Fairfield Pastoral Holdings Pty Ltd v Ridge Estate Pty Ltd (No 4)
[2022] FCA 1
•4 January 2022
FEDERAL COURT OF AUSTRALIA
Fairfield Pastoral Holdings Pty Ltd v Ridge Estate Pty Ltd (No 4) [2022] FCA 1
File number: SAD 312 of 2018 Judgment of: WHITE J Date of judgment: 4 January 2022 Catchwords: CONSUMER LAW – claim of misleading and deceptive conduct pursuant to s 18 of the Australian Consumer Law arising out of a failed business venture – proposed consultancy agreement between the principal parties never executed but parties acted on the basis of the underlying arrangement – whether the consultant made false or misleading representations in relation to his intention to perform, and his performance of duties under, the arrangement – claim for recovery of consultancy payments – claim rejected.
TRUST AND TRUSTEE – claim by the First Applicant for indemnity in respect of the amounts outlaid in its capacity as trustee of the Piney Ridge Trust – where the First Applicant entered into a contract to buy property and contributed funds toward the purchase price – where the first Applicant borrowed an amount secured by a mortgage over the property to complete the purchase – where the First Applicant took out a loan over equipment to complete the purchase – the First Applicant’s claim for indemnity upheld – assessment of amounts to which it is entitled to indemnity.
CONVEYANCING – whether a Deed removing the First Applicant as trustee of the Piney Ridge Trust and replacing it with the First Respondent is voidable under s 86 of the Law of Property Act 1936 (SA) – consideration of the term “creditor” in s 86 – whether Removal Deed constituted a conveyance – claim that the Removal Deed made with the intention of defrauding creditors upheld.
AGENCY – claim that the second respondent received secret commissions from contractors engaged to work at a property at Yennora in NSW– where the Second Respondent was the on site project manager for the redevelopment of the property – several cash payments made to the Second Respondent by two contractors – consideration of the proper claimant for the payment of the secret commissions – claim based on assignment of the separate company’s rights to claim the secret commission payments – absence of the pleading of the assignment – no unfairness or prejudice caused to the second respondent in allowing the claim of assignment – claim upheld.
TORTS – claim of conversion and detinue over items alleged by the applicants to be property of the First Applicant – Respondents concede wrongful refusal to deliver up possession of those items – orders made.
CORPORATIONS – claim for repayment of loans made to the first respondent – whether the applicants proved an outstanding balance in the loan account – claim dismissed.
CORPORATIONS – claims of sham in various appointments and actions for the purpose of distancing the Second Respondent from assets and income – claims of sham not made out.
INSURANCE – claim for insurance proceeds claimed by, and paid out to, the First Respondent on a policy held by the First Applicant – where the Applicants failed to show that the First Applicant had suffered any pecuniary or economic loss pursuant to s 17 of the Insurance Contracts Act 1984 (Cth) – claim dismissed.
CONTRACTS – cross-claim by the Respondents for the sale price of equipment originally owned by the First Respondent and transferred to the First Applicant– whether the First Applicant had agreed to pay for the equipment – finding of agreement to transfer the equipment to the First Applicant for no consideration – cross-claim dismissed.
Legislation: Australian Consumer Law ss 18, 236, 237
Bankruptcy Act 1966 (Cth) ss 73, 149
Competition and Consumer Act 2010 (Cth) s 75B
Evidence Act 1995 (Cth) s 128
Federal Court of Australia Act 1976 (Cth) s 22
Income Tax Assessment Act 1936 (Cth)
Income Tax Assessment Act 1997 (Cth)
Insurance Contracts Act 1984 (Cth) s 17
Trade Practices Act 1974 (Cth) s 82
Crimes Act 1900 (NSW) s 249B
Law of Property Act 1936 (SA) ss 7, 86
Mineral and Energy Resources (Common Provisions) Act 2014 (Qld)
Trustee Act 1936 (SA) s 16
Cases cited: Aequitas v AEFC Leasing Pty Ltd [2001] NSWSC 14; (2001) 19 ACLC 1006
Apostolou v VA Corporation of Australia Pty Ltd [2010] FCA 64; (2010) 77 ACSR 84
Australian Competition and Consumer Commission (ACCC) v Coles Supermarkets Australia Pty Ltd [2014] FCA 634; (2014) 317 ALR 73
Australian Competition and Consumer Commission v Dukemaster Pty Ltd (ACN 050 275 226) [2009] FCA 682
Australian Competition and Consumer Commission v Metcash Trading Ltd [2011] FCAFC 151; (2011) 198 FCR 297
Australian Securities and Investments Commission v Letten (No 17) [2011] FCA 1420; (2011) 286 ALR 346
Boston Deep Sea Fishing and Ice Co v Ansell (1886) 39 Ch D 339
Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61; (2001) 53 NSWLR 153
Bruton Holdings Pty Ltd v Commissioner of Taxation (Cth) [2009] HCA 32; (2009) 239 CLR 346
Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304
Cannane v J Cannane Pty Ltd (in liq) [1998] HCA 26; (1998) 192 CLR 557
Carter Holt Harvey Woodproducts Australia Pty Ltd v The Commonwealth [2019] HCA 20; (2019) 268 CLR 524
Chen v Marcolongo [2009] NSWCA 326; (2009) 260 ALR 353
Chief Commissioner of Stamp Duties (NSW) v Buckle [1998] HCA 4; (1998) 192 CLR 226
Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24; (1982) 149 CLR 337
Elsinora Global Ltd v Commissioner of Taxation [2006] FCAFC 156; (2006) 155 FCR 413
Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55; (2004) 218 CLR 471
Fairfield Pastoral Holdings Pty Ltd v Ridge Estate Pty Ltd (No 3) [2021] FCA 292
Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; (2009) 264 ALR 15
Gibb v Lombank Scotland Ltd [1962] SLT 288
Graziano v Graziano [2010] SASCFC 76
Green v Schneller [2002] NSWSC 671
Hall v Poolman [2007] NSWSC 1330; (2007) 215 FLR 243
Henville v Walker [2001] HCA 52; (2001) 206 CLR 459
I&L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd [2002] HCA 41; (2002) 210 CLR 109
Lane v Deputy Commissioner of Taxation [2017] FCA 953; (2017) 243 FCR 46
Lemery Holdings Pty Ltd v Reliance Financial Services Pty Ltd [2008] NSWSC 1344; (2008) 74 NSWLR 550
Lucas Earthmovers Pty Ltd v Anglogold Ashanti Australia Ltd [2019] FCA 1049
Lym International Pty Ltd v Marcolongo [2011] NSWCA 303
Mahesan v Malaysia Government Offices’ Co‑Operative Housing Society Ltd [1979] AC 374
Mann v Paterson Constructions Pty Ltd [2019] HCA 32; (2019) 267 CLR 560
Marcolongo v Chen [2011] HCA 3; (2011) 242 CLR 546
Novoship (UK) Ltd v Mikhaylyuk [2014] EWCA Civ 908; [2015] QB 499
Official Trustee in Bankruptcy v Alvaro [1996] FCA 483; (1996) 66 FCR 372
Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd [2006] FCAFC 40; (2006) 149 FCR 395
Parkdale Custom Built Furniture Proprietary Ltd v Puxu Proprietary Ltd [1982] HCA 44; 149 CLR 191
Peninsular and Oriental Steam Navigation Co v Johnson [1938] HCA 16; (1938) 60 CLR 189
Powell & Thomas v Evan Jones & Co [1905] 1 KB 11
Raftland Pty Ltd v Commissioner of Taxation (Cth) [2008] HCA 21; (2008) 238 CLR 516
Re Goldsmid ex parte Taylor (1886) 18 QBD 295
Sharrment Pty Ltd v Official Trustee in Bankruptcy (1988) 18 FCR 449
Stone v Chappel [2017] SASCFC 72; (2017) 128 SASR 165
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165
Trim Perfect Australia v Albrook Constructions [2006] NSWSC 153
Wardley Australia Ltd v The State of Western Australia [1992] HCA 55; (1992) 175 CLR 514
Division: General Division Registry: South Australia National Practice Area: Commercial and Corporations Sub-area: Commercial Contracts, Banking, Finance and Insurance Number of paragraphs: 662 Date of last submission/s: 30 September 2021 Date of hearing: 14-17, 20-24 and 29 September 2021 Counsel for the Applicants and Cross‑Respondents: Mr S Ower QC with Mr L Gentry Solicitor for the Applicants and Cross‑Respondents: 1878 Elix Lawyers Counsel for the Respondents and Cross‑Claimants: Mr B Roberts QC with Mr T Kentish Solicitor for the Respondents and Cross‑Claimants: Mellor Olsson ORDERS
SAD 312 of 2018 BETWEEN: FAIRFIELD PASTORAL HOLDINGS PTY LTD ACN 603 973 584
First Applicant
FAIRFIELD PASTORAL HOLDINGS NO 1 PTY LTD ACN 600 365 544
Second Applicant
AND: RIDGE ESTATE PTY LTD ACN 165 731 706
First Respondent
STEVEN PHILIP VAN NIEKERK
Second Respondent
PHILIP FREDERICK VAN NIEKERK (and another named in the Schedule)
Third Respondent
AND BETWEEN: RIDGE ESTATE PTY LTD ACN 165 731 706 (and another named in the Schedule)
First Cross-Claimant
AND: FAIRFIELD PASTORAL HOLDINGS PTY LTD ACN 603 973 584 (and others named in the Schedule)
First Cross-Respondent
ORDER MADE BY:
WHITE J
DATE OF ORDER:
4 JANUARY 2022
THE COURT DECLARES THAT:
1.The Deed of Appointment and Removal of Trustee (the Removal Deed) made on 4 October 2018 by Brenda Van Niekerk (the Fourth Respondent), is a conveyance which was made with the intent to defraud creditors within the meaning of s 86 of the Law of Property Act 1936 (SA).
2.The Removal Deed is void.
3.All conveyances of property effected by the Removal Deed are void.
4.The items listed in Annexure A to the Fifth Statement of Claim and described as the Fairfield Items were, at all material times from on or about 8 April 2016, the property of Fairfield Pastoral Holdings Pty Ltd (FPH) until such time as they were sold or transferred by it.
5.FPH, in its capacity as trustee of the Piney Ridge Trust, is entitled, subject to account being taken of its use of $122,000 to discharge the Whale Beach Loan, to be indemnified from the assets of the Piney Ridge Trust in an amount of $314,741.95.
THE COURT ORDERS THAT:
1.The First, Second and Third Respondents (Ridge Estate Pty Ltd, Steven Van Niekerk and Philip Van Niekerk) are collectively or individually to deliver up to the Second Applicant, Fairfield Pastoral Holdings No 1 Pty Ltd (FPH No 1), by 31 January 2022 the items listed in Annexure B to the Fifth Statement of Claim.
2.There be judgment for the Second Applicant (FPH No 1) against the Second Respondent (Steven Van Niekerk) on the secret commissions claim in the sum of $195,000 inclusive of interest.
3.There be judgment for FPH No 1 against Ridge Estate Pty Ltd on the cattle purchase claim in the sum of $42,720 inclusive of interest.
4.Of the sums held by the Court in the Litigants’ Fund in relation to this Action, $273,178.36, together with the interest accrued on that amount, be paid out to FPH in part satisfaction of its claim to indemnity.
5.The remaining amount held by the Court in the Litigants’ Fund continue to be held in the Litigant’s Fund, subject to the following orders:
(a)if there are current proceedings in a Court at 4 April 2022 concerning the question of whether FPH took out the Whale Beach Loan in its capacity as trustee of the Piney Ridge Trust (Other Proceedings), FPH or the Respondents may apply to a Judge of the Court for an extension of the period in which the funds are so held, pending the determination of the Other Proceedings;
(b)at the conclusion of the Other Proceedings, any person with an interest in the sum held in the Court may apply to a Judge of the Court for an order for the payment out of that sum; and
(c)if at 4 April 2022, there are no Other Proceedings, any person with an interest in the sum held in Court may apply for an order as to its payment out.
6.All other claims of the Applicants be dismissed.
7.All remaining claims in the Respondents’ Cross‑claim be dismissed.
8.I will hear from the parties as to whether any order should be made for payment of some portion of the sum of $273,178.36 to Mr Roberto Lorefice.
9.I direct the Registrar of the Court to refer a copy of this judgment, in particular the portion concerning the secret commissions, to the Director of Public Prosecutions in New South Wales.
