to the claim for further provision out of the estate of the deceased, his Honour addressed this at [439]-[442]. His Honour stated that Dennis' claim for provision invited analysis in terms similar to those which applied to Maria's application ([439]). His Honour held that, in common with James and Maria, Dennis should receive 125 of the 500 management shares and that this was necessary for him, and his siblings, "to have an entitlement to participation in management of the affairs of Esperia Court and, so, to realise the underlying value of the 3,000 shares all parties now acknowledge to be his entitlement independently of the will of the deceased" ([440]).
At [441], his Honour said that, had Dennis' claim to beneficial ownership of the Chapman Street Property and the deceased's shares in A&R not been successful, a family provision order that vested in him all those shares might conceivably have been an appropriate application of the relevant Succession Act provisions (on the basis that Dennis might be said to have been left without adequate and proper provision had his ownership of the Chapman Street Property (directly or indirectly) not been vindicated); but the primary judge expressed some hesitancy as to that conclusion arising from the fact that Dennis had secured his ownership of shares in Esperia Court and had been left under the Will the Smith Street Property (with an estimated value said to be within the range of $3.4-5.8 million) ([442]). (Dennis' notice of contention addresses the position if the proprietary estoppel orders are not upheld - see below.)

[12]

Oppression Appeal

Nick and John raise six grounds of appeal against the decision made and relief granted in the Oppression Proceeding: by ground 1, they contend that the primary judge erred in finding that there was oppression; by ground 2, they contend that his Honour erred in finding that there was continuing oppression; by grounds 3 and 4, they challenge the primary judge's finding as to breach of directors' duties (ground 3, as to the acquisition of the Symond Arcade; ground 4, as to the lease to SPH); and, by grounds 5 and 6, they challenge the relief granted (ground 5, on the basis that the relief went further than necessary to terminate the oppression that had been found to exist; ground 6, on the basis that no such relief was necessary where they had offered to purchase Maria's shares for $7 million and where there had been delay by Maria in bringing the proceedings, with the consequence that any relief would require a taking of the partnership accounts and provision for the fact that they remain liable for the NAB loan by which the purchase of the Symond Arcade was financed).
At the outset of their written submissions, Nick and John emphasise that it was common ground that, given the highly strategic nature of the property, it was in Esperia Court's best interests to acquire a 100% interest in the Symond Arcade, and that Esperia Court may have been justified in paying a premium to do so. In that regard, they note that Nick accepted when it was put to him by Maria's counsel in cross-examination, that Esperia Court had a vital commercial interest in acquiring the property (T 205.31-34) and that, given Esperia Court's ownership of adjoining properties, the acquisition would enable the company to have a larger consolidated development site and enhance the prospects of its obtaining an increased floor space ratio (T 173.30-46). Nick and John note that Maria's main complaint was that the acquisition of 20% by Nick and John was a diversion of a corporate opportunity.
Further, as noted earlier, Nick and John place emphasis on their evidence (mostly elicited in cross-examination) that they did not wish to acquire 20% of the Symond Arcade and that they did so only to secure the property for Esperia Court in circumstances where "at the eleventh hour" the deceased refused to allow it to be purchased in the company's name (a submission that would seemingly have less force on the breach of directors' duties claim than the oppression claim, since the fact that a company cannot itself take advantage of a corporate opportunity will not necessarily absolve a director from breach in taking up such an opportunity personally (see Regal (Hastings) Ltd v Gulliver [1967] 2 AC 134 at 158; Warman International Ltd v Dwyer (1995) 182 CLR 544 at 558; [1995] HCA 18).
Broadly, as to the finding that there was any oppression or breach of directors' duty, Nick and John contend that there was no vice in Esperia Court acquiring the Symond Arcade where (as noted above) it was common ground that it was in the company's interests to acquire it and where there was no finding that it could have been acquired on any different terms to those which the company obtained. Nick and John place weight on the fact that they received a 20% share in the Symond Arcade (and therefore the partnership) only because the deceased (who controlled the company as Governing Director and holder of the management shares), would not countenance Esperia Court acquiring 100% in its own name; and in circumstances where Nick's family was putting up $5 million in security). It is noted that Nick and John paid 20% of the deposit (or rather, 16.7%, noting [36] above); and that they remain liable, together with the company, for the entirety of the $29.05 million bank loan which funded the acquisition. They also point out that they have made no profit from the partnership, which operates at a loss.
As to the grant of a long term lease to SPH without a demolition clause, Nick and John say that there was no vice in this in circumstances where there was no finding that the absence of such a clause was the product of a conscious decision by any director; and where, at the time, Esperia Court's other leases (or, I would say, at least most of them) did not have such a clause. In oral submissions they also point to the fact that the lease executed in 2020 was itself the product of the exercise of an option to renew an existing lease that did not contain a demolition clause (see AT 6 April 2023 at 182, 185). Insofar as it was submitted in the present appeal that there was an intention for there to be a demolition clause in the registered lease (by reference to an instruction from the agent), Nick and John note that this issue was not put to Nick in cross-examination; and that, when the option was initially sought to be exercised on 30 May 2019, this was too early. Nick and John say that when the option was actually exercised, on 27 September, it was exercised by sending the current lease and there was no evidence that anyone checked to see whether there was compliance with cl 4.6 (AT 6 April 2023 at 183). The evidence does include a lease for the period of the renewal, apparently lodged 7 May 2020, that does appear to comply with the requirements of cl 4.6; however, there does not appear to be any evidence indicating that this copy of the lease was included when the option was sought to be exercised in September 2019.
Nick and John argue that the relief granted by the primary judge by way of the restructure of the shareholdings in Esperia Court (in a manner which gives Maria, James and Dennis a voting majority which they can use to achieve the winding up of the company) was a fundamental error because that relief went beyond what was required to terminate the effects of the oppression alleged and found by the primary judge to exist. In this regard, Nick and John argue that Orders 8 to 11 (which deal with ownership of the Symond Arcade, provision for dissolution of the partnership, and variation of the SPH lease - see below) were sufficient in themselves to terminate any such oppression.
Maria, on the other hand, maintains that the primary judge rightly found that there was oppression by reference to the "self-dealing" transactions in which the appellants engaged - the acquisition by Nick and John of a 20% interest in the Symond Arcade and the leasing arrangement with SPH). As to the latter, Maria emphasises that the oppression alleged at [63] of the amended statement of claim was the absence of a "demolition clause" coupled with the length of the term of the lease, which had the effect of conferring on Nick an economic power in relation to any decision by Esperia Court to sell or develop its properties, Maria here drawing a distinction between the oppressive conduct and its economic effect. Maria contends that the relief granted was appropriate in this case.
While Maria is broadly in agreement as to the factual matters asserted by Nick and John in their submissions, Maria complains that Nick and John's submissions have a tendency to conflate findings of fact made in relation to the family provision aspect of the proceedings with his Honour's reasoning process on the oppression claim (particularly in relation to what his Honour identified at [70]-[74] as the "central, intractable problem", namely, that the siblings wished to wind up Esperia Court so as to realise the value of their shares, while Nick wished its operations to continue). As I understand it, Maria does not assert that the inability to realise the capital value of her shares in the company amounts to oppression (as opposed to it being relevant in considering the respective family provision claims).

[15]

(i) The trial judge erred in finding that the directors were obliged to take into account the interests of Maria as a member in determining whether to acquire the Symond Arcade or grant the lease to SPH ([349]-[351], [380], 383, [388]-[391]).

Nick and John contend that the primary judge erred in finding that the directors ought to have had regard to the interests of Maria, in particular, as a member of Esperia Court in acquiring the Symond Arcade. They point out that, as directors, they (and the deceased) were obliged to act in the best interests of the company, not the best interests of shareholders (referring to the distinction noted in DSHE Holdings Ltd (Receivers and Managers) (in liq) v Potts; HSBC Bank Ltd v Abboud; Potts v National Australia Bank Ltd [2022] NSWCA 165; (2022) 405 ALR 70 (DSHE) at [264]-[266]); and say that, while directors must have regard (among other things) to how their actions will affect shareholders (DSHE at [264]), it does not follow that they must have regard to the interests of individual shareholders where they are at odds with those of other shareholders (citing Hart Security Australia Pty Ltd v Boucousis [2016] NSWCA 307; (2016) 339 ALR 659 at [115]).
Nick and John say that the fact that s 232(d) draws attention to the "interests of the members as a whole" makes the analysis no different, referring to the observation by Barrett J, as his Honour then was, in Goozee v Graphic World Group Holdings Pty Ltd [2002] NSWSC 640; (2002) 42 ACSR 534 at [42], that a decision as to what is "contrary to the interests of the members as a whole" focuses attention "not on the interests of the persons who are in fact the members for the time being but on the interests of an individual hypothetical member".
Nick and John point out that Maria was one shareholder with a quarter of the total number of non-voting shares; that the deceased and Nick held the balance of the non-voting shares; and they emphasise that the deceased held the management shares which alone conferred an entitlement to vote. They contend that the directors were not obliged in those circumstances to take particular account of Maria's interests as a member in determining whether or on what terms to purchase the Symond Arcade.
Maria accepts that directors owe their duties to the company and not to shareholders but emphasises that disregard for the interests of the company as a whole and unfairness to a specific member of the company fall within the statutory language of ss 232(d) and (e) of the Corporations Act. Maria maintains that disregard for the interests of the company and the "self-dealing" transactions were what grounded the finding by the primary judge of oppression as informed by what a "notional objective commercial bystander" would consider to be unfair. Maria says that there was no need to assess what her personal interests required; rather, the proper assessment was on the disregard of those interests as a member of Esperia Court or the interests of the members of Esperia Court as a whole. Maria argues that it was plainly not in her interests, or the interests of members as a whole, to see the value of the company of which she was a 25% shareholder affected by a series of self-dealing transactions in favour of Nick and John.

[18]

b. to the extent that the trial judge found that the company ought not have acquired the Symond Arcade with near to 100% bank finance ([349], [365], [390], [391]): (i) that finding involved a denial of procedural fairness, because there was no pleaded allegation that the company ought not have acquired the Symond Arcade with near to 100% bank finance and, accordingly, the Appellants were denied the opportunity of addressing that matter; and (ii) having regard to (a) above, the finding was not open where the trial judge did not find that the acquisition could have been effected in the absence of near to 100% bank finance.

As to the finding that the acquisition of the Symond Arcade involved a disregard of the interests of the company as a whole, Nick and John say that his Honour's reasoning is not entirely clear but they point to the identification by his Honour of the following at [349]: first, a dramatic shift in focus by Esperia Court from commercial enterprise to property development; second, that there was bank finance for nearly 100% of the purchase price; and, third, that there was an intermingling of the affairs of Nick and John with those of the company.
As to the first, Nick and John complain that this was not pleaded nor was it run at trial; and they say that it is contrary to the case that was in fact run (namely, that the acquisition of the Symond Arcade was in the best interests of Esperia Court). Nick and John say that this is also misconceived factually because the company had since 2008 been taking steps to develop all of its properties together with the Symond Arcade (referring to the primary judgment at [304]-[311]).
As to the second (see the references in the primary judgment at [349], [365], [390], [391]), Nick and John again complain that this was not pleaded as being something that was contrary to the interests of Esperia Court. Nick and John say that they had no opportunity to address this by, for instance, evidence as to whether they appreciated in 2017 that the use of near to 100% bank finance was likely to stretch the partnership's finances or as to what other alternatives were available. It is noted that the primary judge made no finding that the acquisition could have occurred without near to 100% bank finance. Nick and John say that such a finding would be essential, where the premise of the case below was that it was in the best interests of Esperia Court to purchase the Symond Arcade.
As to the third, Nick and John accept that the acquisition conferred a personal benefit on them but they submit that this could not be unfair in circumstances where the deceased had the power to use her control of Esperia Court to confer a benefit on them if she wished (and for the reasons submitted in the context of their submissions as to the deceased's constitutional role in the company and the nature of it as a family company - see below).
Maria says that the above features on which the appellants rely to impugn the primary judge's reasoning on the oppression claim were matters used by the primary judge to assess Nick's evidence (pointing to the first sentence of [349] which commences with the words "what is striking about [Nick's] evidence is that … "). Nevertheless, in their submissions in reply, Nick and John maintain their complaint that the primary judge's criticisms of the acquisition of the Symond Arcade at [349] (as well as the primary judge's reference to Nick's siblings being locked into a discretionary management regime for Esperia Court) were matters relied on by the primary judge in finding oppression and granting relief but which did not form part of Maria's pleaded case).

[22]

c. at the time the lease was granted the company did not have demolition clauses in its leases.

Nick and John contend that the primary judge erred insofar as there was a finding that the grant of a long term lease to SPH without a demolition clause was a decision made in the interests of the deceased and Nick personally (see [380]).
It is noted that the primary judge considered that the absence of a demolition clause could objectively be seen as conferring upon Nick a degree of special power or influence over any decision by Esperia Court to sell or develop its properties (see [309]; [379]). Nick and John emphasise that there was no finding that Nick deliberately omitted a demolition clause in order to obtain such power or influence. Nick and John also say that such a finding would have involved disbelieving Nick's denial that the demolition clause was omitted for this purpose, and Nick's evidence that, at the time, Esperia Court did not have demolition clauses in its leases, that demolition clauses were not very popular and that not many shops had demolition clauses. Nick and John argue that the inference available is that there was no demolition clause because nobody considered including one. They maintain that there was no evidence or finding of a conscious decision to favour the interests of Nick and the deceased; and, as such, that the conduct could not be oppressive, in the sense of unfair in the eyes of a commercial bystander (cf [386]).
Pausing here, there is a distinction between there being an objective benefit conferred on Nick or his company, SPH, by reason of the lack of a demolition clause - which clearly there is in the sense that it would be open to SPH to use the lack of such a clause as leverage in the event that Esperia Court wished to terminate the lease early in order to pursue proposed development plans - and whether there was a subjective intention to gain such a benefit. Nick and John's submissions do not grapple with the former; and the argument that Nick would do what was in the interests of the company in the event that such an issue arose also does not address the fact that there might be circumstances in which he would choose not to do so - perhaps, one might speculate, if Esperia Court were to fall into the control of one or more of his siblings.
Nick and John further argue that, to the extent that the primary judge found that the directors ought to have had regard to the interests of Maria as a member in granting the lease to SPH (see [380]), that finding involved error for the same reasons as the similar finding in relation to the acquisition of the Symond Arcade.
In relation to the lease to SPH, Maria argues that it is beside the point that no-one may have considered including a demolition clause; rather, Maria maintains that the notional objective commercial bystander would be satisfied that the absence of any demolition clause could be seen as conferring upon Nick a special degree of influence, if not control (referring to [309]) over any attempts at development by Esperia Court, especially where, as here, Maria says that the focus of Esperia Court (under Nick's control) shifted from a commercial enterprise to property development (per [349]) (a proposition or finding with which Nick and John cavil, as noted above).
Nick and John's response to this is to argue that the grant of a lease to SPH without a demolition clause cannot be described as self-dealing if nobody thought of including one (a proposition that it is submitted Maria appears prepared to accept, citing [44] of her written submissions). Nick and John argue that it is notable that no complaint is made about the terms on which any of Esperia Court's 35 other leases have been granted; referring in this context to Ananda Marga Pracaraka Samgha Ltd v Tomar (No 6) [2013] FCA 284; (2013) 94 ACSR 199 at [417] (Dodds-Streeton J). I note that in the passage to which Nick and John refer it was recognised that a "sufficiently serious" single act or omission might constitute oppression but it was said that a "minor isolated incident was unlikely to attract relief"; and it was noted that "mismanagement or poor management does not, in itself, constitute oppression" ([417] of that judgment). As I understand their submissions, Nick and John here argue that the omission of a demolition clause would at worst be no more than an isolated instance of poor management, if at all.

[23]

(iv) The trial judge erred in finding that the conferral of personal benefits on Nick and John was, in the circumstances of the case, conduct that a commercial bystander would be satisfied was unfair (383(i), [386]).

Insofar as his Honour referred to the intermingling of the affairs of Nick and John with those of Esperia Court, Nick and John accept that the acquisition of the 20% interest in the Symond Arcade involved the conferral of a personal benefit on them. However, they maintain that the primary judge erred in finding that in all the circumstances the conferral of that benefit was oppressive, in the sense of unfair, viewed from the perspective of a commercial bystander (cf [386]). In this context, Nick and John point to the following: the deceased's control over Esperia Court and the family context; that Nick and John did not wish to acquire 20% of the Symond Arcade and only did so to overcome the deceased's refusal to allow the company to purchase it at all; and the fact that Nick's family trust provided security worth at least $5 million when it appeared the company might not otherwise be able to obtain a loan to fund the $30 million purchase.
Further, Nick and John argue that the conduct of an 80/20 partnership in respect of the Symond Arcade and the grant of a lease to SPH without a demolition clause are not self-dealing transactions. As to the partnership, Nick and John say that Maria's contention that Esperia Court ought to have received 100% of the income from the partnership, not 80%, fails to engage with the fact that partnership has been loss-making from the outset, and therefore that Nick and John have received no income from it but instead have funded 20% of its losses ([363]); this reflecting Nick and John's 20% ownership interest in the Symond Arcade.
Insofar as Maria maintains her contention that the heart of the oppression was the self-dealing transactions, Nick and John say that Maria's submission that such self-dealing had "plagued" Esperia Court since John and Nick became involved in its management, in 2003 and 2016 respectively, is not an accurate characterisation of the case run or the findings made at first instance.

[24]

(v) The trial judge erred in finding that Rene's position as governing director and holder of all the management shares provided no justification for her to disregard the interests of Maria as a member ([274], [278]-[280], [388]).

Nick and John point to the fact that, as Governing Director and holder of the management shares, the deceased had the constitutional power to use her control of Esperia Court to confer a benefit on Nick and John if she wished to do so. Further, they argue that his Honour recorded the acquiescence by the deceased's children in the deceased exercising her control (see at [174]) to confer or withhold benefits on or from her children, according to her discretion. It is submitted that in those circumstances the exercise by the deceased of her powers to determine that Nick and John should have 20% of the Symond Arcade could not be said to be unfair, it being argued that there is an analogy here with the situation that arose in Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd [2001] NSWCA 97; (2001) 37 ACSR 672 (Fexuto Court of Appeal Decision), where there was plenary power reposed in the father by reason of a "governor's share" and the position of "Governing Director" in Esperia Court's constitution. Reference is made to what was said by Spigelman CJ (at [35] of that judgment) namely that the power to prefer one son over the others or even to introduce a non-family member "was a manifestation of the totality of the control exercisable by the father as undisputed head of the family".
Reference is also made in this context to the recognition by Sifris J in Exton v Extons Pty Ltd (2017) 53 VR 520; [2017] VSC 14 (at [39]) that in a small family company, where there is an overwhelming identity of interest between shareholders and directors, and consent to or ratification of the directors' conduct, a director's breach of duty may not be contrary to the interests of the members as whole or unfair; and to the similar reasoning in Australian Securities & Investments Commission v Maxwell [2006] NSWSC 1052; (2006) 59 ACSR 373 (ASIC v Maxwell) at [102]-[103] per Brereton J (as his Honour then was). Nick and John invoke such reasoning in the present case, where the deceased was Governing Director and, as holder of the management shares, was the sole shareholder able to exercise the powers of the general meeting.
Maria argues that the deceased never had the power to conduct the business and affairs of Esperia Court in a manner contrary to s 232 of the Corporations Act or without consequence under s 233 of that Act or generally under the Corporations Act (referring to the primary judgment at [114]). In that regard, Maria notes that the powers of the Governing Director under the constitution of Esperia Court were expressly limited to an exercise of power "so far as the law allows" and that the registration of a company pursuant to the corporations legislation creates an entity governed by the legislation and not above it. Maria argues that, to adopt Nick and John's submission would by analogy effectively empower a Governing Director to confer an unlimited range of personal benefits on whomever it pleased without recourse to the company's members (which would leave ss 232 and 233 and most of Ch 2F of the Corporations Act with no work to do).
Nick and John in their submissions in reply accept that the deceased's constitutional powers, as Governing Director and holder of the management shares, cannot override ss 232 and 233 of the Corporations Act but they argue that the deceased's power under the constitution of Esperia Court provides the context in which any assessment of unfairness is to be undertaken. They argue that an identity of interest between directors and shareholders makes any requirement to prevent self-interested dealing far less acute; and say that such an identity of interest existed here where the deceased was Governing Director and, as holder of the management shares, the only person entitled to exercise the general meeting's power of ratification.
Nick and John also argue that the relevance of the shareholding being in a family company is that in such a context fairness does not require benefits to be conferred on children equally and that it is not unusual for some family members to obtain benefits which others do not (citing Re Lowes Park Pty Ltd; Headlam v Lowes Park Pty Ltd (1994) 62 FCR 535; [1994] FCA 579 (Re Lowes Park) at 550; Re George Raymond Pty Ltd; Slater v Gilbertson [1999] VSC 460; (2000) 18 ACLC 85 at [24]; Re Candy-Vend Pty Ltd [2020] NSWSC 1735 at [33]).
In their submissions in reply, Nick and John disavow the suggestion that they seek to place family companies in a special category; rather, they say that the context of a family company is a circumstance relevant to an assessment of fairness because it is not unusual in such a context for benefits to be conferred on children unequally.
Nick and John draw a distinction between the position of a child who receives, as a gift, shares which are the product of her parents' bounty, and which are issued on the basis that they will confer a benefit on a winding up but do not confer any right to control over the operations of Esperia Court except at the will of the controlling shareholder, and the position of a person who has invested his or her own funds in a company or contributed to the enterprise by working in it and seeks to extract himself or herself from it (referring to Re Lowes Park at 552; Byrne v A J Byrne Pty Ltd [2012] NSWSC 667 at [46]).
Nick and John emphasise that all of the deceased's children had received their shares in Esperia Court as a gift; and that, at the relevant time, of the two who still held shares (Maria and Nick), only Nick had remained to work in Esperia Court ([182]) (with his son, John). They submit that, against that background and the fact that when it appeared that NAB might not fund the entire $30 million purchase Nick had determined to put up as security land at Silverwater worth at least $5 million which was owned by his family trust, the exercise by the deceased of her powers as controller to confer on Nick and John a 20% share is unremarkable. Nick and John argue that the fairness of that course, in the context of the family, is underscored by John's unchallenged evidence that, when he told Maria in December 2017 that he and Nick had acquired 20% of the Symond Arcade and put up their own property as security, Maria said "I've got no issues with you having 20%. You have both worked hard and you deserve it" (see John's affidavit sworn 17 August 2021 at [146]-[149]).
Pausing here, Maria points out that her conversation with John in November or December 2017, when she first learnt about the acquisition of the Symond Arcade, took place when she did not know: that Nick and John had not actually put up their properties as security for $5 million (as opposed to Nick's family trust providing security in an unspecified amount); that the lease to SPH had been given on the terms that it had; and that personal benefits had been conferred on Nick and John through the partnership. Maria argues that the conversation to which John deposed (at [148] of John's affidavit sworn 17 August 2021) is inconsistent with any sort of fully informed consent even if that be relevant in the oppression context. Further, Maria points out that when the NAB loan was refinanced in 2019 the security given by Nick's family trust was removed (leaving the borrowing secured by Esperia Court) ([293]).
Nick and John argue that the considerations to which Maria draws attention in this regard are misconceived: that Nick's family trust charged all its property to secure the entire $29.05 million advance from NAB and the fact that the security was removed in 2019 cannot affect whether the acquisition of 20% was unfair when it occurred in March 2017; that the fact that Maria did not know the terms of the lease to SPH has nothing to do with the acquisition of 20% of the Symond Arcade; and, as to the conferral of personal benefits on Nick and John through the partnership, they note that Maria's own evidence was that she was told on 4 November 2017 that Nick and John were in partnership with Esperia Court in respect of properties where they owned 20% and Esperia Court owned 80% (referring to Maria's affidavit sworn 25 October 2019 at [127]; and her evidence in cross-examination that she was told at the time that the properties in question comprised the Symond Arcade (T 83.25-40).
As noted above, Nick and John argue that the suggestion that Andrew and John thought it would be unfair to Maria, Dennis and James to exclude them from having an involvement in the Symond Arcade purchase (349, is a mischaracterisation of the evidence; and that what Andrew and John thought was unfair was the deceased's initial proposal that their family acquire the entirety of the Symond Arcade in their own name (see [132]-[134] of Nick's affidavit sworn 18 August 2021, set out at [338]). Nick and John point to the distinction Andrew drew between "outsiders" such as him (who he considered had no claim to a personal interest in the company assets) and directors such as Nick and John (who he considered did have such a claim) (referring to the primary judgment at [203]-[205]; Andrew's affidavit sworn 17 August 2021). Maria places emphasis, however, on the cross-examination of Andrew, where he accepted that he considered it would have been unfair to let him in on the acquisition over the interests of the members of Esperia Court (T 244-45); and notes that Nick in [134] of his evidence in chief (see [338] of his affidavit sworn 18 August 2021, set out at [338]) said that he remembered Andrew and John saying words to the effect "[w]e shouldn't buy it like that because it doesn't look right" and "it isn't fair" (see [33] above).
Maria says that the circumstances of the acquisition of the Symond Arcade were not (as Nick and John submit) characterised by the primary judge as an "acquiescence" by the deceased's children in her exercising control to confer a personal benefit; rather, Maria says that there was a degree of "predatory behaviour" on the part of Nick in leading the deceased into the transaction.
In that regard, Maria points to the following matters. First, she says that the deceased, whilst a dominant personality, was not sophisticated and, as she aged, became frail, troubled by a loss of hearing and erratic ([2]). Second, she submits that the material parts of Nick's own affidavit sworn 18 August 2021, which are reproduced in the judgment at [338] depose to Nick leading the deceased (then aged 97) to believe that James (who owned no shares in Esperia Court and was not a director) might somehow "get control of the company" if the deceased did not agree to the 80/20 compromise. Third, she highlights the finding at 349 that Nick used a "potential, imagined threat" of a challenge from James "to persuade the deceased to acquiesce in the terms of Nick and John's involvement in the purchase". Fourth, she argues that Nick made it plain in his affidavit that he used that "imagined threat" with the intention of persuading his mother to agree with him (see [137] of his affidavit sworn 18 August 2021, set out at [338]). It is noted that Nick's evidence in chief was that "I knew that she would only be persuaded if she understood that she could harm us. Within about 15 seconds my mother then said: 'Alright, I'll sign'. After that, we passed the second resolution ...". Fifth, Maria refers to the finding that if the deceased had any role to play in the acquisition of the Symond Arcade it was "unlikely to be prominent" ([354]). Maria says that the capacity of the deceased (a nonagenarian) to engage in active management of the affairs of Esperia Court might reasonably be supposed to have been in decline in the last year or so of her life ([356]).
Insofar as Maria says there was a degree of "predatory behaviour" on the part of Nick in leading the deceased into the acquisition of the Symond Arcade (see her submissions at [39]), Nick and John note that the primary judge did not find oppression based on any predatory behaviour; and there is no notice of contention supporting the finding of oppression on the ground of predatory behaviour). They complain that predatory behaviour was not even pleaded. It is submitted that this is particularly important insofar as Maria seeks to rely on the deceased's lack of sophistication, frailty, loss of hearing, erraticism and declining years (considerations that Nick and John say were never identified as relevant to the Oppression Proceeding and as to which they chose not to cross-examine any deponent). It is noted that Nick and John (who constantly interacted with the deceased, gave very detailed evidence that they perceived her to have full command of her faculties in her last years (John's affidavit sworn 17 August 2021 at [22]-[34]; Nick's affidavit sworn 18 August 2021 at [36]-[39]).
As to the various considerations outlined in Maria's submissions at 39-(e) (general observations of the deceased's sophistication, frailty and the like; the threat of a challenge from James; and the unlikelihood of the deceased playing a role in the acquisition of the Symond Arcade), Nick and John argue that these do not contradict their contention that they did not wish to acquire 20% of the Symond Arcade and only did so to overcome the deceased's refusal to allow Esperia Court to purchase the Symond Arcade at all. As to the position of the deceased, Nick and John say that the stance that the deceased took on 28 March 2017 as to the purchase of the Symond Arcade (insisting that it be purchased in the names of Nick and his family) is clear from the uncontested evidence; and they say it was the premise of Maria's submissions at trial (pointing to Maria's statement that "[the deceased's view was firm. Irrespective of Esperia Court's interest she wanted Nicholas and John to own Symonds Arcade") (Maria's trial submissions at [114]).
As to the suggestion that Nick used a "potential, imagined threat" of a challenge from James to persuade the deceased to acquiesce in the 80/20 split for the acquisition of the Symond Arcade, Nick and John say that this mischaracterises the evidence. As to the role that the deceased might have played in the acquisition of the Symond Arcade after Nick and John went to the auction (see [354]), they say that this was of no relevance; rather, it was when they were in the deceased's company that their acquisition of a 20% interest in the Symond Arcade was agreed on as a way of overcoming the deceased's refusal to allow the Symond Arcade to be purchased in Esperia Court's name.
As already noted, Nick and John cavil with the proposition that Andrew accepted under cross-examination that he considered the acquisition of the Symond Arcade to be unfair in the way that it was acquired (cf Maria's submissions at [42]); rather, they say that Andrew expressed the view that it would be unfair for him to receive a share in the Symond Arcade in preference to any other family member outside the company (T 244.38-50). (vi) The trial judge erred in having regard to a suggested expectation of material benefit from the company that Rene and her late husband had created and fostered in Maria and her siblings ([388]) where: a. the evidence recorded at [186]-[205] did not support the existence of any such expectation; and b. the acquisition of the Symond Arcade and the grant of a lease to SPH did not involve the denial of any such expectation.
Nick and John contend that the primary judge erred in having regard to the expectation said to have been fostered in Maria by the deceased and her late husband of material wealth from Esperia Court when His Honour discounted the deceased's total control of the company ([388]), noting the description of that expectation elsewhere in the judgment as being that the children "would be able to realise the full value of their shares upon the death of the survivor of their parents" (see [194]; [210])). Nick and John argue that any such expectation was wholly consistent with the deceased using her powers as controller of Esperia Court to confer on Nick and John a 20% interest in the Symond Arcade while she was alive. It is submitted that the conferral of that interest did not deny any child a material benefit on the death of the deceased, where the company's net assets (which include the 80% of the Symond Arcade which it retained) are worth $38 million. Nick and John point out that the present inability of the children to realise that value through their shareholding is due to the bequest to Nick of the management shares ([168]) and not the fact that Nick and John hold 20% of the Symond Arcade.
Nick and John further maintain that no expectation of the kind referred to by the primary judge emerges from the evidence relied upon at [186]-[205] of his Honour's reasons; rather, that those passages suggest only an expectation that at some indefinite future time the children would receive a benefit from Esperia Court.
Maria maintains that the schedule of unchallenged conversations handed up at the hearing (MFI M54) provides the evidence of the expectations engendered in her, which include numerous assurances that her shares in Esperia Court would be very valuable, that the company assets and income would be shared equally, and the deceased's statement that the deceased had ensured Maria's future and, relevantly, just before the deceased died, that Maria would "not have to hold out your hand for monies gained from Esperia Court from anyone because you are a basic shareholder, and all will be distributed by the number of shares each shareholder has" (Maria's affidavit sworn 25 October 2019 at [96]).
True it is that the evidence also included reference to statements by the deceased to the effect that she expected all the family to be united and together to manage the company affairs as she and her late husband always wanted them to do. (vii) The trial judge erred in finding that the directors' conduct was characterised by decision-making designed to lock Nick's siblings into a management regime in which benefits from the operation of the affairs of the company could be received by them only at the discretion of Nick following the death of Rene (383(ii)), and in having regard to that consideration, where: a. neither the acquisition of the Symond Arcade nor the grant of a lease to SPH was capable of locking Nick's siblings into such a management regime; and b. any such management regime was the product of the constitution and shareholding of the company and the manner in which Rene chose to dispose of the management shares in her will ([166]). (viii) The trial judge erred in having regard to a suggested desire of Nick and John to retain control of the company ([44], [72], [74], [206], [387], [395]) where: a. Nick had such control as a consequence of the constitution and shareholding of the company and the manner in which Rene chose to dispose of the management shares in her will ([166]-[168], [183]); and b. the suggested desire to retain that control was based on conduct occurring after the allegedly oppressive conduct had occurred.
Nick and John complain as to his Honour's characterisation of the matter as one where there was a common thread between the acquisition of the Symond Arcade and the lease to SPH (rendering that conduct oppressive), that being decision-making designed to lock Nick's siblings into a management regime where benefits could be received by them only at Nick's discretion following the deceased's death (see primary judgment at 383(ii)).
Nick and John argue that neither of the impugned transactions was capable of locking Nick's siblings into a management regime where benefits could be received by them only at Nick's discretion following the deceased's death; rather, the reason Nick's siblings were locked in to an exercise of Nick's discretion was because of the existence of the management shares and the fact that the deceased had bequeathed them to Nick in the Will ([166]-[168], [183] of the primary judgment). They argue that the conferral on Nick and John of 20% of the Symond Arcade and the grant of a lease to SPH without a demolition clause could have no impact on the existence of such a regime, since its existence depended entirely on how the deceased disposed of the management shares in the Will.
Nick and John point out that there was no evidence at the trial that decisions in relation to the Symond Arcade or the lease to SPH were "designed" by the deceased, Nick or John to lock Nick's siblings into a management regime where benefits could be received by them only at Nick's discretion following the deceased's death and that, other than at [383], the primary judge made no findings to that effect.
Nick and John also take issue with the reliance placed by the primary judge on the thinking of Nick and John as to their retention of control of Esperia Court ([387]), which was based on findings that proposals advanced by Nick for the future conduct of the affairs of the company, after the deceased's death contemplated Nick retaining control (see at [72]; [74]; [206]; [387]; [395]). They contend that reliance on this matter involved error for three reasons. First, that the conduct of Nick on which the primary judge relied occurred after it emerged that the deceased had bequeathed all the management shares to Nick (thus it is submitted that it is unsurprising that proposals made at that point should be premised on Nick retaining control of Esperia Court). Second, that the conduct is not capable of casting any light on whether the acquisition of the Symond Arcade and the lease to SPH (which occurred while the deceased was alive) were oppressive, especially when Nick did not know at the time that he would eventually receive all the management shares and therefore control of Esperia Court (see [206]). Third, that, to the extent that the primary judge had regard to this conduct in determining that oppression was continuing at the time of institution of the proceedings (cf [382]; [384]) it is irrelevant. It is noted that the oppressive conduct as alleged and found was the acquisition of the Symond Arcade and the lease to SPH; not a generalised desire to retain control of Esperia Court.
As to the reference by the primary judge to the "common thread" ([383]) in the analysis of the acquisition of the Symond Arcade and the lease of the Strathfield Private Hotel to SPH (being the total disregard by the directors of Esperia Court for the interests of Esperia Court or the interests of Maria as a member and decision-making to give effect to the "personal preferences" of the deceased to benefit Nick and John and their branch of the Soulos family personally) ([383]), Maria argues that this was directed to personal preferences and self-dealing, not the features of Nick's evidence outlined at [349], although Maria notes that the intermingling of Nick's personal affairs with Esperia Court was one of those features).
Maria says that the locking of Nick's siblings into a discretionary management regime for Esperia Court was the effect of the "personal preferences", not an integer of the oppression itself, Maria here emphasising again the distinction between the assessment of the oppression (to be determined at the date of commencement of the proceedings) and the effects of the oppression (relevant to the question of relief which is to be determined at the date of the hearing as considered in Fexuto Court of Appeal Decision at [159] per Spigelman CJ; Munstermann v Rayward; Rayward v Munstermann [2017] NSWSC 133 at 22 per Stevenson J). Maria maintains that in the present case the effect of the oppression is that, due to a desire by Nick and John to retain total control of Esperia Court, she has been locked into a management regime where the benefits are solely to be realised at Nick's discretion (referring to [387]). (ix) The trial judge erred in failing to have regard to the conduct of Maria, who had received her shares as a gift, had shown no desire to participate in the management of the company, had made no complaint when she first learned of the acquisition of the Symond Arcade, and brought proceedings only after she discovered that Rene's testamentary dispositions would deny her the ability to realise the capital value of her shares on [the deceased's] death.
Finally, Nick and John say that the primary judge also erred in failing to have regard to the conduct of Maria. They say that the conduct of the plaintiff is relevant, particularly when complaints of oppression are made by a plaintiff who has hitherto shown no interest in being involved in management or decision-making (referring to Joint v Stephens (2008) [2008] VSCA 210; 26 ACLC 1467 at [136]-[137]; Mackay Sugar Ltd v Wilmar Sugar Australia Ltd [2016] FCAFC 133; (2016) 338 ALR 374 at [56]).
Again, Nick and John point to the fact that Maria had received her shares as a gift, in circumstances where the assets of Esperia Court were built up over many years through the efforts of her parents and, more recently, Nick and John. It is noted that Maria deposed to having limited understanding of how companies operate (see Maria's affidavit sworn 13 July 2021 at [40]); and that Maria moved to Greece in 1969 and had not since sought to contribute to the management of the company, despite invitations issued to her and her family to do so (see John's affidavit sworn 17 August 2021 at [57]); Nick's affidavit sworn 18 August 2021 at [208]; primary judgment at [182])).
It is noted that Maria learnt about Nick and John's 20% share in the Symond Arcade in 2017 and made no complaint at the time; rather, she said they deserved it; and that Maria only began asking questions about the affairs of Esperia Court after the deceased died and she discovered that, contrary to her expectations, her mother had not divided the shares in Esperia Court equally between her four children (Maria's affidavit sworn 13 July 2021 at [51]; Steve Kostopoulos' affidavit sworn 13 July 2021 at [14]).
Nick and John say that Maria sought through the proceedings to realise the capital value of her shares in circumstances where she considered that her parents had led her to believe she would come into assets of substantial value on their death (referring to the primary judgment at [209]-[210]) but that this was not the basis of her oppression claim, which challenged two particular transactions and not her mother's testamentary dispositions. In those circumstances, Nick and John say that there was no unfairness to Maria amounting to oppression, arising from transactions undertaken before she began to show any interest in Esperia Court at all.
Maria says that there are a number of reasons for the alleged delay in commencing the Oppression Proceeding, not least of which are that: Maria at all material times resided in Greece; one of her sons died unexpectedly in 2019, causing her to fall into a major depressive episode; and, ever since, Maria has had (and continues to have) a number of serious health issues including a need for surgery in 2019 (of which evidence was given in the context of her family provision claim).

