Chetwynd v Rose - [2020] NSWSC 111

Supreme Court

New South Wales

Medium Neutral Citation: Chetwynd v Rose [2020] NSWSC 111
Hearing dates: 20, 22 March 2017; 4, 5, 6, 7, 26, 27 April 2017; 24 August 2017; 15, 16, 17 October 2018; further written submissions 22 October, 6 December 2018, 21 January 2019
Decision date: 21 February 2020
Jurisdiction: Equity
Before: Kunc J
Decision:
Armidale property held by defendant in trust for herself and natural plaintiffs; some adjustments and liabilities established by the natural plaintiffs against the defendant and vice versa.

Catchwords: EQUITY — Trusts and trustees — Resulting trusts — No issue of principle — Dispute as to ownership of assets and related obligations at conclusion of longstanding but undocumented quasi-partnership — Plaintiffs attempt to undo longstanding accounting treatment of the relationship between the parties
Legislation Cited: Conveyancing Act 1919 (NSW)
Corporations Act 2001 (Cth)
Evidence Act 1995 (NSW)
Supreme Court Act 1970 (NSW)
Cases Cited: Arrow Custodians Pty Ltd v Pine Forests of Australia Pty Ltd [2008] NSWSC 839; (2008) 14 BPR 149
Australian Securities & Investment Commission v Healey (No 2) [2011] FCA 1003
Australian Securities and Investments Commission v Vines [2005] NSWSC 1349
Aytul Ak-Tankiz v Ferat Ak & Ramazan Ak [2014] NSWSC 1044
Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336
Calverley v Green [1984] HCA 81; (1984) 155 CLR 242
Chamberlain (t/as capacity as liquidator of Gerard Cassegrain and Co Pty Ltd (in liq)) v Cassegrain [2015] NSWSC 1838
Cubillo v Commonwealth of Australia (No 2) [2000] FCA 1084; (2000) 103 FCR 1
Forgeard v Shanahan (1994) 35 NSWLR 206
Fulton v Fulton [2014] NSWSC 619
Maria Saravinovksa v Krste (Chris) Saravinovski; Chris Saravinovski v George Saravinovski (No 6) [2016] NSWSC 964
Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692
Napier v Public Trustee (1980) 32 ALR 153
Re Fettell (1952) 52 SR (NSW) 221
Sangha v Baxter [2009] NSWCA 78
Steinberg v Federal Commissioner of Taxation [1975] HCA 63; (1975) 134 CLR 640
Tory v Tory [2007] NSWSC 1078
Vendervell v Inland Revenue Commissioners [1967] 2 AC 291
Vines v Australian Securities and Investments Commission [2007] NSWCA 75; (2007) 73 NSWLR 451
Warner v Hung, in the matter of Bellpac Pty Ltd (Receivers and Managers appointed) (In liquidation) (No 2) [2011] FCA 1123; (2011) 297 ALR 56
Watson v Foxman (1995) 49 NSWLR 315
Whitehead v Whitehead [2002] NSWSC 486
Category: Principal judgment
Parties:
Brian Chetwynd (First Plaintiff)
Jill Chetwynd (Second Plaintiff)
Wincot Pty Ltd (Third Plaintiff)
Glynis Rose (Defendant)
Representation:
Counsel:
B Chetwynd (Litigant in person, for himself, J Chetwynd and Wincot Pty Ltd)

H Stowe (Defendant)
Solicitors:
Fishburn Watson O’Brien (Defendant)

File Number(s): 2015/223303
Publication restriction: No

Judgment

Summary

These proceedings concern what has become a bitter dispute between three people who had been close friends and business colleagues for more than 35 years: the first and second plaintiffs, Brian and Jill Chetwynd, and the defendant, Glynis Rose. Without any disrespect, I shall refer to the parties by their given names and to the first and second plaintiffs jointly as the “Chetwynds”.
The lack of documentation of their relationship was a sign of their deep trust in each other. Regrettably, that same lack of documentation has led to this complex and lengthy litigation. A particularly unfortunate aspect of this case is that it has marred several years of what should otherwise have been well-earned retirement years for each of the parties.
The nub of the dispute is about the ownership of a property in Armidale which has been the Chetwynds’ family home (the “Armidale Property”). The Armidale Property was purchased in 1993 and, pursuant to an arrangement between the parties, Glynis was recorded as the registered proprietor. The Chetwynds contend that Glynis holds the Armidale Property on trust for them and that it cannot be sold without their consent. Glynis’ case is that, in accordance with a longstanding “three way split” agreement, she holds the Armidale Property for the three of them, and that she is entitled to orders for its statutory sale over the objection of the Chetwynds, and to one-third of the proceeds. This issue was primarily ventilated during 2017 across a nine day hearing with additional hearings to resolve interlocutory disputes (the “2017 hearing”).
While judgment on the 2017 hearing was reserved, the Chetwynds caused fresh proceedings to be commenced in January 2018 by Wincot Pty Ltd (“Wincot”) against Glynis based on the same facts. Those proceedings alleged that the Armidale Property was held on trust for Wincot, which had been the corporate vehicle for the relationship between the parties. With Glynis’ consent, these proceedings were re-opened on terms in 2018 for a further three day hearing with Wincot added as the third plaintiff (the “2018 hearing”) and the Court’s consideration of the 2017 hearing was suspended pending the conclusion of the 2018 hearing.
In addition to the question of the beneficial ownership of the Armidale Property, the case also expanded into a vociferous attack on Glynis’ integrity and the accuracy of the accounts for Wincot which Glynis had maintained as bookkeeper. That attack extended to Wincot’s longstanding external accountant, Mr William (“Bill”) Herd, who provided accounting services to Wincot from the 1990s until December 2013. Brian presented a substantially reworked set of accounts that he had prepared, which he invited the Court to accept as being an accurate statement of what he said was the “true position”.
In both the 2017 hearing and the 2018 hearing, Brian represented himself, his wife Jill and the third plaintiff Wincot. Mr H Stowe of Counsel appeared for Glynis.
These proceedings bear a considerable similarity to the type of case described by the former Chief Judge in Equity, Young J (as his Honour then was), in Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692 at 694-695:

“Unfortunately, it very often happens in cases in this court that a person has arranged his affairs for commercial or fiscal reasons employing a particular structure, which with respect to creditors and the Government he expects to be recognized as no sham, but when it comes to a dispute with his former wife or former business associates it is not in his interests to maintain the structure and he pleads before this Court that one must not look at the structure at all but rather at the “realistic” or “practical” effect of what has happened. I do not find this sort of submission attractive. So long as the law permits people to erect structures which have meaningful legal consequences then if a person elects to erect such a structure he must take the consequences of such erection for better, for worse, for richer or poorer, in commercial sickness or commercial health.”

Primarily based on Brian’s own documents produced before there was any dispute between the parties, the Court is well satisfied that the arrangement between the parties was that Glynis was to hold the Armidale Property for herself, Brian and Jill and that there was no agreement that sale required unanimous consent. My note during the 2017 hearing when Brian sought to explain away those documents was that his explanations were unconvincing. A close review of those documents and of the transcript of the hearing has fortified me in that conclusion. During some of Brian’s attempted explanations during the 2017 hearing I was left with the strong impression that I was not sure whether even Brian really believed them himself.
Similarly, during the 2018 hearing and after many days of seeing him present his case in Court over two years, I noted him to be a strong character, articulate and intelligent. Those very qualities made his efforts to explain accounting and other evidence that was unhelpful to his case as something he did not know about or did not understand as completely unpersuasive.
Brian’s allegations against Glynis became increasingly strident. He sought to paint her as a scheming and deceptive individual who, in concert with Mr Herd and completely unbeknownst to the Chetwynds, constructed the accounts of Wincot to her own advantage and thereby breached the complete and unquestioning trust which they had placed in her. For the reasons developed in this judgment, the Court rejects that characterisation as completely unfair and inaccurate in relation to both Glynis and Mr Herd.
At the 2018 hearing, the Chetwynds relied on the evidence of an expert accountant, Mr Andrew Kirk. Mr Kirk had been retained “to look over some of the [Wincot] transactions and provide my expert opinion as to the accounting process and/or the effect of a particular book entry”. Mr Kirk’s evidence was of no real probative value or assistance to the Court. It made no reference to any applicable accounting standards and essayed no views on whether the accounts appeared to comply with those standards. He had not been provided with a copy of Mr Herd’s evidence as to the basis of the preparation of Wincot’s accounts and why Mr Herd had treated particular matters in the way he had in those accounts. Mr Herd’s evidence therefore stood unchallenged by any contrary expert evidence.
With no disrespect intended, Mr Kirk’s evidence was little more than informed speculation based on his interpretation of certain accounting entries. In fairness to him, his conclusions, such as they were, were understandably (and properly) qualified to the effect that something “could” be the case, or that “it did not seem unreasonable to suggest” something. Mr Kirk was not cross-examined, on the basis of an agreement between the parties that Glynis’ election not to cross-examine Mr Kirk would not preclude her from submitting that Mr Kirk’s evidence should not be accepted by the Court.
The Court’s conclusions may be summarised as follows:

Glynis holds the Armidale Property on trust for each of herself, Brian and Jill in equal shares.

There is no agreement between the parties that the Armidale Property cannot be sold without their unanimous agreement and Glynis is therefore entitled to an order for the statutory sale of the Armidale Property unless the parties are able to agree upon some other solution before the Court makes those orders.

On any sale of the Armidale Property, Glynis is entitled to an adjustment in her favour of $100,679.04 for disproportionate contributions made by Glynis for the vendor finance repayments for the Armidale Property.

Glynis owes the Chetwynds $15,953 for dividend payments that they should have received but did not.

There should be a declaration that the Chetwynds are entitled to have their loan account in the books of Wincot adjusted by $53,740 being deducted from Glynis’ loan account and a corresponding credit being made to the Chetwynds’ loan account.

There is an outstanding claim by the Chetwynds for interest at Supreme Court rates on an amount of approximately $70,000 that was held for them by Glynis which she paid during the course of these proceedings. If that claim is still pressed, the Court will give directions for short written submissions to be exchanged as the point has not been the subject of argument. Those submissions will also extend to any claim made for interest in relation to any of the other amounts referred to in these sub-paragraphs.

Save as set out in this summary paragraph, all of the other claims brought by the Chetwynds against Glynis fail.

Procedural history

It is necessary to set out the long and complex procedural history of this litigation.
These proceedings were first commenced by summons on 30 July 2015. The proceedings were largely focussed on the beneficial ownership of the Armidale Property which was purchased through an arrangement between the parties. The Armidale Property was legally owned by Glynis, however occupied by Brian and Jill as their home. Under this summons, the Chetwynds claimed the following relief:

“1. A declaration that the Defendant holds the property commonly known as XX Balgownie Drive, Ben Venue NSW located in Lot XXX in Deposited Plan XXXXX X (Property) on trust for the First and Second Plaintiffs.
2. An order that the Defendant is to transfer the Property to the First and Second Plaintiffs for a value to be determined by the Court.
3. A declaration that the Defendant breached her agreement with the Plaintiffs.
4. Damages.
5. Costs.
6. Interest on costs.
7. Such other orders as the Court thinks necessary.”

Based on this original summons, it was clear the main issue to be determined was the beneficial ownership of the Armidale Property. Despite all the subsequent vicissitudes of these proceedings, that did not change.
On 21 August 2015, the proceedings were first listed for directions before Darke J. Orders were made for evidence to be filed by the Chetwynds by 21 September 2015. At this stage, both parties had legal representation.
On 15 September 2015, the Court was informed that due to the ill health of Brian and his hospitalisation, evidence for the Chetwynds would not be filed on time.
The Court subsequently made orders on 16 September 2015 extending the time for the Chetwynds to serve any evidence, including expert evidence and also granted leave to Glynis to file a cross-claim by 18 September 2015.
On 24 September 2015, Glynis filled a cross-summons. The relief sought in the cross-summons related directly to the Armidale Property. Glynis sought an order pursuant to s 66G of the Conveyancing Act 1919 (NSW) (the “CA”) that the Armidale Property be sold, trustees be appointed as trustees of the land on statutory trust for sale, and the proceeds of that sale be divided between the three beneficiaries of the Armidale Property, being the Chetwynds and Glynis.
On 28 October 2015, a further directions hearing was held before Darke J in which the timetable to prepare and file evidence was extended.
On 4 December 2015, orders were again made by Darke J setting out a timetable for the Chetwynds to serve evidence in reply.
On 5 February 2016, Darke J made orders which extended the time for the Chetwynds to serve evidence.
On 4 March 2016, Darke J made orders which extended the time for the Chetwynds to serve evidence.
On 4 May 2016, the proceedings were listed for mediation by the Equity Registrar which was to be held on 22 June 2016.
On 14 June 2016, Stevenson J made orders extending the time by which the mediation was to take place to 5 August 2016. Further orders were also made extending the time for the Chetwynds to serve their evidence, and for the matter to proceed by way of statement of claim.
On 2 August 2016, a court-annexed mediation was held before the Equity Registrar. The mediation was unsuccessful.
On 10 August 2016, the matter was stood over to allow the parties to continue settlement discussions which continued from the court-annexed mediation.
On 31 August 2016, the proceedings were again stood over at the request of the parties.
On 21 September 2016, orders were made which listed the matter before me for hearing in March 2017.
On 2 February 2017, Mills Oakley filed a notice of ceasing to act for the Chetwynds.
While the initial dispute was limited to the Armidale Property, it soon became evident that the Chetwynds sought to ventilate additional grievances.
On 16 March 2017, the legal representatives for Glynis wrote to the Chetwynds:

“To facilitate the resolution of all matters presently in dispute between the parties, we have received instructions to draft and present for your consideration an amended summons which provides for the ventilation of all claims by you against Wincot, and by Wincot against Glynis, and by you against Glynis in relation to broader partnership claims, which we understand you raised at the mediation (and expressed an intention of pressing) … If you still wish to proceed with the ventilation of all of the claims, our client is willing to consent to leave being granted to you to file and serve that amended summons.”