10.I will hear from the parties with respect to costs.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
WHITE J:
Introduction
[1]
The parties
[3]
An overview of the applicants’ claims
[10]
Sham arrangements
[11]
Misleading or deceptive conduct
[12]
Restitution
[22]
Conversion and detinue
[23]
Recovery of loans
[26]
Secret commissions
[27]
A trustee’s claim to indemnity
[29]
Insurance proceeds
[36]
The cattle purchase and agistment agreement
[37]
Licence of Lot 2 - peppercorn rent
[40]
An overview of the respondents’ cross-claim
[41]
The applicants’ witnesses
[43]
The respondents’ evidence
[51]
The conflicting accounts of Steven’s wealth and bankruptcy
[59]
Other matters bearing on the assessment of Steven’s evidence
[85]
The misleading or deceptive conduct claim
[91]
The factual setting
[94]
The applicants’ pleaded case
[115]
The pleaded representations
[127]
The pleaded case of falsity
[129]
The pleading of reliance and loss
[132]
Were the representations made?
[136]
Dr Hamilton’s evidence concerning the representations
[137]
Steven’s affidavit evidence concerning the PCA arrangement
[141]
Dr Hamilton’s reply evidence
[142]
Did Steven make the Property Transfer Representation?
[145]
Did Steven make the February Properties Representation?
[150]
Did Steven make the representations concerning the Beelbee Road Properties in June 2015?
[159]
Did Steven make representations in November 2015 concerning the Beelbee Road Properties?
[163]
Did Steven make the representations with respect to the December Properties?
[169]
Did Steven make the representations concerning Lot 43, SW Valley Road, Kogan?
[175]
Did Steven continue in 2015 his representations concerning the Fairfield and Millbrook Properties?
[176]
Did Steven make the representations by texts and emails in the period February 2015 to October 2018 concerning his performance of the PCA?
[184]
Were Steven’s representations misleading or deceptive?
[185]
Steven’s expertise
[190]
The applicants’ submission concerning an implicit admission
[192]
Lots 19, 20 and 2572 Weranga North Road and Lot 68 Kerwicks Road
[195]
The Beelbee Road Properties
[204]
The December Properties
[214]
Lot 43 SW Valley Road, Kogan
[226]
General matters
[228]
Evaluation
[229]
The purchase of Ridgebrook
[249]
Background circumstances
[252]
Evaluation
[265]
Transfer of the Fairfield Property, Millbrook and Ridgebrook
[272]
Conclusion
[287]
The refusal to execute a written consultancy agreement
[289]
The evidence
[290]
The backdating proposed by Dr Hamilton
[305]
Steven’s explanation
[307]
Steven’s motivation to prolong the receipt of benefits
[314]
Conclusion on the claim of misleading or deceptive conduct
[318]
The sham claim
[320]
Reliance and causation
[334]
The restitution claim
[344]
The conversion and detinue claim
[350]
FPH’s claims arising from its trusteeship of the Piney Ridge Trust
[353]
Factual setting
[354]
The fraudulent conveyance claim
[363]
Section 86 and relevant principles
[367]
Is FPH a creditor to whom s 86 may apply?
[370]
Did the Removal Deed constitute a “conveyance”?
[377]
The circumstances in which the Removal Deed was made
[386]
Was the Removal Deed made with the intention of defrauding creditors?
[396]
FPH’s claim to indemnity
[405]
The deposit and the funds lent at settlement
[408]
Repayments on the NAB home loan
[409]
The NAB Equipment Loan
[411]
Assessment of the claim for indemnity
[417]
The Whale Beach Loan
[418]
Initial deductions from the starting point of $479,295.45
[434]
The respondents’ contentions for further deductions
[436]
Amounts representing payments of the consultancy fee
[437]
Claims not supported by documents
[443]
Amounts said to be unrelated to the proper administration of the Piney Ridge Trust
[445]
Judicial sale order costs
[447]
Amount contributed by Ridge Estate
[450]
The $122,000 applied to discharge the Whale Beach Loan
[451]
Summary of deductions from the adjusted starting point
[453]
The loan claim
[456]
Was there a loan account between FPH No 1 and Ridge Estate?
[458]
Has FPH No 1 proven the balance of the loan account?
[464]
The Lorefice Loan
[464]
Other misconceptions/inadequacies in the applicants’ evidence
[470]
The secret commissions claim
[483]
Introduction
[483]
Factual setting
[487]
Was FPH No 1 appointed Project Manager of the Yennora Project?
[494]
Did Steven work as Project Manager?
[518]
Did Steven obtain secret commissions?
[531]
(i) Mr Ray Theuma
[532]
(ii) Mr Joe Pasqua
[546]
Steven’s evidence
[561]
Finding as to Steven’s demanding the secret commissions
[562]
The proper claimant for payment of the secret commissions
[563]
The claim based on the assignment
[572]
The absence of a pleading
[579]
Conclusion on the secret commissions claim
[585]
The insurance proceeds claim
[586]
The unpaid cattle purchase price
[597]
The cattle agistment claim
[601]
Licence of Lot 2 - peppercorn rent
[607]
The respondents’ cross-claim with respect to the equipment
[614]
The factual setting for the equipment claim
[617]
The provision of the Equipment Loan
[624]
Aspects of Steven’s evidence
[635]
Conclusion regarding FPH’s liability to pay for the Annexure A Items
[646]
Summary
[655]
Disposition
[663]
Declarations
[664]
Orders
[664]
Introduction
Dr Andrew Hamilton and Mr Steven Van Niekerk met in September 2014. Out of that meeting, there developed a friendship and, in turn, their pursuit of interwoven business ventures. Over time, their relationship soured. The disputes between them became manifest in mid‑2018 and, by October 2018, their relationship had broken down completely.
This judgment concerns the multi‑faceted litigation emanating from that breakdown.
The parties
The first applicant, Fairfield Pastoral Holdings Pty Ltd (FPH), was registered on 2 February 2015. It was originally known as Regional Pastoral Properties Pty Ltd (RPP) but changed to its current name on 11 December 2015.
The two principal shareholders of FPH are Dr Hamilton and Cradle Estate Pty Ltd, a company associated with, and controlled by, Steven Van Niekerk. They each hold 500,001 shares. The other current shareholders are Jamie Dyer Investments Pty Ltd (2,778 shares), Petrichor Projects Pty Ltd (111,111 shares) and PPD (Investments) No 1 Pty Ltd (105,263 shares). Petrichor Projects is a company associated with Mr Vaughan King and PPD Investments a company associated with Mr Nicholas Peacock.
The second applicant, Fairfield Pastoral Holdings No 1 Pty Ltd (FPH No 1) is a wholly owned subsidiary of FPH. It was acquired by FPH on 6 February 2015.
Dr Hamilton is the sole director of both FPH and FPH No 1.
The four respondents are Ridge Estate Pty Ltd (Ridge Estate), Steven Van Niekerk, Philip Van Niekerk and Brenda Van Niekerk. Steven is the son of Philip and Brenda. For convenience in distinguishing between them in these reasons, I will refer to them as Steven, Philip and Brenda.
Ridge Estate was incorporated on or about 10 September 2013 and is the trustee of the Ridge Estate Trust which was established at about the same time. The sole share in Ridge Estate is owned by Andrew Van Niekerk, who is also a son of Philip and Brenda. Philip is the sole director of Ridge Estate.
Steven was declared bankrupt on 26 June 2014 and discharged from that bankruptcy on 27 June 2017.
An overview of the applicants’ claims
The applicants sue on multiple causes of action. It is convenient to identify them briefly at this stage.
Sham arrangements
The applicants allege that a number of appointments and transactions involving Steven and Ridge Estate and the assets associated with them were shams. A particular consequence, they allege, is that all of the assets held by Ridge Estate, whether in its own capacity or as trustee of the Ridge Estate Trust, are held as bare trustee for Steven.
Misleading or deceptive conduct
The applicants’ primary claim is one of misleading or deceptive conduct in contravention of s 18 of the Australian Consumer Law (the ACL) contained in Sch 2 to the Competition and Consumer Act 2010 (Cth) (the CC Act). The claim arises out of the agreement of Dr Hamilton and Steven to pursue forms of land investment and speculation. They hoped to identify and purchase properties which would, for reasons to be developed later, return handsome income or provide significant capital appreciation. Over time, there developed a plan to fund the purchases by soliciting investments from external investors.
Ultimately, the venture between Dr Hamilton and Steven failed. No properties were ever acquired. Dr Hamilton and Steven did attract two investors (the companies associated with Mr King and Mr Peacock respectively). Petrichor Projects invested $250,000 in July 2015 and a further $250,000 in November 2015. PPD (Investments) invested $250,000 in May 2016. As I understand it, subject to the outcome of this litigation, those investments have been wholly lost.
The negotiations between Dr Hamilton and Steven seemed to have commenced in earnest in about December 2014. They contemplated an agreement pursuant to which Ridge Estate and Steven would act as consultant to companies to be formed by them so as to identify, source and negotiate the acquisition of suitable pastoral land with a view to them profiting from compensation payments paid in connection with the extraction of coal seam gas (CSG) from that land. Dr Hamilton referred to this as “the Fairfield Pastoral Model”. In exchange, the companies would pay a consultancy fee to Ridge Estate of $15,000 per month exclusive of GST (the Consultancy Fee). The applicants referred to this agreement as “the Proposed Consultancy Agreement” (the PCA).
A written consultancy agreement of the kind pleaded by the applicants between FPH, on the one hand, and Ridge Estate and/or Steven, on the other, was never executed. However, commencing on 12 February 2015, consultancy fees were paid to Ridge Estate. These continued reasonably regularly until July 2017. In addition, the applicants provided Steven with several motor vehicles and paid substantial amounts by way of expenses.
The initial funding of FPH’s operations was by loans totalling $120,000 from the Hamilton Family Trust. Those loans were repaid in May 2016 using part of the funds invested by PPD Investments.
On 2 November 2018, the applicants terminated the consultancy agreement with immediate effect.
The applicants plead that, throughout the period from February 2015 until October 2018, Dr Hamilton (and through him FPH and FPH No 1) “believed and intended” that the PCA, or a contract of its kind and nature, “was in fact in existence as a binding contract” between FPH, Ridge Estate and Steven, and that Steven knew that Dr Hamilton had that belief and intention.
The applicants allege that “at all material times” (that is, the whole of the period between February 2015 and 2 November 2018), Steven (and through him Ridge Estate) had not intended to perform any of the conduct, duties and obligations promised under the PCA or of a contract of its kind. They allege further that while Steven and Ridge Estate had represented to Dr Hamilton that Steven was identifying, sourcing and negotiating with the owners of suitable properties for purchase or lease by FPH, he was in fact doing no such thing. Instead, Steven and Ridge Estate had only purported to perform the required duties.
The applicants allege that the representations of Steven and Ridge Estate were misleading or deceptive, in contravention of s 18 of the ACL, that they were misled, and that Philip was a person “involved” within the meaning of s 75B of the CC Act in those contraventions. They seek, pursuant to ss 236 and 237 of the ACL, recovery of the Consultancy Payments ($424,684.40), recovery of the payments made in respect of the motor vehicles ($248,286.32), recovery of the payments made to Steven by way of reimbursement of expenses ($288,119.26), and recovery of the amounts said to have been loaned to Ridge Estate by way of cash advances which, after some setting off, are said to amount to $82,321.70.
The applicants’ claim in short is that Steven, and through him, Ridge Estate, engaged in a long running fraud by which he induced them to believe that a consultancy arrangement was in place and took the benefits under the arrangement, while never intending to perform the duties expected of him under the arrangement or under the PCA.
Restitution
The applicants mount, in the alternative, a claim of restitution in respect of the same sums it seeks to recover under the ACL on the basis, principally, of an alleged total failure of consideration.
Conversion and detinue
The applicants allege that, in December 2015, FPH No 1 purchased from Ridge Estate a Honda quad bike, a Honda tow‑behind slasher and a John Deere ride‑on mower for which FPH No 1 paid a purchase price of $22,000. They also allege that FPH No 1 was the owner of other items of equipment (together the FPH No 1 Items). The applicants claim that Ridge Estate, Steven and Philip have wrongfully failed and refused to deliver up possession of the FPH No 1 Items. They had made a like claim in respect of the motor vehicles supplied to Steven but, earlier in the proceedings, the respondents consented to an order for delivery of the vehicles, and they complied with that order.
The applicants allege that the value of the FPH No 1 Items said to be retained by the respondents is approximately $25,000.
The respondents admit that the FPH No 1 Items are owned by FPH No 1 and accept that FPH No 1 is entitled to an order for the delivery up of those Items.
Recovery of loans
The applicants allege that between July 2015 and August 2018, FPH No 1, at Steven’s request, made loans to Ridge Estate by way of cash or EFT advances (the RE Loan). They allege that these totalled $240,934.60 and, after allowing for credits, seek to recover $82,321.70 of that amount. The respondents deny this claim and say that any payments made were payments in advance for expenses to be incurred by Steven in the conduct of the business. They also raise other answers to the claim.
