Zimmermann Vearings Pty Ltd v Sandhurst Capital Pty Ltd [2025] FCA 1675

VILLAWOOD MANAGEMENT PTY LTD (ACN 100 813 161) (and another named in the Schedule)

ZIMMERMANN VEARINGS PTY LTD (ACN 654 220 587) AS TRUSTEE FOR THE ZIMMERMANN VEARINGS TRUST

1. Pursuant to rule 16.21(1)(c) to (f) of the Federal Court Rules 2011 (Cth) and section 37M of the Federal Court of Australia Act 1976 (Cth), paragraph 25(c) of the respondents' defence dated 12 September 2025 be struck out.
2. The respondents pay the applicants' costs of the applicants' interlocutory application dated 10 October 2025.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011 (Cth).

1. By interlocutory application dated 3 October 2025 filed in proceeding VID1196/2024 (the Johnson Vearings Proceeding), the plaintiff (Zimmermann Vearings Pty Ltd) seeks leave to file an amended statement of claim (and to make consequential changes to its originating process). The defendants (Sandhurst Capital Pty Ltd and Vearings Lane Pty Ltd) oppose the application on the basis that if leave were granted to file the amended statement of claim, paragraph 7B (and therefore paragraph B(1) of the plaintiff's prayer for relief), excerpted at paragraph 32 below, would be liable to be struck out.
2. By interlocutory application dated 10 October 2025 filed in proceeding VID794/2025 (the Sandhurst Vearings Proceeding), the applicants (Sandhurst, Vearings Lane, Villawood Management Pty Ltd and Sandhurst Retail & Logistics Pty Ltd (SRL)) seek to strike out paragraph 25(c) of the defence filed by the respondents (Mr Anthony Ronald Johnson and Zimmermann) on 12 September 2025, which is excerpted at paragraph 30 below.
3. The issue that arises on both applications is the same. The plaintiff's application in VID1196/2024 must fail in part and the applicants' application in VID794/2025 must succeed, because the common contention sought to be advanced by the plaintiff in VID1196/2024 and by the respondents in VID794/2025 is untenable.
4. I turn first to the facts.

1. Vearings Lane was incorporated on 17 April 2014.
2. Until about 8 or 10 December 2021 (it is not clear which), Vearings Lane had one ordinary share on issue that was held by Sandhurst.
3. Johnson was the sole director of Vearings Lane from its incorporation until 23 July 2024, and was also one of the directors and indirect shareholders of Sandhurst.
4. In 2020, Vearings Lane entered into contracts to purchase land in Epping, Victoria (the Vearings Property) for $65 million.
5. Vearings Lane is now the registered proprietor of the Vearings Property, which Johnson says is worth approximately $295 million.
6. In September and October 2021, Johnson had a series of discussions with the other directors and shareholders of Sandhurst - namely, Messrs Rory Costelloe, Trevor Lockwood, Michael Duster and Dino Strano - about Johnson (through an associated entity) receiving a greater ownership stake in Vearings Lane.
7. In the course of those discussions, Strano asked Johnson whether Johnson would be happy if Sandhurst agreed to give Johnson 10 per cent of Sandhurst's 100 per cent shareholding in Vearings Lane. Johnson responded that he would be happy with that.
8. On 8 or 10 December 2021, Johnson caused Vearings Lane to issue 8,934 ordinary shares to Sandhurst and 1,065 ordinary shares to himself. He later transferred those 1,065 shares to his entity, Zimmermann.
9. He could do so, and did do so, without reference to anyone else because he was a director of Sandhurst, sole director of Vearings Lane and sole director and shareholder of Zimmermann.
10. It is common ground that none of the other directors or shareholders of Sandhurst who had been present during the September and October 2021 discussions referred to in paragraphs 10 and 11 above had any role in the issuing of the Sandhurst shares referred to in paragraph 12.
11. As so it was that by 8 or 10 December 2021, Sandhurst was recorded as the holder of 8,935 shares in Vearings Lane (89.35 per cent of the total shares) and Zimmermann was recorded as the holder of 1,065 shares in Vearings Lane (10.65 per cent of the total shares).
12. The other directors of Sandhurst did not know at the time of the share issue that Zimmermann had taken 10.65 per cent of the shares in Vearings Lane.
13. They did not find out that Johnson had issued more than 1,000 shares to himself until late 2024. When they did, they told Johnson that neither he nor Zimmermann had ever been entitled to 1,065 shares; that he had been offered 10% of the shares (that is, 1,000 shares); and that, in light of what he had done, that offer was withdrawn.
14. Zimmermann then commenced the Johnson Vearings Proceeding by way of originating process on 1 November 2024, seeking:

