Tjiong & Anor v Tjiong

Tjiong & Anor v Tjiong - [2010] NSWSC 578 - NSWSC 2009 case summary — Zoe

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1 The Plaintiffs, Katrina and Lindsay Tjiong, are the only children of the late Dr George Tjiong, the brother of the Defendant, Dr Richard Tjiong. For the sake of convenience and without intending disrespect, I will refer to members of the Tjiong family by their first names. 2 On 23 December 2001 George, who was seriously ill with cancer, executed a will appointing Richard as his executor and leaving the whole of his estate equally to Katrina and Lindsay. Two days later, George suffered a massive stroke during surgery. He survived but was seriously incapacitated and was unable to deal with his financial affairs. Pursuant to an enduring power of attorney which had been executed by George on 29 March 1996 in favour of Richard and Katrina jointly and severally, Richard took over management of George's investments. 3 On 15 December 2003, a trust deed was executed between Richard Tjiong's wife, Kathryn, as settlor and Maroka Pty Ltd ("Maroka") as trustee establishing the George Tjiong Family Trust as a discretionary trust ("Family Trust"). The directors of Maroka were Richard, Katrina and Lindsay. Using the power of attorney executed in 1996, Richard transferred assets of George into the Family Trust. The value of those assets was about $1.3M. Those assets would have formed part of George's deceased estate, and would have passed under George's will to Katrina and Lindsay. The assets left in George's estate were worth between $700,000 and $1M. Katrina and Lindsay gave their consent to the transfer of assets into the Family Trust and they executed the Trust Deed as directors of Maroka. The beneficiaries of the Family Trust were George, Katrina and Lindsay and three sisters and one brother of George, Harry. The trustee had a discretion to appoint capital and income between the discretionary beneficiaries. 4 On 30 January 2004 George died. 5 By early April 2004, discord began to arise between Katrina and Lindsay on the one hand and Richard on the other as to the management and distribution of funds in the Family Trust. Richard wanted George's brother and sisters to receive part of the capital because, he said, they had helped care for George during his last illness. Richard referred to the brother and sisters as "carers". Katrina and Lindsay were not convinced that the carers had rendered any particular services to George worthy of financial recognition and they wished to have the Trust Fund distributed to them alone. 6 The discord escalated into open hostility. Katrina and Lindsay insisted on receiving money from the Family Trust. On 9 April 2004, with great reluctance, Richard gave each of them a cheque for $100,000 drawn by Maroka but post-dated to 22 April 2004. 7 On 14 April 2004 Richard, in exercise of the powers conferred upon him as appointor under the Family Trust Deed, removed Maroka as trustee and appointed himself as sole trustee. On the same day Katrina and Lindsay were requested to return the cheques for $100,000 given to them on 9 April. Katrina and Lindsay sought legal advice. 8 On 21 April 2004, according to Richard, he received a telephone call from a Mr Johnson who foreshadowed a large medical negligence claim against George's estate. On 30 April 2004, Richard's solicitor, Mr Peter Thornton, then a partner of Ebsworth & Ebsworth, received a letter from Rod Johnson foreshadowing a medical negligence claim against George made on behalf of Mr Johnson's fourteen year old stepson, Kevin. Richard took the position that no distribution to Katrina and Lindsay could be made from George's estate or from the Family Trust until the medical negligence claim by Mr Johnson on behalf of Kevin had been finally resolved. 9 Between 30 April 2004 and 29 May 2009 a further six letters were received by Richard's solicitor or Katrina sent by Rod Johnson or Sharon Reeves, the mother of Kevin, vacillating as to whether the medical negligence claim would proceed. The foreshadowed claim was completely bogus - as Richard now concedes. There never was a Rod Johnson, Sharon Reeves or Kevin Reeves. 10 On 11 February 2005, Katrina and Lindsay commenced these proceedings. They sought:

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George had expressed a wish to Richard that Richard give Katrina and Lindsay guidance and assistance in managing the money in their inheritance and the establishment of the Family Trust was in accordance with wishes expressed by George before he became incapacitated, as recorded in a file note made by Richard on 20 and 22 December 2001, whereas, in fact, George had never expressed such wishes and the file note had been fraudulently created by Richard in early 2004. 12 As additional grounds for setting aside the Family Trust Deed or removing Richard as trustee and appointor, Katrina and Lindsay alleged undue influence or unconscionable conduct on the part of Richard in procuring their consent to the establishment of the Family Trust. 