186 It does not seem to me that it is surprising that some of the family members urging caution in assessing Sid's capacity to make decisions absent any undue influence from those close to him (even accepting that they had a clear interest in what was occurring if the will changes were not in their interests). Where criticism lies I think is in those who seem to have facilitated the entry by Sid into such transactions (both share transfers and wills) at a time when there was room for doubt as to his capacity to do so and without taking steps to ensure his capacity - primarily, Gautam and Arjun. (I do not make any criticism of the issue by Dr Bowe of his certificate. It is by no means clear to me what he was told at the time he assessed Sid for the purposes of his medical certificate and the position may well be that Sid had testamentary capacity at that stage. However, testamentary capacity and a vulnerability to undue influence are two different matters.) Regrettably, to some extent I must include both Mr Czinner and Mr Castino in this criticism. It does not seem to me that either of them could be said to have acted in the best interests of Sid in failing (once the issue of capacity was squarely raised with them) to take or recommend appropriate steps to remove any such doubt. Had they done so, the appearance that things were being done in a rush behind the backs of Parveen and her family would have been avoided and there could have been a determination once and for all as to Sid's capcity at that stage (which might potentially have been spared him the distress of the court proceedings which were commenced in September 2008.). (It is not the case that there was no more than an assertion of incapacity which on its face appeared baseless or mischievous. Dr Aggarwal had diagnosed Sid with dementia as far back as 2001 and was clearly concerned to monitor his condition.)
187 What Parveen's family seems to have been requesting was that there be a proper neurological assessment of Sid's capacity (rather than a possibly brief consultation with a general practitioner). Whatever the motivation of Parveen's family at that stage, there was a simple way to test Sid's capacity and it would surely have been less stressful than that which ultimately occurred. If, as Gautam and Arjun now so strenuously assert, Sid had sufficient capacity at the time to enter into the transactions which were proposed, then the result of such a process would have been to remove a basis for challenge by Parveen's family and (coupled with independent advice as to the transaction) would have gone a long way to rebutting the presumption of undue influence. That did not, however, occur.
188 This April will varied from the January 2004 will, relevantly, insofar as Gautam Varma replaced Ruby as a beneficiary of 33% of the shares.
189 One of the unexplained aspects of the events of April 2008 is why there would have been any point in amending the will in this fashion if, at the same time, Sid was already in the process of effecting the inter vivos share transfers which together would have disposed of all or almost all of his shareholding. (In this regard, I note that there is no suggestion that Sid intended Gautam and Arjun to obtain more than a total two third shareholding through a combination of the inter vivos transfers and then a third share of what was left under the will.) Presumably it was this inconsistency which led Mr Castino later to discuss with Mr Czinner the possibility that the contemporaneous nature of the two events might indicate a lack of competency on Sid's part and provide 'ammunition' for a challenge by Parveen's family. (That choice of language in itself suggests that Mr Castino may have regarded himself as aligned with the interests of Gautam/Arjun to some extent. Certainly, he seems to have regarded the family as by then divided into two camps.)
190 In his affidavit affirmed 8 October 2008 in the tutor proceedings, Sid deposed that "At no time did Parveen challenge me about my Will and the amount of shares that I proposed leaving her." While Parveen accepts that she did not challenge Sid, she adamantly denied knowing anything about the testamentary dispositions in the earlier wills until she saw them in Mr Czinner's file. I accept that there was some inconsistency in Parveen's evidence on this point (although it seemed from my observation of her in the witness box that there was some confusion on her part when giving evidence on this and that she was not attempting in any way to be evasive in answering the questions put to her.) Given Carin's candid observation of Parveen's reaction to the news of those wills, ie that she looked as white as a ghost, which seemed to me to be both genuine and evocative, I would accept that while Parveen may have been aware of the fact that Sid was making wills, she had not seen the contents of those wills and was not aware that Sid had not previously made provision for her in his wills prior to the 2004 will. It seems to me likely, based on the way that Parveen had responded to the 18 July 2007 announcement, that if she had known earlier that there was doubt as to her family's position in relation to the company, then Parveen's would have displayed an emotional reaction of the kind she did in 2007, yet there was no evidence of this. I also note that the explanation Carin gave (at T 538) as to why the subsequent undertaking of 30 June 2008 did not convey an understanding to her about the will (because of the inconsistency between the share transfers and the will operating together) made logical sense.