(a) a declaration that it was entitled to 10 per cent of the shares in Vearings Lane; and

(b) specific performance of an agreement pursuant to which it was alleged that Zimmermann was to transfer back to Sandhurst 65 shares in Vearings Lane said to have been transferred by mistake.

1. Johnson swore an affidavit on 1 November 2024 in support of that originating process.
2. That affidavit is central to the issue that arises on these applications.
3. Relevantly, Johnson deposed as follows:
   1. Zimmermann makes this application on the basis that an error was made in the number of shares issued by the Company to Sandhurst and me (my shares were subsequently transferred to Zimmermann), and alternatively, that Zimmermann and Sandhurst reached an agreement by which Zimmermann agreed to transfer 65 shares to Sandhurst (being, those shares issued by the Company in error to me which should have been issued to Sandhurst).

. . .

1. In around - I believe - October 2021, the board of Sandhurst ... consented to me (or my nominee) acquiring 10% of the shares in the Company. As the Company's share capital comprised of a single share, it was necessary for the Company to issue further shares to Sandhurst and me so as to reflect that Sandhurst hold 90% of the shares and I hold 10%.

2. On 20 October 2021 at 8:20pm, I sent an email to Mr Pappas and Hamish Nicholls. [Nicholls was the Chief Financial Officer at SRL, in which role he reported to Johnson.] I said: "Guys - in Colin's absence we need to get this sorted - there is a fair bit of history to go over". ... Based on this email, I believe that Mr Cass had initially been responsible for carrying out the task of issuing additional shares in the Company. I believe Mr Cass was ill at this point in time and had taken leave from his position.

3. As Mr Cass was absent, I instructed Nicholls to take the necessary steps to effect the share issue. ...

4. In late October 2021, I spoke to Mr Nicholls. I said words to the effect that shares in the Company were to be issued to me. I said that after the shares were issued, I would own roughly "about 20%" of the project, including shares that I held indirectly in Sandhurst. I left it with Mr Nicholls to act on those instructions and I did not concern myself with the process by which the shares in the Company were to be issued.

5. Sandhurst consented to the issue of shares by the Company on the basis that that [sic] I would be issued 10% of the shares, and Sandhurst would retain 90%. When I said to Mr Nicholls, words to the effect of "about 20%" it was because I totalled the 10% interest I was acquiring in the Company as well as the 10% shareholding I had in Sandhurst through Marlton and Calibre.

6. Based on the correspondence that I have since reviewed and describe below, and the allegations that have been made by Sandhurst against Zimmermann, I believe that there was an error made in the calculations that preceded the issue of shares by the Company. Mr Nicholls was assisted in the share issue process by a number of persons, including Mr Cass of [Villawood], Louise Hickman of Ipsum Advisors (former accountant of Sandhurst), and Beth Johnson (my daughter and Operations Manager of Marlton Group Pty Ltd).

7. On 10 December 2021, I was issued with 65 shares in the Company in excess of what I ought to have been issued. What should have occurred is that 9,999 additional shares should have been issued by the Company, and 1,000 of those shares should have been issued to me, with the balance (8,999 shares) issued to Sandhurst.

. . .

1. On 1 December 2021, I executed documents necessary to give effect to the issue of additional shares by the Company. I did not prepare those documents. They included applications for shares, a resolution for the issue of shares, share certificates, and a Form 484 to update ASIC's records:

(a) the issue of 9,999 shares in the Company;

(b) to issue an additional 8,934 shares to Sandhurst Capital; and

(c) to issue 1,065 shares to Zimmermann.

...