13 The essence of the case for restoration to the Family Trust Fund of all legal costs incurred by the trust estate in dealing with the bogus Kevin Reeves claim is the allegation by Katrina and Lindsay that the letters sent by Rod Johnson and Sharon Reeves were in fact written, or procured to be written, by Richard himself for the purpose of making it appear that a substantial claim was threatened against George's assets which would prevent distribution of those assets to Katrina and Lindsay so that the assets would remain under the control of Richard. 14 The essence of the case for equitable compensation to the Trust Fund for breach of Richard's duty to act prudently as a trustee in investing the trust funds is that Richard realised income producing or growth assets and left the proceeds in interest bearing deposits rather than investing them in other growth assets or other assets producing a better income return. 15 The case for the restoration to the Trust Fund of $134,945.78 is that in January 2005 Richard procured the payment out of the Trust Fund of that amount to the "Oninama Charitable Foundation", which was in fact a discretionary trust fund for the benefit of Richard's mother and that neither that discretionary trust nor Richard's mother was a beneficiary under the Family Trust Deed. 16 By his Defence Richard denied the making of certain representations to Katrina and Lindsay. He asserted that the representations which he had made to them concerning George's wishes for the establishment of a trust fund were true, notwithstanding the unqualified terms of George's will. He opposed all relief sought. 17 However, by his Cross Claim, Richard sought relief under s 85 Trustee Act 1925 (NSW) in the event that he was found to have committed a breach of trust, on the ground that he had acted honestly, reasonably and ought fairly to be excused. Further, he sought an order that Perpetual Trustee Limited be appointed as trustee of the Family Trust if the Court considered it in the interests of the beneficiaries to do so. 18 On the third day of the trial Mr Hallen SC, who appears for Richard with Mr Millar of Counsel, informed the Court that Richard might be willing to resign the trusteeship of the Family Trust in favour of an entity controlled by Katrina and Lindsay. He said that Richard was defending the proceedings, not to retain control of the trust assets for himself, but because of the allegations of fraud and dishonesty which had been made against him. There was also the question of the very substantial amount of legal costs which had been incurred. 19 On the ninth day of the trial, 16 June 2009, Mr Hallen SC advised that Richard was ill and was in hospital so that his cross examination could not proceed. The trial had been listed to continue for the remainder of that week. The following day the proceedings were adjourned, part-heard, to a date in December and the following consent orders were made:

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costs against Richard on the indemnity basis. 22 The declaration as to the establishment of the Family Trust, if made, requires no consequential order in terms of the administration of the Trust as Katrina and Lindsay now control the Trust. The declaration is sought as a foundation for a costs order against Richard on the indemnity basis. In short, Katrina and Lindsay say that, notwithstanding the consent orders ultimately made, they were compelled to bring these proceedings and that the conduct of Richard, both that which led to the commencement of the proceedings and his conduct of the proceedings thereafter, is such as to warrant an indemnity costs order. 23 The declaration as to the payment to the Oninama Charitable Foundation is sought in order that Katrina, as trustee of that trust, may properly repay the money to the Family Trust. 24 The orders relating to the Kevin Reeves claim require fact findings as to whether Richard wrote, or procured the writing of, the Kevin Reeves letters in order to prevent distribution of the Family Trust Fund and of George's estate to Katrina and Lindsay. 25 Whether the allegations of fraud made against Richard are substantiated obviously has major cost consequences. If the allegations are unjustified, the cost consequences may be adverse to Katrina and Lindsay; if they are justified, the cost consequences will be adverse to Richard. 26 It is to be noted that Katrina and Lindsay no longer seek the relief founded on allegations of breach of trust by Richard in investing, or failing to invest, assets of George's estate and assets of the Family Trust. Those allegations occupied many pages of the Amended Statement of Claim and a considerable amount of evidence was tendered in support and in opposition, although the issue occupied very little Court time. The cost consequences of the abandonment of these claims will have to be worked out after the issues to be considered in these reasons have been determined. Family background and context