[25]

Determination as to ground 1

There was no dispute as to the relevant principles applicable on a claim of oppression. Section 232 of the Corporations Act is enlivened, relevantly, where there are acts or omissions contrary to the interests of the members as a whole (s 232(d)) or oppressive to, unfairly prejudicial to, or unfairly discriminatory against, a member or members, whether in that capacity or in any other capacity (s 232(e)).
Conduct by majority members of a company, or by its directors, taking a benefit at the expense of the company may constitute oppression (Fexuto Court of Appeal Decision at [505]). Oppressive conduct can include an improper diversion of business or business opportunities from the company (see, for example, Scottish Co-Operative Wholesale Society Ltd v Meyer [1959] AC 324; [1958] 3 All ER 66 (Scottish Co-Operative v Meyer); Re Bright Pine Mills Pty Limited [1969] VR 1002; Webb v Stanfield [1991] 1 Qd R 593; Re a Company (No 002612 of 1984) (1986) 2 BCC 99,453; Sanford v Sanford Courier Service Pty Ltd (1986) 10 ACLR 549, at 555-556; Re Hollen Australia Pty Ltd [2009] VSC 95, at [69]).
The primary judge addressed the question of oppression at [381]-[392], correctly identifying the applicable test as to whether the "notional objective commercial bystander" would be satisfied that the affairs of Esperia Court were being conducted unfairly ([386] of the primary judgment) (see Campbell v Backoffice Investments Pty Ltd [2008] NSWCA 95; (2008) 66 ACSR 359 (Campbell Court of Appeal decision) at [181] per Basten JA; Tomanovic v Global Mortgage at [171] per Campbell JA).
The motivation or bona fides of the company's officers does not preclude the availability of the remedy; see Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; [2009] HCA 25 (Campbell High Court Decision), where the High Court emphasised that it is not to the point to examine a director's motives for acting as he or she did; saying that it is not "to be supposed that there cannot be oppression on the part of one who thinks that he or she is acting rightly" (see at [176] per Gummow, Hayne, Heydon JJ and Kiefel J, as her Honour then was). Thus, it is not to the point that the directors may not have intended to deal inappropriately with the assets of the company.
Whether the impugned conduct was contrary to the interests of the members as a whole or oppressive is based on the objective facts (see Wayde v NSW Rugby League Ltd (1985) 180 CLR 459, at 472; [1985] HCA 68 (Wayde)), Shelton v National Roads and Motorists Association Ltd [2004] FCA 1393; (2004) 51 ACSR 278 (Shelton v NRMA) at [23] per Tamberlin J, although in Doyle v Australian Securities and Investments Commission (ASIC) (2005) 227 CLR 18; [2005] HCA 78 (Doyle v ASIC), it was said that, even though subjective intention or purpose is not a necessary ingredient in determining improper use of position, the presence of such an intention or purpose may be relevant in assessing impropriety (at [41]).
Fairness must not be assessed in a vacuum (Thomas v HW Thomas Ltd [1984] 1 NZLR 686, at 694; (1984) 2 ACLC 610). It has also been said that a narrow view should not be taken of oppression (see Shelton v NRMA at [23] per Tamberlin J). As the test of unfairness is objective, it is the effect of the acts that is material (see Catalano v Managing Australia Destinations Pty Ltd [2014] FCAFC 55; (2014) 314 ALR 62 (Catalano) at [9] per Siopis, Rares and Davies JJ); Wayde at 472-473 (per Brennan J, as his Honour then was).
As Brennan J made clear in Wayde, mere prejudice is insufficient to make out oppression; the question is whether objectively in the eyes of the commercial bystander there has been unfairness, that is conduct that is so unfair that reasonable directors who consider the matter would not have thought the conduct or decision fair (see also Catalano at [9]). This test of unfairness requires a weighing of the furthering of the corporate object against the disadvantage, disability or burden which the decision will impose (Wayde at 473, per Brennan J).
Conduct which confers a benefit on the company may nonetheless be unfair. The decision in Catalano concerned a company that sold food products manufactured by third parties using equipment owned by the company. When one of the manufacturers closed down, one of the directors of the company set up another entity to continue the manufacturing, using the company's equipment. It was accepted by the primary judge that the motivation of the director was not to divert business from the company but, rather, to prevent disruption and ensure continuity of supply so as not to lose customers of the company, in a context where the directors and shareholders had reached an impasse. Nevertheless, on appeal the Full Federal Court found that, viewed objectively, the conduct of that director in taking steps to set up a company in which he and his associated entities had all the interests and in which other directors and shareholders had no interests, and which used the company's equipment to supply to the company's customers, was "conduct that was commercially unfair to [the company] and prejudicial to the interests of the Catalano camp's shareholding" (see at [19]). This was irrespective of whether the conduct was beneficial to the company.
Similarly, in Fexuto Court of Appeal Decision, the Court of Appeal unanimously held that a director's exploitation of a company's commercial opportunities without the consent of the other shareholders was oppressive, notwithstanding that the conduct was of benefit to the company. The case concerned a director (and shareholder) of a bus business who caused the company to enter into a partnership with another company of which he was a director and shareholder, and to commit significant funds to the development of the latter company, all without proper disclosure to the other directors and shareholders of the bus business. The primary judge said that this "could not be justified by some expectation of benefit to Westbus", and, on appeal, Priestley JA similarly emphasised at [505] that while these activities were conducted for the benefit of the bus business, they were also being conducted for the benefit of that director without the knowledge of the business's other directors or shareholders, and that this amounted to obviously unfairly prejudicial conduct to the other members and was contrary to the interests of the members as a whole (see also Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd [1998] NSWSC 413; (1998) 28 ACSR 688 (Fexuto Supreme Court Decision) per Young J, as his Honour then was, at 726).
In the present case, Maria submits that the opportunity for Esperia Court to purchase the Symond Arcade was a benefit which was effectively diverted (as to 20%) to two of the company's directors (Nick and John) in a transaction which then proceeded at the expense of Esperia Court in the sense that the company provided its property (albeit also with security provided by Nick's family trust) to secure the necessary loan but did not obtain the benefit of 100% ownership. As noted above, Nick counters by emphasising that Esperia Court received a benefit from the directors' participation in the transaction, being the increased ability to fund a $30 million offer together with concomitant joint liability as to the loan (in circumstances where Nick and John believed that the deceased would not otherwise have consented to the purchase at all).
However, although it was common ground that it was in the interest of Esperia Court (i.e., its members as a whole) to acquire the Symond Arcade, the consensus was as to the acquisition of a 100% interest, not an acquisition of an 80% interest with a 20% interest being acquired in the name of Nick and John. The fact that the company did receive a benefit as a result of the transaction (i.e., it obtained an interest in 80% of the property) even though it did not receive 100% of the property, does not preclude a finding of oppressive conduct if the conduct is determined to be objectively unfair. Here, as in the Fexuto Court of Appeal Decision, the conduct gave rise to benefits both to the company and to the directors in their personal capacity (the latter being to the prejudice of Maria as the minority shareholder of Esperia Court). The position is not that which was the case in Wayde, where directors were confronted with a conflict of immediate interests between some shareholders on one hand and the company as a whole on the other, and the exercise of their directors' duties would necessarily be prejudicial to one group or the other. This is well-illustrated by the first resolution which was "torn up", by which it was contemplated that Esperia Court would acquire the Symond Arcade by itself. Further, the fact that the company may not have been able to procure a loan of $30 million without additional security provided by Nick does not of itself mean that there could not have been another viable way to structure the purchase (say by way of a loan from Nick or the trustee of his family trust).
The thrust of the argument relied on by Nick and John is that, in the face of opposition from the deceased, this was the only means by which they could secure the purchase of the Symond Arcade, and hence that Esperia Court would otherwise have had to forego the opportunity to acquire the property; and that it was open to the deceased to choose (effectively at her whim) to confer a personal benefit on Nick and John. That, to my mind, takes insufficient account of the fact that this was "self-dealing" on the part of Nick and John (albeit, on their evidence, reluctantly at the behest of the deceased and in order to overcome her otherwise stated refusal to proceed with the transaction).
In that regard, it may be noted that the rule against self-dealing by trustees and executors (said to be of an absolute nature - see the explanation in H A J Ford, W A Lee, Law of Trusts (4th ed, 2010, Thomson Reuters) at [9.19030]) has been applied in modern contexts in the corporate sphere - see, for example, Yates v Halliday [2006] NSWSC 1346 at [59]-[61] per Lloyd AJ, where there was a sale of shares held on trust by an executor to a company of which the executor was a director and shareholder; and Re Manormay Investments Pty Ltd [2013] VSC 260 at [51] per Robson J, where directors' actions in breach of their duties as directors were held to be akin to self-dealing by a trustee.
Had the deceased pursued her initial intention for the Symond Arcade to have been purchased by Esperia Court but placed in the names of Nick's family, there could hardly have been any doubt that this would have amounted to oppressive conduct. So also in my opinion is the diversion of a 20% interest in the property. I am not persuaded that the primary judge erred in finding that what was clearly a diversion of corporate opportunity to two of the three directors (in the acquisition of the 20% interest) was oppressive conduct.
The justification for the purchase of the Symond Arcade was that it bordered other properties already owned by Esperia Court, which would enable the company to embark on a significant development combining those properties. Allowing individuals to take on a 20% ownership of the Symond Arcade as part of the acquisition seems antithetical to this proposed purpose. While this may be tempered by the fact that Nick and John are directors of Esperia Court, and it might be assumed they would not stand in the way of any development of the Symond Arcade (indeed, their submission is that there is not a "real world" divergence of interest arising from their 20% interest), that assumption might for unforeseen reasons have proven not to be correct. The potential for a conflict of interest clearly arises (and in that context the apparent sibling rivalry may be not irrelevant - see for example the answer given by Nick in cross-examination at T 234.6-8 suggesting an adverse attitude towards James 'snatching control'; although it is difficult to place much weight on this). The simple fact remains that the property was acquired for the explicit purpose of consolidation and development; allowing two of the directors to take a personal interest in that property is inconsistent with that purpose, regardless of the roles those individuals currently hold.
The thrust of Nick's argument is that the deceased would not have allowed the acquisition to go ahead without the self-dealing aspect, and, therefore, to borrow the language of Brennan J in Wayde at 472 "the advancement of the object necessarily entail[ed] prejudice". However, while it is correct to say that, due to the deceased's holding of all management shares and position as Governing Director, her insistence that the transaction not go ahead without Nick and John taking an interest meant that the transaction could not go ahead without that deal structure, it is a very different thing to say that such a structure was "necessary" to achieve the corporate objects of Esperia Court, and therefore not oppressive. The purpose of oppression claims would be frustrated if the director or directors of a company could justify what would otherwise be oppressive conduct simply by reference to their refusal to conduct the business of the company in a way that would not be oppressive.
At the time the acquisition of the Symond Arcade was completed, finance had not yet been arranged ([334]). The motive for including Nick and John in the transaction appears not to have been for financial or strategic considerations; rather it is clear from Nick's evidence that the sole reason for the deal structure was that the deceased was insistent that Nick and John take an interest.
The deceased's position as Governing Director and holder of all management shares did not mean she had any lesser obligations to the members, including Maria (see Reid v Bagot Well Pastoral Co Pty Ltd (1993) 61 SASR 165; (1993) 12 ACSR 197 at 207-208 per Debelle J, King CJ and Millhouse J agreeing).
The deceased's insistence that Nick and John take an interest in the Symond Arcade should not be perceived as a "third-party roadblock" that necessitated self-dealing; rather, that insistence is itself what creates the oppression.
While it might be argued that, when specifically considering the options available to Nick and John, it was necessary for them to accept the self-dealing nature of the transaction given the deceased's power over Esperia Court (though even this is unclear), oppression relates to the company's affairs more generally. It was clearly not necessary for the deceased to require Nick and John take an interest in the property; it was her preference. Insofar as the conduct of the deceased founds the oppression, it cannot be said that her insistence (which is the substantial part of that conduct) renders the conduct "necessary".
This acquisition involved the diversion of a corporate opportunity to two directors, on the justification that the controlling shareholder preferred that structure so that her relatives could benefit from the transaction in their personal capacity. It is difficult to see how any reasonable director would consider that conduct to be fair, regardless of the potential utility of acquiring the Symond Arcade.
The extent to which the transaction advanced the corporate objects of Esperia Court is outweighed by the substantial disadvantage it imposed upon the minority shareholder, relevantly, since the 80/20 structure was not "necessary" to effect the transaction; rather, it was the deceased's preference that was determinative on Nick and John's account of events.
As to the grant of the long-term lease without the benefit of a demolition clause, in my opinion there is force in the submission that the relevant lease was executed on the exercise of an option for renewal under the 2014 lease; and that the option lease terms would not have included a demolition clause because the 2014 lease itself did not do so. In those circumstances, it is difficult to conclude that the notional objective bystander would regard it as objectively unfair for that renewed lease to have been granted in those terms (notwithstanding that the absence of a demolition clause objectively conferred a benefit on Nick's company).
Addressing briefly the errors that are particularised in respect of ground 1 of the grounds of appeal, I am of the view that the only one made good is as to the finding in relation to oppression in respect of the SPH lease.
As to particular (i), I consider that the primary judge was entitled to take into account the interests of the only then member of Esperia Court other than two of the directors accused of oppressive conduct, when assessing whether conduct was oppressive to the interests of one or more of the members of the company contrary to s 232 of the Corporations Act. This did not involve the impermissible consideration of Maria's specific position as an individual member; rather it was a consideration of how the conduct affected an hypothetical minority shareholder (as she in fact was).
As to particular (ii), I accept that the reference to a dramatic shift in the focus of Esperia Court from commercial enterprise to property development on its face appears to be inconsistent with the evidence as to the steps that had been taken and options explored for the proposed development of the company's Strathfield properties for some time. However, I consider that, fairly read, the primary judge's reference to a "dramatic shift" is not inapt to describe the fact that by the acquisition of the Symond Arcade there was an expansion of the property development that Esperia Court was contemplating (in that it included a $30 million property acquisition using nearly 100% bank finance), whereas to that point the proposed development was confined to the three properties that the company then held as part of the commercial enterprise. In any event, I do not consider that the primary judge was relying on this aspect of the matter for the finding of oppressive conduct at all. Rather, as Maria points out, the discussion of this feature was in the context of assessing Nick's evidence.
Similarly, I do not see the references to near 100% bank finance (which cannot be disputed) are matters that his Honour relied upon for the conclusion that there was oppressive conduct in the acquisition by Nick and John of a 20% interest in the Symond Arcade (and hence the fact that it was not pleaded as an element of the oppressive conduct goes nowhere).
As to the observations by the primary judge to the intermingling of the affairs of Nick and John with those of Esperia Court (the third of the features to which Nick and John refer in their submissions), this is considered below in the context of the next of the particulars.
I do not consider that the error identified in particular (ii) is made good.
As to particular (iii), there was no error in the conclusion reached by his Honour that, objectively, the absence of a demolition clause in the SPH lease put Nick (through his company) in the position that he could exercise a degree of power or influence in the event that Esperia Court sought to terminate the lease for the purposes of a development of the property (because SPH would then have a degree of leverage in circumstances where there was no right to terminate the lease for the purposes of demolition). Whether Nick would have chosen to exercise that right is not relevant; the fact is that, objectively, the absence of a demolition clause gave SPH that leverage in the event of a potential development of the property.
As to the complaint that the finding was made in the absence of a finding that Nick or the deceased had (deliberately) omitted a demolition clause to give Nick such power or influence, I do not see that the subjective motivation or lack thereof affects the conclusion that objectively the absence of a demolition clause gave him that power or influence. As to the suggestion that at the time Esperia Court did not have demolition clauses in its leases, it appears that there are demolition clauses in a number of the current leases but in any event it does not seem to me that this goes anywhere (and, interestingly, there was material that indicated that a demolition clause had been sought to be included in the interim lease by the solicitor acting for Esperia Court).
That said, the difficulty that I have with the finding that the grant of the SPH lease involved a total disregard for the interests of the company as a whole is that this was an option lease - thus, on the valid exercise of the option by SPH, Esperia Court was obliged to grant a lease on the terms provided for in the original SPH lease. Therefore, I cannot conclude that the notional objective bystander would regard this as unfair conduct in the context of Esperia Court as a whole, or as against one or more of its members.
Thus, with respect, I consider that the primary judge erred in this finding of oppression.
As to particular (iv), this is effectively the ultimate conclusion that his Honour reached and I have considered this already. I have concluded that there was no error in the conclusion in relation to the acquisition of the Symond Arcade.
As to particular (v), I accept Maria's submission that the position of Governing Director does not override the obligations to comply with the requirements of the Corporations Act (and does not excuse oppressive conduct), though I also accept that the context of this being a family company in which the parents (and then the deceased alone) had control is a factor to take into account in considering whether the conduct would be seen by a notional objective bystander to be unfair. I see no error in the primary judge's conclusions on this issue (and it is not necessary to enter into the debate as to whether there was acquiescence by the family members to such control or whether there was "predatory behaviour" on the part of Nick). As to the dispute in relation to the characterisation of Andrew's evidence as to the unfairness of the transaction, I do not consider that this takes the matter any further. Ultimately, whatever individual family members thought of the conduct is not the test.
As to particular (vi), I do not accept that the evidence did not support the existence of an expectation that the siblings would share in the material wealth of Esperia Court (and it is untenable to suggest that the holding of non-voting shares which had nominal value unless the company were to be wound up would make good any such expectation).
As to particular (vii), it is not clear whether the reference by his Honour to decision-making "designed" to lock Nick's siblings into the management regime described at [383] of the primary judgment should be read as referring to the motivation of the decision-making (i.e., that it was intended to produce that result) or as referring to the effect of that decision-making. Either construction would be open. However, in either event, I agree that the management regime was the product of the constitution and shareholding of Esperia Court; and that the siblings were "locked into" that management regime as a result of the disposition of the management shares under the deceased's Will. Insofar as Nick and John say that neither the acquisition of the Symond Arcade nor the grant of the SPH lease was capable of so doing, while there might be an argument that one or both of those matters perpetuated Nick's control (by, say, giving Nick a personal interest in both the Symond Arcade and, through the lack of a demolition clause, leverage in relation to the lease), the case was not run in this way. More likely, it seems to me, is that the primary judge considered that the oppressive conduct was consistent with what his Honour characterised as decision-making which had the effect of locking Nick's siblings into a management regime of the kind he described (and hence relevant to the likely continuation of oppressive conduct rather than the assessment of whether the impugned conduct was itself oppressive). In that sense, Maria relies on this finding as one directed to there being conduct amounting to self-dealing (or preferring the personal interests of Nick and John).
As to particular (viii), the complaint that the primary judge had regard to a suggested desire to retain control (based on conduct occurring after the allegedly oppressive conduct), I accept that reliance on a desire to retain control logically presupposes that there is control and that management control was gained on the deceased's death (after the impugned conduct) with the inheritance of the management shares. Nevertheless, I do not accept that it is not relevant to the consideration of whether the oppression was continuing at the time of the institution of the proceedings; nor is it irrelevant to the exercise of discretion in relation to the grant of relief. The fact that Nick and John have sought to retain control of Esperia Court (and their personal interest in it) means that they have sought to perpetuate the effect of the impugned conduct (at least in relation to the Symond Arcade).
Finally, as to particular (ix), the conduct of Maria of which complaint is here made appears in essence to be as to the delay perceived on the part of Maria in bringing the proceedings. However, the delay was by no means extensive (and Maria's explanation for the delay is not unreasonable). While Maria knew of the acquisition by Nick and John of the 20% interest in the Symond Arcade back in late 2017, there is no evidence that Maria knew the whole of the circumstances of its acquisition (i.e., that Nick and John, while contributing their share of the deposit and becoming jointly liable for the borrowings, essentially obtained the benefit of their interest in Esperia Court by a diversion of the opportunity that the company had to acquire the whole of the property). I would also add that, while the fact that the securities offered by Nick's family trust were ultimately released is not relevant to the question whether there was oppression in the first place, it seems to me to cast doubt on the position staunchly contended for by Nick and John that Esperia Court could not have acquired the property at all but for their involvement in the purchase.
The fact that Maria received her shares as a gift is relevant only insofar as it is said that Maria's position is to be distinguished from that of someone who pays consideration to acquire shares and is then locked into the company and unable to realise those shares; and the fact that Maria has not participated in the management of Esperia Court (or expressed a desire to do so) hitherto is not to the point (particularly in light of the expectation that was found to have been engendered in Maria by the deceased that she would benefit equally in relation to Esperia Court and have substantial wealth through the company).
Thus, I do not consider that this particular takes matters any further.
Accordingly, I have concluded that the primary judge did not err in finding that there was oppressive conduct by the directors (the deceased, Nick and John) in the acquisition by Nick and John of a 20% personal interest in the Symond Arcade (and in the partnership carrying on business in relation to that property), though I consider that his Honour erred in finding that the grant of the lease to SPH was itself an instance of oppressive conduct. To that limited extent, ground 1 is made good.

[26]

Ground 2 - continuing oppression

By ground 2, which is relevant to the complaint as to the relief that was granted, Nick and John contend that the primary judge erred in finding that there was continuing oppression at the time of institution of the proceedings ([382], [384]).
Insofar as the primary judge identified (at [383]) a "common thread" that characterised the acquisition of the Symond Arcade and the lease to SPH (comprising a disregard of the interests of members, and decision-making to benefit Nick's branch of the family and lock Nick's siblings into a particular management regime), and stated (at [384]) that this remained an accurate statement of the way the affairs of Esperia Court were today managed, Nick and John argue that the error in that approach is in proceeding from two particular transactions alleged and found to be oppressive to generalised behaviour which was not alleged to exist and was never alleged to comprise oppressive conduct. They say that the relevant question is not whether characteristics which attended the oppressive conduct continue to be exhibited; rather, it is whether the oppressive conduct, or the effects of it, continued to exist.
Nick and John contend that (focusing on the conduct that was alleged and found to be oppressive) it was not open to the primary judge to find that any unfairness resulting from the acquisition of the Symond Arcade and the lease to SPH continued to subsist.
As to their acquisition of 20% of the Symond Arcade, Nick and John say that this enabled the transaction to proceed in circumstances where the deceased would not otherwise have permitted it; and that they paid 20% of the deposit, put up their own family's property as security for the bank loan which was required to finance it, and remain liable with Esperia Court for the entirety of the $29.05 million loan. Nick and John say that they have made no profit from the partnership but (by virtue of their 20% interest) they fund its losses (see [363]). They argue that, in the current state of affairs, their position as co-obligors under the loan and partners in a loss-making partnership is, if anything, a benefit to the company.
As to the SPH lease, Nick and John say that any burden imposed by the absence of a demolition clause in the lease to SPH is speculative where there was no evidence that there was any development proposal imminent that would necessitate surrender of the lease during the balance of its term or that SPH would seek to rely on such rights to prevent such a development.
Insofar as the primary judge found that Nick has fought an "adversarial battle" to retain the benefits he received (being his interest in the Symond Arcade and the lease to SPH) (see [65]), complaint is made that this criticism is unfair. Nick and John say that it was never put to either of them that he should have surrendered his 20% interest in the Symond Arcade; and that, had that proposition been put, it would have been clear that there was presently no feasible way for that to occur in circumstances where, in return for their 20% interest, Nick and John had paid 20% of the deposit and remained liable for the entirety of the $29.05 million bank loan; and Esperia Court did not have ready funds to purchase Nick and John's interest from them. Nick and John point out that, even after judgment was delivered, it remained Maria's position that the 20% should be transferred without any indemnification from liability for the $29.05 million loan (with Nick and John's position ultimately being preserved by Order 9(a) in the Oppression Proceeding).
As to the SPH lease, Nick and John note that the absence of a demolition clause was not the principal attack made on the lease at first instance; rather, the principal attack (which failed) was as to the alleged uncommerciality of various of the lease terms, particularly the rent]). In circumstances where those attacks failed (see [377]). Nick and John maintain that Nick's conduct in seeking to defend the lease cannot be criticised.

[27]

Maria's submissions

Maria contends that the finding by the primary judge that the oppression continued to exist was self-evident where, as at the date of the hearing, Nick and John continued to own 20% of the Symond Arcade and continued to operate the partnership (and hence Maria argues that the self-dealing which was at the heart of the oppression continued up until the hearing). In their submissions in reply, Nick and John reiterate that there is no feasible way for that interest to be surrendered unless the parties can reach an arrangement which relieves Nick and John of their liability for the $29.05 million NAB loan but that goes to the question of relief, not to whether there is continuing oppression).
Maria argues that Nick and John's acquisition of a 20% interest did not enable the acquisition of the Symond Arcade to proceed; rather Maria says that it was the predatory behaviour of Nick (as identified in her submissions on ground 1 - see above) that led the deceased into agreeing to the transaction in the first place). Nick and John say that Maria's submission as to the predatory behaviour is against all the evidence (and they repeat their complaint as to the reliance by Maria on unpleaded "predatory behaviour").
Maria places emphasis on her complaint that Nick and John did not pay 20% of the deposit nor did they put up "their own family's property as security". As to this, Nick and John say that both propositions are wrong. They note that the primary judge expressly found that Nick and John paid 28.33% of the deposit ([343] of the primary judgment) and that his Honour also found that Nick's family trust charged its property with repayment of the NAB loan (291; [317]-[320]), a matter that they point out is reflected in the terms of the loan facility itself.
Maria next makes the assertion that Nick and John derived income from the 80/20 partnership over the Symond Arcade and used that income (which was obtained from self-dealing) to service the loan to NAB and to compensate them for an alleged "overpayment" of the deposit (referring to the primary judgment at [363]); and that the proposition that Nick and John funded "the partnership losses" is not an appropriate characterisation in circumstances where it is the obtaining of the unauthorised benefit which allows them to continue to retain a 20% interest in a $30 million purchase without contributing the $5 million in the first place).
In this regard, Nick and John say that it is incorrect for Maria to assert that they derived income from the partnership and used that income to service the NAB loan; rather, they say that the partnership was loss-making, and Nick and John have derived no income from it (instead, they have funded the partnership's losses). It is noted that the interest payable on the NAB loan was treated as a partnership expense ([363] of the primary judgment) and that the primary judge made no finding that there was any impropriety in this. Nick and John say that this is unexceptionable, where they were jointly liable with Esperia Court under the loan and were 20% owners of the Symond Arcade in respect of which the partnership was conducted. Nick and John also cavil with the suggestion that they used partnership income to compensate them for an alleged overpayment of the deposit. They say that there was an overpayment of the deposit (as recorded at [343]) and that this was accounted for by Nick and John paying less than their 20% share of partnership losses until the overpayment had been offset ([363]). Again it is noted that there was no finding of any impropriety in this regard.
The complaint by Maria that Nick and John have retained 20% of the Symond Arcade without contributing $5 million is also disputed by them (as noted above).
Finally, Maria accepts that Nick and John cannot afford to service the $29.05 million short term loan in their own right (or even 20% of it) but points out that, if there is a successful development, there is a palpable "upside" for Nick and John in that they will obtain 20% of any profits despite having only contributed part of the deposit to pay the NAB loan (where the NAB borrowings are secured only against Esperia Court's properties and ongoing loan repayments are serviced by income from the partnership). In response to this, Nick and John say that the present state of affairs is remote from that: that the partnership is loss-making; and that Nick and John remain personally liable as co-obligors for the entire $29.05 million loan. It is noted that removal of the securities given by Nick's family trust did not leave Esperia Court "on the hook for the lot"; rather, Nick and John remain liable as co-obligors under the refinanced 2019 facility.

[30]

The Symond Arcade

Nick and John identify the following errors in relation to the finding of a breach of duty in relation to the acquisition of the Symond Arcade ([351], [391]).
First, they say that it was not open for the primary judge to find that the acquisition of the Symond Arcade "at all" by Esperia Court involved a pursuit of the personal interests of the three directors because it was common ground at the hearing that it was in the best interests of the company to acquire the Symond Arcade. I have addressed this in part above. Suffice it to say that the primary judge did not find that the acquisition of the Symond Arcade "at all" was the breach; rather, it was the fact that it was acquired in a transaction under which Nick and John acquired a 20% interest in their own names.
Second, to the extent that the relevant personal interest was the 20% share in the Symond Arcade which Nick and John received, they say that this finding ignores the evidence that they did so only to overcome the deceased's refusal to permit Esperia Court to acquire the Symond Arcade in its own name. It is submitted that it follows from that evidence that they did not acquire the Symond Arcade to pursue their own self-interest. Again, this has been addressed in part in relation to ground 1. Their stated unwillingness to acquire a personal interest in the property does not preclude a finding of self-dealing.
As to the statements by the primary judge that Nick and John did not act at the deceased's direction ([353]); that, if the deceased had any role to play in the acquisition of the Symond Arcade, it was unlikely to be prominent ([354]); and that the deceased's role in decision-making was passive ([357]), Nick and John argue that these appear to be characterisations of the course of events described by Nick and set out at [338], which the primary judge stated he had largely adopted ([51]; [348]). Nick and John say that these characterisations are correct insofar as they indicate that the impetus for acquiring the Symond Arcade was driven by Nick but that they are incorrect (and contrary to the evidence) if they are intended to cast doubt on the proposition that, at the eleventh hour, the deceased refused to permit Esperia Court to purchase the Symond Arcade in its own name; and that Nick and John acquired a 20% interest only to overcome that refusal.
Insofar as the primary judge stated that Nick "deliberately led" the deceased into an agreement that resulted in him and John having a 20% share (see [353]), Nick and John accept that Nick tried to convince the deceased to take this course but say that he did so because without such a compromise the deceased would not have permitted Esperia Court to purchase the Symond Arcade at all.
Insofar as there is a suggestion that Nick chose to play on the deceased's emotions to secure her agreement to the 80/20 split (see at [357]), his Honour having earlier referred to the "potential, imagined threat of a challenge from James" (349), Nick and John say that this was a mischaracterisation of the evidence. Nick and John argue that the reference in Nick's affidavit sworn 18 August 2021 at [136], extracted at [338] to the possibility of James getting control of Esperia Court does not contain a "threat of a challenge" by James (potential or imagined); rather, it refers to the possibility that James would get control of the company. Further, it is said that this was a possibility that the deceased herself had raised, as she kept asking "If Esperia buys it, will Jim have it?" (see John's affidavit sworn 17 August 2021 at [89]). Nick and John say that the point of referring to this was "to talk [the deceased] down" from her insistence that Nick and John buy the Symond Arcade entirely in their own name. It is said that Nick was explaining that it made no sense for Nick and John to own the Symond Arcade outright because, without access to Esperia Court's properties, they could not secure the loan; and they point to John's account, where he records one of them saying "We can't buy it because we won't be able to secure the loan after you have died" (John's affidavit sworn 17 August 2021 at [94]).
Third, Nick and John contend that the primary judge erred in disregarding the deceased's position as Governing Director ([278]-[281]). It is said that, once the deceased had made clear her wishes about the acquisition of the Symond Arcade, Article 86 of the Esperia Court's articles of association required Nick and John to abide by those wishes; and that they cannot have breached their duties to Esperia Court when they had no choice in the matter. Nick and John say that this is consistent with principle, noting that the content of the duties imposed by both statute and the general law depends on the circumstances of the particular corporation, which include the provisions of its constitution, the composition of its board, the director's position and responsibilities within the company and the particular function the director is performing (referring to ASIC v Maxwell at [100]; Doyle v ASIC at [35]; Murdoch v Mudgee Dolomite & Lime Pty Ltd (in liq) [2022] NSWCA 12; (2022) 398 ALR 658 at [81]-[86]). Nick and John say that where, as here, a constitutional provision vests in the Governing Director the authority to exercise all the powers and duties vested in the directors and in the general meeting, such a provision "displaces the right and duty of other directors to exercise the power of deliberation upon the affairs of the company" (citing Levin v Clark [1962] NSWR 686 at 701; approved in Whitehouse v Carlton Hotel Pty Ltd (1987) 162 CLR 285 at 313; [1987] HCA 11).
Fourth, Nick and John say that the trial judge erred in disregarding the deceased's position as holder of the management shares ([274], [278]-[281]), which positively entitled the deceased to permit Nick and John to obtain 20% of the Symond Arcade. Reference is made to ASIC v Maxwell at [102]-[103], where Brereton J, as his Honour then was, explained that where there is an identity of interest between directors and shareholders, so that in effect the directors are the shareholders, the requirement to prevent self-interested dealing is much less acute. The general meeting may be taken implicitly to have ratified the directors' actions and, while that is not an answer to a breach of a director's statutory duties, it can affect their practical content, including whether the director made improper use of their position (Angas Law Services Pty Ltd v Carabelas (2005) 226 CLR 507; [2005] HCA 23 at [32] (Gleeson CJ and Heydon J, with whom Gummow and Hayne JJ agreed at [43] and Kirby J agreed at [70])). Nick and John say that there was such an identity of interest here where the deceased was Governing Director and, as holder of the management shares, the only shareholder able to exercise the power of ratification; and that this conclusion is fortified by the objects of Esperia Court (which include broad powers to confer benefits on employees of the company and their families) (Memorandum of Association, cll 3(ii), (jj)). Nick and John argue that objects of this kind contemplate and permit self-interested dealing, referring to Evans v Braddock [2015] NSWSC 249 at 267 where Hallen J said that in a closely held family company, where the governing director was "given such wide powers and the objects included benefitting family members, the requirement to prevent self-interested dealing is less acute".
Fifth, issue is taken with the statement by the primary judge that there was a breach of duty in acquiring the Symond Arcade "on what were essentially speculative terms given the strained finances of Esperia Court" ([391] of the primary judgment). Nick and John submit that, properly understood, this is not a finding of breach separate to the pursuit of self-interest referred to in [391] but that, if it does amount to a finding that the directors breached their duties by reason of the "speculative terms" of the acquisition, then complaint is made that the primary judge did not explain what the "speculative terms" were. Nick and John argue that if the finding (see [349]; [365]; [390]) is that the acquisition should not have occurred using near to 100% bank finance when that has stretched Esperia Court's financial resources, then such a finding is erroneous for the reasons explained in relation to ground 1.

[33]

Determination as to grounds 3 and 4

As Maria notes, the findings of breach of directors' duties did not sound in any award of damages, but rather informed the nature and the extent of the relief to be granted. Not surprisingly, therefore, less was said of these grounds in the oral submissions.
As to the Symond Arcade, the finding was not that the acquisition per se was in breach of the directors' duties; rather, the relevant finding was that it was a breach of directors' duties for there to be a diversion to Nick and John personally of a 20% interest in the Symond Arcade (this emerges from 385 and [390]-[391] of the primary judgment).
Insofar as it is submitted that Nick and John did not acquire that interest in pursuit of their own self-interest (but, rather, to overcome the deceased's refusal to allow Esperia Court to purchase the property wholly in its own name), this submission appears to conflate the intention or motivation of the transaction with its effect. Accepting that Nick and John genuinely believed that it was necessary for them to take a 20% interest in the property in order to overcome the deceased's refusal to proceed with the acquisition at all, it is nevertheless unarguable (and Nick and John do not seek to argue against this) that the effect of the transaction was that they acquired a personal interest in the property; and was conduct akin to self-dealing.
Similarly, the fact that Esperia Court could not otherwise (as a result of the deceased's position) acquire the property does not of itself necessarily preclude a finding of breach of directors' duty. It is well-known that a person owing a fiduciary duty to the company (such as a director) may be in breach of that duty by taking up a corporate opportunity of which the company could not have availed itself (see the diversion of corporate opportunity cases referred to above at [171]).
As to the complaint about the finding that Nick "deliberately led" the deceased into the 80/20 agreement, there can be no doubt that Nick proposed the arrangement - his own evidence is to that effect. Nick's account was that he did so to overcome the deceased's refusal in that regard. True it is that the primary judge did not reject that account. However, that does not alter the self-dealing character of Nick's involvement in the transaction. Nor does the complaint as to the suggestion that Nick chose to play on the deceased's emotions to secure her agreement have force. Nick's own evidence is that he raised with the deceased the potential that he would be at risk of harm if the property was acquired in his family's names outright (because of the possibility that James would get control of Esperia Court and an inability to secure the loan without access to the company's properties). In any event, the relevant fact is that there was a self-dealing (whether the motivation be pure or impure - Chew v The Queen (1992) 173 CLR 626 at 640; [1992] HCA 19 per Dawson J).
More problematic for the finding of breach of duty is the position of the deceased as Governing Director and with the ability to ratify any breach by Nick and John. However, that does not apply to the deceased's own breach of duty (and, in any event, since there is no award of damages nothing turns on an error in relation to the position of Nick and John).
Finally, insofar as complaint is made as to the reference by the primary judge to the acquisition being on speculative terms "given the strained finances of Esperia Court", I do not read this as a finding that there was a separate breach of duty having regard to the terms on which the acquisition was financed.
As to the finding of breach in relation to the SPH lease, clearly Nick cannot have been in breach of any such duties before he became a director (it not being suggested that prior to this he was acting as a quasi-director or shadow director or the like). Thus, the finding that Nick breached his duties from mid-2014 in relation to the lease must be in error. As to the finding of breach by John, in the absence of any involvement by him in setting the terms of the lease, it is difficult to see how he was in breach of his duty as a director simply in executing the lease (and it would be necessary to articulate the basis for such a finding if one were to be made). As to the proposition that there could be no breach of duty unless the omission of the demolition clause was deliberate, which raises the issue as to the knowledge required for breach of directors' duties involving a conflict of interest or self-dealing, it is not necessary to explore this in detail because, on the facts, the lack of a demolition clause is explicable by reference to the fact that this was an option lease.
Thus, in my opinion ground 3 is not made good but ground 4 is made good.

[34]

Grounds 5 and 6 - relief

In the primary judgment, his Honour foreshadowed an intention to make orders: reclassifying the "A", "B", "C" and "D" class shares as a single class with voting rights; distributing the management shares equally among the four children; abolishing the office of Governing Director; requiring Nick and John to retire as directors; and convening a general meeting to elect a new board comprising a nominee of each of the four children and an independent director ([399]). Nick and John note that Orders 1 to 7 in the Oppression Proceeding give effect to that intention but that his Honour also made orders requiring a transfer of the 20% share in the Symond Arcade, providing for the dissolution of the partnership on notice and for the variation of the SPH lease to include a termination clause (Orders 8 to 11).
In summary, Orders 1 to 7 in the Oppression Proceeding provided for the following in terms of a restructure of Esperia Court: 1. Pursuant to s 233(1)(j) of the Corporations Act, orders were made requiring the Executors to do all things necessary to transfer 125 management shares to each of Maria, Dennis, James and Nick; requiring Nick and John to resign as directors of Esperia Court at a General Meeting referred to in Order 7; and requiring the directors of Esperia Court to do all things necessary to cause the share transfers to be registered (Order 1). 2. Pursuant to s 233(1)(b) of the Corporations Act, orders were made that the Constitution of Esperia Court be modified and/or repealed in accordance with the changes indicated in Annexure "A" to the affidavit of the solicitor, Guy Lewis, which was read at the hearing on 24 November 2022 (Order 2), with those amendments to take effect 7 days after the transfer and registration of the management shares and the transfer and registration of the 3,000 "B" class shares to be received by James pursuant to Order 3 of the orders made in the James Proceeding. By Order 4, his Honour noted that neither Esperia Court nor its current or proposed directors had any power to modify or repeal the constitutional amendments arising from these orders. 3. Pursuant to s 233(1)(j) of the Corporations Act, the Executors of the and/or directors of Esperia Court were required to lodge with Esperia Court all documents and information necessary to satisfy the conditions of Article 37 of the Constitution of Esperia Court for the transmission of shares in accordance with Order 1 (Order 5), with notice to be given to the persons to whom the management shares were to be transferred (via their solicitors) within 3 business days of the share transfers having been entered on the register of members of Esperia Court (Order 6). 4. Pursuant to s 233(1)(c) of the Corporations Act, orders were made requiring Esperia Court to convene and hold a General Meeting of its members (see (1) above) under supervision of an independent chair, at which resolutions were to be passed for the appointment of five named persons as directors of Esperia Court (Order 7). 5. Order 8 dealt with the variation of the SPH lease to include a termination provision, while Orders 9 to 11 addressed the acquisition of the Symond Arcade: 6. Order 9 declared that Nick and John held their interest in the Symond Arcade on trust for Esperia Court, subject to the following: (a) a reservation by Nicholas Soulos and John Soulos of such, if any, entitlement they may have to be indemnified for any liability they may have to National Australia Bank arising from the loan made by National Australia Bank to Esperia Court, Nicholas Soulos and John Soulos. (b) upon any sale of Symond Arcade (but not before). Nicholas Soulos and John Soulos are entitled to receive from any sale proceeds any capital expenditure paid by each of them in respect of the acquisition of the Symond Arcade; and (c) the sum referred to in (b) shall be determined by agreement between the parties or, failing agreement, the Court RESERVES liberty to apply to any party to have the sum determined by the Court. 1. Order 10 provided that, at Esperia Court's sole election, Nick and John were to do everything necessary to transfer their interest in the Symond Arcade to Esperia Court on the giving of 14 days' written notice. 2. Order 11 declared, pursuant to s 233(1)(j) of the Corporations Act "and/or in the exercise of the Court's inherent jurisdiction" that the partnership between Esperia Court, Nick Soulos and John Soulos was terminable on the service by any of them of six months' notice in writing or as otherwise may be agreed between the three of them.
Nick and John contend that the primary judge erred in making Orders 1 to 7, which have the effect of restructuring the management and shareholding of Esperia Court. It is submitted that, where the acts of oppression alleged and found to exist comprised the acquisition of the Symond Arcade and the conduct of a partnership thereafter, as well as the grant of a lease to SPH, the relief set out in Orders 8 to 11 sufficed to terminate the effects of that oppression by requiring a transfer of the 20% share in the Symond Arcade, enabling the dissolution of the partnership and variation of the SPH lease. Nick and John say that there was no justification for ordering any further relief (and that this position is supported by the authorities cited by the primary judge at [260]-[261], which emphasise the need to ensure that relief given under s 233 is proportionate to the oppression found and is the least intrusive remedy available to terminate the effects of that oppression) (see Zong at [79]; Fexuto Supreme Court Decision at 741-742). Nick and John contend that the relief granted by the primary judge in Orders 1 to 7 transgressed those principles.
Insofar as the primary judge said the orders were intended to address the vice that Esperia Court's closed regime of management locked ordinary shareholders into dependency on the discretion of directors with an adverse interest (at [404]), Nick and John contend that his Honour erred in having regard to this in circumstances where that vice was not the oppression alleged or found to exist ([247]; [385]).
Nick and John argue that the primary judge also erred in referring (at [395]) to the constitution of Esperia Court being a reason why there was continuing oppression in circumstances where Maria had not alleged that the constitution of Esperia Court was a matter which constituted oppression (and which the primary judge had not found to be oppressive).
Nick and John submit that it is apparent that the primary judge was moved by the existence of what he described as the "central, intractable problem" (namely that Maria, James and Dennis wished to wind up Esperia Court so as to realise the value of their shares, while Nick wished its operations to continue) (see [44]; 71; [74]). Nick and John say that Orders 1 to 7 seem directed to enabling the children to take a vote on that matter ([398]) and they argue that its outcome is a foregone conclusion where, under the restructure, Maria, James and Dennis together will have three quarters of the voting power and each wishes to wind up Esperia Court to realise the value of his or her shares ([209]).
Nick and John contend that, to the extent that his Honour was seeking to resolve what he considered to be the "central, intractable problem" in this way, his Honour erred; and that the "central, intractable problem" was no part of the oppression alleged or found to exist. Reference is made to the observation by Young J in Fexuto Supreme Court Decision at 742, to the effect that it is not enough merely to find oppression and then proceed to find some remedy that might bring peace to the company generally; the Court should only grant the remedy that removes the oppression found.
Nick and John say that his Honour also erred to the extent that he relied on an expectation that the deceased's children would enjoy a material benefit from Esperia Court in their mature years, where the disappointment of such an expectation was not the oppression alleged or found to exist. In that regard it is noted that this is the reason his Honour gave for determining to allocate the management shares equally between them under both s 233 and the Succession Act ([424]).