1. On 10 December 2021, a further Form 484 (10 December Form 484) was lodged, according to ASIC's records. The only difference was that this Form 484 recorded that 1,065 shares were to be issued to me rather than Zimmermann. ...
2. The 10 December Form 484 erroneously recorded me as a shareholder. This was rectified by the lodgment of a further Form 484 on 17 January 2022, which effected a transfer of the shares to Zimmermann. ...

...

1. The resolution, share certificates, and Form 484 for the issue (and later transfer) of the shares in the Company each referred to 1,065 shares. I did not recognise, when I signed those documents, that they exceeded 10% of the issued shares in the Company.

2. I am a director of numerous companies, including [Villawood] and in excess of 100 associated companies. In my day-to-day role, I execute a significant number of documents as the director of those companies. I delegate the preparation of documents to staff and advisers. I did not identify the error in the documents regarding the number of shares issued to Zimmermann at the time I signed them.

...

1. I was first made aware of the issue in relation to the shareholding of the Company at a mediation with Sandhurst of other legal proceedings, on 9 September 2024.

...

1. ... I reviewed the documents that had been provided to me by Mr Pappas. Those documents included the emails which recorded the calculations preceding the share issue. In the course of that review, I appreciated that a mistake had been made in the issue of the Company's shares.

...

1. For the reasons deposed to above, Zimmermann seeks declarations and orders in accordance with the originating process correcting the share register of the Company accordingly so that Zimmermann and Sandhurst are recorded as the holders of 10% and 90% of the shares in the Company, respectively.

(Emphasis added.)

1. On 5 February 2025, Zimmermann filed a statement of claim in the Johnson Vearings Proceeding.
2. It pleaded, among other things, that on about 8 December 2021, Vearings Lane issued 1,065 ordinary shares to Zimmermann, and repeated the contention made in the originating process and in Johnson's affidavit that a subsequent agreement was made pursuant to which Zimmermann agreed to give back the erroneously issued 65 shares in Vearings Lane to Sandhurst. The relief sought included an order for specific performance requiring Sandhurst to accept the transfer back of 65 shares, and a correction to the register of shareholders pursuant to s 175 of the Corporations Act 2001 (Cth).
3. However, "in the alternative" to the above relief, Zimmermann sought for the first time a declaration that it rightly held 1,065 of the shares in Vearings Lane. No part of the pleading sought to explain how or why that could be so.
4. In their defence dated 2 April 2025, Sandhurst and Vearings Lane denied making any agreement pursuant to which Zimmermann would transfer 65 shares to Sandhurst.
5. Sandhurst and Vearings Lane also took the point that Zimmermann had not alleged any basis for the declaration that, in addition to the claim that the transfer of the extra 65 shares was a mistake, it was nonetheless entitled to keep all 1,065 shares.
6. Sandhurst and Vearings Lane also foreshadowed commencing a proceeding in which they would allege that in the events that occurred Zimmermann had no entitlement to any shares.
7. They subsequently issued such a proceeding (the Sandhurst Vearings Proceeding), in which in substance Sandhurst and Vearings Lane alleged that:

(a) they did not reach a concluded agreement about Zimmermann and/or Johnson having any shares in Vearings Lane; and

(b) Johnson effected the issuing of shares without the knowledge or involvement of the other directors of Sandhurst.

1. In their statement of claim dated 20 June 2025, Sandhurst and Vearings Lane relevantly pleaded as follows:

1. Between around September and October 2021, Johnson had a series of discussions with Costelloe, Lockwood, Duster and Strano (2021 Discussions) to the following effect:

(a) Johnson stated that settlement of [a portion of the Vearings Property] was imminent; > > (b) Johnson stated that he considered that he deserved a higher ownership stake in Vearings Property than that reflected by his ownership stake in Vearings Lane, via his shares in Sandhurst, because he had done all the work in sourcing and securing the Vearings Property without taking any fees and that it was his hard work that had created all of the value in the Vearings Property; > > (c) the others told Johnson that they did not agree, and they did not agree to him having any higher ownership stake in the Vearings Property; > > (d) Johnson reiterated his request for an ownership stake in Vearings Lane; > > (e) Strano asked Johnson whether he would be happy if Sandhurst agreed to give him 10% of Sandhurst's 100% shareholding in Vearings Lane; and > > (f) Johnson responded that he would be happy with that.