Secret commissions
The applicants allege that in early 2018, AusPods Property Pty Ltd (AusPods Property) appointed FPH No 1 as Project Manager for the refurbishment and upgrade of a warehouse at Lot 5 Pine Road, Yennora in New South Wales (the Yennora Property) and that FPH No 1 appointed Steven to act as the onsite Project Manager and its agent for those works. They allege that, in the performance of his work as Project Manager, Steven negotiated contracts with two contractors, AuqSap Pty Ltd trading as Sealutions Industrial Flooring (Sealutions) and with a Mr Raymond Theuma. Mr Joe Pasqua is a director of Sealutions. The applicants allege that between March and May 2018, Steven required Sealutions to pay amounts to him, in the nature of secret commissions, in respect of its contracted works, which amounts Steven retained for his own use. They allege that between June and October 2018, Steven required Mr Theuma to pay amounts to him, also in the nature of secret commissions, in respect of his works which, again, Steven retained for his own purposes.
The applicants allege that Steven received amounts totalling $115,000 from Sealutions and $60,000 from Mr Theuma. They allege that these were secret commissions for which Steven must account to FPH No 1.
A trustee’s claim to indemnity
Ridge Estate is the registered proprietor of Lot 1, 252 Piney Ridge Road, Brukunga, in South Australia (Lot 1). Early in 2016, the neighbouring property (Lot 2, 252 Piney Ridge Road, Brukinga (Lot 2)), became available for purchase. Both Lot 1 and Lot 2 are rural properties. The applicants allege that Steven wished to acquire Lot 2 but was not in a position to do so.
The applicants plead that Dr Hamilton and Steven agreed upon an arrangement by which:
(a)a trust known as the Piney Ridge Trust (the PRT) would be established;
(b)FPH would be the initial trustee of the PRT;
(c)FPH, in its capacity as trustee of the PRT, would:
(i)enter into a contract to purchase Lot 2 for a purchase price of $750,000;
(ii)pay a deposit of $30,000 from its own funds;
(iii)provide a further amount of $59,500 from its own funds towards the purchase price; and
(iv)borrow $525,000 from NAB secured by a mortgage over Lot 2 to complete the purchase price.
FPH was also to raise $182,130 from NAB by way of an equipment loan and goods mortgage (the Equipment Loan) and Dr Hamilton was to provide a personal guarantee to NAB in respect of FPH’s indebtedness to it.
The applicants plead that the arrangement between Dr Hamilton and Steven contemplated that Steven would, within a short period, arrange refinancing of Lots 1 and 2 so as to repay the amounts advanced by FPH and discharge FPH’s indebtedness to NAB (which would also involve a release of Dr Hamilton’s guarantee). FPH was appointed the trustee of the PRT on or about 31 March 2016 and it completed settlement on the purchase of Lot 2 on 8 April 2016, in accordance with the arrangements set out above. The applicants claim that the respondents did not obtain the refinance contemplated.
By a deed executed on 4 October 2018, Brenda exercised her power as appointor of the PRT to remove FPH as trustee and to appoint Ridge Estate in its place. Subsequently, the respondents directed FPH to convey Lot 2 to Ridge Estate. They assert that FPH failed to do so and was thereby in breach of duty. The applicants contend that the Removal Deed is voidable under s 86 the Law of Property Act 1936 (SA) (the LoP Act) and seek a declaration that it is void.
FPH also asserts an entitlement to an indemnity in respect of the amounts it has outlaid in its capacity as trustee of the PRT. On 26 March 2021, on the applicants’ application, the Court made an order for judicial sale of Lot 2 (Fairfield Pastoral Holdings Pty Ltd v Ridge Estate Pty Ltd (No 3) [2021] FCA 292 (the Judicial Sale Judgment)) and settlement on the sale occurred on 5 July 2021. In accordance with the Court’s orders, the proceeds of the sale, after deduction of the amounts secured by mortgage over Lot 2, have been paid into Court to await the determination of the proceedings. The amount paid in was $375,178.36. Pursuant to orders made on 31 August 2021, a further $22,000 (the proceeds of the sale of hay) was paid into Court.
FPH seeks an order as to its entitlement to indemnity and an order that it is entitled to exercise its right of indemnity as trustee against the whole of the amounts paid into Court. The entitlement of FPH to such an order will have to take account of the fact that FPH discharged a loan secured by mortgage over Lot 2 about which the Court was not informed when making the order for judicial sale and which FPH had not, at that time, sought to vindicate as a liability of the PRT.
Insurance proceeds
The applicants allege that in 2016 and 2017, Steven, purporting to act on behalf of FPH but without its authority, made two claims on the insurance policy held by FPH in respect of Lot 2 and caused the insurer (QBE Insurance (Australia) Limited (QBE)) to pay those proceeds to himself and/or Ridge Estate and not to FPH. FPH claims the insurance proceeds of $62,000.
The cattle purchase and agistment agreement
FPH No 1 alleges (and the respondents admit) that in June 2016, it sold 40 cattle to Ridge Estate for a purchase price of $87,120. It claims that Ridge Estate has paid only $49,040 of that purchase price. FPH No 1 claims the balance of $38,060 as a debt due and owing to it.
The respondents acknowledge that $37,720 remains owing in respect of the cattle but claim that there was an agreement between Dr Hamilton and Steven that this amount would be set off against amounts owing by FPH to Ridge Estate. There is, however, no pleading concerning the claimed set off.
FPH alleges that it agreed with Ridge Estate and Steven on about 1 June 2016 to agist on Lot 2 the cattle which Ridge Estate had purchased from it. It alleges that Ridge Estate has failed to pay the agistment fees and claims $37,720 as a debt due and owing to it.
Licence of Lot 2 - peppercorn rent
The applicants plead that, in early 2018, Steven represented to a Mr Bayes that he had the authority of FPH to grant him a licence to occupy Lot 2; that subsequently, Ridge Estate and Steven (purporting to act as FPH’s agent) made an agreement with Mr Bayes by which he could occupy Lot 2 in consideration of payment of $12,500 to Ridge Estate and $1 to FPH. They allege that effect was given to this arrangement without any agreement from FPH. FPH alleges that this conduct of Ridge Estate and Steven was misleading or deceptive in contravention of s 18 of the ACL and that it has thereby suffered loss and damage. It claims damages of $60,000 in respect of this alleged loss.
An overview of the respondents’ cross-claim
Ridge Estate and Steven bring a cross‑claim against FPH, Dr Hamilton and FPH No 1. Elements of the Cross‑Claim were struck out on 26 March 2021 by reason of serious procedural defaults by the respondents – see the Judicial Sale Judgment at [102]‑[133].
Of the remaining claims, the respondents pursued only a claim with respect to the equipment of Ridge Estate which the respondents alleged had been misappropriated by Dr Hamilton, FPH or FPH No 1. As pleaded, Ridge Estate makes claims for the return of the equipment, accounting with respect to the proceeds of those items sold by FPH and damages for conversion or detinue. However, in the final submissions, Ridge Estate pursued only a claim for payment of the amount it alleges FPH had agreed to pay for the items, namely, $240,713.
The applicants’ witnesses
The applicants led evidence from Dr Hamilton, Mr Vaughan King (whose company Petrichor Holdings invested in FPH), Mr Bernays, Mr Pasqua, Mr Theuma, and from Mr Bayes. With the exception of Mr Bayes, the evidence in chief of all the witnesses was contained in affidavits. Mr King and Mr Bernays were not required to attend for cross‑examination on their affidavits.
I considered the evidence of Mr Pasqua, Mr Theuma and Mr Bayes to be honest and reliable. The respondents did not contend to the contrary.
Dr Hamilton is a cardiologist and obviously a person of some intelligence. However, he was an unimpressive witness. At several points, his evidence gave the impression that it was a narrative which Dr Hamilton had constructed, or reconstructed, from the written materials. That is to say, it was an account on which Dr Hamilton had settled in retrospect, drawing on those parts of the records which he thought supported, or could be adopted to support, his narrative. I think that this explains in part why Dr Hamilton said so often that his omission to mention or disclose matters in his evidence was attributable to “oversight”. The “oversight” was a function of the way Dr Hamilton had selected the matters which fitted his narrative.
Significant parts of Dr Hamilton’s evidence were marked by muddled thinking, inattention to detail and incoherence. It was difficult to believe that Dr Hamilton really could have been as incredulous as he seemed in his dealings with Steven or as his own counsel described it, so “big a sucker”.
I considered that Dr Hamilton well appreciated where his interests lay in this litigation and there were times when I thought it obvious that that appreciation and the obvious antipathy between him and Steven had led to the confection of evidence.
It did Dr Hamilton no credit that he had been prepared in the pursuit of the affairs of FPH and FPH No 1 to issue documents in the nature of information memoranda to potential investors which he knew to contain falsehoods concerning material matters. It also did him no credit that the evidence revealed other occasions when he had been willing to make false statements to others in the pursuit of his own ends.
There were numerous instances in Dr Hamilton’s evidence in which he sought (inappropriately in my view) to shift responsibility for his conduct to Steven.
Generally, therefore, I have considered it appropriate to exercise considerable caution before acting on Dr Hamilton’s evidence. I have attached greater weight to the contemporaneous documents and the inferences arising from them.
The respondents’ evidence
The respondents led evidence from Steven only. They had filed and served an affidavit from Philip in anticipation of him giving evidence but he was not called. Philip and Brenda were present during the trial.
Steven is 46 years old and left Queensland University of Technology in 1999 part way through a Bachelor of Business course. Steven described himself as a “property acquisition consultant” and said that his occupations since leaving University have principally been in the purchase, letting, development and selling of real estate. Steven said that his work experience included one year as a consultant in the head office of Ray White Real Estate in Brisbane; a period with Watpac Constructions; a period with Indigo Group (a Brisbane based property development company); four years with RSL Care working in the acquisition of land for its aged care facilities; and a period with Queensland Gas Corporation (QGC) in 2010‑2011.
Steven also said that he had pursued property development in his own right since leaving university but had suffered as a result of the Global Financial Crisis (GFC) in 2008. His debts had been such that, on 26 June 2014, he and his wife had entered bankruptcy on their own petition.
Steven said that he suffers from dyslexia. On many occasions in his evidence, Steven asked for a document to be read to him so that he could better follow it. He also said that, by reason of his dyslexia, it had been his practice to make use of audio books and to convert written material into email format so that his computer could “read it” to him. Steven said that he had preferred oral rather than written communications with Dr Hamilton. There was a seeming challenge at the commencement of the cross‑examination to Steven’s claim of dyslexia and it does seem that the condition may not have been the subject of a formal medical diagnosis. However, I accept that Steven does suffer from dyslexia and that that hampers to some extent his ability to comprehend readily the written word.
In making my assessment of Steven’s evidence, I have endeavoured to keep his dyslexia firmly in mind. However, even taking that condition into account, Steven was a particularly unimpressive witness. It is plain that he is a person who is careless with the truth. Much of his evidence was marked by arrogance, evasiveness and bluster. There were multiple occasions when he had to be directed to answer the cross‑examiner’s question. On occasions, his evasiveness extended to refusals to acknowledge the truth of a matter until he had been taken to the written record concerning it. There were times when he would advance alternative accounts or explanations which were no more than speculative possibilities for the matter in question.
At times, Steven displayed an attention to detail, but at other times, when it seemed to suit him, he professed a disinterest in matters of detail.
During his evidence, Steven seemed ever ready to make gratuitous remarks which were disparaging and critical of Dr Hamilton. Even allowing for the antipathy which now exists between Steven and Dr Hamilton, this did not add to his credibility.
The evidence to which I will refer when addressing the applicants’ secret commissions claim and to a lesser extent the evidence concerning the licence to use Lot 2 indicates that Steven is a person who is willing to engage in dishonest conduct. That too undermines his credit worthiness.
The conflicting accounts of Steven’s wealth and bankruptcy
It is convenient to make findings at this point concerning the evidence about two inter‑related topics which reflected poorly on the credit of both Dr Hamilton and Steven, but more so on Steven. That is the evidence about what Steven is said to have told Dr Hamilton about his wealth and his bankruptcy.
In the affidavit containing his evidence in chief, Dr Hamilton deposed that, at or about the time of their first meeting, Steven had told him that he was “a property developer and had developed a significant portfolio leading up to the [GFC] but that as a result of the [GFC] he [had been] forced to sell off his property portfolio”. He also deposed:
[6]Steven did not tell me that he was bankrupt at any stage prior to us meeting, and when I asked him whether he had become a bankrupt as a result of the GFC, he told me that he did not.