191 The tax invoice on 16 April 2008 issued by Mr Czinner noted an attendance on "16/03/08: Preparation of new Will. Attending you on execution of same". Parveen approved payment of Mr Czinner's invoice and inserted the correct date of Sid's attendance for the purposes of instructions re a new will as 16 April 2008. Mr Petersen relied on this as evidence that Parveen knew of the will or that this was the purpose of the meeting out of the office with Mr Czinner on that date. However, it does not on its face indicate any knowledge on the part of Parveen as to what the contents of that will may have been.
192 On 17 April 2008, Carin, on speaker phone in the presence of Vikram, telephoned Mr Czinner and asked whether he had asked Arjun for a doctor's report before carrying out Sid's instructions. Mr Petersen relied on this as support for the proposition that Carin has been acting as Parveen's advocate throughout and not as an objective witness (and thus to suggest her evidence is not reliable). I consider that the fact that Carin was taking a pro-active role in seeking to prevent steps being taken without independent medical advice was not an unreasonable stance as at April 2008 to take (just as I think it would undoubtedly have been in the interests of all parties, to avoid any later dispute as to capacity or to rebut a presumption of undue influence, for that to have occurred). (What seems more difficult to accept is that if there was (as I would accept there was - with no little foundation) a concern on the part of Parveen's family as to whether Sid was competent to make such decisions (or was acting other than under the influence of one or other faction within the family), that such a concern should not also have applied to matters favouring Parveen's family (such as the proposed share transfers in 2007 and the payment of Carin's HECS bill in 2008).)
193 Carin was cross-examined as to the discussion she said she had had with Sid around this time in which she says she asked him what he had been doing lately and he had said that he had seen Mr Czinner and had been discussing his death. Carin said, and I accept, that she had not questioned Sid about any changes to his will. In the course of this cross-examination Carin gave an account of Ruby's then stated concerns about Sid's memory. Whether or not what Ruby had said was correct, I accept that by this time Carin had concerns as to Sid's memory and this is consistent with her contacting Mr Czinner to express those concerns.
194 Mr Castino says that on 17 April 2008, Mr Czinner told him about the new will and Mr Czinner says he telephoned Vikram and told him that there was a new will splitting the shares three ways. Mr Castino's note records that he had a discussion with Mr Czinner and that he told him provisions of the original and new will, noting that:
Ron advise that fact SV did not disclose his decision […challenge will - 18 months] to transfer shares to Ron yesterday when he made his will. This could give ammunition to others to challenge his mental competency. Fact that share transfers are in same ratio as will may mitigate this. [the words in square brackets seem to have been added as a separate note and may well refer to the time period within which challenges could be made under the then Family Provision Act provisions]
195 The note added:
Don't speak to Vik. [It is not clear whether these were instructions from Mr Czinner or a note to remind himself of the position]
Also discussed agreement option to buy/restrictions on Parveen's shares. Rang & left message for Mr Varma to call me (he was unavailable)
Gautam Rang me to say it may be best to call him at 3.30 or see him at 6pm in private.
Also Disc - Vik call to me & neurologist report - Agreement for share to Parveen [It is not clear if there was at some stage a suggestion that Parveen should obtain nothing by way of shares in the company - what was not suggested to Mr Castino that this referred in any way to an agreement back in 1990 for the shares in the company to go to Parveen]
196 Mr Castino was cross-examined as to the meeting on 17 April 2008. There was a suggestion that it was scheduled at this time as Parveen would have left the office by then. Mr Castino says he dropped in on his way home. It was, according to him, a lengthy meeting in which he satisfied himself as to Sid's mental capacity to undertake the transaction. Mr Castino was not, however, able to assist me greatly in seeing how he could have come to that conclusion (and I place little weight on his stated opinion).