Despite it becoming clear that there were additional issues which the Chetwynds wished to press, and the offer presented by Glynis’ legal representatives to draft an amended summons, the Chetwynds did not amend their summons or provide further pleadings in relation to these additional grievances.
On 16 March 2017, four days before the hearing was set to begin, the Chetwynds served an affidavit of Brian which annexed what purported to be adjusted accounts of Wincot for the period from 1989 to 2012. These accounts did not appear to be linked to the relief sought in the summons which had initially been filed to commence the proceedings.
Following the Chetwynds serving Brian’s latest affidavit which annexed the adjusted accounts for Wincot, Glynis withdrew her offer to draft the amended summons.
On 20 March 2017, what was meant to be the first day of the 2017 hearing, I invited the Chetwynds to articulate the claims which they wished the Court to decide. I was shown the disjuncture between the original summons filed by the Chetwynds and the evidence they were intending to present to the Court.
Additionally, at the time the matter was heard on 20 March 2017, I asked the Chetwynds whether Wincot should be joined as a party to the case:

“If there are Wincot questions that need to be resolved and that can be fairly resolved in the time we have available, then I will do it if the parties choose to present those issues to me.”

The Chetwynds declined to add Wincot as a party.
At the conclusion of the hearing on 20 March 2017, I made the following order:

“Directs that by 9am on Tuesday, 21 March 2017, the Plaintiffs inform the Defendant in writing those particular money claims or adjustments which the Plaintiffs wish the Court to determine in this Hearing including specifying who – in the view of the Plaintiffs – the proper Claimant for each such claim is.”

On 21 March 2017, the Chetwynds sent the following email to Glynis’ legal representatives clarifying the claims they were bringing against Glynis (emphasis added):

“We hereby notify you in writing of the following claims and adjustments:
(a) Claim for $74,082.75 plus interest, held in the Commonwealth Bank in Coffs Harbour by the Defendant.
(b) The amount is held in trust by the Trustee – Glynis Rose.
(c) The Claimants are the First Plaintiff – Brian Chetwynd and the Second Plaintiff – Jill Chetwynd, as the sole beneficiaries.
(d) The source of the funds was the sale of the property at 10/11 Harriette St Neutral Bay in October 2010 for $430,000.00
(e) Please refer to the affidavit of Glynis Rose dated 3rd December 2015, paragraphs 79 to 91 inclusive.
Please be advised that Wincot Pty Ltd was in essence a conduit for the transactions relating to the purchase of the property in Armidale and to this extent, those transactions referenced in these proceedings, thereto should still remain part of these proceedings.”

On 21 March 2017, Glynis replied to the Chetwynds’ email:

“We confess to being somewhat confused by your response below, and uncertain as to what claims you seek to ventilate in the proceedings (both in your individual capacity, and on behalf of Wincot in your capacity as directors of Wincot).
However, we assume that:
1. The Plaintiffs press their claim that the Defendant holds the Armidale Property on trust for the Plaintiffs exclusively;
2. The Plaintiffs intend to press a claim for “adjustment” under section 66G in relation to the “purchase of the property in Armidale”, in respect of which you state: “Please be advised that Wincot Pty Ltd was in essence a conduit for the transactions relating to the purchase of the property in Armidale and to this extent, those transactions referenced in these proceedings, thereto should still remain part of these proceedings”. We remain very uncertain about what claims you contend comprise “those transactions referenced in the proceedings.” There are a large number of transactions referenced in the proceedings, and we do not know which of those transactions you contend should be the subject of adjustment. However, we note that in paragraph 30 of Mr Chetwynd’s affidavit dated 16 March 2017 you set out the “source of funds from which my wife and I paid for the Property”. We assume that the “transactions relating to the purchase of the property” to which you refer are the transactions set out in that paragraph 30, and that there are no other “transactions” in respect of which you seek to press a claim in these proceedings;

3. The plaintiffs do not propose to press general partnership claims, unrelated to the purchase and ownership of the Armidale Property;
4. In their capacity as directors of Wincot Pty Ltd, the Plaintiffs do not intend to press claims on behalf of Wincot against the Defendant, or against Wincot.
Please let us know if our assumptions are correct. If they are not correct, please set out with specificity:
1. The party which makes the claim;
2. The party against whom the claim is made;
3. The nature of the claim;
4. Whether the claim is pressed as a:
a. Claim by the Plaintiffs against Ms Rose, in relation to the purchase and ownership of the Armidale Property, giving rise to an “adjustment” under section 66G;
b. Claim by the Plaintiffs against Ms Rose, in relation to their general partnership dealings;
c. Claim by Wincot against Ms Rose;
d. Claim by the plaintiffs against Wincot.”

On 22 March 2017, leave was granted to Glynis to file an amended cross-summons. In addition to the s 66G order, she sought the following payments:

“4(c) Thirdly, payment of the following sums to the Cross-Claimant: ~~the balance to the Trust Parties in the Trust Shares~~
i. $100,679, in respect of disproportionate contributions made by the Cross-Claimant (relative to the First and Second Plaintiff) in relation to repayment to Wincot Pty Ltd of amounts advanced by Wincot Pty Ltd to facilitate the purchase of the Land;
ii. $96,482, in respect of disproportionate contributions made by the Cross-Claimant (relative to the First and Second Plaintiff) in relation to repayment of vendor finance of the purchase of the Land.
d) Fourthly, the payment of the balance of the Trust Parties in the Trust Shares.”

On 22 March 2017, I vacated the hearing set down between 22 and 25 March 2017, and relisted it before me for hearing in April 2017. The Chetwynds were to serve any draft amended summons by 29 March 2017.
On 4 April 2017, the Chetwynds sought leave to file and serve an amended summons which added eight additional claims. These claims were:

“3. A declaration that the Defendant has breached the trust and her agreement with the First and Second Plaintiffs in relation to the Armidale Property and that the Defendant account to the First and Second Plaintiffs for any financial benefit that she may have received as trustee of the Armidale Property, of which the particulars are:
a)   A breach of trust and her fiduciary duty.
b)   Using the trust property for her own financial benefit.
c)   Failure to account to the Plaintiffs for the income and expenses of the trust.
4. A declaration that the Defendant held the property commonly known as 10/XX Harriette Street, Neutral Bay New South Wales being Lot X SP XXXX (“Neutral Bay Property”) on trust for the First and Second Plaintiffs and the Defendant in equal shares.
5. A declaration that the Defendant has breached the trust and her agreement with the First and Second Plaintiffs in relation to the Neutral Bay Property, of which the particulars are:
a) A breach of trust and a breach of her fiduciary duty.
b) Using the trust property for her own financial benefit.
c) Failure to account to the Plaintiffs for the income and expenses of the trust.
d) Failure to act impartially and treat all beneficiaries equally.
e) An Order that the Defendant pay to the First and Second Plaintiffs, the sum of $43,872.67 being two thirds of the net amounts of the rental received for the period 1991 to 2001, plus interest at the Supreme Court rates of $222,517.40.
6. A declaration that the Defendant is holding the sum of $74,082.75 in trust for the First and Second Plaintiffs in the Commonwealth Bank Coffs Harbour NSW and the particulars are:
a) A breach of trust and a breach of her fiduciary duty.
b) Failure to pay to the Plaintiffs on demand, the monies held in trust.
c) An Order that the Defendant pay to the First and Second Plaintiffs the sum of $74,082.75 plus interest at the Supreme Court rates to the First and Second Plaintiffs.
7. An Order that the Defendant pay to the First and Second Plaintiffs the sum of $30,193.10, being monies owed by the Defendant to the First and Second Plaintiffs, of which the particulars are:
a)The sum of $3,738.66 being one third of the renovation costs paid by the Plaintiffs for the Neutral Bay Property, plus interest at the Supreme Court rates.
b) The sum of $5,437.00, being monies advanced by the Plaintiffs to the Defendant, plus interest at the Supreme Court rates.
c) The sum of $8,039.00, being one third of the rental costs paid by the Plaintiffs for the storage shed in Armidale and guaranteed to be paid by the Defendant, plus interest at Supreme Court rates.
d) The sum of $12,942.34, being one third of the rental and hire purchase costs paid by the Plaintiffs for a Xerox machine and guaranteed to be paid by the Defendant, plus interest at the Supreme Court rates.
8. That in the event that the Court determines that the Defendant holds the Armidale Property for three beneficiaries (which is not admitted) then pursuant to paragraph 3 herein, the Defendant pay to the First and Second Plaintiffs two thirds of the alleged rental received by the Defendant, the particulars of which are:
a) The amount of $47,093.33, being two thirds of such alleged rental.
b) The amount of $205,168.89, being interest at the Supreme Court rates.
9. That in the event that the Court determines that the Defendant holds the Armidale Property for three beneficiaries (which is not admitted), then the Defendant pays to the First and Second Plaintiffs the amount of $55,000.00, plus interest at Supreme Court rates, being monies paid by the First and Second Plaintiffs that should have been repaid by the Defendant, or applied to the payment of the Armidale Property.
10. That in the event that the Court determines that the Defendant holds the Armidale Property for three beneficiaries (which is not admitted), then the Defendant pay to the First and Second Plaintiffs the amount of $16,906.67, plus interest at Supreme Court rates, being divided monies owed to the First and Second Plaintiffs, that should have been repaid by the Defendant, or applied to the payment of the Armidale Property.”

As can be seen, the case had evolved into much more than seeking a declaration that the Armidale Property was held on trust for the Chetwynds. However, notwithstanding that increase in the number of issues, the Chetwynds did not seek an order relating to the general accounting of Wincot or an order for the accounting of the relationship between them generally.
Glynis consented to leave being granted to the Chetwynds to file the amended summons.
I subsequently heard the matter on 4, 5, 6, 7, 26 and 27 April 2017. At the conclusion of hearing all of the evidence, I set out a timetable for the filing of written submissions and a final day to hear oral submissions.
On 5 June 2017, the Court was notified that Brian had been unwell and that he sought to extend the time for the filing of written submissions. I made an order to that effect. The written submissions provided by both parties were very extensive and detailed. The total submissions received amounted to over 320 pages and included detailed argument in relation to individual entries in Wincot’s accounts.
On 24 August 2017, I heard the final oral submissions for the 2017 hearing. At the conclusion of the hearing, I reserved the Court’s judgment.
On 19 January 2018, my chambers received an email stating that Wincot had commenced separate proceedings against Glynis on 18 January 2018. Those proceedings arose out of the same facts as has been the subject of the 2017 hearing. Each of the individual claims pressed in the new proceedings related to transactions which were the subject of the adjusted accounts that had been served with Brian’s affidavit on 16 March 2017.
On 15 February 2018 Glynis filed a motion to stay permanently the new proceedings as an abuse of process. She argued that a new set of proceedings should not be allowed to be commenced because the issues should have been pressed during the 2017 hearing, and the Chetwynds should have added Wincot as the third plaintiff as they had been invited to do.
On 19 February 2018, the matter was bought before me for directions, where the hearing of Glynis’ motion was adjourned to 5 March 2018.
On 5 March 2018, orders were made by consent reflecting a regime proposed by Glynis. The orders granted the Chetwynds leave to amend the summons to join Wincot to these proceedings and pursue the additional relief sought on behalf of Wincot. This was done on the following conditions:

That Wincot claim the same relief as it had pressed in the new set of proceedings;

A mutual release had to be signed between Wincot, Brian, Jill and Glynis releasing each other from any other claims. That release was expressed in the following terms:

“In consideration of Ms Rose’s consent to the amendment referred to in paragraph 1(b) above, we hereby unconditionally agree to terms of agreement that each of:
(a) Wincot Pty Ltd, Brian Chetwynd and Jill Chetwynd (on the one hand), in any capacity, and
(b) Glynis Rose (on the other hand), in any capacity, release each other from any claims, however arising, whether or not the claims are now known by the parties, arising from any dealings between the parties, except to the extent that those claims comprise claims pressed by any party in the summons in force as at 30 April 2018 in each of Supreme Court Proceedings 2015/223303 or 2018/20283”

That Wincot utilise the existing evidentiary record from the 2017 hearing.