In the affidavit which he filed in reply to the affidavit containing Steven’s evidence in chief, Dr Hamilton gave a much enlarged account, namely, that Steven had told him at one of their early meetings that:
[13.2.1]he had been very successful in the apartment space in Brisbane, where he still controlled over 100 apartments;
[13.2.2]he had moved to Adelaide with his family to live on a large property that he had purchased that was worth $4.5M in order to start living the "River Cottage life";
[13.2.3]he was the under bidder for the Crafers hotel - where he had placed a bid for $2.5M;
[13.2.4]he continued to have Gold Coast Apartment assets that he looked after and which were cash flow positive;
[13.2.5]he had recently purchased a JD tractor for $130k for which he paid cash;
[13.2.6]he had made a lot of money buying properties in Chinchilla that had coal seam gas wells on them, and that as a result, he collected disturbance payments from the gas companies; and
[13.2.7] he had been so successful he no longer had to worry about working.
In cross‑examination, Dr Hamilton said that Steven had portrayed himself as financially successful and independently wealthy; that Steven had said that he had a “120 million dollar property portfolio”; that because of the GFC he had to sell some of the property portfolio; that Steven had said that he had to sell some of the apartments which he controlled but still had control over 100 apartments; that the assets which Steven was continuing to hold were those which survived the GFC; and that Steven had said that when the banks “turned off the taps” after the GFC, he had to sell off some of his property portfolio and had done a deal with Westpac using the Financial Ombudsman. Dr Hamilton disagreed that he had been prompted to ask Steven whether he had gone bankrupt because of the difficulties following the GFC about which Steven had told him.
As counsel for the respondents submitted, there is an incongruity between Dr Hamilton’s evidence that Steven had told him that, even after the GFC, he still controlled over 100 apartments in Queensland, on the one hand, and his evidence that he had been prompted to ask Steven whether he had gone bankrupt in consequence of the GFC, on the other. There is also an incongruity in Dr Hamilton’s evidence that Steven had told him in their initial meeting that he was wealthy enough that he did not need to work again, while saying, at or about the same time, that he needed the consultancy payment of $15,000 per month for “cashflow”.
Dr Hamilton’s evidence about these matters was marked by inconsistency. I am, however, willing to accept that part of the inconsistency may be attributable to Steven imparting the information recounted by Dr Hamilton over a series of meetings and to Dr Hamilton’s dupability having the effect that he did not recognise the inconsistencies at the time. I note in this respect Dr Hamilton’s evidence that he had regarded Steven as “very engaging, interesting and charismatic”. It was also very evident that Dr Hamilton had been captivated by the money making opportunity which Steven portrayed in telling him about CSG disturbance payments. My impression is that Dr Hamilton’s greed and gullibility meant that he did not bring any sense of incredulity to bear when listening to Steven’s tales of his wealth and success in Queensland and thereby overlooked the inconsistencies in Steven’s accounts.
To my mind, it seems doubtful that Dr Hamilton would have been prompted to ask Steven whether he had gone into bankruptcy given the impression of wealth and success which Steven was conveying. However, it was not suggested that the Court should disbelieve Dr Hamilton’s evidence that he had made such an enquiry. Accordingly, I will accept that, in the context of Steven telling Dr Hamilton of his financial success before the GFC and the effect which it had had, Dr Hamilton did ask Steven whether he had gone bankrupt. For the reasons to be given shortly, I consider it likely, and so find, that Steven gave a negative answer to that question.
Steven’s evidence concerning his bankruptcy raised serious matters concerning his credit worthiness. In four passages in the affidavit containing his evidence in chief, Steven deposed on his oath to having entered into a composition with his creditors pursuant to s 73 of the Bankruptcy Act 1966 (Cth). Section 73 is in Div 6 in Pt 4 of the Bankruptcy Act which provides a means by which a bankrupt may enter into a composition or scheme of arrangement with his or her creditors and achieve an annulment of the bankruptcy.
Steven claimed to have made a s 73 composition, as he deposed:
[24]In June 2014, my wife and I presented debtors' petitions. We subsequently entered into compositions with our creditors pursuant to s. 73 of the Bankruptcy Act. Westpac was able to realise sufficient funds from the sale of secured properties to be repaid in full.
…
[67]… During the course of these discussions [with Dr Hamilton in December 2014]:
…
[67.5]In discussing why I did not want to deal with banks and raise funds, I said to Andrew that my debt levels had been too high following the Global Financial Crisis and that I had done a section 73 arrangement with my creditors under the Bankruptcy Act and that I was on the bankruptcy list. Andrew said that he did not care, and as long as I could bring in properties to purchase, he could raise the funds. Andrew also said that I might have to show him how to do a section 73 arrangement some day, as he could see it coming, because if not for his parents, he would have gone under due to PODS during the global financial crisis himself.
[68] By late January 2015, Andrew and I had agreed in our discussions that:
…
[68.4]Andrew would be the director of the company. I said to Andrew that, as he was a doctor and had the capacity to raise and borrow funds, and I was of no use not being a doctor and having done a section 73, he would need to be the director of the company. He agreed with this.
[74]Andrew was the sole director of both Fairfield and Fairfield No 1. I could not be a director because I had done the section 73 at the time, which Andrew knew, and I did not want to take on an administrative role as it was not my strength.·
(Emphasis added)
Steven acknowledged that he had sworn that the contents of his affidavit were true and correct.
In an earlier affidavit sworn on 18 January 2019, Steven had deposed:
[16]In June 2014 I presented a debtor's petition and made an arrangement with my creditors pursuant to section 73 of the Bankruptcy Act. During the course of my bankruptcy, several of my properties were sold which realised sufficient funds to pay off all of my debts. My bankruptcy was discharged on 27 June 2017.
(Emphasis added)
At the commencement of his oral evidence in chief, Steven said that he wished to correct [24] and [74] in the affidavit containing his evidence in chief. His “correction” of [24] comprised:
We did not follow through with the composition, which is – but we – because of the way in which the section 73 was done, we were on the bankruptcy list, and that discharged in 2017.
In respect of [74], Steven gave the following “correction”:
Andrew knew that it was about the fact that I was on the bankruptcy list due to thinking that I was going to do the annulment under section 73.
As is apparent, the “correction” of [24] is internally inconsistent. In relation to the correction” of [74], there is no evidence to support the view that a s 73 composition was in prospect at the time of Steven’s discussions with Dr Hamilton and Steven did not otherwise make a claim to that effect.
Steven did not seek to correct the assertions in his affidavit that he had told Dr Hamilton that he and his wife had made an arrangement pursuant to s 73. Nor did the respondents apply to amend the plea in [9(a)] of the Amended Defence that Steven had told Dr Hamilton that he had “made an arrangement with his creditors pursuant to s 73 of the Bankruptcy Act 1966”.
Steven was not asked what he meant by saying that he was “on the bankruptcy list”. It seemed to be no more than a statement that he had been bankrupt.
In cross‑examination, Steven gave conflicting answers concerning his evidence with respect to an arrangement under s 73. At one stage, he said that he had entered into a s 73 arrangement; at another stage that he and his wife had “never followed through with doing the annulment” and that they had been discharged from bankruptcy after the expiration of three years; at another stage that he and his wife had started the process towards a s 73 composition but had never finished it; at another stage that a proposal to his creditors had been put together and “sent out”; at another stage that he had had an accounting firm in Nerang acting for him in propounding the composition; and at another stage that he had not needed to proceed with the proposed composition “because everyone was happy … Westpac got what they wanted … and everyone else – at the end of the day there wasn’t – didn’t feel that anything was outstanding” so that a s 73 arrangement “wasn’t needed”. At one stage, Steven said that all his creditors had been paid in full (he had made the same claim in his affidavit of 18 January 2019) but later agreed that none of his unsecured creditors had received any payment.
Despite it being obvious that Steven’s credit was being seriously impugned by reference to his evidence concerning a s 73 composition, the respondents did not adduce any evidence from an “accounting firm in Nerang” to support the claim that Steven had been assisted in preparing a s 73 proposal. They had had the opportunity to do so if they wished, had such evidence been available. Nor did the respondents adduce other evidence to support Steven’s various claims concerning a s 73 composition.
The falsity of Steven’s claim concerning a s 73 composition and of his claim that all his creditors had been paid in full was made apparent by a letter dated 23 January 2019 from Steven’s trustee in bankruptcy, Mr Leroy, who said:
1.A proposal pursuant to Section 73 of the Bankruptcy Act 1966 has not been proposed nor accepted by the creditors of Mr Steven Van Niekerk and Mrs Gillian Van Niekerk by way of passing a special resolution which would have the effect of annulling the bankruptcy; and
2.A dividend to creditors has not been paid in the abovementioned estate.
Despite acknowledging that he had not made a s 73 arrangement, Steven maintained in cross‑examination that he had told Dr Hamilton that he was bankrupt and that he had made such an arrangement. Dr Hamilton denied that that was so. As already indicated, this is a matter on which I accept Dr Hamilton’s evidence, given the improbability on my assessment that Steven would have been willing to disclose his bankruptcy. He appears to have been intent on conveying the impression that he was a successful property dealer/developer. Disclosing his bankruptcy would have been inconsistent with such an impression. The reasons for Steven moving to South Australia in late 2013‑early 2014 were not explored in his cross‑examination (Dr Hamilton said that Steven had told him that he wished to start living the “river‑cottage life”). It may well have been because Steven wished to make a fresh start given his looming bankruptcy in Queensland. Accordingly, I considered Dr Hamilton’s denials that Steven had told him that he was bankrupt and that he had “done a s 73” to be plausible and accept them.
In the final submissions, counsel for the respondents raised the possibility that Steven had genuinely, but mistakenly, believed that he had entered into, or at least proposed, a s 73 composition. I do not accept that as a realistic possibility. Steven did not proffer this as an explanation and there are limits to the extent to which the bounds of credibility may be stretched. The more obvious explanation is that Steven invented the claim of a s 73 composition with a view to giving a veneer of respectability to his bankruptcy.
I am satisfied that Steven’s evidence was false in the following respects:
(a)he and his wife did not make, let alone propose, an arrangement with their creditors pursuant to s 73 of the Bankruptcy Act;
(b)Westpac did not receive a sufficient amount from the enforcement of its securities to discharge Steven’s indebtedness to it;
(c)Steven did not tell Dr Hamilton that he had made a s 73 arrangement with his creditors. He did not even tell Dr Hamilton that he had been bankrupt, let alone that he was an undischarged bankrupt;
(d)Dr Hamilton did not say that he did not care about Steven having made a s 73 composition;
(e)Dr Hamilton did not say that Steven may have to show him how to do a s 73 arrangement some day; and
(f)Steven did not tell Dr Hamilton that he would not be a director of FPH because he had “done a section 73”. That is to say, Steven had not given Dr Hamilton the explanation he claimed for not wishing to be appointed a director of FPH and FPH No 1.
I am satisfied, keeping in mind the gravity of the finding, that Steven’s accounts of having told Dr Hamilton that he had made a s 73 composition, together with the conversations which he said followed that disclosure, were fabrications. They cannot be passed off as a “misunderstanding”, as Steven claimed at one stage. The fact of the matter is that Steven was discharged from his bankruptcy after three years by operation of law – see s 149(3) of the Bankruptcy Act.
I am also satisfied that Steven’s claim that his creditors had been paid in full is preposterous. Mr Leroy’s report to creditors of 21 July 2014 indicated that, in his statement of affairs, Steven had disclosed debts to unsecured creditors totalling $18,987,695.37 and Mr Leroy’s letter (quoted earlier) stated that there had been no dividend to creditors.
I note that the discussions with Dr Hamilton in which Steven says that he told Dr Hamilton of having made a s 73 composition occurred within 6‑7 months of the sequestration order being made, and probably earlier. Steven knew at the time of those discussions that he had not made a s 73 composition, or even a proposal for such a composition. It follows that, if I had found that Steven had told Dr Hamilton at the times he claims that he had “done a section 73”, a finding that he had lied to Dr Hamilton in that respect would have been inevitable. However, I consider that the lie is in his evidence to this Court that he had told Dr Hamilton that he had made a s 73 composition, and in the statements which he attributes to Dr Hamilton by way of response.
Steven’s willingness to fabricate the claims of a s 73 composition is one of the several matters which has caused me to doubt his credibility more generally.
Other matters bearing on the assessment of Steven’s evidence
It did Steven no credit that he had sworn an affidavit on 12 February 2021 in these proceedings in which he deposed that he was a director of Ridge Estate, and said that he had been appointed on 8 February 2021, when an ASIC search recorded that he had been appointed only on 12 April 2021. Moreover, although Steven had previously been a director of Ridge Estate, he had ceased to hold that office on 31 August 2020. This seemed to be another instance of Steven’s carelessness with the truth.