[35]

Offer to buy Maria's shares

Nick and John further contend that the primary judge erred in granting relief at all in circumstances where the appellants had made an open offer to buy Maria's shares for $7 million ([73]). They compare this offer to the nominal value which the joint expert had attributed to the shares on a market sale (on account of the control which resides in the owner of the management shares) (see [167]). Nick and John say that the offer was relevant because there is a discretion in granting relief under s 233; and they maintain that the existence of an offer which would enable Maria to realise a substantial capital value for her shares (being the interest she had sought to vindicate in the proceedings (see 44; 71; [208]) was a reason to refuse the other relief Maria had sought.
It is noted that the primary judge described the offer as being on extended and highly qualified terms; but Nick and John say that the offer was simply an offer to pay by instalments on "unremarkable conditions" (including that the parties bear their own costs provided the offer was accepted before judgment) (see Exhibit E14).
Nick and John argue that the primary judge, in disregarding the offer because it did not give Maria the value of her shares predicated on a winding up of Esperia Court (being $9 million) ([396], [167]), had regard to the wrong measure. Reference is made to Re Lowes Park at 553-554, where Burchett J explained that, where an applicant receives shares as a result of her parents' bounty, and the value of those shares is affected by provisions in the articles which give one person control over the operations of the company, the valuation must have regard to the effect which those articles have on the value of the shares.
Insofar as the primary judge also emphasised that there was no offer to buy the shares of Dennis and James ([396]), Nick and John say that this was irrelevant, pointing out that Dennis and James were not parties to the Oppression Proceeding and that the offer was made to Maria alone to compromise those proceedings only.

[36]

Delay

Finally, Nick and John say that the primary judge also erred in failing to have regard to Maria's delay in bringing the Oppression Proceeding and the effects of that delay. It is noted that delay in commencing an oppression claim was said to be relevant to the court's discretion to grant relief in Falkingham v Peninsula Kingswood Country Golf Club Ltd [2015] VSCA 16; (2015) 104 ACSR 481 at [88].
Nick and John point out that Maria has known of the existence of their 20% interest in the Symond Arcade since at least December 2017 (T 84.12-33) and that she made no complaint when she first learnt about this (and told John she thought Nick and he deserved it). Nick and John say that, in the interim, they have continued to fund their share of the losses of the partnership; that they have also continued to devote their efforts to working for Esperia Court's benefit and exploring the potential to develop the company's properties, including the Symond Arcade ([207]); and that in 2018 and 2019 they procured an extension of the NAB loan to which they too are parties ([292]-[293]).
Nick and John argue that, to give any relief in respect of the oppression alleged and found to exist, it will be necessary to take the accounts of the partnership ([364]); and to address the liability which Nick and John will continue to have to NAB, even after they transfer their 20% interest in the Symond Arcade to Esperia Court. It is submitted that the latter issue has not been finally resolved (by reference to Order 9(a) - though I do not accept that construction of the order); and Nick and John say that these complications are accentuated by the delay.
Nick and John submit that, having regard to the benefits which their continued holding of a 20% interest continue to secure to Esperia Court and the partnership, Maria's delay in not bringing proceedings until April 2021 (despite filing a Succession Act claim in 2019) is a further reason that the primary judge ought not have granted any relief for the oppression found.

[37]

Maria's submissions on relief

Maria maintains that no House v The King error has been alleged and therefore grounds 5 and 6 must fail (but goes on to make submissions as to relief). As noted earlier, Nick and John accept that the determination of Grounds 5 and 6 involves the standard of review applicable to the exercise of a judicial discretion (citing House v The King at 504-505; Minister for Immigration and Border Protection v SZVFW (2018) 264 CLR 541; [2018] HCA 30 (SZVFW) at [35]-[50] (Gageler J); Australian Health & Nutrition Association Ltd v Hive Marketing Group Pty Ltd (2019) 99 NSWLR 419; [2019] NSWCA 61 at [18]-[19]) but they cavil with the proposition that they have not identified error).
Nick and John, in reply, say that the relief ordered involved the following House v The King errors: an error of law in granting relief which went beyond that which was necessary to terminate the effects of the oppression found; and error in taking into account irrelevant matters. They also argue that if there was oppression but on narrower grounds than found by the primary judge then it follows that the grant of relief was based on a misapprehension as to the nature of the oppressive conduct. Nick and John say that it would then fall to this Court to re-exercise the discretion by reference to its own view of any oppression that it has found to exist.
Maria accepts that the relief should be moulded to the circumstances of the case to ensure that the least intrusive remedy is used to terminate the effects of the oppression (referring to Zong at [79]) but argues that in the present case a "standard" "buy-out" order was not available because it was "beyond the financial capacity of any party to fund" ([396]) and that alternative remedies therefore had to be considered to terminate the effects of the oppression). Maria contends that, as a matter of principle, if a share purchase or buy back is futile, winding up becomes the "appropriate" order under s 233 of the Corporations Act (citing Tomanovic v Global Mortgage at [334]-[337] per Young JA). As to this submission, Nick and John argue that there is no "standard" or presumptively appropriate order in an oppression case; rather, the question remains that stated in Zong at [79], namely, what is the least intrusive remedy available to terminate the effects of the oppression found.
Maria points out that the primary judge indicated an intention to make orders that cured the effects of the oppression together with orders to make adequate and proper provision for each of the three family provision claimants and in that regard Maria emphasises that it is not the oppression which needs to be terminated but the "effects" of the oppression (citing Zong at [79]). Maria notes that circumstances may change as proceedings develop (referring by way of example to the Fexuto Court of Appeal Decision at [159] and Chief Disruption Officer Pty Ltd as Trustee for the McDonald Family Trust v Michel, in the matter of Laava ID Pty Ltd (No 4) [2023] FCA 25 per Goodman J).
Maria says that the identifiable continuing oppression included the closed regime of management that Maria says had facilitated repeat decision making that was in the interests of Nick and John personally (referring to [404]). Maria says that the primary judge was concerned to remedy that issue, on the basis of the many findings of fact that Nick and John had repeatedly preferred their own interests over those of Esperia Court (or its members) (referring to [351]; [383]; [384]; [386]; [387]; [389]); and that the remedy that his Honour chose was appropriate in the context of those findings. Maria submits that the remedy chosen was particularly appropriate where the $29 million NAB loan had not been refinanced by the date of the judgment (7 November 2022) when it was due and payable in full by 31 October 2022. Maria also points out that the primary judge was minded to review the indicative regime that he had proposed at [399] if some other accommodation could be reached with NAB ([400]).
As to Maria's submission that the continuing oppression included the closed regime of management that had facilitated "repeat decision making that was in the interests of Nick and John personally", Nick and John reiterate that the so-called closed regime of management was not the oppression alleged and found to exist. They argue that if, as Maria says, the "heart" of the oppression is the acquisition by Nick and John of 20% of the Symond Arcade (referring to Maria's submissions at [46], [50]), then the fact that this acquisition occurred so as to overcome the deceased's firm refusal to allow Esperia Court to acquire the Symond Arcade at all means that there can have been no need for relief to stop such conduct being repeated when the deceased no longer holds the management shares.
Nick and John also cavil with the submission that they "repeatedly" preferred their own interests to those of Esperia Court (referring to Maria's submissions at [57], [58]). Insofar as Maria refers to Nick and John's credibility as a "factor" (see Maria's submissions at [58]), Nick and John note that no finding made by the primary judge was based on the rejection of Nick or John as credible witnesses. It is submitted that any suggested slight on their credibility cannot justify relief that goes beyond what is necessary to terminate the effects of the oppression found to exist.
As to whether the reference by Maria in her submissions to the then looming deadline for refinance of the NAB loan could justify the primary judge's orders restructuring the management and shareholding of Esperia Court), Nick and John say that the connection between these two matters is elusive. They submit that, bearing in mind the case now advanced by Maria, it could not be suggested that the imminent need to refinance that loan is in any way a result of the oppression on which Maria relies.
Maria in her submissions notes the breadth of the discretion as to the remedies that may be awarded (see Fexuto Supreme Court Decision at 742 per Young J; and Tomanovic v Argyle HQ Pty Ltd [2010] NSWSC 152 at [43] per Austin J). Maria points to the recognition that the power to order relief under s 233 is extremely broad and should not be hedged about by implied limitations (citing Campbell High Court Decision at [178] per Gummow, Hayne, Heydon and Kiefel JJ). Maria maintains that the primary judge structured an appropriate regime to end the self-dealing which had plagued Esperia Court since Nick and John took a more active role in the management of the company.
Maria says that, ultimately, a buy-out was not the appropriate remedy because Nick and John do not have the capacity to pay the money ([396]) and the remedy ordered (instead of a winding up which would have been justified) was for a restructure of the management of Esperia Court which would end the effects of the oppression. Insofar as Nick and John argue that the constitution of Esperia Court was a matter which Maria did not allege was oppressive (see their submissions at [92]), Maria points to the pleading in her amended statement of claim at [63].
Nick and John maintain that the fact that neither a buy-out nor a winding up was ordered does not make a restructure of the management of Esperia Court appropriate, especially where they say that orders capable of remedying the effects of the oppression found to exist were available and were in fact made by Orders 8 to 11. They dispute the proposition that the constitution of Esperia Court was specifically pleaded (at [63] of the amended statement of claim) as being oppressive. Nick and John say that neither [63] of the pleading nor the paragraphs referred to therein mention the constitution of Esperia Court.
As to ground 6, in response to the reliance by Nick and John on the offer by Nick to buy Maria's shares and the alleged "delay" in commencing proceedings, Maria submits as follows.
First, Maria says that the offer was rightly rejected, pointing to the finding that it was "on extended and highly qualified terms" ([73] of the primary judgment. Maria notes that it was less than the value of her shareholding in Esperia Court ([387]) and says that Nick and John demonstrated an "incapacity to pay" ([396]). Maria points out that Nick was cross-examined about his capacity to fund the offer before it was rejected and says that this cross-examination demonstrated a complete inability of Nick and John to satisfy the payment of the offer, pointing out that John conceded that the offer was an offer to buy out Maria's shares at a discount (T 194.40; 196.11-30) and that John's evidence was that "It, it doesn't reflect their, their value. It is what I could afford to pay without killing myself to pay it. It, it's got no bearing on its value. It is purely what we can afford". Maria also says that the offer was on highly qualified terms; that it was not backed by any security; that it proposed to acquire Maria's shares in tranches with the first tranche not arising until six months after the determination of the proceedings (noting that Maria was already elderly by that stage); and that there was no clear plan about how it was going to be funded.
Second, as to the alleged delay, Maria again maintains that there was no delay on her part in commencing proceedings (pointing again to the fact that her son died unexpectedly in 2019 and that she has experienced a range of health problems owing to her advanced age). Maria submits that it is not surprising that she did not commence proceedings until 2021 (almost immediately after instructing new solicitors) and in the face of a worldwide pandemic which curtailed international travel. Further, Maria emphasises that she did not know about the oppression in 2017; that although she was told by Nick in or around November or December 2017 that the Symond Arcade had been acquired by Esperia Court, she was not told about the way in which that acquisition was funded or about the uncommercial lease to SPH or the operation of the partnership. Complaint is made that even a basic request for access to the books and records of Esperia Court was repeatedly refused (as pleaded in the amended statement of claim at [11]). It is submitted that even if it were found that Maria did know about the oppression in 2017 it would be a harsh application of the law to deny her relief in circumstances when her claim was brought within analogous limitation periods in tort and contract.
In their submissions in reply in relation to ground 6, Nick and John say that the House v The King errors involved in the primary judge's disregard of the offer to buy Maria's shares comprised: mistaking the facts, by characterising the offer as being on extended and highly qualified terms; an error of law (by proceeding on the basis that any offer needed to give Maria the value of her shares on a winding up); and taking into account an irrelevant matter, being the absence of an offer to purchase James or Dennis' shares.
Nick and John cavil with the proposition that they demonstrated an "incapacity to pay" (cf Maria's submissions at [63]). Insofar as Maria refers to [396], Nick and John say that the incapacity there referred to was an incapacity to purchase the shares of Maria, James and Dennis. They say that, for present purposes, the only relevant capacity to pay was a capacity to pay the $7 million offered to Maria. As to the cross-examination referred to by Maria in her submissions (at [64]), Nick and John say that this did not demonstrate "a complete inability" on their part to pay the $7 million. Nick and John maintain that the evidence, demonstrated that they had adequate means to pay the $7 million.
Nick and John say that reliance on John's statement that the offer did not reflect the value of the shares but reflected what he could pay (see Maria's submissions at [64]) is misplaced, noting that the expert evidence was that the shares had a nominal value ([167]) (see the Cusack report referred to earlier). Nick and John say that, in that context, a $7 million offer was plainly of very significant value and it is irrelevant how John arrived at the figure.
As to the complaint that the offer was not backed by security (Maria's submissions at [65]), Nick and John argue that that this goes nowhere given that security was never requested. It is noted that Maria's only response was to reject the offer out of hand. Nick and John submit that the breakdown of properties summarised in their submissions at first instance shows that they had adequate security to offer should it have been required.
As to the issue of delay, Nick and John maintain that the failure to take into account Maria's delay in commencing the Oppression Proceeding was a failure to take into account a relevant consideration which justifies review under the principles in House v The King. They point out that the relevance of that matter was clearly raised before his Honour (referring to trial submissions at [263]).
Nick and John contend that reliance on the death of Maria's son in 2019, health problems and the pandemic (see Maria's submissions at [66]) does not diminish the impact of the delay, especially where Maria was able to commence her Succession Act proceeding in 2019; and where, in December 2019 Maria told John that she was concerned about the acquisition and wanted to resolve the matter to avoid going to court (see Maria's affidavit sworn 13 July 2021 at [95]-[100]). Nick and John say that the reference to matters of which it is said Maria was unaware (Maria's submissions at [67]) is misconceived.
Finally, Nick and John deny the assertion that a basic request for access to the books and records of Esperia was repeatedly refused (see Maria's submissions at [68]), noting that no findings were made by the primary judge about those allegations and that Maria points to no evidence supporting them.

[38]

Submissions as to ultimate orders made

In oral submissions for Nick and John, there was also an issue raised as to the structure of the orders ultimately made by the primary judge (accepting that those orders followed the format provided in Annexure A to the affidavit affirmed 23 November 2022 of Mr Lewis) (AT 6 April 2023 at 201). It is said that what is done in Annexure A (which was apparently agreed between the parties - see AT 6 April 2023 at 196.16) is in effect to abolish the management shares rather than to convert them (as proposed in the primary judgment). The point here raised by Nick and John is as to the consequence of the respective orders.
It is said that, if the orders that made further provision (under the Succession Act) by way of the conferral of management shares on the respective claimants were to stand, then there is no need to alter the rights attaching to the ordinary shares (so as to give them voting rights) because the management shares themselves give equal voting power to each of the four children. Conversely, insofar as his Honour foreshadowed orders altering the rights attaching to ordinary shares and giving them voting rights, then it is said that the gift of the 125 management shares has no real consequence since each of the children now has 3,000 ordinary shares.
Nick and John say that, if their submission as to Orders 8 to 11 in the Oppression Proceeding being sufficient to reverse the effects of the oppression (and that Orders 1 to 7 should be set aside) were to be accepted, then the changes to the constitution of the company under Orders 1 to 7 would not occur and they maintain that this would have an impact relevant to the consideration of James' application for further provision in the Succession Act proceeding; i.e., to the question whether he should receive the additional 1,000 "B" class shares (since those shares would then be the only ones of use to him in terms of rights on a winding up or to participate in dividends, though not conferring any voting power).
Nick and John's submission in this regard thus goes to the interaction between the orders in the Oppression Proceeding and the respective Succession Act proceedings (assuming, as they suggest the primary judge proceeded, that the orders made in the Oppression Proceeding are logically made before the orders in the other proceedings). Their submission, as I understand it, is that in the event that Orders 1 to 7 are set aside, then there is no reason for James to receive the additional 1,000 "B" class shares where that would not give him control (and they would have no value except on a winding-up). On a re-exercise of the discretion under the Succession Act, Nick and John argue that the matters at [426] tell against James' claim to the additional 1,000 "B" class shares.
The primary judge reasoned at [433] that James should have the benefit of all 3,000 "B" class share (giving parity in respect of the entitlements to dividend and winding-up) with the 125 management shares being to give him voting rights. The criticism made of this, as noted earlier, is the failure of the primary judge to undertake an analysis balancing this against James' financial position and needs.

[39]

Determination as to grounds 5 and 6

As to ground 5, the challenge to the relief that was granted by his Honour (in terms of the restructure of Esperia Court) is complicated by the fact that the primary judge was considering questions of relief in the context of both the Oppression Proceeding and the various family provision applications under s 59 of the Succession Act.
As to the relief in oppression proceedings, it has been recognised that the aim is to fashion relief which removes the adverse effects of the oppression (see Shelton v NRMA at [26], cited by Bergin J (as her Honour then was) in Backoffice Investments v Campbell [2007] NSWSC 161; (2007) 25 ACLC 302 at [93], and reaffirmed in the Campbell Court of Appeal Decision at [195], [332], which was not questioned in the Campbell High Court Decision at [178]. Further, it has been said that the remedy chosen should be the least intrusive (see Martin v Australian Squash Club Pty Ltd (1996) 14 ACLC 452 at 475; Fexuto Court of Appeal Decision, Young J, at 742).
I do not accept that the primary judge erred in taking into account, in the exercise of his discretion, the fact that Esperia Court's closed regime of management locked ordinary shareholders into dependency on the discretion of Nick. In considering the relief to be granted the primary judge was entitled to take into account the consequences of any such relief. However, I consider that there is force to the submission that Orders 1 to 7 go beyond what is necessary to end the effects of the oppressive conduct that was found to have occurred, in that the relief in Order 8 and following would suffice to set aside the acquisition by Nick and John of the 20% interest and (insofar as the primary judge found that the grant of the lease was oppressive) to make provision enabling the variation of the SPH lease. That would of course leave Maria (the only applicant in the Oppression Proceeding) effectively locked into the company (a situation in which Maria submits the effects of the oppressive conduct would remain). However, as Nick and John point out, Maria's non-voting position is a result of the manner in which Esperia Court was structured from its incorporation (and the control able to be exercised by Nick is simply a result of his inheritance of the management shares in the company).
That said, from a practical point of view (and leaving to one side for present purposes the relief sought and granted in the various Succession Act proceedings), the relief undoing the 20% acquisition by Nick and John of a personal interest in the Symond Arcade (i.e., to rectify the diversion of the corporate opportunity that constituted the oppression) might well result in the outcome that Maria had sought in the first place - since if, as Nick and John seem to maintain, it will not be feasible for Esperia Court to fund the reimbursement to them of the moneys contributed by them to the acquisition of the property and any amount that might be owing to them on an account to be taken of the contributions they have made to the property, the result may well be that the company has to be wound up in any event. Indeed, if, as Nick and John suggest, the restructuring of Esperia Court shareholdings was not an appropriate remedy then the exercise of discretion as to relief might be said to have miscarried only in that a winding up order was not made in the first instance (an order that could now be made on re-exercise of the discretion by this Court but which Nick and John would surely resist).
As adverted to above, the position is complicated by the outcome of the Succession Act proceedings. Although Nick and John submitted that his Honour erred in relying on an expectation that the deceased's children would enjoy a material benefit from Esperia Court in their mature years, this was relevant in the context of the Succession Act claims and was therefore part of the overall circumstances in which the discretion as to relief was to be exercised.
On balance, notwithstanding the practical considerations to which I have adverted above, I consider that the relief granted by the primary judge in relation to the restructuring of the company went beyond that necessary in order to put an end to the continuing effects of the oppressive conduct; and that his Honour erred to that extent in the exercise of his discretion as to relief as contended for by ground 5 (i.e., by making orders 1 to 7).
To the extent to which the primary judge's conclusion as to oppression has been upheld but on narrower grounds than found by his Honour (having regard to the conclusions as to the lease issue), and it can then be said that the grant of relief was based on a misapprehension as to the nature of the oppressive conduct such that the discretion should be re-exercised, the only change to the orders that I consider would be warranted in the re-exercise of the discretion would be to set aside orders 1 to 7 as well as the orders made for the variation of the SPH lease (and hence to reinstate the lease arrangements as between Esperia Court and SPH for the Strathfield Public Hotel). I propose an order to that effect.
As to the complaints raised by ground 6, namely that the primary judge erred in granting relief in circumstances where an offer had been made to buy Maria's shares and in failing to take into account Maria's delay in commencing the Oppression Proceeding, I am of the view that there was no House v The King error as contended by Nick and John.
First, as to the offer to buy Maria's shares, I accept that the fact that there was no offer to buy out James and Dennis was not relevant to the consideration of the import of the offer in relation to Maria as a compromise of the Oppression Proceeding. Further, in considering the quantum of the offer, I accept that it was relevant to note that it was for a substantial sum (particularly bearing in mind that the shares had a nominal value absent a liquidation of Esperia Court). The fact that it was less than the value that might be expected to be realised on a winding up of the company would not of itself necessarily warrant the offer being disregarded as something to be taken into account when determining whether to exercise the discretion to grant relief. That said, some recognition of the fact that Nick and John had acquired a personal interest in a company with valuable assets which Maria could not hope to have realised for her benefit would seem to me to be not irrelevant to take into account. Ordinarily, one might expect a compulsory buy-out order to be set at a price that reflected the market value of the shares in question (or the value of the shares had the oppressive conduct not occurred, perhaps by adjustment to remove the effect of any oppressive conduct that had been found) (see Scottish Co-Operative v Meyer at 369 per Lord Denning). In the present case the market value of the shares (leaving aside any oppressive conduct) was inevitably affected by the fact that the shares held no voting rights or control in what is essentially a family company. Ultimately, the question, had a compulsory buy-out been ordered by way of relief for the oppression, would have been whether this was a fair price in all the circumstances.
Nevertheless, it was in my view relevant for the primary judge to take into account the conditions to which the offer was subject, including that it required Maria to bear her own costs of the Oppression Proceeding (assuming it was accepted prior to judgment), which would necessarily have reduced the value to Maria of the offer; and that it provided for payment in instalments (leaving Maria exposed to the risk that the payment might not ultimately be received in full). While Nick and John argue that the evidence did not establish an incapacity to pay the amount of this offer, the primary judge would no doubt have had in mind the fact that Nick's financial position might well be impacted by the outcome of the respective family provision claims. In my opinion, no House v The King error is established in this regard. The weight that his Honour gave to the offer was ultimately a matter for him.
As to the issue of delay, I do not accept that his Honour erred in failing to have regard to the alleged delay as Nick and John contend. As already noted (see above at [210]), the delay was not extensive and Maria's explanation for the delay is not unreasonable. In any event, the nub of the complaint by Nick and John is that the delay has meant that they have continued to fund the losses of the partnership and to devote their efforts to Esperia Court, such that an account will need to be taken of their contributions (and there will be a need to address their continuing liability to NAB). That, to my mind, is not a reason not to grant the relief that his Honour granted; rather, those matters will be addressed in due course by the taking of partnership accounts and appropriate recognition of the need for Nick and John to be released from or indemnified for their liability under the NAB loan.
I am therefore not persuaded that ground 6 has been made good.

[40]

Appeal from proprietary estoppel findings in Dennis Proceeding

Before turning to the appeals in relation to the claims for family provision made under the Succession Act, it is convenient to deal with Dennis' proprietary estoppel claim (since the outcome of this is relevant to his family provision claim).
In the amended notice of appeal that the Executors sought leave to file in this appeal, they raise the following grounds on the proprietary estoppel issue: 1. The learned Trial Judge erred (at J[229]) in treating Dennis Soulos' equitable claim to 10 Chapman Street (and further, or alternatively, his claim to the shares in A&R Management) as not being opposed by the executors. 2. His Honour erred (at J[230]) by failing to provide any reasons, or alternatively adequate reasons, for the conclusion that a declaration of beneficial interest in favour of Dennis Soulos in respect of 10 Chapman Street (and in respect of the shares in A&R Management) was a necessary and appropriate remedy in equity for the detriment and unconscionability found at J[228]. 3. His Honour erred in finding (at J[228]) that, in the absence of his receipt of title to 10 Chapman Street and/or the shares in A&R Management, Dennis Soulos would suffer detriment such that it would be unconscionable for him not to receive either or both of those assets. 4. The learned Trial Judge ought to have refused to provide Dennis Soulos with any relief in respect of his proprietary estoppel claim to 10 Chapman Street and/or the shares in A&R Management in circumstances where: (a) in lieu of receiving 10 Chapman Street under the Will (as had been proposed by the Deceased under prior iterations of her testamentary instructions), Dennis Soulos received the property at 132-134 Smith Street, which was a significantly more valuable property than 10 Chapman Street; (b) the aggregate value of the contributions made by Dennis Soulos to each of the properties at 10 Chapman Street and 132-134 Smith Street was, even according to his own evidence, materially less than the value of 132-134 Smith Street; (c) the gift of the more valuable 132-134 Smith Street to Dennis Soulos negated any detriment or unconscionability said to arise from the Deceased's failure to gift 10 Chapman Street to him; and (d) consequently, Dennis Soulos had not established that equity required, or that there was a proper basis for, a grant of relief comprising a conferral upon him of a beneficial interest in 10 Chapman Street and/or the shares in A&R Management. 5. His Honour erred by granting Dennis Soulos any relief in respect of his proprietary estoppel claim to 10 Chapman Street and/or the shares in A&R Management. 5A Further or alternatively, in determining that Dennis Soulos ought to obtain relief comprising a transfer of 10 Chapman Street and/or shares in A&R Management ("A&R") ([228], [230]) and in finding that it would be unconscionable to deprive him of that outcome ([228]]), his Honour: (a) erred by failing to take into account a relevant factor, namely the benefit to Dennis Soulos of his receipt of the gift under the Deceased's will of the property at 132-134 Smith Street (being a significantly more valuable property): (b) erred by failing to take into account a relevant factor, namely the benefit that had accrued (and was continuing to accrue) to Dennis Soulos by reason of his occupation of the Chapman Street property, at least from about December 2003, on a rent-free basis and, in large part, without payment of other outgoings and expenses associated with the occupation of the property: (c) erred, by acting upon a wrong principle, by assessing the detriment said to have been suffered by Dennis Soulos by looking only at his expenditure of time, effort and/or monies upon renovation works to the Chapman Street property rather than, as his Honour ought to have by assessing the overall (or net) effect upon Dennis Soulos of having relied upon the Deceased's historical assurances, including the benefits that flowed to him from his occupation of the property but without the obligations of ownership: (d) erred, by failing to take into account a relevant factor and/or by acting upon a wrong principle, by failing to consider both the question of proportionality (or disproportionality) between the relief proposed and the detriment actually suffered and whether some other, more limited, form of relief would be appropriate and sufficient to avoid any unconscionability; and (e) erred by arriving at a conclusion that was unreasonable or plainly unjust, and thereby wrongfully exercised the Court's discretion concerning the relief, if any, to be granted to Dennis Soulos. … 11. Alternatively, if there was a proper basis for the grant of any relief under the Succession Act 2006 (NSW) in his favour, the learned Trial Judge ought to have limited the relief granted to Dennis Soulos to a grant of a life interest in the Deceased's shareholding in A&R Management (as the Deceased had done in her 22 January 2003 and 3 February 2003 wills) or, alternatively to a grant of a life estate in the property at 10 Chapman Street. [This ground relates to the Succession Act Appeal but is included here as it is part of the amendments for which leave was sought]
The filing of an amended notice of appeal in the Dennis Appeal was not opposed by Dennis, on the basis that it was without prejudice to contentions as to whether any such arguments are available to be argued on appeal. Dennis opposes the proposed amendment to the Executors' grounds of appeal on the basis that the amendment appears to be an attempt to take their position beyond what was pleaded or argued at first instance (AT 6 April 2023 at 202.19-20).
Insofar as appeal ground 5A is concerned, the Executors say that only sub-paragraphs (b) and (c) are contentions not put to the primary judge but these can, nevertheless, be raised on appeal.
Ground 5A is raised in the event that the correct standard for appellate review in respect of grounds 4 and 5 is that identified in House v The King (see below), though the Executors maintain that those grounds raise direct challenges to the correctness of the primary judge's decision. The Executors say that if the appropriate standard of review is the House v The King standard, then the wrongful exercise of discretion is revealed by the four matters identified in ground 5A(a)-(d) (as considered in due course).
Insofar as appeal ground 11 is concerned, the Executors say that the amendment in question raises no new issue and simply reflects an element of the alternative relief that was sought by Dennis himself at first instance (see his pleading at prayer 11(b)).
The Executors in their submissions make clear that grounds 1 and 2, though not expressed as such, are raised in the alternative to grounds 3 to 5A. If any of appeal grounds 3 to 5A is successful, the Executors seek that this Court make orders to finalise the matter, including by any re-exercise of discretion. The Executors accept that if only appeal grounds 1 or 2 succeeds then the question of remitter may arise but they argue that this Court has the benefit of sufficient unchallenged factual findings and sufficient unchallenged evidence to finalise the matter and that the interests of justice warrant this Court determining those matters.
Dennis has filed a notice of contention, maintaining that: 1. In the event that orders 3 to 11 (inclusive) of the orders made on 24 November 2022 are set aside, the substance of the relief granted by the primary judge in relation to the shares in A&R Management Pty Ltd (being orders 3 to 8 of the orders made on 24 November 2022) and the Chapman Street Property (being orders 9 to 11 of the orders made on 24 November 2022) should be granted in any event, by way of an order for the provision of the shares in A&R Management Pty Ltd and the Chapman Street Property under s 59 of the Succession Act 2006 (NSW). 2. In the event that orders 1 to 15 (inclusive) of the orders made on 24 November 2022 are set aside, the substance of the relief granted by the primary judge in relation to the shares in A&R Management Pty Ltd (being orders 3 to 8 of the orders made on 24 November 2022) and the Chapman Street Property (being orders 9 to 11 of the orders made on 24 November 2022) should be granted in any event, by way of an order for the provision of the shares in A&R Management Pty Ltd and the Chapman Street Property under s 59 of the Succession Act 2006 (NSW).
I would grant leave for the filing of the Executors' amended notice of appeal. Insofar as ground 5A is acknowledged by the Executors to go beyond the matters argued at first instance (as to (b) and (c)), these go to the countervailing benefit said to have arisen from the rent-free occupation by Dennis for part of the period (see (b)) (in effect subsumed in the debate as to disproportionality, which was argued at first instance); and to the alleged error of principle in relation to the assessment of benefits obtained through historical "ownership" of the property (which similarly raises the question of disproportionality).
As to ground 11, it is in effect an argument as to the appropriate relief which was raised on Dennis' pleading in argument. I see no prejudice to Dennis in allowing those matters now to be raised on appeal

[41]

Standard for appellate review

As adverted to above, there was a question raised in the submissions as to whether the House v The King standard applies to appellate review of relief for proprietary estoppel. This question was left open (see Fifteenth Eestin Nominees Pty Ltd v Rosenberg (2009) 24 VR 115; [2009] VSCA 112 at [272]; Browne v Browne [2019] WASCA 1 (Browne v Browne) at [96]-[100] (Murphy, Beech JJA and Allanson J); Q (A Pseudonym) v E Co (A Pseudonym) [2020] NSWCA 220; (2020) 383 ALR 469 (Q v E Co) at [165] (Meagher JA, with whom Leeming and Payne JJA agreed).
Dennis submits that the House v The King standard applies to a court's determination of the remedy in a proprietary estoppel case but says that the outcome of this appeal will not turn on which standard applies in respect of the particular contentions advanced in ground 4 of the Executors' grounds of appeal. Dennis submits that those listed matters are irrelevant to the grant of relief in respect of the Chapman Street Property; and, even if relevant, would not support a decision to refuse that relief. It is thus contended that, even if the House v The King standard applies, the appeal would fail.
The Executors' primary position is that the applicable standard is one that requires consideration of the correctness of the primary judge's determination. Reference is made by the Executors to what was said by Gageler J in SZVFW at [35]-[50], as to the line of demarcation being drawn by reference to whether the legal criterion applied or purportedly applied by the primary judge to reach the conclusion demands a unique outcome, in which case the correctness standard applies, or tolerates a range of outcomes, in which case the House v The King standard applies ([49] of that judgment). The Executors say that it is not, in and of itself, the evaluative nature of the primary judge's role in respect of a particular legal question that gives rise to the application of the House v The King standard of appellate review (referring to Gageler J's reasoning at [46] of that judgment); rather, the identification of the appropriate appellate standard of review is more accurately seen as being associated with the question whether the applicable legal criteria permitted of some latitude of choice or margin of appreciation such as to admit of a range of legally permissible outcomes (per Gageler J at [44] of that judgment).
The Executors argue that the fact that equity permits a range of potential outcomes in response to a proprietary estoppel claim does not engage the principles identified in House v The King, noting the steps involved when considering a proprietary estoppel claim include: the determination of whether detriment has been suffered and, if so, whether that detriment is prima facie sufficient for equity to require the representation or encouragement to be made good; determination of whether requiring the representation or encouragement to be made good would be disproportionate and inequitably harsh; and, if such relief would be inequitable, deciding whether lesser relief should be granted (the Executors here referring by way of example to Delaforce v Simpson-Cook (2010) 78 NSWLR 483; [2010] NSWCA 84 (Delaforce) at [3]-[5] (Allsop P, with whom Giles JA agreed), at [56]-[57]; [63]-[65] (Handley AJA); Giumelli v Giumelli (1999) 196 CLR 101; [1999] HCA 10 (Giumelli) at [42] (referring with approval to Commonwealth v Verwayen (1990) 170 CLR 394; [1990] HCA 39 (Verwayen) at 443 (Deane J)).
The Executors say that the primary question arising on a proprietary estoppel claim (namely, whether the representation or assurance should be made good) admits of a unique answer (yes or no); as does the next stage of the inquiry (as to whether such relief would be inequitably harsh), albeit one with an evaluative element; and that it is only in the event that full proprietary relief would be disproportionate or inequitably harsh that the court comes to consider the availability of some lesser form of relief, upon which there may potentially be a discretion to select from a range of outcomes.
In Augusta Pool 1 UK Ltd v Williamson [2023] NSWCA 93 (Augusta Pool 1), Bell CJ (with whose observations Adamson JA and I agreed) recently considered the standard of appellate review in the context of decision-making orders approving the settlement of proceedings under s 173 of the Civil Procedure Act 2005 (NSW), concluding that this involved an exercise of judicial discretion (as opposed to the making of a decision that demanded a unique outcome as per SZVFW at [49]) engaging the House v The King principles. In the course of so doing, his Honour observed (at [2]-[3]) that not every evaluative decision is non-discretionary, referring to Norbis v Norbis (1986) 161 CLR 513 at 536, [1986] HCA 17 at [42]-[47]; Gronow v Gronow (1979) 144 CLR 513 at 525; [1979] HCA 63; and Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194; [2000] HCA 47 at [19]). In Augusta Pool 1 at [6], the relevant determination was as to the making of "such orders as are just with respect to the distribution of any money, including interest, paid under a settlement or paid into the Court" (not dissimilar, as Bell CJ noted, to the exercise of power considered in Botsman v Bolitho (No 1) (2018) 57 VR 68; [2018] VSCA 278); as opposed to establishing whether or not a statutory standard of conduct had been met (as was the case in Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (2003) 214 CLR 51; [2003] HCA 18 at [82] and Perpetual Trustee Company Ltd v Khoshaba [2006] NSWCA 41; (2006) 14 BPR 26,369).
Here, while it is an evaluative exercise to determine whether in a particular case detrimental reliance that has been found to have been suffered is prima facie sufficient for equity to require the relevant representation or encouragement to be made good, I would conclude that such a determination attracted the correctness standard of review. However, the question whether such relief would be disproportionate and inequitably harsh, in one sense is closer to the consideration of what is "just" or "just and equitable" in cases of the kind to which Bell CJ referred and would in my opinion attract the House v The King standard of appellate review (as would the ultimate question as to the appropriate form of relief), this involving potentially a range of views as to the harshness or otherwise in equity of making the representation good. That said, as Dennis submits, in the present case I do not consider that anything turns on the appropriate standard of appellate review for the reasons explained in due course.