The mutual releases were to be signed by 19 March 2018. The parties were agreed that I should hear the amended claim and that in order to do so without suggestion of prejudgment, I would defer further consideration of the matters raised in the 2017 hearing until after the hearing of the claim that was to be amended to include Wincot.
A timetable was also set for the Chetwynds to put on any further evidence in relation to the new claims by Wincot:

“PLAINTIFF (BRIAN): I would like to do that, your Honour, and the reason I would like to do that, and the reason I said the end of June - I mean I did propose that I could have a substantial part of the evidence, I believe, presented to the defendant before mid-April, which is when my wife and I are going to Western Australia for some weeks.
And the issue of the expert evidence, I have had a meeting with the proposed person, who is an accounting principal of a large firm and he has taken a cursory look over some of the evidence and given me a timeframe he believes that, I think, would occupy possibly four to five weeks of backwards and forwards. It was a very brief meeting and the person is now currently overseas and won’t be back until, I think, later this month. So that is when I will sit down and go through it in detail.
What I would be seeking to do, and seeking leave to do this, is to be able to present my evidence without it being guillotined once and for all.
HIS HONOUR: I think that is what everyone wants, but you have to commit to a time by which you do it.
PLAINTIFF: I have said the end of June. The reason is that that way it would be impossible for me to come back and stand before this court and ask for any extension.
HIS HONOUR: Can we just write that in big letters?
PLAINTIFF: Yes, you can.
HIS HONOUR: I am deadly serious.
PLAINTIFF: Yes, I am.
HIS HONOUR: If you are going to say 30 June and not ask for an extension, you are raising your petard and risk being hoisted on it.
PLAINTIFF: I will nail it to the mast and say the end of June is appropriate for me. I have given it a good deal of thought. We went to Coffs Harbour and had a good discussion with the solicitor, which is summed up in the affidavit.”

It was ultimately agreed that the Chetwynds would have until 20 April 2018 to serve any lay evidence, and until 29 June 2018 to serve any expert evidence.
On 19 March 2018, the Chetwynds emailed Glynis:

“I refer the [sic] Short Minutes of Order dated 5th March 2018 and His Honour’s Order of same.
Please be advised that in accordance with paragraph 3 therein and after much consideration we have decided not to consent to the Deed of Release as proposed in paragraph 2 a) and b).
Please note that the above statement applies to both Brian and Jill Chetwynd, as well as Wincot Pty Ltd.”

On 4 April 2018 the matter was before me again for directions. Consent orders were made vacating the orders made on 5 March 2018 and provided leave to amend the summons and include Wincot as a plaintiff. Again, this was conditional upon the parties signing the mutual releases. The date for the Chetwynds to sign the release was 29 June 2018. The purpose of extending the date to 29 June 2018 was to allow the Chetwynds ample time to consider whether they wished to agree to the mutual releases and to allow Glynis liberty to oppose leave to amend if the release was not signed.
The Chetwynds also sought an extension to put on further lay evidence until 29 June 2018. This was despite the exchange which had taken place as reproduced in paragraph [56] above. Glynis consented to that extension being granted.
The Chetwynds subsequently filed a further amended summons on 4 June 2018, which added Wincot as the third plaintiff to the proceedings and incorporated the claims pressed on behalf of Wincot.
Under the further amended summons, the plaintiffs (being the Chetwynds and Wincot) also made the following additional claims:

“2. In the alternative, a declaration that the Defendant holds the property commonly known as “Kalina” XX Balgownie Drive, Ben Venue (Armidale) New South Wales 2350 being Lot XXX in Deposited Plan 755808 (“Armidale Property”) on trust for the Third Plaintiff.
…
4. In the alternative, an order that the Defendant is to transfer the Armidale Property to the Third Plaintiff.
5. A declaration that the Defendant has breached the trust and her agreement with the First, Second and Third Plaintiffs in relation to the Armidale Property and that the Defendant account to the First, Second and Third Plaintiffs for any financial benefit that she may have received as trustee of the Armidale Property, of which the particulars are:
a) A breach of trust and her fiduciary duty.
b) Using the trust property for her own financial benefit.
c) Failure to account to the Plaintiffs for the income and expenses of the trust.
6. A declaration that the defendant account to the Third Plaintiff (or the Plaintiffs generally) for any financial benefits she may have received in her capacity as trustee of the Armidale Property.
…
8. A declaration that the Defendant has breached the trust and her agreement with the First, Second and Third Plaintiffs in relation to the Neutral Bay Property, of which the particulars are:
a) A breach of trust and a breach of her fiduciary duty.
b) Using the trust property for her own financial benefit.
c) Failure to account to the Plaintiffs for the income and expenses of the trust.
a) Failure to act impartially and treat all beneficiaries equally.
d) [sic] An Order that the Defendant pay to the First and Second Plaintiffs, the sum of $43,872.67 being two thirds of the net amount of the rental received for the period 1991 to 2001, plus interest at Supreme Court rates of $222,517.40.
e) In the alternative that the Defendant pay to the Third Plaintiff the sum of $65,908.00 plus interest at the Supreme Court rates.
…
11. A declaration of contravention of Section 180 (1) and (2) of the Corporations Act 2001, by the Defendant, in that the Defendant did not:
a) Act in good faith for a proper purpose and with care and diligence in respect of the books of account of the Third Plaintiff, for which the Defendant had the responsibility so to do.
b) Avoid improper use of the Third Plaintiff’s information, or avoid improper use of the Defendant’s’ position, in that the Defendant cause or made improper and misleading entries in the Third Plaintiff’s books of account and did not disclose certain interests in regards thereto.
c). Make business judgments in good faith and for proper purpose and did have or may have had a personal interest in the subject matter therein.
12. A declaration of contravention of Section 181 (1) and (2) of the Corporations Act 2001 by the Defendant, in that the Defendant did not:
a) Discharge the duties of the Defendant as a Director and act in good faith for the benefit of the Third Plaintiff and in the best interests of the Third Plaintiff (and / or the Plaintiffs generally), in respect of the Third Plaintiff’s books of account and the Armidale property.
b) Act in a manner or may not have acted in a manner, so as, to not improperly use the Defendant’s position as Director to gain advantage for the Defendant, to the detriment of the Third Plaintiff (and / or the Plaintiffs generally), particularly in respect of the books of account of the Third Plaintiff, taxation matters and the Armidale property.
13. A declaration of contravention of Section 182 (1) and (2) of the Corporations Act2001, by the Defendant, in that the Defendant did have or may have:
a) Improperly used the Defendant’s position as a Director and / or employee and / or Principal Accounting Officer of the Third Plaintiff in such a manner so as to gain advantage for the Defendant and / or other persons, particularly in respect of entries carried out by the Defendant in the books of account of the Third Plaintiff.
b) Improperly used the Defendant’s position as a Director and / or employee and / or Principal Accounting Officer of the Third Plaintiff, in such a manner so as to gain a financial and / or taxation advantage for the Defendant, particularly in respect of the Armidale property.
14. A declaration of contravention of Section 183 (1) and (2) of the Corporations Act2001, by the Defendant, in that the Defendant did have or may have:
a) Improperly used information obtained as a result of the Defendant's position as a Director and / or employee and / or Principal Accounting Officer of the Third Plaintiff in such a manner so as to gain advantage for the Defendant and / or other persons, to the detriment of the Third Plaintiff (and / or the Plaintiffs generally), particularly in respect of the books of account of the Third Plaintiff and the Armidale property.
b) Improperly used information obtained as a result of the Defendant’s position as a Director and / or employee and / or Principal Accounting Officer of the Third Plaintiff, by providing third parties with information, in such a manner so as to gain advantage for the Defendant and / to the detriment of the Third Plaintiff (and / or the Plaintiffs generally).
15. A declaration of contravention of Section 184 of the Corporations Act 2001, by the Defendant, in that the Defendant did or may have acted with recklessness and / or intentional dishonesty by:
a) Failing to exercise the Defendant’s powers as a Director, in the discharge of such duties in good faith and in the best interests of the Third Plaintiff (and / or for the Plaintiffs generally) and for a proper purpose.
b) Gaining either directly or indirectly a financial advantage and / or other advantage for the Defendant and / or a third party, which was or may have been to the detriment of the Third Plaintiff (and / or the Plaintiffs generally), particularly, but not limited to taxation gains, general financial gains, loan account gains and property gains.
c) Gaining either directly or indirectly a financial or other advantage for the Defendant and / or a third party, as a result of having and / or obtaining information and using, or may have used such information to gain an advantage for the Defendant, to the detriment of the Third Plaintiff and / or the Plaintiffs generally.
d) Causing to make and / or making improper, misleading and / or false entries in the books of account and other records of the Third Plaintiff, particularly, but not limited to cheque books, cheque butts, bank deposits and other accounting documents.
e) Causing to make, omitting to make or making false and / or incorrect statements in the financial records and annual accounts of the Third Plaintiff, particularly, but not limited to annual financial accounts, declarations of dividends. Director's annual Reports and Directors annual Notes attached to the financial records of the Third Plaintiff.

16. A declaration of contravention of Section 191 of the Corporations Act 2001, by the Defendant, in that the Defendant did not or may have not declared a conflict of interest to the Third Plaintiff and / or other Directors of the Third Plaintiff, particularly, but not limited to taxation matters, Armidale property matters, financial records and loan account matters.
17. A declaration of contravention of Section 295, 296, 297, 319, 344 and any other directly related Sections of the Corporations Act 2001, by the Defendant, in that the Defendant did not or may have not:
a) Caused and / or made and / or prepared the financial accounts of the Third
Plaintiff to be presented so as to represent a true and fair view of the Third Plaintiffs financial position and performance
b) Caused and / or made and / or prepared the financial accounts of the Third Plaintiff to be presented with all necessary Reports and Notes, as required by the various regulatory requirements.
c) Caused and / or made and / or prepared the financial accounts of the Third
Plaintiff to be presented with all necessary Reports and Notes, in accordance with and complying with the published accounting standards.
...
21. In the alternative and / or in the event that the Court determines that the Defendant holds the Armidale property on trust for the Third Plaintiff, as the sole beneficiary, then pursuant to paragraph 5. 6 and 8 herein, an order that the Defendant pay to the Third Plaintiff the sum of $695,302.82 being monies owed by the Defendant to the Third Plaintiff, particulars of which are:
a.) The sum of $90,343.26, being plant, equipment and assets owned by the
Third Plaintiff and entered into the Third Plaintiffs books of account by the Defendant, as assets owned by the Defendant.
b) The sum of $253,018.56, being the amount that the Third Plaintiff paid to the Vendor of the Armidale property, for the purchase of the Armidale property and which the Defendant entered into the Third Plaintiffs books of account as being paid for by the Defendant and then applied by the Defendant for the Defendant’s benefit.
c) The sum of $82,037, being a Citibank bank account in the name of the Third Plaintiff and owned by the Third Plaintiff, the ownership of which was transferred by the Defendant to the Defendant's name, without authority and for the benefit of the Defendant.
d) The sum of $67,760.00, being amounts paid to the Third Plaintiff by the First Plaintiff and the Second Plaintiff, but diverted by the Defendant and applied to the credit of the Defendant’s account, for the benefit of the Defendant.
e) The sum of $25,360, being Dividends declared and paid by the Third Plaintiff and credited by the Defendant to her account, for the sole benefit of the Defendant.
f) The sum of $52,730.00, being funds paid by First Plaintiff and the Second Plaintiff to the Third Plaintiff, but diverted by the Defendant and credited by the Defendant without authority, for the sole benefit of the Defendant.
g) The sum of $124,054, being amounts paid to the Third Plaintiff, or owing to the Third Plaintiff, but not entered into the accounts of the Third Plaintiff by the Defendant, but applied by the Defendant for the sole benefit of the Defendant.
h) In respect of paragraph 21 a.) to g.) herein and in the alternative, any amount(s) that the Court may determine is owing by the Defendant to the Third Plaintiff.
i) Interest at Supreme Court rates on all amounts stated in paragraph 21 a.) to paragraph h.) inclusive herein.
22. In the alternative and / or in the event that the Court determines that the Defendant holds the Armidale Property on trust for three beneficiaries (which is not admitted), then pursuant to paragraph 5 and / or paragraph 6 and / or paragraph 8 herein, the Defendant pay to the Third Plaintiff those amounts stated in paragraph 8 e.) herein ($65,809.00, plus interest at Supreme Court rates): paragraph 10 a.), b.), c.) and d,) herein ($30,193.10): paragraph 18 a.) and b.) herein ($47,093.33 plus interest at Supreme Court rates of $205,168.89): paragraph 19 herein ($55,000.00, plus interest at Supreme Court rates) and paragraph 20 herein ($16,906.67, plus interest at Supreme Court rates
23. In the alternative and in respect of paragraph 21 and 22 herein, any amount(s) that the Court may determine is owing by the Defendant to either the First Plaintiff, Second Plaintiff or Third Plaintiff, individually and / or collectively.
…
26. Interest on Costs.”