Steven also agreed that Ridge Estate had in 2016 been paid GST on the amounts it received from FPH but had not been remitting them to the Australian Taxation Office (ATO). He claimed that Ridge Estate had not been obliged to do so at the time. Ridge Estate first lodged Business Activity Statements (BAS Statements) with the ATO on 31 August 2017. These related to periods commencing in October 2013. Steven endeavoured to explain this by saying that he had understood that Ridge Estate had a “four‑year holiday for the repayment of GST”. He claimed to have been told by Ridge Estate’s accountant that it did not have to “lodge GST” for the first four years but that the lodgements had to be done within that period. I regarded that claim as implausible.
There are other instances of Steven engaging in, or being willing to engage in, dishonest conduct. One is a request to Mr Bernays that he should factor into the purchase price for the sale of his interest in Original Fairfield the repayment of a personal loan of $60,000 which he had made to Steven. The consequence is that FPH would have been meeting Steven’s personal liability.
Another instance was of Steven’s conduct in or about May 2017 in causing a Disturbance Payment made by QGC which was due to Original Fairfield to be paid into FPH’s bank account. This was done without the knowledge or consent of Mr Bernays.
As noted, the respondents did not seek to cross‑examine Mr Bernays.
The consequence is that I have regarded Steven’s honesty generally as doubtful and have thought it appropriate to regard his evidence with considerable circumspection. When evaluating his evidence, I have considered whether it is supported by contemporaneous documentation or is otherwise consistent with other matters which I do accept. That is not to say that I do not accept any of Steven’s evidence. To the contrary, there are some matters on which I do accept his evidence.
The misleading or deceptive conduct claim
Section 18 provides (relevantly):
A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
Section 236 provides (relevantly):
(1) If:
(a)a person (the claimant) suffers loss or damage because of the conduct of another person; and
(b) the conduct contravened a provision of Chapter 2 or 3;
the claimant may recover the amount of the loss or damage by action against that other person, or against any person involved in the contravention.
The principles governing the application of s 18 are well established. See, for example Australian Competition and Consumer Commission v Dukemaster Pty Ltd (ACN 050 275 226) [2009] FCA 682 at [10] and the authorities cited therein; Australian Competition and Consumer Commission (ACCC) v Coles Supermarkets Australia Pty Ltd [2014] FCA 634, (2014) 317 ALR 73 at [38]-[46]. They include:
(a)the conduct must be misleading or deceptive or likely to mislead or deceive. Whether conduct has that character is a question of fact, to be determined on the basis of the evidence relating to the alleged conduct and the surrounding facts and circumstances: Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; 218 CLR 592 at [109];
(b)a representation is false if it is contrary to the relevant fact and misleading if it has a tendency to lead into error. The causing of confusion or questioning is insufficient; it is necessary to establish that the ordinary or reasonable consumer is likely to be led into error;
(c)the conduct must lead or be capable of leading the person into error, and the error must result from the conduct. That is, there must be a sufficient nexus between the impugned conduct and the misconception or deception;
(d)conduct is likely to mislead or deceive if there is a “real or not remote chance or possibility regardless of whether it is less or more than fifty percent”: Australian Competition and Consumer Commission v Metcash Trading Ltd [2011] FCAFC 151; (2011) 198 FCR 297 at [57];
(e)the application of the provision involves an objective test and is not confined to conduct that is intended to mislead or deceive: Parkdale Custom Built Furniture Proprietary Ltd v Puxu Proprietary Ltd [1982] HCA 44; 149 CLR 191 at 197; and
(f)the conduct must occur in trade or commerce.
The factual setting
In order to outline how the misleading or deceptive conduct claim arises, it is necessary to refer briefly to aspects of the CSG industry, to Steven’s evidence concerning his involvement, and to Steven’s previous involvement in the acquisition of property leading to CCA payments.
The extraction of CSG from below ground sources in Queensland is regulated by a number of enactments of the Queensland Parliament. This judgment does not require any detailed explication of these enactments. It is sufficient to say that the Mineral and Energy Resources (Common Provisions) Act 2014 (Qld) regulates the means by which entities wishing to engage in gas extraction may enter into arrangements with landholders for access to their land for the purposes of undertaking the exploration and/or extraction. The entities and landholders are encouraged to enter into agreements, known as Conduct and Compensation Agreements (CCAs), about the provision of access, the conduct of authorised activities on the land, and the payment of compensation. The compensation payments, to which the parties referred as “CCA Payments” or as “Disturbance Payments”, may comprise an upfront payment and/or periodic payments.
After first meeting in September 2014, Dr Hamilton and Steven had further meetings. These included at a lunch at a Chinese restaurant, a lunch at an Indian restaurant on 30 November 2014, a golf trip to Tasmania in December 2014, and lunch at the Old Lion Hotel. Steven told Dr Hamilton that he had previously worked for QGC and that, as a result, he had contacts with QGC who gave him access to information about the location and timing of pending CSG activity and that he was well known and respected by gas companies in Queensland. Steven also told Dr Hamilton of his success in identifying and negotiating the purchase of properties which were prospective for CSG activity and in negotiating Disturbance Payments. I accept Dr Hamilton’s evidence about these matters.
Dr Hamilton and Steven commenced discussing the formation of a business, the essential elements of which would involve the establishment of a jointly owned company to acquire pastoral land on which it was anticipated that CSG extraction would be undertaken, with a view to obtaining the CCA Payments and the increase in capital value of the land which it was thought the payments would generate.
Steven’s explanation of how he had acquired experience of CCA Payments in his employment by QGC Pty Limited was one of the matters in which his carelessness (if not dishonesty) with the truth, even when making statements on oath, was apparent. In the affidavit containing his evidence in chief, Steven said:
[17]Between 2010 and 2011, I worked for QGC. My role at QGC was in the negotiation of acquisitions and land access in the Surat Basin in central Queensland, for QGC's coal seam gas operations. During this time, I was based in Chinchilla on a fly in fly out basis. My salary package for this work was worth around $200,000 per annum, and QGC also covered my living expenses while in Chinchilla.
[18]During my time working at QGC, I learned about the coal seam gas industry and the potential income streams that could be realised by landowners when a gas company wanted to explore for gas or extract gas from the land …
…
[26]While working for QGC, part of my role was to negotiate access for QGC to conduct exploration for coal seam gas, or to establish coal seam gas wells. I therefore became aware that gas companies would pay significant disturbance payments to land-owners for access to their land for the purpose of exploration for coal seal (sic) gas and subsequent production. The payments are made pursuant to agreements called "Conduct and Compensation Agreements" (CCAs) between a landowner and the gas company.
…
[29]In about early to mid 2011, I identified a property for sale at 3101, Chinchilla-Tara Road, Crossroads, Queensland (Fairfield Property) as a prospective property for coal seam gas exploration or production.
…
[32]The terms of my employment with QGC prohibited me from buying property in the gas fields while I was working for QGC. I therefore resigned from QGC in late 2011 to pursue the purchase of the Fairfield Property.
(Emphasis in the original)
However, in cross‑examination, Steven accepted that, contrary to his claims in these passages, he had not been employed by QGC at all but by a sub‑contractor to QGC; he had been employed by the contractor for only three months and that was in 2011; he had not actually negotiated access for QGC to conduct exploration for CSG or to establish gas wells; he had not been prohibited from buying property in the gas fields while working for QGC; and he had not resigned his employment to pursue the purchase of the Fairfield Property. He agreed that he had resigned from his employment with the contractor because “[he] had been accused of something and [he] signed some non‑disclosure stuff” and because he had sought to avoid his employment being terminated by the contractor. This was another instance of Steven’s willingness to mislead, even when deposing to a matter on his oath.
Steven’s attempts to explain these inconsistencies and contradictions did him no credit. He said that he had been “rushed putting the affidavit together”, said that he had not appreciated “how exact this needed to be” and at one stage raised (but then withdrew) the suggestion that he may not have read the affidavit before signing it. He also said that he may not have fully appreciated or understood what he had said in his affidavit.
However, I accept that, while employed by the contractor to QGC, Steven had acquired some knowledge of the CSG industry and of the potential for payments to landholders when an energy company such as QGC wished to explore for, or extract, CSG. In particular, he had learnt that the acquisition of a property with a view to obtaining those payments could be lucrative if the existing owner was unaware of the property’s potential for CSG extraction or unaware of the size of the Disturbance Payments which could be negotiated.
In 2011, Steven had learnt that a property which was very prospective for CSG exploration and production was for sale. This was the pastoral property at Lot 21, Chinchilla‑Tara Road, Wieambilla, Queensland known as “Fairfield” (the Fairfield Property). There was some inconsistency in Steven’s evidence as to when he had first learnt that the Fairfield Property was for sale, but it is not necessary for present purposes to resolve that issue.
Steven and Mr Bernays agreed to purchase the Fairfield Property for the purpose of obtaining the anticipated CCA Payments. Mr Bernays was then a neighbour of Steven and Steven had enlisted his assistance. They formed a company, Vannays Pastoral Pty Ltd (Vannays), to make the acquisition. Steven was its sole director but he and Mr Bernays held 10 shares each. On 2 May 2012, Vannays executed a contract to purchase the Fairfield Property for a price of $425,000 with a deposit of only $1,000.
However, later in 2012 and before settlement, Steven instigated changes to the structure of Vannays, to which Mr Bernays agreed: Steven resigned as director and secretary and transferred his shares in Vannays to a Mr Craig Dooley (a friend of Steven’s); Mr Bernays was appointed director and secretary and Mr Dooley was appointed a director. These changes occurred on 12 September 2012.
About the same time, Steven proposed, and Mr Bernays agreed, that a new company, Fairfield Pastoral Pty Ltd (Original Fairfield) be formed to purchase the Fairfield Property. This occurred on 25 September 2012. Mr Bernays and Mr Dooley were the shareholders and directors of Original Fairfield. Subsequently, on 9 October 2012 and at Steven’s instigation, the vendors of the Fairfield Property and Vannays executed a release of Vannays’ obligations under the 2 May contract on condition that Original Fairfield enter into a contract on the same terms. By a deed dated 2 October 2012, Original Fairfield, Mr Dooley and Pelway Pty Ltd (a company of which Mr Bernays was the director) agreed that Original Fairfield would hold property on trust (the QPU Trust) in accordance with the terms of the Trust deed. There were two units in the QPU Trust: one issued to Pelway as trustee for the Nestor Superannuation Fund (associated with Mr Bernays) and one issued to Mr Dooley, as trustee of the KEC EDU Trust. Steven deposed that the KEC EDU Trust was established to provide for the education of his three daughters.
Steven explained that the relinquishment of the Vannays contract had occurred in the circumstance that the vendors had to complete a subdivision of portion of the Fairfield Property, leading (he said) to a “renegotiation” and a “wait period”, and because he and Mr Bernays proposed using Vannays “to do a block of units”. While it is apparent that settlement on the Fairfield Property had to await the completion of a subdivision, there is no evidence supporting Steven’s claim that Vannays was being used for a project involving the development of units. There is also no evidence indicating why it would not have been simpler to establish a new company for the unit’s project. I also note that neither Steven’s Statement of Affairs provided in relation to his bankruptcy nor Mr Leroy’s report to Steven’s creditors contains any suggestion of Vannays having engaged in any profitable activity. Nor do the affidavits of Mr Bernays.
I consider that the more obvious rationale for the substitution of Original Fairfield for Vannays as the purchaser of the Fairfield Property was an endeavour by Steven to distance himself from involvement in the acquisition of Original Fairfield. Steven sought to achieve that because of the significant financial difficulties he was then experiencing and desire to avoid his interest in Original Fairfield becoming available to his creditors. The existence of those difficulties can be inferred from the fact that the creditors of Steven or of entities associated with him had commenced proceedings in the Supreme Court of Queensland to recover debts or secured property from him, as follows:
·Action 8078/2010 by ANZ Banking Group Ltd;
·Action 6833/2011 by Intercredit Securities Pty Ltd; and
·Action 1882/2012 by ANZ Banking Group Ltd.
I am satisfied that Steven’s evidence concerning the reasons for the change in the purchaser to the Fairfield Property was untruthful.
I mention that further proceedings were commented in the Supreme Court of Queensland by the Commonwealth Bank of Australia against Steven and others in 2014 (Action 3496/2014) but that was after the acquisition of the Fairfield Property.
Original Fairfield, as trustee of the QPU Trust, settled on the purchase of the Fairfield Property on 24 October 2012. Mr Bernays provided all of the funds for the purchase, and secured those by a mortgage over the Fairfield Property.