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35 I will begin with the most serious allegation of fabrication: that Richard has fabricated entries in a pilot's log book for the period beginning 27 July 1984 (Exhibit D6(2)). 36 Richard gained a Restricted Private Pilot's Licence in August 1977 and an Unrestricted Private Pilot's Licence in January 1978. He purchased a private plane in 1979, a Beechcraft 358, which he sold a few months after 26 March 1996 - a date which has become of critical importance in the proceedings. 37 In her affidavit of 9 February 2005, Katrina explained the circumstances in which George gave an Enduring Power of Attorney to Richard and to her. She said that George, who was then living in Melbourne, suffered a stroke on 20 March 1996 and was taken to hospital. On 27 March, Richard came to Melbourne and she went with him to see George in hospital. She said that George could not speak properly. He could respond to others by nodding or shaking his head and could speak some words. After the visit she says that Richard suggested that George execute a Power of Attorney. On 29 March 1996, George executed the Power of Attorney which had been prepared by a solicitor instructed by Richard. 38 In his affidavit of 5 October 2005, Richard denied this account of events. He said that on 26 March 1996 he flew from Taree to Melbourne and went on his own to see George in hospital. He gave this evidence: "On the morning of Tuesday 26 March 1996, I flew from Taree to Sydney Kingsford Smith Airport, in time to connect with Ansett to Melbourne. I proceeded from the Melbourne airport directly to Austin & Repatriation Medical Centre and saw George in the far right hand corner (as I walked in) of a four-bed ward. The curtain was partly drawn. I observed that he was lucid, able to recognise me readily and able to engage in meaningful conversation. He had some slurring of speech, but could speak well enough for me to communicate with him, he had some mild facial weakness on one side and weakness in his right arm. I saw that he was able to walk.

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I flew back to Sydney that afternoon, and returned to Taree." 39 Richard exhibited to his affidavit a photocopy of a diary page, which he said was his diary entry for 26 March 1996. With the abbreviations filled out, the entry recorded: "Taree - Sydney - Melbourne", a visit to George and "Melbourne - Sydney 4pm". 40 In his affidavit of 24 June 2008, Richard amplified his evidence about his visit to George on 26 March 1996. He said that he arrived in the ward about midday before lunch was served and was with George during lunch. After lunch, he said, they left the ward and walked around the hospital grounds. Their conversation is set out at length and in detail, particularly George's directions to him to manage his financial affairs and to arrange a Power of Attorney. Richard said that he spent about three hours with George that day. 41 Katrina's lawyers checked the accuracy of these statements. Subpoenaed airline records showed that Richard had not flown from Sydney to Melbourne on Ansett Airlines on 26 March 1996. Records subpoenaed from George's hospital, the Austin Repatriation Hospital at Heidelberg, contained detailed nursing notes which showed that on 26 March 1996 George was visited by Katrina who took him out of the hospital on day leave. The last entry for 26 March shows that George returned from day leave and had an uneventful night. There is no reference to a visit by Richard or to George and Richard walking around the hospital grounds. 42 The nursing notes appear to record family visits as a matter of course. There are such entries for 23 March, when Katrina visited on her own, 26 March when Katrina visited to take George out of the hospital on day leave, 28 March when a visit by "family" is recorded and 29 March, when George is recorded as returning "from afternoon leave with his family". It was on this last occasion that George was taken by Richard and Katrina to execute the Power of Attorney in the solicitor's office. 43 The detailed account given by Richard in his affidavits of his visit to George on 26 March 1996 was, therefore, contradicted by independent contemporaneous records. Nevertheless, Richard asserted that his evidence was true. 44 When the trial commenced, Mr Hallen SC was given leave to lead further evidence from Richard in chief. Richard said that he wished to correct the evidence which he had given about his flight from Taree to Melbourne on 26 March 1996. He said that he had recently found some documents which enabled him to say that rather than flying his private plane from Taree to Kingsford Smith Airport and connecting with an Ansett flight to Melbourne, he had flown his plane from Taree to Sydney, and had then flown on from Sydney to Essendon. In the afternoon of 26 March, he said, he had flown from Essendon to Taree without stopping. 45 The document supporting this evidence which Richard said that he had recently found was a photocopy of a two page document headed "Daily Inspection Certificates and Aircraft Time-in-Service". The photocopy of the document was of poor quality. It showed three entries for "26.3": "TRE SY ES", "ES SY", "SY TRE". Richard said that these entries recorded his flights from Taree to Sydney to Essendon and from Essendon to Sydney on 26 March 1996. 