197 According to Mr Castino, Sid asked Gautam and Arjun to be present but they joined only at the end of the meeting. Also according to Mr Castino, Sid said "I am worried that any shares transferred to Parveen may be transferred to Vikram … Vikram must not obtain any shares in the company under any circumstances", a comment that rings true in the light of Sid's contretemps with Vikram in July 2007 (paras 53-58 Castino affidavit).
Irrevocable Declarations
198 On 23 April 2008, Sid offered shares to each of Parveen, Arjun and Gautam provided they signed an "Irrevocable Declaration", in effect restricting their ability to transfer or assign their shares during their lifetime and obliging them to continue the business of the company. As Sid said he did not type, these must have been prepared for him. Neither Gautam nor Arjun, each of whom readily signed the declaration (and who rely on this as consideration for the transfers), accepted that he had typed the document. The declaration noted, however, that the shares had "not been purchased/earned". Sid wrote on each signed declaration words to the effect "This declaration is OK & accepted. Hence request accountant, Mr Denis Castino to proceed with share transfer as directed by my letter dated 23/4/08". Sid gave evidence before me in the tutor proceedings in which he said that these 'undertakings' had been dictated by him (and they would seem to accord in their phraseology with various other documents seemingly also prepared by Sid or at his direction) (T48.25-45, 24/10/08). (Mr Petersen relies on this to gainsay any involvement by Deepak in the share transfer process.)
199 Sid then signed instructions which were faxed to Mr Castino (referring to a discussion on 17 April 2008) to prepare share transfers for 2,000 A class shares and 20,460 ordinary shares in favour of Gautam and Arjun, and to transfer the same amount to Parveen "only on receipt of her personal declaration, similar to the ones enclosed". Those instructions again contained a declaration that the decision was made by Sid free of any pressure or outside influence.
200 Mr Castino prepared the share transfer forms on 24 April 2008 and they were duly lodged with ASIC. According to Sid's affidavit of 8 October 2008 in the tutor proceedings, he told Parveen that if she signed a similar irrevocable declaration, an identical amount of shares would be transferred to her.
201 Deepak deposed to a conversation in April 2008 with Vikram in which Vikram telephoned and said:
Dada has changed his Will on the birthday of my mum. What a bloody gift. Not only this, Dada now wants mummy to sign a declaration that she is not allowed to transfer her allotted shares to anyone during her lifetime. Even if my mummy accepts 33% instead of 50%, I will never be able to become a shareholder in the company during her life … If you don't come soon and resolve the issues, there will be a family war.
202 On 30 April 2008, Mr Castino says he telephoned and asked Parveen to attend a meeting to discuss "share transfers" and that he did so again on 2 May 2008.
203 On 5 May 2008, according to Gautam, Sid equalised salaries between Parveen, Gautam and Arjun, and did so on the basis that he was making each of them equal shareholders in the business.
204 Parveen says that she refused to meet with Mr Castino or to sign the undertaking or to discuss any further the share transfers. She says there was a conversation on 7 May 2008 in which Mr Castino said Sid wanted to transfer 20% of his shares to her but she must sign a document.
205 On 8 May 2008, Mr Castino sent an email to Sid regarding the meeting on 17 April, the faxed written instructions on 23 April and his recent attempts to arrange a meeting with Parveen and advised that she said that she did not wish to meet with him.