In about September 2013, following negotiation by Steven with Origin Energy, Original Fairfield received a Disturbance Payment of $600,000 in respect of the Fairfield Property. Later, Original Fairfield sold 441 hectares of the Fairfield Property to Origin Energy for $900,000, retaining 126 hectares. Steven had difficulty in explaining why Origin Energy had wished to buy a portion of the Fairfield Property after paying the large Disturbance Payment. In addition, Original Fairfield received other monies from Origin Energy in respect of work undertaken on the Fairfield Property. Accordingly, Steven regarded the acquisition of the Fairfield Property as having been a particularly profitable investment, given that the original outlay of $425,000 had resulted in payments to Original Fairfield of $1.5 m and even then it continued to hold a portion of the Property. It was especially profitable for Steven as he had not had to contribute any of the purchase moneys. He said that he applied his share of the payments received from Origin Energy to the acquisition of Lot 1. Given the stated purpose of the KEC EDU Trust, it is not apparent how that could have been done.
I mention that Steven lived on the Fairfield Property for periods in 2012 and 2013 and it is probable that during that period he also acquired some knowledge about properties for which CCA payments could be made.
In mid‑2014, Steven had identified a further property for sale in the same general area as the Fairfield Property, namely, Lot 17 Wieambilla Road, Wieambilla Road (Millbrook). He considered that Millbrook was also prospective for CSG development. Original Fairfield entered into a contract (negotiated by Steven) to purchase Millbrook in October 2014 for a purchase price of $157,000 with settlement occurring on 22 December 2014. Again, Mr Bernays contributed the whole of the purchase moneys. Millbrook was a successful investment as in due course it had several gas wells constructed on it, and generated significant Disturbance Payments.
Shortly after meeting Dr Hamilton, Steven told him of his activities in relation to the Fairfield Property and Millbrook and of the potential for large profits. Dr Hamilton seems to have been bedazzled by the prospect of making easy money. He and Steven discussed means by which they could jointly pursue that prospect.
The applicants’ pleaded case
The applicants’ misleading or deceptive conduct claim is not well pleaded. The principal elements of the claim commence in [8] in the Fifth Statement of Claim (5SC), which concerns the commencement of negotiations:
[8]In or about September 2014, Hamilton began negotiations with Ridge Estate, Steven and Philip in respect of a business under which:
8.1companies would be registered for the purpose of acquiring pastoral land which would:
8.1.1 secure income streams from:
(a) the grant of leases/licences over the pastoral land; and
(b) disturbance payments; and
8.1.2experience significant capital growth as a result of conduct and compensation agreements granted with respect to the Disturbance Payments,
being a business similar in nature to that engaged in by Original Fairfield in purchasing the Fairfield Property;
8.2an agreement would made between the companies, Ridge Estate and Steven (the Proposed Consultancy Agreement) by which:
8.2.1Steven would be appointed to act as a consultant in the position of ‘Mergers & Acquisitions manager’ of the companies;
8.2.2in his position as consultant, Steven would identify, source and negotiate with owners of suitable pastoral land for the purchase or lease of that land by the corporation for the above described purposes; and
8.2.3the corporation would pay a consultancy fee to Ridge Estate of $15,000 per month, exclusive of GST (the Consultancy Agreement).
(Emphasis in the original)
I mention now that, although this pleading asserts that Philip was involved in the negotiations which commenced in September 2014, there is no evidence that that was so. The negotiations were instead wholly between Dr Hamilton and Steven.
Then, in [9D] of the 5SC, the applicants allege representations by Steven with respect to the inclusion of the Fairfield Property and the Millbrook Property in the arrangements under the PCA:
[9D]At or about shortly after this time, during the course of the negotiations pleaded in paragraph 8 above, Steven made representations to Hamilton to the effect that, as part of the arrangement underlying the [PCA], he would cause or arrange for the true ownership of the whole or part of the Fairfield Property and the Millbrook Property to be transferred to the new companies to be formed for [the] purpose of the [PCA] in return for the issue of shares to Steven in those new companies, such transfer to be achieved by either:
9D.1causing or arranging for the units in the QPU Trust to be transferred to the new companies; or
9D.2causing or arranging for the title in the Fairfield Property and the Millbrook Property to be transferred to the new companies,
either being a 50% interest in the units and the properties or, in the event that the new companies were able to borrow or supply sufficient funds, the whole interest after purchasing that interest controlled by Bernays from him.
Although it is not clear, the term “this time” in [9D] appears to be a reference to the period October‑December 2014.
The applicants then plead:
[9I]In or about January 2015, Hamilton and Steven agreed that, in consideration of Steven causing Original Fairfield to act in accordance with his representations pleaded in paragraph 9D above, Hamilton and Steven would each hold 50% of the issued shares in the new company formed for the purpose of the arrangement underlying the [PCA].
There follow pleadings concerning the registration of FPH, its acquisition of FPH No 1 as a subsidiary, and the issue of one share in FPH to each of Dr Hamilton and Steven.
The applicants then plead that a PCA was not concluded; that Dr Hamilton and the applicants believed and intended nevertheless that a contract in the nature of the PCA was in existence as a binding agreement; that Steven, and through him Ridge Estate, knew of that belief and intention; that Steven and Ridge Estate did not intend to perform any duties under the PCA or a contract of its kind and nature; and that Steven and Ridge Estate had only purported to perform but had not in fact performed, the duties and obligations of the type contemplated by the PCA.
Accordingly, the applicants’ claim is that Steven, and through him Ridge Estate, engaged in misleading or deceptive conduct by, first, falsely representing in the initial discussions with Dr Hamilton, that he intended to perform the PCA when, in fact, he did not have that intention and, secondly, falsely representing that, from early 2015 until late 2018, he was actually performing his role under the PCA when, in fact, was not doing so and did not intend to do so.
In the closing submissions, counsel for the applicants contended that Steven had also engaged in misleading or deceptive conduct by falsely representing to Dr Hamilton, both in the initial discussions and throughout 2015 to 2018, that he had “specialist expertise” in identifying land for CSG deposits and imminent wells when, in fact, that was false and Steven knew it to be false. As I indicated to counsel in the closing submissions, I do not regard that as part of the applicants’ pleaded case and, accordingly, not now open to the applicants.
I mention that counsel for the applicants also advanced in the closing submissions a freestanding claim of misleading or deceptive conduct based on Steven’s concealment of his bankruptcy. However, after the Court raised whether such a contention was available to the applicants having regard to the terms of their pleading and the terms of their opening submissions, counsel accepted that this claim was not available. He submitted nevertheless that Steven’s concealment of his bankruptcy was part of the factual matrix in which the allegations of misleading or deceptive conduct summarised above are to be considered.
The rather absolutist nature of the applicants’ case is to be noted. It is not a claim that, while Steven had initially intended to perform his obligations but had resiled from that intention over time. Nor, as counsel for the respondents emphasised, is it a claim that Steven misrepresented that he would meet some standard of performance when carrying out tasks under the PCA. The applicants’ claim is a bold claim that Steven, and through him Ridge Estate, had never intended, right from the outset of the relationship, to perform the functions expected of him under the PCA and that that had been the position thereafter until the relationship terminated on 2 October 2018. This means that the Court is required to consider Steven’s conduct in relation to the PCA only insofar as it is relevant to the applicants’ claim that it could not be regarded as performance of the PCA at all, and therefore as evidence of the misleading or deceptive conduct alleged.
On 31 October 2018, Dr Hamilton sent to Ridge Estate an invoice in respect of the agistment of cattle on Lot 2. The invoice total of $30,272 was made up of two figures, being the agistment of 40 cattle in each of two periods: 1 July 2016 to 30 June 2017 and 1 July 2017 to 28 February 2018. In respect of each period, Dr Hamilton claimed an agistment rate of $8 per head for 40 head of cattle.
FPH claims the sum of $30,272. The evidence in support of this claim is somewhat scant. Dr Hamilton does depose that Ridge Estate agisted 40 head of cattle on Lot 2 from about 1 June 2016 to early 2018. However, he does not depose to any agreement with respect to the payment of agistment fees. Instead, he deposed to his having sent to Steven on 10 February 2016, 30 May 2016 and 15 June 2016 agistment agreements for his signature.
I have my suspicions about the first of these agreements because of the date it bears. At the time, it is said to have been sent, FPH did not even own Lot 2 (and indeed had not even entered into a contract for its purchase). Yet it purports to relate to the agistment of cattle commencing on 10 February 2016. The agistment rate stated in the draft agreement was $20 inclusive of GST per adult head per month and $10 inclusive of GST per calf head per month. It is not apparent why Steven or Ridge Estate would have been willing enter into such an agistment agreement at that time. However, it does not matter as neither Steven nor Ridge Estate executed that agreement and there is no evidence that they agreed to its terms.
The agistment agreements sent on 30 May 2016 and 13 July 2016 stipulated a rate of $8.75 inclusive of GST per “adult unit” per week. Steven and Ridge Estate did not execute either of these agreements and there is no evidence that they otherwise agreed to their terms. Dr Hamilton does not depose that they did nor does he point to conduct of Steven from which such an agreement could be implied. I note that the agistment rate on which the applicants sue is different from that in the unexecuted agreements.
In these circumstances, FPH does not establish the agreement on which it sues. I add further that one cannot help but have some scepticism about this claim in the circumstances just outlined and given that Dr Hamilton sent the invoice on which he sues only at the time of the final breakdown in his relationship with Steven.
This claim is dismissed.
Licence of Lot 2 - peppercorn rent
FPH alleges that Steven, and through him Ridge Estate, engaged in misleading or deceptive conduct in contravention of s 18 of the ACL in relation to the licencing of Mr Jonathon Bayes in early 2016 to occupy Lots 1 and 2. FPH alleges that Steven caused Ridge Estate to enter into an agreement with Mr Bayes by which he could occupy both Lots 1 and 2 in consideration of a monthly licence fee of $12,500 in respect of Lot 1 and a monthly licence fee of $1 in respect of Lot 2 and that he did this, not only without the authority of FPH, but while keeping the arrangement concealed. FPH alleges that it had suffered the loss of a proportionate share of the licence fee paid by Mr Bayes.
Mr Bayes gave evidence and was an honest witness. He confirmed that following some negotiations with Steven he was provided by Steven with licence agreements for the occupation of Lots 1 and 2 respectively. He executed the licence agreement in respect of Lot 1 on 21 June 2018 but never executed the licence agreement in respect of Lot 2. He occupied Lots 1 and 2 from an unspecified date in early 2018 until late 2018.
My impression is that this may be another instance of dishonest conduct by Steven. However, it is not necessary to express a concluded view about that because I am not satisfied that FPH has shown that it has suffered a loss by reason of the misleading or deceptive conduct it alleges, even if that conduct be established.
The evidence does not establish that FPH was precluded, by reason of the arrangements Steven made with Mr Bayes, from itself leasing or licencing the use of Lot 2 during 2018. There is not even evidence that it made attempts to do so. It is true that there is documentary evidence that Dr Hamilton had told Steven that it was desirable for Lot 2 to be earning an income and that Steven did not inform him of his arrangement with Mr Bayes regarding Lot 2. However, there is no evidence of other steps taken by Dr Hamilton to make profitable use of Lot 2. It is to be remembered that in the first part of 2018, Steven was in Sydney undertaking project management at the Yennora Property.
Moreover, there is a difficulty in the way in which FPH has sought to prove its claimed loss of $60,000. It claimed an amount equal to 40% of the total of $150,000 said to have been paid by Mr Bayes. It derives the figure of 40% from what is said to be the proportion which the area of Lot 2 bears to the combined areas of Lots 1 and 2.
This formulation of the loss has two difficulties. First, FPH did not establish that Mr Bayes had paid $150,000 by way of licence fees. Secondly, there is no evidence at all to show that a 60/40 apportionment based on a pro rata share of the total area of the two Lots is appropriate. The Court was not even given the areas of the two Lots. There is also evidence suggesting that, even if Lot 2 does comprise 40% of the combined area, a 60/40 split would be inappropriate. That is the evidence that Lot 1 has considerably more infrastructure on it than Lot 2. That suggests that, if the rate of $12,500 per month for the two properties be appropriate, there would need to be some weighting in favour of Lot 2 over and above a division based on the respective areas of the two properties. The applicants did not lead expert evidence as to the lease or licence fees obtainable in respect of Lot 2 or with respect to an appropriate apportionment between the two properties.
In short, while the conduct of Steven in relation to the grant of the licence to Mr Bayes appears to be questionable, I am not satisfied that FPH has proven a loss resulting from that conduct which can be the subject of an award pursuant to s 236 of the ACL. This claim of FPH is dismissed.