[43]

Executors' submissions on grounds 3 to 5A

Grounds 3 and 4 challenge the finding that there was sufficient detriment to give rise to a proprietary estoppel and grounds 5 and 5A in essence go to the relief granted. The Executors maintain that the conferral of a proprietary interest in the Chapman Street Property upon Dennis was not warranted by the available evidence and was disproportionate to the detriment said to have been suffered. The Executors argue that the gift of the more valuable Smith Street Property meant that no unconscionability arose from the deceased's failure to gift Dennis the Chapman Street Property (or the shares in A&R).
As to the first aspect of detriment (the acquisition by A&R of the property rather than by Dennis himself) the Executors point out that had Dennis himself purchased the property in 1998 he would have faced the burden and risks of a loan for the balance of the purchase price and that Dennis led no evidence that he would have met such obligations. The Executors note that Dennis fell into financial difficulty even paying for utilities ([224]; Dennis' affidavit sworn 24 March 2021 at [69]); and that by 2006 (only three years after he purchased the Smith Street Property) he ran into financial difficulty and his mother assisted by purchasing the property from him (Dennis' affidavit sworn 24 March 2021 at [79], [81]). Consequently, the Executors argue that Dennis did not discharge his evidentiary onus of establishing a meaningful and substantive detriment. It is submitted that it is more likely that his parents' purchase of the Chapman Street Property (via A&R) and their agreement that he occupy the property was more beneficial to him than detrimental.
As to the second aspect of the alleged detriment (the renovation work to the Chapman Street Property), the Executors note that in his affidavit sworn 24 March 2021, Dennis identified that: he made no contribution to A&R's purchase of the property ([56]-[61]); from about September 1998 to December 2003, he occupied the Chapman Street Property and paid market rent ([61]-[62]); in about late 1998, his parents agreed that he would undertake renovation work, for which he would receive reimbursement but only in respect of the costs of materials and any third-party contractors ([63]); Dennis proceeded to undertake renovation work, the cost of which he estimated to be $300,000 (including his personal labour) and for which he received reimbursement of approximately $150,000 ([64]); and Dennis paid market rent ($1,440 per month) for occupying the Chapman Street Property, up to about December 2003 but not thereafter ([65]-[66]). In his updating affidavit sworn 18 June 2021, Dennis identified that: his non-reimbursed time and expenditure upon the Chapman Street Property was closer in value to approximately $202,000 (being $350,000 less about $148,000 of reimbursements) (72); Dennis' closing submissions at [14]-[15], [21]); and he had paid electricity and water rates, council rates, and for some repairs and maintenance in respect of the Chapman Street Property in the period from about September 1998 to date (totalling approximately $222,732).
The Executors argue that this is not an accurate assessment of detriment. They argue that Dennis' payment of electricity bills ($64,400) and water rates ($15,640) (Dennis' affidavit sworn 18 June 2021 at 72) was not a detriment because he utilised those services; and, therefore, they say that, at best, Dennis' total expenditure upon the property was in the vicinity of $344,000 (being about $424,000 less about $80,000).
Further, the Executors emphasise that, on his own unchallenged evidence, Dennis has enjoyed, since December 2003, the rent-free occupation of the Chapman Street Property. It is noted that Dennis' evidence was that market rent in the late 1990s was $1,440 per month. The Executors calculate that even if that rent remained static for the last 20 years, that represents a cumulative value, for the period from January 2004 to September 2022 (with no adjustment for the time value of money) of about $324,000 (being 225 months at $1,440 per month). It is noted that this does not include the other expenses paid on Dennis' behalf by the deceased (or A&R).
Insofar as Dennis claimed that his contributions to the Smith Street Property gave rise to an assumed proprietary estoppel (which was not pleaded in circumstances where the property had in fact been left to him under the Will), such that the deceased's gift of it was not really a gift at all, the Executors point out that Dennis' contributions involved a relatively small monetary value (a few tens of thousands of dollars), yet the Smith Street Property was worth between $3.4 million and $5.8 million (and that it was not suggested that any life-changing decisions were made by Dennis in that regard).
Thus, the Executors challenge the overall detriment claimed to be suffered by Dennis. In their submissions in reply, the Executors make clear that they accept it is not in dispute that performance of work constituted (in isolation) a detriment. However, the Executors say that this does not equate to sufficient detriment to warrant proprietary relief, and they maintain that Dennis' evidence was insufficient to reach the point at which it might be said that proprietary relief was the prima facie position and they maintain that Dennis' submissions as to "expenditure of a large and valuable amount of time and money" and "vast amounts of time and money" are inaccurate.
The Executors further argue that the sequence of testamentary documents prior to the deceased's last Will shows that the deceased never lost sight of Dennis' connection with the Chapman Street Property and his need for a secure place to live. They argue that, where the question of the deceased's conscience was a central component in an estoppel claim, it was critical that his Honour take into account the manner in which the deceased treated Dennis by the terms of her last Will and that the primary judge's failure to do so was an error.
The Executors submit that the deceased's conscience was not bound simply because she ultimately chose a different way to look after Dennis (i.e., by leaving him the Smith Street Property). They say that the proposed gifts to Dennis after the informally executed testamentary document of 8 February 2017 were an "improvement" (at least as concerns the valuations of the respective properties) from that which he would have received under the 4 June 2008 will.
Pausing here, as referred to earlier, Dennis argues that any inference to be drawn from the sequence of wills is that the deceased left Dennis 100% of the Smith Street Property not in lieu of any claim he might have to the Chapman Street Property but instead of the earlier proposed interest in the Parsons Avenue Property.
Insofar as Dennis' detrimental reliance case depended upon his contribution of time and effort (and payment of some expenses) with a value (in his updating affidavit sworn 18 June 2021 at 72), of about $202,000, the Executors maintain that Dennis' claim was not based upon any alleged "life-changing decisions with irreversible consequences of a profoundly personal nature" (adopting the language in Donis v Donis (2007) 19 VR 577; [2007] VSCA 89 (Donis v Donis) at [34] (Nettle JA, as his Honour then was, with whom Maxwell ACJ and Ashley JA agreed); Sidhu v Van Dyke (2014) 251 CLR 505; [2014] HCA 19 at [84] (Sidhu v Van Dyke), though noting that this expression is not a formula (Q v E Co at [126]), [169]).
The Executors, in their submissions in reply, emphasise that the evidence was that the arrangement between Dennis and the deceased (as to the renovations to the Chapman Street Property) was that there would be reimbursement for out-of-pocket expenses (referring to Dennis' affidavit sworn 24 March 2021 at [63]-[64]). They argue that the calculation by Dennis of the value of his work as a proportion of the acquisition cost of the Chapman Street Property is irrelevant for the purposes of Dennis' proprietary estoppel claim and incorrect (since, even if relevant, the question would be the extent to which Dennis' expenditure of time directly contributed to an increase in value of the property, and evidence to support that analysis would be required). The Executors argue that, even assuming that the time spent on renovations produced an equivalent increase in value (which they say cannot be assumed as a reliable fact), Dennis' contribution of 50% of the initial value of the property would mean a contribution of 33% to its total improved value. However, the Executors say that this was not an available conclusion on the evidence.
The Executors accept that Dennis' evidence stood unchallenged. However, they say that it did not need to be challenged and that Dennis had ascribed a particular monetary value to the work and never suggested that he had made any life-altering decisions. It is noted that there was not even any evidence as to the opportunity cost (in dollar terms or personal terms) of the time that he spent on the renovations.
The Executors contend that Dennis' claim fell within a class of case in which relief ought to have been considered upon the basis of a detriment involving only "a relatively small, readily quantifiable monetary outlay" (referring to Q v E Co at [169]), noting that Dennis pursued this claim in circumstances where he is to receive a different very valuable property under the Will and where he has resided in the Chapman Street Property on a rent-free basis for almost 20 years.
As to the contentions by Dennis as to his contribution to other properties, the Executors say that these contributions are irrelevant to the estoppel claim and that, even if relevant, the entire value of Dennis' work on the Parsons Avenue, Smith Street and 77 The Boulevarde Properties was, on Dennis' own case, about $90,000. As to Dennis' submissions regarding the Parsons Avenue Property, the Executors note that Dennis abandoned his proprietary estoppel claim over that property ([162]) and hence it was never tested. (Although the Executors suggest that the abandonment of the claim speaks to its lack of merit, such a conclusion is speculative and it may be noted that Dennis' position is that this was abandoned having regard to Maria's circumstances.)
The Executors thus argue that Dennis has not suffered any overall detriment and that, even if he has, it is insufficient to bind the conscience of the deceased. It is submitted that conferral of a proprietary interest in the Chapman Street Property was disproportionate relief; and that the deceased's conscience was assuaged by the gift of the Smith Street Property and by requesting that her grandsons (as shareholders of A&R) permit Dennis to live in the Chapman Street Property for as long as he wishes. It is noted that, while this was only a request and not binding, his Honour could have made it binding if that was the issue of concern.
If the appropriate standard of review be that in House v The King, then the Executors say that the wrongful exercise of discretion by the primary judge is revealed by: the primary judge's failure to take into account (in respect of the proprietary estoppel claim) Dennis' receipt of the Smith Street Property under the Will (cf the primary judge's consideration of this in respect of the family provision claim at [442]); the failure to take account of the countervailing benefit of Dennis' rent-free and expense-subsidised occupation of the Chapman Street Property (the Executors' complaint being that his Honour referred to these facts at [221]-[224] but failed to import them into the analysis at [228]); and, third, the failure to apply an important principle by not considering whether the relief was disproportionate. The Executors say that reference to "significant" detriment at [228] involved no analysis of proportionality; and that his Honour's determination comprised an unreasonable result (manifested in disproportionate relief which yielded a windfall gain to Dennis) that bespeaks a wrongful exercise of discretion.
The Executors say that the first two matters (framed as failures to take into account relevant considerations) also reflect an error of principle; and that the third (framed as an error of principle) might also be framed as one involving a failure to consider a relevant matter, namely whether some more limited form of relief was appropriate. It is submitted that the assessment of detriment requires a comparison between the position adopted by the claimant and the position that would have been occupied had there not been a change of position in reliance upon the encouragement or inducement (Q v E Co at [123], [154], citing Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641 (Grundt) at 674-675 (Dixon J); [1937] HCA 58). Reliance is also placed on the principle that equity's enquiry involves consideration of all of the circumstances (Donis v Donis at [20]). The Executors say that, by approaching this too narrowly, his Honour erred.
Complaint is made that the primary judge failed to adhere to the principle that equity goes no further than is necessary to prevent unconscionable conduct (Q v E Co at [168], citing Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 at 419; [1988] HCA 7 (Waltons Stores)).

[44]

Dennis' submissions as to grounds 3 to 5A

Dennis submits that the Executors cannot now contend that he suffered no detriment, having expressly admitted detriment before the primary judge; and he argues that the invocation of the proportionality principle is mistaken at the level of principle.
As to the question of detriment, Dennis says that the Executors did not deny at first instance, in any pleading or submission, that he had established detriment through his affidavit evidence; rather, they expressly admitted in closing address that Dennis suffered detriment.
The Executors point to their submissions at first instance (at [90]; and at [84]-[88]) and say that they were clearly contending that equity would not grant relief to Dennis, because the conscience of the deceased (now the Executors) was not bound to make good on the alleged promise or representation.
Dennis maintains that his unchallenged evidence established that he changed his position in reliance upon the promises made to him by the deceased (involving, among other things, the expenditure of a large and valuable amount of time and money on the Chapman Street Property, including its substantial renovation) and that he would not have done so if the promises had not been made. It is submitted that, if the promise is not performed, Dennis will have spent vast amounts of time and money on a property that he will never receive, which expenditure he would not otherwise have incurred. It is submitted that the change of position and these consequences constitute detriment (reference being made to Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd (2014) 253 CLR 560; [2014] HCA 14 (Hills) at [84]-[88] per Hayne, Crennan, Kiefel, Bell and Keane JJ and Delaforce at [5]).
As to the proportionality principle, Dennis says that this involves an assessment of whether the relief sought ought to be granted having regard to the detriment and that it operates only where the relief would be "out of all proportion to the detriment" (Delaforce at [62]). Dennis argues that the proportionality principle is simply one principle that operates within the overall process of considering whether to grant the relief sought; and that it is directed (see Delaforce) to a comparison between the relief sought and the detriment operating in a context in which, prima facie, the appropriate remedy in the case of an estoppel of this kind is for the person making the promise to be held to it (referring to Vukic v Grbin [2006] NSWSC 41 at [33], approved in Delaforce at [53], to the effect that, in the case of proprietary estoppel, the expectation basis of the equity favours the view that the prima facie entitlement is to satisfaction of the expectation).
Dennis argues that the Executors seek to look away from the detriment (i.e., the change of position under which Dennis came to spend his time and money on the Chapman Street Property) and the relief sought in respect of it (i.e., the transfer of the Chapman Street Property to him as promised), and point instead to a later event (i.e., the deceased dying with a will that gifted the Smith Street Property to Dennis) in order to contend that no relief should be granted in respect of the Chapman Street Property. Dennis says that for these reasons, the Executors have erroneously attempted to invoke the proportionality principle.
The Executors reject the proposition that the gift of the Smith Street Property is unconnected to the relevant enquiry. It is submitted that, had the deceased provided Dennis with a testamentary gift of a cash amount (identifiable as being in lieu of her promises concerning the Chapman Street Property), it could not be disputed that such a gift would bear an immediate relevance to his claim to proprietary relief; and the Executors argue that the gift of the Smith Street Property is not relevantly different. They emphasise that Dennis bore the onus of establishing a basis for proprietary relief and was required to establish that the conscience of the deceased was bound.
Dennis points out that the concept of "minimum equity" is no longer the correct approach (Giumelli at [48]; [50]) and that equity does not measure relief in "coffee spoons" (Sidhu v Van Dyke at [79]-[84] and Delaforce at [1]-[5]). Dennis argues that it is only where relief framed on the basis of holding the promisor to the promise is "inequitably harsh" and "out of all proportion" to the detriment that some lesser relief should be awarded (citing Giumelli at [48]; [50]; Sidhu v Van Dyke at [79]-[82]; Donis v Donis at [19]; Q v E Co at [171] and Delaforce at [62]); and he submits that the present case is not one where it could be said that the relief would be "inequitably harsh" or "out of all proportion" to the nature of Dennis' change of position and the quantum and value of the time and expenditure he invested on the Chapman Street Property as a result. Dennis maintains that there is no disproportionality between detriment and relief, emphasising that the value of his labour and expenditure in the Chapman Street Property (on his calculations) was over $200,000 (about half of what the property was then worth).
Dennis maintains that the fact that the Smith Street Property was gifted to him in the Will is irrelevant to his claim over the Chapman Street Property (and, even if that were not so, the fact provides no basis for an argument that Dennis should not have been granted relief in relation to the Chapman Street Property). Further, Dennis complains that what he refers to as "the Smith Street assertion" was never pleaded (even though the Executors were aware of the basis of Dennis' claim and of the fact that he had been left the Smith Street Property for at least a year and a half before the hearing).
Dennis submits that the Executors' submissions in relation to the Smith Street Property amount in substance to a contention that Dennis should not receive a grant of relief to address the admitted detriment just because he happened to have been gifted the Smith Street Property in the Will. The Executors reject the characterisation of their submissions; they argue that, given that Dennis' claim was premised upon the deceased's failure to gift the Chapman Street Property to him in the Will, other gifts by the deceased under that same will are of relevance. Dennis argues that this is a contention based on the notion that he received the Smith Street Property instead of, and as substitute for, the Chapman Street Property (an argument that he maintains is inconsistent with the historical sequence of the wills referred to above).
Dennis points out that there was no evidence that the deceased had decided to give him the Smith Street Property in the Will instead of the Chapman Street Property (so as to satisfy the equities that arose in Dennis' favour in respect of the Chapman Street Property); and he points out that such a proposition is directly contrary to the Executors' written submissions at first instance (at [59], where the Executors said that the deceased changed her will to give Dennis the Smith Street Property instead of the Parsons Avenue Property, not instead of the Chapman Street Property).
The Executors argue that there is an objective evidentiary basis upon which to conclude that the deceased considered the Smith Street Property a replacement gift for the Chapman Street Property (by reference to the sequence of testamentary documents, noting that under the deceased's 4 June 2008 will, Dennis was to receive the shares in A&R and that her next will (11 June 2010) treated the Chapman Street Property as a gift to Dennis only to the extent of a life estate, but then included (for the first time) a gift of 50% of the Smith Street Property). They say that the reference in their submissions at first instance to a shift from the Parsons Avenue Property to the Smith Street Property was obviously a slip, and the correct reference was to the Chapman Street Property (noting that the deceased never recorded a gift of the Parsons Avenue Property other than in respect of a life estate to Dennis).
The Executors' response is that this was a typographical error in their submissions and that the reference was meant to be to the Chapman Street Property. However, Dennis argues that this is further supported by the Executors' own summary of the deceased's wills (referring to the Executors' submissions at [38]-[39]).
Noting that the deceased expressed in the Will a desire that Dennis be allowed to continue to live at the Chapman Street Property (see cl 11(a) of the Will), Dennis argues that this provides further confirmation that the deceased was not giving him the Smith Street Property instead of the Chapman Street Property. It is submitted that the deceased wanted Dennis to be able to continue to live at and enjoy the Chapman Street Property as well as receiving the Smith Street Property. In response, the Executors submit that the shift in the testamentary intentions (from a gift of the Chapman Street Property to a gift of the Smith Street Property) occurred in the period between 2008 and 2010, and it is argued that the submission made by Dennis serves to emphasise the disproportionate and unreasonable outcome associated with conferring ownership of the Chapman Street Property upon him, as opposed to (for example) permitting him to reside in the Chapman Street Property whilst taking the gift of the Smith Street Property.
Dennis also argues that the Executors' submission in this regard proceeds on the basis of an unstated (and he says incorrect) assumption that the Smith Street Property represents a "pure gift", and that the deceased had no equitable or moral obligation to leave the Smith Street Property to him; whereas Dennis argues that, given the unchallenged evidence in relation to the circumstances surrounding the Smith Street Property, the gift of that property to Dennis is properly understood as satisfying an underlying equitable right held by Dennis in respect of that property (or at the very least a strong moral claim to that property as well, by reason of his contribution to it). Thus, Dennis argues that the Smith Street Property should not be considered as something available to be used to satisfy equities that exist in Dennis' favour in respect of the Chapman Street Property.
As to the Smith Street Property, the Executors say that: the evidence does not support the description "significant renovation and restoration works" (noting that the monetary value of that work was identified by Dennis as being $60,000, of which $30,000 was reimbursed to him (Dennis' affidavit sworn 24 March 2021 at [40]); figures later updated to $62,200 and $32,200 respectively (Dennis' affidavit sworn 18 June 2021 at 72); Dennis' contentions were limited to that monetary value (there was no case based upon opportunity cost) and that the evidence suggests that the work on the Smith Street Property took place between about June 2003 and July 2004; and that Dennis had not returned to any other work after his heart attack in about November 1999. (I note in relation to that last proposition that Dennis' evidence seems to be that he did not work for six months after his heart attack but that he currently operates a signage business and he has given evidence of other work performed by him since 1999, for example, his work on the Parsons Avenue Property in 2002 - see [76].)
The Executors maintain that Dennis' contention as to a resulting increase in rental is not supported by the evidence (referring to Dennis' affidavit sworn 24 March 2021 at [42]-[43], which did not evidence any causal connection between his work and the increased rental returns); and they argue that, even if renovation work increased the prospect of raising rents, it does not follow that the increased income stream was solely (or even primarily) the product of Dennis' efforts. In that regard, it is noted that there was no evidence as to how long the previous rental rates had been in place. The Executors says that the analysis presented by Dennis assumes that $180/week for the café and $80/week for the unit were market rents. It is submitted that if those were outdated rental arrangements, then the increased rent was not attributable to Dennis. The Executors thus argue that the notion that Dennis contributed about $815,000 to the estate has no evidentiary basis.
As to the Smith Street Property, the Executors say that the relevant fact is that Dennis did not bring such a claim in relation to that property and that, even on his own case, Dennis' contribution to the Smith Street Property was about $30,000. Finally, in this regard, the Executors say that the work undertaken on 77 The Boulevarde is irrelevant but, in any event, the value of that work was, at best, approximately $30,000.
The Executors say that Dennis is incorrect to suggest that a $30,000 contribution resulted in a clear and unchallengeable proprietary right to the Smith Street Property (with a value between $3.4 million and $5.8 million).
In any event, Dennis argues that it is not correct to treat a testamentary gift as assuaging the equitable rights that have arisen and exist in respect of some other property by reason of the events which have transpired in relation to that other property. It is submitted that to do so is to assume that the beneficiary of the gift is not entitled to enjoy the receipt of a gift under a will, and that any gift must first be used to exhaust a beneficiary's claims against the deceased, with all other beneficiaries getting their gifts freely. Dennis argues that, considered as a gift alone (i.e., leaving aside what he had done in respect of the Smith Street Property), the gift of the Smith Street Property was a gift to one of the deceased's four children, out of a very large estate, and in circumstances where the deceased had bequeathed and/or had given inter vivos substantial gifts to each of her children.
Complaint is further made that, although the Executors advance the contention that Dennis will receive the Smith Street Property and that this will serve to address Dennis' claim over the Chapman Street Property, the Executors have made no attempt to demonstrate that Dennis will actually receive that property. Dennis says that the evidence before the primary judge demonstrated that, due to the increasing quantum of the costs of the estate administration and the fact that one of the properties gifted to a beneficiary (Nick) has already had to be sold to meet some of those expenses, the Smith Street Property will probably be sold and a significant portion of the net sale proceeds lost to cover administration costs. Dennis says that the scale of that loss from his perspective is unknown because the Executors have not disclosed all commissions intended to be charged and the costs are ongoing. It is submitted (and I agree) that it is unsatisfactory for the Executors, in these circumstances, to contend that the gift of the Smith Street Property satisfies Dennis' equitable claim in respect of the Chapman Street Property. (The Executors' response to this is to point to the fact that the Smith Street Property is far more valuable and hence, as I understand it, they suggest that there will be some benefit remaining to Dennis in respect of that bequest. In that context there was debate in the oral submissions as to the value to be attributed to the Smith Street Property, see AT 5 April 2023 at 123.35-124.30.)
The Executors say that this is inaccurate and unfair, and that there is no suggestion that Dennis will not receive a very significant portion of the net proceeds of sale of the Smith Street Property (once it is sold "as it almost necessarily must be"). The Executors point out that their costs (which they say are largely attributable to the litigation at first instance) are but a relatively small fraction of the total costs incurred by the other Soulos family members in that litigation.
Dennis, however, maintains that even if, following a sale of the Smith Street Property and other estate properties and the satisfaction of administration costs, there were to be a sum left over to pay to him, the receipt of that cash sum reflects a substantially different outcome from the prima facie appropriate one (namely, holding the deceased's estate to the promise). It is submitted that there is nothing inequitably harsh, in these circumstances, in a grant of relief which requires fulfilment of the promise and the transfer of the Chapman Street Property to Dennis.
Dennis argues that, as a matter of principle, for a benefit to be able to be taken into account, as a countervailing benefit, it must be established that it was derived from the claimant's change in position brought about by the promise (citing Ashton v Pratt (2015) 88 NSWLR 281; [2015] NSWCA 12 (Ashton v Pratt), Q v E Co; Gee v Gee [2018] EWHC 1393 (Ch) at [125]); and he maintains that the gift of the Smith Street Property does not satisfy that test.
As to the pleading issue, Dennis says that the arguments that the Executors now seek to advance were not pleaded (repeating that the Executors did not deny the claim, did not plead the existence of a countervailing benefit, and did not assert that a material fact relied upon for the purpose of any such denial was the fact that the Smith Street Property had been left to Dennis in the Will). Dennis contends that if the Executors wished to deny his claim on that basis, then it was incumbent upon the Executors to do so; noting that they could have done so (as they knew what Dennis was alleging and they knew that the deceased had gifted him the Smith Street Property in the Will). Hence, Dennis says that it was not open to the Executors to deny the claim on this basis in closing address as they did, and it is not open to them to do so now.
Further, Dennis says that the Executors are now advancing arguments that were not put at first instance: namely, the attempt to deny detriment and the argument that Dennis cannot have relief because he lived at the Chapman Street Property rent-free after 2003 and that is a countervailing benefit. Complaint is again made that the Executors knew about the rent-free occupation of the Chapman Street Property through Dennis' own affidavit evidence but they did not deny the claim or plead any such countervailing benefit. In any event, Dennis says that this new contention is plainly wrong because it fails to recognise the evidence that Dennis did make rental payments for some years and those payments were made for the express purpose of meeting the mortgage payments for the property (such that in substance Dennis was making payments towards the mortgage in respect of the house promised to him). Further, it is said that this also ignores the substantial detriment in the form of the time and money expended by him on all of the renovation work, done at a time when Dennis was making these payments, and on the faith of the promises made to him.
The Executors accept that their defence did not plead the existence of a countervailing benefit (nor did it refer to the gift of the Smith Street Property) and that they did not make submissions on the topic of countervailing benefits at first instance, but they disavow any such submission on this appeal that the Smith Street Property is a countervailing benefit. Rather, the Executors say that the countervailing benefit was (and continues to be) the occupation by Dennis of the Chapman Street Property on a rent-free and expense-subsidised basis for approximately 20 years. It is submitted that this is directly related to the dealings in question because, had Dennis himself purchased the property, he would then have borne the burden of the debt and interest obligations.
The Executors say that it was unnecessary for their defence to plead to those matters; and that the facts on which they rely for these contentions are entirely drawn from Dennis' own unchallenged affidavit evidence and/or from unchallenged documents in the form of historical testamentary documents. It is noted that the Executors' written opening submissions at first instance referred to reliance upon the other testamentary gifts as a factor going to the question of the deceased's conscience.
As to the fact that the countervailing benefit argument was not put at first instance, the Executors argue that there is no prejudice to Dennis in circumstances where the evidence concerning payments during his occupation of the Chapman Street Property are contained entirely within Dennis' own affidavit evidence. The Executors say that the facts in question were before the primary judge and expressly acknowledged at [221]-[224]. The Executors argue that the principles identified in Coulton v Holcombe (1986) 162 CLR 1 at 7-8; [1986] HCA 33; Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 at 438; [1950] HCA 35 and Water Board v Moustakas (1988) 180 CLR 491 at 497; [1988] HCA 12 do not prevent this factual matter from being considered on appeal. The Executors maintain that their reliance upon this countervailing benefit argument to support the conclusion that no material detriment (or insufficient detriment) has been suffered so as to warrant proprietary or any relief is not contrary to, or inconsistent with, their case at first instance (cf Australian Karting Association Ltd v Karting (New South Wales) Incorporated [2022] NSWCA 188 at [61] (Gleeson JA, Meagher JA and Simpson AJA agreeing)).
The Executors maintain their factual challenge with respect to the question of "significant detriment". The Executors say that they are not asking for this Court to undertake a precise mathematical assessment of detriment down to dollars and cents. They submit that, even if Dennis suffered an identifiable net detriment, it is realistically in the tens of thousands of dollars (not the hundreds of thousands of dollars).

[45]

Determination

The principles as to proprietary estoppel were considered by the High Court in Sidhu v Van Dyke and applied in this Court in Q v E Co (Meagher JA, with whom Leeming and Payne JJA agreed) and were not here in dispute. It is recognised that the fundamental purpose of equitable estoppels is to protect against detriment (see Meagher JA in Q v E Co at [123]), namely, the prejudice or disadvantage that the party invoking the estoppel would suffer by reason of his or her change of position in reliance on the encouraged expectation if there were to be a departure therefrom (see Grundt per Dixon J at 674-675; and Bathurst CJ in Ashton v Pratt. As the Executors point out, however, that analysis of detriment in the context of a proprietary estoppel claim is not undertaken narrowly or technically; rather, it involves a broad enquiry of all relevant circumstances (Q v E Co at [124], citing, inter alia, Donis v Donis at [20] per Nettle JA).
As noted earlier, in the present case there was no challenge to the evidence of Dennis as to the representations made or the expectation encouraged in him as to the ownership of the Chapman Street Property, nor that he relied on those representations and acted in that expectation in agreeing to the arrangement whereby A&R acquired the property and in carrying out renovations to that property in part at his own expense. Rather, the Executors challenge the proposition that there was "significant detriment" or detriment sufficient to give rise to a prima facie entitlement to relief; and, as noted, they argue that the countervailing benefit that Dennis has obtained (by virtue of a considerable period of rent-free accommodation) means that the deceased's conscience in relation to the Chapman Street Property was assuaged and it is not unconscionable for the deceased to have departed from the expectation that had been encouraged in Dennis that he would obtain ownership of the Chapman Street Property. The Executors further rely on the fact that Dennis was left the Smith Street Property under the Will, not as a countervailing benefit but as something to be taken into account (in effect as a substitute for the Chapman Street Property) that renders the ultimate relief disproportionate in the circumstances.
The Executors argue that the materiality of the alleged detriment arises for consideration in at least three overlapping ways: first, the detriment must be "substantial" or involve "something substantial" (or that it be "real" or "material") such that equity considers the other party's conscience to be bound (Q v E Co at [127], citing, inter alia, Hills at [150] (Gageler J)); second, it is necessary to consider whether the plaintiff's reliance was accompanied by countervailing benefits which might impact the question of overall detriment (citing Q v E Co at [154]-[155]); third, it is necessary to consider whether making good the encouragement would operate inequitably harshly, such that some lesser form of relief, or no relief, might be appropriate.
As to the first, Dennis used substantial capital ($98,758) and gave up one year's worth of his own earning capacity (52 weeks, valued by him at $104,000) to effect the renovations to the Chapman Street Property that he undertook on the understanding that he would one day own the property. That investment in the renovation of the property is material when one considers that the capital outlay (leaving aside the contribution of Dennis' own efforts) represented close to one third of the initial purchase price for the property.
I am not persuaded that his Honour erred in concluding that Dennis had established sufficient detriment to give rise to a prima facie entitlement to equitable relief applying the principles of proprietary estoppel (there is no challenge to the fact that the matter was not disposed of by reference to a common intention constructive trust).
Much emphasis was placed by the Executors on the proposition that Dennis had not made a life-changing decision in reliance on the promises made to him or expectation encouraged in him (adopting the terminology in Donis v Donis and considered in Sidhu v Van Dyke). However, what amounts to a "life-changing" decision may vary from case to case and it is a guide to determining whether there is significant detriment (not an element of the cause of action as such). Moreover, it involves an evaluative judgment for which, like a determination of whether conduct is unconscionable in breach of statutory provisions prohibiting such conduct, there may not necessarily be only one correct outcome.
In the present case, there is no dispute that Dennis agreed to an arrangement whereby he adopted the position that his parents wanted in relation to his family law property settlement with Kerrie so as to preserve his "A" class shares in Esperia Court, and then transferred those shares back to the deceased, on the faith of the promise that those shares would ultimately be returned to him and that his parents would assist him back into the property market. Relevant to his proprietary estoppel claim is the fact that Dennis then acceded to an arrangement at the deceased's behest, whereby the house that he wanted to purchase to get back into the market (the Chapman Street Property) would be acquired in A&R's name, on the faith of a promise that it would eventually be his own. The payment of rent for the first five or so years is consistent with the property being treated as his own, given that it covered the mortgage repayments; and the renovations were carried out (using Dennis' own labour but also his payment of certain of the contractors' expenses) on the basis of clear statements from the deceased acknowledging that the house would be his. An expectation of ownership of real property is quite different from an expectation of a life interest in such property (not least because the former carries with it the ability to make provision for the inheritance. In that sense there was quite clearly a life-changing decision made by Dennis as to the Chapman Street Property on the faith of the representations made to him as to his ultimate ownership of that property.
As to the second of the considerations referred to by the Executors, there is no doubt that, in considering the question of detriment, account may be taken of countervailing benefits which have accrued to the party invoking the estoppel (as was the case in Ashton v Pratt, where the Court, in concluding that the appellant had not established detriment, took into account, inter alia, gifts that the appellant had received during and following the termination of her relationship with the deceased). Meagher JA said in Q v E Co at [155]: There is nothing contrary to Giumelli or Sidhu in having regard to the benefits which accrued to a party attempting to set up an estoppel. The suggestion that doing so reflects English rather than Australian law - as it was put, "positive" rather than "negative" proportionality - confuses two questions, namely whether there is detriment and whether, where there is, the ordinary or usual remedy will be to require the party estopped to make good the encouraged expectation. It is possible to conceive of cases in which a party relying on an expectation will have benefitted so greatly through his or her reliance that he or she would suffer no prejudice or disadvantage if the expectation were departed from. In such a case conscience would be unlikely to require that the party who created the expectation make it good, in whole or part.
The debate on this issue in this Court in essence was not as to whether countervailing benefits may (or should) be taken into account but, rather, whether or to what extent such benefits must be connected with the relevant expectation or representation giving rise to the estoppel.
There is no doubt that Dennis has had the benefit of rent-free occupation since December 2003 (on the Executors' calculations worth at least $324,000). Recalling Dixon J in Grundt, a comparison needs to be made between the position Dennis currently occupies, and the position he would occupy had he not changed his position in reliance on the promise that the Chapman Street Property would be gifted to him.
In respect of his current position, Dennis has enjoyed two decades of rent-free accommodation, has had the deceased (through A&R) occasionally pay for utilities in connection with the property, and has had the benefit of the renovations of the property partially funded from the deceased. He does not have the benefit of a devise in his favour of the property in the Will, simply the benefit (if it can be so termed) of the deceased's request that her grandchildren (to whom the shares in A&R have been bequeathed) continue to "lease" the property to him. That precatory request hardly approximates ownership of the property. In the counterfactual, Dennis would not have expended time and money renovating the property, nor spent two decades paying council rates, nor paid rent from 1998 to 2003 (although he would have occurred significant expense in acquiring his own accommodation, through either rent or purchase, but on this counterfactual he might be expected to have sought to retain some benefit from the assets of his marriage that might have assisted him in that regard).
Dennis has clearly benefited from the arrangement, having suffered both financial difficulties and health problems over the years which affected even his ability to pay utility expenses. However, as noted, he has also contributed to the renovation of the property. At least some of the benefits Dennis reaped as a consequence of this arrangement were arguably only necessary due to his reliance on the deceased's promise.
The evaluative exercise of examining whether a party has suffered detriment does not require a narrow, balance sheet-like approach in which the opportunities available in the counterfactual are quantified and valued (see Hills at 600-601 (Hayne, Crennan, Kiefel, Bell and Keane JJ)). This is made particularly clear in Q v E Co per Meagher JA at [157]: What is foreclosed by authority is attempting to quantify all forms of advantage and disadvantage when making a comparison between the relying party's position in fact and their position as it might have been in the absence of reliance on the encouraged expectation.
A financial comparison of the sort that the Executors appear to encourage (see at [36]-[37] of their submissions) is not appropriate. Considerations in both the present situation and the counterfactual are unquantifiable. It appears likely that, had Dennis' parents not told him they would assist him to re-enter the property market and encouraged him to allow Kerrie to take the majority share in the matrimonial home (due to their own concerns about her taking his shares in Esperia Court), Dennis would have sought a more favourable divorce settlement which may have allowed him to pay a deposit without parental assistance (see Dennis' submissions at [8]-[10]). Further, had the promise not been made that the property would be his one day, Dennis may have sought alternative arrangements that would have ensured that the Chapman Street Property would be in his name (such as taking a loan from his parents to fund the deposit and mortgage repayments) (see Dennis' submissions at [11]-[12]). These intangible changes in position accompany the significant and quantifiable expenses he has incurred in respect of the property, both in its initial renovation and its ongoing maintenance.
Following Meagher JA in Q v E Co, the rent-free accommodation Dennis has enjoyed must be factored into the exercise of determining detriment. However, Dennis has conducted his life, dating back to his divorce in 1998, based on his parents' promise that the Chapman Street Property would be given to him. He has expended considerable money, time and effort in reliance on that promise. On balance the countervailing benefits are not so significant as to lead to a conclusion that no detriment has been suffered. This is not a situation such as that in Ashton v Pratt, in which the claimant had benefited substantially from the arrangement, and also could not demonstrate detriment suffered as a result of the changes she made to her position. Here, there is a benefit, but there is clearly also a detriment suffered. The countervailing benefits to which the Executors point do not displace the significance of that detriment. The primary judge did not err in any misapplication of principle in a House v The King sense in this regard.
Thus, as to whether the subsequent rent-free occupation for a large number of years was a countervailing benefit so as to make it not unconscionable for the deceased to depart from her promise, to the extent that there is a requirement for a connection between the promise and the countervailing benefit, that is satisfied in the present case. However, I am not persuaded that the primary judge erred in concluding that the deceased's conscience in this regard would be satisfied only by recognition of beneficial ownership of the property. As already noted, there is a significant difference between ownership and life tenancy.
As to the third of the considerations to which the Executors refer, whether the relief granted was disproportionate, this raises the issue as to the bequest to Dennis under the Will of a more valuable property (the Smith Street Property), which the Executors maintain assuaged the deceased's conscience in relation to the promises made in respect of the Chapman Street Property (relying on Allsop P in Delaforce at [3] as to the necessity to consider any matters that can "assuage the detriment brought about by the resiling from the representation or encouragement").
Generally speaking, in cases where the detriment suffered is being compared to some benefit, as in the "countervailing benefits" cases referred to above, it appears that the benefit to be considered must have been received as a consequence of a change to one's position in reliance on a promise or representation (see Q v E Co at [154]-[155]). In that regard, the evidence does not support a conclusion that the gift of the Smith Street Property under the Will was related to the decision not to leave Dennis the Chapman Street Property. Reference has been made above to the fact that the deceased made frequent changes to her will over the years. These changes (which took place across 15 wills) do not evince an intention on the part of the deceased to have the Smith Street Property serve as a replacement for the promised ownership of the Chapman Street Property. Indeed, when the 30 January 2015 will downgraded Dennis' interest in the Chapman Street Property from a life estate to a reference to a leasehold interest, a previous clause giving 50% of the Smith Street Property was removed. Further, when the 100% interest in Smith Street was included (in February 2017), the reference to the leasehold interest in the Chapman Street Property had been present in the will since 2015.
Suffice it to say that the interests that it was proposed that Dennis receive in the Chapman Street and Smith Street Properties through the deceased's will changed frequently and seemingly without reference to each other. It is therefore difficult to perceive the gift of the Smith Street Property as a replacement for the promises made in relation to the Chapman Street Property; and hence I do not accept that the gift of the Smith Street Property operates either to assuage the deceased's conscience or to act as some kind of countervailing benefit that reduces the detriment suffered by Dennis.
As to relief, in Sidhu v Van Dyke the High Court noted that the relief which is necessary is usually that which reflects the value of the promise; recognising, however, that the "requirements of good conscience may mean that in some cases the value of the promise may not be the just measure of relief", particularly where the party claiming estoppel has been induced to make a relatively small and readily quantifiable monetary outlay on the faith of the other party's assurances (see at [83]-[85]). In Sidhu v Van Dyke, the plurality endorsed (at [79]) Brennan J's observation in Waltons Stores at 418-419 that the relief equity extends is analogous to that given by "estoppel in pais" (in that context meaning estoppel by representation), namely, "protection against the detriment which would flow from a party's change of position if the assumption (or expectation) that led to it were deserted". The emphasis is on that which is required by way of conscientious conduct (Sidhu v Van Dyke at [83]).
The starting point has been described as a "prima facie entitlement" to relief framed on the basis of the assumed (or expected) state of affairs (see Verwayen at 442; Giumelli at [42], [50]; Donis v Donis at [19]; Delaforce at [63]-[65]; Sidhu v Van Dyke at [82]-[86]). This prima facie position will yield to individual circumstances (Donis v Donis at [20]). Relevant circumstances may include the impact of the relief upon third parties and concerns of proportionality (see Delaforce at [62]).
In the present case, as noted, the challenge by the Executors is as to the finding that (in the absence of title to the Chapman Street Property or the shares in A&R) there was sufficient detriment to Dennis that it would be unconscionable for him not to receive either or both of those; and as to the grant of any relief at all. This raises the issue of proportionality.
As has been noted, the consideration of the relief, if any, to be granted in response to the alleged detriment involves broader considerations than merely the detriment itself (Q v E Co at [168], citing Delaforce at [3]-[4] (Allsop P)). Other considerations include matters that can assuage the detriment brought about by the resiling from the representation or encouragement (Delaforce at [3]) and the proportionality of the claimed interest or remedy to the prejudice or detriment (Delaforce at [4]). The Executors note that (see Delaforce per Handley AJA (at [77]), with whom Allsop P agreed (at [4])) the concept of proportionality is one that comes to be applied as a negative principle (rather than a positive principle) so as to mandate that "enforcement of the expectation must not be disproportionate".
In Delaforce, Allsop P (as his Honour then was) said at [4]: Proportionality of the claimed interest or remedy to the prejudice or detriment is undeniably a relevant consideration, and sometimes of considerable importance. It should not, however, be transformed into a necessary constitutive element of a cause of action to be pleaded or proved by the party seeking relief. To do so would elevate one consideration above others …It would tend to equate the analysis to one requiring that the party encouraged receive no more than it can prove that it suffered in detriment. This would see the equity become one of compensation for proved equivalent detriment. The equity is a broader one based on the just and conscionable satisfaction in appropriate fashion of the equity arising from the expectation created in another by encouragement or representation. As Handley AJA says, the role of proportionality is better understood … as assisting in an assessment whether what is claimed or contemplated to be granted is disproportionate or unjust in all the circumstances.
Some tension in the case law on the role of proportionality can be discerned in academic commentary (see Professor Ben McFarlane, The Law of Proprietary Estoppel (1st ed, 2014, Oxford University Press) at [7.157]). In Priestley v Priestley [2017] NSWCA 155 (Priestley v Priestley), Emmett AJA (with whom McColl and Macfarlan JJA relevantly agreed) said (at [164]) that: The principle of proportionality applies only in unusual cases where proprietary relief would be out of all proportion to the detriment. The proper measure of relief in a case where the detriment to a promisee or representee is something substantial is performance of the promise or representation. … [my emphasis]
Proportionality is relevant in considering whether final relief of the kind sought by the plaintiffs would be "wholly disproportionate" to the detriment suffered (see Ambridge Investments Pty Ltd (in liq) (rec apptd) v Baker [2010] VSC 59 at [594]; Verwayen at 413) or "out of all proportion" to the detriment (see Priestley v Priestley above).
As noted above, the evidence does not to my mind support a conclusion that the deceased saw the Smith Street Property as a substitute for the Chapman Street Property (rather than as a gift quite apart from the testamentary disposition of the shares in A&R, which carried with them the benefit of ownership of the Chapman Street Property). Rather, the scheme of the Will is to treat those assets separately; and any inference to be drawn from the sequence of the deceased's wills over the years reinforces that the Smith Street Property was not a substitute for the giving of rights in relation to the Chapman Street Property (more likely it was a substitute for the Parsons Avenue Property).
As to the complaint that the relief granted offends the proportionality principle, I am not persuaded that making good the expectation that was encouraged in Dennis is out of all proportion to the equity that arose in his favour. A life tenancy would certainly meet Dennis' need for accommodation during his lifetime but ownership of real property encompasses more than the right of exclusive occupation of that property. It permits the owner the ability to sell the property if necessary or desirable to do so; and to devise the property to his or her own beneficiaries. The fact that Dennis sought in the first instance proceeding a life interest as one of the alternative forms of relief does not alter this conclusion.
It is relevant to note that, despite acknowledging that proportionality of relief is a relevant consideration, Allsop P in Delaforce emphasised that proportionality must not be elevated above the importance of making good an expectation by encouragement or representation; his Honour noted at [3] that equity has always had a place in keeping parties to representations or promises and his Honour warned at [4] (see above) of the consequences of an approach that held proportionality as an element of a cause of action.
Accordingly, while equity goes no further than is necessary to prevent unconscionable conduct (see Walton Stores at 419), where that conduct involves resiling from a representation that has induced detriment, the relief that is "necessary" is typically to make good that representation (Sidhu v Van Dyke at [85]).
While some lesser form of relief, such as a life estate, would to some extent assuage the deceased's conscience, I do not accept that (given the expenditure of time, money and effort by Dennis into the Chapman Street Property in reliance on the expectation fostered by the deceased and her late husband and the primacy of holding parties to their promises) making good the deceased's promise in the present case can be said to be wholly disproportionate, or out of all proportion, to the detriment that Dennis would suffer should it not be made good. The primary judge did not err in my opinion in applying the principles of proprietary estoppel nor did his Honour's exercise of discretion involve any House v The King error.
Therefore grounds 3 to 5A of the notice of appeal are not made good.