The plaintiffs did not elect to sign the mutual release by 29 June 2018.
On 6 July 2018, further consent orders were made, again providing for leave, subject to the plaintiffs’ consent to the mutual release by 18 July 2018.
On 18 July 2018, the plaintiffs signed the mutual release.
As part of the mutual release agreement, Glynis has assigned her shares in Wincot to the Chetwynds.
On 10 September 2018, I ordered:

“1. Pursuant to Section 192A of the Evidence Act, that if the plaintiffs elect to read the following affidavits in the hearing listed for 15 October 2018 (“Adjourned Hearing”):
(a)   affidavit of Brian Chetwynd, sworn 2 July 2018;
(b)   affidavit of Brian Chetwynd, sworn 19 July 2018;
(c)   affidavit of Andrew Kirk, dated 2 July 2018 but sworn 18 July 2018;
(d)   affidavit of Brian Chetwynd, sworn 16 August 2018;
the affidavits (and any annexures or exhibits thereto) and any oral testimony at the Adjourned Hearing will be admitted as relevant to any of the new claims included in the Amended Summons dated 4 June 2018 (being those claims underlined in the Amended Summons, referred to in paragraph 2, 4, 5, 6, 8, 11, 12, 13, 14, 15, 16, 17, 21, 22 and 23 of the Amended Summons) (“New Claims”) but not as relevant to any other claims (including the claims pressed by the first and second plaintiffs in the earlier hearing in these proceedings conducted on 20 and 22 March 2017, 4, 5, 6, 7, 26 and 27 April 2017 and 24 August 2017 (“Earlier Hearing”)).
2.   Evidence led in the Earlier Hearing in these proceedings is admitted as evidence in respect of the New Claims.”

The purpose of these orders was to allow the new claims to be heard, without reagitating any claims from the 2017 hearing.
On 17 September 2018, the Court made various case management directions for the final preparation of the matter, and noted the following matter by consent:

“1. The Defendant has notified the Plaintiffs that the Defendant has elected not to:
a) serve any fresh affidavits, in relation to the hearing set down for 15 October 2018 (“Adjourned Hearing”);
b) press any objections to the evidence served by the Plaintiff;
c) cross-examine Mr Chetwynd or Mr Kirk, subject to 2 below.
2. The Plaintiffs have indicated that the Plaintiffs will not contend that the Defendant is prevented from submitting that the Court should not accept the evidence of Mr Chetwynd and Mr Kirk, merely because the Defendant elects not to cross-examine Mr Chetwynd and Mr Kirk.
3. In light of the election referred to in paragraph 1 above, proceedings at the Adjourned Hearing will move immediately into closing oral submissions.”

I then heard the continuation of the case on 15, 16 and 17 October 2018. As the order just referred to foreshadowed, those three days were taken up with submissions only. At the conclusion of the hearing, I reserved my judgment subject to a timetable for final written submissions.
Final written submissions were received from the Chetwynds and Wincot on 6 December 2018. On 21 January 2019, Glynis’ solicitors informed the Court that she did not intend to take up the opportunity for which directions had been made that she could file submissions in reply to the plaintiffs’ submissions. The parties’ written submissions for the 2018 hearing totalled 160 pages, again including detailed arguments about a number of specific entries in the accounts of Wincot.

Facts

The background facts were not in dispute. The Chetwynds owned photographic stores. Glynis has known the Chetwynds for many years, having been first employed by them during the 1970s.
During the course of her employment, Glynis formed a close personal and business relationship with the Chetwynds of more than 35 years’ duration. Brian described the relationship between the Chetwynds and Glynis as being “practically family”.
In addition to being employed by the Chetwynds, Glynis also became good friends with them. Between 1970 and 2005, Glynis regularly saw Jill and Brian in social situations, averaging approximately twice a month. Her relationship with the Chetwynds extended to being close with their children, and they referred to her as “aunty”.
The early business relationship with the parties was developed through a company called Rogote Pty Ltd (“Rogote”). Their business relationship was not documented in formal contracts, instead consisting of and relying upon a great deal of trust between the parties.
In April 1979, Glynis purchased a unit in Neutral Bay (the “Neutral Bay Property”). This property was purchased in her name and she was the sole contributor of funds to purchasing the property.
Rogote began experiencing financial difficulties in 1989 and consequently the Chetwynds sold their home in Forestville to discharge the outstanding debts for Rogote and stave off creditors. The Chetwynds had personally guaranteed the company’s debts.
Following the Chetwynds sale of the Forestville property, there was an agreement between Chetwynds on one hand, and Glynis on the other. This agreement was known as the “three way split” agreement. Under this agreement, the Chetwynds sold the Forestville property, discharged the debts of Rogote and subsequently each gained a one third interest in Glynis’ Neutral Bay Property. In terms of what was to happen in relation to the Armidale Property, it is important at this point to recall that Glynis gave up two-thirds of her interest in the Neutral Bay Property which up until that time had undoubtedly been her property absolutely.
It was agreed, as Brian put it in his affidavit sworn 2 November 2015, that “everything we do will be equally shared one third between the three of us and that includes assets and liabilities.” While this agreement initially related to discharging the debt of Rogote and the Chetwynds gaining an interest in the Neutral Bay Property, there was no dispute that this agreement extended into other aspects of the parties’ relationship.
As with other important arrangements between the parties, the three way split agreement was not reduced to writing. Despite this, all parties accept that the agreement existed.
At this time, the Neutral Bay Property was being rented out. The rent was paid into Glynis’ personal Commonwealth Bank account, and not into any business account. Glynis paid tax on the rental income she received from the Neutral Bay Property. This arrangement was in place until the Neutral Bay Property was sold.
The Neutral Bay Property was tenanted from 1991 until 2010 when it was sold.
In 1990 the parties acquired a shelf company: Wincot. At the time of purchasing Wincot, it was agreed that Glynis would hold a 90% shareholding in the company, whilst Brian would hold the remaining 10% share. Glynis’ evidence was that there was a conversation between her and Brian, namely that she would actually own 100% of Wincot, and the 10% shareholding which Brian held was actually to be held on trust for her.
Despite this arrangement where Glynis was effectively the sole owner of Wincot, it was agreed between the parties that Wincot too was subject to the three way split agreement. As with previous agreements between the parties, the arrangement was not recorded in writing.
The purpose of Wincot was to purchase photography stores. The company purchased a store in Armidale and also in Coffs Harbour.
The Chetwynds moved to Armidale to run the store which Wincot had bought. Similarly, following Wincot purchasing a store in Coffs Harbour, Glynis moved to Coffs Harbour to oversee the running of that store.
The Coffs Harbour store closed in approximately 1993, which consequently saw Glynis also move to Armidale to work in the shop there.
In the early 1990s, Wincot secured an interest only line of credit from Citibank. This loan was secured against the Neutral Bay Property. There was an original limit of $225,000, with each of the parties being guarantors for the loan.
In 1992 after moving to Armidale, Brian and Jill moved into the Armidale Property. The Armidale Property was formerly owned by John and Barbara Phillips, who were friends of the Chetwynds. At this time, Brian and Jill were housesitting for the Phillips.
After housesitting for approximately twelve months, the Phillips told the Chetwynds that they were going to sell the Armidale Property and offered to sell it to them.
The Chetwynds were interested in purchasing the Armidale Property and Brian and Jill carried out the negotiations with the Phillips. These negotiations concerned price and terms of the sale of the Armidale Property. Glynis was not involved in the negotiations.
The terms of the purchase were that $110,000 would be paid up front to the Phillips and $110,000 would be borrowed off the Phillips by way of vendor finance. This loan of $110,000 would be repayable over seven years at a rate of 9.5% interest.
At this time, Brian was particularly concerned that he could still be liable to creditors from his previous business ventures. In order to protect his assets and the purchase of the Armidale Property, it was suggested by the Chetwynds that Glynis would be the legal owner of the Armidale Property, however she would hold the property on trust for the Chetwynds. Additionally, the Chetwynds would reside in the Armidale Property. Glynis agreed to purchase the Armidale Property for the Chetwynds as the legal owner.
In accordance with the agreement, the Armidale Property was purchased in Glynis’ name, but it was understood that the Chetwynds would reside in the Armidale Property. The crux of this dispute is whether Glynis holds the Armidale Property on trust exclusively for the Chetwynds, or whether she is also a beneficiary under the trust. I shall return to the resolution of that question later in these reasons (see paragraphs [267] to [344] below), but for present purposes will continue the narrative.
Brian gave evidence that while the Armidale Property was legally held in the name of Glynis, it was held exclusively on trust for Jill and himself. His affidavit evidence was that the following conversation happened with Glynis:

“Me:   Would you consider holding the property on trust for Jill and I? We will make all the repayments and pay the interest and outgoings etc. but given the risk of litigation against me and Jill, it may be better if the property and the mortgage were both in your name.
Ms Rose:   If it’s in my name, will I be responsible for anything at all, including repayments, maintenance and rates?
Me:   As I said, you won’t have to make any mortgage repayments or payments towards the upkeep or pay any of the expenses. We want this to be our family home and I’m sure that we won’t want to sell it either, is that OK?
Ms Rose:   Yes, I understand and that’s fine by me. I am prepared to have the property and mortgage in my name and I will only ever act in your best interest and of course I will never sell the property without the three of us agreeing to do so.”

Glynis acknowledged a conversation with Brian had occurred and that she was asked to hold the Armidale Property in her name, however disputed that the word “trust” was ever used. Glynis further disputed that the Armidale Property was held exclusively on trust for Brian and Jill, and not also for her.
Brian said there was a conversation between Glynis and himself which was an express oral agreement. This oral agreement allegedly set out the terms of the arrangement concerning the Armidale Property. Brian submitted that the following conversation occurred:

“Me:   Now that we have agreed, we need to get the terms right, so that all of us agree and understand them. I would suggest the following:
a.   The Property will be transferred into your name as the sole registered proprietor;
b.   You, as the sole registered proprietor, will be liable to the Phillips under a vendor finance mortgage over the Property (which Jill and I would indemnify you in respect of);
c.   As it is Jill’s and my family home, we will pay off the mortgage;
d.   As it is Jill and my family home and we are paying for all outgoings, no fee is payable to you for us occupying the Property;
e.   Jill and I will be solely responsible for all outgoings of the property; including water rates, council rates, land tax, home and contents insurance, general maintenance, and improving repairs. You will not be required to contribute to these costs; and
f.   The Property is not intended to be used to realise income or profit by way of lease to a third party.

Ms Rose:   Yes I understand and am happy to agree with all that.
Me:   Of course, in the event that Jill and I cannot pay off the entire mortgage, a contingency mechanism will be that we each share a one third split and you will have a one third split in the purchase price of the property, which is $220,000.
Ms Rose:   Yes, of course and I do agree and fully understand that this is your family home and my one third is only applicable as you state and also to protect my interests as the property is in my name.
Me:   It’s all agreed, then let’s go ahead.”

I note in passing that this version contains no express reference to the Armidale Property only being sold if all three parties agreed.
Glynis did not recall a specific conversation where the terms outlining the arrangement were expressed, however noted such a conversation outlining the terms could have occurred. While Glynis does not recall the conversation generally, she specifically does not recall the suggestion that she would be indemnified, that the Chetwynds would make the mortgage repayments, and that there would be no fee payable for occupying the Armidale Property.
Glynis stated that she remembered a term of the arrangement would be that “this transaction will be treated the same as all our other dealings. We will split the asset in one third shares, just like the Neutral Bay Property.”
The Chetwynds submitted that the agreement with Glynis was that they would make all the repayments for the vendor finance, pay the interest and pay the outgoings related to the Armidale Property. As such, Glynis would not be a beneficiary of the trust. Whether or not this was agreed to, this is not what happened.
Of the $110,000 which was to be paid up front, at least $102,000 was paid by Wincot through the Citibank line of credit, which was secured by mortgage over the Neutral Bay Property. This fact is not disputed.
Glynis executed a mortgage in respect of the vendor finance, which was guaranteed by the Chetwynds.
On 13 August 1993, Wincot paid a 10% deposit on the land of $22,000. This money was paid from the Citibank line of credit.
On 17 August 1993, contracts for the sale of the Armidale Property were exchanged.
On 17 September 1993, the sale was completed.
From 1993, the Chetwynds resided at the Armidale Property.
Between 1993 and 2000, all three parties worked in the Armidale store.
When working in the store, Glynis became responsible for bookkeeping and managing the accounts; Jill was responsible for stock ordering and Brian was involved in sales and oversaw the general operations of the business.
Despite having no formal qualifications as an accountant, Glynis performed the financial tasks associated with Wincot. This made her responsible for all accounts, including banking, payments, invoicing, journal entries, bank reconciliations, and preparation of draft accounts. Journal entries were made by Glynis just before the end of the financial year.
Draft accounts, while prepared by Glynis, were later reviewed by Mr Herd, the accountant for Wincot. When Mr Herd reviewed the accounts for Wincot each year, Glynis would be present, and Brian would occasionally attend these meetings. After reviewing the draft accounts, Mr Herd would settle the accounts and send them to the Armidale shop. After the accounts were sent to the Armidale shop, they were reviewed by both Brian and Glynis. The financial practices of Wincot were complex and are outlined below in further detail in paragraphs [194] to [218].