46 Richard said that he did not have the original of the document. He said that the original document, as a whole, had remained with the aircraft when he sold it in 1996. He said that the photocopy document which he exhibited was only part of the record of "Aircraft Time-in-Service" for his plane but it was the only part that he could find: T 283.3-.18. 47 As I have noted, the photocopy of the document was of poor quality. Everyone knows that it is reasonably easy to make an alteration to a document, and produce a photocopy of that document which makes the alteration to the original difficult, or impossible, to detect. That is why the Court usually insists, when the authenticity of a document is in question, that the original be produced. 48 The document, even though a photocopy, showed that a number of alterations had been made to various entries. For example, at the top of each page there is a space provided under the words "brought forward" to show the total time-in-flight of the aircraft up to the date of the last entry on the previous page. At the top of the page, apparently starting from 29 October 1995 (the first page), a "brought forward" figure of 1,395 hours and 50 minutes appears. It is clear enough that this number has been written on top of some other number. On the next page - the page on which the questioned 26 March 1996 entries appear ("the second page") - the "brought forward" total time-in-flight appears to be 1,421 hours and 15 minutes. 49 However, on the third page the "brought forward" figure of total time-in-flight was originally shown as 1,395 hours and 50 minutes (the same figure as appears on the first page) but this figure has been crossed out and "1,448 hours .03 minutes" has been written in. In other words, the total figure originally written on the third page suggests that not as many hours had been flown as would be consistent with the second (questioned) page and that the total figure on the third page was later amended to be consistent with the hours flown as shown on the second page. 50 Mr M.B. Evans of Counsel, who appears with Mr Lambert of Counsel for the Plaintiffs, asked Richard about these entries: "Q. Now if you look over the page at page 3 you will see there alongside 'brought forward' in the shaded box the numbers 1395 50? A. Yes.

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Q. If I take you back to the numbers 1395 50 on the first page, I suggest to you that those numbers look as though they have been written over? A. I see where you are coming from. I have no comment to make, your Honour, on that point." 51 When some other inconsistencies between the appearance of pages one and three, on the one hand, and page two on the other hand, were put to Richard. He was unable to explain them. He then said: "It is quite obvious I have to keep looking for other maintenance releases, photocopies or whatever, to do with the aircraft": T 287.43. 52 This part of Richard's cross examination took place in the morning of 5 June 2009. Shortly before the luncheon adjournment, Richard said that he was feeling dizzy and that he would rather not proceed with his cross examination that afternoon. That request was granted. 53 On the next day of the trial, 9 June, Mr Hallen advised that Richard had gone to hospital for observation. He remained in hospital under observation until the last day of the hearing, 19 June. Other witnesses were examined during that time, and the trial had to be adjourned, part heard, to 14 December 2009. 54 After the adjournment, the Plaintiffs' solicitors served on Richard's solicitors a Notice to Produce Richard's pilot log books. There was a delay in production and the Plaintiffs' solicitors complained in a directions hearing on 14 September. Mr Hallen said that, according to his instructions, Richard was looking for the pilot log books and the search was still continuing. 55 When the trial resumed on 14 December, Richard was re-called to conclude his evidence. Mr Hallen produced two pilot log books in response to the Notice to Produce, the first covering the period from August 1976 to July 1984, the second covering the period between 27 July 1984 and 10 October 1997. They were admitted, without objection, as Exhibits D6(1) and (2). I will call them Book 1 and Book 2. 56 In cross examination, Richard was asked why he had taken so long to produce the log books. He said that they had been archived amongst 253 boxes of materials at Surry Hills, he had not been in good health, it had taken him some time to go through the boxes, and he had discovered the books only fairly recently: "… or log books in plural, and then I did not discover both pilot log books at the same time, either. I discovered volume 1 first and some considerable time later volume 2. And, your Honour, may I at this juncture, at the risk of speaking too much, draw your Honour to the attention …