Varma Family Agreement documents
206 On 15 May 2008, two versions of a document titled "Varma Family Agreement" were prepared. Carin acknowledges she typed a portion of that document or a smaller version of it. She says that Sid asked her to type up a document which would divide up the company into four pieces and that this was when she was at the company office for a social visit. She denied that Vikram was there at the time and she denied the conversation attributed to him by the defendants (namely that he had asked why Gautam and Arjun could not be satisfied with 25% each of the company). (While Carin accepted that Vikram had asked a question of that nature she said that this was later - in about June or July 2008). Carin says that part of the document was dictated by Gautam or Arjun both of whom were present at the time (they deny it was their document).
207 Whether or not the document emanated from Sid, what it proposed was that Gautam and Arjun accept 25% each of the shares, with 25% of the shares to go to Parveen and 25% to go to Carin (or, in the alternate version, Vikram). (Perhaps the reason for the alternate versions was due to the possibility of continuing resistance to Vikram having an involvement in the business.) The document went on to provide that in the event that there was any testamentary or other disposition allocating shares as between three people (33% each) the signatories were agreed that the three shareholders would allocate an appropriate amount of their share capital to bring the shareholders to 25% each.
208 Mr Petersen says that this was a proposal put forward by Parveen, as well as by Vikram and his wife, Carin. Parveen adamantly denies this. Carin similarly denies that either Parveen or Vikram was present in the office when Sid asked her to type it.
209 It would be consistent with the fact that (even after she became aware of the wills/share transfers) Parveen never directly challenged Sid as to what he had done, that Parveen (as she says she did) refused to have any part in the family discussions which took place around this time in order to achieve a resolution of the dispute between the two opposing sides of the family. My impression of Parveen in the witness box was that she was steadfast in her view that it was inappropriate for there to be discussions in relation to the shareholdings while Sid was alive. (I also accept her evidence that she would have regarded it as disrespectful of her father-in-law to do so.)
210 It seems to me clear that what was happening around May 2008 was that Vikram and Carin were seeking to reach an accommodation with Vikram's cousins (at one stage using Deepak as an intermediary for that purpose with Sid) in order to attempt to reach a family solution as to how the shareholding of the company was to be distributed (and to put in place a mechanism where that might be achieved even if that were contrary to Sid's wishes) and that they assumed they would then be able to persuade or pressure Parveen into accepting such an arrangement.
211 Relevantly, however, if the proposals under consideration on 15 May 2008 emanated from Sid (as Carin says they did) then they are inconsistent with a belief by Sid at the time that he had any binding obligation to leave the whole of the company to Parveen.
212 The reference in the documents to the prevention of a family legal dispute over any testamentary will or inter vivos transaction was something Carin said was dictated by Arjun or Gautam. Again, that was not accepted by them. Even if the statement had been one included by Carin it seems to me that it would be consistent with what must have been apparent to all by then, which was that if agreement as between the two sides of the family could not be reached then there was a possibility that litigation could ensue. (It would certainly be consistent with the references in Mr Castino's notes to the possibility of a challenge to the will.) In any event, the document as typed by Carin does not indicate any awareness of a belief on the part of those closest to Parveen that she was entitled to all of the company.
213 Mr Petersen cross-examined as to litigation what was sought to be avoided (and emphasised that it was Parveen who instituted the proceedings), as I understood it to suggeset that this must have been a document emanating from Parveen's side of the family but it seems to me that a concern as to challenges to the wills (and/or perhaps the share transfers) would also have been in the minds of Gautam and Arjun at that time. Of interest is the fact that Sid, at least at this stage (on Carin's evidence), seems to have been prepared to consider a division of the shares at that stage that was in effect 50/50 as between the two families.
214 In any event, after the two documents were given to Sid he wrote upon both versions the words "Not acceptable" (and expressly marked the reference to Vikram with a cross). According to the company minutes, these documents were tabled at a board meeting.