As the parties were all working equivalent hours, it was agreed by all parties that they would each receive an equal salary from Wincot. As the bookkeeper for Wincot, Glynis was responsible for distributing wages. Glynis’ evidence was she made weekly remuneration distributions to Brian, Jill and herself.
In 2000, Brian became mayor of Armidale. He acted as mayor until 2005. During this time, he did not draw a salary from Wincot, however Jill continued to receive remuneration for her work with the business during Brian’s term as mayor. Brian suggested he voluntarily did not receive remuneration during this period as he did not require the salary, given he was receiving his mayoral salary. He alleged there was an agreement between the parties that he would still work for Wincot at this time, not receive payment for his work with the company, and instead defer receiving his salary to a later date. The Court does not accept this and finds that Brian’s hours were reduced during his time as mayor.
Throughout the time the Armidale store was running, Wincot acquired various assets and debts, including a storage shed, a Xerox machine and various other pieces of equipment.
In 2000 the Neutral Bay Property was renovated. The Chetwynds contributed substantially to the costs of those renovations.
On 24 January 2001 the mortgage over the Armidale Property was discharged and the Land Titles Office removed the mortgage and issued a new certificate of title in the name of Glynis.
The Court finds that the repayments made in respect of the vendor finance were made by Wincot from the Citibank line of credit. They were paid in 84 instalments of $1,797.84, which included interest owing. The Chetwynds asserted that while repayments were made by Wincot, they subsequently paid Wincot back. This was supposedly done through funds advanced when Brian was mayor of Armidale, through rental payments made by the Chetwynds and through a series of debits to the Chetwynds’ loan account. For the reasons provided in paragraphs [228] to [261] below, the Court does not accept this.
During 2001 to 2005, Brian transferred $55,000 to Wincot in order to reduce the Citibank line of credit interest costs.
In 2005, the Armidale store was closed. Following the closure of the store, Glynis ceased to have any direct involvement in the running of Wincot.
In November 2006, Brian created the Financial Position Report, which detailed the financial assets of Brian, Jill and Glynis (set out in paragraph [285] below).
In about 2010, the parties agreed to sell the Neutral Bay Property. It was common ground that throughout the time Glynis had owned the Neutral Bay Property, the Chetwynds had spent money on the upkeep of the Neutral Bay Property, however how much money was spent was unclear.
The Neutral Bay Property was sold in October 2010 for $430,000.
The proceeds of the sale were to be distributed in accordance with the three way split agreement. Throughout the duration of owning the Neutral Bay Property, both the Chetwynds and Glynis contributed funds to pay for various aspects of the Neutral Bay Property. As such, following the sale of the property it was necessary to make adjustments to reflect the individual contributions.
As with the previous agreements between the Chetwynds and Glynis, there was no formal documentation to reflect or document the adjustments agreed to between the parties.
As the Neutral Bay Property was legally owned solely by Glynis, she alone received the $430,000 into her account upon the sale of the property. It was agreed between the parties that Glynis would hold onto the entirety of the money from the sale, however noting it was being held on trust for both Brian and Jill.
Subsequently, Glynis opened two Commonwealth Bank Netbank Saver accounts, one for Brian and one for Jill. $82,450 was deposited into one account, being the money from the sale of the Neutral Bay Property as adjusted for Jill, and $105,450 was deposited into the other account, being the money as adjusted for Brian. This was agreed to between the parties.
On 10 February 2011, in accordance with instructions from Brian, Glynis transferred the money set aside for Jill into the account for Brian, and subsequently closed Jill’s account.
On 4 April 2011, in accordance with instructions from Brian, Glynis deposited an amount of $150,000 into a term deposit account with the Commonwealth Bank. This left approximately $27,000 in the Netbank Saver Account.
Glynis continued to hold the money for both Jill and Brian and only dealt with the funds in accordance with instructions from the Chetwynds. Glynis acknowledged that, at various times, Brian would request that she make a withdrawal on his behalf and send him the money in cash. Upon these requests, Glynis would transfer the money from the Netbank Saver account into her cheque account, withdraw the money, wrap the cash in foil and express post it to the Chetwynds.
As Glynis held the money legally in her name, she was taxed on it accordingly. As such, she made deductions to account for the amount of tax she paid on the money. The Chetwynds were aware Glynis made deductions to account for the tax that she paid, and consented to her doing this.
At the commencement of the hearing, Glynis still held approximately $70,000 for both Brian and Jill. This has since been paid to them and they make a claim for interest on that sum at Supreme Court rates.
In 2012, Glynis resigned as a director of Wincot.
In 2012, Mr Herd resigned as the accountant to Wincot.
On 3 January 2015, Glynis sent an email to the Chetwynds and said:

“Hi Jill and Brian,
I hope you had a great Christmas and New Year with your family.
Now to something more serious. As I am turning 65 in June 2016 I am thinking of retiring. Because of this I believe that things must be resolved well before this time.
(1) Armidale property must be sold and finances sorted.
(2) Term Deposit and Netbank Saver Accounts must be transferred to your names.
I want to work together with you both to resolve these issues before the end of 2015 and in the next 3 months I will be seeking advice from Bill and/or an independent Tax Accountant to discuss all the ramifications. Perhaps in this regard we could have a telephone link to discuss the situation once I have established the initial contact.
These matters should be taken care of sooner than later. I would appreciate both your thoughts on the above.
Regards
Glynis”

It is this correspondence from Glynis which set off the chain of events that led to these proceedings.
On 9 January 2015, Brian replied to Glynis’ correspondence by saying:

“Hi Glyn,
We hope you also had a great Christmas and New Year.
We have considered your email and comment as follows:
1) As you know, we are all one third beneficial owners of the property and all three of us must agree for the property to be sold. This is in accord with our long standing agreement.
2) The Term Deposit and Netbank Saver can be transferred to us shortly, as we have discussed with you before Christmas. No problem if you have rolled the Term over and we will get back soon with the transfer details.
We understand your situation about retiring and are quite happy to work together with you to resolve the matter in an equitable manner and in accord with the agreement.
We would be prepared to come to Coffs very soon to commence the discussion with you. We will wait to hear back from you.
Regards
Jill and Brian”

Glynis responded on 14 January 2015 with the following email:

“Hi Brian and Jill,
Thanks your email.
(1) As to point 1.) if this was our agreement (and I must admit I don’t recall it), this would disadvantage my position.
(2) As to point 2.) the TD has rolled over and should remain in my name until a solution re the property is resolved.
As far as I can see there are only two options.
(1) You buy my one third of the property at market value and the TD can be used as part of the proceeds, or
(2) The property be sold to market with vacant possession and we each receive one third of the proceeds. You would retain the TD at that point.
I do need this matter to be sorted in the short term so as not to prejudice my Centrelink position. I think it is reasonable that we agree to a plan by the end of this month.
I await your reply.
Regards
Glynis”

The Chetwynds responded to Glynis on 16 January 2015. They said the following:

“Hi Glyn,
Thanks for your reply, which we have read with a high level of concern and whilst we won’t go into all the details here, suffice it say the following:
Our concerns are because for some 25 years we have had a one third arrangement in all activities and assets, where every decision was discussed and agreed by the 3 of us, in a proper and equitable manner, with good will and trust. This includes all business activities, Forestville, Neutral Bay, Armidale property, super, cash, shares and etc. – never a problem. This agreement still stands the same today, as always, but suddenly, you appear to want to ignore or avoid our agreement, which has been confirmed by all of us and has been operative over all these years.
We say the above, as out of the blue, you send us an email stating the property “must” be sold, and now you are stating that the Term Deposit “should remain in your name”. However, these are not decisions for you as one person to make and we reject them. Any decision on the property or any sale thereof, is a decision to be made by the 3 of us equal beneficial owners, whereupon we discuss the issue and all agree in accord with our long standing arrangement. Regarding the Term Deposit, the decision on those funds has already been agreed upon by the 3 of us and it is a result of each of us receiving an equal share of sale proceeds. The Term Deposit is ours (Jill’s component in fact) and it cannot be retained by you under any circumstances.
We are at a complete loss in understanding why you have suddenly sent these insensitive and rather offensive emails, when you well know exactly what the agreement is. If you desire to change something, then the appropriate and proper way would have been to have phoned one of us (as has always been the case) and discuss your ideas and preferred outcomes, so that we are part of the decision process as agreed. We don’t think your emails and the holding of a gun at our heads, is either a sensible or fair way to go and in any event is totally against our agreement.
Having said the above, we would suggest that you reconsider your approach, so that we may then meet to discuss the matter (as we suggested in our last email). We repeat that we are quite prepared to work with you in the same manner as we always have and to look at the aspects, as well as how best they can be resolved, in an equitable way (in accord with our agreement), where no one person is put at a disadvantage or treated with disrespect. We trust that you will agree that this is a more positive and sensible approach.”

On 11 February 2015, the Chetwynds registered a caveat over the Armidale Property, noting the caveatable interest being that Brian and Jill had an “Equitable Interest as beneficiary under a Trust.”
This was by virtue of the fact that:

“The Registered Proprietor purchased the property as trustee for the benefit of the caveators as to 1/3 interest to Brian Chetwynd and 1/3 interest to Jill Chetwynd and in her personal capacity to 1/3 interest.”

On 17 February 2015, MVS New England & North West Pty Ltd, a valuation and property consulting business, attended the Armidale Property and undertook a market assessment. Glynis had arranged for this property valuation without the consent of the Chetwynds. The Armidale Property was subsequently valued at $675,000.
In around mid-May 2015, Brian attempted to resolve the dispute with Glynis. He called her and spoke to her for approximately 45 minutes. Various options were canvassed, however no agreement was reached between the parties.
A further phone conversation occurred between Brian and Glynis on 26 May 2015, again trying to resolve the dispute. Brian offered to buy Glynis’ one third share of the Armidale Property for $130,000. As the Armidale Property had been valued at $675,000, Glynis believed she was entitled to $225,000. Consequently, Glynis did not agree to the offer, however said she would consider it.
On 3 June 2015, Brian called Glynis and a conversation was had to the effect that Brian and Jill would pay Glynis $130,000 for her share of the Armidale Property. Additionally, it was discussed that if the Armidale Property was later sold for more than $500,000, Glynis would receive an additional payment from the Chetwynds, between 10-20% of the amount over $500,000.
Brian’s evidence was that the following were agreed terms between the Chetwynds and Glynis at this time:

Glynis would transfer the certificate of title into the names of Brian and Jill, and Glynis would also remain on the title.

A Contract for the Sale for Land would be created by the Chetwynds’ solicitors for $130,000, with a delayed settlement.

Glynis would transfer her interest in the Armidale Property so the title was completely held by Jill and Brian.

This transfer would be done to minimise stamp duty and capital gains.

Brian and Jill would then get a loan from the bank.

Glynis would continue to hold the term deposit and Netbank saver account, and additional money owed to Glynis would be sourced from the money loaned from the bank.