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His Honour: Q. You now remember that there was something stolen from your aircraft, do you? A. Oh, I have remembered something was stolen from my aircraft some time, some 25 years ago, and before lunch what I was saying was there was a possibility that this log book - a log book, not this log book - might have been stolen. But on rethinking during the lunch time I did say a moment ago that my thinking was that I remembered having late entries to this but I don't remember putting a re entry as in to put a second entry. But is that possible? I have to think about that because what my recollection of when this book was issued is quite different from what counsel now says and this book is no longer available, your Honour, for me to be fabricating. The book that's currently available is not by Civil Aviation Authority, it is by CASA, Civil Aviation Safety Authority, and I have got a copy of that new book because I somewhat thought that I might be challenged as to rewriting a book. You can't buy this book, your Honour." 68 My overwhelming impression on hearing this evidence and in observing Richard's demeanour in giving it was that Richard had been caught out in the most flagrant act of fabricating evidence. Confronted with the obviously falsity of his evidence that Book 2 was a contemporaneous record of his flights, he had immediately launched into a babble of explanation - obviously pre-prepared - about suddenly remembering that the original Book 2 had been stolen - contrary to his earlier evidence that he had no recollection of such an event actually occurring. As I have noted, before beginning his cross examination, Richard had prepared that escape route for use, had tried to lay the groundwork for it (see [62] - [64]) but when he was given the option of saying that Book 2 was a reconstruction he had chosen to affirm it as the original document because its fabrication had not yet been exposed and he did not then know if Mr Evans had the means of exposing it. 69 To refute the suggestion that Book 2 was a fabrication, Richard pointed to certificates of flying time written in Book 2 bearing dates from April 1990 onwards, over the rubber stamp "Gowings Flying School" and apparently bearing the signature of a Mr David Gowing. Mr Gowing was not called to authenticate his signatures in the log book. Because of the obvious care Richard took in the fabrication of the log book and the blatant contradictions in his evidence, I can attach no weight to this uncorroborated signature. 70 Richard's re-examination did not commence until he had had the opportunity of an over-night conference with Mr Hallen SC. Mr Hallen began by taking Richard to Book 2: "Q. … It seems clear from the evidence that has been given by you that to the extent that there are notations in that pilot log book prior to 1989, they couldn't have been written contemporaneously. You now accept that, I think? A. I do.

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Evans: Q. Are you saying that the bag was lost or the bag was stolen? A. I'm saying the bag was lost presumed to be stolen because I remember now, after seeing the, the, the new aide memoire a flood of memory came back as to the circumstance. Because I found my aircraft door wasn't properly locked. At the time I saw the door wasn't locked with the aircraft sitting outside Hawker Pacific. It didn't trigger any concern because after all the maintenance hangar is immediately next to it, but when I opened the door and the first thing I need to do of course is to access my, my, my flight bag, to ascertain that the maintenance release after the Hawker Pacific engineers had repaired the aircraft had been returned to my, my flight bag. I couldn't find the flight bag so I said, I went back into the Hawker Pacific hangar, spoke to the engineer or chief engineer or assistant chief engineer. My, my bag's not there." 77 Richard's sudden and voluble rush of minutely detailed recollection about an event which he had, only two days before, emphatically said he could not remember actually happening - coupled with his demeanour when giving that evidence - convinced me that Richard was simply making his evidence up on the spot. Further, when asked about the conflict between his earlier unequivocal evidence that Book 2 had been kept at home and his later evidence that it was stolen from his flight bag at Bankstown Airport, Richard evaded the questions by saying that it was the maintenance release document which was kept in the flight bag. Then he said that that document was not in the flight bag when it was stolen, so that he was able to reconstruct Book 2 of the pilot log from the maintenance release document. But Richard had not explained why it was necessary to reconstruct Book 2 from the maintenance release document if Book 2 had been kept at home and was not in the flight bag when it was stolen. 78 These contradictions in Richard's evidence, again coupled with his demeanour in the witness box, strengthened my impression that he was simply making his evidence up as he went. In those circumstances, I thought it fair to give him the opportunity to pause, reflect on the consequences and withdraw his evidence: "His Honour: Q. Doctor, I regret to have to inform you that my present impression is that you have been perjuring yourself shamelessly. Repeatedly perjuring yourself. And this last piece of evidence is a complete fabrication. I am giving you the opportunity now for you to say what you want to say about that? A. I am horribly and regrettably, I am horrified by your Honour's impression.