PARTICULARS

The 2021 Discussions comprised at least three separate discussions that were either in person between all of Johnson, Costelloe, Lockwood, Duster and Strano at the [Villawood] Group's offices in Southbank or in a separate telephone conversation between Johnson and Lockwood.

...

1. On a date or dates presently unknown but believed by the Applicants to be in about November 2021, Johnson executed:

(a) in his capacity as a director of Sandhurst:

(i) a "consent to be a member and hold shares" in respect of 8,934 ordinary shares in Vearings Lane on and from 1 October 2020;

(ii) an "application for shares" in respect of 8,934 ordinary shares in Vearings Lane;

(b) and in his capacity as a director of Zimmermann:

(i) a "consent to be a member and hold shares" in respect of 1,065 ordinary shares in Vearings Lane on and from 1 October 2020; and

(ii) an "application for shares" in respect of 1,065 ordinary shares in Vearings Lane.

...

1. On or about 28 April 2023, Johnson caused Zimmermann to pay $1,845,203 to Vearings Lane purportedly in respect of the 1,065 ordinary shares in Vearings Lane ...

1. In their defence filed on 12 September 2025, Zimmermann and Johnson relevantly pleaded as follows:

25. As to paragraph 25, they say that:

(a) in around September 2021, Johnson had discussions with the other Core Owners [being Messrs Costelloe, Lockwood, Duster and Strano] about Johnson obtaining a shareholding in Vearings Lane in recognition of his work in identifying and acquiring the Vearings Property and securing its rezoning and the significant value that had thereby been created for the benefit of the Core Owners;

PARTICULARS

The discussions included a meeting between Duster and Johnson in early September 2021 and discussion between the Core Owners at a meeting of the boards of [Villawood] and Sandhurst on 29 September 2021.

(b) on about 27 October 2021, Sandhurst and Johnson agreed that Johnson or his nominated entity would be a 10% shareholder in Vearings Lane, in addition to his interest via Sandhurst's shareholding (the 10% Ownership Agreement);

PARTICULARS

The agreement was oral and comprised discussions between Johnson and the other Core Owners (acting on behalf of their respective entities as shareholders of Sandhurst and on behalf of Sandhurst) at a strategy meeting of the [Villawood] and Sandhurst boards held on 27 October 2021, the material substance of which was to the effect alleged.

(c) subsequently, Sandhurst and Johnson agreed to vary the 10% Shareholding Agreement so that Johnson's nominated entity, Zimmermann Vearings, would be a 10.65% shareholder in Vearings Lane;

PARTICULARS

The agreement to vary was to be inferred from the parties' conduct in and from about December 2021, including as referred to in paragraphs 27 and 30 below.

1. The conduct referred to in paragraphs 27 and 30 was pleaded in their defence as follows:

27. As to paragraph 27, they say that:

(a) in about November and December 2021, Nicholls (CFO of SRL) and Cass (CFO of Sandhurst) instructed Louise Hickman of Ipsum Advisors accountants to prepare documents to effect the issue of shares in Vearings Lane to Johnson's nominated entity, Zimmermann Vearings;

(b) on 8 December 2021, in accordance with the instructions she received from Nicholls and Cass, Hickman provided the following documents:

(i) ASIC Form 484 ["]Change to company details" in respect of Vearings Lane;

(ii) Memorandum of Resolution of the Sole Director of Vearings Lane for the issue of 8,934 shares in Vearings Lane to Sandhurst and 1,065 shares to Zimmermann Vearings;

(iii) Sandhurst's Application for Shares in Vearings Lane in respect of the 8,934 shares;

(iv) Zimmermann Vearings's Application for Shares in Vearings Lane in respect of the 1,065 shares;

(v) Sandhurst's Consent to be a Member and Hold Shares of Vearings Lane in respect of the 8,934 shares;

(vi) Zimmermann Vearings's Consent to be a Member and Hold Shares of Vearings Lane in respect of the 1,065 shares;

(vii) Zimmerman[n] Vearings's Declaration of Trust in respect of shares being held on trust for the Zimmermann Vearings Trust;

(viii) Share Certificate #2 certifying that Sandhurst is the registered holder of 8,934 shares ordinary shares in Vearings Lane;

(ix) Share Certificate #3 certifying that Zimmermann Vearings is the registered holder of 1,065 ordinary shares [in] Vearings Lane;

(c) on about 8 December 2021, Nicholls requested that Johnson sign the said documents;

(d) on about 10 December 2021, Johnson signed and returned to Nicholls the said documents,

and they otherwise admit paragraph 27.