Cancellation of medical appointment
215 On 15 May 2008, Sid wrote a note to Arjun and Parveen asking them to cancel an appointment with Dr Aggarwal and stating this was "As I am not well after the incident in the office today", which confirms that there was an incident of some kind about which he had been upset (and would give credence to the Gautam/Arjun version except that the note as written suggests that Vikram was not in the office at the time (since it is asking them to notify him not to come and pick Sid up as planned). Given the contents of a later document as edited by Gautam, there might be room for suspicion that by this stage at least some of the family were not keen for there to be a complete medical check as to Sid's competency (as also suggested by para 13 of Exhibit K, to which I refer in due course). The fact that Sid was upset seems most likely to have been in part or in whole at the fact that Parveen had not signed the Irrevocable Declaration. In that regard, in evidence at p40 of the Annexures to Parveen's September affidavit (Annexure M) are copies of two typewritten documents, which Parveen says she saw on Sid's desk at the time Sid asked her to sign the Irrevocable Declaration. Those documents were unsigned and typed in capital letters; one is signed 15 May 2008.
216 The unsigned document (p39) urges Sid not to attend Dr Aggarwal's office for at least one month and asserts that Tayji (Parveen, Vikram and family are not happy with a 33% shareholding and trying to prove Sid was not of sound mind and suffering from dementia (that document suggests Sid instruct her to sign the declaration that day in Sid's presence).
217 The dated document (p40), which is longer, refers to Sid's "last appointment" with Dr Aggarwal at which it is said that a medical report was issued stating Sid was suffering from dementia and should not take any major financial decisions; the opinion was expressed that this report superseded that of Dr Bowe; the note stated that if Sid visited Dr Aggarwal again on 16 May then a brain test will be conducted and report confirming dementia issued and sent to Mr Castino and Mr Czinner - that this would mean the current will and the share transfers would be cancelled and void. The note goes on to state:
WE ARE NOT SAYING THAT YOU SHOULD NOT GO TO A SPECIALIST. ALL WE ARE REQUESTING IS THAT YOU SHOULD POSTPONE THE APPOINTMENT & MUST TAKE ALL THE MAJOR DECISIONS BEFORE YOU GO FOR THE APPOINTMENT. THE APPOINTMENT IS A TRAP AND YOU ARE FALLING IN THIS TRAP . (Emphasis in original)
PLEASE UNDERSTAND YOU ARE CURRENTLY SUFFERING FROM MILD TEMPORARY MEMORY LOSS AND FOR THIS REASON YOUR BRAIN SCAN WILL AGAIN CONFIRM AS ABOVE & ALL YOUR EFFORTS WILL GO TO WASTE.
218 That note went on to explain that the effect of the April documents being cancelled would be for the old will to become active. There is then the statement that Vikram and family were running a million dollar business but that Gautam and Arjun were working in Sid's company and their future depended on it - thus if the will was challenged this would only affect them not Vikram and family. "PLEASE UNDERSTAND THAT IF YOU DO NOT POSTPONE THE APPOINTMENT WITH ARUN AGGARWAL, IT WILL NEGATIVELY IMPACT BOTH ARJUN AND GAUTAM". Arjun denied that this was his document and its provenance was not established. However, it raises serious doubts about the protestations by Arjun and Gautam that there was no concern in relation to Sid's capacity at that stage - concerns seemingly reflected in para 13 of the Exhibit K document as amended by Arjun.
Arrival of Deepak
219 On 21 May 2008, Deepak arrived in Australia (and his passport records him leaving again on 28 December 2008 - he says that he did so with his father's ashes). After Deepak arrived in the country it seems that he and his family paid their respects to Vikram and Carin who by then had a new baby. According to Arjun's wife (Geetika), it was at this time that Sid told her on 21 May 2008 that he had worked long enough and wanted to retire, and said "It's time for the next generation to take over from me. I have already given some of my shares to Gautam and Arjun, and I will be transferring more shares soon. I want Gautam to take over my position by the end of this financial year". (paras 50-51). Geetika was not required for cross-examination on her affidavit. Her evidence is consistent with what Sid had in fact done though it says nothing as to the influence under which he may have made those decisions.