Glynis refuted that there was an express agreement with the terms outlined above. Ultimately the Chetwynds did not press that there had been agreement to settle the case in those or any other terms.
On 4 June 2015, Glynis suffered a heart attack and was placed in intensive care at Coffs Harbour Hospital.
Following Glynis’ heart attack, a letter dated 24 June 2015 was sent to Brian and Jill. The letter was sent from Fishburn Watson O’Brien, a law firm in Coffs Harbour. The letter was sent on behalf of Ms Lani Metzmacher and Ms Rachel Twigg, who were the enduring powers of attorney for Glynis. The letter is reproduced below:

“For the period that you have both lived at the Property you have not paid Glynis rent, or any form of compensation, to recognise her one third share in the Property. We put you on notice that my clients reserve Glynis’ rights in this regard.
…
In February 2015, Glynis commissioned, at her own cost, a valuation of the Property to be completed by MVS National Valuations and Property Consulting (MVS), a respected and reputable valuer, to determine what the market value of her 1/3 share would be. MVS completed the valuation on 17 February 2015, valuing the Property at $675,000.00 (copy enclosed).
Based on this valuation, Glynis offered sale of her one third share to you for a third of the valuation price of the Property ($225,000.00). I am instructed that you have refused this offer and maintain the position that Glynis may not take any steps to sell the Property.
…
Lani and Rachel are now instructing me exclusively in relation to the Property and the disposal of Glynis’ one third share in the Property.
My clients offer Glynis’ one third share in the Property to both of you, at a price of $225,000.00 being the market value of the one third share as confirmed in the 17 February 2015 valuation of the Property, completed by MVS, based on the following terms:
a)   The respective parties enter into a contract for sale, no later than 28 days from the date of this letter, confirming the sale of Glynis’ one third share in the Property to Brian and Jill (or whomever, between you, is the purchasing party);
b)   The $73,964.87 Glynis currently holds on your behalf, will be treated as the deposit for the one third share sale;
c)   Lani completes transfer of Glynis’ one third share, to be handed to you on settlement;
d)   You transfer to our trust account $151,035.13 (being $225,000.00 less the $73,964.87), which on settlement (to be no later than 48 days from the date of this letter) we will distribute to our client; and
e)   The parties confirm in writing that each of the parties (Brian and Jill) have no further claim against the other (Glynis or her attorneys).
My clients’ offer is non-negotiable and is open for acceptance until 5pm on Friday 10 July 2015.
If we do not hear from you by this date, my clients will immediately make an application to the Court under s66G of the Conveyancing Act 1919 (NSW) for the appointment of a trustee to sell the whole of the Property. In this application, my client will be seeking an order for costs in their favour, including all legal costs.”

On 3 July 2015, Brian contacted his legal representative and instructed them to reject the offer from Glynis.
These proceedings were commenced on 30 July 2015.

Findings as to credit

This case has involved two conflicting narratives as to who were the intended beneficiaries of the trust relating to the Armidale Property and as to its terms. Given the lack of any formal documentation surrounding the three way split agreement or the scope of it, the Court has had to consider the credit of both Brian and Glynis. While Jill is the second plaintiff, she has not played a significant role in the case. Mr Stowe did not cross-examine Jill. This was in accordance with an agreement with the Chetwynds that they would not submit that any inference should be drawn against Glynis solely by reason of that election.
The Court was also invited to consider the credit of Mr Herd, Wincot’s accountant. While Mr Herd was not a party to the proceedings, his evidence primarily supported Glynis’ version of events. Therefore, the Chetwynds made submissions which questioned his credit. Consequently, I have made various findings in relation to the evidence Mr Herd put before the Court.
I considered the principles applicable to findings of credit in Maria Saravinovksa v Krste (Chris) Saravinovski; Chris Saravinovski v George Saravinovski (No 6) [2016] NSWSC 964. Those principles are as follows.
First, at the forefront of the Court’s approach has been the oft cited statement of McLelland CJ in Equity in Watson v Foxman (1995) 49 NSWLR 315 at 318-319:

“Where, in civil proceedings, a party alleges that the conduct of another was misleading or deceptive, or likely to mislead or deceive (which I will compendiously described as “misleading”) within the meaning of s 52 of the Trade Practices Act 1974 (Cth) (or s 42 of the Fair Trading Act), it is ordinarily necessary for that party to prove to the reasonable satisfaction of the court: (1) what the alleged conduct was; and (2) circumstances which rendered the conduct misleading. Where the conduct is the speaking of words in the course of a conversation, it is necessary that the words spoken be proved with a degree of precision sufficient to enable the court to be reasonably satisfied that they were in fact misleading in the proved circumstances. In many cases (but not all) the question whether spoken words were misleading may depend upon what, if examined at the time, may have been seen to be relatively subtle nuances flowing from the use of one word, phrase or grammatical construction (1995) 49 NSWLR 315 at 319 rather than another, or the presence or absence of some qualifying word or phrase, or condition. Furthermore, human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience.
Each element of the cause of action must be proved to the reasonable satisfaction of the court, which means that the court “must feel an actual persuasion of its occurrence or existence”. Such satisfaction is “not … attained or established independently of the nature and consequence of the fact or facts to be proved” including the “seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding”: Helton v Allen (1940) 63 CLR 691 at 712.”

Furthermore, Glynis’ evidence that she would have sought instruction from either Brian or Mr Herd is consistent with her evidence as to her general accounting practice, namely that she would defer to their expertise when she was unsure how to record a transaction.
Mr Kirk gave almost identical evidence in relation to this journal entry, as he did above in paragraph [490]. His evidence was

“a) That this entry refers to the sale of a Safai [sic] processor from the Defendant to Wincot and credits her loan account. Therefore, this transaction, in isolation, would result in the Defendant being owed $30,000.
b) that in a) above, the Defendant is deemed to have owned the item, however, if the item was not owned by the Defendant, then the entry is incorrect.
c) that if the Defendant knew that she did not own the item, but sill made the entry, then it would be, in my opinion either false, misleading or misrepresentation [sic].”

As with the previous journal entry, no evidence has been put before the Court to ascertain the nature of the transaction, or the proper accounting of it. Furthermore, there is no evidence to suggest the entries made by Glynis were made knowing they were false and misleading. Consequently, the Court cannot find that Wincot is owed $30,000 from Glynis and, in the absence of any other evidence, will not speculate as to the nature of the payments.
Therefore, the Court finds that the Chetwynds have failed to prove that Glynis owes Wincot $90,343.26 for plant and equipment funds.

Repayments for the Armidale Property

A claim is made by Wincot for $253,018. This claim is based on the fact that Wincot was the source of the repayments for the vendor finance. The only submission made by the Chetwynds was in their written submissions where they stated:

“This is a claim by Wincot.
This claim is in the alternative as detailed on the Summons in paragraph 21 B). The claim related to the payment of the property by Wincot.”

No other evidence was referred to or submission put to the Court.
The Chetwynds have failed to demonstrate any legal basis for which Glynis should be liable to Wincot for the repayments the company made. No argument was put by the Chetwynds to suggest a finding could be made that Glynis was liable for these payments to Wincot. No evidence was submitted which would suggest Glynis owed funds to Wincot. Consequently, the Court finds that the Chetwynds have not made out this claim.

Citibank Account

A claim is made by Wincot that Glynis owes the company $82,037. The claim relates to a journal entry about a Citibank account which Wincot owned, and was subsequently transferred to Glynis. The entry reads,

“Loans – Citibank; Loans – G Rose $82,037
Being transfer of C’Bank A/C”

When cross-examined about the entry, Glynis did not recall whether she took on the liability of the account, why she made the entry and gave evidence that she did not understand it to be assigning liability to her personally, rather than with the company.
Mr Herd gave the following evidence in relation to the transfer in his affidavit sworn 31 March 2017:

“22. The Citibank Line of Credit was first taken out in the name of Wincot, and used for general business purposes before the account was drawn down for the purpose of making a part payment on the Armidale Property. There was a ledger created in Wincot’s chart of accounts titled “Citibank Loan”, to record the liabilities associated with that facility (ie, record the balance of the drawdowns on the line of credit, which Wincot was liable to repay).
…
23. In August 1993, drawdowns in the total amount of $102,000 were made on the Citibank Line of Credit, for part payment of the Armidale Property.
24. At the time of those drawdowns, it appears that there were “debit” entries made in GR’s Wincot loan account … Although I don’t recall those entries being made, I consider it entirely appropriate because:
a) Wincot did not have an interest in the Armidale Property;
b) Consequently, the drawdown on the line of credit to part pay for the Armidale Property is effectively an advance to the purchaser of the property, which is recorded by a “debit” in the purchaser’s loan account;
c) GR was the legal purchaser of the Armidale Property. Even though GR purchased the Armidale Property as trustee (and therefore did not enjoy the full beneficial ownership of the property), it is appropriate that the full amount of the drawdown be debited exclusively to her account (and not the account of the trust beneficiaries). That is because when a company transacts with a trust, the trustee is the legal entity which transacts on behalf of the trust, and all transactions are characterised in the company accounts as being with the trustee.
…
26. To seek to eliminate the substantial tax exposure to which GR would otherwise have been exposed, I conceived and implemented a new accounting policy for the manner in which the Citibank Line of Credit was accounted for. It involved the re-characterisation of the Citibank Line of Credit from being in substance a liability of Wincot, to being in substance a liability of GR.
27. If the Citibank Line of Credit was treated as being in substance GR’s facility rather than Wincot’s, the drawdown on the Line of Credit of $102,000 for part payment of the Armidale Property would be properly characterised as being in substance a drawdown by GR (and not a drawdown by Wincot and a corresponding advance by Wincot to GR). By avoiding characterising the Citibank drawdown as involving an “advance” by Wincot to GR, the adverse Division 7A tax exposure was eliminated.
28. The motivating purpose for this re-characterisation of the Citibank Line of Credit was minimising the tax exposure of GR. On reflection, it may be contestable as to whether the re-characterisation was entirely consistent with accounting standards. However, at the time I considered that the re-characterisation was justifiable and appropriate, for the following reasons:
a) following the drawdown of $102,000 for the part payment for the Armidale Property, the facility was being used primarily for the purpose of financing the acquisition by GR of the Armidale Property (which had nothing to do with Wincot’s general business). As a matter of commercial substance, the line of credit was for GR’s benefit;
b) the re-characterisation significantly reduced GR’s tax liability. To the extent that GR incurred that liability in her capacity as trustee, she would presumably have a right on indemnity against the beneficiaries (including the Chetwynds) in respect of any tax liability. The minimisation of GR’s tax liability was therefore of benefit to beneficiaries of the trust: ie, the Chetwynds, and GR;
c) it was balance sheet neutral for Wincot. As elaborated below, the consequences of re-characterising the facility as being in substance GR’s facility, was that Wincot’s balance sheet liability to Citibank in respect of the line of credit was transformed into a balance sheet liability to GR;
d) it has no adverse taxation implications for Wincot;
e) it did not affect the operations of Wincot;
f) it did not otherwise prejudice Wincot or any shareholder of Wincot;
g) for all those reasons, the re-characterisation was not a matter of particular commercial significance for Wincot.
29. The conceptual re-characterisation of the Wincot line of credit as being in substance GR’s facility (rather than Wincot’s) necessitated adjustments to the Wincot accounts. By way of summary:
a) Wincot’s liability to Citibank had to be removed from the balance sheet;
b) If the line of credit was in substance GR’s facility, then it followed that any drawdown on the line of credit for the benefit of Wincot, was properly characterised as being in commercial substance an advance from GR to Wincot, which needed to be recognised as a credit in GR’s Wincot loan;
c) Those adjustments were effected by Journal Entry 1593 … which provided:
i) Debit: Loans, Citibank: $82,037;
ii) Credit: Loans, G Rose: $82,037.
d) $82,037 was the closing balance of the Citibank line of Credit on 30 June 1994;
e) The effect of that journal entry was effectively to transform Wincot’s liability for the outstanding balance of the Line of Credit, from a liability owed to Citibank to a liability owed to GR, reflecting that GR was now (in substance) the party to the Citibank facility, and advancing to Wincot sums drawn down from that facility.”

Glynis submitted that Wincot suffered no prejudice from this transaction because the transaction was balance sheet neutral for Wincot, the transaction was authorised by Wincot’s accountant, and there was no additional liability or exposure generated for Wincot. Consequently, Wincot had no additional claim against Glynis.
The Chetwynds submitted that Mr Herd’s evidence was a “blatant untruth”, that “BH sounds very much like he is involved in tax fraud” and that his evidence amounted to “nothing more than a series of convoluted excuses coupled with conjecture and guesswork.”
Despite these assertions being put forward by the Chetwynds, Mr Herd was not cross-examined at any point about his accounting of this transaction, any relevant accounting standards against which his approach should be measured or any other applicable ethical guidelines.
The Court does not accept the Chetwynds’ characterisation of Mr Herd’s evidence. The evidence quoted in paragraph [507] above was from Mr Herd’s affidavit sworn 31 March 2017. This means the evidence was given well before any claim was made in relation to this payment to Glynis, and well before Wincot was a party to the proceedings.
Therefore, the Court does not accept the Chetwynds’ submission that “BH is just setting this up for a property claim by GR” or that there was an “ulterior motive” because when the evidence was given, Wincot was not a party to the proceedings.
Furthermore, given Mr Herd’s evidence was adduced in the 2017 hearing, the Chetwynds had ample opportunity to consider it and to challenge it if they wanted to. They made no such attempt to challenge it.
The Chetwynds relied upon the evidence of Mr Kirk, which was:

“a) that the entry refers to the transfer of the Citibank loan to the Defendant’s loan account, in the sum of $82,037.00. The journal entry page is dated 1994 and the entry immediately above is dated the 30th June 1994. Therefore, in my opinion it would be reasonable to assume that the transfer entry for $82,037.00 below it, would be the same date.
b) that the transaction in isolation, referred to in a) above, would suggest that the Defendant paid the amount of $82,037.00 from her personal funds, against the loan, or took over the liability of the loan from Wincot.
c) that [the] … Citibank statement No 72 dated 15th July 1994, in the name of Wincot, which shows the closing balance on the 30th June 1994 to be $82,037.82. Therefore, in my opinion it would be reasonable to assume that the amount of $82.037.00 is the rounded up figure of the amount in a) above.
d) that if the Defendant paid out or took over the loan as in c) above, it is my opinion that it would be reasonable to assume that one or more of the below stated would be the case:
i) Wincot would immediately cease to make any further repayments of the principal and/or interest for that loan and/or to the Citibank account.
ii) Wincot’s loan account with Citibank would cease, if the amount paid against the loan, was the total owing at that time. In all probability this would be nil, if the transaction took place on the date stated.
iii) Alternatively, Wincot’s loan account with Citibank would reflect the payments made by the Defendant for the principal and/or interest on the loan, in the event that she took the loan over.
iv) Alternatively, Wincot’s loan account with Citibank could remain as it is shown on the statement, if there was some other arrangement that has not been declared in the Wincot records, or that I have not seen.”