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Evans: Q. Someone sets up a fake claim on your late brother's estate and to give that claim some veracity and receive mail they provide a mailing address, and that mailing address happens to be a place which is attended, at least on a monthly basis, by someone with whom you are in regular telephone conversation. Dr Tjiong, of all the houses in all the suburbs in all the streets in all the towns and cities in Australia, the person who set up this claim managed to use as the mail box an address at which someone you knew and you were in regular phone contact attended and you tell his Honour that's a coincidence. Is that correct? Is that your evidence? A. Yes. I wasn't and am not that stupid." 102 I reject Richard's evidence that it was a coincidence that the return mailing address shown on the Kevin Reeves' letters was SARPA's office. I conclude that that evidence was deliberately untruthful. 103 Richard said at first that he did not know that 2 Narambi Avenue, Ingle Farm, South Australia, was the address of SARPA's office until August or September 2006, when his solicitor, Mr Kennedy, told him, after a private investigator had been engaged to make enquiries. I reject that evidence as false. 104 I infer that by April 2004 Richard knew of SARPA's address through his long-standing connection with Mr Taransky. Further, I observe that Richard's telephone records show that on 30 November 2004 Richard made three telephone calls to a Mr Javor, who is the owner of 2 Narambi Avenue, Ingle Farm, and lived at an adjoining property. Richard denied that the calls had anything to do with the fact that on 16 November 2004 Mr Kennedy had sent notice of Richard's s 93 application, barring Kevin Reeves claim, to the Narambi Avenue address. Richard said that it was a coincidence that he rang Mr Javor: T531.10. Richard gave no explanation as to why he was ringing Mr Javor in 2004, before the time he said he found out about the location of SARPA's office. 105 Richard was then asked about his evidence at the beginning of the trial that he believed that the Kevin Reeves claim was bogus: "Q. Do you remain of the belief that it is not a genuine claim? A. I do.

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Q. And when Katrina, having received that letter, did not disclose it to you in the proceedings you organised for a private inquiry agent to go to Melbourne and set up a meeting on a false basis for the purpose of leaving a copy of that letter with her in circumstances where there would be a witness, didn't you? A. Not correct." 108 I am satisfied that each of Richard's denials was false. I am satisfied that he either wrote, or directed someone else to write, the Kevin Reeves letters and that when he realised that the Plaintiffs were suspicious of the letters and of his part in the emergence of the Kevin Reeves claim, he tried to remove suspicion from himself by casting it onto Katrina and Margaret. My reasons for those conclusions are as follows. 109 First, the bogus claim had the effect of preventing distribution from the Family Trust and from George's estate to Katrina and Lindsay at a time when Richard strongly wished to resist their demands for distribution. The claim emerged shortly before Katrina and Lindsay would be able to present the cheques for $100,000 which had been given to them by Richard on 9 April 2004. 110 It would have been utterly irrational for Katrina, or Margaret, to have prevented the distribution which Katrina and Lindsay so urgently sought by making the bogus claim. Indeed, if they had made the bogus claim to ensure Richard's removal as executor and the quick distribution of the Trust Fund and of the estate, they would have exposed damning facts - such as Richard's connection with the return mailing address given in the 30 April 2004 letter - much earlier than has occurred in these protracted and expensive proceedings. 111 Second, Richard's evidence as to how Mr Johnson came to know his telephone number was contradictory and implausible. 112 Third, the facts of the bogus claim were copied from Black v Lipovac, a case of medical negligence with which Richard was very familiar, having written several articles about it: T259-.29 to T260.38. There is no evidence to suggest that Katrina or Margaret was aware of the facts of the Lipovac case. 113 Fourth, the writer of the letters was familiar with medical terminology and treatment - see especially the letters of 12 July 2005 and 21 August 2007 - and was also familiar with the firm of Maurice Blackman Cashman as specialists in medical negligence litigation. Richard had both these familiarities. There is no evidence that Katrina had either of these familiarities. Margaret had been a nurse many years previously but there is no evidence that she knew of Maurice Blackman Cashman as medical negligence specialists. Further, the forensic examiner retained by Richard reported that she could detect no similarity between Margaret's handwriting and the handwriting on the Kevin Reeves letters. 