The respondents’ cross-claim with respect to the equipment
By its cross‑claim, Ridge Estate sought orders for the recovery of equipment said to have been misappropriated and converted by Dr Hamilton, FPH or FPH No 1. Ridge Estate claimed in the alternative that FPH and FPH No 1 had agreed to purchase the equipment but had never paid for it. It sought payment of the sum of $240,713, being the amount shown in the invoice of 6 April 2016 which it had provided to FPH.
In the final submissions, Ridge Estate pursued only the claim for payment of the sum of $240,713 as per the 6 April 2016 invoice.
Ridge Estate identifies the equipment in question by pleading that it includes the items listed in Annexure A to the 5SC (other than Items 12, 19 and 26). However, neither its pleaded case nor its evidence identified any items of equipment other than those listed in Annexure A as the subject of its claim. For reasons which will become apparent, it is not necessary to identify the claimed items more precisely. It is convenient for the time being to refer to the items claimed by Ridge Estate as the Annexure A Items. Before identifying the issues, it is appropriate to outline some aspects of the factual setting. To an extent this involves a repetition of some findings already made.
The factual setting for the equipment claim
On 17 February 2016, FPH, as trustee of the PRT, entered into the contract to purchase Lot 2. The purchase price was $750,000 with a deposit of $30,000 and settlement was due on 8 April 2016. The contract became unconditional on 9 March 2016.
As previously noted, it was Steven who wished to purchase Lot 2 because it adjoined Lot 1 but he had the difficulty of being bankrupt and the vendors being “unfriendly” towards him. Accordingly, he negotiated with Dr Hamilton to be the purchaser. This was achieved by FPH being appointed trustee of the newly established PRT and by FPH entering into the contract on 17 February 2016 to purchase Lot 2.
When the contract to purchase Lot 2 was made, Steven had proposed using the equity which Ridge Estate held in Lot 1 to provide security for a loan from NAB. I am satisfied that that was so despite Steven’s initial denial that that had been the case. However, in the events which happened, NAB said initially that it was prepared to lend $525,000 secured on Lot 2 only, together with the guarantee from Dr Hamilton. In order to make up the shortfall, Steven and Dr Hamilton sought, and obtained, the loan of $182,130 for three years from NAB secured over the Annexure A Items which, subject to some exceptions which it is not necessary to identify presently, had hitherto been owned by Ridge Estate. It is the means by which these items came to be the security provided by FPH which gives rise to Ridge Estate’s present claim.
In early November 2018, after the breakdown in the relationship between Dr Hamilton and Steven, Dr Hamilton attended at Lot 1 and took possession of the Annexure A Items. Steven considers that he acted in an underhand way in doing so. Subsequently, Dr Hamilton sold most of these items. He applied the proceeds in reduction of the indebtedness of FPH to NAB in respect of the Equipment Loan and in payment of other expenses of PRT.
As already noted, Ridge Estate now asserts that the Annexure A items were transferred by it to FPH in circumstances obliging FPH to pay $240,713 for them.
FPH and Dr Hamilton agree that the Annexure A items were transferred by Ridge Estate to FPH in early April 2016 in order to allow it provide the equipment mortgage to NAB. They dispute, however, that FPH agreed, by contract or otherwise, to pay the sum of $240,713 in Ridge Estate’s invoice. Their claim is, in effect, that the Annexure A items were transferred to FPH for no consideration in order that it could provide the required security to NAB.
I think it fair to say that neither the claim to the Annexure A Items, nor the defence to it, are well pleaded. However, the principal remaining issue relating to the claim is whether FPH agreed to pay for the Items.
The provision of the Equipment Loan
As previously noted, Steven had contemplated that the equity of Ridge Estate in Lot 1 would be used to provide security for the loan from NAB with which Lot 2 would be purchased. However, the necessary application to NAB, and its obtaining of a valuation of Lot 1 for mortgage lending purposes, were not pursued in a timely way. The reasons for this were not made clear but the evidence does indicate that it was Steven, and not Dr Hamilton, who had the carriage of the steps towards settlement.
The consequence was that, by the evening of 5 April 2016, it was apparent that the scheduled settlement of the purchase of Lot 2 on 8 April was in jeopardy.
The precipitant for a flurry of activity on 6 April appears to have been an email from Mr Bierbaum to Dr Hamilton at 4.47 pm on 5 April 2016. He attached the guarantee and indemnity which Dr Hamilton would be asked to execute the following morning, confirmed that NAB would be advancing $525,000 for the settlement and said that this meant that FPH would have to provide “circa $225K”. Mr Bierbaum raised in his email the possibility of Dr Hamilton providing security over his own home for an additional advance.
This information seemed to come as a surprise to Dr Hamilton as he responded later that evening, querying why Lot 1 was not providing security for the whole of the funds and indicating that he would not provide his own home as security. Mr Bierbaum responded later on 5 April 2016, confirming NAB’s position, but pointing out that a valuation of Lot 1 would be required before it was taken as security and that this would take “additional time”.
The evidence indicates that Mr Beirbaum, Dr Hamilton and Steven met at 10 am on 6 April 2016. The actual evidence of what was discussed at the meeting is scant, but it can be inferred that there was agreement that the possibility of a loan from NAB, secured over items which became the Annexure A Items, should be explored urgently. There is no suggestion in the evidence that Dr Hamilton agreed at that meeting that FPH would purchase the Annexure A Items.
Steven said, and I am willing to accept, that Tony Bierbaum attended at Lot 1 and that, together, they drew up a list of the items which could be provided to NAB as security. That must have occurred in the late morning of 6 April 2016. I am also satisfied that Mr Bierbaum must, either before or after this attendance, have sought evidence as to the value of the listed items. In order to satisfy that requirement, Steven sought urgently from the entities from which Ridge Estate had acquired the equipment originally, copies of the invoices relating to their purchase. He provided copies of those invoices to Mr Bierbaum at 1.12 pm, 1.20 pm, 1.44 pm and 2.12 pm on 6 April 2016. At 2.27 pm, Dr Hamilton sent an email to Mr Bierbaum listing four items owned by FPH which could also be used as security.
The 6 April Invoice on which Ridge Estate relies for this claim was addressed to FPH. It listed 26 items (which for the most part are the Annexure A Items) with a dollar amount for each. Those dollar amounts were drawn from the invoices supplied to Ridge Estate earlier that afternoon by the original suppliers of the equipment to Ridge Estate. The total dollar amount in the invoice is $240,713.
I am satisfied that Steven either prepared the 6 April Invoice himself, or caused it to be prepared. That is so for a number of reasons: first, as Steven acknowledged, the list of items of equipment was drawn from the list which he had prepared with Mr Bierbaum earlier that day; secondly, the dollar amounts for each item of equipment were drawn from the copy invoices which Steven had requested the original suppliers of the items to provide to Ridge Estate earlier that day and at least one of those had not been copied by Steven to Dr Hamilton; thirdly, apart from Steven’s evidence which I do not accept, there is no evidence at all that Dr Hamilton had any involvement in the preparation of the invoice; and fourthly, the immediate recipient of the email from Steven providing the 6 April Invoice was Mr Bierbaum.
Steven provided the 6 April Invoice to Mr Bierbaum on 6 April 2016 at 3.09 pm (at the same time copying it to Dr Hamilton, to Steven’s wife Gillian, and to Philip). In the accompanying email, Steven asked Mr Bierbaum “let me know that you have want you need”. This is consistent with Steven’s agreement in his evidence that he had been the one in contact with Mr Bierbaum in relation to the Equipment Loan.
On the following day 7 April 2016, at 4.20 pm, NAB sent an email to Dr Hamilton confirming its willingness to make the Equipment Loan. Later still on 7 April 2016, Steven sent an email to Dr Hamilton attaching a copy of the 6 April Invoice under the subject line “insurance or cover note”. I am satisfied that he provided the invoice to Dr Hamilton at that time in order to provide him with documentary evidence of the items and their value so that FPH could, in accordance with the terms of the equipment mortgage, obtain insurance over the items.
On the following day, Dr Hamilton as director of FPH signed the Equipment Loan mortgage with NAB for $182,130, as well as the other documents so as to allow the settlement to proceed.
Aspects of Steven’s evidence
Much of Steven’s evidence about the Equipment Loan was unsatisfactory.
At one stage, Steven said that it was “never an option” for Lot 1 to be used to provide the security in respect of the purchase of Lot 2. Later, however, he acknowledged that he and Dr Hamilton had discussed the provision of Lot 1 as security for the purchase of Lot 2 but then said that he did not remember that. Later again, when confronted with his contemporaneous emails, Steven acknowledged that all his discussions with Mr Bierbaum about the provision of finance had involved Lot 1 being used as security. There was also an email to another prospective financier on 22 February 2016 and email exchanges with Dr Hamilton in which Steven had referred to using Lot 1 as security. He also acknowledged that he had consented to NAB obtaining a valuation of Lot 1 with a view to an assessment of it suitability as security. Indeed, at one stage, Steven acknowledged that he had lied to Dr Hamilton in telling him that Lot 1 would be available as security for the NAB loan.
Steven said that he could not remember whether Mr Bierbaum had told him that he could not accept security which was not owned by FPH as trustee of the PRT but maintained that it was Dr Hamilton who had asked him to put the list of items into an invoice.
The following excerpt of evidence indicates that, initially Steven disclaimed involvement in the arrangements for the Equipment Loan but later acknowledged that he was the person who, on behalf of Ridge Estate, was involved in discussing the arrangement by which the Annexure A Items would be provided to NAB as part of the security:
XXN: So you were involved at the time in respect of this transaction?
A:No, I wasn’t. Tony Bierbaum, who represented both Ridge Estate and [FPH], was invited onto the property to collect all the ID numbers of the equipment, and that was the last we ever heard of how that ended up transpiring, and I knew that it was held as security. I didn’t realise that it was – and that’s why the property is all still on our – on our property.
HH:Now, somehow or other these items of equipment came to be provided to NAB as security in what has been called in these proceedings the Equipment Loan. Am I right so far?
A:Yes. It was – yes.
HH:Were you, on behalf of Ridge Estate, the person who was involved in discussing the arrangement by which these items of equipment would be provided to NAB as part of that security?
A:Yes.
The contemporaneous documentary evidence, to some of which I have already referred, confirms Steven’s extensive involvement. It is plain that he was the human actor on behalf of Ridge Estate. The copying of his emails to Philip confirms that in doing so he was acting with the implicit, if not explicit, authority of Philip as director of Ridge Estate.
Steven’s evidence about the agreement he alleged with Dr Hamilton was unsatisfactory:
XXN:And what was your understanding of the arrangement between Ridge Estate and [FPH] in relation to these items of equipment?
A:That it was standing as security for Lot 2 purchase because Lot 2 was wholly owned by the Van Niekerk family and [PRT].
…
HH:As opposed to … a question of what your understanding was, can you tell me what it is you actually agreed with Dr Hamilton with respect to the provision of these items as security for the equipment loan?
A:I agreed with NAB that they could put a charge over it to hold them as security for the loan of Lot 2.
HH:And did you agree anything with Dr Hamilton?
A:That was the same.
XXN:There was never an agreement between yourself and Dr Hamilton that he would pay for the equipment or Fairfield would pay for the equipment, was there?
A:He – he should have paid for it if he was going to take it, but he wasn’t going to take it.
XXN:There was never an agreement between the two of you on behalf Ridge Estate and [FPH] that the equipment was going to be paid for, was there?
A:There was an invoice done where the money from NAB should have come to Ridge Estate and then Ridge Estate should have put that money into the lot 2 deal purchase, and that never happened.
HH:Did you discuss with Dr Hamilton the preparation of an invoice?
A:Yes. He asked for it.
HH:Tell me what was said between the two of you in relation to the preparation of the invoice?
A:If [FPH] was to own this, you need to pay for it, but if it’s my equipment that we’re putting up as security, then I understand that Ridge Estate would need to sign something with NAB to put that up as security. And we never signed anything with NAB, and he did take the equipment. So he didn’t pay for it.
This evidence of Steven concerning the agreement he said he had made with Dr Hamilton was implausible and unconvincing. The context in which it was given indicates its self‑serving nature.
Steven claimed that there had been a discussion between himself and Dr Hamilton in which Dr Hamilton had requested the preparation of the 6 April 2016 invoice; that Dr Hamilton had asked for the invoice in order to show FPH’s ownership; and that he and Dr Hamilton had specifically discussed that if there was to be an actual transfer of ownership, it needed to be paid for. He claimed that there was a verbal agreement that FPH would have to pay for the equipment if Ridge Estate was putting it up as security for the purchase of Lot 2. This evidence was implausible. Steven acknowledged that he had not said anything at all in the affidavit containing his evidence in chief about offering an option to Dr Hamilton to pay for the Annexure A Items if it was to become the property of FPH. He also acknowledged that he had mentioned this part of the arrangement for the first time in the witness box. I had the strong impression that Steven had invented this evidence in an attempt to advance the respondents’ claims with respect to the Annexure A Items.