[46]

Grounds 1 and 2 (relied upon in the alternative)

Ground 1 of the Executors' grounds of appeal contends that the primary judge erred in treating Dennis' equitable claim to the Chapman Street Property (and further or alternatively his claim to the shares in A&R) as not being opposed by them. What his Honour said, at [229] was that: No party to the proceedings has contested Dennis' claim. The deceased's executors, by a non-admission of the claim, have put him to proof of it.
The Executors contend that (although they say it is not entirely clear) his Honour's statement at [229] had an impact upon his Honour's analysis and determination of Dennis' claim, having regard to what they refer to as the "abbreviated manner" in which his Honour dealt (at [228]) with the question of unconscionability; and the lack of reference by his Honour to, or engagement with, the submissions made by the Executors regarding the impact of the gift of the Smith Street Property. The Executors contend that this statement was incorrect; noting that a non-admission operates as a traverse of the relevant pleading and is not an implied admission (see r 14.26 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR); Samaan bht Samaan v Kentucky Fried Chicken Pty Ltd [2009] NSWSC 1265 at [5], [32]-[34] (Rothman J); Perpetual Ltd v Barghachoun [2010] NSWSC 108 at [19] (Rothman J)).
Ground 2 challenges the adequacy of reasons for the conclusion that a declaration of beneficial interest in favour of Dennis was a necessary and appropriate remedy in equity for the detriment and unconscionability found at [228].
The Executors refer to the principles concerning an assessment as to the adequacy of reasons as outlined in Wiki v Atlantis Relocations (NSW) Pty Ltd (2004) 60 NSWLR 127; [2004] NSWCA 174 at [56]-[68] (Ipp JA, with whom Bryson JA and Stein AJA agreed); Browne v Browne at [80] (Murphy, Beech JJA and Allanson J).
In particular, the Executors complain that the primary judge did not provide adequate reasoning with respect to: how it was concluded that the detriment said to have been suffered by Dennis arose on the totality of the evidence; how it was concluded that such detriment was "significant"; and how it was concluded that the (only) appropriate remedial response to such detriment was conferral of beneficial ownership of the property. The Executors say that the totality of his Honour's reasons in respect of these matters appear to be set out in the last sentence of [228] and in [230]; and they submit that those reasons were inadequate.
Paragraphs [228] and [230] read as follows: 228 Dennis claims that A&R holds 10 Chapman Street (and that the deceased's executors hold her shareholding in A&R) on a constructive trust for him arising from an application of principles governing proprietary estoppel. He acted in reliance upon multiple assurances given to him by his parents (on their own account and as directors of A&R) that he would be given title to 10 Chapman Street and the shares in A&R on the death of the survivor of his parents. If those assurances are not made good he will suffer significant detriment such that any departure by the executors of the deceased or A&R from those assurances would be unconscionable. … 230 In circumstances where the elements of a proprietary estoppel claim, as stated in Delaforce v Simpson-Cook (2010) 78 NSWLR 483 and Sidhu v Van Dyke (2014) 251 CLR 505, are spelled out in Dennis' unchallenged evidence, I find that Dennis' claim has been made out. I propose, accordingly, to make a declaration that A&R holds 10 Chapman Street on trust for Dennis, and consequential orders designed to vest the legal estate of trust property in Dennis.

[47]

Determination of grounds 1 and 2

As to ground 1, I see no error in the statement at [229] that the Executors, by their non-admission (of the proprietary estoppel claim) had put Dennis to proof of that claim. That is precisely what a non-admission does, and what was here done (for understandable reasons in that the allegations would not have been matters known to the Executors). As to the proposition that no party to the proceedings had "contested" Dennis' claim, I read this as a statement that there was not a denial of the claim per se; nor was Dennis challenged in cross-examination (or evidence relied upon) to resist the allegations made by Dennis in his proprietary estoppel claim as to the making of the representations and encouragement fostered in him and his reliance thereon. I see nothing in the reasons to suggest that his Honour was not well aware of the need to consider whether the claim had been established on the evidence before him. Rather, his Honour simply noted (at [217]) that Dennis' evidence in support of this claim was not challenged by any other party to the proceedings.
Ground 1 is not made good.
As to ground 2, the judicial duty to give reasons has been considered in various authorities (see for example the consideration in Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 (Soulemezis)). One of the purposes served by a judicial decision (and thus of the obligation to give reasons) is that it enables the parties to see the extent to which their arguments have been understood and accepted (see Soulemezis at 279 per McHugh JA, his Honour then sitting in this Court). His Honour there made clear that discharge of the obligation to give reasons did not require lengthy or elaborate reasons (citing Ex parte Powter; Re Powter (1945) 46 SR (NSW) 1 at 5; 63 WN 34 at 36) but that it was necessary that the essential ground or grounds upon which the decision rests should be articulated; and his Honour added that in many cases the reasons for preferring one conclusion to another also need to be given (citing Wright v Australian Broadcasting Commission (1977) 1 NSWLR 697). See also Mifsud v Campbell (1991) 21 NSWLR 725 at 727-728 per Samuels JA, with whom Clarke JA and Hope AJA agreed.
In the context of appellate review of the adequacy of reasons, the function of an appellate court is to determine not the optimal level of detail required in reasons for a decision but rather the minimum acceptable standard (see Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33 (Resource Pacific) at [48] per Basten JA). The adequacy of reasons is not to be judged as against a standard of perfection (see Bisley Investment Corporation v Australian Broadcasting Tribunal [1982] FCA 58; (1982) 40 ALR 233 at 255; New South Wales Land and Housing Corporation v Orr (2019) 100 NSWLR 578; [2019] NSWCA 231 at [66] per Bell P as his Honour then was). The question is whether the reasons attained the minimum acceptable standard. In that context, a minimum requirement has been identified as being that the reasons be given in a form that will enable the losing party properly to understand the grounds on which the case was lost, and will not frustrate the losing party's right of appeal (see Public Service Board of New South Wales v Osmond (1986) 159 CLR 656 at 666-667; [1986] HCA 7).
In the present case, the reasoning in respect of Dennis' proprietary estoppel claim was certainly brief, the primary judge simply referring to the evidence (from [218]-[227]) before stating (at [228]) that Dennis acted in reliance on those assurances such that, if they were not made good, he would suffer significant detriment such that any departure therefrom would be unconscionable. The primary judge made clear (at [230]) that he considered the elements of the cause of action were those as stated in the cases he cited and said that they had been made out by the unchallenged evidence of Dennis.
What can readily be discerned from this is that the primary judge: accepted Dennis' evidence as to the representations made to him; accepted Dennis' evidence as to his reliance on those representations; and considered that this reliance would be to Dennis' significant detriment were the assurances not to be made good (such that departure therefrom would be unconscionable). In the context of a relatively lengthy judgment at first instance (disposing of four separate proceedings heard over some nine days), it might be inferred that the reasoning was brief and expressed in conclusory terms because the primary judge considered it was a straightforward case of proprietary estoppel, the representation/encouragement of assumption and detrimental reliance thereon being made out on the evidence to which he had referred.
As to how the detriment said to have been suffered by Dennis arose on the totality of the evidence, this is to be found in his Honour's acceptance of Dennis' evidence as to the expenditure of effort and money on his part in the renovation of the Chapman Street Property; as to how it was concluded that such detriment was "significant" (in the sense of real or material), this is to be spelled out from the conclusion that Dennis had acted in expending his effort and money on the faith of assurances that the property would be his and would not otherwise have undertaken the renovation work he did to the property at his expense. As to how it was concluded that the appropriate remedial response to such detriment was conferral of beneficial ownership of the property, with respect that can be inferred to have been in order to make good the expectations encouraged in Dennis (consistent with the authorities to which his Honour had clearly had regard and which his Honour cited at [230]).
True it is that his Honour did not engage in his reasons with the submissions made by the Executors regarding the impact of the gift of the Smith Street Property but, to be fair, the Executors' submissions at first instance on the issue of proprietary estoppel were not as detailed as have been presented in this Court. Before the primary judge the Executors' outline of submissions referred to the proprietary estoppel claim at [89]-[91]) and simply alluded to the gift of the Smith Street Property as a problem for Dennis in establishing his claim; the Executors' closing submissions (at [58]-[62]) went somewhat further, submitting (after the reference to the substitution for the Parsons Avenue Property in the Will that is said to have been an error and should have referred to the Chapman Street Property) that the consequence of the gift of the Smith Street Property is that it could not be concluded that there remains any inequity to which relief ought to be directed. Thus, while there was an allusion to the issue of proportionality of relief (in the sense that it was said no inequity remained) this was not expressed as such; and the argument that no detriment had been suffered due to the receipt of countervailing benefits was not made at any point. In oral submissions (T 451-454), there was a brief reference to the availability of other remedies (implying the proportionality issues but not explicitly mentioning them) (see T 453.48-454.3). Senior Counsel also made the argument that the gift of the Smith Street Property alone was sufficient to relieve the conscience of the deceased (see T 452.50-453.9). Thus, the criticism made of inadequacy of his Honour's reasons in this respect is uncharitable to say the least.
In any event, in circumstances where I have concluded that the gift of the Smith Street Property was not in substitution for the Chapman Street Property and does not assuage the conscience of the deceased in relation to her promises in relation to the latter, nothing turns on the fact that the primary judge did not address this issue in his reasons.
Therefore, albeit brief, I consider that the primary judge's reasons suffice to explain to the Executors (the losing party) why it is that Dennis' proprietary estoppel claim succeeded; and the relief granted by the primary judge is readily explicable by the authorities which emphasise the importance of making good expectations on which there has been detrimental reliance and from which it would be unconscionable to depart. Ground 2 is not made good.

[48]

Succession Act appeals

Turning finally to the various appeals in relation to the orders made in favour of the three siblings (James, Maria and Dennis) for further provision under s 59 of the Succession Act, as noted earlier there are separate appeals by Nick (on the one hand) and the Executors (on the other hand). Nick in essence adopted the Executors' submissions but made some additional (though in parts overlapping) submissions raising various matters (not all of which, the respondents complain, are agitated in the notice of appeal).
In each of the Executors' Aappeals in relation to the Succession Act claims, challenge is made to: the conclusion that the claimants were left without adequate or proper provision (grounds 1 and 2 in the Executors' James and Maria Appeals; grounds 6 and 7 of the Executors' Dennis Appeal, though these are raised only if the Executors' appeal as to the proprietary estoppel findings is upheld); the conclusion that the scheme of the Will was undermined by erroneous assumptions (ground 3 of the James and Maria Appeals; ground 8 of the Dennis Appeal, again only if the Executors' appeal as to the proprietary estoppel findings is upheld); and the relief that was granted (grounds 4 and 5 of the Executors' James and Maria Appeals; grounds 9 to 11 of the Executors' Dennis Appeal, again premised on the success of the Executors' Appeal on the proprietary estoppel findings).
If the Executors' appeal from the proprietary estoppel findings in the Dennis Proceeding (grounds 1 to 5 of their grounds of appeal in the Dennis Appeal) is rejected (as I have concluded it should be), then the Executors maintain a single ground of appeal in respect of the family provision order made in Dennis' favour (ground 12), although their ground 12 expressly incorporates the matters identified at grounds 6 to 11.
For his part, Nick raises a single ground of appeal as to the findings as to inadequacy of provision (ground 1) in each of his appeals from the decision in the Succession Act proceedings, identifying as particulars to that ground similar matters to those raised in the Executors' challenges (and seeking leave to add a further particular to ground 1(d) of his grounds of appeal).
The respective appellants accept that the appropriate standard of appellate review in relation to the Succession Act claims (both in relation to the jurisdictional question concerning a determination under s 59(1)(c) and to the exercise of discretion to award further provision) is that stated in House v The King at 504-505 (reference being made to Scott v Scott [2022] NSWCA 182 (Scott v Scott) at [10] per Meagher JA (with whom Kirk JA and I agreed)) but they maintain that they have identified errors of the requisite kind (see below). There is dispute as to this by the respective respondents, who maintain that various of the grounds of appeal (and submissions made in support thereof) do not raise House v The King errors and therefore that the appeals ought be dismissed on those grounds alone. In any event, the overriding challenge to the findings as to inadequacy of provision, insofar as it is based on manifest unreasonableness would fall within the notion of House v The King error.
Further, the Executors accept (and, by his adoption of the Executors' submissions, I understand that Nick also accepts this) that it is unnecessary to determine separately the two questions concerning whether provision was inadequate and whether an order for further provision ought to be made (cf, Singer v Berghouse (1994) 181 CLR 201 (Singer v Berghouse) at 226 (Gaudron J); [1994] HCA 40); Sgro v Thompson [2017] NSWCA 326 (Sgro v Thompson) at [68]-[74] (White JA, with whom McColl JA agreed)); Maynard v Maynard [2018] NSWSC 1961 at [121]-[163] (Robb J)).
As noted earlier, James' notice of contention filed in the appeal proceedings concerning him raises the issue of his contributions (as a matter that supports the relief made in his favour); Dennis' notice of contention falls for consideration only if (which I have concluded should not be the case) the orders in respect of the proprietary estoppel claim are set aside.

[49]

Standing issue

At the outset, it is convenient to deal with the standing issue raised by Dennis as to Nick's Dennis Appeal. While Dennis accepts that Nick was the only person affected by the provision order that was sought and obtained in the Dennis Proceeding relating to the Succession Act application, Dennis submits that, as Nick withdrew his defences to all claims prior to the commencement of the hearing and indicated that he was leaving it to the Executors to defend that claim, it is not appropriate for Nick to seek to challenge the correctness of his Honour's decision in the family provision proceedings.
In response to the challenge to his standing, Nick says that what he withdrew was his separate defence, indicating that he relied on the defence of the Executors (referring to the transcript at 4.17-20), and that it is therefore incorrect for Dennis to contend that the only proceeding in which Nick maintained a defence was the oppression suit. Nick points out that the family provision orders primarily affect him and he thus has an obvious interest in the outcome of the appeals (something Dennis does not appear to dispute) and he maintains that, as a party to the first instance Succession Act proceedings, he has standing to bring his present appeals.
I do not accept that the challenge to Nick's standing to bring his appeal from the orders made in the Dennis Proceedings is made good. Nick was a party to the proceeding at first instance and is a person clearly affected by the orders that were made. That said, to the extent that there is overlap in the submissions made relating to the Succession Act appeals, this may be relevant to the ultimate question of costs, since the Executors have the role of upholding the Will and in that capacity ordinarily they would be appropriately placed to protect Nick's interests as beneficiary (and Nick would not be permitted separately to be heard on issues dealt with by the Executors).
Although Maria does not challenge Nick's standing, she does make a complaint as to the prosecution of separate appeals by each of Nick and the Executors in relation to the orders made in her Succession Act proceedings. As noted above, there was an attempt made by the respective appellants to minimise duplication but, in any event, as noted above, this is a matter which would go to the ultimate question of costs and is not necessary at this stage to determine.

[50]

Application by Nick for leave to amend his notices of appeal

It is also convenient at this stage to consider the application by Nick to amend each of his notices of appeal in the respective Succession Act appeals (which application is opposed by both James and Maria).
The relevant amendment is to add to the fourth of the particulars to ground 1 of the respective notices of appeal the words italicised below: d. The primary judge erred in concluding that an order for conferral on the applicant of 125 Management Shares was necessary to make adequate provision for the applicant. In particular, the trial judge erred in having regard to the expectations of material benefit from the company recorded at J [186], [187], [194], [195] and/or [424] that [the deceased] and her late husband were said to have had created and fostered in James, Maria and Dennis where the evidence recorded at J [186]-[205] did not support the existence of any such expectation.
The application to amend was first raised at the end of Nick's oral submissions in reply (see AT 6 April 2023 at 193.13ff), in response to the complaint by James that it was not open to Nick to make submissions as to the expectations engendered by the conversations of which the siblings had given evidence because there was no challenge to the findings at [186]ff. Nick's position was that he did not challenge that those things were said but rather that he challenged the characterisation placed thereon. Nick maintained that this was raised expressly in the Oppression Appeal (ground 1(vi)(a)), directed to [388] of the primary judgment but by reference to the evidence at [186]-[205], although it is conceded that it was not expressed with the same level of specificity (or, arguably, I would say, at all) in the Succession Act Appeals (AT 6 April 2023 at 193.31-34) (hence his application to amend).
James argues in this regard that a challenge to an inference drawn by the primary judge (or a "characterisation" of evidence) is still required by r 51.18(1)(e) of the UCPR to be included in the notice of appeal; and that this was not done (James pointing to the requirement of specificity in r 51.18(2)) (James' submissions on amendment of 12 April 2023 at [9]-[10]). James argues that the existing ground and the proposed amendment address different issues and the latter should have been raised as a separate ground (noting that ground 1(d) is in its terms a challenge to the primary judge's conclusion that an order for conferral of 125 management shares was necessary to make adequate provision, whereas the additional words seeking to criticise the primary judge having had regard to the "expectation of material benefit").

[51]

Submissions

Nick submits that the respondents were on notice that Nick intended to agitate this point. Nick says that it was fully argued by all parties to the appeal (referring to his written submissions in chief in each of the Succession Act appeals at [17]-[19] and to the transcript on appeal at AT 4 April 2023 2.3-4, 60.45-61.4) (Nick's submissions on amendment of 11 April 2023 at [6]-[8]); and he argues that the respondents would therefore not suffer prejudice by the grant of leave. Further, Nick submits that it is in the interests of justice that this issue be determined as one of the real issues in dispute in the appeals.
In this regard, Nick notes that a challenge to the findings in relation to the expectations said to have been held by the siblings has been made (and arises for consideration) in the Oppression Appeal; and Nick submits that, in circumstances where all the claims were heard together at first instance and on appeal it would be unsatisfactory for the Oppression Appeal to be determined on a different factual basis from the Succession Act Appeals.
Nick notes that no complaint was made by Maria or Dennis that this point was not adequately pleaded (and that it was addressed by Maria in her submissions, which were adopted by Dennis) (referring to 9 of Maria's written submissions and AT 5 April 2023 at 95.36-96.17; 97.37-49; 102.3-26; 125.20-23). Nick argues that if leave is granted for this point to be pursued in the Maria and Dennis Appeals it would be artificial for the point not to be considered in the James Appeal. Nick also notes that James, while taking the point that this was not in the notice of appeal, nevertheless addressed it in written and oral submissions ([53]-[57]); AT 6 April 2023 at 138.32-140.38; 149.17); and Nick argues that James has had ample opportunity to respond to the point.
Finally, Nick says that the application was not brought sooner because it was not anticipated that there could be any "real complaint" about the point not being included in the notices of appeal with greater particularity; noting that there was no suggestion that any adjournment or delay of the appeals would be necessary if the amendments were to be allowed. Nick submits that there is no "irreparable element of unfair prejudice in unnecessarily delaying proceedings" in this case (cf Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27 (Aon Risk Services) at [5], [30] per French CJ).
The opposition by James and Maria to the application for leave to amend Nick's notice of appeal in their respective appeal proceedings is on the following bases.
Complaint is made by James that the proposed amendment is not in exactly the same terms as that in the Oppression Appeal (noting the assurance given at AT 6 April 2023 at 194.33-36) in that it is not limited to the expectation of material benefit found in [388] but is now broader, extending to the expectations of material benefit found by the primary judge at [186], [187], [194], [420] and [424]. Further, complaint is made that the proposed amendment is defective in that it does not identify with specificity which findings in each of those paragraphs are challenged (the phrase "expectation of material benefit" not appearing in any of those paragraphs). James complains that those paragraphs contain various findings expressed in different ways and says that it is not acceptable to challenge them in a rolled-up manner by reference to a phrase ("expectation of material benefit") that does not appear in any of them.
James also points out that he was not a party to the Oppression Proceeding and says that, in a case involving multiple appeals and multiple parties, he should not be taken to have been on notice of a matter raised only in an appeal to which he was not a party and in relation to which he had no standing and did not seek to make submissions. Similarly, James argues that the position taken by other parties (whether or not party to the Oppression Appeal) is not relevant in considering whether James was put on notice of the matter that Nick now seeks to pursue.
James says that the point that Nick now seeks to advance by the amendment was not raised as such in Nick's written submissions, as James draws a distinction between an expectation that the children "would be able to realise the full value of their shares in Esperia Court" (as challenged in the written submissions) and "an expectation of material benefit" (now sought to be challenged by the proposed amendment), although a finding was only made by the primary judge at [388] as such in relation to the Oppression Proceeding. James says that the latter is a much broader challenge and therefore raises a more wide ranging enquiry than that made in the submissions by Nick and John in the Oppression Appeal, in challenging the finding at [388] of an "expectation of material benefit", where this expectation was described "more particularly as an expectation that the children 'would be able to realise the full value of their shares upon the death of the survivor of their parents'" (reference thus being made to [194] and [210]).
James says that (in circumstances where objection was taken to various of Nick's additional submissions on the basis that the argument was not raised in the notice of appeal and he had referred to some of the other findings in relation to the relevant expectation; to which there was no response by Nick) he was entitled to (and did) take the view that this point was not being pursued; and he argues that Nick should not now be permitted to pursue a broader and different challenge by reference to "expectations of material benefit". James says that the submissions he made briefly on this issue only relatively briefly addressed the narrower challenge by Nick to the expectation of realising the full value of the shares.
Further, James argues that, by the proposed amendment, Nick is adopting a position inconsistent with that in his written submissions, contrasting the submission that the passages at [186]-[205] "suggest only an expectation that at some indefinite future time the children would receive a benefit from the company" with the proposed amendment, in which Nick seeks to contend that the primary judge erred "in having regard to a suggested expectation of material benefit from the company". James says that those positions are inconsistent since an expectation of receiving a benefit from Esperia Court at some indefinite future time is still an expectation of material benefit from the company; and hence that Nick's written submissions conceded what he now seeks to raise by the proposed amendment. James argues that this reinforces that Nick now seeks to pursue a different matter that was not raised in his written submissions, and to do so inconsistently with those written submissions.
James also argues that, insofar as Nick does not seek to challenge the finding at [210], and only seeks to challenge the additional paragraphs in relation to the issue of the management shares (by way of the proposed particular addition to ground 1(d)), the proposed additional challenges would not achieve the result that Nick now seeks in relation to James. James says that the finding at [210] that the siblings "were led by their parents to believe that they would come into possession of assets of substantial value upon the death of the parents" would support an award of further provision based upon that expectation; and that, even though [210] appears in the context of the class shares, the issue of the siblings' expectations cannot be neatly separated. James submits that, even under the proposed amended notice of appeal, he is entitled to use the additional findings (which Nick now seeks to challenge in relation to the management shares) in order to support his claim for the return of his class shares, noting the passage at [426] (which Nick does not challenge), where the primary judge observed that "James' claim is based on an expectation, fuelled by the deceased during her lifetime, that his shares (upon which no dividends had ever been paid to him) would be returned to him upon the deceased's death so that, in common with his siblings, he could enjoy substantial material wealth".
James further submits that Nick has not made good the argument that the findings he seeks to challenge are not supported by the evidence, pointing to the schedule prepared by Maria of unchallenged conversations on expectations, many of which conversations are not quoted by the primary judge in his judgment. James argues that, in circumstances where Nick did not present a full review of the evidence to demonstrate error in the findings made by the primary judge, he should not now be permitted to raise these matters formally at this late stage based only upon a limited review of certain paragraphs in the judgment (and that, even if the amendment were permitted, it could not succeed without Nick presenting a full review of the evidence, which Nick did not seek to do). James says that, had Nick sought to raise these issues properly and in a regular fashion, then he (James) would have been able to respond by reference to the detail that ought to have been set out in the notice of appeal and supporting submissions and that it is not appropriate in effect to reverse the onus and require James to justify any findings by reference to the entirety of the evidence.
Finally, James maintains that the findings as to the "expectations of material benefit" are made good by the passages of evidence quoted by his Honour (even if only taken individually rather than by reference to the evidence as a whole), especially at [188]-[190]).
Maria similarly opposes Nick's application to amend his notice of appeal in Nick's Maria Appeal, pointing out that it does not contend, as a matter of principle, that a promise or an expectation reasonably held may not be proper to enable a potential beneficiary to improve his or her prospects in life; nor does it contend that the primary judge erred in accepting any of the evidence of the siblings concerning pertinent conversations or the reasonableness of Maria's holding of an expectation that she would receive a material benefit, by reason of her shareholding, as part of her inheritance. Maria argues that the proposed amendment calls into question only one fact (whether Maria and her siblings had any such expectation) and that leave to amend should be refused because there was no issue at first instance that Maria, James or Dennis held the said expectations.
Not only does Maria submit that existence of the expectation was never an issue (referring to the finding of the primary judge at [194]), Maria also points to the unchallenged evidence given by her at [79]-[82] of her affidavit sworn 25 October 2019 as to her refusal to give back her shares in return for the Smith Street Property when asked to do so in November 2005 (submitting that this is consistent with her having a strong expectation that she would receive a material benefit from her shares as part of her inheritance); as well as her unchallenged evidence at [83]-[85] of that affidavit that she expected to receive management shares and an equal share of residue, consistently with "the representations made to [her] by [her] parents over the years".
Maria argues that Nick has not given any explanation for his delay in moving for leave to amend (though I note there is an explanation in the submissions filed on that application) and has not sought to satisfy any of the other requirements of Aon Risk Services at 229. Maria complains that raising a new ground of appeal which seeks to call into question a fact that was not challenged at first instance and was raised for the first time at the conclusion of a three day hearing on appeal causes prejudice by denying her (and the other respondents) an opportunity to be heard; and that it is no answer that the evidence at [188]-[205] was addressed in argument (since the question of fact to which the proposed ground of appeal is directed, namely, the existence of the subject expectation, was not addressed in argument).

[53]

Appeal grounds

Turning then to the appeal grounds in the various Succession Act appeals, there is a large degree of overlap in the submissions, such that it is convenient to address the appeals by reference to the issues raised (rather than setting out the competing submissions in detail; and without dwelling on the dispute as to whether some of the complaints made by the respective appellants properly identify House v The King error - such as, for example, Nick's complaint in 1(b) of his appeal grounds (replicated across his appeals against each of his siblings) as to the primary judge's failure to give "appropriate weight" to the deceased's testamentary intentions, which Dennis argues is not maintainable, being in substance a contention that the primary judge should have made a different ultimate decision because the order made was one that did not reflect the Will. In similar vein, James says that the additional matters raised in the submissions for Nick failed to apply correctly the accepted grounds of appellate review set out in House v The King at 505 (and James complains that only two of the issues agitated by Nick in those submissions are raised in the notice of appeal - namely, those raised in his submissions at [7]-[8] and at [9]-[16] relating respectively to the perceived contradictions in the provision made for the additional 1,000 "B" class shares and to the issue concerning the deceased's testamentary intentions being undermined by erroneous assumptions).
The nub of the complaint by the respective appellants is that the primary judge overlooked or failed to take into account a relevant factor (the respective applicants' financial needs) and failed to engage in a comparative analysis of financial needs and benefits obtained by the respective siblings; instead, his Honour placed weight on the expectations held by the respective applicants (said to be not supported by the evidence and/or not a relevant factor). Both complaints fail in my opinion: the first, because the primary judge at least implicitly (and in James' case explicitly when referring to his impecuniosity) had regard to the respective siblings' financial position in the context of concluding that the only finding as to inadequacy of provision was by reason of the inability to realise the value from their class shares in the face of the expectations that they had been led to hold; and, second, because the primary judge was entitled to have regard to the siblings' expectations and to give them appropriate weight in the exercise of his discretion (having concluded that there was an inadequacy in the proper provision made for them under the Will because of their inability to realise the value locked up in the class shares).
The Executors in their submissions distil their complaints into four issues: first, that the award of further provision was unreasonable (see appeal grounds 1, 2, 4(e) and 5 of the Executors' James Appeal and related grounds in other Succession Act appeals); second, the alleged adoption of incorrect principles in the exercise of the statutory power to award further provision (appeal ground 4(c) of the Executors' James Appeal and the related ground in other appeals); third, the exercise of discretion on the basis of mistaken facts (appeal ground 3 in the Executors' James Appeal and other appeals); and, fourth, an additional (said to be peripheral) matter that the Executors argue points to a wrongful exercise of discretion in the Executors' James Appeal (ground 4(d) of the James Appeal, which refers to the expenditure by James of funds from his family trust on legal fees in respect of the litigation.
In addition to the submissions made by the Executors, Nick raises the following matters that he relies on as House v The King errors: first, perceived contradictions in the provision made for James to receive an additional 1,000 "B" class shares in Esperia Court; second, alleged error in disregarding the deceased's testamentary intentions or in taking into account irrelevant considerations (as to the erroneous assumptions said by the primary judge to have undermined those intentions - see at [417]); third, the finding that the deceased had encouraged in her children an expectation that they would be able to realise the full value of their shares in Esperia Court on her death (and come into their inheritance); fourth, alleged error in the consideration of Nick's asset position as a consequence of the proposed orders; and, finally, failure to consider why, on the assumption that James had a need for a further 1,000 "B" class shares in Esperia Court, those shares should be taken from Nick's entitlements under the Will. Those issues will be addressed in the context of the four issues identified by the Executors.
I propose to address those issues, dealing first with the complaints as to alleged mistaken facts (the Executors' issues 3 and 4) and then as to alleged mistake in the application of principle (the Executors' issue 2) before turning to the complaint as to the ultimate conclusion (the alleged unreasonableness of the making of the orders for provision that were made by his Honour (the Executors' issue 1)). I note that the Executors do not press their complaints as to adequacy of reasons (ground 1(a) of their Maria Appeal, ground 6(a) of their Dennis Appeal) though they do press the complaint as to adequacy of reasons in relation to Dennis' proprietary estoppel claim (ground 2 of their Dennis Appeal).

[55]

Finding as to erroneous assumptions (ground 1(a) of Nick's appeals; ground 3(a) of the Executors' James Appeal and equivalent grounds in other appeals)

The respective sets of appellants challenge the finding at [417] that the scheme of the Will had been undermined by erroneous assumptions (though the Executors also suggest that this is a potentially peripheral challenge on the basis that it is not clear that the conclusion at [417] was material to his Honour's ultimate conclusion at [424]) and that the deceased had failed to consider important matters concerning the benefits flowing from the shareholdings in Esperia Court.
It is convenient at the outset to set out what was said at [417] in full: Although respect must be shown for the deceased's testamentary intentions, the scheme of her will has been undermined by erroneous assumptions. The need for an order that the will be rectified to correct misdescriptions of shares in Esperia Court left to James and Dennis may be left to one side. Fundamentally, the will was predicated upon a false assumption that the deceased was beneficially entitled to all of the shares in A&R and to Dennis' shares in Esperia Court, as well as a false assumption that A&R was beneficially entitled to [the Chapman Street property]. The deceased also evidently had no regard to James' moral claim to the return of all the shares in Esperia Court he dutifully surrendered as a price paid for his love match marriage. Nor did she have regard to the possibility that, if she placed Esperia Court within the control of Nick and he pursued his plans for development of the Company's properties, any benefits conferred on his siblings by their shareholdings in the Company could be illusory, dependent upon the discretion of a person unable to command the respect given by all family members to her in her lifetime.
James, in the context of his submission that the Executors are not in a position to say that the alleged mistake as to the facts (at [417] of the primary judgment) was material, refers to the difficulty that the paragraph here sought to be impugned ([417]) appears in introductory material relating to three different family provision claims, without itself identifying the specific claims affected. The Executors' response to this is the fact that [417] appears in the introductory portion of his Honour's reasons does not detract from the materiality of the findings in that passage (noting that other paragraphs in that introductory portion of the reasons, such as [421], [422] and [424], also set out his Honour's ultimate conclusions). Further, the Executors say that it is also irrelevant that [417] is material to all three applications for family provision.

[56]

Assumption as to ownership of A&R/Chapman Street Property

The first of the false assumptions expressly identified as such by the primary judge at [417] was that the deceased was beneficially entitled to all of the shares in A&R and to Dennis' shares in Esperia Court (coupled with the further false assumption that A&R was beneficially entitled to the Chapman Street Property).
The Executors contend that there was no false assumption made by the deceased in this regard in executing the Will, since A&R was the legal owner of the Chapman Street Property and Dennis' beneficial entitlement to the Chapman Street Property did not exist at the time of the Will (that interest flowing from the primary judge's decision to recognise a remedial constructive trust and arising only upon the making of those declarations and orders). Moreover, the Executors argue that there was no identifiable link between the false assumption as to the ownership of the Chapman Street Property and the position of the siblings as beneficiaries.
James points out in this context that the primary judge was required to make his determination on the facts as known at the time of the hearing; and says that it is not to the point, even if it be the case, that the ownership of A&R and of the Chapman Street Property did not go to Dennis until the orders arising from that hearing were made. It is submitted that the outcome on those orders is part of the factual context at the hearing, by which any mistaken view of the deceased is to be assessed. James says that a mistake (in the sense that the Will does not proceed upon a correct basis) can occur at the time of a will being made or by reason of subsequent events, and that either has the effect that a fact assumed at the time of the Will is no longer correct at the time the issue of provision comes to be considered.
As to this issue, it has certainly been recognised that what some have referred to as an institutional constructive trust will ordinarily be treated as coming into existence at the time of the conduct which gives rise to the trust (see Muschinski v Dodds (1985) 160 CLR 583 (Muschinski v Dodds) at 614; [1985] HCA 78; Parsons v McBain (2001) 109 FCR 120; [2001] FCA 376 at [9]-[13]; Secretary, Department of Social Security v Agnew (2000) 96 FCR 357 at 365; [2000] FCA 59; In re Sharpe (a Bankrupt); Ex parte Trustee of the Bankrupt's Property v The Bankrupt [1980] 1 WLR 219 at 225; [1980] 1 All ER 198, Ch D; see also Young, Croft and Smith, On Equity (Thomson Reuters, 2009) at [6.850], A J Oakley, Constructive Trusts (3rd ed, 1997, Sweet & Maxwell)); as opposed to a remedial constructive trust coming into existence at the time it is so declared by the court (see, for example, Muschinski v Dodds at 615; Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669 at 714).
The time at which a constructive trust arises was considered in McNab v Graham (2017) 53 VR 311; [2017] VSCA 352, where the Victorian Court of Appeal (at [102], [107], [108]) confirmed that, generally speaking and subject to consideration of all the relevant circumstances (as to which, see the discussion in Giumelli and Delaforce), where detrimental reliance upon a promise gives rise to a constructive trust, in the context of an estoppel, the constructive trust comes into existence before a court makes any order; it comes into existence at the time of the conduct which gives rise to the trust (the relevant time as to reliance on a promise giving rise to the estoppel being the time of the reliance which would render departure from the fulfilment of the promise unconscionable). In the context of the present case, the time at which departure from the fulfilment of the promise would be unreasonable would be the date of the deceased's death (at which time the Will, which did not make provision for the Chapman Street Property to go to Dennis, became operative); not the date of the making of the Will.
Nevertheless, at whatever time Dennis' beneficial entitlement to a proprietary interest in the Chapman Street Property arose, it is fair to say that the deceased, when making her last will, appears to have been operating on the basis that the property was beneficially owned by A&R (which is where the legal title then rested). I do not read the primary judge's reference to the scheme of the Will being undermined by a false assumption in that regard to mean more than that (which seems to me self-evident from the terms of the Will) the deceased had intended the Will to operate such that, relevantly, the shares in A&R (which carried the benefit of ownership of the Chapman Street Property) would be inherited by the named grandchildren, whereas the effect of the finding as to Dennis' proprietary entitlement to a beneficial interest in that property and the relief granted to give effect to his expectation in that regard means that what the deceased had intended at that time will not now come to pass.
Thus, I see no error in the primary judge proceeding on the basis that the deceased's testamentary intentions were undermined in this regard.