114 Fifth, the writer of the letters gave as the return mailing address an address with which Richard had a direct and immediate connection, through Mr Taransky, with whom Richard was in frequent contact at the time that the letters were sent. There is no evidence to suggest that Katrina or Margaret knew of the location of SARPA's office or of Richard's connection with it. 115 It would be important for the fabricator of the Kevin Reeves' claim to have a return mailing address for Mr Thornton's letters because if those letters had been sent to an address randomly selected, the return of the letters marked "not known at this address" would have immediately suggested that the claim was bogus. The writer of the letters, therefore, had to have a return mailing address remote enough to discourage anyone in Sydney or Melbourne from going there to enquire about Kevin Reeves. The writer also had to have someone at the mailing address to collect Mr Thornton's letters so that suspicion would not be aroused by the return of the letters. The SARPA office and Mr Taransky's availability to collect mail sent there fulfilled both requirements. 116 Sixth, Richard's advisers were aware in good time that the Plaintiffs would be alleging that Richard's connection with SARPA's office through Mr Taransky was a central piece of circumstantial evidence pointing to Richard as the author of the letters, but they did not call Mr Taransky or Mr Javor to corroborate Richard's evidence. I refused an application by Mr Hallen to tender affidavits sworn by Mr Taransky and Mr Javor in 2006 procured in the s 93 application as he wished to read those affidavits without making the deponents available for cross examination. I gave Mr Hallen the opportunity of taking evidence from Messrs Taransky and Javor by videolink. The opportunity was declined. I infer that the evidence of Messrs Taransky and Javor would not have assisted Richard. 117 Seventh, Richard's assertion that the choice of SARPA's office as the return mailing address was pure coincidence was obvious nonsense. Yet he persisted in that assertion. He could hardly do otherwise: the only other explanation was that it was he who had chosen the address. 118 Eighth, the writer of the Kevin Reeves' letters betrays stylistic quirks which appear in Richard's own writings:

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121 In his will made in 1992, George appointed the State Trust Corporation of Victoria as executor and gave the whole of his estate equally to Katrina and Lindsay, subject to giving a right of residence in one of his properties to his mother. 122 In his will made 23 December 2001, which Richard himself drew up, George appointed Richard as executor and gave the whole of his estate to Katrina and Lindsay. It is a straightforward will with no qualifications or reservations about the bequests to his children. 123 However, Richard said that he had lengthy discussions with George on 20 and 22 December 2001 in which George expressed severe reservations about leaving his estate to his children without the benefit of Richard's guiding hand to protect their use of their inheritance. Richard said that he made a detailed file note of these conversations which he typed on his laptop computer and carefully dated at the end "11.45pm 22 December 2001". The file note is seven pages in length and records George's intentions that, despite the clear and unconditional terms of the will which he was to sign the next day, what he really wished was that his children should have no more than ninety percent of his estate, the remaining ten percent to be distributed amongst his siblings in the complete discretion of Richard. Further, George expressed apprehension that Katrina and Lindsay would dissipate their inheritance and he desired that Richard establish a trust fund "outside his will" by which Richard, as trustee, could control wisely the use and enjoyment by Katrina and Lindsay of their inheritance. 124 Richard says that he carried out George's intentions, as recorded in the file note, in advising Katrina and Lindsay to establish the Family Trust. Richard showed the file note to Katrina and Lindsay for the first time on the screen of his laptop computer at a meeting with them on 8 April 2004 in an endeavour to persuade them that, in resisting their requests for a distribution of the Family Trust Fund, he was only doing what their father had wished. Richard asked Katrina and Lindsay to accept the file note as genuine. They declined to do so. Whether the file note is, indeed, a genuine and contemporaneous record of discussions between George and Richard which occurred shortly before George made his 2001 will has been a large issue in these proceedings. 125 Both at the meetings with Katrina and George in April 2004 and in the course of these proceedings Richard has laid heavy emphasis upon the computer date stamp appearing on the file note which shows that it was saved to a diskette at 11.45pm on 22 December 2001. Richard says that that date stamp authenticates the document beyond question. 