...

30. In response to paragraph 30, they say that:

(a) since about January 2022, in response to requests for payment, Sandhurst and Zimmermann Vearings have contributed funds to Vearings Lane in amounts commensurate with their respective shareholdings in that company which (as at the date of this defence) total as follows:

(i) Sandhurst has contributed $24,124,501 (being 89.35% of total shareholder contributions of $27,000,000); and

(ii) Zimmermann Vearings has contributed $2,875,499 (being 10.65% of total shareholder contributions of $27,000,000).

PARTICULARS

Funds have been contributed as follows:

* These contributions by Zimmermann Vearings (totalling $1,845,203) were credited to Sandhurst on about 3 February 2023 by way of reimbursement of 10.65% of the amounts contributed by Sandhurst to that point in time.

The requests for payment were in writing, contained in emails from Nicholls to Sandhurst and/or Zimmermann Vearings, including:

(i) email from Nicholls to Cass and Beth Johnson dated 7 January 2022;

(ii) email from Nicholls to Cass and Beth Johnson dated 11 January 2022;

(iii) email from Nicholls to Cass and Pappas dated 12 January 2022;

(iv) email from Nicholls to Travis Deans (General Manager of Sandhurst) dated 23 February 2024;

(v) email from Nicholls to Deans dated 7 June 2024.

Further particulars may be provided following discovery.

1. Zimmermann now seeks to amend its statement of claim in the Johnson Vearings Proceeding (which includes the same claim made in paragraph 25(c) of the defence in the Sandhurst Vearings Proceeding), relevantly as follows:

Vearings Lane shareholders and shareholder contributions

7A. On about 27 October 2021, Sandhurst and Johnson agreed that Johnson or his nominated entity would be a 10% shareholder in Vearings Lane, in addition to his interest via Sandhurst's shareholding (the 10% Shareholding Agreement).

PARTICULARS

The agreement was oral and comprised discussions between Johnson and the Core Owners (acting for and on behalf of their respective entities as shareholder of Sandhurst, and of Sandhurst) at a strategy meeting of the [Villawood] and Sandhurst boards held on 27 October 2021, the material substance of which was to the effect alleged.

7B. Subsequently, Sandhurst and Johnson agreed to vary the 10% Shareholding Agreement so that Johnson's nominated entity, Zimmermann, would be a 10.65% shareholder in Vearings Lane.

PARTICULARS

The agreement to vary was to be inferred from the parties' conduct in and from about December 2021, including as referred to in paragraphs 8 and 9 below.

1. On about 8 December 2021, Vearings Lane issued 8,934 ordinary shares to Sandhurst and 1,065 ordinary shares to Zimmermann so that the total shareholdings in the company were (and are) held as follows:

(a) Sandhurst as to 8,935 shares (89.35%); and

(b) Zimmermann as to 1,065 shares (10.65%);

PARTICULARS

The share issue is recorded in the following documents which were prepared by Louise Hickman of Ipsum Advisors (accountants engaged by SRL to advise Vearings Lane) in consultation with Hamish Nicholls (CFO of SRL) and Cass (CFO and secretary of Sandhurst) and then signed by Johnson on 8 about 10 December 2021.

1. Memorandum of Resolution of the Sole Director of Vearings Lane;

2. Sandhurst's Application for Shares in Vearings Lane in respect of 8,934 shares;

   1. Zimmermann's Application for Shares in Vearings Lane in respect of 1,065 shares;
      1. Sandhurst's Consent to be a Member and Hold Shares of Vearings Lane in respect of 8,934 shares;
      2. Zimmermann's Consent to be a Member and Hold Shares of Vearings Lane in respect of 1,065 shares;
      3. Zimmerman's Declaration of Trust in respect of shares being held on trust for the [Zimmermann Vearings Trust];
      4. Share Certificate certifying the issue of 8,934 shares to Sandhurst; and
      5. Share Certificate certifying the issue of 1,065 shares to Zimmermann.