[57]

James' moral claim to the return of the surrendered class shares

The second matter to which the appellants point in this context (albeit not expressed by the primary judge as an assumption per se) is the statement by the primary judge that the deceased "evidently had no regard to James' moral claim to the return of all the shares in Esperia Court he dutifully surrendered as a price paid for his love match marriage". Nick argues (and I would agree) that this is not a "false assumption". Nick submits that this simply amounts to the primary judge considering that the deceased had not had regard to that particular matter; and that this provided no basis for the primary judge putting to one side the deceased's testamentary intentions. In any event, Nick says that this would have no bearing on the deceased's intention in relation to the management shares in Esperia Court. The Executors argue that the fact that the deceased only bequeathed James 2,000 (rather than 3,000) of the "B" class shares originally held by him is not evidence of a failure by the deceased to consider any moral claim James had to those shares.
James argues that the reference by the primary judge to the deceased "evidently [having] had no regard to" his moral claim to the return of the class shares was a reference to a failure by the deceased duly to consider the claims on her estate, as a factor undermining the testamentary scheme. James points out that due consideration of claims on the estate is a condition which limits the requirement to show respect for the testator's intentions (referring to Sgro v Thompson at [83]) and argues that, where there has been a failure to exercise due consideration, there is greater warrant for interfering with testamentary intentions.
James notes that Nick does not cavil with the conclusion that the deceased and her husband took away the class shares belonging to James, and then resisted returning them, on the basis of James' decision to marry. Reference is made to that being a consideration of the kind deprecated in Wheatley v Wheatley [2006] NSWCA 262 (Wheatley) at [22]. It is submitted that, where considerations of that kind have a material effect on, or where (as James says is here the case) appear dominant in, the testator's consideration, there will be a failure duly to consider the claims on the estate. Accordingly, James says that it is on that basis that the failure to consider James' moral claim to return of the shares is a factor that relevantly undermined the testamentary scheme of the deceased.
James argues that the failure to recognise his claim to the full 3,000 "B" class shares is evidenced by his not having been given the full 3,000 in the Will; and is also evidenced by the conduct of the deceased, including: her conversation with Mr Kristallis in about 2016 (see affidavit of Mr Kristallis sworn 15 February 2019 at [11]) where James' marriage is expressed as the reason for seeking to exclude him altogether; and the fact of the deceased having (together with James' father) taken the shares around the time of James' marriage, in circumstances where the shares were part of a succession plan, and not having returned them. It is submitted that the entire course of conduct was in the nature of a testamentary act driven by motives extraneous to the due consideration of claims on her testamentary bounty (considerations of the kind deprecated in Wheatley at [22]).
The Executors say, in response to that submission, that the deceased's gift of 2,000 class shares to James, notwithstanding that the deceased was initially of a mind not to do so (see affidavit of Mr Kristallis sworn 15 February 2019 at [11]), is indicative of the deceased's consideration of his "claim"; and they argue that the decision not to leave James 3,000 class shares does not establish the contrary position.
As to this "assumption", there seems to me a potential ambiguity in that the finding that the deceased "evidently had no regard" to something might mean that the deceased had not taken it into account at all or might mean that the deceased had taken it into account but had not acted so as to give effect (or have regard) to it (i.e., that the decision to leave only 2,000 of the "B" class shares to James indicates that the deceased did not thereby recognise or give effect to a moral claim of this kind). If the latter, then it is evident (to use the primary judge's description) that the bequest of only 2,000 of the 3,000 class shares did not correspond to what his Honour accepted was James' moral claim to the whole of that parcel of shares. Nothing, however, seems to me to turn on this, even if there be some "erroneous" assumption on the deceased's part or failure to take this moral claim into account in some way.

[58]

Potentially illusory nature of benefits of class shares

The third matter referred to by the appellants in this regard is the statement by the primary judge to the effect that the deceased did not have regard to the possibility that, if she placed Esperia Court in the control of Nick (i.e., by gifting him the management shares), any benefits conferred on Nick's siblings by their shareholding in Esperia Court "could be illusory".
The respective appellants argue that other findings by the primary judge are inconsistent with the conclusion that the deceased did not have regard to this possibility. Relevantly, those findings, variously referred to by one or other or both of the sets of appellants, are: at [63], that the deceased was anxious to have Esperia Court's real estate developed and the company retained in the ownership and control of the male line of the Soulos family; at [66], that the deceased intended that Esperia Court's real estate should be retained and developed; at [151], the primary judge's observations as to the deceased's apparent desire to retain Esperia Court and particular properties within the family, together with the deceased's "dynastic tendency of mind"; at 166, the finding that the deceased "evidently intended to confer upon [Nick] a power to conduct the business of the Company as a going concern"; at [181], the primary judge's reference to the "fair inference" that the deceased and her husband anticipated that the enjoyment of benefits from shareholdings in Esperia Court would occur "at some indefinite future time"; at [183], the reference to the deceased appearing to have intended that the discretion concerning the management of Esperia Court be vested in Nick, leaving the other siblings dependent upon an exercise of discretion by him regarding distribution of financial benefits; at 185, (e),, the observation that it was not always the case that the deceased proposed to gift all of the management shares to Nick and that it was common for the deceased to express a wish that property be retained and developed rather than sold; and at [416], the observation that the deceased favoured Nick because he was male and because he was someone "who shared her vision of the future", which included her desire for "the Soulos family to work together to develop the property that she, her husband and her children had accumulated".
The Executors argue that, in the context of a family where the matriarch had "dynastic" tendencies, it does not necessarily follow that the gifting (both inter vivos and by the Will) of shares in the corporate "empire" was accompanied by an intention (or a guarantee) that there would be an immediate distribution of assets upon the death of the matriarch; and that the evidence points to the deceased preferring that her Esperia Court "empire" be retained for future generations of the Soulos family). It is said that the deceased's interest, and concern for, subsequent generations of the Soulos family was reflected in the way that she made a number of significant gifts (and expressed her non-binding desires in respect of various assets) under the Will (and under previous testamentary documents) in a manner that focused upon her grandchildren, referring in this regard to statements in the Will indicating a desire that grandchildren would obtain some of the value of the shareholdings in Esperia Court (see cll 4-10).
Nick submits that there could be little doubt that the deceased knew exactly the effect of gifting the management shares to him (that being that he could control Esperia Court); nor that the deceased's intention was directed to the continuation of Esperia Court as a going concern and the development of its assets. Thus, it is submitted by Nick that the primary judge erred in disregarding a material consideration (the deceased's testamentary intentions) or, alternatively, in taking into account irrelevant considerations.
In that regard, Nick argues that the "supposed" false assumptions have no logical relevance to the question whether the deceased's desire, as expressed in the Will, for a further 1,000 "B" class shares and all of the 500 management shares to be left to Nick had been undermined).
As to the appellants' complaint that the primary judge erred in concluding that the scheme of the Will had been undermined by erroneous or false assumptions and failed to give appropriate weight to the intentions of the deceased, ground 3 in the Executors' Maria Appeal, Maria maintains that the only finding as to an "erroneous assumption" directly applicable to her claim was the third of the matters referred to above (the deceased's failure to have regard to the possibility that if she placed Esperia Court within Nick's control, any benefits conferred on his siblings by their shareholdings in the company "could be illusory").
Maria says that there is no material challenge to the veracity of that finding. Maria argues that, self-evidently, the power vested in Nick (by the conferral of all the management shares taken together with his directorship and informal assumption of the role of managing director), enabled him carte blanche to act in his management and decision-making vis-à-vis Esperia Court. Insofar as the appellants seek to draw a distinction between the value of the shareholdings, in the context created by the Will, being "limited", as opposed to "illusory", Maria complains that they do not specify how the distinction practically operates, including by reference to the primary judge's comments at [421]-[422]; and says that they have not identified how any such distinction could manifest as a material error.
Maria submits that the impugned findings are not inconsistent with a proper weighing of the deceased's intentions to vest control of Esperia Court in Nick, to maintain the family legacy via real estate holdings tied up in Esperia Court, and to enable Nick to take the reins of the company "as a going concern"; and argues that further to prioritise the deceased's intentions (in a way that would prevent an order being made for redistribution of the management shares) would have no jurisdictional basis. (In passing, I would add that a complaint as to failure to give appropriate weight to a factor - as contended for in Nick's grounds of appeal, would on its face not be a typical House v The King error.)
As to the perceived inconsistency in the finding by the primary judge (at [166]) that the deceased intended to vest control in Esperia Court (in terms of the power to conduct the business as a going concern) in Nick, Maria says that the deceased could well have intended to vest control in Nick while, at the same time, failing duly to turn her mind to how that might affect the other shareholders in the family company, if Nick chose, in his absolute discretion, to shut them out of the affairs and benefits of the company.
Similarly, Dennis maintains that the findings were correct, though he argues that the correctness or otherwise of the impugned factual findings is irrelevant to an appeal from the ultimate order, particularly on the House v The King basis, since that order was made (see [424]) on the basis that the siblings were unable to unlock the value of their class shares and had been encouraged by the deceased in an expectation that the shares would enable them to enjoy substantial wealth in their mature years). (The appellants see this submission as an acknowledgement that the basis of the finding for provision was not "need" but to make good the children's expectations.)
Dennis argues that the findings flowed naturally from: the primary judge's findings as to what the deceased intended, expected and said to her children about provision being made for them through the class shares in Esperia Court; and the incontrovertible fact that such an outcome was not achieved through the Will (and instead remained only a contingent possibility dependent upon the exercise of Nick's discretion).
James says that in any event there is material to support the findings here impugned; and that the Executors' complaint is really that the primary judge should have weighed the underlying facts differently.
James argues that the Executors have mischaracterised the relevant finding made as to the illusory value of the class shares. It is submitted that the incorrectness is not in the possibility that Nick would pursue a development of the Symond Arcade but, rather, in the deceased failing to appreciate that putting all of the management shares in the hands of Nick rendered illusory the benefits of the class shares to the other shareholders. James says that, of the matters identified by the Executors as being contrary to such a finding, only that referring to [183] seeks to address this aspect but that the Executors' submission in that regard involves a misreading of [183]. James says that the intention there referred to was to give Nick control (with the rendering of the other siblings dependent on him for benefits of share ownership being a consequence, rather than part of, the intention). James points to the recording elsewhere in the judgment of the deceased's expectation that the shares would offer a substantial benefit (for example at [181]; [186]-[191]; [194]).
James argues that the pattern of will-making also reveals that the deceased saw the "A", "B", "C" and "D" class shares as having real value, including by dividing those shares as she sought to do in her final will (154-154, [156], [158]) and by protecting them by a trust in an earlier will (the 5 November 2015 will (cll 6-7) (and he refers to one note on the deceased's instructions concerning her will in this context).
James maintains that there is no evidence suggesting that the deceased understood that, in her dispositions under the Will of the "A" and "B" class shares, she was giving something that would, in the context of her gift of all of the management shares to Nick, have no value. James argues that this was a factor that relevantly undermined the testamentary scheme and says that this is not avoided by pointing to an intention that the capital pass to further descendants. First, James says that none of that demonstrates an understanding that the shareholders would be entirely dependent on the discretion of Nick as to receipt of dividends (including, if property is sold before a winding up, dividends paid out of capital gains), given that he would be empowered to direct all the dividends to his own "D" class shares. Second, James argues that an expressed (but non-binding) wish that the shares then pass to further descendants reinforces, rather than erodes, a conclusion that the deceased saw the shares as having non-illusory value.
The Executors respond to this by pointing out that the deceased, by the terms of the Will, put Nick in the same position of control over Esperia Court as she herself was in during her life, and that the exclusion of the other Soulos siblings from management power was not new. Further, the Executors say that James' submission re-frames the issue incorrectly. It is said that the deceased clearly anticipated and desired that Esperia Court, which held properties with development potential, would be retained for the benefit of future generations. Further, the Executors say the suggestion (in James' submissions at 29(ii)) that Nick would distribute dividends to himself is wrong, noting the proposal made shortly before the hearing that there be amendments to the articles so as to "equalise the payment of dividends" (see [48]).
Nick, in his submissions in reply, maintains his contention as to inconsistency between the primary judge's finding at [417] and his Honour's other findings in the judgment as to the deceased's intentions in relation to Esperia Court. Nick argues that the deceased evidently did not just intend that Nick remain in control; the deceased also intended that Esperia Court's properties be retained and developed (referring to [63]; [66]; 166). Nick contends that it was a necessary consequence of that intention that Esperia Court's assets not be liquidated "and thus that the value of the siblings' shares not be released". (Nick clearly therefore accepts that the consequence of the Will is that his siblings are locked into the company, holding class shares of nominal value.)
Insofar as Dennis contends that the finding at [417] was not relevant to the primary judge's determination that further provision should be made for him and his siblings, Nick says that it was obviously necessary for the primary judge to grapple with, and appropriately take into account, the deceased's intentions. Nick's complaint is that the primary judge did so on an erroneous basis, with the result that his Honour erred in disregarding a material consideration or taking into account irrelevant considerations.
In my opinion, the primary judge's conclusion that the deceased did not have regard to the potentially illusory nature of the benefits conferred on the siblings by the class shares (in light of the bequest of all the management shares) is, again, more a statement of the effect of the testamentary scheme than as to its intent. I accept that there were findings as to the deceased's dynastic tendencies and the like; and that the deceased no doubt intended that Nick should have control through the management shares of Esperia Court. The outcome of this was to render the siblings' class shares (some of which were held independently of the Will, as in the case of Maria) of nominal value. That this was already the case prior to the deceased's death is not to the point. The observation by the primary judge as to this matter can only sensibly be read as being that this was the effect of the bequest of the management shares and the deceased either had no regard to this (thus failing to appreciate the practical import of that bequest) or chose to proceed without regard to that (relevant for the purposes of considering the weight to be placed on her testamentary intentions).
Thus I have concluded that the complaints that his Honour erred in finding, first, that the Will had been undermined by erroneous assumptions and, second, that the deceased had not had regard to the possibility that the benefit of the shareholdings in Esperia Court might be illusory (ground 3 of the Executors' James and Maria Appeals; ground 8 of the Executors' Dennis Appeal; ground 1(a) of Nick's Succession Act appeals) are not made good.

[59]

Complaint as to finding as to "expectations" of benefit

I have already dealt with the application by Nick for leave to amend his notices of appeal to raise this as an issue in relation to the findings as to expectations of benefit. In his "additional" submissions to those of the Executors, Nick submits that this conclusion formed a core part of the reasoning in relation to the appropriateness of further provision being made for each of James, Maria and Dennis pursuant to the Succession Act (referring to [209]; [210]; [420]; [424]). Nick maintains that there was no proper evidential basis for this finding; and that the passages relied upon at [186]-[205] suggest only an expectation that at some indefinite future time the children would receive a benefit from Esperia Court.
Complaint is also made that the primary judge did not identify any evidence to make good the conclusion that "within the community of the deceased (her extended family)" the allocation of 3,000 class shares to each of the deceased's children was long seen as necessary and appropriate to make proper provision for them (see at [430]). Hence, Nick argues that in this regard the primary judge made a material error of fact and took into account an irrelevant consideration.
Leaving to one side his complaint that Nick's submissions on this issue (at [17]-[21]) seek to agitate an issue that is not included in his notice of appeal, James argues that these submissions fail in any event on two bases: first, they attack a finding that differs from the finding found in the judgment, and, second, the evidence extracted in the judgment would support the finding asserted by Nick to have been made (and supports the finding actually made).
As to the first, James submits that the expectation that the primary judge found had been encouraged was that the siblings would "inherit substantial wealth in due course" ([186]) and "would be well provided for" ([187]). James contends that the material at [188]-[194] and [197]-[202] supports a finding that there had been such encouragement (and even encouragement of the kind referred to in Nick's submissions at [17]). As to the second, James submits that, although there is a reference at [195] to access to the capital being the only way the siblings could receive that wealth, it is not there said to be the expectation encouraged; rather it is a conclusion as to the position that they were in (not said to have been part of anything the deceased and her husband said) ([195]). James argues that this needs to be understood in the context of the terms of Esperia Court's constitution, under which the receipt of value in any particular share class or at all was at the discretion of the owners of management shares; and James refers to the comments at [423] as to accessing the value by selling shares or using them as security for borrowings.
As to the complaint by Nick that there was no evidentiary basis for the findings as to "expectations", Maria in her submissions points to matters such as the structure of Esperia Court itself (including the initial allocation of shareholdings, and the terms of the memorandum of association and articles of association), the history of dealings within the company (including the changes in shareholdings over time and decisions made in respect of dividends and reinvestment of capital), contributions made to the company from time to time by the children of the deceased, and statements made by the deceased and her late husband to their children.
As noted earlier, even had the amended pleading been allowed, I would have concluded that there was evidentiary support for the findings here sought to be challenged. This complaint is therefore not made good.

[60]

Issue 4 - Executors' additional argument (ground 4(d))

Ground 4(d) of the Executors' James Appeal is as follows: 4. In concluding (at J[431], [433]) that orders should be made in favour of James Soulos conferring upon him: (a) 1,000 of the "B" class shares in Esperia Court that had been gifted by the Deceased under the Will to Nick Soulos; and (b) 125 of the Management Shares that had been gifted by the Deceased under the Will to Nick Soulos, including in circumstances where James Soulos was already entitled under the will, as rectified, to 2,000 "B" class shares, the learned Trial Judge: … (d) failed to take into account a relevant factor, namely that James Soulos had been able to obtain access to, and had chosen to expend, approximately $1 million of his financial resources, available to him via the James Soules Family Trust, in pursuing the legal claims before the Trial Judge where, if he was successful in those claims, he would receive a substantial part of those funds back upon any costs assessment and, if he was unsuccessful, then those funds had been expended on litigation which he ought not to have commenced; …
A similar contention is made by the Executors in their Maria Appeal: 4. In concluding (at J[435]-[436]) that orders should be made in favour of Maria Pagones conferring upon her 125 of the Management Shares that had been gifted by the Deceased under the Will to Nick Soulos, the learned Trial Judge: … (b) failed to take into account a relevant factor, namely that Maria Pagones had chosen to expend approximately $1 million of her resources in pursuing the legal claims before the Trial Judge where, if she was successful, she would receive a substantial part of those funds back upon any costs assessment and, if she was unsuccessful, then those funds had been expended upon litigation which she ought not to have commenced; …
The Executors, in their submissions in respect of the Executors' James Appeal, say that the point raised by their appeal ground 4(d) is potentially peripheral to the core issues on this appeal but they nevertheless maintain that the reference by his Honour (at [426]) to James being reliant upon the continuing support of his wife and children in the management of the trust does not take into account the evidence that James has been provided with at least $1 million to fund the prosecution of his claim (which the Executors say stands as evidence that James has the continuing support of his wife and that he is able to draw upon the family trust even when the liabilities or expenses in question are significant).
As to this issue, James complains that the Executors do not address why it is said that the consideration there put was a mandatory consideration in the exercise of the discretion. James argues that it is difficult to see how it could be, given that ss 59(1)(c) and 59(2) of the Succession Act require the position of the applicant to be considered as at the time of the hearing, and s 60 sets out considerations that may (rather than "must") be taken into account (and does not list the fees incurred by the applicant as one of the enumerated factors). It is submitted that, on any view, even if it were to be taken into account, it would be just one of the factors going to a multi-factorial discretion.
James also argues that the submission also amounts to a claim that an applicant who is given sufficient financial support to continue an application against a well-resourced estate should be denied provision - that is, the fact that they were not forced to discontinue proceedings out of impecuniosity should count against them. It is submitted that such an approach would amount to a grant of immunity to large estates except in the most straight- forward of cases where conditional cost agreements might be available.
I accept that in assessing whether, and if so what, relief should be granted on an application under s 59 of the Succession Act, the Court may take into account any relevant factor and that the expenditure of moneys on the bringing of such proceedings is not an irrelevant factor, although commonly in family provision applications the relevance of the incidence of costs largely goes to the ambit of the distributable estate.
However, that does not appear to be the relevance that the Executors here seek to argue in relation to the expenditure of moneys by James and Maria, respectively, on the litigation. Rather, it seems to be suggested (at least by the framing of these grounds of appeal) that the relevance of this lay in the fact that if successful the litigant would recover a substantial part of the funds back on any costs assessment and, if unsuccessful, the funds would have been expended on litigation which ought not to have been commenced.
What might be the outcome for a successful litigant on a subsequent costs assessment seems to me to be irrelevant when considering an application for family provision unless it is said that the amount for which provision should be provided is somehow to be determined by the likely recoverable costs. That was not agitated in the present case. Nor do I consider that it necessarily follows that because a litigant is unsuccessful the litigation should not have been commenced in the first place. That would be the case if the litigation was doomed to failure from the start but it is difficult to see how such a conclusion could be drawn in the present case.
In their submissions, the Executors seem to confine their complaint to a complaint as to James that the expenditure of moneys on the litigation demonstrates that he was able to have access to moneys from the family trust. That is not disputed, although it is said for James that his access to funds from the family trust is not unlimited (see below). However, any complaint that his Honour failed to take into account James' ability to have access to such funds cannot be sustained. His Honour was well aware of the position in relation to the family trust and did not err, in my opinion, in his conclusion that its assets could not be treated as if they were assets held by James personally.
Ground 4(d) in the Executors' James Appeal and the corresponding ground in the Executors' Maria Appeal are not made good.

[61]

Complaint as to finding as to no compensation to Nick

Nick makes complaint in his submissions as to the consideration by the primary judge at [434] of the question whether there was a need to make an adjustment under Ch 3 of the Succession Act in favour of Nick as compensation for his loss of the 1,000 "B" class shares gifted to him but, by the Court's orders, returned to James. Nick contends that the primary judge erred in concluding that no such compensation was required.
Nick points out that the primary judge, when considering Nick's asset position at [434], took into account the assets held by or gifts made to his sons (John and Andrew) (on the basis that he and his sons are "close"). Nick argues that he has no legal right to assets held by his sons. It is noted that the primary judge made no findings that Nick's sons would confer financial benefits upon him, or even that they would assist him if he was in financial difficulty. It is submitted that the financial position of Nick's sons was therefore irrelevant to the consideration of whether compensation should be provided.
Further, Nick says that the primary judge appeared to consider it relevant that, in relation to Nick's sons (John and Andrew), the Will had provided for the forgiving of finance "provided for acquisition of property". Nick says that the finance in question (cf the contextual suggestion at [434] that this related to the deceased's Balmoral Beach unit) related to a factory unit in Bankstown ([163]). Nick argues that the forgiving of a debt owed by Nick's sons to the deceased has no relevance to the question whether Nick should be compensated for being deprived of shares in Esperia Court in favour of James; and hence his Honour erred by taking into account an irrelevant consideration.
Related to the above complaint is Nick's contention that the primary judge committed a fundamental error of principle in disregarding the question as to why, on the assumption that James had a need for a further 1,000 "B" class shares in Esperia Court, those shares should be taken from Nick's entitlements under the Will. Nick points out that each of the siblings has substantial holdings of ordinary shares in Esperia Court, there being no practical difference attaching to the respective "A", "B", "C" and "D" class shares; and Nick argues that, in the event that the primary judge considered it was necessary that James receive additional shares in Esperia Court, those shares did not need to come from Nick. Nick says that the primary judge appears to have been motivated by a desire to "equalise" the shareholdings in Esperia Court of each of the siblings (noting [430] of the primary judgment) but argues that such a desire had no logical connection to the task of determining an adequate provision for James in light of his need.
As to Nick's submissions raising the question as to how any provision for James to be made should have been addressed, James argues that these again seek to agitate an issue that is not included in the notice of appeal, and thus do not arise for consideration in this appeal. James also contends that they would not succeed in any event for the reason that it was unnecessary for the primary judge to consider why, if James required 1,000 extra shares, they had to come from Nick because that was the only other source, within the estate, from which those shares could have come. James says that this explains why neither Nick nor the Executors suggested at first instance that they should come from elsewhere (and notes that Nick does not suggest a rational alternative source). Pausing here, this submission should be accepted. The parties accepted that Dennis was entitled, independently of the Will, to be registered as the holder of all 3,000 "A" class shares (see [159]).
Similarly, as to the complaint that the primary judge did not engage in any analysis of the net asset position of Nick as compared to his siblings (Nick's submissions at [30], again James says that these agitate an issue that is not included in the notice of appeal but would not succeed in any event. James says that the assertion that the primary judge was motivated by a desire to "equalise" is not supportable from the judgment, and that no attempt has been made in Nick's submissions to identify within the judgment such a motivation. James submits that the primary judge justified his decision on a conventional basis without any appeal to expectations of equality.
I interpose here to note that Maria argues that there is no basis to assert that the primary judge was "motivated by a desire to 'equalise' the shareholdings in Esperia Court of each of the siblings" as applicable to Nick (noting that the reference by Nick in the context of this submission to [430] relates to an analysis of the ordinary shares owned by James). Maria points out that none of the deceased's children had any entitlement to the management shares until the deceased's death. Maria says that the deceased's treatment of those shares in her historical wills was considered by the primary judge, as was the overall propriety of provision made to Maria in light of the rights and benefits attaching to those shares. Maria says that, to the extent that equalisation was effected, that cannot be demonstrated as a "material error" in the overall factual matrix of the case.
I do not accept that the primary judge erred in concluding that the additional 1,000 "B" class shares to be provided to James as a consequence of his Honour's conclusion as to the proper provision for James should be taken from that parcel of shares given to Nick under the Will. It is difficult to criticise the primary judge for failing to address arguments not put to him in this regard. In any event, given that the only class shares forming part of the deceased's estate that could be the subject of an order for provision in favour of James were those that had been bequeathed to Nick (the "A" class shares left to him having been acknowledged to be shares to which Dennis was entitled), there can have been no error in his Honour concluding that the additional "B" class shares for James should be those that were left under the Will to Nick. As to the complaint that the primary judge erred in seeking to equalise the class shareholdings of the children, to the extent that the primary judge did have in mind the notion of equalising the benefits of the class shareholdings, that would in any event be in accordance with the expectations that the deceased had encouraged to the effect that the children would share equally in the material benefits through their shareholdings in Esperia Court.
Thus, no error is established in this regard.

[62]

Issue 2 - complaint as to adoption of incorrect principles (ground 4(c))

The Executors identify their appeal ground 4(c) as relating to how his Honour determined the "nature of the relief to be granted". The Executors complain that his Honour exercised the power to make good the alleged expectation without referencing whether such relief was being granted for the purpose of addressing inadequacy with respect to "maintenance, education or advancement in life". Their complaint is that those expectations were utilised as the sole measure by which the relief was determined.
The Executors contend that the primary judge's orders constituted a wrongful exercise of the discretion under the Succession Act because they were not directed to addressing an actual inadequacy of provision vis-à-vis the maintenance, education or advancement in life of any of those applicants. It is said that this is reflected in his Honour's rationale for the conferral of the management shares upon the siblings, as identified at [440] (cf [167]) and the reference to "underlying" value). The Executors maintain that the determination for further provision was made without any analysis or conclusions in respect of the actual adequacy of the applicant's current circumstances as they pertained to the maintenance or advancement in life.
The Executors say that the tangible benefit from ownership of the management shares arises only if the three family provision applicants can combine their voting power so as to control and, if they wish, wind up Esperia Court. In that regard, the Executors point out that, if, on these appeals, one or more of the family provision applicants fail to retain the benefit of the orders conferring upon them 125 such shares, the other sibling applicants would obtain no tangible benefit from those management shares.
Reference is made to the primary judge's statement at [424] (set out earlier in these reasons), where his Honour based the conclusion of inadequate provision upon the inability to "unlock the asset-backed value" of the class shares. The Executors contend that basing the conclusion upon something additional that the family provision applicant wants (namely, an ability to realise the wind-up value of their shareholding in Esperia Court) but without any reference to what that family provision applicant already has, involves an error of principle; and that there is an overlapping error of principle for the primary judge to use family provision orders to fulfil an expectation of an ability to enjoy substantial wealth.
The Executors point in this regard to statements in the authorities to the effect that consideration of an application for provision does not involve "an exercise of addressing any sense of wrong, hurt feelings, disappointed expectations or of achieving fairness or equality between beneficiaries and claimants on the deceased's estate" (citing Brown v Brown [2022] NSWSC 1393 at [283] (Henry J), her Honour there citing Steinmetz v Shannon [2019] NSWCA 114 (Steinmetz) at [94]-[97] (Brereton JA) and Meres v Meres [2017] NSWSC 285 (Meres v Meres) at [114] (Hallen J)).
Further, as to the conferral on James of an additional 1,000 "B" class shares, the Executors point to the text of [430], noting that his Honour there expressly identified that the purpose of the order for conferral of the 1,000 "B" class shares was in order to satisfy expectations held "within the community of the deceased" (i.e., her extended family. Including James and other members of the Soulos family) "if not also within the broader community" as to what would constitute proper provision. The Executors contend that it was an error for his Honour to have concluded, in effect, that the deceased failed in her moral duty to make adequate provision for James' proper maintenance simply by reference to what James considered to have been his legitimate (but unrealised) expectation of significant future wealth.
Insofar as the intention of the primary judge was to equalise the position of the siblings in the context of Esperia Court, the Executors say that this also involved an error on his Honour's part.
Thus, the Executors complain that his Honour erred in exercising the discretion to make an order for further provision not for the statutory purpose for which the power was granted (referring to s 59(2) of the Succession Act) but for the purpose of making good an expectation on the respective applicants' part and to obtain a particular outcome as to the control of Esperia Court. In this regard, the Executors argue that the primary judge ostensibly exercised the discretion to order further provision so as to fulfil what his Honour considered to be a legitimate expectation of material wealth on the part of the deceased's children (at [420] of the primary judgment); and in order to provide the family provision applicants with the power to obtain the outcome (being a winding up of Esperia Court) which the Executors note the primary judge had identified was not available relief under the Corporations Act (see [397]; [195]; [209]; 243).
Dennis argues that his Honour took into account more than the expectations of the children in making his decision but says that in any event there is nothing in the relevant statutory provisions which prohibited his Honour from taking into account the expectations of the claimants. Similarly, James argues that, in an appropriate case, "expectations" may permissibly "carry the day" in assessing whether, and if so what, further provision is warranted (AT 6 April 2023 at 143.38-39).

[63]

Complaint as to failure to take into account a material consideration re compensation

In his additional submissions to those of the Executors, Nick complains that the primary judge failed to take into account a material consideration in relation to the further 1,000 "B" class shares in Esperia Court that his Honour determined that James should receive in addition to the 2,000 "B" class shares he was gifted in the Will, being the contradictions in making such a provision.
Nick says that there are two possible scenarios in relation to those shares: first, that (despite the primary judge's orders in relation to the management shares) the "B" class shares remain valueless, in which case Nick says that the transfer of a further 1,000 "B" class shares to James could have no effect in addressing any need he may have; second, that, because of the orders made in relation to the management shares, the "B" class shares now have their net asset value, being $3 million for every 1,000 shares ([422]), in which scenario the 2,000 "B" class shares gifted to James under the Will would have a value of $6 million (and Nick complains that there could then be no justification for James to be granted further provision beyond that $6 million, in addition to the other assets available to him). Further, complaint is made by Nick that his Honour's reasons do not disclose why the ultimate orders were made in light of these difficulties (although there is no inadequacy of reasons ground as such in Nick's grounds of appeal).
As to Nick's complaint as to the finding that there be no compensation for his loss of the 1,000 "B" class shares to be given to James (at [22]-[25] of his submissions), it is again submitted by James that this seeks to agitate an issue that is not included in the notice of appeal but in any event would not succeed. James points out that Nick did not put his asset position into evidence, declining to read any of the affidavits served by him; and that there were no submissions made to the effect that there should be compensation. James says that, having taken that course, Nick cannot now complain that his asset position should have been better taken into account in the reasons for judgment or that there should for some reason have been compensation.
In his submissions in reply, Nick argues that the fact that no evidence or submissions were put by him to the primary judge in relation to his asset position or on the question of compensation is irrelevant in circumstances where the primary judge determined to assess that asset position, and the appropriateness of compensation, on the evidence before him. Nick maintains that the financial benefits conferred on his sons were irrelevant unless it could be concluded that his sons were likely to provide financial assistance to him were that to be necessary and the primary judge did not reach any such conclusion.
In this context, James emphasises that the power to compensate arises under s 66(2) of the Succession Act and is discretionary. James argues that in circumstances where no one has advocated for an adjustment, it was not necessary for the primary judge to consider the issue at all. James points out that there is no provision in the statute setting out what may be considered in determining what, if any, adjustment should be made. It is submitted that a reference to property passing to Nick's sons is a matter that a court considering adjustments might take into account (even though it may give him no personal financial benefit) and that, if he is close to his sons (as is not disputed), that is something that may be of non-financial benefit to him. James submits that the weight to be attached to this would be within the discretion of the primary judge.
James argues that Nick's submissions (at [7]-[8]) as to the additional 1,000 "B" class shares assume incorrectly that need is the sole or determining factor making family provision orders. James emphasises that the assessment is multifactorial; and says that the power is as much about contribution as it is about need. As to Nick's assertion (at [7]) that the order for a further 1,000 "B" class shares was made based on James' financial circumstances, James argues that the expressed reasoning was by reference to contribution and hence Nick's submission proceeds on a mistaken footing. Insofar as reference is made to an asserted value of the "B" class shares, James says that this disregards the fact that the "B" class shares became post Capital Gains Tax (CGT) shares (half on the death of James' father in December 2003 ([83]), and half on the death of the deceased).
As to Nick's assertion that the primary judge failed to take this into account as a material consideration, James says that the fact that one factor that might have supported an order in his favour was absent does not prevent an order being made in his favour if other factors are present to support an order. It is said that the factor (or its absence) is not in itself a mandatory consideration if other factors make it unnecessary to take that factor into consideration; rather, it is a matter for the trial judge, exercising a discretionary power, to determine which factors are relevant and the weight to be accorded to them, in circumstances where the statute sets out permissible rather than mandatory considerations (referring to s 60 of the Succession Act).

[65]

Issue 1 - alleged unreasonableness of award for further provision (Appeal grounds 1, 2, 4(e) and 5 of the Executors' James Appeal and equivalent grounds)

The primary basis upon which the Executors challenge the determination reached by the primary judge as to the inadequacy of provision is their contention that there was no evidentiary basis for reaching the necessary state of satisfaction that there had been inadequate provision (the jurisdictional gateway for the grant of additional provision under s 59(1)(c) of the Succession Act).
The Executors accept that, in the evaluation of whether adequate provision has been made for an applicant's proper maintenance, the Court's powers under s 59 of the Succession Act can be applied in a way that goes beyond a mere calculation of the applicant's financial needs (referring by way of example to Singer v Berghouse at 209-210 (Mason CJ, Deane and McHugh JJ) and Sgro v Thompson at [70]-[74] (White JA). However, they say that this does not mean that the Court is unconstrained as to the provision which might be made, even in the case of large estates.
Insofar as James relies upon Lloyd-Williams v Mayfield (2005) 63 NSWLR 1; [2005] NSWCA 189 (Lloyd-Williams) at [31] (Bryson JA, with whom Giles JA and Stein AJA agreed) (see James' closing submissions at [40]), the Executors say that the context in which the appeal in Lloyd-Williams was dismissed is important. They note that in Lloyd-Williams, Bryson JA observed (at [31]) that the case involved what was considered a very large estate, being about $410,000 of assets that passed on intestacy and notional estate comprising a half-interest in shares (valued at about $3.5 million at the time of hearing) (see at [6]-[8]). Bryson JA also took the view (at [32]) that the orders made at first instance (by White J, as his Honour then was in Mayfield v Lloyd-Williams [2004] NSWSC 419 (Mayfield)) were open to his Honour, even if the purposes for which White J notionally calculated the proposed provision were "not concrete projects, but are means of appraising the provision which ought to be made".
The Executors point out that, in Mayfield, White J approached the question of further provision by considering (at [131]-[139]) the need to provide the applicant with "a fund from which she can draw to purchase reasonable accommodation", a fund "sufficient to provide her with a secure income which is not dependent upon a distribution from the … family trust", and "an amount to take into account other contingencies". Those other contingencies included (as identified at [137]) "a capital sum to provide against the vicissitudes of life, such as unexpected medical costs, and also to provide for some of the conveniences of life such as holidays, travel and a new motor vehicle".
The Executors argue that it is illustrative that, in Mayfield, White J found (at [139]) that a total provision of $893,950 would be adequate provision, (calculated by his Honour estimating an amount for the purchase of a home (at [132])), by identifying a weekly after-tax income amount for the applicant's estimated future life expectancy (estimated at 20 years) (at [136]; cf [133]) and also by providing a figure for contingencies of $150,000 (at [138]).
The Executors say that it is clear that, even where a large estate is involved, the Court is not liberated from considering the actual requirements of an applicant for their proper maintenance, education and advancement in life).
The Executors emphasise that, reading ss 59(1)(c) and 59(2) together, the statutory regime calls for an exercise of that judicial discretion in such a way as to provide adequate provision, but not more than adequate provision (referring to Steinmetz at [52]-[59] (White JA) at [94]-[97] (Brereton JA); Meres v Meres at [114] (Hallen J).
The respective respondents all take issue with the focus by the Executors on financial need (which they see as incorrectly suggesting that this factor is the sole determining factor). James argues that, although financial need may be a relevant factor, "adequacy of provision is not to be determined by a calculation of financial needs" (citing White JA in Sgro v Thompson at [71], which was cited with approval in Scott v Scott at [15]). James notes that "[t]he concept of advancement in life can take consideration well beyond needs" (Lloyd-Williams [32]) and the concept of needs does not limit appropriate provision (Lloyd-Williams at [29], [41]). James notes that one of the enumerated factors is contributions (s 60(2)(h) of the Succession Act). James also refers to the recognition that the jurisdiction is one that is "not solely needs-based" but is "plainly also contributions-based" (citing Steinmetz at [132] per Brereton JA, Simpson AJA agreeing at [151]).
James submits that the correct position is that the Succession Act provides for a consideration based on multiple factors outlined in s 60(2), taking into account all of the circumstances (Sgro v Thompson at [86]); and that no one factor is elevated above the others. It is noted that those factors include "any other matter the Court considers relevant, including matters in existence at the time of the deceased person's death or at the time the application is being considered" (s 60(2)(p)).
Similarly, Dennis argues that Nick's appeal ground 1(c) (which identifies error in the primary judge not conducting an assessment of the claimants' needs which could not be met from their own resources, and not then comparing those needs to the provision made for them in the Will) proceeds on the erroneous basis that the statutory provisions mandate that such an assessment be conducted in every family provision claim. Dennis points to s 60(1) of the Succession Act which he argues makes plain that the matters to which Nick points in this appeal ground are only ones that a court "may" consider, not ones that the court must consider in every case. Dennis submits that, in substance, ground of appeal 1(c) is that the primary judge ought to have made a different decision for some other reason (and, again, this is not in the nature of a House v The King ground of appeal).
Dennis argues that the concept of a claimant's needs and concerns about competing claims may have little or no role to play in the case of a large estate such as this; and that it was well open to the primary judge, in the present case, to make the order that his Honour did.
As to the complaint (see Nick's appeal ground 1(c) and equivalent in Executors' grounds of appeal) of an error in not conducting an assessment of "needs" and comparison between those and the actual provision in the Will, Maria argues that the appellants' focus on financial needs disregards the fact that the jurisdiction here being exercised is not exclusively needs-based and disregards the application of concepts of "propriety" and moral claims in this area.
Addressing ground 1 of the Executors' appeal, Maria contends that the focus exclusively on her financial circumstances and needs has no basis in the legislation; rather, that s 59(2) of the Succession Act directs attention to the facts known to the court at the time the order is made and that the court is required to weigh up the factors set out in s 60(2) of the Succession Act none of which is made decisive or mandatory.
Maria emphasises that: the jurisdiction is not exclusively needs-based; financial needs do not have statutory primacy, or exclusivity, when viewed alongside the other s 60(2) factors; an assessment of what is "proper" requires an evaluative judgment that has regard to all relevant circumstances, not merely the parties' financial circumstances; and it is for the primary judge to determine what weight should be given to the s 60(2) factors. Maria says that the fact that an appellate court might consider that greater or lesser weight should have been given to such factors does not constitute a basis for an appeal court to interfere with a discretionary decision.
Maria argues that ground 1 overlooks the other matters which the primary judge was entitled to, and did, take into account, including, significantly: first, the nature of the estate, including the fact that the deceased, at her death, held all the management shares (and, thus, all the control) in the private company, Esperia Court; and, second, the nature of the relationship between the deceased and Maria, the contributions made by Maria, and the obligations owed by the deceased to Maria in the context of their relationship and the contributions made (this being found to involve the perpetuation of "an expectancy of future benefit" through the family company).
Maria points out that, at [168], the primary judge noted that any value in the shares already owned by Maria was "locked in" and, by virtue of the Will, became "dependent upon an exercise by [the second respondent, the beneficiary of the management shares] of rights attaching to the management shares". Maria says that this cannot be, and is not, seriously disputed in the appeal.
Maria argues that, read in the context of these matters, the primary judge's determination that there was not proper provision made was open and reflected an acceptable evaluative judgment required by the legislative scheme. Maria contends that ground 1, and the appeal, by honing in on financial factors, does not grapple with the intersection between the deceased's moral obligation to Maria and the evaluation of what amounts to "proper" provision.
Nick, in his submissions in reply, expressly disavows the suggestion that the sole determining factor in a family provision assessment is financial need; rather, he argues that it was wrong for the primary judge to disregard this issue.
In their submissions in reply, the Executors maintain that their position is not predicated upon "need" (or bare financial necessities) being the sole benchmark; rather, the Executors say that there must be some "requirement" that is absent from the provision made by the testator (otherwise, they contend that it cannot be said that there is inadequate provision for the proper maintenance, education or advancement in life of the applicant). While accepting that the jurisdiction is not solely needs-based, the Executors say that the proper level of provision for James could not have been determined without regard to his future needs or requirements, and that his Honour ignored these relevant (and necessary) considerations and reached an outcome that was quite unreasonable.
As noted, the nub of the complaint here made as to his Honour's findings is that there was no finding of actual financial need (and no detailed assessment of the financial circumstances and needs of the respective claimants). It is to my mind implicit in his Honour's findings that his Honour did not consider there to be a relevant financial need, as such, on the part of any of the siblings having regard to the provision that had been made for them under the Will. However, the fact that his Honour had had regard to their financial position is evident by references such as the observation that James was able to present as an impecunious claimant (see at [426]) and that, but for the finding in relation to Dennis' proprietary estoppel claim, it might be concluded that an order for provision in respect of the A&R shares would be required (see at [441]).
To my mind it is not necessary (though this is commonly found in such judgments) for there to be a formulaic ticking of the boxes in relation to each of the factors identified as a relevant factor in s 59(1) of the Succession Act, when determining a claim for further provision out of the estate of the deceased. It was sufficient in the present case for his Honour to set out the relevant circumstances of the applicants for provision and the basis on which his Honour considered that adequate provision for their proper maintenance and advancement had not been made. This his Honour did, by reference to the expectations that had been generated in them by the deceased and the fact that, by reference to the conferral of all the management shares on Nick, those expectations were not fulfilled since the benefit of the class shareholdings was illusory while Nick had control of Esperia Court. I accept the submission made for James that this is a case where the expectations carried the day (AT 6 April 2023 at 143.38-39) and, in those circumstances, a detailed analysis of the financial circumstances of each of the siblings (in an already lengthy judgment) was not necessary. It is apparent that his Honour proceeded on the basis that there was no financial need, as such, on the part of any of the deceased's children. Not to make an express finding as such does not give rise to appellable error.
I turn to the position of the individual respondents in the respective Succession Act appeals.