Mr Kirk’s evidence did not engage with the evidence of Mr Herd, and it appears Mr Kirk was not aware of the arrangement outlined in paragraph [206] above.
The Chetwynds put on no further evidence to substantiate their assertion that Glynis had knowingly acted improperly, as was consistently submitted.
Additionally, no further evidence was put before the Court to suggest the accounting by Glynis was incorrect.
In the absence of any evidence which contradicts or challenges the approach taken by Mr Herd, the Court is not satisfied that there is a basis on which Glynis owes Wincot $82,036.82.

Dividend amounts

A claim is made by Wincot for $25,360 in relation to dividend payments. This claim arises from the same circumstances as outlined in paragraphs [445] to [455] above.
This claim has not been particularised and it is unclear how this amount has been calculated. As noted above, the claim made personally by the Chetwynds against Glynis is $16.906.67 as expressed in the amended summons, while their submissions calculate the amount to be $22,895. Therefore it is unclear how the sum of $25,360 has been quantified.
No further evidence was put to the Court, and submissions in relation to this claim were very limited. As such, the Chetwynds have failed to discharge their burden of proof. The Court does not find Glynis is liable to Wincot for the dividend payments in addition to the liability she has to the Chetwynds, which I have dealt with in paragraphs [445] to [455] above.

Proceeds from the sale of Neutral Bay Property

A claim is made by Wincot for $53,740. This claim arises from the sale of the Neutral Bay Property.
It was common ground that following the sale of the Neutral Bay Property, Glynis held funds on trust for the Chetwynds.
Upon the instructions of the Chetwynds, Glynis would occasionally draw down funds from that account, and deposit the money where requested.
The funds that were drawn down in accordance with the Chetwynds’ instructions were for the sole benefit of Brian and Jill. As a result of these funds being drawn down for the Chetwynds, a credit entry should have been made in their loan account with Wincot. Glynis, however, incorrectly credited her own loan account with the funds. Glynis has accepted that she made a mistake with recording these payments. Funds were drawn down in 2011 and 2012. The total sum of these funds was $53,740.
In written submissions from the 2017 hearing, Glynis conceded “by way of summary, Glynis does not contest that this adjustment [$53,740] be made to the Chetwynds’ loan account.”
Glynis submitted further that rather than she personally being liable to Wincot for $53,740, a declaration be made that there be adjustments to the Wincot loan accounts to reflect that a credit should have been made in respect of both Brian and Jill, rather than Glynis. The Court finds that this is the appropriate course of action to remedy the situation because Glynis did not personally receive cash in that amount and the Chetwynds have not demonstrated that she has received any other actual benefit to the value of that amount that would give rise to an obligation to repay that amount.
The final set of Wincot accounts which were presented to the Court listed Glynis having a balance of $157,007. This would suggest there are sufficient funds to make the declaration. Therefore an adjustment should be made deducting $53,740, and a credit being made in favour of the Chetwynds.

Claim for $124,054

A claim is made by Wincot against Glynis for $124,054 “being amounts paid to the Third Plaintiff, or owing to the Third Plaintiff, but not entered into the accounts of the Third Plaintiff by Glynis, but applied by Glynis for the sole benefit of the Defendant.” This claim has not been particularised and no evidence was led as to what the claim was made in relation to.
The written submissions of the Chetwynds merely rearticulated the claim, without providing any further details as to what it related to, or how the amount had been calculated.
Consequently, given this claim has not been particularised and no evidence has been put to explain it, yet alone substantiate it, the claim fails.

Other monetary claims made by Wincot against Glynis

Although I have already dealt with these claims incidentally insofar as they were also made by the Chetwynds, for ease of reference I will deal with them expressly in this section of my reasons.
Claims amounting to $30,193.10 are made by Wincot against Glynis and are particularised as above in paragraph [377(3)]. These claims are virtually identical to those claims already pressed by the Chetwynds and are phrased as “in the alternative” to the Court making any finding that the $30,193.10 is owed to Brian or Jill personally.
The written submissions of the Chetwynds do not provide any further argument to suggest any substance to the claims insofar as they are made “in the alternative” by Wincot.
Additionally, following the reopening of the case, no evidence was put before the Court to differentiate these new claims as opposed to those made by the Chetwynds in the 2017 hearing. In relation to the renovations, living expenses, storage shed and Xerox machine, their written submissions state “this claim is primarily claimed by BJC (Brian and Jill Chetwynd), claimed by Wincot in the alternative.” No further submission is made.
As no evidence was presented to the Court to suggest Wincot was owed any money as particularised in paragraph [377(3)] above, the Court declines to make any such finding.
In the absence of this evidence, the Court cannot be satisfied Glynis owes any funds to Wincot as alleged.
Furthermore, a claim was made by Wincot for $55,000, being money the Chetwynds advanced to Wincot. This is detailed above in paragraphs [422] to [444], namely being the $55,000 Brian transferred to reduce the interest on the Citibank line of credit.
It is not in dispute that this payment was made. Despite the Court’s findings in paragraphs [442] to [444] above that most of these funds had already been repaid to Brian, no evidence was presented to the Court to suggest Glynis was liable to Wincot for this money. No further submission was made to justify or articulate how Glynis was liable to Wincot. As no evidence was put before the Court, there are no grounds to suggest Glynis owes $55,000 to Wincot.

Wincot’s claim for account over the Armidale Property

Wincot seeks “a declaration that the Defendant account to the Third Plaintiff (or the Chetwynds generally) for any financial benefits she may have received in her capacity as trustee of the Armidale Property.” While this claim goes beyond the scope of the leave granted to the Chetwynds to amend the summons, Glynis has consented to this claim being pressed.
This claim is separate to Wincot’s claim in relation to any rent received by Glynis for the Armidale Property. In seeking Glynis be held to account, the Court must consider the benefit and the costs which Glynis incurred in relation to the Armidale Property.
The financial benefit Glynis received through the Armidale Property amounted to $67,760. This is calculated by considering the monthly payments of $780 from 1994 until 2000. However, as has already been observed more than once in this judgment, Glynis never personally enjoyed those funds as a result of the round robin of cheques, which saw the money deposited back into Wincot.
If Glynis were to be liable to Wincot, she would be liable for $45,173, being two thirds of the amount she received.
As stated above in paragraph [420], there is nothing to suggest Glynis received rental payments in her capacity as trustee, as opposed to being the landlord of the Armidale Property. Glynis received $780 in rent to ensure the Armidale Property was negatively geared, and that arrangement ceased in 2000 upon the advice of Mr Herd, when the property became positively geared. Consequently there is nothing to suggest Glynis is liable to anyone for the rent she received for the property.
Even if Glynis were found to be liable to the Chetwynds for the income she received for the Armidale Property, which is not the case, offsetting expenses would need to be considered.

Glynis is not seeking any offsetting exercise to take place, however asks the Court to note that there were three categories of expenses related to the rent received for the Armidale Property:

Interest on the vendor finance repayments: The rental payments for the Armidale Property were paid to Wincot to pay for the vendor finance repayments. Glynis is already seeking an adjustment pursuant to her s 66G cross-claim, as outlined in paragraphs [353] to [376] above, and as such, does not press for any offsetting in relation to a claim for account;

Interest on the Citibank facility: The Citibank interest payments were originally also the subject of an adjustment pursuant to the cross-claim, however this is no longer pressed; and

Miscellaneous expenses: these expenses included rates, repairs and insurance. There is little evidence in relation to these supposed payments, and as such Glynis does not press for account to be taken of these offsetting expenses.

However, as the Court has determined Glynis is not liable to Wincot for the rental payments she received, no offsetting exercise is required.

Declarations that Glynis has contravened the Corporations Act (the “Act”)

Wincot seeks a declaration that Glynis contravened sections 180, 181, 182, 183, 184, 191, 295, 296, 297, 319, and 344 of the Act. These provisions relate to directors and officers of companies discharging their duties with care and diligence, acting with good faith, not taking personal advantage from a company, having a material personal interest in a company, the financial report of a company, complying with accounting standards and lodging a financial report with ASIC.
Glynis’ accounting practices and the bookkeeping of Wincot is detailed above in paragraphs [194] and following.
The written submissions of the Chetwynds appear to particularise those breaches of the Act to be as a result of accounting entries about Wincot made by Glynis for which it is alleged she knew they were improper and untrue. Those entries have been discussed at various points throughout this judgment. How those entries relate to the various sections of the Act is not entirely clear and was not clarified in the submissions of the Chetwynds.
The Chetwynds rely upon the evidence of Mr Kirk in establishing those contraventions of the Act. However, Mr Kirk’s evidence does not relate to certain sections of the Act which the Chetwynds allege Glynis has violated. For example, Mr Kirk’s evidence does not address s 319 of the Act which relates to the contents of the annual financial report. Similarly, his evidence does not relate to s 191 of the Act concerning a director’s material personal interest and a possible conflict. This limits the usefulness of Mr Kirk’s evidence in so far as it is relied upon for the making of various declarations sought by Wincot.
In response to the claims that she contravened the Act, Glynis submitted the following:

There is no basis for finding that the accounting as Glynis recorded it is incorrect;

There is no basis for finding that if the accounting as Glynis recorded it was incorrect, that she knowingly or negligently made those entries;

There is no basis to suggest subterfuge in the method of accounting adopted by Glynis; and

The accounting practices in place for Wincot were not solely for the benefit of Glynis.

The Court accepts each of these submissions by Glynis for the reasons below. It is also convenient to record at this point that to succeed in any of these claims, given their seriousness, the Chetwynds would have had to have satisfied the Court to the Briginshaw standard of the elements necessary to make them out. In no respect have the Chetwynds succeeded in doing so.

No basis to suggest the accounting was incorrect

The complexities of the Wincot accounts are outlined above in paragraphs [194] and following. These included Wincot paying personal expenses of the directors, various legal structures in place, and tax minimisation strategies.
Brian’s involvement in the accounting should also not be overlooked. At the end of each financial year Mr Herd finalised the accounts for the year and showed them to Brian, which he would then review. At no time did Brian ever suggest the accounting as shown to him was incorrect.
While there were some errors in the accounts which Glynis kept (and Glynis accepts these errors), for example crediting her own loan account instead of the Chetwynds’ account following the distribution of funds from the Neutral Bay Property, to suggest her accounting practices in general were incorrect is wrong.
While a claim has been made by the Chetwynds, there is no expert evidence before the Court to suggest the accounting was either inaccurate or contrary to normal accounting standards.
The evidence of Mr Kirk fails to provide any definitive opinion in relation to the expected accuracy of any accounting entries, and therefore the Court has no basis on which to determine Glynis’ entries were incorrect.
Mr Herd was not challenged in cross-examination as to the correctness of his overall approach to the accounting for Wincot and as such, the claims put forward by the Chetwynds are unsubstantiated.
Given the lack of evidence, the Court is not in a position to make a declaration that the accounting practices of Glynis were incorrect.

No basis to suggest Glynis knowingly made incorrect accounting entries

Even if the Court found that Glynis’ entries were incorrect, there is nothing to suggest she made those accounting errors knowingly. I have outlined Glynis’ accounting experience and lack of formal qualification above in paragraph [179].
In support of the assertion that Glynis knowingly made incorrect accounting entries, the Chetwynds relied on numerous journal entries which have previously been discussed, and Glynis’ inability to explain those entries.
Merely pointing to those entries and Glynis’ inability to explain them is not sufficient to suggest Glynis knowingly made incorrect accounting entries. Those entries do not prove that Glynis understood the matters, let alone conceived or instigated them.
Instead, I accept Glynis’ submission that her failure to explain the entries supports her submission that she followed the advice of Brian and Mr Herd on complex accounting matters and did not question their advice.
In cross-examination, Glynis consistently denied the fact that she knowingly made incorrect journal entries. There has been no objective evidence to suggest those denials were false. The credit findings which I made above in paragraphs [183] to [184] above fortify the decision I have reached in relation to the weight I give Glynis’ consistent denials.
The Court has also considered the broader context of the allegations made against Glynis. This broader context includes:

The transactions in question occurred more than twenty years ago.