3. Since the share issue on about 8 December 2021, Sandhurst and Zimmermann have contributed funds to Vearings Lane in response to drawdown requests, in amounts commensurate with their respective shareholdings in that company which (as at the date of this amended statement of claim) total as follows:

(a) Sandhurst has contributed $24,124,501 (being 89.35% of total shareholder contributions of $27,000,000); and

(b) Zimmermann has contributed $2,875,499 (being 10.65% of total shareholder contributions of $27,000,000).

PARTICULARS

Funds have been contributed as follows:

(* These contributions by Zimmermann (totalling $1,845,203) were credited to Sandhurst on about 3 February 2023 by way of reimbursement of 10.65% of the amounts contributed by Sandhurst to that point in time.)

The drawdown requests were in writing, contained in emails from Nicholls to Sandhurst and Zimmermann dated 7 January 2022, 11 January 2022, 12 January 2022, 23 February 2024 and 7 June 2024. Further particulars may be provided following discovery.

(1) Sandhurst specifically perform the Share Transfer Agreement by executing all necessary documents to effect the transfer of 65 ordinary shares in Vearings Lane by Zimmermann to Sandhurst;

(2) pursuant to s 175 of the Corporations Act, the register of shareholders of Vearings Lane be corrected so that Zimmermann is recorded as the holder of 1,000 of 10,000 ordinary shares and Sandhurst is recorded as the holder of 9,000 of 10,000 ordinary shares.

1. Alternatively to A, a declaration pursuant to s 21 of the Federal Court Act 1976 (Cth) that Zimmermann holds or is entitled to hold:

(1) 1,065 of the 10,000 issued ordinary shares in Vearings Lane pursuant to the 10% Shareholding Agreement (as varied);

(2) alternatively, 1,000 of the 10,000 issued ordinary shares in Vearings Lane pursuant to the 10% Shareholding Agreement.

1. I heard the interlocutory applications together on 20 November 2025. Mr Hutley SC appeared with Mr P H Wallis KC and Mr W Newland of counsel for the defendants in the Johnson Vearings Proceeding and for the applicants in the Sandhurst Vearings Proceeding. Mr J S Graham KC appeared with Ms C J Dawes of counsel for the plaintiff in the Johnson Vearings Proceeding and for the respondents in the Sandhurst Vearings Proceeding. As I have already mentioned, the issue that arose on both applications was the same.
2. The submissions that Mr Graham advanced on behalf of Johnson and Zimmermann in support of what I will call the "10.65% Ownership Agreement" were concerned principally with the proposition that the relevant pleas were not foreclosed by the "admissions" contained in Johnson's affidavit.
3. I was taken at some length to cases about the objective theory of contract, whether evidence of matters subsequent to the formation of an alleged contract must be confined to conduct and communications known to both parties, and whether such evidence may include uncommunicated acts or facts (for example, subsequent admissions by a party of the existence or non-existence of a contract or of a fact relevant to that issue).
4. It is not necessary to burden these reasons with a consideration of those matters, because Sandhurst does not principally rely on anything Johnson said in his affidavit as an admission. It rather contends that the plea in paragraph 7B of the proposed amended statement of claim in the Johnson Vearings Proceeding, and the cognate part of the defence in the Sandhurst Vearings Proceeding, is inarguable because:

(1) the only term of any contract pleaded in paragraph 7A was that Johnson or his nominee would be a 10 per cent shareholder in Vearings Lane;

(2) by either 8 or 10 December 2021, on its own case and as Johnson swore in his affidavit, Zimmermann had become at least a 10 per cent shareholder in Vearings Lane;

(3) the contract as pleaded was therefore fully performed by both parties, such that as a matter of law it could not thereafter be "varied", rendering the plea in paragraph 7B (and the cognate plea in the defence in the Sandhurst Vearings Proceeding) a legal nonsense.