[66]

James

As to James, the Executors refer to [424] and [430]-[431] and complain that there was no finding made that the deceased had left James with inadequate provision for his maintenance or advancement in life (and they note that James' notice of contention does not contend that his Honour ought to have made any finding of actual financial need). Further, the Executors point out that the conclusion that an additional 1,000 of the non-management shares in Esperia Court should be conferred upon James (see [430]-[431]) was reached notwithstanding the finding (at [422])) that those non-management shares have no commercial value unless Esperia Court is wound up but that if the company were to be wound up, a value of $3 million would attach to every 1,000 shares. The Executors here raise the same issue as that identified by Nick as to the perceived contradiction in the making of provision by way of the additional "B" class shares (that they either have no discernible value or, if the management shares permit James to realise the value of the class shares left to him under the Will, then they confer an additional $3 million benefit on top of the $6 million represented by the 2,000 class shares gifted by the deceased). Nick argues that his Honour, in failing to take into account that (by re-distributing the management shares) the class shares bequeathed to James would be worth something in the order of an additional $6 million, failed to take into account a material consideration).
The Executors contend that the orders made by the primary judge in favour of James bore no nexus with, and manifestly exceeded, what might be seen as James' needs insofar as they concerned his maintenance or advancement in life; and (as discussed above) that this amounts to an error of principle in making an order for a purpose other than the statutory purpose.
The Executors emphasise, on the issue of need, that James: lives in a house rented by his wife, but paid for by funds derived on an annual basis from the James Soulos Family Trust; had no complaint as to the adequacy of his present accommodation; shared with his wife net assets of about $872,000 as at 30 September 2019 (but which had diminished to a negative amount of about $227,000 by the time of the final hearing because of payment of legal fees); had "free access" to substantial resources whereby he was able to borrow about $1 million from his wife (who herself had accessed funds either owed to her out of James' family's trust (the James Soulos Family Trust) or borrowed from the trust) and his children in order to pay the legal expenses for the proceedings at first instance (T 115.24-118.48); has access, on an annual basis, to the profit generated by the James Soulos Family Trust, which amount varies from year-to-year but can be in the vicinity of $120,000 per annum; until mid-2020 (and therefore at the time of the filing of his application for provision) had complete control over the James Soulos Family Trust and its corporate trustee (Zalok Pty Ltd), both as majority shareholder of that company and as appointor under the trust deed, in circumstances where the trust holds some $14 million to $15 million of real property assets, including income generating commercial properties (T 110.35-40); and has the unlimited use of a house in Vincentia, on the South Coast of New South Wales, being one of the assets held by the James Soulos Family Trust.
Insofar as the primary judge referred to James being "reliant upon the continuing support of his wife and children in management of the trust", the Executors say that there was no evidence that his wife or children would not permit the trust's resources to be utilised for James' benefit, pointing to James' evidence in cross-examination (T 135.11-14) where he accepted that, in respect of the family trust, if and when he needed money for expenses he had a conversation with his family and then if the money was available it was provided for his use). The Executors say that the assets of the family trust are sufficient to meet all of James' conceivable future needs. They argue that the family trust is a very significant "financial resource" for James (citing Kennon v Spry; Spry v Kennon (2008) 238 CLR 366; [2008] HCA 56 at [96] (Gummow and Hayne JJ) and Hall v Hall (2016) 257 CLR 490; [2016] HCA 23 at [54]), saying that there was no evidence that any of James' financial needs had ever been left unsatisfied by either the family trust or his family.
Insofar as the draft September 2019 accounts of the family trust indicated a negative net asset position as at 30 September 2019 of just under $415,000 (see Andrew's affidavit sworn 2 October 2019 at [31]; Annexure "C), the Executors argue that the true asset position was much different). In that regard, the Executors draw the conclusion from the lack of explanation by James' son Andrew (the accountant for the James Soulos Family Trust) for a non-current liability described as a "provision" in the accounts in the amount of $2,168,238 (referring to Andrew's cross-examination at T 105.35-109.2) is that there was no such liability. Further, the Executors note that the financial statements of the trust record the trust's real property investments at historical acquisition cost, not their current market value (T 109.46-110.40), noting that the primary investment purpose of the James Soulos Family Trust was to acquire and accumulate real property assets (T 132.23-25).
The Executors also note that James' financial position is supplemented by the gift to him under the Will of the property at 79 The Boulevarde, which had an agreed value of $2.3 million ([427]) (although it must here be noted that there may be a need for the Executors to sell this or other properties to meet estate administration costs, in which case the benefit represented by the gift of 79 The Boulevarde would be diminished). The Executors say that, even without personal access to any other assets or financial resources, it would be strongly arguable that such a gift would, in and of itself, have constituted more than adequate provision for James' proper maintenance, given his age, health and other circumstances as at the date of the hearing before the primary judge.
In conclusion, the Executors contend that the primary judge ought not to have made any orders for further provision in favour of James; that James had not established that the provision made for him was inadequate for his proper maintenance or advancement in life; that he had no actual monetary need; and that even if there had been a basis to conclude that there had been inadequate provision, his Honour misused the discretion by purporting to use it for an extraneous purpose relating to a fulfilment of the expectations or hopes of James, rather than by awarding a monetary amount directed to an identified need.
The Executors say that his Honour ostensibly utilised the power: for the purpose of remedying an historical grievance regarding the "confiscation" of James' shares in Esperia Court by his parents ([426], [432]); to fulfil an expectation on James' part ([424]; [426]; [430]); and in order to provide James (and the other family provision applicants) with the power to obtain the outcome (being a winding up of Esperia Court) which his Honour had identified was not available relief under the Corporations Act (referring to [397], [195], [209], 243).

[67]

James' submissions

Having regard to the applicable standard of appellate review (being that articulated in House v The King), James argues that the Executors cannot succeed merely by showing that the primary judge did not find, in his favour, a particular fact that might have weighed in favour of an order for provision; rather, they would have to show that the factors considered, taken as a whole, were incapable of justifying the order. James says that no attempt has been made to do that, and for that reason the appeal must fail.
James contends that the primary judge found that he was impecunious ([426]) (insofar as the primary judge referred to his impecuniosity having arisen due to James having placed property in the discretionary family trust). James refers in this regard to his contribution to the trust of his share of proceeds, in the amount of $1,177,171, from a prior sale of assets owned by James' family and points out that this represents 20% of the seed money for the trust (saying that the other 80% came from other family members). James submits that the approach of the primary judge (in implicitly declining to take the trust into account in the manner urged by the Executors was both open and correct, for a number of reasons.
James points out that the primary judge was required to consider the circumstances as at the date of the hearing (ss 59(1)(c); (2) of the Succession Act). While James accepts that the fact that an applicant for provision has caused his or her own impecuniosity may be a relevant consideration (s 60(2)(p)), he submits that it would not ordinarily be decisive absent some additional factor, such as a scheme to achieve impecuniosity so as to obtain an order for provision; and that the facts do not support the existence of any such scheme having regard to the timing of James being removed from control of the trust and as appointor. (In that regard, see Leary v NSW Trustee and Guardian [2017] NSWSC 1113, where the complaint was that the applicant for provision had deliberately expended funds in order to present a false picture of his financial affairs, and the authorities considered in that case. There is no suggestion of any such untoward conduct in relation to the removal of James as appointor of the family trust and director of its trustee company after the commencement of his Succession Act proceeding.)
Further, James argues that the source of the seed funds for the assets of the trust speaks against treating the whole of the assets of the trust as James' personal assets or the whole of the income of the trust as James' personal income. It is submitted that the fact that 80% of the seed funds were contributed by other beneficiaries of the trust would be a powerful consideration for the trustee in the exercise of the trustee's discretion as to the advance of funds from the trust. James points to the evidence from his son, Andrew, that the family would object if, leaving aside the income, James were permitted to draw funds from the trust beyond his original loan (T 118). James also criticises as unedifying (and not consistent with the scheme of Ch 3 of the Succession Act) the Executors' submissions insofar as they amount to a submission that he should be treated as "somebody else's problem" (by putting the burden for his maintenance and advancement on the discretionary trust), again noting that James provided only a minority of the seed capital for the trust.
James points to the evidence as to his removal from control of the trustee, and from the role of appointor, including its timing (T 139-140); and it is noted that the submissions put to the primary judge on James' behalf included that, having seen James on the witness stand, his Honour was able to see that James was no longer capable of acting as controller or appointor of the trust (see closing submissions for James at [33]). James says that this Court is not in a position to form its own view on that matter. James further points out that, even if he were capable of remaining in a position to control the trust, a power of appointing a trustee is not a power to control the trust or the distribution of funds from it and it does not give the appointor beneficial ownership of the assets of the trust (reference here being made to Public Trustee v Smith [2008] NSWSC 397; (2008) 1 ASTLR 488 at [104]-[109]). It is noted that appointment of a trustee in order to obtain for oneself the funds of the trust can be a fraud on the power (Baba v Sheehan [2021] NSWCA 58 at [4]-[7] per Brereton JA); and that even a trustee given a wide discretion must give due consideration to the other beneficiaries (Owies v JJE Nominees Pty Ltd (ACN 004 856 366) (in its capacity ATF the Owies Family Trust) [2022] VSCA 142).
James submits that the resort by the Executors to "financial resource" principles by reference to cases decided in family law property settlement applications fails to have regard to the difference in statutory context applicable to those cases, where the wide statutory formulation of "property of the parties" has an impact on the exercise and the reasoning; and he argues that the Executors do not say how such a financial resource should be taken into account in this context, instead seeking to treat it as if it were all property of James.
James maintains that there is no basis for any suggestion by the Executors (referring to 23 of their submissions) that there was something untoward done in the accounts for the trust. James says that historical cost is the accepted method for recording accounts (and notes that this was the method used by Nick to record assets of Esperia Court); and that the inability of an accountant (here, his son Andrew) without notice to identify the source for a particular item in the accounts while in cross-examination is not a basis for suggesting that the entry is false. It is noted that these matters were the subject of submissions at first instance and that the primary judge, with the benefit of seeing Andrew in the witness box, did not make any adverse findings on matters of this kind.
On the question of adequacy of proper provision, James maintains that the assertion by the Executors that there was no finding that the deceased had left him with inadequate provision for his maintenance or advancement in life is unsustainable by reference to [424] and [430].
Further, James says that the valuation of the property at 79 The Boulevarde (at [32] of the Executors' submissions), fails to take into account: the CGT and realisation costs on the property, which bring the realisable value down to $1.8 million; the fact that the estate has already had to sell specific gifts of property so that this value will be further diminished; the application of the rules in Part II of the Third Schedule to the Probate and Administration Act 1898 (NSW) will lead to the other specific gifts being realised for the payment of expenses of the estate and possibly commission (see [21]-[29] of the primary judgment); and the erosion of the estate by costs and expenses. Similarly, it is said that the Executors, in ascribing a value to the "B" class shares, fail to account for the fact that the "B" class shares are now post-CGT shares.
James says that the primary judge proceeded on the basis of an inference that the value of the class "A", "B", "C" and "D" shares would be substantial if the rights to participate in management were equalised ([423]) and that this finding underpinned the allocation of 125 management shares to each of the four children of the deceased, so as to produce value out of their interests in Esperia Court. James submits that it is not necessary, on that approach, for Esperia Court to be wound up to realise value; and that it is not correct to say that the order provides no value. James argues that a "seat at the table" with the ability to influence Esperia Court and "even if only potentially unlock financial benefits" would still constitute a benefit and thus provision to James. Further, James argues that if the management shares were, in the absence of a majority, really worthless (as the Executors contend), it is difficult to see why they would pursue an appeal against the provision of those shares to James. (That submission, however, does not appear to recognise the collective effect of 75% of the management shares being held by Nick's three siblings.)
As to the reliance by the Executors on the particular considerations applied and orders made in Lloyd-Williams, James says that: this fails to recognise that the power is discretionary and that the discretionary considerations applied in Lloyd-Williams cannot be elevated to propositions of law (noting that the power under s 59 is not limited by concepts of "need") and also fails to recognise the difference between the magnitude of the estate in Lloyd-Williams (being approximately $4 million including notional estate - see at [6]-[8] of that decision), and the magnitude of the estate and dispositive power in the present case, which James asserts is nearly $50 million. In any event, James argues that the identification of the use of funds has less importance in a contributions case.
I note that the Executors say that they referred to Lloyd-Williams only because of the heavy reliance placed upon it by each of the family provision applicants. Noting that the proceedings in that case were heard at first instance in 2004, the Executors say that a $4 million estate would be worth a significantly larger amount in present-day dollars but, nevertheless, taking James' submissions at face value the net assets of the James Soulos Family Trust are at least about three times greater than the entire estate considered in Lloyd-Williams.
James further submits that limitations based on a capable testator who has properly given consideration to the claims on their estate are not applicable where the testator did not do so (citing Steinmetz at [57] per White JA; at [89]-[91] per Brereton JA). It is noted that the rationale for affording weight to the wishes of a testatrix is to recognise the "better position in which [she] was placed" to consider the claims on her estate but that this is predicated upon those claims being "duly considered" (James referring, by way of example, to Olsen v Olsen (2019) 101 NSWLR 225; [2019] NSWCA 278 at [75]). James argues that, where the deceased has not "duly considered" those claims and has not taken advantage of the better position in which she was placed, her views should not be afforded the weight that otherwise might have been given to them. James refers in this regard to what was said by Lindsay J in Estate Lioutas; Lioutas v Papasoulis [2018] NSWSC 352 (Estate Lioutas) at [31].
As to the Executors' contention that the primary judge took into account an irrelevant consideration by reference to the evidence as to "expectation", James says that this cannot withstand the breadth of s 60(2)(p) of the Succession Act and notes that relevant considerations may include the making of a promise, or a reasonably held expectation (citing Vigolo v Bostin (2005) 221 CLR 191; [2005] HCA 11 (Vigolo v Bostin) at [114]-[115], [122] per Callinan and Heydon JJ).
James says that in the present case the expectations were created and encouraged by his parents, (noting [186]-[202], [424], [426]), including to encourage him to perform work in the business without remuneration ([187]), and that those are matters to which the primary judge could have regard. Moreover, James says that the reasoning was directed at what was adequate for "proper" provision, not (as suggested by the Executors) by reference to addressing a sense of wrong, hurt feelings, disappointed expectations (per se) or achieving fairness or equality. James says that the order was not done "simply by reference to" his expectations. Further, James says that even a concept of equality between siblings is not impermissible, referring to what was said by Basten JA in Phillips v James (2014) 85 NSWLR 619; [2014] NSWCA 4 at [113].
James argues that in the present case, where there were additional factors in his favour (such as his expectations created and encouraged by his parents, his contributions to the business - referring to his notice of contention; and the circumstances in which he was deprived of his shares), the orders for provision made in his favour by the primary judge were justified.
James argues that the Executors' conclusion (in their submissions at [51]-[52]) discloses the dependency of their appeal on successfully asserting "need" as the sole benchmark. James says that this ignores that family provision applications can be as much about contribution as "need"; and ignores that "advancement" can extend well beyond "need". It is noted that the primary judge at [430] emphasised the contribution aspect as a factor, if not the dominant factor, in the decision to award a further 1,000 "B" class shares to James. James argues that the decision was made for proper purposes based on contributions.
Insofar as the Executors dispute that James' contributions justified an order for further provision, James complains that they do not identify the basis for such a dispute or how it would be beyond the discretion of the Court below to conclude that the contributions did justify the order. James emphasises that this is a review of a discretionary decision.

[68]

Notice of contention - James' contributions

It is convenient at this point to address James' notice of contention (filed in both Succession Act appeals relating to him) raising a single contention: The decision below was justified, appropriate and correct in all the circumstances, particularly the special contribution made by James Soulos to the acquisition, conservation and improvement of the estate of the deceased person and to the welfare of the deceased person or the deceased person's family, for which adequate compensation was not received.
James points to the reference by the primary judge to his contributions to the property ([430]; [187]), although he accepts that those contributions were not canvassed in detail. James argues that the contributions he made were unchallenged, uncontested and corroborated; and that they show that the approach taken by the primary judge was reasonable.
In summary, James points to evidence as to the work done by James from the time he was a child and during his university studies, and continuing until he left home and that, at the request of the deceased, he ceased his university studies towards becoming a doctor in order to run the business full time for two years (unpaid) while his father was incapacitated. It is noted that Maria had previously acknowledged the special extent of James' contribution and that those contributions were unpaid.
James attaches significance to the "special sacrifice" made by him in ceasing his university studies in second year, which he says came at a critical time to his education and future career development. It is noted that James never returned to university, instead becoming a solicitor through articles, obtaining his practising certificate 10 years later, and going on to practice in conveyancing. (I interpose to note that it would be invidious to express any view as to the comparative benefits or otherwise of the two career options - I simply note that James contends this involved a special sacrifice, suggesting that he placed more weight on the prospect of a medical career than one as a solicitor.)
It is noted that the deceased recognised that James' sacrifice saved the family's business and finances. James submits that, without this, the business would have failed; his father's mortgage over the first set of shops at 3-9 The Boulevarde would not have been serviced and the property would have been lost. Hence, it is said that the assets now available would not be there.
James contends for a finding that proper provision, in the context of a sacrifice and contribution of that kind, required a particular recognition in terms of shareholding in Esperia Court (which became the owner of the original properties), and the making of orders accordingly.

[70]

Executors' submissions in reply

The Executors maintain their contention that there was no analysis or finding made as to the adequacy or otherwise of the provision actually made for James. The Executors say that his Honour's finding was that there would be inadequacy to the extent that something additional (an ability to "unlock the asset-backed value" of his shares and a voice in Esperia Court) was not received. The Executors place emphasis on this, noting that the finding at [424] is made uniformly and in exactly the same terms with respect to each of James, Maria and Dennis, yet each of their financial circumstances and positions in life (and aspirations or desires for the future) were different. The Executors say that this reflected the lack of examination or analysis of their individual positions in life and the lack of a basis, on an orthodox application of Succession Act principles, for providing 125 management shares to each applicant (and an additional 1,000 shares in Esperia Court to James). The Executors argue that James' submissions themselves emphasise that the conferral of management shares was never really directed towards maintenance, education or advancement in life (referring to the submissions at [19]).
Insofar as James raises the issue of capital gains tax obligations, the Executors say that those are relatively small (referring to the estimates of CGT liabilities that were undertaken by an expert witness, William Buck).
The Executors question how the deceased came to be treated as a testator who had not properly considered claims upon her estate. It is noted that his Honour referred to James' "moral claim to the return of all the shares in Esperia Court he dutifully surrendered as a price paid for his love match marriage" ([417]) but the Executors point out that the deceased did gift 2,000 of those same "B" class shares to James. The Executors say that the deceased's decision not to gift all 3,000 shares was not a basis for attacking the entirety of the deceased's testamentary intentions as involving a lack of "wisdom" or "justice" (referring to James' reliance on Estate Lioutas at [31]).
The Executors say that the potential relevance of contributions does not mean that such contributions authorise further provision without reference to an applicant's financial capacity to address his or her own "requirements" for maintenance, education or advancement in life; and they emphasise their contention that relevant factors were not taken into account.
The Executors reiterate their position that the primary judge did not make a finding (at [426]) of impecuniosity. It is submitted that his Honour's language (i.e., that "James' case is able to be presented as that of an impecunious claimant") was deliberate and operated as nothing more than an acknowledgement of the way in which James' case had been put forward. The Executors argue that in using that expression "is able to be presented", his Honour was tacitly rejecting the proposition that James was an impecunious claimant. It is submitted that this is apparent from the subsequent express reference to assets deliberately being placed within a trust and the identification that James' claim was "essentially grounded less on 'need' than upon a 'moral'" claim [for return to him of his full 3,000 shares in Esperia Court]" (a point that the Executors say would not have needed to be made if James was actually impecunious).
As to James' submissions in respect of his contribution to the family trust, which suggest that he only has a 20% interest in the trust, the Executors say that, irrespective of the source of moneys in the trust, it was (until mid-2020) a trust over which James had full and complete control; that the contributed funds were advanced by way of loan (not equity) (T 107.32-42); and that the funds in question were sourced from an asset sale for about $6 million by H J Nominees Pty Ltd (a company controlled by James and his family) in about 2004 or 2005 (the Executors referring to Andrew's affidavit sworn 2 October 2019 at [25]). It is noted that in the financial statements of the James Soulos Family Trust that loan of almost $6 million ($5,885,852.55) has been treated as having been made by James and his wife (Margaret) as to $1.177 million each, and by their four children as to $882,000 each (notwithstanding that the fourth child had not been born at the time H J Nominees Pty Ltd was registered and was not a shareholder in that company). The Executors say that it is implausible that any of those children actually contributed funds to the purchase of the asset and they argue that the funds contributed in about 2005 were really moneys belonging to James and his wife. In any event, it is noted that the funds were contributed by loan. The Executors say that the net assets of the James Soulos Family Trust (after deducting those outstanding loans) remained an amount well over $10 million (probably about $12 million).
As to the evidence by James' son, Andrew, that his family might object to James drawing moneys beyond his loan balance, the Executors say that this is irrelevant because, at the time of the final hearing, the controller of the trust (as sole director of the trustee company, Zalok Pty Ltd) was James' wife (T 121.20-122.6; and see ASIC extract for Zalok Pty Ltd), who did not give evidence; and that in any event this evidence is not credible because Andrew acknowledged (T 118) that his mother had, in fact, drawn funds beyond her own loan account in order to provide James with funds for the payment of his legal fees.
The Executors argue that James' ability to access over $1 million of funding was significant and contradicted any suggestion of impecuniosity. It is said that this was relevant by reason of s 60(2)(d) (financial resources), s 60(2)(l) (any other person liable to support the applicant), and/or s 60(2)(p) (any other matter).
The Executors say that James' submission (at [10]) ignores the deceased's testamentary gift to him of a $2.3 million property (79 The Boulevarde) ([427]) and that the deceased and her late husband provided James with what was a significant inter vivos gift of $117,500 in 2002 (which permitted James and his wife to purchase a home for themselves in Brunswick Avenue, Strathfield) ([240]-[242]).
The Executors note that, in the hearing at first instance, the proposition that his abandonment of legal control of the trust was a step intended to distance himself from the assets of the trust was put to James (T 132.42-133.20). Further, the Executors argue that if James says that he ceded control because his own capacity and competence became significantly diminished, then this must impact upon his claim for further provision. The Executors say that the primary judge's observation at [426] as to James' advanced age ought then to have assumed far greater importance, not least because the question of proper provision for "advancement in life" would have very limited or no relevance.
The Executors disavow any question of misuse of power in the utilisation of trust funds for James' benefit; rather they emphasise that until mid-2020, James was both appointor and sole director and majority shareholder of the trustee company.
As to their reference to "financial resources", the Executors point to s 60(2)(d) of the Succession Act. The Executors maintain that the family trust had always provided for any of James' needs, requirements or amenities; and that it was proper and necessary for the Court to consider the question of adequacy and propriety of provision by reference to both the provision made for James by the deceased (including her gift to him of 2,000 "B" class shares, worth about $6 million on a winding up) and his future "needs" and whether they would likely be able to be met from his own resources (the Executors here referring to Hunter v Hunter (1987) 8 NSWLR 573 at 575 per Kirby P (as his Honour then was)).
In reply to James' submission as to the reference in the accounts to the liability recorded as a provision, the Executors maintain that it was relevant (and a cause for concern) that this liability in an amount exceeding $2 million remained recorded in the financial statements of the trust but that the accountant responsible for the accounts and financial statements for the prior 12 years (Andrew) was incapable of providing any explanation for that provision. The Executors disavow any submission as to Andrew's credit; rather, they say that the question is as to the true financial position of the trust and that it is not the case that the trust had limited assets and income.
The Executors say that if his Honour's grant of relief did not fall within a reasonable and fair range, then one of the House v The King grounds would be made out.
As to the submissions made by James (at [40]-[42]) as to his need for the additional 1,000 "B" class shares, the Executors say that these submissions involve a circularity. The Executors argue that if the conferral upon James of management shares in Esperia Court is not sustainable, it will be (at least in part) because use of the jurisdiction merely to "unlock" the asset-backed value of the shares in Esperia Court was not appropriate. The Executors say that, in that circumstance, the conferral of an additional 1,000 shares purely to provide James with an ability to appoint a director (and thus "have rights that are uniform with those of other shareholders") would be subject to the same criticism. The Executors reiterate their position that equality of treatment is not, in and of itself, a relevant objective of the legislation.
In oral submissions in reply for Nick and John, emphasis was placed on the need to understand the effect of the orders made in relation to the Constitution of Esperia Court (accepting that it was not raised as a ground of appeal and that the ordes in Annexure A as to the restructuring of the company shares had been agreed between the parties) in the event that there were success on the Oppression Appeal at least to the extent that Orders 1 to 7 were set aside. The submission ultimately advanced (as adverted to above) was that, in that eventuality, the amendments to the Constitution of Esperia Court (which included the abolition of the status of the management shares) would not occur and it would then be necessary to ask whether James should receive by way of provision the additional 1,000 "B" class shares. Nick and John submit that there would be no point giving him those shares because they would not give him control, nor would they confer any value except on a winding up (AT 6 April 2023; 195-200).

[71]

The notice of contention - James' contributions

The Executors say that, contrary to James' submissions (at [35]), his Honour did not relevantly base the grant of any relief upon an examination of his contributions (let alone "special contributions"). It is noted that at [179], [187], [430] his Honour referred generically to the Soulos children all having worked in the family business without remuneration and all having helped to build wealth in Esperia Court. The Executors argue that the primary judge did not single James out as having made any "special" contribution; nor, they say, was there any basis for treating his "moral claim" as being superior; and it is noted that there was no finding that those contributions were determinative of Esperia Court's financial success. The Executors emphasise that the Succession Act is not a vehicle for obtaining either reparation for past parental behaviour or reward for good services.
The Executors maintain their position that James has received significant benefits by way of inter vivos financial assistance ($117,500 in 2002) and under the Will (79 The Boulevarde, plus 2,000 "B" class shares in Esperia Court). It is submitted that, just as in Vigolo v Bostin at [123] (Callinan and Heydon JJ), it is not irrelevant that the financial benefits received by James significantly exceed the monetary value of the sum of his efforts over the years. It is submitted that James did not demonstrate that he would have been better off had he not made those contributions (cf Vigolo v Bostin at [123]).
Further, the Executors take issue with James' description of his contributions (at [36]-[38] of James' submissions) in the following respects. First, noting that James worked in the family's cafés and lived at home until the age of almost 28 (and was not required to pay for food or accommodation), the Executors say that James' contributions in the context of the family's small businesses (which saved the Soulos family the expense of a non-family employee) are not uncommon contributions in such a context. Second, the Executors say that the evidence does not make good the suggestion that James abandoned a career as a medical doctor, nor that he was ultimately disadvantaged by the course that his life took (noting that James was studying science at university and "had planned to study medicine for 4 years after 2 years of studying science") (this being a reference to James' affidavit sworn 24 March 2021 at [9]-[10]); and that there was no evidence as to how well (or poorly) James was doing in his science degree and thus no evidence as to how realistic a career in medicine may have been; and that there was no evidence that his actual career path as a legal practitioner was less advantageous to him (nor as to why he did not return to his science studies following his father's illness).
Third, insofar as James refers to recognition of his sacrifice by the deceased, it is noted that the deceased had simply expressed the view that James "[h]ad helped a lot in business before he got married" (T 324.29). The Executors further argue that the appreciation that the deceased had for James' assistance (which came at a time when she might otherwise have had to work alone) does not necessarily mean that the business would have failed without his contribution, nor that "[t]he assets now available [in Esperia Court and in the estate] would not be there" had it not been for him.
The Executors do not dispute that James made a contribution to the deceased's estate, but they submit that none of those contributions provides a justification for the relief granted by his Honour.

[72]

Maria

As to Maria, the Executors say that the primary judge's conclusion at [437] was indicative of there being no identifiable or tangible basis upon which it could be suggested that Maria had any kind of need that was required to be addressed by the conferral of an additional monetary benefit out of the estate. They contend that the gift of the Parsons Avenue Property comprised more than adequate and proper provision for Maria. In that regard, the Executors say that Maria is not confined to a life that is limited to bare necessities, noting that: Maria and her husband own their own home in Greece and Maria owns an additional investment property in Greece; Maria has the benefit of a cash resource of $1.1 million, which is held in a bank account in Australia; and that Maria's financial position is supplemented by her receipt under the Will of the Parsons Avenue Property (valued between $1.35 million to $1.5 million) and an additional property in Greece ([437]).
The Executors contend that the primary judge's determination that Maria had been left with inadequate provision out of the estate suffered from a number of errors: namely, it failed to take account of the $7 million offer by Nick to acquire Maria's shares in Esperia Court; it was manifestly unreasonable in circumstances where there was no identifiable need that warranted further provision out of the estate; and it was also an error to treat the making of family provision orders as a mechanism by which Maria's expectations of material wealth were to be achieved.
The Executors say that the primary judge ought not to have made any orders for further provision in favour of Maria but that, even if Maria had been left without adequate provision under the Will, it was unjustifiable and inappropriate to address that by orders conferring upon her (together with the two other family provision applicants) 125 of the 500 management shares in Esperia Court.
The Executors argue that, to the extent that a conferral of 125 management shares upon Maria had any utility, there would only be utility if a similar order was made in favour of each of James and Dennis (and then only if those three siblings combined their voting power so as to cause Esperia Court to be wound up or to liquidate and distribute its assets). The Executors say that the misapplication of the Succession Act power is illustrated by the fact that the conferral of the management shares upon the three siblings (James, Maria and Dennis) is either of no real monetary value (because the holders of the management shares are not entitled to dividends or a distribution of capital) or else it allows access to about $3 million for each 1,000 of the "A", "B" or "C" class shares in Esperia Court. It is noted that, in the case of Maria, who was already the holder of 3,000 "C" class shares, this would mean that she would have an ability to realise approximately $9 million.
It is submitted that, had his Honour been of the view that the deceased had failed in her moral obligation to make adequate provision for Maria by not addressing some actual or potential future need that might arise in the course of her remaining lifetime, then his Honour could have made an order for provision in a fixed dollar amount (hypothetically, a few hundred thousand dollars) and ordered that such a cash provision be made available out of the estate's other assets.
Maria, in response, emphasises that every decision made under the jurisdiction conferred by s 59 of the Succession Act requires an evaluative judgment that is sensitive to the specific facts of each case (citing Steinmetz at [62] per White JA; Sgro v Thompson at [66]-[67]), and that every determination as to the nature and quantum of a family provision order is a "true discretionary decision" (citing Durham v Durham (2011) 80 NSWLR 335; [2011] NSWCA 62 at [82] (Campbell JA, Tobias and Young JJA agreeing). Hence, Maria submits that, on appellate review, the principles stated in House v The King are applicable and the primary judge's evaluative decision can only be disturbed on appeal if there was an error of principle, a material error of fact, a failure to take some material consideration into account, or the converse, or that the result is so unreasonable or plainly unjust to bespeak error of such a kind.
Maria argues that appellate courts ought show restraint in disturbing the evaluative determinations of first instance judges and substituting different evaluations which, objectively speaking, may be no better than the first (citing Singer v Berghouse at 212 (Mason CJ, Deane and McHugh JJ)). In the present case, Maria says that the outcome was well within the range of acceptable outcomes.
It is noted that in Sgro v Thompson, White JA (with whom McColl and Payne JJA agreed) said (at [86]) that "[t]he most important word in s 59(1)(c) is 'proper'", his Honour making clear that what is adequate or inadequate can only be assessed in the context of what is proper or improper. Maria says that the Executors' appeal fails to engage with this key concept and that the Executors' submissions, in focusing exclusively on adequacy of provision fail to engage with the concept of proper provision.
As to the complaint that there was no evidentiary basis for the findings as to "expectations", Maria points to matters such as the structure of Esperia Court itself (including the initial allocation of shareholdings, and the terms of the memorandum of association and articles of association), the history of dealings with the company (including the changes in shareholdings over time and decisions made in respect of dividends and reinvestment of capital), contributions made to the company from time to time by the children of the deceased, and statements made by the deceased and her late husband to their children.
Maria says that there is no basis to assert that the primary judge was motivated by a desire to "equalise" the shareholdings in Esperia Court of each of the siblings as applicable to Nick (noting that the reference by Nick in the context of this submission to [430] of the primary judge's reasons relates to an analysis of the ordinary shares owned by James). Maria points out that none of the deceased's children had any entitlement to the management shares until the deceased's death. Maria says that the deceased's treatment of those shares in her historical wills was considered by the primary judge, as was the overall propriety of provision made to Maria in the light of the rights and benefits attaching to those shares. Maria says that, to the extent that equalisation was effected, that cannot be demonstrated as a "material error" in the overall factual matrix of the case.
Maria submits that the Executors' concession in respect of an inability to "unlock" the value of her shareholding in the family company reinforces that the primary judge's ultimate conclusion of what provision ought to be made in her favour was duly guided by an assessment of why that constituted "proper" provision.
Insofar as ground 4(a) suggests that the primary judge committed an error of legal principle by considering, in the evaluative exercise, the "expectations" held by Maria in relation to Esperia Court, Maria contends that there is no error in the primary judge having regard to this aspect (and, importantly, the conduct of the deceased and her late husband in engendering the relevant expectation) ([178]; [186]-[199]; [424]). Maria submits that the concept of expectation can find a footing in ss 60(2)(a), (b), (c), (h), (i), (j) and (m) but in any event would be able to be considered under s 60(2)(p) of the Succession Act. Maria says that the legitimate expectations of an applicant are regularly part of the factual matrix in family provision proceedings.
As to 4(b) of the Executors' Maria Appeal grounds (which refers to the primary judge's failure to take into account Maria's expenditure on litigation costs in assessing whether provision in the form of 125 management shares in Esperia Court ought be made), Maria notes that s 59 of the Succession Act requires the court to determine family provision claims at the time of the hearing. It is said that Maria's circumstances and entitlements at that time were clearly the subject of evidence and borne in mind by his Honour. Maria says that it can be inferred that this included the expenditure on costs, which was the subject of cross-examination. Further, Maria argues that even if the Executors could establish that the primary judge did not consider this aspect, there is no articulation of why and how this would amount to a material error. Maria says that the Executors here call on the court to focus solely on financial matters, as opposed to making a broad evaluative judgment bearing in mind all the circumstances, including weighing the propriety of the provision.
As to 4(c) of the appeal grounds, which refers to the primary judge's failure to take into account the open offer made to Maria to buy out her ordinary shares in Esperia Court in assessing whether provision in the form of 125 management shares in Esperia Court ought be made, Maria says that the Executors do not cavil with the primary judge's finding (at [396]) that the evidence demonstrated that the offerors had no capacity to make good the offer; and that the Executors do not engage with the primary judge's finding (at [73]) that the offer was made on "extended and highly qualified terms" or the cross-examination and evidence that traversed same.
Maria says that the primary judge clearly took into account the offer and considered it on the face of the judgment; and that limited weight was attributed to it in wholly explicable circumstances. It is said that no error is here made out and that there is no need for the Court to presume why the offer was rejected (as suggested at [21] of the Executors' submissions).
As to 4(d) of the appeal grounds, which asserts that the determination at first instance was manifestly unreasonable and plainly unjust, Maria notes that the only bases articulated are that the 125 management shares in Esperia Court awarded by way of provision were not, of themselves, of any immediate value capable of meeting an articulated (and impliedly financial) need of Maria; and that they were capable of effecting a realisation of Maria's own shares in Esperia Court if a winding up was procured.
Maria says that there is no engagement with why the determination: is outside of the range of evaluative outcomes open to the primary judge; and/or manifests as a failure properly to exercise the discretion which the law reposes in courts of first instance; and/or is reflective of a substantial wrong having, in fact, occurred. In particular, Maria submits that the determination aligns with an evaluative assessment of what was "proper" provision in all the circumstances.