126 The Plaintiffs, through their expert witness, say that it is not difficult to create an incorrect computer date stamp on a document. I need not go into the technicalities: there was no challenge to the proposition that it was technically possible. 127 The only way in which the computer date stamp on the file note could have been verified with certainty was by examining the laptop computer on which Richard said that he had typed the document in December 2001. When these proceedings commenced, the Plaintiffs' solicitors served a Notice to Produce the laptop computer. Richard's solicitors responded by saying that Richard had traded the computer in on a new computer. Richard produced a tax invoice apparently showing that the trade-in occurred on 12 May 2004. 128 By 12 May 2004, Richard was well aware that Katrina and Lindsay disputed the authenticity of the file note and were pursuing enquiries as to its authenticity. On 14 April 2004, the Plaintiffs' solicitors had written to Richard's solicitors requesting a transcript of the file note which had been shown to Katrina and Lindsay on Richard's laptop screen. Richard's solicitors declined the request. The Plaintiffs' solicitors had pursued the request on 27 April 2004. On 5 May 2004, they had written challenging the establishment of the Family Trust. On 7 May 2004, Richard's solicitors had responded, asserting that the Family Trust had been established in accordance with George's extra-testamentary wishes. Clearly, at that point, Richard must have realised that if the authenticity of the file note was challenged, an expert examination of the laptop computer on which he said he had created the document would be critical. Yet, apparently, five days later he disposed of the laptop computer. 129 I do not accept the file note of 22 December 2001 as a genuine contemporaneous record of George's wishes expressed in December 2001 to Richard. My reasons may be shortly stated:

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131 Both Katrina and Lindsay are firm in their evidence that at a meeting in the morning of 11 December 2003 between themselves, Richard and Kathryn, Richard represented to them that when George died his estate would have to pay a huge tax bill based on the size of the estate, which could be avoided if assets in George's estate were transferred into a trust while George was still alive. It is not in dispute that if such a representation had been made, it would have been false and that Richard could have had no reasonable basis for making it. 132 Richard and Kathryn deny that Richard made such a representation. I do not give any credit to Richard's denial. I prefer the evidence of Katrina and Lindsay to the evidence of Kathryn. Their credit was not shaken at all in cross examination on any issue. Katrina frankly conceded a number of errors in her evidence when they were pointed out to her. She never attempted prevarication. Lindsay was direct and frank in his evidence. He appeared to me to have a clear recollection of what Richard said to him at the meeting on 11 December about the tax consequences to George's estate if a trust were not established. 133 The whole of the evidence in this case suggests that by December 2003 Richard had formed the firm intention of taking control of George's estate and administering it between Katrina and Lindsay on the one hand and George's other siblings on the other as Richard thought best in his own discretion. Richard seems to have an unshakeable belief that by reason of superior intellect, superior professional qualifications and superior business experience, he is best suited to control and direct the fortunes in life of his entire extended family to their own best advantage, whether or not they agree. This appears to have been Richard's overpowering motive to do whatever was necessary to ensure that he retained control over the disposition of George's estate. 134 I conclude that it is inherently probable that Richard, as an encouragement to Katrina and Lindsay to agree to his proposal for the establishment of a family trust, represented that they would be financially better off if they agreed because they would thereby avoid a heavy imposition of tax on George's estate. I find the alleged misrepresentation proved. 135 If this matter had not been compromised during the trial, I would have found that Katrina and Lindsay had relied upon misrepresentation by Richard as to tax consequences for George's estate, and that their consent to the establishment of the Family Trust had been procured by Richard's fraud. That finding would have been a sufficient basis for setting aside the Family Trust Deed or granting the other relief sought by the Plaintiffs, without the necessity of finding whether the other representations referred to in [11] had been proved. 136 I think that my finding as to Richard's representation about tax consequences for George's estate and my findings as to the file note of 22 December 2001 in [130] are sufficient to deal with the costs issues pertaining to the establishment of the Family Trust. Conclusions

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