1. With respect, that submission must be accepted, and it is sufficient to make the orders sought by the Sandhurst parties in both proceedings.
2. Mr Hutley also submitted that because Johnson swore in his affidavit that until September or October 2024 he was unaware that he (or his entity Zimmermann) had other than a 10 per cent interest in Vearings Lane, he:

(a) was necessarily ignorant of the subject matter of the alleged 10.65% Ownership Agreement; and

(b) must necessarily have had no intention to enter into a contract in the form pleaded in paragraph 7B of the proposed amended statement of claim.

1. Mr Hutley submitted that the plea is also hopeless because all the evidence (including, in particular, Johnson's own evidence in his affidavit) is that Sandhurst: (i) had no knowledge of the transfer to Zimmermann of the additional 65 shares; and (ii) could not have intended by its conduct to enter into the alleged 10.65% Ownership Agreement. As Mr Hutley put it (and I agree):

... But unless my learned friend says his witness should not be accepted, that's what his sworn evidence is. He was utterly ignorant of this. So that's why we say, when you go back through it, and he's repeated it over and over ... he did not prepare the documents, erroneously recorded me as a shareholder. ... "I did not recognise when I signed the documents that they exceeded 10 per cent", etcetera. In other words, he says at all material times, I believed up until September 2024, I only had 10 per cent. Therefore, it's impossible that he had an intention to vary the contract, impossible on his sworn evidence. And therefore, to run this case, they must have to allege, true it is we had no intention, but the respondent, my client Sandhurst, had an intention to contract. They don't allege that. There is absolutely no evidence in favour of it, and all the evidence is to the contrary. And we say in that situation, this is unpleadable ... It shouldn't be allowed.

...

And your Honour doesn't have - and nothing I've put here is anything inconsistent with any of the cases my learned friend has taken you to. We just say, in effect, that's the position here. It's the unique case of a contract on the basis of conduct. The proponent of the contract gives sworn evidence, which - utterly inconsistent with it having the intention, and put before you as evidence - they put before you evidence from my client which is utterly inconsistent with my client having the intention to do it. And yet they say they can plead it. Your Honour, it is arch. It is, in my respectful submission, inarguable on the materials before your Honour and shouldn't be allowed.

1. Where it is sought to be proved that a contract is to be inferred from conduct, the parties' conduct must reveal an understanding or agreement or a manifestation of mutual assent, which bespeaks an intention to be legally bound to the essential elements of a contract. See, by way of example only, Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424 at 525 [369] (Allsop J). And the character and circumstances of the conduct must indicate unambiguously that the parties intended to contract. See, by way of example only, Laidlaw v Hillier Hewitt Elsley Pty Ltd [2009] NSWCA 44 at [5] (MacFarlan JA, with whom Beazley JA agreed).
2. It is obviously not possible to plead an agreement by conduct (by which conduct the parties "unambiguously" intended to agree to a transfer of 10.65% of the shares) whilst at the same time pleading that the parties did not have that intention because they had another wholly inconsistent intention (namely, to agree to a transfer of only 10% of the shares). Yet that is precisely what Johnson and Zimmermann propose.
3. For those reasons, I will make the following orders in the Johnson Vearings Proceeding:

(1) The plaintiff have leave to file an amended originating process and an amended statement of claim in the form of the drafts annexed to the affidavit of Michael Tandora dated 3 October 2025, save for paragraph 2(a) of the amended originating process, paragraph 7B of the amended statement of claim and paragraph B(1) of the prayer for relief.

(2) The plaintiff pay the defendants' costs of the plaintiff's interlocutory application dated 3 October 2025.

1. I will also make the following orders in the Sandhurst Vearings Proceeding:

(1) Pursuant to rule 16.21(1)(c) to (f) of the Federal Court Rules 2011 (Cth) and section 37M of the Federal Court of Australia Act 1976 (Cth), paragraph 25(c) of the respondents' defence dated 12 September 2025 be struck out.

(2) The respondents pay the applicants' costs of the applicants' interlocutory application dated 10 October 2025.

I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice O'Callaghan.

SANDHURST RETAIL & LOGISTICS PTY LTD (ACN 622 437 030)