Other implausible evidence given by Steven was that it was Mr Bierbaum who had suggested the values for each item of equipment in the 6 April Invoice. This made no sense given that Steven had then moved quickly to obtain copies of the invoices for the original supply of the items of equipment.
Ridge Estate’s claim in respect of the Annexure A Items had an opportunistic quality about it. Steven acknowledged that the first time Ridge Estate had made a claim with respect to the items was when they had retained solicitors soon after the applicants’ commencement of proceedings. He said that this because no one had previously come round to fetch it so that in our eyes “it hadn’t transacted”.
For these reasons, together with my general adverse view about Steven’s credibility, I am not willing to regard his evidence concerning the equipment loan as reliable.
Conclusion regarding FPH’s liability to pay for the Annexure A Items
There are in effect two alternatives: Ridge Estate and Dr Hamilton agreed that Ridge Estate would transfer the Annexure A Items to FPH in consideration of payment of $240,713, or the parties agreed that it would do so for no consideration.
The question of whether there was agreement between Steven and Dr Hamilton that FPH would pay for the Annexure A Items is to be determined objectively: Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24, (1982) 149 CLR 337 at 352; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52, (2004) 219 CLR 165 at [36]‑[41].
In my view, a number of matters indicate that, in the flurry of activity on 6 and 7 April 2016 directed to achieving settlement on Lot 2 on 8 April 2016, Ridge Estate (through Steven) did transfer the Annexure A Items to FPH, in its capacity as trustee of the PRT in order that FPH could complete settlement on Lot 2, but did so without any agreement that FPH would pay the amount of $240,713 in the 6 April 2016 invoice. That is to say, there was agreement on a transfer for no consideration.
First, Steven knew that Ridge Estate was not itself taking out the equipment mortgage, and was not itself providing security to NAB in respect of the Equipment Loan, for example, to support a guarantee. It is highly likely, and I so find, that Steven knew that NAB required the security to be provided by its borrower. In order to provide the chattel mortgage with respect to that equipment, FPH, in its capacity as trustee of the PRT, had to own the equipment. It could not mortgage equipment which it did not own. The terms of the equipment mortgage entered into by FPH with respect to the equipment required it to declare that it was “the only person who has any rights or interest in the goods” and that it “the right to grant a security interest in the goods”. It must have been obvious to Steven that FPH could provide the security only with respect to property actually owned by it. That explains why he provided, not just a list of the Annexure A Items to NAB, but a list in the form of an invoice to FPH with respect to those items. The invoice was to satisfy NAB that there had been a transfer of the items to FPH in its capacity as trustee of the PRT. Steven sought to make it appear that the items were being sold to FPH but, considered objectively, that was not the parties’ intention. I reject as dishonest Steven’s evidence that he had agreed with Dr Hamilton that FPH would pay for the items. Considered objectively, it is implausible that Dr Hamilton would have done so. FPH was doing Steven and Ridge Estate a favour: there is no reason to suppose that it intended to bind itself to pay Ridge Estate $240,713 in order to do so especially as Ridge Estate retained the use of the equipment.
Secondly, it is pertinent that the 6 April Invoice did not contain any terms of sale or provide for the time or means of payment. That is consistent with Ridge Estate not having any expectation that FPH would have to pay it the amount of $240,713.
Thirdly, it is to my mind very pertinent that Steven provided the 6 April invoice to Dr Hamilton at the same time as he provided it to Mr Bierbaum at NAB and, indeed, that NAB was the primary addressee on his email. This is indicative that Steven was not providing evidence of a transaction into which FPH and Ridge Estate had entered antecedently.
Fourthly, when Steven did provide the 6 April Invoice to FPH separately on 7 April 2016, he did so in order that it could comply with the requirements of the chattel mortgage to NAB that it insure the items. He thereby confirmed that property in the items had passed to FPH, as without that FPH would not have had an insurable interest. FPH did insure the items and did so in the manner consistent with it being the owner of the items.
As counsel for the applicants submitted, whether Steven intended subjectively to transfer the Annexure A Items to FPH for no consideration is immaterial. The matter is to be determined objectively. On my assessment, and having regard to the findings above, I am positively satisfied that there was no agreement that FPH was to pay for the Annexure A Items, let alone pay the prices listed in the 6 April 2016 invoice. In my view, this is a matter on which the respondents have seized in retrospect following the breakdown of the relationship between Steven and Dr Hamilton in late 2018.
Accordingly, the respondents’ cross-claim with respect to the Annexure A Items is dismissed. This conclusion makes it unnecessary to identify the items more particularly or to address the respondents’ other submissions with respect to the claim.
Summary
I summarise my conclusions with respect to the applicants’ claims as follows:
(a)the applicants’ claims of misleading or deceptive conduct by Steven and Ridge Estate, and in which Philip is alleged to have been an accessory, in relation to the consulting arrangement for the pursuit of the Fairfield Pastoral Model fail;
(b)the applicants’ claims that the various appointments and transactions concerning Steven and Ridge Estate are shams fail;
(c)the applicants’ claims for restitution of the amounts paid to Ridge Estate in respect of consultancy fees, motor vehicle expenses and other expenses fail;
(d)FPH No 1 is entitled to an order for the delivery up of the items described as the FPH No 1 Items, being the items listed in Annexure B to the 5SC;
(e)FPH No 1’s claim for $82,321.70 which is said to be the balance of loans to Ridge Estate fails;
(f)FPH No 1 is entitled to judgment in the sum of $195,000 inclusive of interest, against Steven on the secret commissions claim;
(g)FPH is entitled to a declaration that the Removal Deed made by Brenda on 4 October 2018 is void;
(h)FPH is entitled to indemnity from the assets of the PRT in the sum of $314,741.95, but account must be made of the $122,000 applied by FPH in discharging the Whale Beach Loan when it has not proved in these proceedings that that was a liability which it incurred in its capacity as trustee of the PRT;
(i)FPH’s claim against Ridge Estate in respect of the insurance proceeds paid to Ridge Estate in 2016 and 2017 fails;
(j)FPH is entitled to judgment against Ridge Estate in the sum of $37,720, being the unpaid balance of the price for the sale of cattle;
(k)FPH’s claim in respect of agistment fees fails; and
(l)FPH’s claim for payment of a portion of the licence fees paid by Mr Bayes fails.
On the respondents’ cross‑claim:
(a)Ridge Estate’s claim for payment of $240,713 in respect of the items in the 6 April 2016 invoice fails; and
(b)all remaining claims in the cross‑claim (which were not pursued) will be dismissed.
The circumstance that FPH has discharged the Whale Beach Loan from the proceeds of sale of an asset of the PRT without establishing that the Whale Beach Loan was a liability it incurred in its capacity as trustee of the PRT creates a difficulty. If it be the case that the $122,000 was not a liability of FPH incurred in its capacity as trustee of the PRT, FPH should not be able to retain the benefit of that payment.
However, there is some indication in the documents which the respondents obtained by notice to produce during the trial, and to which Steven was a party, that FPH did take out the Whale Beach Loan in its capacity as trustee for the PRT. There would be injustice in that event if FPH is not entitled to the benefit of the $122,000 paid to discharge the Whale Beach Loan.
As I will make a declaration that the Removal Deed was void, FPH will continue for the time being as the trustee of the PRT. This means that there is no other entity to which the Court could presently order payment of the sum of $122,000. Counsel for the applicants has hinted at further litigation by FPH with a view to vindicating a claim that the Whale Beach Loan was incurred by FPH in its capacity as trustee of the PRT. The Court is not presently in a position to determine the merit of any claim to that effect nor the viability of any proceedings which FPH may bring to that effect.
In all these circumstances, I take the view that the Court should not now prejudice the means by which FPH may recover the sum of $122,000 if it is able to vindicate its entitlement to that sum. A practical way in which to proceed is as follows.
The deduction of $122,000 from the sum of $395,178.36 (the amount paid in the Court) leaves a balance of $273,178.36. That sum can be taken as the aggregate of FPH’s entitlement to indemnity and for reimbursement of the additional costs of the judicial sale of Lot 2 ($6,564.80). It is less than the sum of $314,741.36 which on my findings is FPH’s entitlement to indemnity. Accordingly, the sum of $273,178.36, plus the interest accrued on that amount, should be paid out of the funds held in Court to FPH. I will hear from the parties as to whether some of that amount should be paid directly to Mr Lorefice.
The remaining $122,000, plus the interest accrued on that portion of the monies held in Court, should, subject to further order of the Court, continue to be held in the Court’s Litigants’ Fund to the credit of this action. My intention is to give FPH the opportunity in other proceedings to vindicate its entitlement to that sum. As I have said, I am making no comment as to the viability of such an action, given FPH did not pursue the claim in these proceedings. If no proceedings are current as at 4 April 2022, any other person with an interest in the monies may apply for an order for payment out. If proceedings are current, FPH or the respondents may seek an extension of the time in which the monies are to continue to be held, pending the determination of those proceedings. At the conclusion of those proceedings, the same persons or entities may apply for an order for payment out in accordance with the determination of the issue in those proceedings.
Disposition
For the reasons given above, I make the following declarations and orders.
Declarations
(1)The Deed of Appointment and Removal of Trustee (the Removal Deed) made on 4 October 2018 by Brenda Van Niekerk (the Fourth Respondent), is a conveyance which was made with the intent to defraud creditors within the meaning of s 86 of the Law of Property Act 1936 (SA).
(2)The Removal Deed is void.
(3)All conveyances of property effected by the Removal Deed are void.
(4)The items listed in Annexure A to the Fifth Statement of Claim and described as the Fairfield Items were, at all material times from on or about 8 April 2016, the property of Fairfield Pastoral Holdings Pty Ltd (FPH) until such time as they were sold or transferred by it.
(5)FPH, in its capacity as trustee of the Piney Ridge Trust, is entitled, subject to account being taken of its use of $122,000 to discharge the Whale Beach Loan, to be indemnified from the assets of the Piney Ridge Trust in an amount of $314,741.95.
Orders
(1)The First, Second and Third Respondents (Ridge Estate Pty Ltd, Steven Van Niekerk and Philip Van Niekerk) are collectively or individually to deliver up to the Second Applicant, Fairfield Pastoral Holdings No 1 Pty Ltd (FPH No 1), by 31 January 2022 the items listed in Annexure B to the Fifth Statement of Claim.
(2)There be judgment for the Second Applicant (FPH No 1) against the Second Respondent (Steven Van Niekerk) on the secret commissions claim in the sum of $195,000 inclusive of interest.
(3)There be judgment for FPH No 1 against Ridge Estate Pty Ltd on the cattle purchase claim in the sum of $42,720 inclusive of interest.
(4)Of the sums held by the Court in the Litigants’ Fund in relation to this Action, $273,178.36, together with the interest accrued on that amount, be paid out to FPH in part satisfaction of its claim to indemnity.
(5)The remaining amount held by the Court in the Litigants’ Fund continue to be held in the Litigant’s Fund, subject to the following orders:
(a)if there are current proceedings in a Court at 4 April 2022 concerning the question of whether FPH took out the Whale Beach Loan in its capacity as trustee of the Piney Ridge Trust (Other Proceedings), FPH or the Respondents may apply to a Judge of the Court for an extension of the period in which the funds are so held, pending the determination of the Other Proceedings;
(b)at the conclusion of the Other Proceedings, any person with an interest in the sum held in the Court may apply to a Judge of the Court for an order for the payment out of that sum; and
(c)if at 4 April 2022, there are no Other Proceedings, any person with an interest in the sum held in Court may apply for an order as to its payment out.
(6)All other claims of the Applicants be dismissed.
(7)All remaining claims in the Respondents’ Cross‑claim be dismissed.
(8)I will hear from the parties as to whether any order should be made for payment of some portion of the sum of $273,178.36 to Mr Roberto Lorefice.
(9)I direct the Registrar of the Court to refer a copy of this judgment, in particular the portion concerning the secret commissions, to the Director of Public Prosecutions in New South Wales.
(10)I will hear from the parties with respect to costs.
I certify that the preceding six hundred and sixty-two (662) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice White. Associate:
Dated: 4 January 2022
SCHEDULE OF PARTIES
SAD 312 of 2018 Respondents
Fourth Respondent:
BRENDA LYNN VAN NIEKERK
Cross-Claimants
Second Cross-Claimant:
STEVEN VAN NIEKERK
Cross-Respondents
Second Cross-Respondent
ANDREW HAMILTON
Third Cross-Respondent
FAIRFIELD PASTORAL HOLDINGS NO 1 PTY LTD ACN 600 365 544
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