Glynis had no formal qualifications as a bookkeeper.

Many of the transactions in question were not straightforward.

Glynis is now in her late sixties.

When these broader circumstances are taken into account, it is unsurprising that Glynis was unable to explain the accounting entries in question. As such, the Chetwynds have to adduce any evidence that could satisfy the Court to the requisite standard that Glynis knowingly made any incorrect accounting entries.

No basis to suggest Glynis’ accounting was deceptive

The Chetwynds have submitted that Glynis’ behaviour in recording certain entries was not only incorrect, but that it was also deceptive and dishonest. There has been no evidence put before the Court to suggest this is true.
All of the relevant documentation for this case has been in the possession of the Chetwynds and they have had ample time to examine it, or have an expert examine it. The Chetwynds submitted to the Court that certain documents were deliberately kept from them which related to the case. That is incorrect.
Additionally, it is clear that despite his denials and obfuscations when it suited his case, Brian has reasonable accounting proficiency and provided advice to Glynis for complicated accounting transactions. Brian also accepted that at the end of each financial year, he would have reviewed the final accounts as produced by Mr Herd.
I also adhere to the observation I made on the final day of the hearing that “if [Brian] has, as it were, suffered the accounts to be prepared in the way they were and did nothing about them, but took whatever benefits and burdens came with those characterisations”, then whether or not he knew about the accounting treatment is irrelevant (T129:43-46). Brian was prepared to follow the accounting procedures he sought to have put in place and as such, he is bound by that decision.
Given Brian’s accounting experience, and his role in reviewing the accounts of Wincot on a frequent basis, including advising Glynis on how to record certain transactions, the Court does not accept the submission that Glynis was a deceitful mastermind of deceptive accounting transactions.

No basis to suggest Glynis’ accounting was purely for her benefit

The submissions made by the Chetwynds suggested that in addition to Glynis knowingly making dishonest and incorrect entries into the accounts to Wincot, the entries were purely for her benefit.
No evidence was put before the Court to support that assertion. The evidence suggests much to the contrary.
Glynis held the legal title to assets at the instigation of the Chetwynds. This was done by Brian to protect the Chetwynds from being pursued by any creditors following a previous failed business venture, therefore expressly benefiting Jill and himself.
Furthermore, the accounting practices were overseen and approved by both Mr Herd and Brian. The strategies implemented by Mr Herd to minimise tax exposure was for the collective benefit of all the parties, and not just Glynis.
Therefore, any suggestion that Glynis’ accounting practices were purely to her benefit has not been made out and is falsified by the evidence.

Declarations that Glynis has contravened the Corporations Act – Resolution

It follows that for the reasons set out in paragraphs [553] to [577] above, I accept the submissions made for Glynis that, other than where she acknowledges she made errors, the accounting entries put in issue by the Chetwynds were not incorrect. In relation to all of those entries the Court finds that they were not made knowing that they were incorrect, were not deceptive and were not for the sole benefit of Glynis for the reasons provided above.
The Court therefore does not find any of the following:

That Glynis failed to discharge her duties with care and diligence;

That Glynis failed to act in good faith;

That Glynis improperly used her position as bookkeeper to gain a personal advantage;

That Glynis improperly used information obtained in her role as bookkeeper;

That Glynis has committed a criminal offence for not acting in good faith;

That Glynis failed to disclose a material personal interest;

That Glynis’ accounting practices failed to comply with accounting practices; and

That Glynis’ financial statements did not provide a true and fair view of the company’s financial position.

Therefore, the Court will not make any of the declarations under the Act sought by Wincot.
For the sake of completeness, I will also set out below why it is that even if the challenged entries were incorrect as alleged, the Court still would not have made the declarations sought by Wincot.

Glynis’ defence

In the alternative, Glynis also pleads a defence to Wincot’s application for declarations in relation to the breach of the various statutory duties under the Act.
If it were found that Glynis had made incorrect accounting entries, Glynis seeks an order under s 1318 of the Act that she be relieved wholly from any liability.
Section 1318 of the Act states:

“(1) If, in any civil proceeding against a person to whom this section applies for negligence, default, breach of trust or breach of duty in a capacity as such a person, it appears to the court before which the proceedings are taken that the person is or may be liable in respect of the negligence, default or breach but that the person has acted honestly and that, having regard to all the circumstances of the case, including those connected with the person's appointment, the person ought fairly to be excused for the negligence, default or breach, the court may relieve the person either wholly or partly from liability on such terms as the court thinks fit.”

Section 1318 involves the Court undertaking a three stage inquiry (Australian Securities and Investments Commission v Healey (No 2) [2011] FCA 1003 at [84]):

Whether the applicant has acted honestly;

Whether having regard to all the circumstances the applicant ought fairly to be excused; and

Whether the applicant should be relieved from liability wholly or in party and if partly, to what extent.

Australian Securities and Investments Commission v Vines [2005] NSWSC 1349 at [52] (“Vines”) is authority for the proposition a person has acted honestly if the person acts “without moral turpitude.”
Austin J’s conclusion on this point was not disturbed in the subsequent appeal: Vines v Australian Securities and Investments Commission [2007] NSWCA 75; (2007) 73 NSWLR 451.
The second and third elements for the Court to consider are much more subjective. The Court has a wide discretion and as noted in Vines at [46], “it is extremely difficult to attempt to lay down general principles because, of necessity, each case will very much depend on its own circumstances.”
Glynis submitted that she acted honestly in relation to her bookkeeping. Glynis took pride in her work and as was recorded above in paragraph [213], Glynis had a “commitment to achieving accuracy.” Glynis acknowledged the limitations of her knowledge and where she felt entries were beyond her skillset, she defaulted to the opinion of those who she deemed more qualified, namely Brian and Mr Herd. This was in order to not compromise the quality of her work.
Furthermore, it was acknowledged by all parties that Glynis sought advice from either Brian or Mr Herd in relation to transactions which were beyond typical everyday transactions. This practice of Glynis seeking advice was not only in relation to difficult transactions, but also extended to making the end of financial year journal entries.
Although repeatedly pressed during cross-examination, Glynis never conceded any entry was knowingly false. I give this considerable weight when also considering the credit findings I have made regarding Glynis, as noted in paragraphs [183] to [184] above.
In considering Glynis’ liability it is also necessary to take into account the size of Wincot. Wincot was a small company, which consisted of just Brian, Jill and Glynis. The company lacked the resources to employ an accountant on a fulltime basis, so Glynis dutifully took on those responsibilities. When considering the nature of Wincot as a company, Glynis’ behaviour was entirely reasonable.
It was completely sensible for Glynis to act as she did, and to follow the advice of Mr Herd when she was uncertain how to record specific transactions. The reasonableness of Glynis’ actions in deferring to Brian or Mr Herd is underscored by Glynis’ lack of formal training or qualifications.
Glynis did make some mistakes in her bookkeeping. However, the nature and effect of those mistakes must be considered. The consequences of Glynis’ actions were not great, in that neither Wincot nor the Chetwynds suffered any actual damage by reason of Glynis’ accounting. Similarly, Glynis did not derive any significant personal gain from the accounting entries. While a credit entry was made in Glynis’ loan account, she never sought to call upon the outstanding balance with Wincot.
As such, even if I had been satisfied that Glynis has acted improperly and contravened the Act (which I am not), I would not have made the declarations sought by Wincot. In accordance with s 1318 of the Act, the Court would have excused Glynis for her actions and relieved her of any liability.

Conclusion

Unfortunately, the nature of these proceedings means that it is not as simple as now giving the parties time to bring in short minutes to give effect to these reasons. Rather, I will give the parties time to consider these reasons and determine what they say the next steps should be.
There is an outstanding claim by the Chetwynds for interest at Supreme Court rates on the amount of approximately $70,000 that was held for them by Glynis which she paid during the course of these proceedings (see paragraph [395] above). If that claim is still pressed, the Court will give directions for short written submissions to be exchanged as the point has not been the subject of argument.
Leave to file those submissions will also extend to any claim made for interest in relation to any of the other amounts for which any party has been held liable to the other or in respect of which an adjustment should be made (see the summary in paragraph [13] above).
It will also be necessary for the Court to determine the question of costs. Subject of course to hearing any applications (including for special costs orders), it is my preliminary view that costs should follow the event so that the Chetwynds and Wincot will be liable to pay Glynis’ costs of the proceedings. Wincot’s liability should only relate to the 2018 hearing being the only hearing to which it was a party. In real terms the Chetwynds have enjoyed very small success and Wincot none. So there appears to me no basis to vary what would otherwise be the usual costs order. I emphasise that these are merely preliminary observations for the assistance of the parties, and I will hear the Chetwynds if they wish to contend otherwise.
The practical reality is that these reasons, and the orders that will be made to give them effect, will not bring matters to a close between the parties. That is a particularly unfortunate outcome given the age and circumstances in life of each of Brian, Jill and Glynis. For that reason I conclude this judgment by urging the parties in the strongest possible terms to give serious consideration to whether it is possible for them, by a formal mediation or otherwise, to attempt to reach a solution that involves a complete settlement between them in the light of these reasons. If that is an opportunity of which the parties wish to avail themselves, then the Court is prepared to allow a reasonable hiatus for that to occur before resolving any outstanding matters and making final orders.

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Decision last updated: 21 February 2020

Medium Neutral Citation:	Chetwynd v Rose [2020] NSWSC 111
Hearing dates:	20, 22 March 2017; 4, 5, 6, 7, 26, 27 April 2017; 24 August 2017; 15, 16, 17 October 2018; further written submissions 22 October, 6 December 2018, 21 January 2019
Decision date:	21 February 2020
Jurisdiction:	Equity
Before:	Kunc J
Decision:	Armidale property held by defendant in trust for herself and natural plaintiffs; some adjustments and liabilities established by the natural plaintiffs against the defendant and vice versa.
Catchwords:	EQUITY — Trusts and trustees — Resulting trusts — No issue of principle — Dispute as to ownership of assets and related obligations at conclusion of longstanding but undocumented quasi-partnership — Plaintiffs attempt to undo longstanding accounting treatment of the relationship between the parties
Legislation Cited:	Conveyancing Act 1919 (NSW) Corporations Act 2001 (Cth) Evidence Act 1995 (NSW) Supreme Court Act 1970 (NSW)
Cases Cited:	Arrow Custodians Pty Ltd v Pine Forests of Australia Pty Ltd [2008] NSWSC 839; (2008) 14 BPR 149 Australian Securities & Investment Commission v Healey (No 2) [2011] FCA 1003 Australian Securities and Investments Commission v Vines [2005] NSWSC 1349 Aytul Ak-Tankiz v Ferat Ak & Ramazan Ak [2014] NSWSC 1044 Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 Calverley v Green [1984] HCA 81; (1984) 155 CLR 242 Chamberlain (t/as capacity as liquidator of Gerard Cassegrain and Co Pty Ltd (in liq)) v Cassegrain [2015] NSWSC 1838 Cubillo v Commonwealth of Australia (No 2) [2000] FCA 1084; (2000) 103 FCR 1 Forgeard v Shanahan (1994) 35 NSWLR 206 Fulton v Fulton [2014] NSWSC 619 Maria Saravinovksa v Krste (Chris) Saravinovski; Chris Saravinovski v George Saravinovski (No 6) [2016] NSWSC 964 Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692 Napier v Public Trustee (1980) 32 ALR 153 Re Fettell (1952) 52 SR (NSW) 221 Sangha v Baxter [2009] NSWCA 78 Steinberg v Federal Commissioner of Taxation [1975] HCA 63; (1975) 134 CLR 640 Tory v Tory [2007] NSWSC 1078 Vendervell v Inland Revenue Commissioners [1967] 2 AC 291 Vines v Australian Securities and Investments Commission [2007] NSWCA 75; (2007) 73 NSWLR 451 Warner v Hung, in the matter of Bellpac Pty Ltd (Receivers and Managers appointed) (In liquidation) (No 2) [2011] FCA 1123; (2011) 297 ALR 56 Watson v Foxman (1995) 49 NSWLR 315 Whitehead v Whitehead [2002] NSWSC 486
Category:	Principal judgment
Parties:	Brian Chetwynd (First Plaintiff) Jill Chetwynd (Second Plaintiff) Wincot Pty Ltd (Third Plaintiff) Glynis Rose (Defendant)
Representation:	Counsel: B Chetwynd (Litigant in person, for himself, J Chetwynd and Wincot Pty Ltd) H Stowe (Defendant) Solicitors: Fishburn Watson O’Brien (Defendant)
File Number(s):	2015/223303
Publication restriction:	No