[73]

The Executor's submissions in reply

In their submissions in reply, the Executors cavil with the proposition that they ignore the adjective "proper" or seek a reductionist approach to the statutory formula. The Executors emphasise (as indeed do the respondents) that the text of the statutory formula refers to the adequacy of "proper" provision for the "maintenance, education or advancement in life". The Executors note that in Sgro v Thompson, immediately after referring to the importance of the word "proper" (at [86]), White JA referenced (at [87]) the observations of Dixon CJ in Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9; [1962] HCA 19 at [19] and also alluded (at [88]) to the existence of criticism of "the readiness of courts to vary the expressed will of the deceased by granting family provision claims".
The Executors say that the evidence established that Maria was a 77-year old with assets and entitlements that placed her in a very comfortable position. It is submitted that all reasonable expectations of lifestyle and access to amenities were readily within her financial reach, including such expectations as might have arisen from her "station in life" (Vigolo v Bostin at [114] (Callinan and Heydon JJ)). The Executors say that Maria's life in Greece over essentially the last 50 years has been relatively modest and that there is no evidence that the deceased or the deceased's late husband created in Maria a familiarity with a lifestyle that is beyond her present financial means.
The Executors contend that, by any assessment of moral obligation or modern community standards, the deceased had fulfilled her maternal obligations vis-à-vis Maria: the deceased gifted to her daughter an Australian property (the Parsons Avenue Property) worth between $1.35 million and $1.5 million together with an additional property in Greece worth about $80,000 ([20], [161]) and had previously provided a valuable inter vivos gift (81 The Boulevarde) which Maria sold in 2018 for about $2.75 million. The Executors point out that Maria also holds 3,000 "C" class shares in Esperia Court (for which she paid no money), from which it is said she still has the ability to realise $7 million by accepting Nick's offer to purchase them ([73]). (It should be noted that, per cll 6-8 of the letter of offer, that offer is now closed given that judgment was made against Nick; further, the offer was formally rejected by Maria, so it is not clear to me how it is suggested that Maria still has the ability to realise such an amount by accepting the offer.)
Although the language of s 59 is broad and the range of relevant factors is wide (as recorded in s 60(2)), the Executors say that it remains the case, as identified by Kirby P (Handley and Sheller JJA agreeing) in Robinson v Tame [1994] NSWCA 266 at 5 and 8, that: The purpose of the Act is not to salve wounded feelings or to right every feeling of injustice, slight or hurt pride. It is simply to permit the Court an exceptional jurisdiction in effect to alter the testamentary disposition made by the deceased where it is shown that the Court ought to repair the failure of the deceased, in respect of eligible persons, to make adequate and proper provision for their maintenance, education or advancement in life. … But the fact remains that to the end of the case the appellant could not point to any specific objective which she had in mind and which was needed to provide adequately for her welfare and advancement. A hint of the need of a motor vehicle was made from the bar table. But if this had been the true desire of the appellant, one would have thought that such evidence would have been given at some stage during this long litigation. Alternatively, one might have expected more substantial evidence concerning her real needs. It is a constant source of surprise to me in this, as in other cases under the Act, that so much attention is spent upon personal recrimination and insufficient attention is paid to the proof of precise financial means of the parties and the precise needs of the claimant. The Act is not about the righting of moral wrongs, as such, but about the making of adequate provision. In short, the focus of the Act is upon property - dollars and cents; not emotion and ethical desserts.
The Executors say that even the observations of Brereton J in Hay v Renwick [2016] NSWSC 1048, especially at [12]-[24], and Brereton JA in Steinmetz at [123]-[132] do not provide a foundation for Maria's claim of inadequacy of provision where she had inter alia: an unencumbered home in Greece; another unencumbered income generating investment property in Greece; income from her husband's pension in Greece (covering basic living expenses); about $1.1 million in an Australian bank account (even after having spent about $1 million on her legal fees for the proceedings at first instance); a testamentary gift of the Parsons Avenue Property ($1.35 million to $1.5 million) and of a further property in Greece (about $80,000); and a $7 million offer (from Nick) to purchase her shares in Esperia Court.
The Executors point in this context to the distinction drawn by White JA in Steinmetz at [59] between consideration as to what might be seen as "fair" or "just and equitable" and consideration of what is or is not "adequate provision … for the [applicant's] proper maintenance, education or advancement in life".
The Executors maintain that the enumerated sub-paragraphs in appeal ground 1 (and appeal grounds 1 and 2 when read together) identify facts and circumstances that meant that there was no reasonable basis for any further provision being made in her favour, even taking into account matters pertaining to moral obligation and duty (cf Maria's submissions at [13]).
The Executors say that Maria's disparagement of their reference to financial factors impacting upon the merits of her claim for further provision out of the estate is misdirected, because her own application for relief (and the learned primary judge's intention to facilitate her "unlocking" the value of her shareholding in Esperia Court) was expressly directed to financial concerns. The Executors say that there is no suggestion by Maria that the desire to "unlock" the value of her shareholding is anything other than a financial issue (referring in this regard to Maria's submissions at [14]). The Executors argue that Maria's submissions bypass at least two core questions: first, what is the purpose or objective (beyond a simple desire to be richer) behind her wish to "unlock" the value of the shareholding and what is it that makes it a priority for her to access the value of that asset now; and second, how it is that the conferral by the primary judge of 125 management shares upon her was better directed to that undefined purpose or objective than would have been an order for further provision in a fixed dollar amount (noting that his Honour rejected the proposition that any legacy would be justified at [437]).
The Executors maintain that the primary judge erred in applying the Succession Act to permit Maria and her siblings to control the affairs of Esperia Court when the deceased did not (during her lifetime) cede her management shares or her control of the company to anyone else. It is noted that the Will clearly passed the management control vested in those management shares to Nick. The Executors say that the deceased was free to determine which beneficiaries received which assets, provided that, taken as a whole, the moral obligation she owed to each of her children was fulfilled.
As to ground 3 of the Maria Appeal (which raises the contentions that his Honour erred at [417] by stating that the scheme of the Will had been undermined by erroneous assumptions)), the Executors point out that the 3,000 "C" class shares in Esperia Court which are the subject of these submissions were not a gift to Maria under the Will (cf [161]); rather, they were shares gifted to Maria many years previously, in about 1964 ([79]; [172]. The Executors say that the analysis in the context of "illusory" gifts is misplaced; that the rights and entitlements attaching to Maria's shareholding were essentially the same in 2022 as they were in 1964.
As to Maria's argument (at [21] of her submissions) that the primary judge's findings are not inconsistent, the Executors say that this is misdirected inter alia because it assumes that placing control of Esperia Court in the hands of Nick was a material (and adverse) change in the manner of management of Esperia Court. They say that the evidence established that no dividends had been declared and paid out of Esperia Court for at least 45 years (see [105]-[106]) and therefore this is not a case where the deceased had a pattern of causing Esperia Court to declare and pay dividends to its shareholders, such that Maria had become accustomed to receiving such income (but with that expectation now imperilled by Nick receiving all of the management shares).
In reply to Maria's submissions (at [22]) (as to the legislative interference with freedom of testation), the Executors say that, even allowing for the scope of the legislation, at all times the Court must return to the central principle, as stated by McLelland J (as his Honour then was) in Re Fulop Deceased (1987) 8 NSWLR 679 at 679, namely: The Court should not interfere with the dispositions in the will…except to the extent necessary to make adequate provision for the plaintiff's proper maintenance, education and advancement in life.
As to ground 4(a) of the Executors' Maria Appeal (which alleges an error of legal principle in taking into account an irrelevant factor, namely the expectations of Maria and/or her siblings) the Executors refer to their submissions on the Executors' James Appeal on this issue. They say that the primary judge used expectations for the purpose of framing the relief to be granted, rather than by reference to overcoming any inadequacy of proper provision for "maintenance, education or advancement in life"; and that this was an error of principle and a use of "expectations" that was irrelevant.
The Executors say that (contrary to Maria's submissions at [27]-[30]), it is not apparent that his Honour paid any regard to the expenditure of over $1 million in legal fees (which otherwise would have augmented Maria's savings to meet her future contingencies in life) which the Executors maintain was, on any view, a significant financial issue. The Executors say that, to the extent that a likely large portion of those funds were expended upon her pursuit of the Oppression Proceeding at first instance, it would be expected that, having succeeded in that claim, Maria would obtain reimbursement of at least 50% of those costs. It is said that this would represent a significant additional cash sum and thus, if not considered by his Honour, would be a material error.
As to Maria's submissions (at [31]-[34]) in relation to appeal ground 4(c) (the failure to take into account the offer to buy her shares), the Executors say that these submissions do not accurately state the position, nor do they accurately identify the contents of the primary judgment). The Executors say that, contrary to Maria's submissions at 32, the finding at [396] was not that Nick and John had no capacity to make good on the offer of $7 million; rather, it was a finding that, by reason of having "only" offered $7 million, they had demonstrated an inability "to pay to Maria the full amount of the value of her shares predicated upon a winding up of Esperia Court" (that is, $9 million). Second, it is said that, contrary to Maria's submissions at 32, it is not apparent how the terms or conditions attaching to the offer of $7 million rendered it a meaningless offer. It is noted that Maria does not identify which terms were so qualified as to be illusory, nor is there any identification of the "cross-examination and evidence that traversed same". The Executors point to the cross-examination of Nick on that topic at T 227.13-229.30 and the cross-examination John at T 191.47-197.10.
The Executors say that Maria's submissions also ignore that Nick and John are the recipients of valuable gifts under the Will, being 77 The Boulevarde ([21]), which was sold by the Executors for about $4.2 million ([434]), and the Balmoral Beach property ([163]), which is worth about $2.1 million ([434]). The Executors say that there is no suggestion in the primary judgment that his Honour paid any regard to Maria's ability to access $7 million in return for her shareholding ([73]).
In relation to their appeal ground 4(d) (which goes to the contended manifest unreasonableness and unjust nature of the relief by way of conferral of the management shares), the Executors say that (contrary to Maria's submissions at [35]-[37]) it is precisely the dichotomy between, on the one hand, the management shares being of no financial value (in and of themselves) and, on the other hand, those shares being a mechanism for realising about $9 million in value that is illustrative of the unreasonable and unjust nature of the relief granted by his Honour (and, they maintain, illustrative of the error in principle in the approach adopted by his Honour).
The Executors say that it is seemingly a corollary of what is said at Maria's submissions at [36]-[37] that, if the primary judge had conferred upon her further provision of $9 million (rather than conferring upon her and each of the other two applicants 125 management shares), then she would still be contending that this fell within "the range of evaluative outcomes open to the primary judge" and that it "aligns with an evaluative assessment of what was 'proper' provision in all the circumstances". The Executors say that if that hypothetical proposition is obviously wrong (i.e., that further provision of $9 million would be obviously unreasonable), then it is difficult to identify how a conferral of management shares upon Maria was not also unreasonable (either because the shares had no value or they had $9 million of value).

[74]

Dennis

As to Dennis' family provision claim, the Executors make similar submissions to those made in support of the Executors' James Appeal and the Executors' Maria Appeal (see at [57]) in relation to grounds 6 to 10 of the Executors' Dennis Appeal.
As noted above, appeal grounds 6 to 11 in the Executors' Dennis Appeal are premised on the appeal being upheld in relation to the orders made on his proprietary estoppel claims; whereas ground 12 is premised on the orders made on the proprietary estoppel claim not being disturbed (in which case the Executors point out that Dennis will have received assets (namely, the Chapman Street Property and the Smith Street Property) worth around $6.2 million to $8.6 million, not including the 3,000 "A" class shares in Esperia Court that are already owned by him). The Executors contend that the latter scenario underscores the artificiality of the further provision to Dennis of 125 management shares. It is submitted that this provision was not necessary to remediate any inadequacy of provision but, rather, was directed to permitting Dennis, Maria and James jointly to control Esperia Court.
Insofar as ground 11 is concerned, the Executors note that Dennis himself sought relief to that effect (being a life estate in the Chapman Street Property) (referring to the second further amended statement of claim prayer 11(b).
As to costs, while the Executors contend that both Dennis' proprietary estoppel claim and his Succession Act claim ought to have been dismissed with costs, they acknowledge that there are some "potential complications" with respect to costs at first instance (noting that Dennis did obtain some other relief in his favour that is not the subject of this appeal). Thus the Executors say that if the appeal is upheld, there may need to be a hearing on the question of costs. (As the Succession Act appeal is not being upheld, this question should not arise.)
Dennis argues that, if the Executors' appeal against the order in relation to his proprietary interest in the Chapman Street Property were to be upheld, then there would be all the more reason to uphold the primary judge's family provision order. Dennis further argues that, if Nick fails in his appeal against the orders in the Oppression Proceeding for the 500 management shares to be distributed equally between the deceased's children (such that Dennis receives 125 management shares as a result of the outcome of that case), then Dennis will be entitled to receive 125 management shares in any event and he says that the appeals from the family provision orders in his case will then become otiose. (This to some extent highlights the difficulty that the relief was put on both an exercise of discretion under the Succession Act and exercise of the power under the Corporations Act.)
Dennis argues that it is of relevance (as recognised by the primary judge at [421]), that a gift which is subject to the exercise of a discretion by a third party may not be a proper provision in favour of a donee (in that the gift is illusory because the discretion in question may never be exercised in the donee's favour).
Dennis emphasises that the deceased's estate is extremely large but that most of the deceased's wealth is tied up in Esperia Court. Indeed, Dennis argues that, adding the assets controlled but not owned by the deceased (namely, the class shares held by Dennis, Maria and Nick) to the net value of the estate, the assets controlled by the deceased had a net value of some $54 million; though he accepts that the gross distributable estate at the time of probate was of some $36 million, of which a large portion was attributable to the estate's shareholdings in Esperia Court.
Dennis argues that although the deceased made the Will on the understanding that the four parcels of 3,000 class shares were very valuable and that each parcel represented a quarter of the value of the property of Esperia Court, the practical effect of the Will was that the gifts of class shares to her children (including the gifts inter vivos to Dennis, Maria and Nick) are gifts of no value because the sale of any property in Esperia Court is a matter entirely for the holder of the management shares, and, under the Will, they were all left to Nick. Hence it is said (as Nick himself appears to recognise) that the class shareholders are dependent on Nick for the enjoyment of any benefit out of Esperia Court.
Dennis points to the evidence that the deceased had told her children that, while not all children would receive the same number of properties held in her own name, Esperia Court existed for the four of them equally, and she wanted her children to share equally in the wealth held by the company, with the assets of Esperia Court to be used to generate funds for each of them so that they would have a comfortable life (as referred to by the primary judge at [186]-[196]); and notes that the primary judge found that the children of the deceased had a legitimate expectation that they would be well provided for through the shares they held in Esperia Court, and they were encouraged to work in the family business without remuneration ([420], [424] of the primary judgment).
Dennis thus identifies the inadequacy of the provision made for him as being in the fact that he is unable to access that which was, as a matter of substance, a major intended part of his inheritance (the value in his 3,000 "A" class shares); pointing in that regard to the evidence of Nick's control over Esperia Court since the deceased's death and the lack of any indication that the siblings will receive anything as a result of the class shares gifted to them (referring to [61]; [67]; and [74]).
Dennis describes his financial circumstances at the time of the deceased's death as threadbare, noting that he did not own his own home, had few assets and had an income that did not even cover his immediate medical needs. Dennis says that, rather than being gifted any real estate inter vivos as his siblings had been, the deceased had promised that she would leave three properties to him in the Will (the Chapman Street, Smith Street and Parsons Avenue Properties); and that, on the faith of the deceased's promises, he had contributed time and expense to the renovation and expansion of the buildings on those properties. Dennis also points to other contributions to the deceased's estate through improvements made to other properties of the deceased and those within Esperia Court.
Dennis maintains that, although he was left the Smith Street Property under the Will, it remains unknown what he will enjoy in respect of this gift because it appears likely that the property will be sold along with other real estate to cover the costs of this administration of the estate. Dennis accepts that if he retains his success on his proprietary estoppel claim then he now has his own residence secured (the Chapman Street Property) but argues that the order for further provision is appropriate because he is unable to unlock the value of his class shares in Esperia Court (emphasising that he and his siblings were encouraged by the deceased in an expectation that the shares would enable them to enjoy substantial material wealth in their mature years and the shares, in themselves, provide for a measure of what their parents regarded as proper provision for their children.
In reply to Dennis' submissions, the Executors say that the principle to the effect that a gift which is subject to the exercise of a discretion by a third party may not be a proper provision in favour of a donee in that the gift is illusory because the discretion may never be exercised is inapplicable (there being no operative gift of any "A" class shares; rather, as recorded at [158]-[159], Dennis had a pre-existing entitlement to those shares). Thus, the Executors say that there is no question of any gift by the deceased being of illusory value. It is noted that Dennis' 3,000 "A" class shares in his possession had a liquidation value of about $9 million.
The Executors cavil with the proposition (see Dennis' submission at 13) that the pool of assets controlled by the deceased had a net value of some $54 million. It is noted that the total value of Esperia Court was about $36 million but that Nick had agreed to amendments to the articles of association so as to ensure equal distribution of dividends ([48]). The Executors say that it does not follow that the full amount of $36 million is attributable to the 500 management shares. Nevertheless, the Executors accept that the estate was large (exceeding $35 million).
The Executors say that, of the three family provision applicants, Dennis received the most generous of the real property gifts under the Will. As to Dennis' reliance in his submissions upon the proposition that there was a legitimate expectation of material wealth, the Executors note that at [195] the primary judge recorded that the deceased and her husband appear never to have told their children explicitly that Esperia Court would or must be wound up on their deaths (which the Executors say aligns with his Honour's observations as to the deceased's "dynastic tendency of mind" ([151]). The Executors say that any expectation that the passing of the deceased would lead inexorably to the liquidation of Esperia Court (or its assets) was not reasonably held. I interpose to note that what his Honour then went on to say at [195] was that: … However, the children were told that they would inherit wealth; they were never paid dividends from the company; and any inherited wealth that could come their way, as they themselves aged, could come only from access to capital of the company.
His Honour then went on to note that the children had been left with shares which, in the absence of a winding up, have no commercial value and, under the management of the holder of Esperia Court's management shares, no certain right to dividends.
As to Dennis' submission that the inadequacy of the provision for him lies in the fact that he is unable to access the value in his 3,000 "A" class shares, the Executors say that this ignores both the first sentence of [195] of the primary judgment (where his Honour recorded that the deceased and her husband appeared not to have told their children explicitly that Esperia Court must be wound up on their deaths) and the fact that, on his own evidence, Dennis and his siblings were told that there would need to be ongoing management of the company after her death so as to develop the Strathfield property ([191] of the primary judgment)
Insofar as Dennis' accommodation is concerned, the Executors point out that his own claim for relief expressly included an alternative claim for a life estate "or such other order as is appropriate to permit the plaintiff to continue to reside in the Chapman Street Property for so long as he can do so". The Executors note that early iterations of the deceased's will had conferred upon Dennis a life estate in the shares in A&R (being the owner of the Chapman Street Property), which would have had the same effect (see cl 11 of the 22 January 2003 will and 3 February 2003 will). It is said that this would have been the maximum required by way of further provision for Dennis (amended notice of appeal, ground 11).
The Executors maintain that the award of provision was unreasonable and unjust in circumstances where Dennis already received a valuable gift under the Will (appeal ground 6(c)) and where the 125 management shares were either of no value or immense value (appeal ground 9(b)). The Executors maintain that there was an error of principle in the approach adopted by his Honour in making the order because the siblings were unable to unlock the value of their class shares in Esperia Court and because they were encouraged in an expectation that the shares would enable them to enjoy substantial material wealth in their mature years. They complain that the manner in which expectations were taken into account (as a measure of the relief to be granted) involved an error of principle. The Executors say that his Honour looked to what Dennis did not have, and to what Dennis thought he should have, instead of examining the adequacy of what Dennis did have and whether it was adequate for his proper provision.
The Executors say that appeal ground 12 is, like appeal ground 6(c), an identification of why the primary judge's orders for further provision were unreasonable and unfair; and that appeal grounds 10 and 11 identify the outcome for which the Executors contend. The Executors say that the orders made by the primary judge were, at best, directed solely to the fulfilment of the "lofty and unreasonable" expectations of an adult child; at worst, they empowered the winding up of Esperia Court, being an outcome neither desired by the deceased nor available to his Honour under the Corporations Act.

[75]

Determination

There was no error in the primary judge concluding that the scheme of the Will had been undermined by what proved ultimately to be an erroneous assumption as to the ownership of the Chapman Street Property (even though at the time that the Will was executed the property was owned by A&R and the deceased, despite being aware of the circumstances in which the property was acquired by A&R and then renovated by Dennis, would presumably not have foreseen the ultimate litigation as to the property nor the outcome of that litigation). The relevant fact is that, as events have transpired, the Chapman Street Property was held to be beneficially owned by Dennis and this has necessarily undermined the deceased's testamentary intentions at least in relation to the disposition of the shares in A&R to the grandchildren as this no longer carries with it the benefit of ownership of that property.
Nor was there error in the primary judge's conclusion that the deceased evidently did not have regard to the possibility that, by leaving the management shares to Nick, any benefit to the siblings of the class shares could prove illusory. There can be no doubt as to the potential for the benefit of those shares to be illusory - the class shares conferred no voting rights and hence any value that might be realised from ownership of those shares would always be contingent on the exercise by Nick of his sole voting rights (whether to declare dividends or to wind up Esperia Court or in some other way to confer benefits on his siblings through the company). The expert report confirmed that the shares, prior to the restructure by the primary judge, had nominal value absent a winding up scenario. The Executors' contention (see ground 3(b)(i) of the James Appeal and equivalent grounds in other appeals) that there was "limited" benefit to those shareholdings is an understatement.
Thus, ground 3 of the respective Executors' Appeals is not made good; nor is ground 1(a) of the appeal grounds raised by Nick.
As to the complaint by Nick (sought to be raised by his proposed amended ground 1(d)) as to the finding that the siblings were encouraged to hold, and held, expectations of material benefit, as noted above, even were this amendment to be permitted, I would conclude that the primary judge did not err in making the finding as to the siblings' expectations (having regard to the evidence of conversations over the years in relation to that very issue). The distinction sought to be drawn in this regard as to the precise content of the expectations encouraged in the siblings is semantic in the extreme.
The complaint that the primary judge erred in failing to give appropriate weight to the testamentary intentions of the deceased (ground 1(b) of Nick's grounds of appeal) is not in its terms a ground raising a House v The King error unless it can be said that the outcome was so manifestly unreasonable as to fall within the fourth category of such error; and that is not here the case. The primary judge carefully had regard to the deceased's testamentary intentions and made clear why it was that he considered that to give full effect to those intentions would not amount to adequate provision for the proper maintenance and advancement of the siblings. Hence ground 1(b) of Nick's grounds of appeal is not made good.
The essence of the complaint as to the finding of inadequate provision (as I have earlier noted) is the complaint by both sets of appellants that the primary judge did not have regard to, or make specific findings, as to the financial needs of the respective siblings. The suggestion that the primary judge "overlooked" the question of financial need is not a fair criticism in my opinion. His Honour made clear that he had in mind the question of financial need insofar as he referred in relation to James to his impecuniosity being of his own making; and in his conclusion that Maria had been left with inadequate provision only insofar as the value of their shares was locked in. As far as Dennis is concerned, his Honour similarly stated that it was necessary that he receive management shares to enable him to realise the underlying value of his shares ([440]).
True it is that his Honour did not engage in what might be described as a formulaic 'ticking of the boxes' in respect of the factors to which s 59(1) of the Succession Act provides regard may be had. However, what his Honour clearly did was to reach a conclusion (that must have involved a weighing of the relevant factors with the benefit of the parties' submissions in relation thereto) that the determinative factor in the present case was the fact of the expectations engendered in the siblings of material benefit through their shares in Esperia Court in their mature years. It cannot be said that this was an irrelevant factor to take into account (not least because s 60 permits account to be taken of any other relevant matter and it has been recognised in other cases that expectations encouraged by the deceased may be relevant in determining whether there has been proper provision made). As Senior Counsel for James argued, in the present case this is the factor that "carried the day" (AT 6 April 2023 at 143.38-39) but that does not reveal error of principle on the part of the primary judge. I am not persuaded that the primary judge thus failed to take into account a relevant consideration (financial need) or that he took into account an irrelevant consideration. Nor do I accept that the primary judge erred as contended for by Nick in ground 1(c) of his grounds of appeal. The manner in which a judge assesses the relevant factors in a family provision application is not prescribed; nor is it correct to suggest (as this ground appears to contend) that the exercise is limited to a comparative exercise as to the applicant's needs and the provision in the Will.
It must be emphasised that the statutory provision speaks of adequacy of provision for the "proper" maintenance or advancement (education here not being relevant) in life, as was emphasised in Sgro v Thompson. The fact that this was a large estate (albeit that the bulk of the wealth was effectively tied up in the family company) does not provide a basis for some kind of blank cheque exercise but that was not what his Honour here did. Rather, his Honour quite permissibly had regard to the long held expectations of the siblings (encouraged by the deceased and her late husband) that they would have an equal share of the material wealth in Esperia Court; and concluded that in the absence of an ability for the siblings to realise the value of their class shares, adequate provision for their proper maintenance and advancement had not been made by the deceased. I see no error in that conclusion, let alone any House v The King error.
Thus in my opinion his Honour did not err in concluding that s 59 of the Succession Act was enlivened in respect of each of the siblings.
As to the complaints made in relation to the exercise of discretion by his Honour to make provision as ordered, I am also not persuaded that error has been established.
As to the perceived contradiction in the provision made for James (namely, that the class shares had no value unless coupled with an ability to exercise some control in Esperia Court via the management shares but that if the value in those class shares could be realised then the provision already made for James under the Will was worth some $6 million), this goes to the provision made for James of the additional 1,000 "B" class shares. Again, this focuses unduly on financial need in circumstances where the deceased had encouraged an expectation that her children would be treated equally. Nick's complaint that, if provision were to be made of the 1,000 additional shares, the primary judge erred in concluding that it should be made out of the 1,000 "B" class shares left to him under the Will fails to take into account that the other siblings' shares were held by them independently of the bequest under the Will and, in any event, it does not behove Nick to contend for error in this regard when there was no submission put to the primary judge to this effect.

[77]

Orders

For the above reasons, I propose the following orders: 1. Grant leave for the filing of the Executors' amended notice of appeal in the Executors' Dennis Appeal. 2. Dismiss with costs the Executors' appeals in proceedings 2022/369112 (the Executors' James Appeal); 2022/369130 (the Executors' Maria Appeal); and 2022/369139 (the Executors' Dennis Appeal). 3. Refuse leave for the proposed amendment of Nick's notice of appeal in the Succession Act appeals. 4. Dismiss with costs the appeals by Nick in proceedings 2022/370862 (Nick's James Appeal); 2022/370852 (Nick's Maria Appeal); and 2022/370837 (Nick's Dennis Appeal). 5. Set aside Orders 1 to 8 made by Lindsay J on 24 November 2022 in proceedings 2021/00108316 (the Oppression Proceeding). 6. Otherwise dismiss the appeal by Nick and John in proceedings 2022/370857 (the Oppression Appeal). 7. Direct that any brief submissions as to costs of the proceedings at first instance be filed within 14 days, to be dealt with on the papers. 8. Direct that any brief submissions as to the costs of the Oppression Appeal be filed within 14 days, to be dealt with on the papers.
MEAGHER AND MITCHELMORE JJA: We have had the advantage of reading the comprehensive reasons of Ward P. We agree with the orders her Honour proposes, and with her Honour's reasons. The following comments aim briefly to summarise, rather than to narrow the scope of, those reasons.
In the Oppression Appeal, Nick and John's central contention on the challenge to the finding of oppression regarding the purchase of the Symond Arcade was that the alleged commercial unfairness attending the purchase, as to 80% by Esperia Court and as to 20% by Nick and John, needed to be evaluated in the family and corporate context, whereby Rene was the "benevolent matriarch" (a description used by the primary judge at [174]) and was able to exercise complete control as Governing Director of Esperia Court. Senior Counsel for Nick and John submitted that Rene's authority provided the "real world" reason for what transpired, in the sense that they had to contend with Rene's will and overcome her refusal to have Esperia Court purchase the Symond Arcade (AT 4 April 2023 at 32-33). The structure of the purchase as it was ultimately completed, which gave Esperia Court an 80% interest in the Symond Arcade, was submitted to be justified in those circumstances, and where it was accepted that it was in the interests of the company to acquire 100% of that property.
We agree with Ward P (at [180]) that the fact that Esperia Court received a benefit from the acquisition of the Symond Arcade does not preclude a finding of oppressive conduct if that acquisition is determined to be objectively unfair. For the reasons her Honour has given, the conduct was objectively unfair. It involved the diversion of a corporate opportunity to two directors, in their personal capacity, at the behest of the controlling shareholder, to the substantial disadvantage of the minority shareholder. The primary judge did not err in concluding that the acquisition was oppressive, or in concluding that the oppression was continuing. Nor did his Honour err in concluding that the same conduct involved breaches on the part of Nick and John of their duties as directors of Esperia Court.
The primary judge did err, however, in concluding that the grant of the SPH lease without the benefit of a demolition clause constituted oppressive conduct and involved corresponding breaches of directors' duties, for the reasons Ward P has given. The notional objective bystander would be unlikely to regard as unfair that the renewed lease had been granted without a demolition clause in circumstances where the relevant lease was executed on the exercise of an option for renewal and the original lease did not include such a term.
His Honour also erred, in our view, in relation to the relief granted for the oppressive conduct that his Honour found. We agree with Ward P that Orders 1 to 8 of the Orders his Honour made in the Oppression Proceedings, together with the orders his Honour made in relation to variation of the lease, should be set aside.
The Executors' challenge to the primary judge's conclusions on Dennis' proprietary estoppel claim in relation to the Chapman Street Property should fail for the reasons expressed by Ward P. In the light of the substantial capital expended and work undertaken by Dennis in renovating, his Honour did not err in concluding that Dennis had suffered detriment sufficient to give rise to proprietary estoppel. This detriment was not displaced by the fact that Dennis had enjoyed countervailing benefits insofar as he had lived in the Property rent-free since December 2003, as well as having the deceased occasionally pay his utility bills and for renovations. Nor was it displaced, or the deceased's conscience assuaged, by the fact that Dennis had received under the will a more valuable property at Smith Street, which the evidence did not establish was gifted in substitution for the Chapman Street Property.
As to the Succession Act Appeals (noting Ward P's decision, with which we agree, to refuse the application for leave that Nick made at the hearing of the appeal to amend his notices of appeal), the appellants had to establish that the primary judge's determinations under s 59(1)(c) of the Succession Act were affected by an error of the nature identified in House v The King (1936) 55 CLR 499 at 504-505; [1936] HCA 40: see Scott v Scott [2022] NSWCA 182 at [10] (Meagher JA, Ward P and Kirk JA agreeing) and the authorities there cited.
Ward P has addressed the various appeals by the issues they collectively raise. The appellants' central contention was that the primary judge was required, and yet failed, to consider the financial needs of the respective applicants. We agree with her Honour that the primary judge did consider, at least implicitly (and, in the case of James, explicitly), the financial positions of each of the siblings, in concluding that the only finding as to inadequacy of provision was by reason of their inability to realise the value from their class shares in the face of the expectations they had been led to hold. It was open to his Honour, in the exercise of the discretion conferred by s 59 of the Succession Act, to find the parents' engendering of those expectations to be determinative. As to the other issues that arose on the Succession Act appeals, we agree with the reasons of Ward P.

Legislation Cited (6)

(NSW), Pt II, Third Schedule Succession Act 2006(NSW)

Succession Act 2006(NSW)

Civil Procedure Act 2005(NSW)

Corporations Act 2001(Cth)

Probate and Administration Act 1898(NSW)

Uniform Civil Procedure Rules 2005(NSW)

Cases Cited (169)

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[1962] HCA 19 Priestley v Priestley [2017] NSWCA 155 Public Service Board of New South Wales v Osmond (1986) 159 CLR 656; [1986] HCA 7 Public Trustee v Smith [2008] NSWSC 397; (2008) 1 ASTLR 488 Q (A Pseudonym) v E Co (A Pseudonym) [2020] NSWCA 220; (2020) 383 ALR 469 Re a Company (No 002612 of 1984) (1986) 2 BCC 99,453 Re Bright Pine Mills Pty Limited [1969] VR 1002 In the matter of Candy-Vend Pty Ltd [2020] NSWSC 1735 Re Estate Soulos [2022] NSWSC 1507 Re Fulop Deceased (1987) 8 NSWLR 679 Re George Raymond Pty Ltd; Slater v Gilbertson [1999] VSC 460; (2000) 18 ACLC 85 Re Hollen Australia Pty Ltd [2009] VSC 95 Re Lowes Park Pty Ltd; Headlam v Lowes Park Pty Ltd (1994) 62 FCR 535; [1994] FCA 579 Re Manormay Investments Pty Ltd [2013] VSC 260 Regal (Hastings) Ltd v Gulliver [1967] 2 AC 134 Reid v Bagot Well Pastoral Co Pty Ltd (1993) 61 SASR 165; (1993) 12 ACSR 197 Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33 Robinson v Tame [1994] NSWCA 266 Samaan bht Samaan v Kentucky Fried Chicken Pty Ltd [2009] NSWSC 1265 Sanford v Sanford Courier Service Pty Ltd (1986) 10 ACLR 549 Scott v Scott [2022] NSWCA 182 Scottish Co-Operative Wholesale Society Ltd v Meyer [1959] AC 324; [1958] 3 All ER 66 Secretary, Department of Social Security v Agnew (2000) 96 FCR 357; [2000] FCA 59 Sgro v Thompson [2017] NSWCA 326 Shelton v National Roads and Motorists Association Ltd [2004] FCA 1393; (2004) 51 ACSR 278 Sidhu v Van Dyke (2014) 251 CLR 505; [2014] HCA 19 Singer v Berghouse (1994) 181 CLR 201; [1994] HCA 40 Snell v Glatis (No 2) [2020] NSWCA 166 Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 Steinmetz v Shannon (2019) 99 NSWLR 687; [2019] NSWCA 114 Suttor v Gundowda Pty Ltd (1950) 81 CLR 418; [1950] HCA 35 Thomas v HW Thomas Ltd [1984] 1 NZLR 686; (1984) 2 ACLC 610 Tomanovic v Argyle HQ Pty Ltd [2010] NSWSC 152 Tomanovic v Global Mortgage Equity Corporation Pty Ltd [2011] NSWCA 104 Vigolo v Bostin (2005) 221 CLR 191; [2005] HCA 11 Vukic v Grbin [2006] NSWSC 41 Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387; [1988] HCA 7 Warman International Ltd v Dwyer (1995) 182 CLR 544; [1995] HCA 18 Warren v Coombes (1979) 142 CLR 531; [1979] HCA 9 Water Board v Moustakas (1988) 180 CLR 491; [1988] HCA 12 Wayde v NSW Rugby League Ltd (1985) 180 CLR 459; [1985] HCA 68 Webb v Stanfield [1991] 1 Qd R 593 Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669 Wheatley v Wheatley [2006] NSWCA 262 Whitehouse v Carlton Hotel Pty Ltd (1987) 162 CLR 285; [1987] HCA 11 Wiki v Atlantis Relocations (NSW) Pty Ltd (2004) 60 NSWLR 127; [2004] NSWCA 174 Wright v Australian Broadcasting Commission [1977] 1 NSWLR 697 Yates v Halliday [2006] NSWSC 1346 Zong v Lin [2022] NSWCA 136 Texts Cited: H A J Ford, W A Lee, Law of Trusts (4th ed, 2010, Thomson Reuters) J Hudson, "One Thicket in Fraud on a Power" (2019) 39 Oxford Journal of Legal Studies 577 Professor Ben McFarlane, The Law of Proprietary Estoppel (1st ed, 2014, Oxford University Press) Young, Croft and Smith, On Equity (2009, Thomson Reuters) A J Oakley, Constructive Trusts (3rd ed, 1997, Sweet & Maxwell) Category: Principal judgment Parties: 2022/00370857 (Oppression Appeal)

Solicitors: Wotton & Kearney (Nicholas Andrew Soulos and John Nicholas Soulos) Uther Webster & Evans Solicitors (Maria Pagones) Carroll & O'Dea Lawyers (James Soulos) McPhee Kelshaw Pty Ltd (Con Kristallis and Trevor Ian Cork) McCabes Lawyers (Dimosthenis (Dennis) Soulos) Chalk Behrendt Lawyers (Esperia Court) File Number(s): 2022/00370857; 2022/00370862; 2022/00370837; 2022/00370852; 2022/00369112; 2022/00369139; 2022/00369130 Publication restriction: Nil Decision under appeal Court or tribunal: Supreme Court of New South Wales Jurisdiction: Equity Division Citation: [2022] NSWSC 1507 Date of Decision: 7 November 2022 Before: Lindsay J File Number(s): 2018/00050908; 2019/00026988; 2019/00027080; 2021/00108316

The Oppression Appeal The primary judge did not err in finding that there was oppressive conduct in the acquisition by Nick and John of a 20% personal interest in the Symond Arcade (and the subsequent partnership between them and Esperia Court) (Ward P at [211]); nor was there error in the finding that the oppression was continuing (Ward P at [226]). The primary judge also did not err in concluding that Nick and John had breached directors' duties in relation to the acquisition of the Symond Arcade and the ongoing partnership (Ward P at [251]). (Meagher and Mitchelmore JJA at [690]). The primary judge did err in finding that the grant of the lease to SPH without a demolition clause was an instance of oppressive conduct, in circumstances where the lease was an option lease which the company was bound to grant on the valid exercise of the option (Ward P at [211]). There was also error in the finding of breach of directors' duties by Nick and John in relation to the grant of the lease to SPH (Ward P at [254]). (Meagher and Mitchelmore JJA at [691]). In respect of the relief granted, the primary judge went beyond what was necessary to bring an end to the oppression in making the orders amending the Constitution of the company and re-structuring Esperia Court's shareholding (orders 1 to 7), as the remaining orders (which dealt with the acquisition of the Symond Arcade and the related partnership) were sufficient to put an end to the continuing effects of the oppressive conduct. Discretion was therefore re-exercised to set aside orders 1 to 7 (Ward P at [304]). Given the Court's conclusion as to the lease to SPH, the order varying the lease (order 8) was also set aside (Ward P at [304]). (Meagher and Mitchelmore JJA at [692]). Wayde v NSW Rugby League Ltd (1985) 180 CLR 459; [1985] HCA 68; Catalano v Managing Australia Destinations Pty Ltd [2014] FCAFC 55; (2014) 314 ALR 62; Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd [2001] NSWCA 97; (2001) 37 ACSR 672 applied.

Dennis' Proprietary Estoppel Claim The primary judge did not err in concluding that Dennis' proprietary estoppel claim should succeed (Ward P at [408], [416] and [424]). The countervailing benefits that accrued to Dennis were not sufficient to displace the detriment suffered (Ward P at [392], [395]), nor was the relief granted by the primary judge out of all proportion to the equity that arose in his favour (Ward P at [407]). (Meagher and Mitchelmore JJA at [693]). Sidhu v Van Dyke (2012) 251 CLR 505; [2014] HCA 19; Delaforce v Simpson-Cook (2010) 78 NSWLR 483; [2014] NSWCA 84; Q (A Pseudonym) v E Co (A Pseudonym) [2020] NSWCA 220; (2020) 383 ALR 469; Ashton v Pratt [2015] NSWCA 12 applied.

The Succession Act Appeals The primary judge's determination that further provision (in the form of a parcel of management shares such that each sibling held 125 management shares) was necessary for the proper maintenance and advancement of the siblings was not manifestly unreasonable, particularly given the expectations engendered by the deceased in her children (Ward P at [686]). There was no error in the finding that the siblings were encouraged to hold expectations of material benefit (Ward P at [686]). The complaint that the primary judge did not make specific findings as to the financial needs of each sibling was not upheld (Ward P at [680]). There was no failure by the primary judge to take into account a relevant consideration under s 60 of the Succession Act (Ward P at [681]). Nor was there error in the finding that proper provision for James included the transfer to him of an additional 1,000 "B" class shares; or in the conclusion that those additional shares be taken out of Nick's bequest under the Will (Ward P at [686]). (Meagher and Mitchelmore JJA at [695]). Sgro v Thompson [2017] NSWCA 326 applied.

[2018] VSCA 278

[2019] WASCA 1

[2007] VSCA 89

[2017] VSC 14

[2015] VSCA 16

[1998] NSWSC 413

[2009] VSCA 112

[2016] HCA 23

[2008] VSCA 210

[2017] VSCA 352

[1986] HCA 17

[2022] VSCA 142